House of Representatives
1 November 1977

30th Parliament · 2nd Session



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

page 2581

PETITIONS

The Clerk:

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

Non-State Business Colleges

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 report of the Department of Employment and Industrial Relations on Employment Prospects by Industry and Occupation, July 1977, p. 197, states that, in respect of Stenographers/Secretaries:

With the exception of new business college graduates the demand for less experienced and less skilled people in Sydney is in balance with the supply.

Business College graduates are exactly what the market wants and employers demand.

In one of the few fields of employment shown by the report to be under-supplied, the Government is effectively reducing the ability of business colleges to train enough secretaries and stenographers for the positions which are available.

The sixteen technical colleges in the Metropolitan area of Sydney which accommodate 3,220 students in day secretarial studies do not have the capacity to accommodate more than 6 per cent of the 2,435 students at non-State business colleges in the same area who will be disadvantaged by the Government’s recent decision to withdraw fees subsidies and living allowances from the end of 1977. 1977 School leavers who wish to undertake a course in Secretarial Studies and thus ensure they obtain a worthwhile position of employment on graduation are being forced to pay fees of the order of $ 1 , 400 for the year and also to forgo TEAS living allowances.

The Government’s decision is unfair, unjust, discriminatory, unreasonable and capricious.

Your petitioners, therefore, humbly pray that the Commonwealth Government will act immediately to undertake a thorough review of the position of non-State business colleges, guarantee interim funding forthwith and reverse its decision.

And your petitioners as in duty bound will ever pray. by Mr Armitage, Mr Baume, Mr Bradfield, Mr Dobie, Mr Ellicott, Mr Fife, Mr FitzPatrick, Mr Gillard, Mr Graham, Mr Les McMahon, Mr Neil and Mr Ruddock.

Petitions received.

Taxation: Volunteer Firemen

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of undersigned Volunteer Firemen attached to the New South Wales Fire Brigade Service respectfully showeth:

That the Volunteer Firemen of the New South Wales Fire Brigades are performing an essential community service in suburban and country towns by providing low cost fire protection and in sacrificing their leisure and rest hours to perform this essential service, are being subjected to servere financial loss by having to pay income tax on two incomes which under the present taxation system discourages most individuals from having two jobs.

That the present situation has resulted in the resignation of a large number of volunteer firemen because of the effects of taxation, leaving a number of fire brigades under strength and a reluctance of potential recruits to pay excessive taxation.

That this growing problem could be effectively dealt with by granting taxation concessions to volunteer firemen in the State of New South Wales similar to those being received by members of the Citizens Military Forces.

Your petitioners therefore humbly pray that the House of Representatives will urge the Government to review the Taxation Act to exempt the earnings of volunteer firemen in the State of New South Wales from income tax, or give consideration to separate assessment of earnings and so protect the future of the volunteer fire service in New South Wales.

And your petitioners as in duty bound will ever pray. by Mr Baume, Mr Fife, Mr FitzPatrick and Mr Morris.

Petitions received.

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

  1. affect our social and moral environment,
  2. are family media watched and heard by many children at all times, and
  3. c) 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 ABC, 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

  1. for adequate and comprehensive programs in the best interests of the general public,
  2. for a ‘dual system of regulation’ enforced by the Australian Broadcasting Tribunal by internal regulation and external control,
  3. for an independent consumer body to represent the best interests of the general public, and
  4. 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 Armitage.

Petition received.

Welfare, Health and Public Education

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

That we wish to register our strongest objection to any proposed cutbacks in the 1977-78 Federal Budget in the areas of welfare, health and public education. We request that the levels of expenditure in welfare, health and public education be maintained at current levels of expenditure or increased in levels of expenditure in real terms.

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

Petition received.

Uranium: Mining and Export

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

That we believe that none of the safety problems associated with uranium and plutonium has been solved.

The mining and export of uranium will help to expand the nuclear power industry thus contributing to the health hazards of the world. Mining uranium will damage the environment and the health of the Aboriginal people.

Our beliefs on this matter are shared by a majority of physicists and scientists including 75 per cent of all specialists in nuclear medicine.

Your petitioners therefore humbly pray that the Government will not allow the mining, selling and export of uranium ore.

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

Petition received.

Taxation

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

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

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

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

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

Petition received.

Private Nursing Homes: Pensioner Patients

To 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-

  1. . 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.
  2. That a pensioner holding a Pensioner Health Benefit Card shall have a telephone installed free of charge, or at a very nominal charge.
  3. 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 in duty bound will ever pray. by Mr Morris.

Petition received.

Business of the House of Representatives

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

  1. That there are diverse matters of great importance awaiting determination by your honourable House.
  2. That it has been intimated that your honourable House will shortly be dissolved.

Your petitioners therefore humbly pray that, before any such dissolution, your honourable House would make every effort to see that all such matters of importance are properly determined by it.

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

Petition received.

Allegations Against Leader of the Opposition

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

  1. That on 6 May 1976 the Honourable Member for Mackellar gave a notice of motion which first appeared on Notice Paper No. 27 of the House of Representatives, dated 18 May 1976, as Notice No. 1, General Business.
  2. That the said Notice remained undebated on the Notice Paper until the prorogation of the House on 28 February 1977.

Your petitioners therefore humbly pray that your honourable house will use all the powers available to it to facilitate action to restore the Notice to the Notice Paper, and to have the matter dealt with before the forthcoming dissolution of the House.

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

Petition received.

Uranium

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

We welcome the decision to mine and export Australian uranium, under Australian and international safeguards. This decision will result in great benefits both for Australia and the whole of humanity.

We recognise that:

Rich nations, heavily dependent on Middle Eastern oil, are relying on atomic power to maintain their standard of living.

Ten poor nations with limited energy resources of their own are relying on atomic power to raise their standard of living.

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

  1. Continue to emphasise Australia’s responsibility to export uranium for the benefit of Australia and the whole of mankind. 2, Ensure that Australia’s uranium is made available to those countries which need it and comply with Australian and international requirements. 3, Ensure that radical minorities are not permitted to overrule the decisions of properly elected government.

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

Petition received.

page 2583

ALLEGATIONS AGAINST LEADER OF THE OPPOSITION

Mr WENTWORTH:
Mackellar

-Mr Speaker, I refer to the petition I presented concerning allegations against the Leader of the Opposition, and I move:

That the petition lodged by the honourable member for Mackellar relating to the notice of motion given by him on 6 May 1976 be printed.

In doing so I draw the attention of the House to the serious nature of the matters concerned and the great importance-

Mr Scholes:

- Mr Speaker, I rise on a point of order. In moving that a petition be printed it is necessary that an honourable member indicate that he intends to take a specific course of action arising from such a petition.

Mr SPEAKER:

-That is correct.

Mr WENTWORTH:

– I intend to do that. I shall most certainly do so during my remarks.

Mr SPEAKER:

-The honourable gentleman is required to inform me of the nature of the course of action.

Mr WENTWORTH:

– I move:

That so much of the Standing Orders be suspended as would preclude the Leader of the Opposition speaking in this House at a time of his own choosing for a period not exceeding 30 minutes in order to explain:

apparent discrepancies between his own protestations and the account given at a Press briefingby Mr Hawke in relation to alleged negotiations between certin Irakis and the ALP for the receipt of election moneys by that Party; and

matters relating to the foregoing.

That is the action I propose to take. I want to tell the House why it is necessary that that action be taken.

Mr SPEAKER:

-Order! I will not permit the honourable gentleman to inform the House why the action must be taken. He is entitled only to inform the House of the nature of the action he proposes. If he wishes to proceed with that course of action the Standing Orders will permit him to do so.

Mr WENTWORTH:

-Yes, Sir. The standing order concerned-and I draw your attention to it- permits me to speak in relation to this matter. I have to explain to the House why I think this matter is of importance.

Mr SPEAKER:

-The honourable gentleman, when he takes the course of action, can use the Standing Orders to explain then why he is taking that course. At this stage his motion is that the petition be printed. He is required, under the Standing Orders, to explain what course of action he intends to take. He has explained the course of action he intends to take. The motion now before the Chair is -

Mr WENTWORTH:

-No, Sir. I have not completed -

Mr SPEAKER:

-The honourable gentleman will resume his seat.

Mr WENTWORTH:

– I am entitled to read the petition which I have asked to be printed.

Mr SPEAKER:

-The honourable gentleman will resume his seat.

Mr Scholes:

- Mr Speaker, I rise on a point of order. The honourable gentleman is entitled to move that a petition be printed if he indicates a course of action which he intends to take. He has indicated a course of action which is not covered by the Standing Orders and therefore is not open to him at this time. A motion to suspend Standing Orders is not, I would suggest, a method by which the honourable gentleman would normally be able to proceed. Therefore it does not warrant a motion to enable him to proceed.

Mr SPEAKER:

– I rule that the honourable member for Mackellar, having indicated the course of action as required by the Standing Orders, is entitled to proceed with his motion that the petition be printed. He can speak only as to why the petition should be printed and not further.

Mr WENTWORTH:

-Yes, Sir. In order to explain that, I shall have to read the petition. It reads as follows:

The humble Petition of the undersigned Electors of the Commonwealth of Australia respectfully showeth-

That on 6 May 1976 the Honourable Member for Mackellar gave a notice of motion which first appeared on Notice Paper No. 27 of the House of Representatives, dated 18 May 1976, as Notice No. 1, General Business.

That the said Notice remained undebated on the Notice Paper until the prorogation of the House on 28 February 1977.

Your petitioners therefore humbly pray that your honourable House will use all the powers available to it to facilitate action to restore the Notice to the Notice Paper, and to have the matter dealt with before the forthcoming dissolution of the House.

And your Petitioners, as in duty bound, will ever pray.

I draw your attention now, Sir, to the notice to which this petition refers. I will not read it all. I will read only the concluding sentence:

This House therefore expresses the hope that, if the Leader of the Opposition believes himself to be innocent of these charges, he will take prompt steps to call for the setting up of an effective tribunal, with full powers to probe them all and to clear his name.

Sir, I think the name of the Leader of the Opposition is under a cloud. It is quite definite that it would be most improper for him to go to the electors -

Mr SPEAKER:
Mr WENTWORTH:

– … on 10 December -

Mr SPEAKER:
Mr WENTWORTH:

– . . . until that matter is resolved.

Mr SPEAKER:

-Order! If the honourable gentleman persists in speaking while I am trying to draw his attention to my ruling under the Standing Orders I will have to deal with him. He is entitled to speak only to the question as to why it ought to be printed, not as to the subject matter. He will confine himself to that or I will order him to resume his seat.

Mr WENTWORTH:

-Mr Speaker, I am confining myself specifically to what you have asked me. It should be printed because this is a most important matter. It is important that the Leader of the Opposition, going to an election-the most important thing that happens under the Constitutionshould be able to clear his name from the very heavy imputations made against him by his own party leader, Mr Hawke. He must be able to clear his name.

Mr SPEAKER:

-Order! The honourable gentleman is now going beyond the subject matter to which I have limited him.

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES · LP; IND LIB from Oct 1977

– Right. Very good, Sir.

Question resolved in the affirmative.

page 2584

ELECTION TIMETABLE

Ministerial Statement

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– by leave- Mr Speaker, when I informed the House that the Government

Proposed the next House of Representatives and half Senate election should be held on Saturday, 10 December 1977, I undertook to confirm details of the timetable when replies had been received from the States. I am now able to say that all States are in agreement with the timetable, which is as follows: The issue of writs, 10 November 1977; close of nominations, 18 November 1977; polling day, 10 December 1977; the date for return of writs, on or before 8 February 1978.

page 2584

ALLEGATIONS AGAINST LEADER OF THE OPPOSITION

Notice of Motion

Mr WENTWORTH:
Mackellar

-I give notice:

That so much of the Standing Orders be suspended as would preclude the Leader of the Opposition speaking in this House, at a time of his own choosing, for a period not exceeding 30 minutes in order to explain (a) apparent discrepancies between his own protestations and the account given at a Press briefing by Mr Hawke in relation to alleged negotiations between certain Irakis and the Australian Labor Party for the receipt of election moneys by that party and (b) matters relating to the foregoing.

Mr SPEAKER:

-The motion needs to be in writing and seconded.

Mr Wentworth:

– It is both.

Mr Scholes:

-Mr Speaker, you called for notices of motion. The honourable member said that he gave notice. It would then rest on the Notice Paper until the next day of sitting and would not be called on now. Therefore it does not require a seconder.

Mr Wentworth:

– It is seconded and in writing.

Mr SPEAKER:

-I understood the honourable gentleman to have moved the suspension of Standing Orders.

Mr Wentworth:

– I now give notice.

Mr SPEAKER:

-Notice of motion to suspend Standing Orders?

Mr Wentworth:

– Yes.

Mr SPEAKER:

-Notice is received.

page 2585

QUESTION

QUESTIONS WITHOUT NOTICE

page 2585

QUESTION

BUDGET DEFICIT

Mr UREN:
REID, NEW SOUTH WALES

– I direct my question to the Treasurer. Is it a fact that the deficit for this financial year is now estimated to be in excess of $2, 500m, which amounts to an increase of $300m over the figure presented in the Budget? Does this mean that the Government has reversed its policy on reducing the deficit to control inflation? Further, how does the Treasurer reconcile a lowering of interest rates with a need to finance the increase in the size of the deficit?

Mr LYNCH:
Treasurer · FLINDERS, VICTORIA · LP

– The Government’s policy on interest rates is well known to this House and I have reaffirmed that policy on a number of occasions recently. I have said to the honourable gentleman that, consistent with the Budget statements and in particular with Statement No. 2, it is the Government’s intention to see the lowering of interest rates during the course of this year. The honourable gentleman will see in Statement No. 2 reference to the expectation of a lesser demand by the corporate sector for funds from the general capital markets of Australia. Secondly, I remind the honourable gentleman of the fact that he seeks conveniently to overlook, that the recent consumer price index increase of 2 per cent has given very real encouragement, in the Government’s fight against inflation, to outside investors, particularly to those operating in the market place. As a consequence of that the honourable gentleman ought to be aware of the fact that there has also been a very significant reduction in the bond rates at both the short and long end.

I recited the figures to the honourable gentleman previously. If he is interested, during the course of this day when the financial markets are closed, I will give him the figures which will operate. I do not want to say any more than that to the honourable gentleman on that point.

So far as the Government’s Budget deficit is concerned, I invite the honourable gentleman to look at page 26 of Budget Paper No. 2 in which he will see the target which has been set down by the Government. If the honourable gentleman is concerned with what he might see as some extension of the Budget deficit, I invite him to think back to the same period in 1975 when the then Treasurer, whom I regard as having been discredited by his performance in this sense, brought down a Budget deficit of $2.8 billion, as

I recall the figure. Towards the end of that year, certainly by December of that year, the figure had been blown out to $4.5 billion. If there is one thing this Government can say as a matter of record, looking back to the past year, it is that it has a capacity to adopt a financial discipline and to adhere to that financial discipline over the course of the year. I think that answers patently what the honourable gentleman is seeking.

page 2585

QUESTION

PUBLIC DEBATE ON URANIUM

Mr CALDER:
NORTHERN TERRITORY

– My question is addressed to the Minister for National Resources. I ask: In view of the strong calls for wide public debate on the mining and sale of uranium, can the Minister inform the House of recent progress regarding such public debate?

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

– Considerable discussion has been proceeding and some very interesting remarks have been made in recent days. I think one of the most interesting remarks was the reaction of the Deputy Leader of the Opposition to the comments made by Dr Mabon, who was in Australia to have talks with me, with the Government and with people from the uranium industry. I should have thought that the honourable member would value the viewpoint of another country, particularly a country such as the United Kingdom, which also has a Labor Government. I think some of Dr Mabon ‘s remarks are very pertinent to the international situation as it exists today. On AM the other morning he said:

What 1 am trying to say, particularly to our trade union friends in Australia, is that they really must understand that uranium for us is extremely critical for the wellbeing of the working people in Great Britain.

I think that is a factual statement. Britain today generates 1 1 per cent of its power from nuclear sources. It was the first country in the world to embark on a nuclear power program. It has developed to be the second largest proportional producer of electric power in the world- second only to Switzerland. I think the remarks made by an eminent British Minister, such as Dr Mabon, should be considered seriously.

It is interesting to see the remarks of the President of the Australian Labor Party, Mr Hawke, who said that, whilst Dr Mabon had a right to make comments to the Government, he should not be making these comments publicly. I ask you, Mr Speaker! I should have thought that the pleas by the Deputy Leader of the Opposition ‘ and other Labor supporters for public debate would mean people making public statements rather than little private statements to the Government. This is where the Labor Party is in a confused, contrary situation so far as uranium is concerned.

Might I add also that Dr Mabon was in Australia to talk very seriously about a long term uranium contract with the United Kingdom. He was canvassing the possibility of a contract from 1982 to 1995 for one thousand tonnes of uranium a year, worth $ 1,200m to Australia. This contract, of course, would guarantee to the United Kingdom during that period the supply of uranium so that the British Government can help the working people of England to remain employed. To Australia it means added income that will maintain the living standards of this country. If the Labor Party wants to disown a contract that this Government might enter into with the United Kingdom to help it maintain its economic stability, it is up to the Labor Party to tell the Australian people during the election campaign that it will disown such a contract.

page 2586

QUESTION

BROADCASTING OF ELECTION MATERIAL

Mr JAMES:
HUNTER, NEW SOUTH WALES

– My question is directed to the Minister for Post and Telecommunications. The Minister will recall that on the Australian Broadcasting Commission news this morning he stated that laws banning the broadcasting of election material on television and radio for two days before a Federal election were outdated and outmoded. The Minister also said that the Government could not amend the statute before the Parliament is dissolved. I ask the Minister: As the Government has on two occasions been able to effect major amendments to industrial relations legislation within 24 hours of their introduction to the House, why cannot the same haste and zeal be applied to this outmoded and outdated legislation?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– What was said on the ABC news this morning was part of an answer I gave to a question which came from a conference that I attended in Surfer’s Paradise yesterday when one of the delegates asked me about that matter. I said, as I repeat to the honourable member, that the Australian Broadcasting Tribunal report, which we got a couple of months ago, has made recommendations to delete the present relevant provisions in the Act. I have also made it quite clear to the House that the Tribunal’s report has not been studied by the Government. In fact, I gave first of all to the end of September and then to the end of October for people to express their views to the Government.

I went on to say that when I had considered submissions to me and the report I would make recommendations to the Government and if there was to be a change in that Act, obviously it would be a decision for the Government. I did express the personal point of view that I thought the law was outdated and outmoded and I still think so.

page 2586

QUESTION

URANIUM EXPORTS: TALKS WITH BRITISH DELEGATION

Mr COTTER:
KALGOORLIE, WESTERN AUSTRALIA

-I direct my question to the Minister for Foreign Affairs. Can the Minister inform the House whether any progress has been made in talks with the British delegation led by the British Minister of State in the Department of Energy, Dr Mabon, in regard to the supply of uranium? Were those talks affected by the outburst from the Deputy Leader of the Opposition attacking the Leader of the British delegation?

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

-I feel very tempted to express a personal view about standing here at this particular time. I am dealing with a very serious matter. The honourable member has asked a question regarding talks which occurred last week between officials accompanying Dr Mabon, who has received a fair degree of publicity over the course of the last few days, and Australian officials about the preparation of bilateral safeguards agreements between the two countries. The British officials were, of course, fully apprised of Australia’s policy and expressed their understanding of it. It is anticipated, by both sides I think, that there should be no particular difficulties in the successful conclusion of the negotiations, which will continue next month. Both sides agree that it should be possible to reach an initial agreement before Christmas of this year. That is in answer to the first part of the question that has been posed.

In regard to the second part of the question as to whether the statement of the Deputy Leader of the Opposition had any effect on those talks, I would bluntly say no. The people involved are fully apprised of Britain’s needs and of Australia’s policy and the statement made by Dr Mabon, referred to by the Deputy Prime Minister, and the response from the Deputy Leader of the Opposition are in my view very significant in several respects. First, Dr Mabon ‘s statement made clear what is deliberately being obscured by Labor in this country- that the question of the export of uranium need not be and should not be reduced to a party political or ideological issue. The Deputy Leader of the Opposition should realise, as some of his colleagues clearly do, that the issue is the survival of the energy dependent Western societies.

May I recall just two statements made not by conservative politicians but by well known British unionists. First, the General Secretary of the Electronics Union in Britain, in supporting the development of Britain’s nuclear energy industry last month, said that death from starvation, cold and wars of conquest would be the fate of the world if energy supplies ran out. If that is not good enough, honourable members should check with Joe Gormley, the British miners’ leader, who added that an anti-nuclear energy motion would ‘send us back to the jungle’. Quite frankly, the perspective of men like these, men who need no lectures from the Deputy Leader of the Opposition on Labor principles, is light years away from that of the Deputy Leader of the Opposition who tries to reduce uranium merely to an election issue. Those men are unlikely to be impressed by his rantings.

The second point of substance is that Dr Mabon ‘s statement is a salutory reminder of how supine- let me put it bluntly- and how gutless the leadership of the Australian Labor Party is. Where were the viewpoints of Mr Hawke, Mr Whitlam and Mr Hayden at the time of the ALP Federal Conference? They are the people who allegedly recognised the overwhelming strength of the case for exporting uranium. Where have they been lately on this issue? They have washed their hands of the matter. Why they cannot show the courage of their British counterparts and let Australia meet its international obligations in responding to a world energy problem and developing a major industry will be tested by the Australian people.

The third point I make is that the outburst of the Deputy Leader of the Opposition is the clearest evidence that nothing has changed. Between 1972 and 1975 the leaders of the Labor Government developed the gratuitous insulting of friendly governments into a major art form. For example ‘bash a Yank a day’ was their pretty familiar slogan. That slogan was used by the Australian Financial Review in describing them. It was not just the Americans who were subjected to this treatment. Now the Deputy Leader of the Opposition is showing us that he is in serious training to give a repeat performance, but he will not get the opportunity. In summary, it is clear that the Labor Party’s approach is not based on morality or principle; it is based merely on an ideological opportunism of the worst kind.

page 2587

QUESTION

RHODESIA INFORMATION CENTRE

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

-I ask the Foreign Minister a question which concerns the legislative program for the rest of this session. Why does the program not include legislation to close the Rhodesia Information Centre in accordance with the undertaking by Australia’s delegate to the United Nations last May that such legislation would be passed in the session commencing last August? I point out that the Labor Party would facilitate die passage of legislation to honour Australia’s obligations to the United Nations. I also ask: Has the Australian Embassy in South Africa been given or has it sought instructions on the attitude that it should express, as our British and other counterparts have already expressed, towards the repressive actions taken by the minority government of South Africa against newspapers and journalists and critics of apartheid? If so, have the instructions been given and carried out?

Mr PEACOCK:
LP

-I had before me legislation that was in draft form and which I hoped to put to the Parliament and to inform the Security Council of. But I sent it back. Frankly I thought it was too dragnet in its approach. I have consistently said on this matter that Australia will meet its international obligations as determined by the Security Council, but in meeting those obligations I will not trample over the rights of individual Australians to participate in political matters and express a particular view about Rhodesia. If honourable members opposite want it bluntly, as far as I am concerned in meeting that obligation I will not jeopardise the rights of those people one iota. I will meet those obligations and I will repeat in the Security Council that Australia will meet its obligations.

Mr Uren:

– All things to all men.

Mr PEACOCK:

-You raced in, in blind style -

Mr SPEAKER:

-Order! The Minister will not address members individually. He will speak through the Chair.

Mr PEACOCK:

-I must say it is fairly rare to be able to look at Opposition members and think of them as speaking with one voice. I fell into that trap on this occasion. The Government will execute its international obligations on this issue. Let there be no mistake about that. But it will be done to meet the requirements of the Security Council without jeopardising the rights of any Australian. I have always made that perfectly clear. If there were time to introduce legislation before the end of the week, well and good. But as I sent back the draft legislation because I thought it was too wide in ambit, it would appear to me that we will not be able to introduce the legislation during this period of the parliamentary sittings. We will be able to do it in the new year. It will be legislation, firstly, that discharges our international obligations and, secondly, that protects the rights of Australians to put forward views whether or not they are in contrast with the views of the Government.

In regard to the repressions in South Africa, the Australian Government’s views are well known. Whether it be in regard to the closure of newspapers or other repressive measures we deplore them. We have indicated this over a lengthy period. We did it in relation to the death of Steve Biko. I recall the honourable member for Adelaide criticising the Government for not expressing views on that matter but, in fact, we did express them in the United Nations, and of course we were represented at the service.

page 2588

QUESTION

RESERVE BANK

Mr BRYANT:
WILLS, VICTORIA

– I address a question to the Treasurer. In the course of his answer to a question from the Deputy Leader of the Opposition, the Treasurer said that outside investors actually are operating in the market place. Who are the outside investors? What are their operations? To which market place is he referring and how does it operate? Can he put his answers in English?

Mr LYNCH:
LP

-I really do not know what the honourable gentleman is seeking to expose by the use of that reference. I mean of course, as I indicated to the House during the course of recent days, that the Reserve Bank engages in an open market operation. I would have thought that what the Reserve Bank has been doing in the market place is a matter of public record. It has been clearly reported in all the financial newspapers during the course of the week. The honourable gentleman ought to understand the normal transactions that take place in open market operations and in which the Bank itself has been exercising certain moves, after consultation with the Government. All I say to the honourable gentleman- I am uncertain as to the particular reasons he is querying this matter- is that he should note the fact that there has been the most significant fall in interest rates at both the short and the long end for a period of four years. I would have thought that the honourable gentleman and the Deputy Leader of the Opposition ought to be the first to applaud the fact that because of the reasons, some of which I gave the House today, interest rates have been the subject of a significant fall.

Mr Bryant:

– I raise a point of order. My question was: Who are the outside investors?

Mr SPEAKER:

-Order! There is no point of order.

page 2588

QUESTION

AUSTRALIA’S URANIUM POLICY

Mr HODGES:
PETRIE, QUEENSLAND

– Can the Prime Minister tell the House about the attitudes to Australia’s uranium policy expressed to him by heads of government during his visit to Europe earlier this year?

Mr MALCOLM FRASER:
LP

– Heads of government in Europe, the United Kingdom, Germany and other countries expressed a keen interest in supplies of Australia’s uranium. They wanted to know when the Government would make firm and final decisions concerning the continued mining and export of Australian uranium. Prime Minister Callaghan, in particular, Mr Wedgwood Benn and I held lengthy discussions concerning British requirements. The mission that has just been to Australia, led by Dr Mabon, was as a direct consequence of those discussions. They need energy to supply the needs of their factories and to supply the needs of their people.

This is a very important matter indeed. I believe that my colleagues have very amply shown the importance of these issues this morning. At the highest level in the United Kingdom and in Europe, Australia’s energy supplies are needed for peaceful purposes. If the Australian people were to take it upon themselves as a resource rich country in many different things to say that we were going to deny energy to another country such as Britain, which would fulfil all the safeguards in the most scrupulous way, and thus, in part, be responsible for its factories grinding to a halt, that would be a position that I believe the great majority of Australian people would not want to entertain.

It is a very important issue indeed and it is one which Dr Mabon has emphasised. It is only a tragedy that the Deputy Leader of the Opposition has tried to involve Dr Mabon in domestic politics in Australia when his comments were made from the heart and from a British national interest. Apparently the Deputy Leader of the Opposition thought that Dr Mabon ‘s loyalty to the Australian Labor Party should be greater than his loyalty to the working people of the United Kingdom. That is a very odd concept indeed for the Deputy Leader of the Opposition to suggest to a senior and significant British Minister.

These are important matters. They have been dealt with by this Government carefully, scrupulously and with the highest regard for Australia ‘s national interest. When we recall, as my colleague the Foreign Minister did, the circumstances in which the Leader of the Opposition and, as I understand it, Mr Hayden and Mr Hawke did not speak in the uranium debate during the Perth conference, how seriously can we take their attitude to be? It is founded on base political motives and nothing else.

page 2589

QUESTION

AUSTRALIAN ENCEPHALITIS

Mr FISHER:
MALLEE, VICTORIA

– Can the Minister for Health inform the House of the action the Government is taking to control Australian encephalitis?

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

– The honourable member for Mallee, as well as the honourable members for Murray, Angas and Riverina, have been very interested in this problem for some time because of the serious threat that encephalitis has imposed on the Murray Valley region. They would have been pleased to learn that in this year’s Budget a further $ 100,000 was set aside to be spent in association with the State Governments on a dollar for dollar basis to control the spread of encephalitis in the Murray Valley. The Government, of course, will be spending that amount of money in association with the States of New South Wales, Victoria and South Australia. In November-December, a total of 57 officials from the various health departments will be meeting in Mildura to draw up a further longer term program which will include mosquito abatement procedures. I am confident, and indeed my Department is confident, that the measures that have been taken will control the encephalitis problem that has been causing some worry and concern in the Murray Valley. Because of those measures we are quite certain that this program will overcome the serious threat to the tourist industry and to the health of the people who live in the region.

page 2589

QUESTION

RHODESIA INFORMATION CENTRE LEGISLATION

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

-When did the Foreign Minister receive the Rhodesia Information Centre legislation? When did he send it back? Have specific objections been expressed by Australia, as they have by other Western countries, to the latest repressive measures taken by the minority government in South Africa last month? Has the Australian Embassy in South Africa sought instructions on that issue?

Mr PEACOCK:
LP

-I do not have the dates with me, and I doubt that I would be inclined to give them in any case, because this is a matter between the officials and myself. The nature of legislation, which is in draft form only at this stage, should not concern the Leader of the Opposition. It is up to the Government to determine the legislation that is introduced into the Parliament. When such legislation is in draft form or its principles are before me, that is a matter for my judgment. But I can assure the Leader of the Opposition that these matters have been discussed in some detail. I think the last discussion would have, taken place early last week, although I do not want to be held to that. That is the situation as I recall it at the present moment.

As regards the other matters raised by the honourable gentleman, I have said already that the measures that the South African Government has taken have filled us with regret. They include, as I recall, the banning of about 18 organisations, some of which are well known internationally and whose representatives have been highly regarded for their moderate views on South Africa. I have said when interviewed on a number of occasions that we have received the news of repressive measures with profound regret. We have fully shared the serious concern expressed by the international community at this most recent turn of events in that country.

Lest there be any misapprehension in the mind of the Leader of the Opposition, let me remind him of the sorts of things I have been saying. Far from deterring opposition to apartheid, the denial of basic human rights and Press freedom, which such measures represent, they are likely to have the opposite effect. Whilst silencing moderate opinion, in our view they will strengthen the hands of the extremists. This can only limit the possibility of dialogue as the only satisfactory means of solving South Africa’s political problems. Matters such as these, as the Leader of the Opposition knows, are before the United Nations. Depending upon the way in which they come forward as resolutions, we will be expressing further views.

page 2589

QUESTION

INFLATION AND UNEMPLOYMENT

Mr BROWN:
DIAMOND VALLEY, VICTORIA

– My question is directed to the Treasurer. Has the rate of inflation in Australia been reduced in the last 21 months? If so, by what degree has it been reduced?

Mr Willis:

-Prove it.

Mr BROWN:

– I am not an economist like the honourable member. Has the Treasurer seen reports that unemployment in Australia has in fact increased in the last 21 months? Are those reports accurate”? What is the Treasurer’s prognosis of the extent of unemployment and the prospects for the opening up of new job opportunities?

Mr LYNCH:
LP

-The September increase of 2 per cent in the consumer price index gives the he very clearly indeed to all of the assertions and practised misrepresentation which have been made recently by the Leader of the Opposition. The honourable gentleman was quoted recently on a major television program as saying that inflation has gone down in all the other Western countries, scarcely at all in Australia; secondly, that unemployment has certainly gone down in every other Western country without exception, and in Australia it has gone up by 32 per cent. These statements are absolutely wrong. They demonstrate the honourable gentleman’s intention of mounting an election campaign based on falsehood and outright misrepresentation.

I quoted what the honourable gentleman said in relation to unemployment going down in every other Western country without exception, and in Australia going up by 32 per cent. The fact is that since December 1975 unemployment has increased in all but six of the 24 countries which are members of the Organisation for Economic Co-operation and Development. The rate of unemployment in Australia has not increased by 32 per cent during that period. The actual number or individuals registered as unemployed in December 1975 was 328,700, or 500 more than in September of this year. The figure for September of this year was 328,200, or 8 per cent more than for the same month of 1975. What I am saying in quite clear terms is that the honourable gentleman’s statement was an outright lie.

Mr SPEAKER:

-Order! The right honourable gentleman will withdraw that remark.

Mr LYNCH:

-I withdraw it. Let me say that the statement by the Leader of the Opposition was utterly inaccurate and a complete distortion. I point out to the House that between the September 1976 quarter and the September 1977 quarter consumer prices in this country rose at an annual rate of about 9 per cent. This increase broadly matches the average of our major trading partners during the same period. Our underlying rate of increase in consumer prices between the December 1975 quarter and the December 1976 quarter was some two to three percentage points higher than that of our major trading partners. During the previous year, under the Labor Government, the gap was some six to seven percentage points. In other words, contrary to what the honourable gentleman has sought to assert in other places- I mentioned the misrepresentation and absolute distortion in those statements- Australia’s performance in relation to the economy, under the present Government, has been most significant by international standards.

page 2590

QUESTION

IDENTIFICATION OF VIRUS

Mr SCHOLES:

-Did the Minister for Primary Industry announce on 28 October that a virus similar to blue tongue had been found in Australian insects? Was it necessary to send samples overseas to obtain final identification of the actual virus? What action has the Australian Agricultural Council decided to take as a result of the Minister’s request on Friday? Finally, have any countries outside Australia taken any action in respect of this discovery?

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

– The virus that has been found is similar to blue tongue. At this stage it has not been found in livestock or in any other animals. It was isolated in a sampling of some 250,000 insects taken from about the middle of 1974 to about the middle of 1976. 1 am told that in that sampling quite a number of diseases and viruses were found, some of which might well contain a threat to the livestock industries of Australia and others of which may not. At this stage, in order to identify exactly what the implications are, a number of blood tests are to be taken in the area from which this sampling took place; but there is no suggestion that in any way the disease is present in Australian livestock.

With respect to action being taken, I understand that discussions have been under way with a number of countries. Indeed, the isolation of this virus was done in a laboratory in the United States of America. Another laboratory in South Africa is examining the virus to determine the extent to which it is akin to blue tongue and whether there is a threat of it spreading the disease in Australia. In order to ensure that there is no threat to Australia’s export industries, I have recommended to the Australian Agricultural Council- to date I have not received a response from all Ministers- that restrictions be placed on the movement of cattle, buffalo and other ruminants for 50 miles around the Northern Territory site where the virus was isolated. The insects sampled in March 1975 were sent abroad as part of the overall survey at that time. There has been no recorded presence of the disease despite the fact that the virus was found nearly 2Vi years ago. In those circumstances I think the matter needs to be placed in perspective.

Beyond all else, identification of this complaint illustrates a very high degree of consciousness in the general health services of Australia. We certainly hope that it proves to be present only in insects and not in livestock, but no risks will be taken. After further tests have been conducted, if necessary I will make a further statement upon the matter. At this stage no action has been taken on any export of livestock from Australia, although some discussions are under way with New Zealand about whether there might be some temporary suspension of movement of livestock from Australia to that country.

page 2591

QUESTION

VICTORIAN POWER DISPUTE

Mr YATES:
HOLT, VICTORIA

– I put my question to the Minister for Employment and industrial Relations. Has the Minister’s attention been drawn to statements made during the serious State Electricity Commission strike in the Latrobe Valley, when thousands of people in my own electorate were out of work, that his Department did nothing to assist the Conciliation and Arbitration Commission and did not assist in solving the dispute in any way at all? Will the Minister kindly tell the House what action the Government took to assist in this most serious dispute which gravely affected all the workers in my area and in many other electorates?

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

– It has been drawn to my attention that comments of the kind the honourable gentleman mentioned were made by the Leader of the Opposition in a recent interview, I think, on This Day Tonight. I must admit that I have been astounded by those comments. When the Arbitration Commission sat as a reference bench early in October- honourable members will remember that that was after proceedings before Mr Commissioner Vosti had failed to produce a settlement- the Commonwealth Government intervened before the Full Bench, as I emphasise was its right, and participated in the proceedings there. A considerable part of those proceedings of course was in private conference between the State Electricity Commission and the unions concerned. The Commonwealth, as an intervener, was not admitted to those proceedings. The statement of this Bench did not produce a return to work. Then an anomalies conference was convened. I am pleased to inform the House and the honourable member that the Commonwealth Government was represented at all stages of the anomalies conference and supported the Victorian Government in its submissions that no anomaly existed.

Arising out of this conference, the matter was then sent to a Full Bench of the Commission to examine in detail the union grounds for a wage increase based on the situation involving possible anomalies within the SEC pay structure itself. Again the Commonwealth intervened, as of right, and made submissions to the Full Bench in support of the Victorian Government. The decision of this Bench was that no wage increases were warranted on the grounds which the unions had put forward. At a subsequent stage the dispute was referred by the President of the Commission to Commissioner Mansini to investigate the prospects of a work value case. I am pleased to inform the House that the Commonwealth has sought leave and has been granted leave to intervene in these proceedings which are still in progress. Incidentally, at one stage of these proceedings the Commonwealth supported the Victorian Government’s application for a reference bench to be reconvened.

The most charitable view which can be taken of the comments by the Leader of the Opposition is that he did not know what he was talking about and had not bothered to find out. An alternative explanation is that he had bothered to find out but had suffered a remarkable lapse of memory. Yet another explanation is that he deliberately tried to present false information to the public. As there were other examples of that in the interview, I think that is probably the most likely explanation.

page 2591

QUESTION

UNEMPLOYMENT STATISTICS

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

-I direct a question to the Minister for Employment and Industrial Relations. Bearing in mind the Cabinet decision of which I have previously reminded him that questions should, except in special cases, be answered within a month, I ask the Minister why he has not yet answered the score of questions which have been on the Notice Paper for some seven weeks in each House and which seek the number of persons registered as unemployed at various Commonwealth Employment Offices at the end of August 1 975, August 1 976 and August 1977. The Minister will, I hope, have noticed that over a score of similar questions concerning unemployment at the end of the last three Septembers have also been on the Notice Paper for him for several weeks in both Houses. I also ask on what dates the CES figures will be published before 10 December.

Mr STREET:
LP

– In relation to the first part of the question, that is, the number of persons unemployed as registered at each Commonwealth Employment Office, it is my recollection- I will check this after Question Time- that I answered that since the interim Norgard recommendations had been accepted and more equipment was available in employment offices for copying records and things of that kind, honourable members who wanted information relating to particular offices should ask those offices for the details required. A great deal of time is involved in my Department if the information has to come back to central office and then be collated to be put into answers to questions. As I say, I shall check the accuracy of that information after Question Time. With regard to the date for the publication of CES figures on employment, as usual they will come out on the Friday following the Friday nearest the end of the month.

page 2592

QUESTION

AUSTRALIAN ALUMINIUM INDUSTRY

Mr CARIGE:
CAPRICORNIA, QUEENSLAND

-Is the Minister for National Resources aware that Comalco has let a $lm contract for clearing and levelling of the site for the company’s proposed alumina smelter at Boyne Island near Gladstone? I further ask the Minister What are the prospects for the Gladstone alumina smelter and other projects in the Australian alumina industry?

Mr ANTHONY:
NCP/NP

– I understand that work has commenced on the clearing and levelling of the site for a proposed alumina smelter at Gladstone. It has been the Government’s wish for a long time to be able to attract a major smelter works to Gladstone. The honourable member will recall that several years ago the Government involved itself in providing the bulk of the funds for the big power station at Gladstone and it hoped that it could interest Comalco Ltd. In fact, Comalco had the option of taking part of the power from that station at an attractive price so that it could compete with overseas smelters. I am now led to believe that early next year Comalco will be making a decision to construct a 320,000-tonne alumina smelter there, costing some $300m and providing about 700 jobs for people in Gladstone. I think that all of us welcome these sorts of decisions which are giving more job opportunities to Australians.

But one has to recognise that between now and the beginning of next year a decision will be made to determine who will govern this country for the next three years. I think that a decision to return a Liberal-National Country Party government would more or less make it conclusive that such a smelter would be constructed at Gladstone, whereas any other decision, which I believe is most unlikely to be made, would put a lot of doubts and fears in the minds of people who have such very large contracts to consider.

I am also pleased to say that Comalco has extended its Bell Bay smelter, and currently Alcan

Australia Ltd is expanding by half its Kurri Kurri plant at a cost of about $45m. In addition, at Weipa in north Queensland Comalco is undertaking an expansion costing about $80m. Both Alcoa of Australia Ltd and Alwest have prospects for a further expansion in Western Australia. So all round the prospects for substantial increases in aluminium production are attractive but, I suppose, the final decisions will depend on the outcome of the election on 10 December.

page 2592

ADVISORY COUNCIL FOR INTER-GOVERNMENT RELATIONS

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– Pursuant to section 7 of the Advisory Council for Inter-Government Relations Act 1976 I present the first annual report of the Advisory Council for Inter-Government Relations for the year ended 3 1 August 1977.

page 2592

DRIED FRUITS

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

– Pursuant to section 28 of the Dried Fruits Export Control Act 1924 I present the annual report of the Australian Dried Fruits Control Board for the year ended 30 June 1 977.

page 2592

AUSTRALIAN WINE BOARD

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

– Pursuant to section 29 of the Wine Overseas Marketing Act 1929 1 present the interim annual report of the Australian Wine Board for year ended 30 June 1977.

page 2592

AUSTRALIAN DAIRY CORPORATION

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

– Pursuant to section 29 of the Dairy Produce Act 1924 I present the interim annual report of the Australian Dairy Corporation for the year ended 30 June 1977.

page 2592

AUSTRALIAN AGRICULTURAL COUNCIL

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

– For the information of honourable members I present the resolutions of the 102nd meeting of the Australian Agricultural Council held in Alice Springs in August 1977.

page 2592

EUROPEAN COMMUNITIES

Mr HOWARD:
Minister for Special Trade Negotiations · Bennelong · LP

– For the information of honourable members I present a document entitled ‘Australia’s Trade and Economic Relations with the European Communities’, being a copy of a document which I handed to the Commission of the European Communities in Brussels last Thursday.

page 2593

SNOWY MOUNTAINS ENGINEERING CORPORATION

Mr McLEAY:
Minister for Construction · Boothby · LP

Pursuant to section 36 of the Snowy Mountains Engineering Corporation Act 1970 I present the annual report of the Snowy Mountains Engineering Corporation for the year ended 30 June 1977.

page 2593

AUSTRALIAN NATIONAL PARKS AND WILDLIFE SERVICE

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

Pursuant to section 52 of the National Parks and Wildlife Conservation Act 1975 I present the report of the Australian National Parks and Wildlife Service for the year ended 30 June 1977. Copies of the report will be sent to all members and senators as soon as bulk supplies become available. In the meantime, copies of the report have been placed in the Parliamentary Library and the Senate Records Office.

page 2593

PRICES JUSTIFICATION TRIBUNAL

Mr FIFE:
Minister for Business and Consumer Affairs · Fairer · LP

– Pursuant to section 35 of the Prices Justification Act 1973, 1 present the Prices Justification Tribunal Annual Report 1976-77 and its half yearly report for the six months ended 30 June 1977.

page 2593

BUSINESS OF THE HOUSE

Mr SPEAKER:

-The honourable member for Mackellar will resume his seat.

page 2593

PERSONAL EXPLANATION

Mr SPEAKER:

-The Deputy Leader of the Opposition has informed me that he wishes to make a personal explanation. Does the honourable gentleman claim to have been misrepresented?

Mr UREN:
Reid

-Yes, by both the Minister for Foreign Affairs (Mr Peacock) and the Prime Minister (Mr Malcolm Fraser) in that order. I made no outburst and I made no attack on the British workers. I made a clear, reasoned statement based on Labor Party policy. Copies of that statement are available in my office to any honourable member. I have made no statement other than the letter to the Sydney Morning Herald which was published this morning. My letter was concerned for British workers and

Australian workers. It was made in support of the human race. It was not based on greed or the expansion of nuclear war, as is the Government ‘s uranium policy.

page 2593

QUESTION

BUSINESS OF THE HOUSE

Mr WENTWORTH:
Mackellar

-Mr Speaker, I wish to raise a point of order arising from the Votes and Proceedings No. 56 of the House of last Thursday. The matter concerned is trivial in itself but the precedent it establishes is not trivial. It relates to the motion for the suspension of Standing Orders. You will be familiar with the fact that Standing Order 399 is very specific. The Standing Orders are for the protection of all members of this House and it is important that they be followed. Standing Order 399 states:

In cases of necessity, any standing or sessional order or orders of the House may be suspended, on motion, duly moved and seconded, without notice: Provided that such motion is carried by an absolute majority of Members having full voting rights.

It is very important that these formalities be observed. Mr Speaker, I draw your attention to page 374 of the Votes and Proceedings publication. You will see that the motion for the suspension of Standing Orders was not seconded. This, perhaps, is a matter of form but it is a matter of very considerable consequence. To allow the integrity of this vital Standing Order to be impeached by precedent would be negligent. Furthermore, if you look at the Votes and Proceedings and also at page 2557 of Hansard, of last Thursday you will see that the motion was not carried in the proper way by an absolute majority. It was said that it could be done by leave because there was only one voice in opposition. If this be so and if this be a precedent, things can be done by leave of the House and members’ rights can be taken away by a small minority who may be in the House at the time. Mr Speaker, you will know that very often there are only half a dozen people in the House. This precedent must not be allowed to stand. It is no use saying that at the subsequent division the requisite number of members were in the House. What happened in the subsequent division is not necessarily evidence. In a matter like this the forms of the House should be most scrupulously complied with. I ask you not, perhaps, to rule on this matter immediately because I know you would like to consider it, look at the documents and perhaps speak to the Clerk in regard to it, but to make it clear, in the interests of all members of this House that, when Standing Orders are suspended, the proper forms must be complied with. It is our protection and you are the guardian of our rights.

Mr SPEAKER:

– I shall indeed be the guardian of the rights of all members. This matter was drawn to my attention earlier. I am satisfied that the will of the House was discharged on that occasion. The record in Votes and Proceedings does not state that there was a seconder. On that point I will require seconding for suspension of Standing Orders on all occasions in future. As I mentioned at the outset with regard to this matter, I am satisfied that the will of the House was discharged adequately. I understand from what the honourable member for Mackellar has said that he does not challenge that that was the will of the House.

Mr Wentworth:

– Thank you very much. I do not challenge that it was the will of the House. I say that there should be no precedent.

Mr SPEAKER:

– I take the point the honourable member has made.

Mr Wentworth:

– Thank you, Mr Speaker.

Mr SPEAKER:

– In future, a seconder will be required for such a motion. With regard to the absolute majority that was required, the Votes and Proceedings records merely that the question was put and passed with the concurrence of an absolute majority. I listened to the debate in my chambers. As I understand it the protest is: How can it be known to be an absolute majority without a division being taken? I have inquired from the records as to past practice and it has been the practice in the past not to go to the necessity of dividing when there is unanimity in the House. There was unanimity on that occasion. In that respect, I am satisfied that it was a proper procedure.

page 2594

ASSENT TO BILLS

Assent to the following Bills reported:

Loan Bill 1977.

States Grants (Housing Assistance) Bill 1977.

Remuneration and Allowances Amendment Bill 1977.

Oilseeds Levy Bill 1977.

Oilseeds Levy Collection and Research Bill 1977.

page 2594

COMMITTEE OF PRIVILEGES

Motion (by Mr Sinclair)- by leave- agreed to:

That Mr Clyde Cameron be appointed a member of the Committee of Privileges in the place of Mr M. H. Nicholls.

page 2594

QUESTION

STANDING COMMITTEE ON ABORIGINAL AFFAIRS

Mr RUDDOCK:
Parramatta

-On behalf of the Standing Committee on Aboriginal Affairs, I present the final report of the Committee dealing with alcohol problems of Aboriginals, together with extracts of the minutes of proceedings. Reference copies have been placedin the Table Office and the Parliamentary Library. Additional copies will be available for general distribution in the near future.

Ordered that the report be printed.

Mr RUDDOCK:

– by leave- Just over a year ago I tabled an interim report in which the Committee stated:

Alcohol is the greatest present threat to the Aboriginals of the Northern Territory and unless strong immediate action is taken they could destroy themselves.

During visits to the mainland States, it became apparent that alcohol abuse among Aboriginals is just as devastating in some areas of those States as in part of the Northern Territory. Of major concern to the Committee is the devastation caused by alcohol in some traditional communities where the whole community is vulnerable. Evidence was given that in some communities more than half the total expenditure by the community is on alcohol compared with about 6 per cent for Australia as a whole. The Committee found that in metropolitan areas and country towns drinking patterns of Aboriginals are related to those of non-Aboriginals of similar socio-economic groups or where they have been integrated into the general community. However, as a higher percentage of Aboriginals are in the lower socio-economic group in metropolitan areas and country towns, the serious nature of Aboriginal drinking in these areas is apparent.

The report outlines the devastating impact of alcohol in some communities, including serious illnesses and injuries, accidents, fighting, neglect of family, promiscuity and the breakdown of traditional Aboriginal authority. Many deaths have been alcohol-related. After 18 months of detailed investigations and discussions with Aboriginal communities the Committee has concluded that there is no immediate solution to Aboriginal alcohol problems. It has, however, made a number of recommendations aimed at prevention and treatment. The Committee stresses that emphasis should be placed on prevention. The report discusses and makes recommendations on the many and varied psychosocial and environmental factors leading to excessive use of alcohol by Aboriginals. The Committee strongly supports initiatives already taken by Aboriginals and decisions made by communities themselves such as the prohibition of alcohol, the rationing of alcohol or the establishment of beer canteens. These steps, however, have not been completely successful because of ‘binge’ drinking arising from sly grog and drinking at towns and nearby outlets. The movement to traditional land has in some cases led to a reduction in alcohol problems. The Committee is also encouraged by the positive contribution being made by Aboriginal organisations such as Benelong’s Haven in Sydney, the Woma Committee in South Australia, and the system of police aides in Western Australia.

The Committee believes that if an Aboriginal community decides to allow alcohol there should be only one liquor outlet within that community, conducted as a licensed club or beer canteen with strict guidelines and conditions specified in licensing legislation. The Committee firmly believes that if a community decides to limit or prohibit alcohol that decision should be supported by all resources of Commonwealth and State laws. In this regard the Committee has reiterated the views expressed in its interim report concerning practical legislative changes that should be introduced to prevent sly grog being carried on aircraft, boat, taxi, private car and through the mail.

Other preventive measures recommended by the Committee to overcome the causes of alcohol abuse include the need for improved alcohol education. The Committee also suggests that Aboriginals make greater use of provisions of the Social Services Act to ensure that basic necessities such as food and clothing are provided to families instead of social security benefits being squandered on alcohol.

The question of alcohol treatment programs and facilities was also considered. Because most Aboriginal alcohol programs are at an experimental stage the Committee has recommended that they continue to receive government assistance until their effectiveness has been evaluated. The Committee also sees the need for continuing support for the recruitment and training of Aboriginal alcohol counsellors and encouragement of organisations such as Alcoholics Anonymous and Aboriginal sobriety groups.

During the inquiry the Committee was informed of problems arising from licensing legislation, especially the sale of alcohol to intoxicated or under-age persons and has recommended that existing legislation be more rigidly enforced.

Disruption to Aboriginal communities arising from their proximity to isolated liquor outlets is of serious concern. The Committee has made recommendations aimed at giving such communities every opportunity and assistance to put their case for objecting to the renewal of liquor licences before licensing courts.

The Committee has expressed disappointment that despite the fact that more than one year has passed since the tabling of the urgent interim report, little action has been taken on the recommendations. It is hoped that recommendations contained in the final report will receive prompt and urgent attention. I can only reiterate the unanimous view expressed by my colleagues that because of the devastating situation in some Aboriginal communities immediate action by Commonwealth and State governments is essential. This view is summed up in the foreword of the report which states that ‘unless there is a reduction in the effects of alcohol abuse among Aboriginals many programs designed to assist Aboriginals will be jeopardised ‘.

I would like to add that there are many people who, for the wrong reasons, attempt to gloss over the alcohol problems of Aboriginals in the mistaken belief that by disguising the problem they are in some way protecting the Aboriginals. This is illustrated by the following statement in a recent submission by the Department of Aboriginal Affairs to this Committee on the health problems of Aboriginals:

We view with caution more extreme claims about the extent of Aboriginal alcoholism. Consumption is often associated with only intermittent residents on the edge of towns.

There is no doubt that the view expressed above does not reflect the true position. It is certainly not the view of this Committee based on the evidence it received, or of the Senate Select Committee on Aborigines and Torres Strait Islanders in its report ‘The Environmental Conditions of Aborigines and Torres Strait Islanders and the Preservation of their Sacred Sites’, and the Senate Standing Committee on Social Welfare in its recent report ‘Drug Problems in Australia- An Intoxicated Society?’ Indeed, the Senate Standing Committee on Social Welfare voiced its concern when it said: . . . concern that the problem of alcoholism is much more acute among Aboriginals than in the rest of the community. Unless urgent action is taken part of our original Australian community may be wiped out by this epidemic. and it recommended:

That the Federal Government implement the recommendations made by Committees of both Houses on alcohol and its use by the Aboriginal communities.

I would therefore like to inform the people who are mindful of ignoring the recommendations of this Committee that they need to bear in mind the strong support that recommendations aimed at alleviating the serious alcohol problems of Aboriginals have in both Houses of the Parliament

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

-by leave-I want to associate the Opposition with the report of the Standing Committee on Aboriginal Affairs. I endorse what the Chairman of the Committee has said when he indicated that the members of the Committee are unanimous in the view that the alcohol problem among the Aboriginal people is of such a serious nature that no member of the Committee who returns to the next parliament would be prepared to see inaction on the recommendations that have been made. The Committee, having heard from some 205 witnesses, having received 139 submissions, most of them extremely informed and expert, haying sat for some 20 days and having visited some 65 communities in very remote parts of Australia where the alcohol problem of Aboriginals is in evidence, regards the problem as being extremely serious and I sincerely hope that the Department of Aboriginal Affairs especially will treat the report with the importance that it deserves and commence immediately to give effect to the recommendations.

Let me say in conclusion that if something of a dramatic nature is not undertaken the seriousness of the alcohol problem among Aboriginal people can easily reach genocidal proportions and this indigenous people, its cultures and traditions would stand in danger of total destruction.

Mr CALDER:
Nothern Territory

-by leave- I thank the House. I also would like to associate myself with this report and to say how pleased I was at the bipartisan approach to this inquiry by all members of the Standing Committee on Aboriginal Affairs. The Committee travelled extensively from Thursday Island to Perth, Melbourne to Darwin and to many points in between. The sub-committees of the Committee, assisted very ably by the staff, did a tremendous job in putting together a very sound report indeed. I support the remarks of my colleague the honourable member for Hughes (Mr Les Johnson), the Deputy Chairman of the Committee. I hope that some notice is taken of the recommendations in this report. There have been many reports in the past but very little notice has been taken of any of them. The Committee, under the able chairmanship of the honourable member for Parramatta (Mr Ruddock), has presented a very significant report and I commend it highly.

page 2596

STANDING COMMITTEE ON ABORIGINAL AFFAIRS

Mr RUDDOCK:
Parramatta

-I present a report from the Standing Committee on Aboriginal Affairs being a report that the Committee has been unable to complete its inquiry into health problems of Aboriginals.

Ordered that the report be printed.

page 2596

STANDING COMMITTEE ON ROAD SAFETY

Mr KATTER:
Kennedy

-I present a report from the House of Representatives Standing Committee on Road Safety, being a report that the Committee has been unable to complete its inquiry into safety aspects of motor cycles and bicycles in Australia, together with extracts from the transcript of evidence.

Ordered that the report be printed.

Mr KATTER:

-by leave-The Committee has presented two reports to Parliament since its appointment, namely reports on passenger motor vehicle safety and heavy vehicle safety. The Committee is currently inquiring into motor cycle and bicycle safety. This work is well advanced. In relation to this inquiry, the Committee has received 178 submissions, heard evidence from 93 witnesses, taken more than 1,800 pages of evidence and received many exhibits. The Committee has also conducted three inspections. The Committee had planned a further two days of public hearings and inspections on this inquiry. Preparation of the Committee’s report has commenced. The Committee recommends that it be reconstituted by the new Parliament in order that the inquiry into motor cycle and bicycle safety can be completed and that other areas vital to road safety, such as the human aspect, may be made the subject of inquiry. I would like to pay tribute to the members of the Committee who acted in a most bipartisan manner and were quite intense in their interests in the Committee’s activities. I particularly commend Mr Frank Hinkley, the Secretary to the Committee, who devoted himself to our interests and the interests of the inquiry in a manner quite beyond what one might expect from such an officer. The various people who worked with him also did a splendid job.

page 2596

JOINT COMMITTEE OF PUBLIC ACCOUNTS

Mr CONNOLLY:
Bradfield

-On behalf of the Joint Committee of Public Accounts, I present a special report on the proceedings of the Conference of Commonwealth and State Public Accounts Committees in June 1977.

Ordered that the report be printed.

Mr CONNOLLY:

-by leave-To the best of our knowledge the Conference of Commonwealth and State Public Accounts Committees was the first occasion since Federation that equivalent committees of the Parliaments of Australia have met with the common purpose of giving greater substance to Parliament’s traditional responsibility of effectively reviewing the financial activities of the Executive Government, to ensure that funds are spent as Parliament intended and that taxpayers do in fact receive value for money. It was the firm view of the Conference that the proper and efficient expenditure of public funds and the collection of revenue must remain the paramount concern of all public accounts committees.

During the Conference the mechanics of financial scrutiny by parliaments was examined and although no resolutions were recorded the following general observations are contained in the report: The function of public accounts committees is to exercise parliamentary scrutiny over the executive and administration with the object of stimulating a more effective use of public funds. With the continuing growth of government expenditure in real terms, an increase of almost 50 per cent in the past decade, there is a pressing need for more effective scrutiny by par.iaments both State and Federal. It was hoped that the increasing emphasis placed by the Auditors-General on efficiency auditing rather than merely regulatory auditing would enable public accounts committees to place more emphasis on their value for money inquiries.

It was necessary to aim for greater coordination between State and Federal public accounts committees to ensure adequate public accountability for expenditure across all spheres of government. It is worth making the observation that with the continuing use of special purpose grants parliaments should consider the development of new techniques to ensure more effective parliamentary overview, especially in those areas where there is 100 per cent Commonwealth funding such as tertiary education where the legal as well as the financial overlap between State and Federal responsibilities will require further clarification. Departmental and ministerial co-operation was also essential for the effective operation of public accounts committees. Public accounts committees would benefit by the use of expert guidance either as permanent or seconded staff and the use of expert witnesses. The Committee has had consultations with both the Auditor-General and the Public Service Board in the hope that a regular arrangement for the seconding of professional staff on rotation could be established. We believe this would be of advantage to both the Public Service and the Committee.

It was considered important that effective guidelines for the selection of priorities for inquiry be developed. The public accounts committees generally accepted government policy as a starting point for their investigations, and examined the performance and the achievement of objectives within the context of that policy. Closer collaboration between public accounts committees and their respective AuditorsGeneral, Treasuries and Public Service Boards was essential to ensure more effective scrutiny of expenditure. Closer co-operation and coordination between the public accounts committees and other parliamentary committees concerned with the estimates of expenditure was essential for parliamentary control over the public purse. In the context of the Federal Parliament, we believe it will be necessary to maintain a close working relationship between the Public Accounts Committee, the Expenditure Committee of the House of Representatives, the Senate Estimates Committees and the Senate Standing Committee on Finance and Government Operations. Apart from informal meetings of chairmen of these committees it would be advisable for staff to have a close working relationship to minimise potential duplication and to increase the impact of specific examinations. The effective functioning of public accounts committees and of parliamentary scrutiny depended upon a clear understanding by members of Parliament of the budgetary processes. Committees should be concerned with the nature and comprehensibility of the financial information presented to the Parliament.

The 1 1th Committee agreed in principle to an examination of the financial documents presented to Parliament. To assist members of the Parliament to appreciate the purpose and substance of the Budget documents, the Treasury was requested to re-issue a parliamentary handbook on Commonwealth and financial affairs. This has been done. While in theory the budgetary processes enable Parliament to review expenditure, in fact, despite the massive increase in government activities, the public accounts committee mechanism first introduced into the House of Commons in 1861 has not been significantly reformed, and it is doubtful that in its present form it can meet current responsibilities effectively. With the objective of overcoming some of these problems, the Committee has recommended to the Government substantial reforms to the Public Accounts Committee Act introduced into this House in 1951. These requirements would permit the Committee to examine regularly expenditure by statutory corporations and authorities which currently receive little effective parliamentary review, and widen terms of reference to include the review of efficiency audits conducted by the AuditorGeneral. This will ensure that the machinery of the Parliament is able to meet the expanded functions recently given to the Auditor-General.

It is unfortunate that the public at large appears to have the impression that Parliament is little more than a venue for gladiatorial contests between political parties and because of the nature of the system it is unaware of the considerable work done by parliamentarians of all parties behind the scenes in committees such as that of public accounts. Provided the Parliament is prepared to take the initiative, we are confident that it will be possible to achieve an improvement in the effectiveness of public accounts committees, the members of which have a unique opportunity to gain a deep insight into the workings of the Public Service and to examine actual expenditure of funds by conducting public hearings and publishing, when necessary, critical reports. The Conference opened up a number of challenging areas in which the parliaments of Australia can seek closer co-operation in the future. I commend the report to honourable members.

page 2598

JOINT COMMITTEE ON PUBLIC WORKS

Reports

Mr Keith Johnson:
BURKE, VICTORIA · ALP

-In accordance with the provisions of the Public Works Committee Act 1969, 1 present the reports relating to the following proposed works:

Beef Cattle Research Laboratory at Rockhampton, Queensland; and

Headquarters Operational Command at Royal Australian Air Force station, Glenbrook, New South Wales.

Ordered that the reports be printed.

page 2598

OVERSEAS-OWNED FIRMS: EXPORT OF FUNDS

Discussion of Matter of Public Importance

Mr SPEAKER:

– I have received letters from the honourable member for Oxley (Mr Hayden), the honourable member for Bradfield (Mr Connolly) and the honourable member for St George (Mr Neil) proposing that definite matters of public importance be submitted to the House for discussion today. As required by Standing Order 107 I have selected one matter; that is that proposed by the honourable member for Oxley, namely:

The economic instability caused by the massive export of funds by overseas-owned firms.

I therefore 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 HAYDEN:
Oxley

-Throughout this year, month by month, there has been a massive export of funds by Australian corporations and individuals. In most cases the export of funds has exceeded surpluses earned on the balance of trade or in any of our other external balances. The upshot of that is that it has injected economic instability into the general management of the domestic economy. One recognises that in its own way it is the most effective vote imaginable of no confidence in the Government by those people who shifted funds. In short, it means that people are shifting their money out on this massive scale because they do not have confidence in the way in which the economy is being managed and they are not likely to achieve that confidence because of the general thrust of economic management. Its implications are both immediate and at least medium term. Accordingly, when one sums together the impact of what has been happening as a result of the massive export of these funds and general movements on our external accounts it must be recognised in Australia today that we are in the grip of a serious balance of payments problem, that there is no evidence that the Government has a solution to those problems if, indeed, it fully acknowledges to itself how serious they are.

I think it is fair to acknowledge also, from the point of view of many business managers and financial administrators of business, that it is necessary for them to shift funds if they experience this uncertainty and if the result of that uncertainty being fulfilled in fact is going to be a massive loss of capital on the part of the various organisations. But on analysis it is quite apparent that in many instances the situation goes well beyond this. The facts are, as disclosed by the Australian Financial Review last week and by other media outlets, that there has been a massive export of funds to a degree which exceeds the earnings of particular corporations in the course of a given period. Two particular cases are referred to in those reports. They are the Ford Motor Co. of Australia and the Utah Development Corporation. In the case of the Ford company, it is reported in the Australian Financial

Review that its profit slumped from $9m to $2m last year. In spite of that, it declared a dividend of $ 12m and exported $10m. It exported much more that it had earned in that year. The evidence of that is, I repeat to underscore the point I made earlier, a want of confidence by the Ford Motor Co. of Australia in the management of the Australian economy.

In the case of the Utah Development Corporation, in the first nine months of this year it exported $130m in dividends but its net earnings were only $116m. It clearly needed an end loader to shift the massive profits it had been earning and, indeed, to dig into the various provisions which it had available for other contingencies so as to bolster the funds exported. It is shifting money out as is the Ford company on a massive scale- a scale which cannot be justified on the basis of earnings in the respective periods. Let us look at the situation of these two overseas owned organisations. Both have been the recipients of generous favour from Australian governments. The latter company, particularly, has received specially generous favour from the present Australian Government. I refer firstly to the Ford company. The Ford company is able to draw on the benefit of a high level of protection developed around the 85 per cent local content motor vehicle plan. That means that the Ford company has been able to extract significant profits from the Australian consumers- significant to the point where there is a most substantial consumer subsidy implicit in every sale that the company is able to make in this country. In referring to this matter, an Industries Assistance Commission report stated:

The high cost nature of the Australian market for passenger vehicles is confirmed by details of prices of similar vehicles in other major vehicle markets. While varying design rules, import duties, sales tax rates, freight costs, dealer margins, et cetera, prevent the precise calculation of price differences, the evidence indicated that similar vehicles sold at retail prices of up to SO per cent below the price in Australia.

That means very clearly that there is a massive subsidy on these vehicles. For instance, it means -because of the generous protection which has been extended to motor car manufacturers in this country and in this case, specifically Ford-that a motor vehicle retailing for, say, $9,000 in fact involves implicitly a consumer subsidy of about $4,500. It means that the Ford company is able to enjoy profits which, in a more freely competitive situation, it would be denied. It is able to enjoy profits on this generous scale because of the level of protection and then ship the money out of this country creating considerable instability in the domestic economy through effects on a weak and weakening external account.

Let us look at the Utah operation which is 85 per cent overseas owned. There is no disputing that it is a profitable undertaking. Last year its profit was $ 137m- that is the dividend it was able to declare. That is the profit it made after tax, after all its costs of operation and so on- a clear net profit of $ 137m. This year the profit is expected to be about $ 160m. I repeat: There can be no disputing that this is one of the most outstandingly profit enterprises in the world. It is probably the most profitable enterprise of any significant scale in this country. To substantiate that point, I seek leave to incorporate in Hansard a relevant table.

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

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

The document read as follows-

Mr HAYDEN:

-In summary, this table shows that the dividend as a percentage of shareholders funds for the Utah Development Company in the year to 31 October 1976- which was that company’s financial year- was 51.1 per cent. The next highest was the Utah Mining Australia Ltd with 15.5 per cent. I ask honourable members to contrast that with the Australian conglomerate the Broken Hill Pty Co. Ltd in its financial year to 31 May 1976. Its dividend, as a percentage of shareholders funds, was 3.5 per cent. By any measure ‘at all and being most liberally inclined to the Utah operation, it is a phenomenally successful, profitable company in this country. It is reaping out enormous profits and, on the evidence available, it is exporting those profits as rapidly as it can.

Indeed, it has gone beyond that. It is exporting much more than it earned in the latest period for which data is available. It is generously treated by government. I indicated how generously Ford, as a participant in the local content motor car plan, is generously treated. But Utah is even more generously treated. We introduced the coal export levy when in government and we make no apology for it because that redistributed profit from that company back into Australia, which would otherwise have gone overseas. In redistributing that profit back into this country we provided benefits for people in a myriad of areas where we took up responsibility, such as school dental services, community health services, better roads and improvements in urban environment, Aboriginal welfare and education. Those vast areas in which we did accept responsibility were assisted in some way by the redistributional processes. This was part of that redistributional process. Let us not have any argument that the present Government is opposed to redistribution. It supports it. The dispute really is about who benefits from that redistribution. This Government believes that it is better to redistribute away from the mass of people in this community to the advantage of influential and wealthy organisations like the Utah organisation- an organisation which is exporting as rapidly as it can its earnings in this country.

In the last two years-last year and this yearthe effects of the progressive reduction of the coal export levy mean a reduction of $60m in income otherwise available for the benefit of the Australian community. It means, in terms of the Utah organisation, a windfall gain and an addition to profits not being earned in any way by any additional exertion or contribution to the Australian community of $25m. I suppose that the Government will argue, as some of their spokesmen have argued, that Utah as an organisation displays a generous corporate spirit towards the Australian public. Let me put that argument to rest. By the end of 1976 the Utah Foundation had distributed the princely sum of $668,551 in donations within Australia in various welfare, research and cultural areas. That is not a bad return for such a small outlay. It received a $25m reward from the Government for a contribution to the community marginally more than half a million dollars. It is like sowing grains of salt and reaping harvests of gold, and the Australian public is providing the gold.

The Utah organisation has a bad foreign corporation image. It is sad to note that the Ford Motor Company is now listed with Utah because of its behaviour in relation to the export of massive amounts of funds earned in this country to its overseas parent body in a way which creates considerable instability in the Australian economy. Utah is manipulated by the Queensland Government to its own advantage. There may be an argument about the nature of industrial disputes. There may be some particular aspects of argument about the industrial dispute between Utah and the seamen. While the Government refuses to accept its responsibilities in ensuring that a more reasonable amount of the massive profits reaped from this country’s natural resources are being redistributed, to the advantage of this community, I think it not surprising that industrial organisations like the Seamen’s Union will react and will seek to claim that at least their members should enjoy some of that profit which they believe rightfully belongs not only to this country but also to posterity.

Let us look at the situation pertaining to Utah. It is earning $137m with only 3,000 employees. In comparison, the Broken Hill Pty Co. Ltd earns $66m with more than 60,000 employees. At least the Australian company is prepared to create jobs for people in this country and is prepared to contribute to the Australian economy and does not shift in a most destabilising way massive amounts of Australian earned funds. Funds earned from Australian resources belonging to Australian people; funds sent out of the country to the disadvantage of the people of this country because of the instability caused to the Australian economy through adverse effects on the balance of payments.

What has to be acknowledged by the Government is that the corporate interests of organisations such as Utah are not congruent with the Australian public interests. Utah is a price cutter. It is prepared to cut the throats of domestically owned Australian coal producers. As the honourable member for Blaxland (Mr Keating) pointed out in this House a few weeks ago, while the long term price for the sale of contract coal to Mexico is $A47 a tonne, in its spot contract sales Utah has been cutting the price to SA32.40 in Greece, SA34.55 in the Netherlands, SA34.20 in Belgium. So it is slashing the price by between $A13 and $A15 a tonne below the long term contract price. It is not operating in the best interests of the Australian community.

Let us look very quickly at the effects of that. Most serious effects are injected into the economy via the balance of payments. If we have a situation in which, because of the substantial increase in the net outflow of dividends and because of the absence of a capital inflow we are running a deficit on our balance of current account and capital account which in total well exceed the surplus on the balance of trade, we have a balance of payments problem. Our reserves are being eaten away. Since midSeptember official borrowings and the revaluation of gold have added $8 16m to our overseas reserves. Because of the clumsy and incompetent way in which that was handled- the area of incompetence is one area in which the honourable member for Denison (Mr Hodgman), who is interjecting, could make a distinct contribution because that is the only area in which he has any special qualifications- in spite of the official borrowings and the revaluation of gold adding $8 16m to our reserves since mid-September, our reserves have increased by only $ 1 97m. So there has been a massive outflow of $6 18m. The Treasurer (Mr Lynch) might perhaps like to argue that there has been an increase of $ 16m in reserves since the week of 26 October. That was largely due to the $85m earnings from the sale of raw sugar which had previously been held up in Tokyo Bay. So we are far from being out of the woods. What has to be done? The Ford company has to be reminded of the favourable position which it enjoys in this country and the advantages which it derives at the expense of the consumer. The Utah organisation has to be required to pay the withholding tax which applies to other companies. That would be a simple matter of introducing legislation to provide a special tax rate for foreign owned branches in this country which unlike foreign owned subsidiaries otherwise avoid their withholding tax liability. A special corporate rate of about 53 per cent corporation tax imposed on such branch organisations will overcome this problem.

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

Mr LYNCH:
Treasurer · Flinders · LP

– The matter of public importance which is before the House represents a continuation of the Opposition’s campaign to talk down the economy and to knock Australia. The Australian public is becoming fed up with the negative and destructive approach that has been adopted by the Australian Labor Party over the last 12 months. The honourable member for Oxley (Mr Hayden) in particular and a number of his colleagues have deliberately sought to create speculation about the exchange rate and to depress international confidence in our economy. That campaign has served only to demonstrate the bankruptcy of the Opposition’s own economic policies- policies which would lead to more inflation and to a return to the recession years of 1974 and 1975.

Today’s matter of public importance, I regret to say, is being brought before the House by a man who at every turn has tried to undermine the Australian economy. The honourable member for Oxley is a man who cannot stand the heat of the Treasury kitchen. One day he wants to be the Treasurer; the next he does not. One day he wants to be the Leader of the Opposition; the next he does not. The events of the past week have demonstrated the utter confusion in the minds of the honourable member for Oxley and the Leader of the Opposition (Mr E. G. Whitlam) about who should be responsible for economic matters in the Opposition party. That confusion continues in this debate. Why has this matter not been brought forward by the man whom I understand to be the shadow Treasurer, the honourable member for Adelaide (Mr Hurford)? It is a further indication of the divided and discredited group of misfits led by yesterday’s man.

Only last week members of the Australian Labor Party were indicating that the honourable member for Oxley was to have a major responsibility in economic matters under a Labor government. A few days later the Leader of the Opposition said publicly that the honourable member was to have responsibility for foreign affairs and defence matters because he had indicated that he no longer wanted to be involved in economic affairs.

Mr Hodgman:

– He was sacked.

Mr LYNCH:

– Yes. It is kind of the honourable member to say that he was sacked. There are other interpretations, but my friend from the back bench tells me that he was sacked. Yesterday morning the Leader of the Opposition said on an Australian Broadcasting Commission program that he had reversed his decision. No doubt he did so because once again the honourable member for Oxley had had a change of heart. It is difficult to understand exactly what is happening on the Opposition benches in regard to this matter, but apparently the honourable member for Oxley is still to take charge of defence matters, except that he now wants to become involved in economic planning- long term, medium term and short term. If the honourable member for Oxley is still incapable of making up his mind, the Leader of the Opposition could, of course, separate these functions and establish three new ministries- one for short term planning, one for medium term planning and a third for long term planning. The honourable member for Oxley could then, if he is capable of making up his mind, choose one of the three new portfolios or he could rotate between them in order to gain greater breadth of experience in government, which I understand he is anxious to do, before making a new challenge for the leadership.

If the events of last week prove anything, they prove that neither the Leader of the Opposition nor the honourable member for Oxley has the faintest idea of what the word ‘planning* means. The question must be asked: Why cannot the honourable member for Oxley make up his mind whether he wants to be Treasurer? It is this Government’s view that he was a failure as Treasurer. The job got on top of him. I read to the House part of an article which appeared in the Melbourne Age on 1 1 September 1975:

The Treasurer, Mr Hayden, yesterday struck a television reporter in the face with his briefcase at Sydney airport . . . The Channel 10 news director, Mr Tom Barnett, said yesterday: ‘Hayden took a full-blooded swing at Wilison with his briefcase .

I think that is unprecedented in Australian political life. The reason why the honourable member for Oxley lost control of himself was that he had lost control of the Australian economy.

Mr Keating:

– I rise on a point of order. The Opposition has brought forward a matter of public importance which is related to the outflow of funds, which has a bearing upon the currency of Australia. The Treasurer now is personally attacking the honourable member for Oxley in a way which I think is contrary to the Standing Orders. It is certainly not relevant to the matter under discussion.

Mr DEPUTY SPEAKER:

-Order! There is no point of order involved. If the Treasurer commits an offence against the Standing Orders in any way, action will be taken. So far the Treasurer has not contravened the Standing Orders.

Mr LYNCH:

– What I am seeking to do is to expose the man who has created more speculation against the Australian dollar than has any other man in this country. I believe that that exposure needs to be put on the record. The honourable member for Oxley brought down a Budget with an estimated deficit of $2.8 billion, but by January 1 976 it was expected to run out to almost $4.7 billion. He based his Budget on an increase in real gross non-farm product of 5 per cent. The result was an increase of only 2 per cent. He said that his monetary policy would not be fully accommodating to inflation. Yet he presided over a growth in the money supply of about 20 per cent on an annual basis by the end of 1975.

This debate concerns very heavily the question of capital flows I turn to what happened to private capital flows under the previous Government. During the period in which it was in office there was a net outflow of private capital across the exchanges of more than $500m. The honourable member for Oxley was the man who triggered speculation against the Australian dollar by his grossly irresponsible comments on 7 September last year. He wants to repeat that episode this year. He purports to be an economic rationalist but writes in Fabian pamphlets about bringing in an excess profits charge and a capital gains tax and about extracting death duties in the form of property rather than cash. I ask the honourable member for Blaxland (Mr Keating), who will follow me, to say whether the honourable member for Oxley in this debate is saying that the Opposition would bring back the coal excise levy or whether it would abolish the investment allowance which the honourable gentleman, I recall, is on the record as saying that it would.

I turn specifically to the question of whether there is any economic instability as a result of funds being repatriated by foreign owned companies. The fact is that Australia s external position is now strengthening visibly and will continue to do so as the year proceeds. The trade account has turned around sharply since the March quarter, with the rate of importing slackening and exports recovering. There was an overall balance of payments deficit of $46m in September, after a deficit of $382m in August. There was a trade surplus of $ 151m in September, after a surplus of $81m in August. The current account of the balance of payments has firmed through the September quarter, continuing the underlying strengthening in Australia’s trading position which was evident in the June quarter. As this strengthening becomes. more widely realised, as inflation is further reduced, we can expect to see a reversal of the recent speculative positions taken against the Australian dollar. Indeed I confidently expect that the October balance of payments figures will show a net inflow of private capital.

In the meantime, pending a return to more normal levels of private capital inflow, the Government has expanded its overseas borrowing program. Taking 1977-78 as a whole, we currently expect to borrow overseas sums totalling about $1% billion. Our demonstrated capacity to raise funds of this order at low interest rates on private capital markets is, in itself, of course a reflection of international confidence in the Australian economy and in the policies being pursued by this Government. The effect of these borrowings has been to keep reserves at relatively comfortable levels. Reserves have not been unstable. On the contrary, they have been maintained at relatively high levels by international standards.

The progress which the Government has made in restoring economic stability is now becoming apparent in many areas- for example the emerging evidence of new capital investment projects moving ahead. The figures which I am about to quote deny completely the assertions of the honourable member for Oxley that the international instability, of which he spoke and which I completely reject, has had any damaging effect upon confidence in Australia. The honourable gentleman should be aware of the Commonwealth Statistician’s latest survey which indicates that private enterprises expect to increase their aggregate new capital expenditure in the six months to December by no less than 14 per cent, in seasonally adjusted terms, on the level of the previous six months. On the same basis, the expected increase in manufacturing industry is 33 per cent, and in mining it is 66 per cent. Can this be seen as a lack of confidence? Of course not.

Let us look abroad, to the latest figures which are emerging from the various major countries from which we have drawn a very considerable inflow of foreign funds for investment purposes in the earlier years in which we were in government, and which are now returning. The latest United States Commerce Department survey of expected capital expenditure by United States affiliates in Australia points to an increase of about SO per cent in 1978 in the mining sector. This is a clear sign of the increasing confidence being shown by overseas investors in the policies of the present Government. If one sees further evidence that confidence has returned, one needs only to look at the number of significant projects now moving in the minerals sector. Construction has already commenced on the $256m Norwich Park coking coal project which will involve additional employment opportunities for 1,000 men during the construction period. In Western Australia construction has begun on the $100m Agnew nickel project, and plans are in hand to expand the Robe River, Mount Newman and Hamersley iron ore projects, at a total cost of $600m. In addition, the impending commencement of $300m worth of petroleum exploration operations at the Exmouth plateau has now been announced. The proposals to develop the North West Shelf natural gas resources are also entering the project definition stage.

In manufacturing industry, new projects amounting to $600m were announced in the Press during the recent June quarter. Major new investment projects in this country now under way total almost $2 billion. In addition, new projects involving an investment of almost $1.6 billion are due to start this year. The fact is that there are now clear indications that long term foreign investment is reviving. In 1975-76 foreign investment in Australia amounted to only $128m. Last year the amount was more than six times higher, at $826m. As time passes, this revival in foreign investment will provide jobs and security for thousands of Australian families. It will also provide more resources to governments, Commonwealth and State, by way of taxation. Our political opponents sought in government to drive away foreign investors, and they did. Oil and mineral exploration came to a standstill. Major projects were deferred or abandoned. The Opposition wants to do the same thing again.

I turn now to the question of the repatriation of profits. It has been longstanding exchange control policy, which the previous Government did not alter, to allow repatriation of profits without restriction. Indeed that is in accord with the requirements of Article VIII of the International Monetary Fund and is obviously sensible if Australia is to continue to be a net importer of capital. Under existing tax law, which was not changed by the former Government, a foreign company that operates here through a branch rather than through a subsidiary company incorporated or otherwise resident in Australia may withdraw its profits without incurring a liability for dividend withholding tax. This of course arises because a subsidiary is a separate legal entity, whereas a branch of a foreign company is not. Profits withdrawn by a foreign company from its Australian branch are, therefore, not dividends.

I informed the House on 27 October that the Government had this whole matter under review and that the Treasury had papers on the subject under preparation. These papers have now been received, but it is hypocrisy for a former Treasurer, a man who showed no interest in the subject when in government, to be critical of the present Administration. I do not want to go into the details regarding the Utah organisation, the Ford organisation or any other organisation, except to say that the honourable gentleman, with his socialistic aspirations, would obviously seek to re-introduce the coal export levy in relation to Utah, would withdraw the investment allowance and would put up the communist Seamen’s Union against Utah. I make no comment about the companies because the issue which I mentioned is under active examination at present.

This Government has made significant progress in the fight against inflation. Its policies are now starting to produce results on both the domestic and the external fronts. More importantly, we have reduced the level of inflation from almost 17 per cent under the previous Government to the point where Australia’s rate is now about the same as the average for its trading partners. There is no doubt that we are well on the way to restoring full economic health to the economy and that 1978 will be the best year of economic performance in more than five years. We- every man and woman on this side of the House and the Senate- deplore the constant attacks by the Opposition and its desire to pursue a destructive campaign with the intent of talking down Australia.

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

Mr KEATING:
Blaxland

– I rise to support the honourable member for Oxley (Mr Hayden) in the discussion of this matter of public importance, namely, the economic instability caused by the massive export of funds by overseasowned firms. This is a matter to which the Treasurer (Mr Lynch) did not address himself. It is an indication of the Government’s desperation that much of the Treasurer’s speech was devoted to a personal attack upon the honourable member for Oxley. The real problem is the absence of Government policy in the handling of the balance of payments problem which has caused a massive flight of funds from Australia. This has created economic instability and has produced a want of confidence in the parity of the currency among firms resident in Australia, particularly international companies which have either branches or subsidiaries operating in Australia. It is worth recounting for the record that since mid-September the outflow has been $6 18m. Despite official borrowings and a revaluation of gold holdings which added $8 16m to our reserves, the reserves rose by only $197m. Even since the Acting Treasurer announced one month ago that the Government would be securing a $ 1,700m borrowing outside Australia there has still been a $253m outflow from Australia. So the flow continues because outflow begets outflow. Once there is a lack of confidence and once there is speculation, of course companies cannot take a chance and they shift their profits offshore.

Importers in Australia get chary about the state of the dollar and they pay instantly for their imports. Instead of extending their payments over a normal period they start bunching them and paying forthwith. The result is a propensity to intensify the outflow which of course undermines the whole basis of the currency. We have seen this trend over a number of years now. The invisibles are growing rapidly in the balance of payments picture despite some healthy trade surpluses. The largest factor in the invisibles is represented by dividends. The investment hump of the 1960s is now the dividend hump of the 1970s. Dividends are not being reinvested in Australia. Companies are obliged to repatriate dividends because they believe they will suffer a capital loss if the currency changes.

The two companies which have raised this matter and brought it to public gaze are Utah International and the Ford company, which both operate in Australia. Utah has shipped $130m out of the country, although its earnings were only $1 16m. In other words, it has been shifting every cent it can out of Australia to avoid the possibility of a capital loss. Of course the Treasurer blames the honourable member for Oxley for this problem. I should just like to recount to him a statement by Hill Samuel Australia Ltd in its October bulletin on the Australian banking and capital markets. Hill Samuel is a merchant banker with whom the Treasurer would be acquainted. The report states:

The Government must take a lot of the blame for allowing this situation to develop and for not taking corrective actions which were clearly needed many months ago. As we had suggested in recent reports, if the Government had announced substantial overseas borrowing arrangements earlier, the major part of the capital outflow experienced in recent months would not have eventuated.

We are aware of several companies who elected to remit funds abroad and we would add here that none of them indicated that their decision was a result of announcements made by Mr Hayden or other Labor spokesmen, or newspaper articles. The weakness of the Australian Dollar was evident, not only to companies in Australia, but also to those overseas companies which have subsidiaries in Australia . . .

The report went on: … no responsible actions being taken on the Australian Dollar front by the Fraser Government, there was only one correct action for corporations exposed to exchange risks to take- i.e. to remit their funds, where due, overseas.

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

-Who said that?

Mr KEATING:

– That was the conservative merchant banker, Hill Samuel Ltd, as set out in its October bulletin on the state of the Australian capital market. So much for the Treasurer’s mealy-mouthed attack on the honourable member for Oxley and on statements by members of the Opposition. The situation is as I have stated. There is a malaise in government thinking in terms of the balance of payments problems and there is the villainy of companies resident in Australia, particularly Utah, which are acting against the Australian national interest. Utah is the company which advertises: ‘We are backing Australia’. It is backing Australia all right. It is knifing Australia in the back by producing a run on the currency and by fostering speculation. Companies look at the statistics. Look at the way this company has been treated in Australia. The Government obliged it by lifting the coal export duty levy. This company was paying $75m in levy in 1976. That is now being phased out and eventually Utah will be paying nothing. That is despite the fact that the company’s profitability rose by 36 per cent from $100m to $136.9m in that year and despite the fact that it paid out $76m in duty. Of course the company can afford to pay, but it has been treated very generously by the Australian Government. Yet not only does it export and repatriate its earnings from Australia but it does it in such a way and under such a corporate structure as to also even absolve itself from paying the normal withholding tax that other subsidiaries of foreign companies pay. So the company is at fault on two accounts-evading the tax laws and exporting capital when the Australian Government is doing its best to save the currency. That is the performance of Utah.

Next is the Ford company. Sir Brian Inglis, chairman of Ford, is part of Mr Fraser ‘s economic consultative committee. So there is a real Trojan horse operation. One of the main offenders in this matter is right inside the Government’s councils giving advice. Ford is a company which is protected, as the honourable member for Oxley mentioned, by the 85 per cent content plan for motor vehicles. Its cars are over 100 per cent dearer than similar vehicles in the United States of America. There is a 100 per cent premium on its cars manufactured in Australia. It is a company which has constantly resisted rationalisation of the industry. When the Australian Labor Party was in government, Sir Brian Inglis was parading here telling us that he would not forgo product identification for rationalisation. He has to have the Ford stamp on the company’s gearboxes. The company will not have any rationalisation. Yet this company, which is protected, is prepared to ship its money out of this country to the detriment of the Australian currency. It is prepared to do this in the face of policies of the Australian Government, a government to which Sir Brian Inglis is a principal adviser.

So much for the goodwill of these two companies operating in Australia. What is underlying their activities and their motives? What is underlying them is their lack of confidence in the Fraser Government’s management of the balance of payments problem. That is the real reason why they have shipped money out of the country. They have no confidence in Mr Lynch as the Treasurer or in the Prime Minister (Mr Malcolm Fraser). It ill becomes the Treasurer to attack the honourable member for Oxley when he himself is the laughing stock of Australian business. There is no single personality on the Government side who is thought less of in corporate Australia than Mr Lynch. Let that go on the record. Let us deal now with some of these companies. The Taxation office should be looking at the behaviour of Utah, Conzinc Riotinto of Australia Ltd, Comalco Ltd, Esso Australia Ltd, and even Broken Hill Pty Co. Ltd, an Australian company. They are large enough to have closer scrutiny by the Taxation Office. It is far better to do that and adjust the laws so that these kinds of situations do not arise and pay for the extra staff to have these companies policed than to find one day that our tax laws are wanting and that we have a hole large enough to drive a horse and cart through in as much as the Utah company is a branch of Utah International and not a subsidiary in Australia. I think all of those companies should come under scrutiny. That is the point.

The currency has been depreciated. There has been a tax upon it because of the behaviour of these companies brought about through the bungling of the Government in its management of the balance of payments problem and the ineptitude of two very well looked after foreign companies in Australia which are acting contrary to the Australian national interest, flagrantly disregarding the interests of Australia in managing and stabilising its currency, which is crucial to a trading nation and particularly a nation which is largely dependent on investment for the development of its industries. Shame on these companies and shame upon the Government for letting them get away with it.

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

Mr MOORE:
Ryan

– I listened with interest to the contributions made by the two spokesmen from the Opposition. They were just diatribes stemming from the anti-business, business bashing, anti-profit and anticompetitiveness instinct of the Australian Labor Party. It is very disappointing, because only recently in Pitt Street I heard that the honourable member for Oxley (Mr Hayden) was around town and was telling the business doyens of Pitt Street: ‘Look, we really are not a socialist party. We understand business. We know all about this business of profit’. Really he was getting on very well with those people. I congratulate him on his approaches. Those people were sucked in by the proposition. Indeed, I hope the Treasurer (Mr Lynch) makes available some of the Fabian pamphlets. I have not read them but if they are half as good as the stories the honourable member for Oxley has been putting over they must be pretty good.

I come to one or two other things which the honourable member for Oxley said. After what he said, I have no doubt at all as to why the Leader of the Opposition (Mr E. G. Whitlam) was thinking of sending him to the Foreign Affairs portfolio or the Defence portfolio should Labor come to office. The honourable member alluded to the problems of the Utah company. He said: ‘Look at Utah’s massive pay-out. Fiftyone per cent of its profit is paid out overseas’. Then he compared that pay-out with BHP’s payout. I think the figure he cited was about 3lA per cent. Well, what is the difference? Anyone would know that BHP is confronted with a massive expansion program. Any internal revenue retained profits will be mighty handy in the development of the North West Shelf, not to mention other areas. BHP is incurring massive losses in steel in Australia and in the development of its mining operations. Utah is not in a position to engage in any further expansion at this moment because of labour problems in central Queensland. The Norwich Park project has not been allowed to go on because of labour troubles in that area.

The honourable member for Oxley also went on to discuss some of the questions relating to why governments move out of currencies. When we talk about international currencies, we have to understand that we are going through a period of enormous change. I do not think any honourable member would have foreseen such a tremendous improvement in sterling or the enormous fall in the American dollar in the last 6 months. The American balance of payments situation is quite the most drastic I have seen since the War. Its repercussions are yet to be felt. We still have not seen the real consequences of it. We have seen how the European currencies have withstood the onslaught of the huge deficits coming from America. The warning signals are there. The price of gold is moving up. That is a bad sign for anyone involved in international trade. Any person employed as the treasurer of a multinational company would be very concerned at the moment not to get his company locked into currencies which may have some difficulties. I do not doubt for a moment that if I were the treasurer of one of these companies I would be looking at the options involved in covering the company’s position. This is why I believe there is a tremendous need in Australia to introduce a forward exchange cover market. If we had had these tools of financial management, a lot of the problems with currency runs that we have been experiencing in the last 6 months to a year would not have occurred.

I turn now to the view of overseas people and how they look at the question of evaluating what they should do with funds in Australia. Firstly, they look at costs within the nation. Then they look at the record of industrial trouble; that is a very sad story. Then they look at the standard of Australian management- and that is not always good. Then they look at the question of exchange rates. Then they look at economic management in this country- whether the government has the will to dominate the economy, to bring inflation under control and to bring a sense of proportion back to the nation as a whole. Finally, they look at political stability. They want to know whether the government will honour contracts, whether it will honour agreements, whether it will honour undertakings given. They look at the ALP and its record. A Labor government would welsh on the uranium contracts. That has been said publicly. They look at the New South Wales Government and the way in which it welshed on the coal leases. These are the sorts of records which overseas people look at. They add to that the basic anti-business view of the ALP and therefore they are concerned about the prospects of having a socialist government in this nation.

I am not referring to any one particular area of investment; I am talking about America, the Continent and Japan. These are always the points that come out: Costs, labour problems, political stability and the exchange rate as a consequence of that. It is from these areas that they make their judgment as to whether to invest in Australia, whether to hold their position in Australia or whether to withdraw their funds. This comes within the area of judgment and speculation. I hope people will understand these matters because we will never be able to control speculation. There will always be an element of this in exchange rate and currency movements. This is particularly so at the moment because overseas patterns are so uncertain. If this were really understood, there would not be some of the hysteria that goes on about exchange rates and we really would not have to face half of the vexing problems that confront us.

Finally, I wish to say a few words about multinationals. They are one of the great whipping horses around here. They can be readily thrown off at. Apparently one of the problems with Utah is that it makes a lot of money. What a tremendous crime! There are an enormous number of multinationals and major companies in this country which lose millions of dollars a year. We do not hear too much about them. But because Utah has made a success of its operations, it is belted roundly for its troubles. I would have hoped Utah would be given the opportunity to develop, to use its resources, to use its research and techniques and to use the funds it undoubtedly has in the future development of this nation. Had the opportunities been provided to Utah, I have no doubt these funds would not have been removed. We have to look at the situation in the context of the management of a multinational group. If it is prohibited or shut out from one particular market clearly it will move somewhere else, and the funds will be lost to Australia if there is an alternative investment in some other country. In making that judgment, the group will have to look at the same old things- costs, labour relations, political stability and currency. If those four factors are met in some other country and are better than those available in Australia, clearly the company will move to that other country. It is up to us to provide and ensure the proper climate for the development of this nation. These are the people who can provide us with the jobs, the know-how and the techniques.

There are times when such companies act not in the national interest but in their own interest and it is up to the government of the day to ensure that the interests of this nation are looked after. Australia’s interests should not be left to the rhetoric that is used to frighten people to the hills. We should get these companies in, get them involved in projects and then get the economic process going. Once we have those companies here they are then open to negotiation. No person who has thousands of millions of dollars involved in any particular area will back off from sensible negotiations. This is why I should like to see this nation, which will always be dependent on foreign currency, foreign money, for its development in the foreseeable future to go out and welcome foreign investment.

I come to the warning point. It is most important that we offer partnerships and not just give away equities. It is most important that as far as possible we should turn to the question of loans rather than equity. Of course we are not going to be able to get all the money in on loan account only; there will have to be an equity sweetener. There is a tremendous need to understand that Australia is capital hungry. Its needs in the foreseeable future in respect of the known projects alone are enormous. We must use our negotiating skill, our political stability and our economic management to ensure that these people, when they come to Australia, invest their money in Australia and that the money is used in the national interest. The government of the day has a great responsibility to see it through.

I see very little merit in the raising of this matter for discussion. It is probably one of those things that ties in with the nervousness of some people in the Opposition who are facing an election. Because of this they are kicking around any can they can find. They are trying to kick a nationalistic can but really they are belting confidence and belting business. They are back to their old tactics which have proved to be so hopeless in the past and which will again prove to be so when election day comes round.

Mr DEPUTY SPEAKER (Mr Lucock:

-The discussion is now concluded.

page 2607

COAL RESEARCH ASSISTANCE BILL 1977

Bill presented by Mr Anthony, and read a first time.

Second Reading

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

– I move:

The purpose of this Bill is to establish a Coal Research Trust Account for the receipt and disbursement of funds for coal research. This follows the announcement by the Treasurer (Mr Lynch) in his Budget Speech of 16 August 1977 of the Government’s decision to finance increased coal research by a levy of 5c per tonne on coal produced in Australia. The primary sources of funds for the Trust Account will be amounts received by increasing from 10c to 15c per tonne the existing excise on non-State owned black coal production in Australia together with amounts received from States in respect of brown coal and State-owned black coal not covered by the existing excise.

In addition to identifying the source of funds the Bill describes the area of research to be covered and the method of disbursement. The Bill provides for the establishment of research advisory committees to provide advice and recommendations on appropriate research programs to be funded from the Trust Account. The importance the Government places on this area of activity is reflected in the contribution which the Government makes directly through the valuable coal research activities of the Commonwealth Scientific and Industrial Research Organisation. More recently the Government decided to fund, in partnership with interested State governments and the Government of the Federal Republic of Germany a study which will look at the economic and technical feasibility of a plant to convert Australian coals to synthetic liquids.

As the major technological effort in this field is undertaken overseas, it is vital that Australia should pursue opportunities for international cooperation in coal research. In this context an agency-to-agency agreement on coal research co-operation was recently signed by the Department of National Resources and the National Coal Board of the United Kingdom. Similar agreements with the United States ‘ Energy Research and Development Administration and with the United States Bureau of Mines, which have recently been subsumed within the new United States Department of Energy, are at an advanced stage of negotiation. Part of the funds raised by the coal research levy will be set aside to stimulate research co-operation under each of these agreements.

Expenditure on coal research and development in Australia has been extremely modest. In 1972-73 it totalled $5m rising to $9.5m in 1976-77. The measures now being introduced are expected to increase this figure by approximately $4m. The need for an expanded energy research and development effort has been recognised by Ministers with energy responsibilities from each of the major Australian political parties. At the 19 August 1977 meeting of the Australian Minerals and Energy Council, the Council expressed the unanimous view that there is a need for an active and co-ordinated national energy research and development effort. This judgment was based on the recognition of Australia s vast coal reserves; the certainty that without further major oil discoveries Australia will become increasingly dependent on imported oil; and the increasing attractiveness of coal both as a source of energy by itself and as a proven basis for the production of liquid fuels for the transport and petrochemical industries. The State Ministers agreed that there was need to pursue coal research and investigate feasibility in respect of better definition of coal resources, improved mining techniques, conversion of coal to gas or liquids and improved combustion of coal.

This Bill and associated measures I am about to introduce represent an important step towards achieving these objectives. I commend this Bill.

Debate (on motion by Mr Keating) adjourned.

page 2608

EXCISE TARIFF AMENDMENT BILL (No. 2) 1977

Bill presented by Mr Anthony, and read a first time.

Second Reading

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

– I move:

The purpose of this Bill is to increase the existing excise on coal from 10c to 15c per tonne for the purpose of financing coal research. The existing excise of 10c per tonne is used to finance the Coal Mining Industry Long Service Leave Fund. The additional 5c per tonne will be used for coal research. This follows the statement by the Treasurer (Mr Lynch) in his Budget Speech on 16 August 1977 that the Government would levy 5c per tonne on coal produced in Australia, to which I referred in introducing the Bill to establish a Coal Research Trust Account. I commend the Bill.

Debate (on motion by Mr Keating) adjourned.

page 2609

STATES GRANTS (COAL MINING INDUSTRY LONG SERVICE LEAVE) AMENDMENT BILL 1977

Bill presented by Mr Anthony, and read a first time.

Second Reading

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

-I move:

The purpose of this Bill is to amend the States Grants (Coal Mining Industry Long Service Leave) Act 1949 to provide for two-thirds of the amounts raised as duties of excise on coal to be paid into the Coal Mining Industry Long Service Leave Fund. At the present time this Act provides for all amounts raised as excise on coal to be paid into the Fund. However, following the announcement by the Treasurer (Mr Lynch) in the Budget Speech of the introduction of a levy of 5c per tonne on coal produced in Australia to finance increased coal research, the excise on coal is being increased from 10c per tonne to 1 5c per tonne for this purpose. The effect of this amendment is to provide for two-thirds of the amount raised as duties of excise on coal after 2 a.m. on 17 August 1977 to be paid into the Coal Mining Industry Long Service Leave Fund. The remaining one-third will be paid into the Consolidated Revenue Fund for appropriation to the Coal Research Trust Account. I commend the Bill.

Debate (on motion by Mr Keating) adjourned.

page 2609

APPLE AND PEAR STABILIZATION AMENDMENT BILL (No. 2) 1977

Bill presented by Mr Sinclair, and read a first time.

Second Reading

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

– I move:

The purpose of this Bill and of the two Bills which I am about to introduce is to extend the support provided under the apple and pear stabilisation scheme to exports of apples and pears in the 1978 export season. Honourable members will recall that the Liberal-National Country Party Government, after the receipt of the Industries Assistance Commission report, decided that it was not sufficient that the assistance to the industry be phased out. Therefore the

Government is introducing yet again a continuation of apple and pear stabilisation in this legislation. Application of the stabilisation scheme to apples in the 1978 export season as in the 1977 season will be based on a maximum level of support of $2 per box and a maximum quantity eligible for support of 2 million boxes. Support will be limited to sales ‘at risk’ to Europe, including the United Kingdom.

The 1977 levels of pear export support will also apply to the 1978 season, namely, a maximum level of support of 80c per box and a maximum quantity eligible for support of 1.4 million boxes. Support will continue to be limited to sales ‘at risk’ to Europe, including the United Kingdom, and North America. The Government is also consulting with the States on a supplementary assistance program for 1978 which could involve an additional $ 1 m to assist apple exports to Europe, including the United Kingdom.

The stabilisation scheme has operated since the 1971 season and has been of particular importance to the apple and pear exporting States of Tasmania, Victoria and Western Australia as it provides a measure of stability in the extremely uncertain climate that has prevailed in the export field for several seasons. The continuation of the scheme in 1978 at the 1977 levels of support will allow the export industry further time to adjust to the very difficult economic environment in which circumstances have placed it.

It is clear that substantial adjustment has already occurred, particularly under the provisions of the recently concluded fruitgrowing reconstruction scheme. The number of bearing apple trees in Australia has fallen by an estimated 25 per cent over the past four years, while the volume of apple exports in 1977 covered by the stabilisation scheme was about one half the 1975 level. These facts give me no particular pleasure. They illustrate the extent to which the products and policies of the European Economic Community prejudice our opportunities and illustrate how the fruit industry, in common with other industries in Australia, is disadvantaged under the present access arrangement within the European Economic Community and, of course, in that old, traditional market of the United Kingdom.

Detailed 1977 season export market returns and consequent final stabilisation results are not known at this stage, but European apple market prices were exceptionally high because of poor crops in Europe following the 1976 drought and a marked reduction in supplies from southern hemisphere countries. The apple and pear stabilisation scheme played a significant role in underpinning the 1977 export operation, particularly in the pre-shipment period when there was considerable uncertainty in the industry. Although the European apple market is a volatile one, there is some early prospect that prices may be favourable in 1978, because of a poor 1977 European apple crop. I believe that the early announcement of these support measures will sustain existing industry confidence, and enable preparations to proceed for marketing of the 1978 crop. I commend the Bill to honourable members.

Debate (on motion by Mr Scholes) adjourned.

page 2610

APPLE AND PEAR STABILIZATION EXPORT DUTY AMENDMENT BILL (No. 2) 1977

Bill presented by Mr Sinclair, and read a first time.

Second Reading

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

– I move:

This Bill is complementary to the Apple and Pear Stabilization Amendment Bill (No. 2) 1977, which I have just introduced. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned-

page 2610

APPLE AND PEAR STABILIZATION EXPORT DUTY COLLECTION AMENDMENT BILL (No. 2) 1977

Bill presented by Mr Sinclair, and read a first time.

Second Reading

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

– I move:

This Bill, like the Bill I introduced a moment ago, is complementary to the Apple and Pear Stabilization Amendment Bill (No. 2) 1977. The three Bills need to be read together. The purposes of this Bill are set out in my second reading speech for the Apple and Pear Stabilization Amendment Bill (No. 2) 1977. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2610

COMMONWEALTH GRANTS COMMISSION AMENDMENT BILL 1977

Bill presented by Mr Street, and read a first time.

Second Reading

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

-I move:

The purpose of this Bill is mainly technical. In terms of the Commonwealth Grants Commission Act 1973, the Grants Commission will have one too few members after 30 November to exercise its functions under the Act. As it is not intended to appoint any further members for the time being, the legislation now proposed will have the effect of removing this impediment. At the sams time, the opportunity has been taken of reducing the maximum number of members to four in accordance with the Government’s recent decisions to that effect. I commend this Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 2610

HOMELESS PERSONS ASSISTANCE AMENDMENT BILL 1977

Bill presented by Mr Hunt, and read a first time.

Second Reading

Mr HUNT:
Minister for Health · Gwydir · NCP/NP

That the Bill be now read a second time.

The purpose of the Bill is to extend for a further period of 12 months those provisions of the Homeless Persons Assistance Act which are due to expire on 13 December 1977. The Homeless Persons Assistance Act was introduced in December 1974 on the basis of a report by a Working Party on Homeless Men and Women, which recommended, amongst other things, that capital grants totalling up to 35m per year should be made available over a three-year period to voluntary agencies and local and statutory authorities for approved projects, such as night shelters, reception and assessment centres, hostels, flats, day centres, special clinics and detoxification units, in order to upgrade and replace existing inadequate accommodation and to build new facilities for permanently and chronically homeless men and women.

The Act provides for capital grants to be made to eligible organisations, which are defined as non-profit organisations, local governing bodies and charitable or benevolent trusts, towards the full cost of purchasing, constructing or renting buildings, including the purchase of furniture and equipment. It also enables the Commonwealth to pay 50 per cent of the salary of a social welfare worker employed at a homeless persons assistance centre. Approved organisations may also be paid a daily subsidy at prescribed rates for each homeless person to whom both food and accommodation are provided- 75c a dayand a subsidy- 25c a day- for each meal supplied to non-resident homeless persons.

In accordance with one of the recommendations of the 1973 Working Party that the program should be reviewed after three years, the major provisions of the Act relating to capital and rental grants are operative until 13 December 1977. The salary and accommodation and meal subsidy provisions are not subject to the three-year prescribed period. In his second reading speech the then Minister for Social Security said that the purpose of making the legislation subject to a three-year ‘prescribed period’ was to ensure that the scope, value and standards of the services provided would be monitored and an assessment of the total program made prior to the expiration of the first three years of its operation. In accordance with this intention, a review of the operation of the Act has been carried out by the Department of Social Security, based on an analysis of a national sample survey of the views expressed by homeless persons and by the agencies caring for them. The Minister for Social Security (Senator Guilfoyle) has also received submissions from the Advisory Committees on Homeless Persons set up in each State to advise the Minister on matters relating to the administration of the Act.

Briefly the conclusions reached by this review were that the operation of the Act should be extended beyond 13 December and that the provisions of the Act should be amended in such ways as to enable it to support a wider range of facilities for homeless people, if and when additional funds are available.

In accordance with our policy of concentrating welfare assistance on people in the greatest need, the Government is in favour of making the Act more effective in meeting the needs of a wider range of homeless people.

At this stage, however, the Government has not yet reached a decision on the proposals of the Task Force on Co-ordination in Welfare and Health, one of which is that the homeless persons assistance program should become part of a wider ‘Sheltered Accommodation Program’, administration of which might be devolved to the State governments.

In the circumstances, it would be premature to consider widening the scope of the Act at the present time, but it is necessary to extend its operation beyond 13 December 1977 if only to authorise continuation of subsidies for which funds have already been provided. For the information of honourable members, capital grants totalling $8.4m have been approved under the Act to date. Of this amount $2.1m had actually been expended by 30 June 1977, $5. 3m has been allocated for expenditure in 1977-78 and the remaining $lm will be carried forward to 1978-79.

Expenditure on rental and salary subsidies for the period from 13 December 1974 to 30 June 1977 totalled $377,958. The appropriation for these subsidies in 1977-78 is $275,000. Expenditure under the National Welfare Fund on accommodation and meal subsidies for the period from 13 December 1974 to 30 June 1977 amounted to $1.7m. Estimated expenditure on these subsidies in 1977-78 is $800,000. As at 30 June 1977, financial support was being given towards the running costs of 95 homeless peoples centres, with a total bed capacity of 3, 102. Total overnight occupancy of these beds during 1976-77 was 785,484. In addition 668,548 meals were served to non-resident homeless people. Salary subsidies were paid for 34 social welfare workers.

In legislating to extend the operation of the Act in its present form for a further period of one year, the Government has in mind that suggestions for widening the ambit of the Act should receive further consideration in the context of the 1978 Budget. I commend the Bill to the House.

Debate (on motion by Mr Willis) adjourned.

page 2611

QUEENSLAND GRANT (SPECIAL ASSISTANCE) BILL 1977

Bill presented by Mr Viner, and read a first time.

Second Reading

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

That the Bill be now read a second time.

The main purpose of this Bill is to authorise the payment to Queensland of $24.8m in 1977-78 as a special grant. The payment of this amount is in accordance with the recommendations of the Commonwealth Grants Commission contained in its forty-fourth report on special assistance for the States which was tabled recently. The Bill also seeks authority for payment of advances to Queensland in the early months of 1978-79, pending receipt of the Commission’s recommendations for that year and enactment of any necessary legislation to provide for any special grant that may be paid to the State in that year.

The Commonwealth Government from time to time, on the recommendation of the Grants Commission following applications by States, makes special grants to the less populous States to compensate them for such factors as lower capacity to raise revenue from their own resources and higher costs in providing government services of a standard comparable to that provided by the financially stronger States. When such special grants were first paid they constituted the only regular form of general revenue assistance paid to the financially less strong States for this purpose.

However, for many years now, the main way in which special compensatory assistance has been provided to these States has been through the payment of higher per capita amounts of other general revenue funds. This situation is reflected today in the fact that personal income tax sharing entitlements paid to Queensland, South Australia, Western Australia and Tasmania are higher, in per capita terms, than similar entitlements paid to New South Wales and Victoria.

Under the personal income tax sharing arrangements, the less populous States continue to be free to apply for special financial assistance on the recommendation of the Grants Commission. This is one of the explicit understandings between governments in relation to the tax sharing arrangements. Any such special grants should be regarded as supplementing a State’s entitlement under the tax sharing arrangements in the same way as they formerly supplemented the financial assistance grants. Currently Queensland is the only State applying for special revenue assistance under the Grants Commission arrangements.

Queensland’s estimated entitlement in respect of 1977-78 under the personal income tax sharing arrangements is $776.2m, representing $361 per head of population compared with an average of $264 per head for New South Wales and Victoria. Accordingly, the assistance provided by way of the special grant should be seen as supplementing the special compensatory assistance of $97 per head, or $2 10m, provided to Queensland by way of the tax sharing entitlement. Local authorities also, of course, participate in the tax sharing arrangements and this year Queensland received $27.9m for distribution to local authorities in the State. This is $3.7m more than last year and more than double the general purpose assistance provided to local authorities in Queensland in 1975-76.

The Commonwealth Grants Commission, in arriving at its recommendations in relation to claims for special assistance, makes an assessment of the ‘financial needs’ of a claimant State. In making such assessments, the Commission compares in detail the finances of the claimant State with those of New South Wales and Victoria, taking into account differences in revenue raising capacity and differences in the cost of providing comparable services.

The payments of special grants recommended by the Commission consist of two parts. One part is based on a preliminary estimate of the claimant State’s financial need in the current financial year, and is treated as an advance payment subject to adjustment two years later when the Commission has compared in detail the finances of the claimant and standard States for that year. The other part represents the final adjustment to the advance payment made two years earlier and is known as the completion payment. This adjustment may be positive or negative and therefore may result in the final grant in respect of a year being higher or lower than the advance payment for that year.

The payment to Queensland in 1977-78 of $24.8m provided for by this Bill comprises an advance payment of $ 14m in respect of 1977-78, and a completion payment of $ 10.8m in respect of 1975-76. The completion payment in respect of 1975-76, when added to the $25m advance grant paid to Queensland in that year, brings the final grant in respect of 1975-76 to $35.8m, which is $ 11.4m more than the corresponding figure for 1974-75. The advance grant for 1977-78 will, in accordance with normal practice, be subject to adjustment in two years’ time. The Commission’s recommendations in relation to the special grants arrangements have been adopted by the Parliament each year since the Commission’s inception and the Government considers that they should be accepted on this occasion. I commend the Bill to the House.

Debate (on motion by Mr Willis) adjourned.

page 2612

TASMANIA GRANT (THE MOUNT LYELL MINING AND RAILWAY COMPANY LIMITED) BILL 1977

Bill presented by Mr Newman, and read a first time.

Second Reading

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

That the Bill be now read a second time.

Honourable members will be aware that the Minister for National Resources (Mr Anthony) and the Minister for Business and Consumer Affairs (Mr Fife) announced on 15 August 1977 the Government’s decision to provide financial assistance to Tasmania to assist the continuation of operations of the Mt Lyell mine operated by the Mount Lyell Mining and Railway Co. Ltd. The purpose of this Bill is to seek Parliament’s approval to the implementation of the Government’s decision, by authorising the execution of an agreement or agreements between the Commonwealth and Tasmania for the provision of assistance to Tasmania.

Honourable members will know that the operations of the Mount Lyell mine are important to the people in the Queenstown region- indeed, the mine employs about half the work force of the region- and that the mine has been incurring substantial losses principally due to the low world copper price. The company has indicated to the Government that it could not continue to absorb the large operating losses without assistance and, in view of the mine’s regional significance, the Tasmanian and Commonwealth governments announced their agreement to meet the cash deficit on the mine’s operations. The two governments proposed to share the cost of the assistance on a dollar for dollar basis.

The Commonwealth’s assistance to be provided to Tasmania relates to the mine’s operation from 15 August 1977 until the Government announces its decision on the Industries Assistance Commission’s report on the copper industry. Accordingly, the Bill seeks approval for the provision of assistance to Tasmania of amounts up to one-half of the payments made by Tasmania to the company for the mine’s operations and provides that the Commonwealth assistance be for the continuation of those operations from 15 August up to a date not later than 30 June 1978. The Bill thus provides for the contingency that some interim extension of the present assistance might be warranted following the Government’s consideration of the Industries Assistance Commission’s interim report on the copper industry, and having regard to the company’s developing cash flow situation.

Honourable members will appreciate that the agreement being negotiated with Tasmania is necessarily complex, not least because of the need for precise definition of the detailed accounting concepts to which the assistance must be related. Broadly, the agreement will provide, in accord with the Government’s decision, that the assistance to Tasmania would be repayable to the Commonwealth should the mine return to a position where it generates positive cash flow. Should the mine be unable to achieve that position, the Commonwealth’s advances to Tasmania would not be repayable. In any event, the assistance would be provided on an interest free basis. As honourable members would understand, the provisions of the Commonwealth’s agreement with Tasmania would be broadly reflected in a separate agreement between Tasmania and the company.

While it is not practicable at this stage to calculate precisely the cost of this assistance, I can give the House an indication of the order of magnitude. Thus it is estimated that, for a period of continued operation of the mine from 1 5 August 1977 to 2 November 1977, the cost of the Commonwealth’s contribution would be approximately $lm. I believe the Government’s action in this matter has again shown its concern for the welfare of the Australian communities suffering adverse effects from international economic conditions. I commend the Bill to honourable members.

Debate (on motion by Mr Willis) adjourned.

page 2613

STEVEDORING INDUSTRY ACTS (TERMINATION) BILL 1977

Second Reading

Debate resumed from 20 October, on motion by Mr Street:

That the Bill be now read a second time.

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

-May I have the indulgence of the House to raise a point of procedure on this legislation? I thank the House. Before the debate is resumed on this Bill I suggest that it may suit the convenience of the House to have a general debate covering this Bill, the Stevedoring Industry Charge (Termination) Bill, the Stevedoring Industry Levy Bill, the Stevedoring Industry Levy Collection Bill, the Stevedoring Industry Finance Committee Bill, the Conciliation and Arbitration Amendment Bill (No. 2) and the Port Statistics Bill as they an associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest therefore, Mr Deputy Speaker, that you permit the subject matter of the seven Bills to be discussed in this debate.

Mr DEPUTY SPEAKER (Mr Giles:
ANGAS, SOUTH AUSTRALIA

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

Mr WILLIS:
Gellibrand

-The Bills now before the House provide for a considerable restructuring of the stevedoring industry in respect of the arrangements covering the employment and deployment of waterside workers. I am pleased to be able to say that the Opposition does not oppose this legislation. In so saying, I draw attention to the irony of the situation where on a non-contentious industrial issue, such as that now before us, the normal time has been given to the Opposition to consider the legislation between its introduction and the commencement of debate in this House. However, on highly contentious industrial legislation, such as the recent amendment to the Conciliation and Arbitration Act, which affected not just one industry but almost every industry in the country, the Opposition was given practically no time at all to consider it before it was brought on for debate and rammed through the Parliament. If there was any rationality at all in the way this Government runs the Parliament, one would surely expect than the more -

Mr Street:

– I rise on a point of order, Mr Deputy Speaker. I draw your attention to the fact that the motion before the House relates to the package of Bills concerning the stevedoring industry. I suggest that the honourable member is not speaking to those Bills.

Mr DEPUTY SPEAKER:

-I thank the Minister for drawing my attention to that fact. I will watch more carefully.

Mr WILLIS:

– I am addressing myself to the way in which the Bills have been brought before the House and comparing them with the way in which other Bills have been brought before the House. If there was any rationality at all in the way this Government runs the Parliament, one would expect that the more contentious the issue the more time would be given for consideration and debate, especially as the Government continually maintains that industrial relations, which are certainly covered by this legislation -

Mr Street:

– I take the same point of order.

Mr DEPUTY SPEAKER:

– It is the general procedure of the House to allow some minutes of introductory comments which frequently are of a political nature.

Mr Street:

– I do not object to the Bills being discussed.

Mr DEPUTY SPEAKER:

-I do not as yet see any matter on which to call the honourable member for Gellibrand to order. Perhaps the honourable member for Gellibrand will nevertheless take some notice of the Minister’s point of order.

Mr WILLIS:

– If the Minister will contain himself he will find that I will be talking about the legislation in about 30 seconds. I repeat: If there was any rationality at all in the way this Government runs the Parliament one would surely expect that the more contentious the issue the more time would be given for consideration and debate, especially as the Government continually maintains that industrial relations, which we are talking about in this legislation, are such a major issue in this country. As the reverse procedure in fact applies, in this case one can only conclude that although the Government is anxious to make as much political mileage as possible out of industrial relations issues it is extremely nervous about allowing any extensive debate on the more contentious aspects of its industrial relations policies. The people of Australia would do well to ponder that point.

The legislation now before us is the culmination of an enormous amount of investigation and consideration of the arrangements covering waterfront employment and the way in which those arrangements could be improved. The dissatisfaction of all concerned- that is, the stevedoring companies, the waterside workers, the customers and governments of both political persuasion- with the present system has led to various inquiries being established and to the continual prolongation of temporary legislation while all concerned endeavoured to find a more satisfactory permanent arrangement.

The dissatisfaction of all parties with the existing arrangements stems from a number of factors. Firstly there is the problem of idle time which results partly from an excessive number of waterside workers, despite the dramatic drop in their numbers in recent years, and also from the method of allocation of labour between stevedoring companies and the holding company known as SEAL- the Stevedoring Employees of Australia Ltd- which results in what is known as locked up idle time. Since the introduction of permanent employment of waterside workers in 1967 it has not been possible to retrench them in the normal way, but there has nevertheless been an incredible drop in their numbers from 2 1 ,000 in 1 966 to just over 10,000 now- a drop of over 50 per cent in 1 1 years, a quite remarkable reduction. The fact that their numbers are still somewhat excessive despite this amazing decline results from the dramatic and continuing move away from conventional labour intensive cargo handling to capital intensive containerisation, and also from the recruitment of labour in 1974 when imports were at record levels. Some 1200 men were recruited, principally in Sydney and Melbourne, at that time and the subsequent substantial drop in trade resulted in a surplus of labour. Although the various inquiries have recorded much employer, customer and government concern at the high cost of reducing the number of waterside workers by financial inducements, I think it must be remembered that the dramatic move to containerisation has taken place without union opposition and that considerable benefits have thereby been achieved as compared with what would surely have happened had containerisation been simply imposed on the waterfront and large scale retrenchments implemented.

Apart from some surplus labour, idle time also results from employees being ‘locked in’. Under present arrangements, when a stevedoring company is particularly busy, it can draw on pool labour employed by the holding company, SEAL, to top up its labour force. However, it is apparently not an infrequent occurrence that a stevedoring company which has a substantial degree of business on hand finds that the pool is empty so that it can obtain no more labour, while at the same time employees of other stevedoring companies are idle because of lack of business for that company. As no transfer arrangement exists there is a double cost through the delay in one company conducting its operations and through idle time payments for employees of another stevedoring company. Clearly, this is a most unsatisfactory situation and one which has to be resolved.

The second cause of dissatisfaction with present arrangements relates to the funding of the industry for various payments to waterside workers and for the cost of operations of the Australian Stevedoring Industry Authority. The ASIA is the statutory body responsible, amongst other things, for funding various financial liabilities which, in other industries, are the responsibility of the employer. Thus, the ASIA is responsible for long service leave payments, redundancy payments, idle time payments and payments to the waterside workers pension fund which goes by the intriguing name of SERF- the Stevedoring Employees Retirement Fund. I can only assume that whoever gave that retirement fund that name must have had a good sense of humour. The ASIA also is responsible for a variety of other payments to waterside workers in smaller, non-permanent ports- for instance, sick leave, annual leave, attendance money and so on. For various reasons the funds raised by the ASIA through the charge imposed on man hours worked have been nowhere near sufficient to meet the accrued obligations of the ASIA in respect of payments to waterside workers. This is known as the industry deficit and, according to the special consultant to the Government in these matters, Mr Stevens, that deficit in March of this year was an enormous $2 7m. The reason for this deficit seems partly to be the failure of governments to adjust the charge to keep pace with wage costs and partly the fact that the charge is based on man hours rather than tonnage. So as the industry has become more capital intensive, the charge has failed to keep pace with the Authority’s financial obligations and placed an undue burden on conventional labour intensive operations.

The third major cause of dissatisfaction relates to industrial relations issues. Both the employers, as represented by the National Industrial Council, and the Waterside Workers Federation, have expressed a very strong desire to achieve a normal industrial relationship, that is, one where employees are identified as employees of a particular company which is responsible for meeting their award entitlements. Under present arrangements about one-quarter of waterside workers are employed by the holding company SEAL and are farmed out to stevedoring companies as needed. Both parties also are anxious to terminate the overseeing and interfering role of the ASIA. In the Waterside Workers Federation there is particular resentment at the disciplinary role that the ASIA has played in the past. Although the degree of industrial disputation in the stevedoring industry has diminished markedly since the 1950s, both parties are strongly of the belief that industrial relations could be further improved by establishing a normal employer-employee relationship. These causes of dissatisfaction have been known and identified for quite a few years now but finding an appropriate formula for resolving them has been a difficult matter.

The Labor Government appointed two inquiries during its three years in office. The first conducted by Mr Foster basically recommended that the best means of resolving the issue was to establish a corporation which would be solely responsible for overseas trade and which would acquire the assets of all stevedoring companies involved in overseas trade. He proposed that this corporation could be solely government owned or could be owned jointly by governments, Federal and State, and could include the current stevedoring companies as part owners. This nationalisation or semi-nationalisation approach has much to recommend it because it would prevent profiteering by stevedoring companies which has been rampant. As honourable members will recall, Australia’s largest stevedoring company, the James Patrick company holds the distinction of being the first company in Australia to be ordered by the Prices Justification Tribunal to reduce its prices because they were so unjustifiably high. This approach of establishing a corporation would also have enabled the basic causes of dissatisfaction to which I have referred to be resolved. However, it clearly involved practical difficulties, including the vigorous opposition of the employers to nationalisation and the fact that although the external power would appear to provide constitutional power to nationalise the industry, the then Labor Government would have faced a very real difficulty in getting such legislation through the Senate.

Consequently, another investigation was ordered by the then Minister for Labor and Immigration, Senator James McClelland, in October 1975, and was conducted by Mr Northrop, as he then was. This report again considered the views of all parties and basically came up with two alternatives: Either a withdrawal of the Government from its statutory role in the industry or restructuring to involve a larger role for the Government. Interestingly, a number of parties involved, such as the Broken Hill Pry Co. Ltd., the ASIA and the Australian Shippers Council, and even one stevedoring company, F. G. Strang Pty Ltd, supported the greater involvement of the Government through the establishment of a statutory corporation to employ all waterside workers and allocate them to stevedoring companies as needed. This proposal was vigorously opposed by both the National Industrial Council representing stevedoring companies generally and the Waterside Workers Federation because both wanted a normal industrial relationship. Such a statutory corporation which would not involve nationalisation of the stevedoring companies would have prevented that normal industrial relationship from being developed.

In these circumstances, the present Government has opted for Mr Northrop ‘s first alternative, that is, the withdrawal of the Government from its statutory role in the industry. The legislation now before the House gives effect to that concept and hopefully will lead to a substantial improvement in the operation of the industry. This is especially so given that the legislation is based almost entirely on the report of the National Stevedoring Industry Conference- a body which was established under Sir Richard Kirby, an eminent figure in the industrial arena, to thrash out the means by which the industry could be rearranged without the Government’s presence yet overcome the many difficulties arising from the present arrangements. The Conference which involved all interested parties, has produced a report which represents a consent position for most sections of the industry, except for a couple of organisations which still favour the statutory corporation concept. It seems to the Opposition that the new arrangements will provide a good chance of overcoming the principal defects of the existing arrangements. The normal industrial relationship desired by the principal parties will be established by the abolition of the ASIA and the allocation of all waterside workers in permanent ports to particular stevedoring companies so that all will have an identifiable employer and all employers will have their own work force. *

Furthermore, the establishment of port conciliators to deal with the disputes on the job as they arise seems, to be a decided improvement and, indeed, has been adopted on the recommendation of Mr Justice Robinson and Commissioner Neil of the Conciliation and Arbitration Commission. Hopefully, this will effect a significant reduction in time lost in industrial disputes by providing a referee at the point of the dispute who can at least quickly ascertain the facts relating to the dispute and, hopefully, conciliate the parties and assist them in resolving any such disputes. The National Stevedoring Industry Conference report also contains details of arrangements whereby the problem of locked-in labour will be overcome and so substantially reduce idle time payments. They involve procedures for transfer of surplus labour from employers with a labour surplus to other employers with insufficient labour to meet their current needs. The proposed establishment of a port labour co-ordinator to direct and control the allocation of labour between employers should assist this procedure to operate smoothly. The establishment of supplementary labour forces in all ports rather than just small ports, as is presently the case, should also assist greatly in meeting additional labour requirements in times of high work load. If these arrangements succeed in eliminating locked-in labour whilst, at the same time, enabling all employees to be identified with a particular employer, it would seem that a very substantial step has been taken towards reducing costs and improving the industrial relations environment at the same time.

The other major cause of dissatisfaction at present- the funding arrangements- is also substantially taken care of by the proposed procedures and the legislation now before the House. To a large extent, employers will now be liable for their own funding for such matters. Apart from their contributions to the waterside workers’ pension fund, SERF, which will be collected by a proposed levy, employers in the major ports will be obliged to make their own funding arrangements to meet their obligations to their employees in relation to long service leave and other such matters. The special levy on tonnage to wipe out the industry deficit to which I referred earlier also is a sensible procedure. The Opposition believes that this legislation should not be opposed because it offers the possibility of a substantial improvement in the arrangements covering employment on the Australian waterfront. However, in saying that, I do not want it to be thought that we have abandoned all thought of adopting the alternative procedures- that is, nationalisation or semi-nationalisation, as recommended by Mr Foster, or even the establishment of a statutory authority to employ all waterside labour. If these proposed arrangements turn out not to be satisfactory, a future Labor government, such as the one which will be elected in six weeks time, will be free to contemplate such alternative procedures and will adopt them if it believes that they will offer a better modus operandi than that being introduced at present. That said, however, on behalf of the Opposition I express the sincere hope that the arrangements now to be adopted do prove satisfactory from all points of view.

I say in conclusion that this legislation shows what can be done if a consensus approach is sought. The union involved in this legislation is a noted left wing union. It contains in its leadership members of the various communist parties, amongst others. Yet this union has shown a very substantial willingness to discuss this issue and to co-operate with the Government and with the employers in reaching arrangements which can be to the betterment of all Australians. I think that it shows what can be achieved by adopting that kind of approach. I think it contrasts remarkably with the kind of reaction which one would get from a trade union movement if the other kind of approach were adopted, namely that which seeks not so much consensus as the wielding of big sticks and the offering of threats rather than co-operation.

Mr FALCONER:
Casey

-The House is debating a set of Bills whose passage will have the effect of restructuring the stevedoring industry in Australia. I was interested in a number of the remarks made by the spokesman for the Op- f position, the honourable member for Gellibrand Mr Willis), who has just resumed his seat. He indicated that the Opposition would not be opposing this legislation. Therefore, there is probably no need for a lengthy and heated debate on the subject. However, I would like to address myself to one or two of the problems that the Government faced in looking at the industry and the need for restructuring it and to make one or two observations about the legislation that has been introduced.

Few, if any, industries in the Commonwealth have been the subject of so many commissions of inquiry, reports, studies and complaints as the stevedoring industry. Unhappily that has been accompanied in the past by a period of trouble on the waterfront. As a result of that, we have a stevedoring industry in Australia which must be rated as being a high-cost industry. In many respects it is an industry which is typified by meagre output. Appeasement has been the policy followed by governments of various political complexions over a lengthy period, and amongst the byproducts of that policy of appeasement has been the progressive destruction of effective managerial control, upon which the rational and economic conduct of all industry must depend.

Reform in this sector of the Australian economy is of prime importance. Yet defiance of authority generally in this area has become a way of life. One therefore faces the problem of finding a way in which to restructure the industry without bringing on a direct confrontation between the unions, on the one side, and the Government, on the other. I think the Minister for Employment and Industrial Relations (Mr Street) is to be commended for the way in which he has approached this task, because since he took on responsibility for that portfolio he has ensured that all the parties can get together to discuss the matter and work out an agreement upon which the Government can base its own legislation for the restructuring of the industry. That obviously is the preferable way of going about it, rather than the government simply legislating and forcing all the parties in the industry to conform to that legislation, when the parties may not wish to proceed in that way.

As has already been indicated, the Government faced the prospect of going in two substantially different directions. It could get out of the industry altogether and try to restore a normal employer-employee relationship within the stevedoring industry or it could decide that the problems in the industry could be solved only by a government body having even greater disciplinary power and an even greater involvement than has the Australian Stevedoring Industry Authority at present and therefore perhaps going to the extent of nationalisation, as has been mentioned by the honourable member for Gellibrand. The Government chose the first alternative, that is, to try to get out of the industry as far as possible and to restore in the industry a normal relationship or as close to a normal relationship as could be achieved.

Certainly everyone involved in the industry is dissatisfied with the current situation. Those who favour the withdrawal of the Government from the industry use the argument that the Australian Stevedoring Industry Authority has been powerless to intervene and should be abolished because it is just a useless anachronism. Some people reply to that argument with the point that the Authority has been rendered ineffective because of the lack of government support for its disciplinary powers, on the one hand, and because of union and employer pressure, on the other.

When it came into office the Government had before it the report presented by Mr Justice Northrop. As was mentioned by the Minister in his second reading speech, late in 1975 the then Minister or Labor and Immigration, Senator James McClelland, requested Mr R. M. Northrop, Q.C. to report on the views of the parties to the industry as to what they saw as the problems and how they thought they could be overcome. Mr Justice Northrop, as he subsequently became, reported to the Government in early 1976. His report indicated that, whilst all of the organisations and parties who made submissions to him agreed that the existing arrangements should not be allowed to continue, there was a sharp division between those who proposed that the Government should take a more direct role in the industry and those who believed the Government should seek to withdraw from its existing limited regulatory role.

The Northrop report also commented on a number of the problems that existed in the industry. For example, it drew attention to the need to provide for a reduction in the existing size of the work force. Obviously the system of voluntary redundancy on the waterfront posed a problem. The report drew attention to the need to provide a satisfactory means of providing additional waterside workers to cope with fluctuating labour needs. It pointed to the need for evidence of an adequate method of labour allocation and a means of securing improved industrial relations. It commented on the need for effective consultative arrangements to allow user intereststhese often are the forgotten people in the industryand others to have an effective voice in that industry. Of course, there was the need to ensure that satisfactory funding arrangements were made, including measures to recover the deficit accumulated by the Australian Stevedoring Industry Authority.

The first step in the industry being restructured by the Government was to ask Mr Justice Robinson of the Conciliation and Arbitration Commission to bring the parties in the industry together in conference to consider ways of overcoming the problem of surplus labour. Arising from those discussions a special redundancy program was developed which was to apply for a limited period. Mention has already been made of the great success achieved in bringing the work force of the industry down from 21,000 men in 1966 to a position where there are now slightly more than 10,000 waterside workers, which represents quite a remarkable reduction. It is notable to point out that since June 1975 the work force has been reduced by almost 3,000 as a result of the efforts to get people out of the industry and to get the labour levels down to the point which is really applicable in the industry.

The Government also asked Mr Richard Kirby in December of last year to bring the parties together and to try to develop a framework within which the problems of the industry could be handled and the overall performance of the industry improved. As a result of his report and the agreement expressed in it, the Government has considered its legislation and based a very large part of its legislation on that agreement. The features of that legislation include provisions for improved utilisation of the labour force so that surplus labour held by any employer can be made available for use by all other employers in the port and so that arrangements can be made for casual pools of labour to operate where there are fluctuating needs and a high demand at particular times. There have been measures to improve the industrial relations system in the industry, consultative arrangements to make sure that problems are ironed out by consultation, steps to protect the interests of the smaller pons and a means by which the accumulated deficit of the industry can be recovered.

I draw attention to one or two problems in other parts of waterfront activity. I refer to the position of the shippers of bulk cargo- that is, those who ship ores, minerals, sugar and other products which are loaded by conveyor belt operations, for example. Their position is one which has not been affected directly by the operations on the waterfront because under the previous legislation something of a division was brought about by the fact that the Australian Stevedoring Industry Authority had a regulatory role to play in terms of the handling of conventional cargo. The handling of other bulk cargo was outside that scheme of operation. The legislation which the Minister has introduced has sought to protect the status quo in the stevedoring industry in respect of the division between the handling of conventional cargo and the handling of bulk cargo, insofar as that division can be preserved under the new arrangements. Of course where there is a different structure it is difficult to preserve exactly the same situation. The Government has attempted to do so, as was in fact agreed by all parties to the stevedoring industry conference.

I will be interested to see whether the new arrangements work. I believe the Government has taken the right approach in attempting to involve all interested parties in discussion and in corning to an agreement on how the new arrangements should proceed. However it is a debatable point as to whether the Government should become more heavily involved or whether it should have tried to get out of the industry altogether. On the basis that the various parties to the industry want to restore a normal employer-employee relationship, I believe the Government should act on that general wish in the industry. If we find after a period of years that the arrangement does not work out as hoped, if we find that certain ship owners, for example, decide that because they want to get their ship out of port they give in very readily to pressure for extra benefits, without having regard to the impact that would have on other ship owners and on the cost structure of the stevedoring industry as a whole, this Government or any government may have to reconsider its stand and see whether it should revise the situation and become involved in the industry to a much greater extent.

I compliment the Minister on the enormous amount of work that he has done in the past two years in bringing about this agreement and bringing the legislation to this point. Those of us who have been involved in some discussions with him and with representatives of the various parties involved in the industry know just how many thorny problems there have been to iron out. I think it is to his credit that he has been able to bring into the House this set of Bills for consideration by the Parliament Indeed it is to his credit that he has been able to introduce a scheme which, by and large, has the support of all political parties in this Parliament.

Mr DEPUTY SPEAKER (Mr Giles:

-Before I call the honourable member for Cunningham, may I point out to him, so that we know where we stand, that honourable members in the House may not pass notes back and forth to the gallery. Likewise, strangers in the gallery are not in any circumstance to converse with honourable members in this House. I hope I have said that in a kindly fashion.

Mr WEST:
Cunningham

-The Minister for Employment and Industrial Relations (Mr Street) said in his second reading speech that the total work force in the stevedoring industrythat is the waterside workers- had fallen from some 21,000 men in 1966 to just over 10,000 today. He did not explain the reason for this decline. The reason is that mechanisation and improved cargo handling facilities such as bulk sugar installations in Queensland, the containerisation of cargo and the advent of roll-on roll-off shipping have improved tonnage rates, have increased profits and have made large numbers of men redundant to the industry. This faster turn-around of shipping has meant greater efficiency in the industry. It has provided greater profits for stevedoring companies and shipping companies. For the men who work the snips it has meant a very hard struggle to obtain improvements to their wages and working conditions or to achieve ameliorative measures to alleviate the need for fewer workers in the industry.

I remember the position in north Queensland ports in the mid-1950s. Then there were 2,666 workers engaged in the sugar trade. Ten years later, in 1965, there were only 1,199. By 1977 all that remained of the 2,666 workers in north Queensland in 1955 were a mere 284 workers. Like the highland Scots after their eighteenth century persecution by the English ruling class, they had scattered far and wide. They had to because there was no further work for them in north Queensland. They had received no help and no compensation from the industry for the loss of their work.

Today the workers in the stevedoring industry receive reasonable wages and work under reasonable conditions. It was not always so. Until 1968 the industry was of a casual nature. The 1930s was the time of the infamous bull system in which at the major ports men would go to the wharves every morning or every evening in the hope of obtaining work. Each day they went there. They were picked up on a daily basis, at the discretion of the employer. During the Depression in the 1 930s more often than not they did not receive work. They received no fringe benefits. They often worked 24-hour shifts. Some of them actually worked 48-hour shifts. I understand that the 24-hour shift was not removed from the Australian waterfront until the Second World War. Even in the 1950s, an era of which I personally recall, they did not enjoy the normal rights that the other workers enjoyed. They were not paid for sick leave or for public holidays. They did not enjoy a long service leave entitlement. There was no pension scheme.

In 1965 a crisis had arisen because of mechanisation in the industry. Large numbers of men had become redundant. The Waterside Workers Federation at that time commenced a struggle for an industry pension, for two reasons. The first was to give common justice to men who had worked a lifetime in the industry. Many of them at that time were approaching 75 years of age. The second reason for the struggle in 1965 was to ease those older men out of the industry, to overcome the redundancy situation. This pension demand led to the Woodward conference, an all inindustry conference, which by 1968 had come up with a permanency proposal which was eventually implemented. The inhuman casual system on the waterfront was finished forever by 1968. 1 think I should pay a tribute to the General Secretary of the Waterside Workers Federation, Mr Charles Fitzgibbon, at this time, because I know that no other man in the industry fought harder than he did for an end to the casual system. Permanency, as it was then known, set up a system under which men were placed in operational companies. Further to provide for the rise and fall of labour demands, labour pools were set up under the administration of the Stevedoring Employers of Australia Ltd, the idea being that they would form a backup labour force.

It is interesting to study the role of the Authority while all this was taking place. Since 1968 the power of the Australian Stevedoring Industry Authority has waned. Of course the Authority is now about to be phased out altogether. It has survived, I think, since 1941, first as a commission, then as a board, and finally as an authority. Its activities and attitudes have been all that those of a government instrumentality ought not to have been. It has been the very essence of heavy-handed bureaucratic interference with the nuts and bolts working of the industry. The main role of the ASIA over the years was to attack the workers on whom the industry depended, the men who actually worked the ships. In the 1960s the Authority attacked its own workers with absolute dedication. For instance, in 1963, using its powers under the Waterfront Long Service Leave Act, the Authority fined waterside workers-its own workers-£ 1.2m by cancelling their already pitifully inadequate attendance money allowances. Instead of being a force to reduce confrontation, it exacerbated confrontation by its over zealous use of its statutory disciplinary powers over individuals.

The Authority has now reaped the bitter harvest of those years of anti-worker activities. When the maritime workers were given the opportunity to vote for its continuation or otherwise, to a man they voted to abolish it. Those in the Government and the Labor Party, in the Broken Hill Pty Co. Ltd, in the Australian Shippers Council and in the trades unions- I include myself amongst them, now as a federal memberwho may have wished to see a national corporation as favoured in the Foster report or the nationalisation of stevedoring, can thank the Authority for the backlash of industry opinion that has resulted in the National Stevedoring Industry Conference deciding to recommend firstly the abolition of the Australian Stevedoring Industry Authority; secondly, the restoration of the industry to full private control; and thirdly, the withdrawal of the Government as a body having a meaningful presence in the industry.

Let me examine briefly the proposals of the National Stevedoring Industry Conference, since they are what this legislation is all about and what the legislation legitimises. Obviously, after the Government abolishes the Authority and the SEAL labour pool, the National Conference proposes to allocate workers from the labour pools to private operational companies, with the exception of the ports of Kembla and Newcastle, where I understand that the pools will continue. National port and co-ordinating committees will be set up. Not much emphasis has been placed upon those committees in this House. I wish to expand on them in a moment. It is proposed that these committees will take the place of the Authority and of the Stevedoring Employees of Australia Ltd administration procedure. There will be supplementary labour pools. I note that the Minister did not say that these supplementary labour lists would be made up of exwaterside workers, men who are now on the B register or men who may retire in the future. Certainly, it is my personal opinion that the workers in the maritime industry will never accept pools of supplementary casual labour that are not made up from this source.

The report of the National Stevedoring Industry Conference provides for the Conciliation and Arbitration Commission to act as a final arbitrator to the co-ordinating committees in the event of disagreement. I think it is appropriate at this time to examine what the federal and port co-ordinating committees are all about. The industry still has to be administered and these committees will take the place of the bodies which are doing the administration- now that is SEAL, as it is known, and the Authority. The federal co-ordinating committee shall be composed of representatives of the major employers- the Australian Employers of Waterfront Labour- BHP, the Australian National Line and the Waterside Workers Federation. Its functions will include deciding the number of waterside workers required in each port, the requirement for recruitment including agreed procedural matters, the establishment and operation of registers of waterside workers for each port, arrangements for application of agreed redundancy and early retirement procedures, arrangements for transfers of labour between ports to cater for peak requirements, agreed arrangements concerning supplementary labour force, and matters referred to it from the port coordinating committees.

The port co-ordinating committees have a similar role. They have equal representatives from the industry users, the employers and the union, in this case the Waterside Workers Federation. Their functions are similar. They include responsibility for recruitment arrangements agreed by the federal co-ordinating committee, registers of authorised waterside workers and matters associated with removal of men from registers, redundancy or early retirement arrangements agreed in the federal co-ordinating committee, and local matters associated with the supplementary labour force.

Since I arrived in this Parliament I have noticed that there is one major theme of the Government. That is to attack unions. I heard it firstly from Cabinet Ministers and then from a gaggle of back benchers. Without exception the theme is that most leaders of major unions are left wingers, communists or fools all intent on stirring up industrial confrontation, all intent on causing trouble in industry. That is the view, apparently, of the Government. It might be that it has to have something to hang an early election on before those 170,000-odd people leave school next year and add to the ranks of the unemployed.

Mr McVeigh:

– Let the people decide on 10 December. Let the people decided who is right or wrong.

Mr WEST:

– The honourable member can have his say later, but I bet he has never carried a bag of sugar on his back. Since I came into this House I have heard two explicit attacks on the Waterside Workers Federation. I find it very strange to listen to these attacks on trade unions. Early in 1976, after the Foster report had proved inconclusive and the Northrop inquiry was set up, the Waterside Workers Federation was asked to submit proposals. They were submitted on 23 March 1976. The inquiry dragged on until Mr Justice Kirby finally released the final report on 5 April 1977. What did we then find? We found that the original proposals of the Waterside Workers Federation are almost without exception the same proposals as this Bill implements. This Government, which is so fond of union bashing, is legislating to give responsibility for the administration of the Australian stevedoring industry to the Australian Employers of Waterfront Labour and the Waterside Workers Federation. It is amazing. The Government believes in worker participation in the management of industry and yet it has the audacity to attack with such ferocity the very same leaders who put forward these proposals to restructure Australian stevedoring. The Government has called Mr Fitzgibbon a communist, but it took his advice, tendered in March/ April 1976, about the best ways in which to restructure the industry.

Let me give another example of what I regard as duplicity on the part of the Government. I have heard attacks made on the power workers in the Latrobe Valley because they wanted an increase in their miserable starting wage of $161 a week. The euphemisms which the Minister for Employment and Industrial Relations used in his speech to explain how these amazing, painless redundancies took place on the Australian waterfront do not make clear how they really did take place. Let me tell honourable members how they took place. They occurred because all men over 60 years of age in the ports concerned on the Australian waterfront were offered a retirement allowance of 70 per cent of what they would have earned if they had stayed in the industry until they were 65 years of age. That is quite generous; very good; very understanding. Why does this Government not extend similar generosity to other underpaid workers? The Government has attacked the workers of the Latrobe Valley while it has offered generosity to waterside workers. That is what happened when

I was a waterside worker. Why does the Government not offer similar generosity to other workers whose jobs are at stake in industries where men are becoming redundant? I understand the Government is even legislating now to deny the unemployment benefit to the youngsters who will leave school this year. They will not be eligible to receive the benefit until February. It is a pity they could not be afforded the same generosity that was extended to the men in the stevedoring industry.

In the long term there is a need for unions in the stevedoring industry to amalgamate. For instance, Port Kembla in my electorate is one of the largest ports in terms of tonnage in Australia. In that port 13,735,000 tons of steel, coal, iron ore and general cargoes were handled last year. It is one of the great ports of the Southern Hemisphere. But is it necessary to have Federated Enginedrivers’ and Firemen’s Association of Australia members exporting coal; ironworkers discharging iron ore and waterside workers handling steel and general cargoes? In the stevedoring industry, just as in other industries, there is a need for unions to combine for greater efficiency and to achieve better results for their members. I know that BHP obstinately refuses to extend the same precise working conditions to its iron workers engaged in stevedoring as it extends to members of the waterside workers union. Therein lies the seed of industrial trouble, trouble that this Government likes to ascribe to ‘left wing agitators ‘ to suit its own political purposes.

I wish I could say that I regard this legislation as being the solution to problems in the stevedoring industry. But I cannot. I do not think that stevedoring companies are more fit today to run the industry than they were last year when Patrick Stevedoring paid exorbitant fees amounting to over $600,000 to Sir Reginald Reed. Australian workers and consumers paid Sir Reginald that sum of $600,000. Stevedoring companies are just as rapacious as multinationals like Utah who act in their own self-interest in their pursuit of rip-off profits from Australian coal exports.

We in the Opposition support the Bill. The waterside workers support it and so do the Australian employers of waterfront labour. Possibly it is the only viable alternative at this time. However, it is my opinion that some future Federal Labor government will very likely still find it necessary to place this highly volatile stevedoring industry under public administration and ownership to achieve the best results for Australia and the men who work the wharves.

Debate interrupted.

page 2622

NOTICES OF PRESENTATION

The Deputy Clerk- Notices have been received for the next day of sitting from:

The Minister Assisting the Minister for Defence of his intention to present a Defence Force (Retirement and Death Benefits Amendments) Bill (No. 2);

The Minister representing the Minister for Administrative Services of his intention to present an Archives Bill;

From the Minister representing the Minister for Administrative Services of his intention to present a Copyright Amendment Bill.

page 2622

DEVELOPMENT OF GLENBROOK RAAF BASE HEADQUARTERS

Notice of Motion

The Deputy Clerk- Notice has been received from the Minister for Construction of his intention to move for the approval of the following work which was referred to the Parliamentary Standing Committee on Public Works:

Development of Glenbrook RAAF Base Headquarters Operational Command.

Sitting suspended from 6 to 8 p.m.

page 2622

STEVEDORING ACTS (TERMINATION) BILL 1977

Second Reading

Debate resumed.

Mr BURR:
Wilmot

– I join with the honourable member for Casey (Mr Falconer) in congratulating the Minister for Employment and Industrial Relations (Mr Street) on presenting these Bills to the House for debate. I am conscious of the fact that, since this Government took office, the Minister has worked religiously to try to bring together the parties involved in the stevedoring industry to come to agreement and to bring some more logical order into what has been a most bedevilled industry. The Minister has brought the parties together in debate in a most orderly fashion. I think it is to his credit that these Bills which we are debating have the support of all parties involved in the stevedoring industry.

I think that we need to give some consideration in this debate to the factors that caused these Bills to be introduced and to the changes which are now being made to the administrative structure of the stevedoring industry. As the honourable member for Cunningham (Mr West) mentioned in his speech in this debate, the Australian Stevedoring Industry Authority was set up in 1956 as a government instrumentality to control the functions of the stevedoring industry and those people who would be engaged in stevedoring activities. That Authority, albeit a government run authority, worked with some success and brought stability to the waterfront up until 1967-68, when an inquiry headed by Mr Justice Woodward recommended that significant changes be made to the conditions of employment of waterside workers. The honourable member for Cunningham mentioned that waterside workers had been deprived of some of the conditions to which other people working under other awards have been entitled. I think that any fair minded person, looking at the conditions of employment that have applied to waterside workers since the Woodward commission of inquiry brought down its recommendations and since those recommendations were implemented, would have to agree that the conditions that have applied to waterside workers since that time were more than the economy of any industry could possibly tolerate.

I do not think that anybody in this chamber would deny that waterside workers are entitled to adequate holiday leave, sick leave and illness compensation. I think that honourable members on both sides would agree that waterside workers, like all other industrial workers, are entitled to those conditions. But the main problem that was introduced by the Woodward inquiry was the provision of permanent employment. What that really meant- I do not think the honourable member for Cunningham really spelt out the significance of that recommendationwas that a waterside worker could not be dismissed from his employment. That was a most significant change from what had previously applied and from what applies under any other award. What happened over a period since 1967-68 when those recommendations took effect was that, through mechanisation on the waterfront and through the impact of roll-on roll-off ferries the demand for physical labour by the waterside workers simply became less. The waterside workers grew older but there was no way in which those people could be removed from their positions on the waterfront, and that meant that we had an aging group of waterside workers who could leave the industry only by voluntary retirement. They could not be retrenched by their employer, the Australian Stevedoring Industry Authority. They could not be removed from the industry by any mechanism other than voluntary retirement. The net effect of that recommendation over a period was that we had a build-up in numbers of waterside workers who were surplus to the numbers required at ports throughout Australia, to the extent that in recent months some 1,200 men who simply did not have a job were still being paid by the Australian people.

What happened finally to bring this matter to a head was that waterside workers were working 20 hours a week, the remainder of their working time was what was known as ‘idle time’ but they were still being paid through the levy system by the employers or the shipowners. This situation was totally intolerable. Whilst the honourable member for Cunningham and other honourable members opposite may say that certain stevedoring companies should be able to afford to pay waterside workers for such idle time, the plain fact is that it was not the employers or the stevedoring companies which were paying these people not to work; it was the Australian consuming public, because any cost that is imposed on the waterfront must be passed on in costs that ultimately reach the retail consumer. In Tasmania we are all too conscious of that fact. Any manufactured goods or rural goods that have to leave that State must leave by ship. There is no alternative to getting our goods over to the local market or to export markets. In Tasmania we were paying, through a very heavy levy system, an inordinate cost that was taking away the profitability of all the goods that we were producing in Tasmania. That situation, whether it applied to Tasmanian producers or to other Australian producers selling on an export market, simply could not be tolerated.

The situation was reached in which the Australian Stevedoring Industry Authority, albeit imposing heavy costs on the industry and those costs being passed on to the consuming public, had an accumulated debt of some $22m. That debt was being guaranteed by the Federal Government. It had built up because of the idle time that was not being worked by waterside workers. It was the responsibility of any government to correct that situation so that this anomalous cost could be removed from the taxpayers of Australia. I believe that it was only through the dedication of the present Minister for Employment and Industrial Relations that that situation has been resolved, resulting in the presentation of these Bills. During the period in which this Government has been in office, conferences have been held between the stevedoring companies, the Australian Shippers’ Council, the Waterside Workers Federation of Australia and other bodies with an interest in the stevedoring industry. They have come together on many occasions to discuss this anomalous situation and, in private conference, to determine what can be done about it.

The first inquiry, set up by the previous Government, under Mr Northrop, Q.C., heard a considerable amount of evidence and brought down a report. That report was taken up at a later stage by an inquiry headed by Mr Justice Kirby, during this Government’s period in office, which finally reported in April 1977. If one analyses the two reports, one finds that the Government had one of two alternatives available to it. The Government could either continue as a direct employer of waterside labour and subcontract that labour to whoever chose to hire it or it could withdraw from the industry and allow the employers, the stevedoring companies, to employ directly the waterside labour that they required in order to maintain their operations. The Government, I believe, very wisely chose the latter of those two alternatives. In other words, it decided to withdraw its participation from the stevedoring industry. As the honourable member for Cunningham agreed in his speech, it was the Government’s involvement that built up a bureaucratic organisation that was inefficient in its operations and which caused many of the problems that were perceived in the stevedoring industry. I agree with the honourable member for Cunningham that each time the Government tries to set up and operate in a private enterprise situation it ends in disaster because the Government does not have the motivation to be efficient that a private enterprise organisation has. The Government very wisely decided to withdraw from this industry and to allow direct employeremployee negotiations to take place so that the industry can be conducted on a far more efficient and economic basis.

The honourable member for Cunningham seemed somewhat surprised that the present arrangements hinged on worker participation. I remind the honourable member that this Government has been very conscious that worker participation, direct participation between employers and employees, can have a most beneficial effect on those who are involved in the industrial field. Certainly this Government has been doing much to promote that concept of worker participation in other industries. We are fortunate to see this come to fruition in these Bills. I also remind honourable gentlemen opposite that it was achieved not only as a result of the recommendations of Mr Justice Kirby and Mr Northrop, Q.C., now Mr Justice Northrop, that there should be direct negotiation and direct consultation between employers and employees; it was also accepted unanimously by the Waterside Workers Federation to work in a private enterprise situation. I commend the Waterside Workers Federation for coming to that conclusion. It was able to see that by having this direct negotiation it would be better able to negotiate with the people who were paying its members and that must lead ultimately to a more efficient and harmonious situation on the waterfront.

We have a situation now where the Government is introducing a considerable number of Bills that are designed to re-establish the administrative organisation of the waterfront. The Government must do two things in this series of Bills. Firstly, it must disband the Australian Stevedoring Industry Authority and replace it with another administrative organisation that will allow the operation of the waterfront to be conducted in an efficient manner. Secondly, it must, by way of this series of Bills, pay off the accumulated debts of $22m that have been built up during a period of time, particularly since 1967. Unfortunately, to pay off those debts it has been necessary to continue a very heavy levy arrangement but the Government was in the situation where it had no alternative. Perhaps this is one of the factors that honourable gentlemen opposite really do not understand. In a government administration, if a debt is built up, it must be paid off at some point in time. Whilst that might be true in any other situation, it is equally true in the stevedoring industry. It is unfortunate but there really is no alternative.

A committee has been set up to administer the financial arrangements of the stevedoring industry, to handle the levies, to pay off the debts and also to make provision for sick leave, long service leave and other benefits to which waterside workers are entitled. Very wisely, the Government has decided to accept the recommendations of the Kirby conference to establish a series of port and Federal committees to negotiate and liaise on matters between waterside workers and the employers. This will be done at two levels. Firstly, there will be the port committees that will operate at a local level to hear, discuss and liaise on local matters in each port. If resolution cannot be obtained in those port committees- hopefully it will be- matters will be referred to a Federal committee for final decision. I think the Government very wisely has accepted the option to .establish these port committees. As the honourable member for Cunningham said, this is a very realistic way for the Government to bring in worker participation, to allow the workers who are involved directly on the waterfront to negotiate personally with their employers.

One of the matters that we need to be conscious of in these arrangements is the continuation of redundancy. Whilst it has accepted the present arrangements, the Waterside Workers Federation has reserved the right to resist any suggestion of involuntary redundancy. I do not think any fair minded Australian could accept that as being a logical situation. If there is no gainful employment for a worker, then there is no job and, logically, he should not be paid for doing nothing. Whilst it might be a difficult fact of life that those people who, because of mechanisation or modernisation in a particular work area, are made redundant, there is no alternative. This is progress and we should not hold back progress. I hope that the Waterside Workers Federation will be more realistic in the coming months and years and change its attitude on this matter of redundancy.

In these Bills the Government is taking a most significant step in regard to the stevedoring industry. It has not been done lightly. The Minister for Employment and Industrial Relations and the Government have worked very hard in a most dedicated way during this Government’s period in office for all those people involved in the stevedoring industry- the employers and the unions. The Minister has been prepared to listen to representations, to negotiate and to liaise between the parties involved. In framing the legislation, he has done it in a way that should satisfy all of those people who are involved in the industry. I believe that if all those participants in the stevedoring industry are prepared to put their weight behind these Bills and support the Government’s efforts, we will see a more rational, a more economic and a more efficient operation on the waterfront in future years.

Mr MORRIS:
Shortland

– I want firstly to respond to a few of the comments made by the honourable member for Wilmot (Mr Burr). I am alarmed at the way he discarded the interests of those people on the waterfront who now find themselves redundant. He dismissed them with the proposition: Well, it is a difficult fact of life but you have to face up to reality; that is progress. I wonder whether that is what he tells his constituents? I wonder whether that is what he has put to the apple and pear growers? I seem to recall that he was one of those who voted last year in favour of the increased subsidy for the apple and pear growers. Here is the contradiction and the cynicism of honourable members opposite towards people who have only their labour to offer. They do not have capital. They have only a skill and through no fault of their own but through changes in society they find that their skills are no longer required, or that the process of age has made them not as efficient as they used to be, or that they cannot lift the heavy weights they used to lift in their younger days. The honourable member for Wilmot says: ‘We are sorry about that, but you will just have to go ‘. I know that he does not really believe that. I know that he does not apply that to the people of the State of Tasmania, but if in any way he thinks he believes it, I wish that he would put that same kind of thinking across ail of the arguments and across all of the propositions he puts to the people.

In respect of Tasmania I should point out that it was a conservative government in the 1950s that abolished the freight subsidies that were available to Tasmania. It was not until the Labor Government came into office in 1972 that a freight subsidy was re-instituted to help Tasmania to try to get out of the freight problems that had been caused in transport because of the neglect that Tasmania suffered over many years under conservative administrations. It was the Labor Government that appointed the Nimmo inquiry, and whilst that inquiry was being carried out we re-instituted that subsidy to try to assist Tasmanians. The present freight equalisation scheme which would have been adopted by the Labor government had it still been in office is a result of the initiative of the Labor Government of that period. Honourable members opposite can claim no credit for it. They are fortunate that they are in a position to superintend it. But there again if we were to take the honourable member for Wilmot seriously, as Tasmania is to the south of the continent- it is separated by water from the mainland- following his reasonable line of thinking and trying to do him justice he would have to say that that scheme should not operate. So I think it is fair to say, following the line of thinking of the honourable member for Willmot, that if he had been here at the time he would have opposed any subsidy for Tasmania, and that is really the truth of what he is trying to put to us.

He said that the costs of the waterside industry are borne by consumers. I notice that he neatly neglected to mention the $696,000 per annum or $13,000 per week payable as directors fees to Sir Reginald Reid. But it is true to say that in any industry all the costs and charges ultimately are borne either by the tax payers or by the consumers.

I suggest to the honourable member for Wilmot and those honourable members on the other side of the chamber who have spoken in the debate that they ought to direct their remarks in respect of the waterfront particularly to the Minister for Transport (Mr Nixon) and to his colleagues on the other side of the chamber who seem to get some sort of fiendish delight out of aggravating people who work on the waterfront or in any of the transport industries. That is all very well for short term political gain for honourable members opposite. They might think that they score points out of it, but they disrupt people’s lives, they put an added burden of costs on to the industry, they make Australia less competitive in export markets and they make the cost of transport within this country artificially high. Because of a lack of political argument they stoop to denigrating people working within an industry who are not as fortunate as they are. They could not go to Geelong Grammar like the Minister for Employment and Industrial Relations (Mr Street) who is sitting at the table. They could not go to any of the other wealthy schools.

Mr Street:

– I did not go to Geelong Grammar.

Mr MORRIS:

-Where did you go?

Mr Willis:

– He went to Melbourne Grammar.

Mr MORRIS:

-I am sorry, Melbourne Grammar. I do not want to downgrade him to Geelong Grammar; that is how he feels apparently. But these people are Australians. They are entitled to be given the opportunity to support their families. Surely they are entitled to the consideration and compassion of us all. They should not be singled out because the National Country Party or the honourable member for Wilmot feels that here is a good substitute for a rational argument. All those added costs go to the consumers. The honourable member came back to the attack on publicly owned transport enterprises. He suggested that anything that is publicly owned cannot be competitive and cannot be successful and for that reason the waterfront should be handed back to private enterprise. That again is in line with the thinking of honourable members opposite- anything that is profitable, particularly anything in which there are exhorbitant profits to be made, ought to be left to the private sector. It should have a licence to rip off the Australian community as and how it wishes. The same honourable members opposite regularly denigrate Trans-Australia Airlines, Qantas Airways Ltd and the Australian National Line, but these are quite efficient, successful, publicly owned transport enterprises. I would have thought that as government supporters they would have been seeking to improve and encourage these enterprises to greater effort. This is understandable because it is a reversion to the old Menzies’ philosophy: ‘If there is a dollar or a quid in it, you give it to the private sector, and if there is a loss incurred you socialise it and let the taxpayers bear the burden’. If Sir Robert Menzies had not disposed of the Commonwealth Oil Refineries back in the 1950s, if his Government had not disposed of that well-developed Australian firm Amalgamated Wireless (Australasia), if it had not disposed of the Commonwealth Handling Equipment Pool, which was the genesis of Brambles; it pushed Brambles on to its feet in the early years- if those three private enterprises had been left in public ownership this country would be far more efficient today, particularly in transport services, because the government, irrespective of which party was in office, would have a direct insight into the costs of the oil industry, into the costs of the transport industry at the waterfront level and into the electronics industry. But, as I have said, if there is a dollar to be made it ought to be left to those who can rip off the people, and if there is a loss to be incurred, it ought to be pushed on to the taxpayers.

In this cognate debate I firstly want to make a few remarks on the Port Statistics Bill 1977. The import of that Bill is to provide for the collection of stevedoring and related port statistics and transfers that responsibility from the Australian Stevedoring Industry Authority, which is to be abolished, to the Department of Transport. Clause 4 of the Bill empowers the Secretary of the Department to collect and publish statistics on the loading and unloading of ships and vehicles at ports and on the movement of ships. Clause 5 of the Bill enables the collection of statistics and persons will be required to furnish specified information, books or documents to verify information provided under the threat of a penalty for non-compliance. Clause 7 of the Bill provides that a person performing duties under this Bill will be prohibited from recording or divulging any information acquired, except in the course of duty. That is a natural inclusion in the Bill. It is to maintain secrecy and confidentiality on the part of the company concerned or the officer concerned with handling the detailed statistics of that company.

The background to this Bill is that the Australian Stevedoring Industry Authority currently collects a wide range of statistics on the stevedoring industry. In his second reading speech the Minister indicated that the present wide powers of the Authority under the Stevedoring Industry

Act 1956 to collect and disclose information are not appropriate under the new arrangements for the stevedoring industry. Consequently much of the Bill is concerned with defining the limits of the powers of the Department of Transport in the collection and disclosure of port statistics. It is worth mentioning also that at the meeting of the Marine and Ports Council of Australia in Surfers Paradise last year the new proposals were discussed and a working group comprising Federal and State officers was established to facilitate the transfer to the Department of Transport of the responsibility for the collection of the statistics.

The charges made for port handling services are a key element in marine transport services. They are a key element in determining the range of our access to export markets and in our internal markets, and whilst much criticism is made of Australian coastal shipping it is a fact of life that from about 1941 to recent years, though there has been a large shift in the composition of coastal shipping, the gross tonnage that has been transported has not changed so much. What has changed in actual fact has been an exchange of general cargo for bulk cargoes. Whereas the tonnage shifted around the Australian coast is much the same the composition of those cargoes is now bulk cargoes and general cargo has moved on to surface transport.

The accompanying Bills, together with the Port Statistics Bill, provide for the new arrangements and for the operation of our port services as well as for the abolition of the ASIA. The question that is immediately posed is: Will this system work? As the honourable member for Gellibrand (Mr Willis) mentioned earlier, only time will tell, and we as a future government reserve the right to review the effectiveness of the new arrangements. We hope they will work. We hope for the sake of Australia because of the heavy cost component of transport services in our marketing, that they will work. As the proposals are supported by the industry and by the unions we are not opposing them. As I said, we reserve the right to observe whether the new scheme works. Here the responsibility is upon the industry itself to make sure that the scheme does work.

I think most honourable members are conversant with the Prices Justification Tribunal inquiry into the costs of some aspects of the stevedoring industry and the charges made. The Minister for Transport stated- as I recall he did so before these arrangements were actually publishedthat while the Government still retains the Prices Justification Tribunal it could well be a means of checking on the efficiency of the new arrangements and seeing whether the charges to be imposed in the future are charges that can be properly validated. I simply refer honourable members to the conclusions of the PJT inquiry into container handling. I refer to page 103 of the Australian Shippers Council report which contains an appendix listing conclusions of the PJT. It states:

The Tribunal is of the opinion that the existing wharf handling and shippers charges in the ports of Sydney and Melbourne are not justified but that the lower wharf handling and shippers charges set out in Appendix ‘V hereto are justified.

The appendix continues:

The Tribunal is of the opinion that the proposed higher wharf handling and shippers charges for the ports of Brisbane, Melbourne, Geelong and Portland and the proposed higher wharf handling charges for the port of Sydney are not justified.

The fourth conclusion set out in the appendix reads:

The Tribunal is of the opinion that the existing prices for mechanical equipment hire in the port of Sydney are not justified but that the lower prices set out earlier in this Report are justified.

I simply mention those conclusions of the PJT to draw attention to the fact that an inflated system of charges was operating. All fault does not lie with the work force. That brings me back to the point made by the honourable member for Wilmot who tried to push the responsibility on to the work force itself.

Much criticism is made of our waterfronts, port handling systems and transport industries generally and marine transport particularly. Some of this criticism is informed; much of it is uninformed. A great deal more of it is made for political purposes rather than for the purpose of trying to find a solution to the problems that exist. Let me refer to a few statements made by the Minister for Transport. I refer to a comment in the Age of 19 August 1976 in an article by Tony Thomas which referred to a strong attack by the Minister for Transport on the waterfront unions made in Federal Parliament on the previous day. Mr Thomas was referring to a Dorothy Dix question asked in this House of the Minister for Transport about the number of strikes and stoppages on the waterfront in Melbourne. I can recall the day when the Minister used the occasion to ridicule those workmen. After all, that is their station in life. They are human beings. They are Australians. The Minister went out of his way to ridicule them and to exacerbate a difficult and delicate situation.

One of the things the Minister said was that those workers were not at work because it was their picnic day. Surely we all know that towns have show days. I do not see that a picnic day, which is part of an award which a government endorses, is anything to ridicule. All those pinpricking nonsense exercises aggravate people. Such action to me indicates the height of irresponsibility on the part of those who sit opposite and who continually claim to be responsible. The editorial of the Daily Commercial News, one of our shipping newspapers, of 8 July 1977 states:

The Federal Minister for Transport, Mr Peter Nixon, has been a politician long enough to know better than to make wild statements.

Commenting on the statement that the Minister had made on the incidence of waterfront strikes which was out of context and inaccurate when compared with the review over the year of the number of stoppages, the editorial states:

His statement was probably ill-conceived and possibly misunderstood.

The editorial went on to state that the number of stoppages was in fact down and not up at all. It continues:

Whichever way the Minister cares to look at the figures, they are down . . . Far be it for this or any other newspaper to condone stoppages- but there are stoppages and stoppages.

Here again the thrust of that editorial is to draw attention to the action of the Minister in deliberately using a sensitive area of our transport industry for snort term political gain. Who pays? The community pays in disruption, the primary producers pay in delays in getting their product to market and we as a nation pay in terms of foreign exchange in that we are not getting our goods overseas. Our reliability record suffers. In this game it seems that on the other side of the House there are no holds barred and that what happens does not matter because the unions can always be blamed. If we are to have an efficient industry and if we are to have some sort of leadership, the role of a Government and particularly the role of a Minister is to provide leadership, to avoid and to solve problems, and not to set out deliberately to create difficulties and flash stoppages. That, unfortunately, is the history of the National Country Party in this House.

Let me point to another contradiction of the same Minister. In April this year, the Minister for Transport noted that Australia’s waterfront charges were one of the world’s highest for container traffic. He noted that the price of handling a 40 foot container on a Sydney wharf was $308 while in San Francisco it was a mere $65. Comparisons about port handling charges cannot be made in such an easy way. The port handling industry is complex. Many different factors are involved. The factors vary from port to port and include such things as the type of equipment that is being used, the age of the work force, the amount of space that is available at the wharf, the number of cranes available and the number of holds that can be operated at any one time. One of the silly comparisons I hear often quoted is that a vessel can be put into Rotterdam and unloaded in 24 hours but if it was put into Melbourne unloading would take several days. The equipment is not comparable. Cargo is not located in similar positions in the holds. A portion of the cargo would be removed in Melbourne whereas all the cargo may be removed in Rotterdam. I am saying these things to illustrate the complexity of the industry. If we are to make a better and more efficient transport service in this country, let us deal with facts and rationality and let us seriously try to find solutions and above all let us try to develop goodwill. The Opposition sees its role as developing goodwill. I might say that it is extremely difficult sometimes in the face of the information that comes from honourable members opposite and the abuse that comes from honourable members opposite towards trade unions to persevere in that land of task.

Having said that, I turn to remarks made on behalf of the Minister for Transport on 6 May 1976, a bare few weeks later. The information was given in response to a question asked in the Senate by one of the Minister’s own colleagues, Senator Carrick, who represents the Minister in that place. The answer, which I am about to read, and which relates to the same subject of container costs, gives the truth. The answer was in reply to a question which asked why handling charges for 40 foot containers was so high in Australia. Part of the answer which appears in Senate Hansard on page 1610 on 6 May 1976 reads:

There may have been some differences in the circumstances applying to the development of container traffic in Australia. Initially, the volume of 40 foot containers was very low and terminal operators faced additional investment and set-up costs to handle 40 foot containers. These factors may have justified a heavy surcharge for 40-foot containers some years ago but this may be no longer the case. It is difficult to make accurate comparisons of container handling charges because of the different bases used for measuring working time and constraints inherent in the layout of a particular facility. There is some evidence, however, that handling rates generally applying in Australia are somewhat lower than those generally achieved overseas.

There is the proof of the humbug of the Minister for Transport on this most important issue. There in print in the Senate Hansard is the true situation which gives the lie to the nonsense that is raised in this House which damages severely the kind of goodwill we are trying to create in the transport industry and particularly in the port handling area. I make a plea on behalf of the industry and on behalf of the consumers that the Government, in its last couple of days at least, leaves the unions alone and sets about trying to develop a spirit of goodwill in reducing charges and achieving a higher rate of efficiency. I mention one last matter. How much do port handling charges cost? Some 38.9 per cent of the Australian National Line costs last year comprised port handling charges.

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

Mr McVEIGH:
Darling Downs

-The Fraser-Anthony Government has always indicated a willingness to wrestle with the problems on the waterfront. This bracket of Bills indicates that the Minister for Employment and Industrial Relations, the Hon. Tony Street, and the Government are prepared to wrestle afresh with these problems. Overseas trade is a vital ingredient in our nation’s economic wellbeing and, unfortunately, people in the stevedoring industry have occupied a far too powerful position. For too long they have held our great export industries to ransom, adding to the frustrations and trials of rural Australia as well as denying the opportunity of employment to many of their fellow workers. Ports, unfortunately, slowly are being strangled through the operations of waterside workers union officials who continue to operate with a most irresponsible standover attitude. With rather sickening regularity, we find ships sailing from ports in Australia without full cargoes and incoming cargoes choking up wharf terminals. Industries and warehouses are starved of needed materials and goods and in many instances there has been a forced lay-off of employees in the transport and other industries.

Australia exports 90 per cent of its wool, 75 per cent of its sugar, 65 per cent of its wheat and grains and 55 per cent of its meat and veal. As well as the financial inconvenience caused to the exporters, we place in jeopardy our reputation as a reliable export trading nation because of our inability to deliver goods under the specification of a contract. The world is a wide open market place brimming with activity and if we lose our tag of reliability many of our export markets will be lost forever. By continuous strikes, the Government has been challenged by Mr C. H. Fitzgibbon and Mr Docker of the Waterside Workers Federation of Australia to indicate who is running this country. This legislation spells out clearly and definitely that the elected representatives are not going to be sidetracked in carrying out their responsibilities. In circular No. 96/1 19 of 29 September 1976, Mr C. H. Fitzgibbon, a self-acknowledged communist, stated that the Federation would recommend a national stoppage of unlimited duration -

Mr West:

– I raise a point of order. I ask that that comment be withdrawn. Mr Charles Fitzgibbon, the General Secretary of the Waterside Workers Federation, to my knowledge never has been a member of the Communist Party. He is a well known member of the Australian Labor Party.

Mr DEPUTY SPEAKER (Mr Jarman)Order! The honourable member for Cunningham is a new member of the House. I appreciate that he may not be familiar with the Standing Orders. That is not a point of order.

Mr Crean:

- Mr Deputy Speaker, with all respect, it is a point of order. I respect my friend the honourable member for Darling Downs and I simply say to him that Mr Fitzgibbon is a member of the Australian Labor Party. It is incorrect for someone to say that he is a self-confessed communist. I would hope that the Minister for Employment and Industrial Relations (Mr Street), who is sitting at the table, would indicate to the honourable member from his own side that at least in this respect he is incorrect. I suggest to the honourable member for Darling Downs that he wrong in his assertion and I ask him to withdraw the remark.

Mr DEPUTY SPEAKER:

-Order! With all respect to the honourable member for Melbourne Ports, no point of order is involved. The Chair is not in a position to know of these things.

Mr Crean:

– I should like to speak to the point of order. It has been said here before that if one indicts a whole community, by saying they are communists, there is no point of order; but when it is said about a particular person and somebody objects to that statement then, I think, in decency it ought to be acknowledged that the statement is incorrect.

Mr DEPUTY SPEAKER:

-The statement may be correct or incorrect but the Chair is not in a position to know. I appreciate the fact that the honourable member for Melbourne Ports (Mr Crean) is upset because that statement was made. If the honourable member for Darling Downs wishes to withdraw the remark it is up to him. The Chair is not in a position to know about such matters. No point of order is involved. If the honourable member for Melbourne Ports wishes to refute that statement he can do so at a later time of the day.

Mr McVEIGH:

-I have the greatest personal respect for the honourable member for Melbourne Ports and I accept his intimation. Information that came to me led me to believe that the statement I made was correct. I accept the contrary view of the honourable member for Melbourne Ports. I make that statement in deference to my personal regard for him. I suggest to the newcomer, the honourable member for Cunningham (Mr West), that in future he cleans his teeth with toothpaste rather than with laxative because he obviously has verbal diarrhoea. I was making the point that in that circular Mr Fitzgibbon stated that the Federation would recommend (Quorum formed).

Mr Willis:

– I raise a point of order. I think that the honourable member for Darling Downs has grossly slandered the honourable member for Cunningham. I ask that he withdraw the comment that he made.

Mr DEPUTY SPEAKER:

– In what way does the honourable member claim that the honourable member for Darling Downs slandered the honourable member for Cunningham?

Mr Willis:

-I think you would agree, Mr Deputy Speaker, that it is highly out of order to accuse a member of this Parliament of suffering from verbal diarrhoea. I ask that the honourable member withdraw that comment.

Mr DEPUTY SPEAKER:

-I suggest to the honourable member for Darling Downs that he withdraw that remark.

Mr McVEIGH:

-If the remark I made has had a highly laxative effect on the honourable member for Cunningham I will withdraw it.

Mr DEPUTY SPEAKER:

-Order! I ask the honourable member for Darling Downs for an unqualified withdrawal of that remark.

Mr McVEIGH:

-Out of respect for you, Mr Deputy Speaker, I make an unqualified withdrawal. Before continuing with my speech and in order to set at ease the mind of my friend, the highly esteemed honourable member for Melbourne Ports, while the quorum was being formed I received information to the effect that the report given to me about Mr Fitzgibbon being a communist is not true. I correct the impression that I may have given. Incorrect information was given to me. I make a complete and unqualified withdrawal of that remark. In the circular that I was speaking about Mr Fitzgibbon stated that his Federation would recommend a national stoppage of unlimited duration if the Federal Government interfered with payments for waterside workers and if the Government initiated plans on a long term basis to ensure that our great export industries are not placed at the mercy of stevedores and waterside workers.

The present temporary arrangements- temporary being now of many years’ duration- have placed enormous financial demands on Australian exporters. We find that 1,800 men out of 11,600 workers in all ports are surplus to the labour requirements and all these men have been paid for doing absolutely nothing. This has led to the actuarial bankruptcy of the Australian Stevedoring Industry Authority and to an annual ‘idle time ‘ bill which is currently running at more than $20m a year. The Minister is to be congratulated for signalling the end to this disastrous state of affairs. It is the fervent wish of many of us that the parallel industrial relations legislation- I refer to the Industrial Relations Bureau- will smash waterside workers union bans on such things as wheat shipments to Chile and Indonesia, livestock exports and uranium exports.

Our exporters have proved that they are in the forefront of the world’s economic producers by any comparison, but they do have difficulty in absorbing costs such as the $20m annual bill for idle time referred to earlier and the cost of the high wages paid to Seamen’s Union of Australia employees whose average wages are of the order of $16,000 a year. Unlike their fellow employees in Australia these seamen have to work for only 29 weeks a year and are paid full wages for the other 23 weeks of each year. The honourable member for Capricornia (Mr Carige) remarked that people engaged in the cattle industry are on the verge of bankruptcy. Yet we find that seamen are earning $ 1 6,000 a year for doing half a year’s work. No wonder the honourable member for Capricornia gets upset when he finds trade unionists trying to bash the primary producers of this country.

In these Bills the Government has adopted a full-blooded approach without any pretence. In the eyes of responsible Australians there can be little sensible argument against the Government’s attitude. It is time our policies were designed to bite the irresponsible attitudes of people who act in a manner designed to destroy the Australian way of life. There should be few grouches about this legislation. The only grouches we have heard have come from the honourable members opposite. We want to get on with the implementation of this legislation so that we can continue to turn Australia back to prosperity. The expectations of many Australians m this type of legislation are properly directed to the position of the exporter who, when the bills have to be paid, has to write out the cheques.

Costs per man hour on the waterfront have increased from $8.90 at the end of June 197S to $14.46 at the end of June 1977.

Mr Burr:

– How much is that?

Mr McVEIGH:

– From $8.90 an hour in June 1975 to $14.46 at the present time. One hopes that out of the ranks of waterside workers there will emerge real leaders who will play a more effective role in future developments. In our industrial relations legislation we have set up the parameters which allow them to be effective representatives if they have the will. For too long the tendency has been allowed to develop for privileged groups of workers to withhold their labour when the major effect is to disadvantage fellow workers and the country as a whole. In 1976-77 man hours lost on the waterfront through unauthorised stoppages amounted to 1.8 per cent of total man hours worked. The greater part of the time lost- 52.7 per cent- was due to disciplinary and non-industrial causes, mainly political in nature. During the month of February this year Melbourne was at the top of the waterside strike league. Of Australia’s total of 13,139 man hours lost by unauthorised stoppages during that month, 80.6 per cent or 10,594 hours were attributed to the Melbourne Waterside Workers Federation. Quite obviously the leaders of the waterfront in Melbourne- we cannot describe them as anything but men of malice- must be replaced.

This legislation will inject a breath of sanity into this disastrous area. The levels of Australian stevedoring costs have a significant effect on the freight bill from Australia to places overseas and from overseas countries to Australia. In a recent inquiry held by the Prices Justification Tribunal it was ascertained that in five areas being discussed the Australian stevedoring costs, as a percentage of total freight revenue, varied from 27 per cent to 5 1 per cent. These percentages are in respect only of the transfer of the cargo from vehicle to the hold of the vessel. The costs for these relatively short movements, when compared with the total cost of the freight service, are clearly disproportionately high. It is time that this feather-bedding of watersiders ceased. In terms of dollars per tonne, recent figures show that the cost of transferring cargo from vehicle to a conventional ship is now up to $35 per tonne. No wonder there is widespread concern at the high costs of handling cargo through Australian ports.

We find that the cost of loading fruit in Australia is astronomical when compared with overseas prices. We have to compete with the overseas ports in the world market place. The cost of handling a carton of fruit in Hobart in 1974 was 40c a carton. In 1975 it was 60c a carton, and the projected price for the most recent year is of the order of 90c a carton. In South Africa and New Zealand the price would not exceed 15c to 20c a carton. Productivity in Hobart is about 15,000 cartons a day; in Nelson, New Zealand, it is 60,000 to 70,000 cartons a day; and in South Africa it is 90,000 cartons a day. These are quite staggering comparisons. One can only repeat those time honoured words that Australia can compete if there is a return to the work ethic. As regards outgoing cargoes, we find that Sydney stevedoring companies have to include in their calculations an added cost of 20 per cent for an item called ‘ delays on gang costs ‘.

The Minister is to be congratulated for achieving so much in a most difficult environment. Particularly is he to be congratulated in being able to arrange to have a system of port conciliators and to allow for the transfer of labour arrangements between companies which will enable a certain amount of elimination of locked up idle times. There will be a more efficient and productive use of labour. One is heartened by the fact that the Government has undertaken to review the situation in 12 months’ time. This legislation is a careful value judgment on how responsible government can be most effective in the operational sense.

During the negotiations which took place with various bodies prior to the introduction of this legislation, representatives of the various bulk handling exporters in Australia made representations to the appropriate authorities seeking an assurance that the traditional ways of operating would not be interfered with. I am heartened by the assurance of the Minister that that matter will be kept under close scrutiny and that adequate power is contained in the legislation to allow traditional procedures and modes of operation to continue.

The export of wheat and grain industries in Australia have been most responsible. The workers in the various terminals who, incidentally, are not members of the Waterside Workers Federation, have been deeply conscious of their position as members of the Australian work force. There have not been many disputes or many holdups. In fact, an analysis of the turnaround of ships engaged in the bulk grain trade in this country would indicate that m the vast majority of cases ships have been loaded well within the specified time limits. It would be disastrous if the Waterside Workers Federation were allowed access to wheat terminals, thus disrupting the present amicable working arrangements.

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

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

– in reply-I thank honourable members who have contributed to this debate on a very complex subject. Stevedoring has been an area that has troubled successive governments throughout the years. Now this Government has finally grappled with the problem in a realistic way. I think the speakers in this debate have acknowledged that fact. The approach now proposed will put responsibility where it belongs, and that is clearly on the industry parties. It will draw into the affairs of the industry other parties concerned with stevedoring, such as the Australian Shippers’ Council, port authorities and even wider community interests. It will involve more positively the Conciliation and Arbitration Commission. It allows a positive government influence which will enable genuine safeguards without restrictive interference in the normal operations of the industry. It recognises that the new arrangements were settled and agreed by all the major parties in the industry after protracted, detailed negotiations.

I think that these new arrangements, given goodwill- in most areas of industrial relations that is an essential ingredient- can lead to substantial improvements in the performance of the industry, to better industrial relations and to lower costs. The Parliament and the community will have the opportunity to see how the new arrangements work because, as I have indicated already to the Parliament, a review will take place within about 12 months. This aspect was picked up by the honourable member for Gellibrand (Mr Willis) and the honourable member for Casey (Mr Falconer). The honourable member for Gellibrand made the interesting comment that the Opposition had not abandoned nationalisation as a possible approach to the problems of the industry. I remind him that the review which I mentioned a moment ago will ensure that the Government maintains proper surveillance during this interim period. The honourable member for Casey expressed concern that if the Government’s present proposals do not work we would have to look to alternatives. I make the same comment about the review in relation to his remarks.

The honourable member for Cunningham (Mr West) made some substantial criticisms of the Australian Stevedoring Industry Authority. I was surprised to hear them because I would have expected that he, with his background, would have known a little more about the industry and would have known sufficient not to say that the Authority had fined its own employees. That is not so. The Authority is not the employer of the people concerned. The operational stevedores are the employers of the people concerned. So is the Stevedoring Employers of Australia Ltd.

Mr Charles Jones:

– I would back the honourable member for Cunningham to know more about the industry than the Minister. He can criticise in the way that he did because of his knowledge. It shows what an incompetent Minister you are.

Mr STREET:

– I would have thought the honourable member for Newcastle would have exhibited a little more detailed knowledge of the industry too. The honourable member for Cunningham should know that following the permanency arrangements waterfront labour was employed by operational stevedores and SEAL. In my view, the members of the staff of the Authority performed their duties with integrity for many years. I would especially pay tribute to their work during the very difficult time they have had in recent months, with depleted numbers of staff.

The honourable member for Wilmot (Mr Burr) made a very pertinent comment, I think, when he drew atention to the fact that both the employers and the unions involved in the industry opted for private enterprise in the industry. It is obvious from many comments coming from the Opposition that it is uncomfortable about that fact. The plain fact is that the unions prefer it, whether or not the Opposition likes it. The mechanisms which allow the industry to change for the better have been created. The procedures which enable the industry to go ahead have been endorsed. The way has been opened up for the industry parties to show the community that the approach that they wholeheartedly endorse is the right one. For our part, the Government’s continuing involvement in the industry and its surveillance of the developments will be geared to ensuring that improvements take place. We will not hesitate to take any action to ensure that the objectives of the new arrangements are faithfully pursued and that the community benefits from what is now proposed.

Finally, I thank most sincerely the officers of my Department who worked almost without pause since the Northrop report was received to help with and encourage the major changes in the stevedoring industry that are now put forward. It has indeed been a huge task. The Government, the Parliament and the industry owe much to three men in particular- Mr Fogarty, Mr Maher and Mr Bekema who between them have carried a great load for many months. The industry now has a tremendous opportunity to prove that it is worthy of the responsibility that it has been given. As I indicated earlier, the Government will be watching very closely developments in this industry in the coming months.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2633

STEVEDORING INDUSTRY CHARGE (TERMINATION) BILL 1977

Second Reading

Consideration resumed from 20 October, on motion by Mr Street:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2633

STEVEDORING INDUSTRY LEVY BILL 1977

Second Reading

Consideration resumed from 20 October, on motion by Mr Street:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2633

STEVEDORING INDUSTRY LEVY COLLECTION BILL 1977

Second Reading

Consideration resumed from 20 October, on motion by Mr Street:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2633

STEVEDORING INDUSTRY FINANCE COMMITTEE BILL 1977

Second Reading

Consideration resumed from 20 October, on motion by Mr Street:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2633

CONCILIATION AND ARBITRATION AMENDMENT BILL (No. 2) 1977

Second Reading

Consideration resumed from 20 October, on motion by Mr Street:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2633

PORT STATISTICS BILL 1977

Second Reading

Consideration resumed from 20 October, on motion by Mr Street:

That the Bill be now read a second time.

Question resolved in the affirmative. Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2634

INCOME TAX (RATES) AMENDMENT BILL (No. 2) 1977

Second Reading

Debate resumed from 20 October, on motion by Mr Lynch:

That the Bill be now read a second time.

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

- Mr Deputy Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this Bill, I suggest that it may suit the convenience of the House to have a general debate covering this Bill, the Income Tax Assessment Amendment Bill (No. 2), the Income Tax (Individuals) Bill, the Income Tax (Companies and Superannuation Funds) Bill, the Health Insurance Levy Bill, the Income Tax (Film Royalties) Bill, the Income Tax Assessment Amendment Bill (No. 3) and the Income Tax (International Agreements) Amendment Bill as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest therefore, Mr Deputy Speaker, that you permit the subject matter of the eight Bills to be discussed in this debate.

Mr DEPUTY SPEAKER (Mr Jarman)There being no objection, I will permit that course to be followed.

Mr HURFORD:
Adelaide

-The Labor Opposition is not happy with many aspects of these eight Bills. Therefore, on behalf of the Australian Labor Party, I move the following amendment to the motion for the second reading of the Income Tax (Rates) Amendment Bill (No. 2):

That all words after ‘That’ be omitted with a view to substituting the following words: ‘whilst not declining to give the Bill a second reading, the House is of the opinion that the Bill (a) contains changes to the personal tax system which are regressive in nature and which will have little effect in stimulating economic activity, (b) repudiates the Government’s commitment to full tax indexation, (c) fails to take measures to alleviate the increase in family tax burdens which have arisen as a result of the Government’s failure to index family allowances, and (d) contains insufficient measures to counter tax avoidance practices ‘.

Let me now substantiate each one of those four points by discussing these Bills in more detail. We are discussing eight Bills. Six of them have as their main purpose the implementation of the tax changes announced in the 1977-78 Budget. Of the others, the Income Tax Assessment Amendment Bill (No. 3) provides for the reinstatement of the income tax exemption in respect of income derived from the sale, transfer or assignment of a right to mine for gold or for certain prescribed minerals and metals, and the Income Tax (International Agreements) Amendment Bill gives legislative authority to tax agreements negotiated between Australia and Belgium and between Australia and Greece. The last Bill follows the pattern of those negotiated by successive governments, and all the Bills have been welcomed by the Opposition. Indeed, we brought a number of these agreements into the House ourselves and put them through this chamber when we were in government. The prime motivation for the introduction of the deductibility of the sale of mining ore rights, of course, has something to do with an election, particularly in the electorate of Kalgoorlie. My only comment about that is that pork-barrelling in not dead.

Let me look in more detail to the main Bills. The Treasurer (Mr Lynch) described in his Budget speech the changes his Government intended making to the personal income tax scales as ‘the most revolutionary change yet made to Australia’s system of taxation’. That is the end of the quote, and that is enough. In his second reading speech to the Income Tax (Rates) Amendment Bill (No. 2) 1977, he emphasised this point and repeated his belief in the revolutionary nature of the new system. In this instance I agree with the Treasurer. He has made a revolutionary change to our tax system. Unfortunately, the revolutionary nature of the change does not stem from any of the differences the Treasurer found between the new scales and those previously in operation. The changes are revolutionary only because they represent a blatant and undisguised attempt to redistribute the tax burden to middle and low income earners from those already relatively well off. This has not been done for a great many years. The principle on which taxation has been based in Australia is ability to pay, and the transfers of benefits have been from haves to have-nots. In these amendments the tax scales are changed in such a way that the transfer is the other way, from have-nots to haves. The changes made are unashamedly regressive in nature, as we say in the amendment. I will return to this later.

Let me first point out that the changes the Treasurer regarded as revolutionary were simply a replacement of a tax rebate with a tax-free income zone and the reduction of the number of steps in the income tax scale from seven to three- or seven to four if we count the first nontaxable zone as one step. The revolution is not in the form of the new system but in its relative incidence. The Treasurer claimed in his Budget Speech and in this second reading speech to the Rates Amendment Bill that the new tax system has as its most important benefit tax reductions at all levels of taxable income. As many independent observers have indicated, it takes a rather dubious method of comparison to validate this particular claim. The very best that can be said is that many taxpayers will receive on February 1978 the benefits they would have gained from indexation in July 1978, some five months earlier.

Calculations by, for instance, Mr Eric Risstrom, the Secretary of the Australian Taxpayers Association, demonstrate that those on present incomes between $5,200 and $6,200 will be worse off in 1978-79 under the new scales and half indexation than they would have been with a continuation of the pre-Budget scales and indexation according to legislation already on the statute book. A larger group, those on present incomes between $4,800 and $7,200, will pay a greater percentage of their income in tax in 1978-79 than they will in this financial year. It has been estimated that some one million middle and lower income earners will be adversely affected in this manner.

The fundamental reason for the total effect of that tax change not leading to a drop in taxation for everyone, as seems to have been claimed by the Government, is the repudiation of the commitment to full tax indexation. For 1978-79 the new scales are only to be subject to half indexation. This makes a mockery of the Government’s talk of full automatic indexation. In three years we will have had full, partial and now half indexation. The commitment has been watered down every year. Obviously, this has been done to limit the costs to revenue of the changes. There may well be good reasons for such action. Perhaps the Government had decided that increased capital works spending would be a far more effective way of stimulating the economy than tax cuts. The Fraser Government must not be allowed to have it both ways. It cannot take steps to limit the cost of revenue and at the same time claim it is making ‘tax reductions at all levels of income’. That just is not true. Professor John Neville of the University of New South Wales summed up the impact of the Government’s tax changes in assessing the economic impact of the 1977 Budget He told members of a North Shore economic society:

Despite Mr Lynch ‘s brave or perhaps just misleading words, most people will be paying a greater proportion of their income in tax in 1977-78 than in 1976-77.

He deduced this fact from the Budget forecast regarding movements in net pay-as-you-earn receipts. The amount of income to be taxed is to rise by 11.25 per cent and the tax receipts will rise by 17 per cent. If Treasury’s calculations are correct, the average rate of tax will rise in 1977-78, despite all the claims made by the Fraser Government.

I have just instanced examples in which independent analysts have expressed the belief that the sum total of the Government’s tax changes will be to increase rather than decrease the burden of taxation on many income earners. However, it is true that some taxpayers, particularly those earning considerably in excess of average weekly earnings, will gain substantially from the changes. This is the essence of the regressive nature of the changes. The alterations are regressive because the benefits accrue predominantly to those on relatively high incomes.

While middle and low income earners will find their average rate of tax rising in 1978-79, those on incomes above $25,000 will find their average tax burden lightened by between 5 per cent and 7 per cent. On another comparison, a taxpayer on average weekly earnings will, as of 1 July next, pay $ 1 less in tax than under the existing indexation arrangements to make up for increases in the cost of living. By contrast, somebody on the salary of a Prime Minister will have $64 extra a week with which to amuse himself.

The Government’s priority of giving high income earners substantial tax cuts m a time of record unemployment has been condemned by many eminent and respected people. Professor Ronald Henderson, Chairman of the Commission of Inquiry into Poverty, severely criticised the Government for its new tax system and its policy towards the unemployed. On the Melbourne edition of the program This Day Tonight he stated that the Budget redistributed income in favour of the rich. The newspaper of the Anglican Church, Church Scene, went so far as to condemn the community at large because the community had passively allowed ‘a government to change the tax scales to give maximum benefit to the very rich ‘.

When the changes to the tax scales we are presently debating are combined with other tax changes introduced by the present Government, a further pattern of the Government’s redistributive policies emerges. In the 1976 Budget, the Government introduced the system of family allowances to replace child endowment and tax rebates for dependent children. This in itself was a worthwhile reform and was welcomed by the Opposition, although we did not want it done at the expense of so many deserving people who lost the family tax rebate. However, to add insult to injury, failure to index those family allowances has meant a relative erosion of family incomes. If the 1975-76 system of tax rebates and child endowment had continued and if the child rebate had been indexed in line with other rebates, thousands upon thousands of taxpaying families, the vast majority- in fact all on $240 a week or less, which I believe constitute about 80 per cent of tax-paying families- would be better off now than under the proposed tax scales we are now debating, plus the present family allowance. The disadvantage under the family allowance system varies from $1.80 for a family with one child to $5.30 for a family with five children. In the words of Professor Groenewegen of Sydney University:

The introduction of the family allowance scheme praised by the Prime Minister as one of the greatest social reforms of the post-war period is largely a cleverly disguised tax rip-off.

They are not my words: They are the words of Professor Groenewegen, one of the few academics who specialises in the tax field. Put in another way, Ross Gittins, the economics editor of the Sydney Morning Herald, said:

The Government ‘s ‘ most significant social reform ‘ of 1 976 is saving it a lot of money one year later.

Of course Mr Gittins was referring to the fact that family allowances have not been indexed. In other words the cumulative effects of the Fraser Government’s tax changes in distributing income away from low income families can be seen by comparing tax rates in 1978-79 as they will be with those that would have existed under the fully indexed 1975-76 scales. This comparison reveals that a family with five children and an income of $200 a week will be over $6 a week worse off as a result of this Government’s tax changes. On the other hand, a family with one child and an income of $400 a week will be over $7 a week better off.

The Government has put forward a rather curious justification for its tax changes. Frankly, one would have thought that equity could not have been a paramount consideration because of the extraordinary effects I have cited. Let me quote from the Treasurer’s Budget Speech, misleading though it is. The Treasurer said:

The present tax scale is not only inequitable, it is having devastating effects on incentive and the will to work.

It takes an imagination far more subtle than mine to conjure up a rationale as to how the changes made have added to equity. Of course they have not; and I have already proved that. The second question, the disincentive effect, raised by the Treasurer has been referred to by many of the Government supporters; but they have not produced any objective evidence to support their case. The very fact that one asserts that high taxation levels are a disincentive to work effort does not mean that one is correct in that assertion.

I want to make it quite clear that I am not arguing for higher direct tax levels. I believe the threshhold in personal income tax has been reached. The Labor Party is not a high personal tax party. It is not a high tax party at all. What I am arguing is that it is wrong to use reasons such as disincentive effect when they do not apply. For, on available evidence, although some people reduce their work effort when extra income attracts high marginal tax rates- and we concede that some people do- others increase their working time m order to obtain a given income in order to pay for particular goods to which they are committed or to which they aspire. The substitution effect occurs when a person decides to substitute leisure for work because the returns from extra work effort are low and falling as a result of the high marginal tax rate. However, the income effect occurs because a taxpayer may experience an increased incentive to work in order to recover income lost through taxation. There is no way of determining conclusively, on available evidence, which of these two effects will predominate in a given country or community. Anyway, I believe that the effects are likely to alter over time, depending on other circumstances. The Asprey Committee reported:

Commonsense reasoning suggests that the higher a marginal rate of tax in relationship to average rates, the more is the substitution effect likely to outweigh the income effect; but psychological and sociological forces obviously play a major role in determining the work efforts of a particular individual, while the ability of taxpayers to vary the number of hours they work may be limited by such factors as the length of the minimum working week or the state of demand in the labour market. It is little wonder that empirical evidence on the effects of income tax on incentives to work has tended to be inconclusive and of hardly any guidance to policy makers . . .

If I had time, I could also cite the work of the Organisation for Economic Co-operation and Development in this area. All I want to say in summary and in passing over that part of my speech which I had prepared, is this: In the light of this careful though inconclusive study both by the OECD and the Asprey Committee, the proponents of any tax change based on the arguments that incentives should be increased by reducing taxation need to produce new substantial evidence to support their claim. Simple assertion is completely inadequate. I talked on much the same subject as this in the speech I made on the Estimates for the Department of the Treasury. The point I want to make, and the reason why I raise this point now, is that we need more evidence, we need more surveys on this very subject and we need independent advice as well as that which is going on within the Taxation Office. Government needs to subsidise, to help, to stimulate such bodies as an independent tax research foundation so that we can build tax policy on more solid information than we have at the present time. I raise this point about the incentive effects of taxation for that reason but also to clear away the humbug that surrounds the subject.

There are many good reasons for lower personal taxation. There is no need to raise improper reasons or unproven reasons, which are probably false, particularly when those unproven reasons lead to the relatively better-off getting the benefits at the expense of the more needy in our community. That is what has happened. The rationale has been that we must give the better-off people in our community the will and the incentive to work. There is no evidence that that is the result of this sort of action.

The Income Tax Assessment Amendment Bill also contains provisions relating to the eligibility of capital expenditure for purposes of tax deductibility. Deductions are to be allowed for capital expenditure on natural gas liquefaction plant. As my colleague the honourable member for Blaxland (Mr Keating) pointed out during the debate on the North West Shelf proposals, the Opposition does not oppose this move. The investment allowance provisions are to be extended by two years. At the time the Minister for National Resources (Mr Anthony) made his statement on the North West Shelf it was not clear whether the extension of the allowance was to relate solely to expenditure involved in that project. Frankly it is now clear that it is to be extended for eligible investment in all areas. I think the Government will be sorry that it has to do this. I have a fairly clear idea that the Government is sorry about the promise it made in relation to the investment allowance two years ago during an election campaign because it realises that the investment allowance has, if anything, caused a decrease in employment rather than an increase in employment. It has caused an investment deepening rather than an investment widening. It has caused automation and has resulted in people being off work or not getting jobs rather than in the creation of employment.

The Opposition has made its position on the investment allowance clear on a number of occasions. There is virtually no evidence to show that the allowance has stimulated any investment which would not have taken place in the normal course of events. That statement is true not only of Australia. Wherever one looks in the world for the result of measures such as the investment allowance one finds that they have not achieved the purpose which they were designed to achieve. The allowance has contributed nothing to solving the unemployment problem. The revenue forgone would have been far better spent in other areas. In fact, by subsidising capital, the allowance has probably led to a reduction in employment opportunities. It has encouraged investment deepening rather than investment widening. It is difficult to imagine that the exaggerated claims of the Prime Minister (Mr Malcolm Fraser) of the effect of wage levels on unemployment are connected with a real concern for the unemployed. If the Government were really concerned with the unemployed situation would it really continue an incentive to shed labour, for this appears to be the only impact which the investment allowance is having? However, let me make it clear that the Australian Labor Party in government will phase out this wasteful allowance responsibility, honouring existing commitments.

These tax Bills contain arrangements for a new system of tax averaging for primary producers. It is worth recalling the circumstances m which this scheme was introduced. The 1977-78 Budget papers contained provisions which effectively eliminated tax averaging for farmers. It was quickly apparent that the dubious claim by the Treasurer that the Budget brought tax gains to all could by no stretch of the imaginaton be applied to the farming community. The outcry raised, in which the Opposition played a not insignificant part, forced the Prime Minister to repudiate a section of his Treasurer’s Budget. The significance of this move should not be dismissed lightly. Within a week of being brought down, the Budget, the cornerstone of this Government’s economic management, had its revenue side altered substantially. The Ministryin particular those who claimed for themselves a special role in protecting the interest of rural producers-had failed adequately to examine their own budget and they allowed through something that was of grave disservice to the primary producers of this nation.

They were seen to be in disarray in trying to salvage the situation, in making last minute, overdue alterations to the tax averaging provisions. This was the crowning example of the confusion and ad hockery which pervades policy making under this Government. The Government launched a so-called ‘revolutionary’ new tax scheme without even knowing how it would affect a significant number of taxpayers. Of course, more confusion was to follow. The Treasurer and the Prime Minister found it impossible to agree on the cost of the new scheme. The Treasurer could not even agree with himself from one day to another, and we remember with amusement what happened immediately after the Budget was introduced. The averaging scheme with which the Government has come up will add a further $50m to the deficit. It should be noted that this Government, which has always expressed such great concern about the deficit, has not released an estimate of the expected deficit following the rapid alterations to its Budget, made so soon after that Budget was announced.

No attempt is to be made to limit averaging to those who are genuine primary producers. The scope for exploitation by Pitt and Collins Street farmers is still there. One would have thought that what the Government sees as the added generosity of its revised scheme would have prompted it to tighten up the eligibility provisions. In a time when rural industries are at their most depressed level in recent years any genuine attempt to aid them is to be welcomed. It remains to be seen whether alterations to the averaging scheme, which will have little immediate effect on those who have had several low income years, is the most appropriate measure for doing just that- aiding the more hardpressed rural community.

Another measure introduced in the Budget, to which effect is given by these Bills, is the decision to raise the level of company tax. Company tax on both public and private companies is to be lifted from 42.5 per cent to 46 per cent and is to be payable in 1977-78. This rate of 46 per cent is unprecedented in recent years. Other income which falls within the ambit of the Income Tax (Companies and Superannuation Funds) Bill is to be subjected to an equivalent rise in taxation. It is difficult to follow the Government’s rationale for this move. It has argued repeatedly that a restoration of historical levels of the share of national income going to profits was a prerequisite for economic recovery. Now it takes action which will effectively reduce the funds available to companies for further investment. Some companies will be harder hit than others. For example, those which have received negligible assistance from the investment allowance and the stock valuation adjustment schemes are to be particularly disadvantaged. Private company taxation is now to be at its highest level ever. I look to the officials to see their reaction to that statement. I cannot remember a 46 per cent rate for private companies taxation. I think that it can at least be called an unprecedented level. The Government which purports to be concerned about the plight of small business has taken action which must have a further depressing effect on this sector in the present economic climate.

Changes are to be made to correct some anomalies which have arisen as a result of the Government’s decision to emasculate Medibank. These relate to provisional tax requirements and to a decision taken to exempt the income of deceased estates to which no beneficiary is presently entitled, from payments of the health insurance levy. Unfortunately, no action is to be taken to correct more substantial anomalies. As they stand, the regulations do not allow for husband and wife insuring differently, one paying private insurance and the other the levy. Under

E resent arrangements the married couple are both liable for the levy if they insure differently and have no children. The Government would have been well advised to take steps to rectify this anomaly which is inequitable.

In the legislation which we are debating the Government has also taken steps to clamp down on tax avoidance practices. These steps, as far as they go, are welcomed by the Opposition. Changes are to be made to the provisions that establish when a company is a public company for the purposes of division 7 of the income tax law. These amendments are necessary to overcome a particularly iniquitous practice in which essentially private companies enter into arrangements with public hospitals and other public bodies to confer public company status on the private company. This is nothing more or less than a quasi tax avoidance scheme. The Opposition is very happy that the Government has moved to close that loophole.

The private company in this manner is able to avoid the profits distribution requirement of division 7. The amendments will extend the number of requirements a private company has to fulfil before it will be eligible for public company status. I repeat that the Opposition supports that change. If we are to change division 7 for private companies we should do so in another context, and certainly we should not allow these sorts of tax avoidance schemes to allow one company to get away with it vis a vis another company. In his Budget Speech the Treasurer (Mr Lynch) referring to tax avoidance said:

We propose to crack down hard on such practices.

In his second reading speech to the Income Tax Assessment Amendment Bill he said that the Government’s decision to clamp down on the use of trusts to avoid tax were ‘contained’ in the legislation now being introduced. As with the great majority of measures taken by this Government, its performance has fallen far short of its promises. The economics writer for the Australian, Russell Barton commented:

The Treasurer, Mr Lynch ‘s much vaunted crack-down on tax avoidance has begun, but with little more than a whimper.

He was referring to these changes.

Changes are to be made to the treatment of trusts assessed under sections 98, 99 and 99a. The new rate scale with no tax payable on income up to $3,750 has necessitated changes in the method of taxing the income of beneficiaries of inter vivos trusts assessable under section 98 to preserve the ground rules operating under preBudget conditions. The Government’s major avoidance move has been in the area of section 99a trusts which accumulate funds and which have no present beneficiary. First the rate of tax on these trusts is to be raised from 50 per cent to 60 per cent and the Government has withdrawn the advantage they prossess of one year’s deferral of tax. The practice where some family groups arrange for an unrelated aged person who is not expected to live much longer and who has little in the way of assets to set up multiple ‘shell’ trusts under a will to the benefit of members of the sponsor family is to be curtailed by bringing such estates under the scope of section 99a, This closes a loophole which existed in antiavoidance legislation passed in 1964. As the Treasurer observed, few people have used this technique to avoid tax. This was the extent of the Government’s moves against the use of trusts to lower tax liability.

The real areas of concern have not been covered. Income sharing by one form or another leads to a significant reduction in the effective rate of taxation paid by many high income earners. It has been estimated that there are about 80,000 self-employed professional people in Australia. In 1976 they earned about $2,000m. It would be expected that they would pay about $820m in tax. In fact tax receipts from this group totalled only about $560m, a shortfall of $260m. The point that I make here is that there are many other loopholes yet to be closed and the ones covered by this Bill are minimal. This is the explanation for another of the clauses in the Opposition’s amendment. The Treasurer’s brave words in the Budget Speech gave some of us hope that the Government was proposing wide ranging reforms in this area. Unfortunately, the actions finally taken are unlikely to cause great concern to the tax avoidance industry. Some observers have been churlish enough to suggest that the Commissioner of Taxation actually has further legislation ready, that the Government has held it back until after the election, the Government’s thinking probably being that those such legislation is likely to effect would be found more readily among the ranks of its own supporters. I seek the support of the House for the amendment I have moved.

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

Mr Crean:

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

Mr BRADFIELD:
Barton

– I support the Government in its implementation of the Bills presently being debated cognately. In the time allotted to me I would like to touch on some of the main features that are embodied in these complex taxation Bills. Firstly, and most importantly, the Income Tax (Rates) Amendment Bill (No. 2) provides for the imposition of the new flat rate personal income tax scheme to commence on 1 February 1978. This is a scheme that will allow the Australian taxpayers a considerable amount of benefit from the payment of tax. I will deal with that later. This taxation legislation provides also for the modification of the exemption limit of the Medibank levy. This is necessary simply because of the new flat rate scale which provides a higher exemption limit for people who pay tax and which of course necessitates that the exemption limit on the Medibank levy also should be raised. Complicated legislation for the alteration of trusts is also included. I would like to deal with that aspect in more detail later because it is a subject with which many people are concerned. I would like to explain to those people that the Government’s attitude is not to do anything of a detrimental nature to genuine trusts, but the Government is sincere in its desire to clamp down on the various tax avoidance schemes which have been built around trusts in the past. The legislation provides also for an extension of the investment allowance which was introduced by this Government in early 1976. This was a 40 per cent investment allowance which provided tremendous stimulus to industry. From June 1978 that scheme phases down to a 20 per cent investment allowance. It was originally due to cease in June 1983. This legislation provides for an extension of that investment allowance for a further two years, designed mainly to assist those organisations that are involved in investment of a very large and continuing nature, in construction programs that extend for many years and in expansion programs that require a number of years to complete. This legislation will ensure that those programs will now go ahead and it will ensure also that those people genuinely going ahead with those programs will be entitled to the investment allowance.

The legislation provides also for the averaging of income of primary producers. Many honourable members of this House have spoken on that aspect. It provides also for increased taxing arrangements on overseas companies being paid film royalties from Australia and, as was mentioned by the honourable member for Adelaide (Mr Hurford), particularly in relation to the development of the North- West Shelf, it provides for tax concessions for petroleum mining in regard to the construction costs of liquification plants. From time to time amendments to laws related to taxation become very necessary because of changing economic circumstances and the need to adjust the tax burden on the Australian people and also because of progress in the continuing efforts, usually by some unscrupulous professional people, to invent schemes to minimise or avoid taxation. There are in Australia many people who seem to delight in avoiding their responsibilities to contribute fairly to the running costs of our great country, thereby throwing an increasing and unfair burden on to the majority of honest and responsible taxpayers who are meeting and accepting their just responsibilities in regard to their contribution towards taxation. In his Budget Speech the Treasurer (Mr Lynch) said that the Government will clamp down on such tax avoidance. This is the main reason why much of this legislation has come forward.

I mentioned first of all that the most important part of this legislation is the new flat rate tax scheme that has been introduced by the Treasurer. I cannot help but comment on something that the honourable member for Adelaide said. He spoke of this new flat rate scheme as simply the replacement of a tax exemption rebate for the tax free zone. Actually he is quite correct. That is exactly what it is. But in doing this it leaves in the Australian taxpayers’ hands a substantial amount of money that they otherwise would have had to pay under the rebate scheme that was brought in by the Labor Government in 1975. In the Budget Speech, the Treasurer in speaking about personal income tax said:

Our success since taking office in reducing the rate of growth in expenditure by the Government has made it possible for us to reduce the excessive level of personal taxation

Our first step towards reform of the personal income tax system was to introduce last year full automatic indexation to prevent effective rates of personal income tax from increasing purely because of inflation.

He went on to say:

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.

The honourable member for Adelaide ironically suggested that his party, the Labor Party, is not a high tax party. Yet during its reign from 1972 to 197S Australian taxpayers suffered increases in personal taxation levels that have never before been seen. So, I suggest that that statement should be reversed- that the Fraser Liberal Government is not a high tax party. That is exactly what this Government is demonstrating now by the introduction of this flat rate scheme.

Had this Government continued with the general rebate scheme and with full tax indexation, the rebate this year would have been $676 and it would have had the effect of freeing from tax the first $3,1 S3 of taxable income. In other words, had we continued with tax indexation as was promised with the level of the general rebate brought down by Treasurer Hayden in 1975, only people with a taxable income of less than $3,153 would have been exempt from taxation. Yet, under the Government’s tax reform, people are going to be exempt from taxation at a much higher level- $3,750. In fact, as it has been well stated in this House, 225,000 former taxpayers will now not have to lodge tax returns and will now not have to be subject to taxation. That fact illustrates the generosity of this Government. This Government has helped those people on the lower tax scales. As well as helping people throughout the entire tax range those people at the lower end of the tax scale will benefit most.

Just briefly I will move on to trusts. This is a complicated area. It is one of those devices that has been around for a long time, but it has been misused by many Australian people. It has been necessary once again to amend through these Bills the taxation laws relating to trusts. This has become necessary mainly for two reasons.

Firstly, it is brought about because of the necessary adjustments to taxing arrangements on trusts so as to relate them better to the new personal flat rate scale that I have just mentioned. Under the flat rate scale, incomes below $3,750 are exempt from tax. The laws in relation to trusts are being altered because of the need to clamp down on those people who, as I have said, have resorted to the use of trusts for no other reason than tax avoidance. May I say that the Treasurer in putting forward this legislation has no desire to disadvantage those trusts of a genuine nature, as I mentioned previously.

The legislation will effectively control the misuse of deceased estate trusts. I am distressedand the honourable member for Adelaide mentioned this- at the incidence of tax avoidance which has resulted from deceased estate trusts. One case is known of someone flying from one capital city in Australia to another city to get a person with two days to live with virtually no assets to sign 500 blank forms so that this person in future years could sell for a sum of money in tax avoidance schemes involving deceased estate trusts the blank forms to whoever his clients may be. When people resort to flouting the tax laws to do something like that, of course amendments are very necessary.

The legislation also controls the use of multiple trusts which are designed to organise each trust income to be below the minimum exemption level that attracts tax. It is well known that people were setting up multiple trusts for the sole purpose of avoiding tax, and this legislation controls that activity. I would briefly like to describe some of the more common trusts under the new taxing arrangements because I have had many calls m my office and I know other honourable members have probably had calls from constituents concerned at the effects of the taxation laws regarding trusts on their own families. I am pleased to say that in most cases these people have genuine trusts. Trusts formed for children by a living trustee will be exempt from taxation on incomes below $1,040. One of the more common trusts is where the mother, father or parent has a trust for their children and where the income is below $1,040 it will not be taxable. Incomes over $1,040 will be taxed at the rate of 50 per cent. In other words, for every $2 in excess of $1,040 which the trust earns $1 will be taken in tax. That rate is designed so that when the income from that trust gets up to $3,750, which is the exemption level under the new flat tax scheme, the income will be subject to the same tax rate of 32 per cent. A trust for an infant child, which is the proceeds of a will, will have a tax exemption level of $3,750. 1 applaud this legislation because it does tighten up the tax laws and, at the same time, it copes with the situation where people are just trying to flout the tax laws. When the Treasurer introduced these Bills, he said that the provisions will ensure that ordinary trusts for children under 16 years of age will not be called on to pay tax where the income is under $ 1 ,04 1 , which I have just mentioned.

The legislation also deals with section 99A of the Income Tax Assessment Act. This section which deals with trust laws is the section that is used where a trust is set up purely for tax avoidance. I am very pleased to say that the legislation increases the present taxing rate from 50c in the dollar to 65c in the dollar on trusts that are set up purely for tax avoidance and this the maximum level of personal rate scale.

The investment allowance is another point that has been mentioned in this Bill. I have applauded the investment allowance since the Government introduced it in 1976. It was designed originally to promote capital expenditure by organisations, businesses and people in the community. It is one of the keys to the Government’s policy on economic recovery. The recovery is now starting to take shape. The economic indicators in many instances snow that this is so. Let me repeat the words of the Prime Minister (Mr Malcolm Fraser) many months ago when he was talking on the investment allowance. I think they are important words for the Australian community, important because many people in business are not taking advantage of the scheme. He said that those people who invest today will be in the best position for the economic recovery of tomorrow. I want to speak to those people who are able to take advantage of the investment allowance and to remind them that the investment allowance is a great incentive for investment in capital equipment and the types of equipment that come under the relevant legislation.

The 40 per cent investment allowance ceases in June 1978 which is only seven months away. Admittedly this Bill introduces a 20 per cent level to come into effect after the 40 per cent investment allowance is discontinued. I want to remind business people and people who are listening to the debate tonight to take advantage of the capital expenditure that is afforded under this legislation. They were very true words spoken by the Prime Minister some months ago when he said that those people who invest now will be in the best position to take advantage of economic recovery. Today we have economic recovery. Due to the monetary controls of this Government, Australia and the Australian economy now have a sound base from which recovery can continue and will continue. We have inflation under control. The latest figures on retail sales show some pleasing results. The latest figures on finance approvals for the building of dwellings show a favourable trend. I suggest that the investment allowance as altered in this legislation, plays a key part in that role.

In conclusion I congratulate and solidly support the Government on this legislation. As I said at the beginning, the legislation is necessary. Changes will always be necessary to the tax laws. The Government accepts the responsibility that it must tax the Australian people at the lowest possible level and at the same time not allow unscrupulous people to stoop to the depths of tax avoidance, thereby refusing to accept responsibility to their country, and continually look for ways not to pay taxes. I support the Government and congratulate it on this legislation.

Debate interrupted.

page 2642

PARLIAMENTARY STANDING COMMITTEE ON PUBLIC WORKS

Notices of Motion

The Clerk:

– Notices have been received from the Minister for Construction (Mr McLeay) of his intention to move tomorrow, firstly, that it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the Committee has duly reported to Parliament:

The construction of 9 Beef Cattle Research Laboratory at Rockhampton, Queensland.

And secondly, that because of the urgent nature of the work it is expedient that the construction of approximately 165 dwellings in the Rockingham area in Western Australia be carried out without having been referred to the Parliamentary Standing Committee on Public Works.

page 2642

INCOME TAX (RATES) AMENDMENT BILL (No. 2) 1977

Second Reading

Debate resumed.

Mr CREAN:
Melbourne Ports

-Ever since 1 95 1 -52 1 have spoken on every income tax Bill that has come before this House. There was nearly as much interest then as there seems to be now in what is really the most fundamental of all the taxes that is applied or inflicted, depending on how one looks at the situation. To check on these matters, I have looked up Mr Fadden’s Budget of 1951-52. Page 69 of Hansard of 26

September 1951 shows that it was anticipated that total tax revenue would be pretty close to f 800m or, if you like to double the pounds and call them dollars, $ 1600m of which some $920m was to be found from income tax- £3 50m or $700m from individuals and a bit over £ 100m or $200m from companies. The latest Budget we have been contemplating shows that total income tax on individuals and companies will be in the region of $16 billion out of a total anticipated tax revenue of $22 billion. The proportion of income tax under this Government is higher than I would think it has ever been.

I was a little intrigued by the honourable member for Barton (Mr Bradfield) talking about reduction of taxes. This year the tax on individuals and on companies is anticipated to yield $16 billion as against $14 billion for the year before and $12 billion for the year before that. What does the honourable member mean when he talks about taxes being reduced?

Mr Bradfield:

– There are more people and more companies.

Mr CREAN:

– The honourable gentleman is coming to it. There are more people and there are more responsibilities. But should income taxes have gone from $ 14 billion to $ 16 billion in a single year by a ratio of one-seventh? Does that mean that per person the burden is lighter in 1977-78 than it was in 1976-77? The honourable gentleman has made great play about what he calls the new standard rate system as against an older system. No doubt if he has a safe seat he will be here for a few years to come -

Mr Bradfield:

– He has not.

Mr CREAN:

-If he has not, he might lamentably say: ‘If I had seen this trick I might still have been a member of Parliament.’ How can we compare one tax system, a changed system, with another? The inevitable fact is that with the changed system the total yield is still greater than it was the year before. I accept the fact for two reasons- more people and inflation. How does one deduce that the new system is more equitable than the old? The honourable gentleman has made a great play about exempting people from taxation whose income is $3,750 a year, roughly $70 a week. Who is there in the Australian community at the moment -

Mr Bradfield:

– A lot of pensioners, Frank.

Mr CREAN:

-Is that the sort of person to whom the honourable member was referring? A person receiving only a pension has never paid tax in Australia. This is one of the things we have to look at a little quietly. In-so-far as there is still income splitting in the Australian community the Government is really exempting incomes in some cases in a single entity of $7,500 which may not be quite as equitable as it thinks. I am simply saying that we have to look deeper at this aspect. A tax system, its exemptions or its basic levels and rates, cannot be taken in isolation from what is allowed as deductions. One of the points I wish to raise has been drawn to our attention in the amendment moved by my colleague the honourable member for Adelaide (Mr Hurford). I have advocated for years in this House- and it finally came to pass- that it would be better to take child concessions out of the Income Tax Act altogether and to look after this area by means of child endowment. The Government has taken child concessions out of the Income Tax Act and is relying on child endowment. The Government wants to take great virtue in what it calls indexation but it has quietly forgotten to index family allowances. I have said this before and I repeat it: If the Government attempts to index everything I doubt that in the long run it will index anything. But certainly, if it indexes some things and not others it is conferring a certain advantage on those who have been indexed as against those who have not. I have no doubt that one of the promises that will be tossed up in this election by honourable members opposite will be that the Government, as from 10 December, has decided to index family allowances. But why does the Government not do that now?

I want to deal with matters one by one because this is technical legislation. There is some difficulty about what is called averaging. Again I submit that once the Government changes to the new system of taxation, it will be pretty hard to encompass averaging within it. I do not think all those loose ends have been covered by this legislation. In fact, the Government has got itself into some difficulty. I think it has overlooked some technicalities but I do not want to dwell very much upon them except to note them in passing. There are one or two matters about which I do want to say something. I should like to refer to the investment allowance. The investment allowance is what I have always called a fiction. The investment allowance means that something that costs $1,000 or $10,000 shall be presumed to have cost $2,000 or $14,000, according to the level of the investment allowance. The person receiving that allowance is allowed to write off that amount in the year in which plant is purchased and, thereafter, depreciation is claimed at the normal rates. I suggest it is a fiction to start with. I do not deny that it is a benefit to those who get it.

The Government is most unselective, if I might say so, in its application. If it is to be a device that is supposed to stimulate investment when investment needs to be stimulated, and to retard investment if it is thought that it is booming or exuberant, then certainly it is not something that ought to have a life beyond a single year. I submit, with all respect, that what is being done now if it is to continue right up to 1982- is an investment deferral rather than an investment stimulus. I ask the honourable gentleman who told people to hurry up and get the allowance in the remaining few months: What about the people who can take until 1982 to get it? Is not that going to defer investment rather than to encourage it? I suggest to governments that if they are going to have an investment allowance it has to be like a yo-yo. It has to be something that can be rolled out and rolled up, not something that is pushed further and further forward. I have no objection to having what is called free depreciation whereby people can claim if they so desire. To do so defies accounting principles. Let people claim, if they want to, the total capital cost in the year in which they install the plant. But why should they be allowed to claim more than the plant has cost? Basically, this is what the investment allowance does.

Another matter about which I wish to say something is the question of tax avoidance or tax evasion. I know that some people are very sensitive about whether one implies one term or another. If one looks at the estimated $16 billion that will be collected this year in income tax, one will find that nearly $10 billion of that is collected by means of what is called pay as you earn tax. The PAYE taxpayer can hardly avoid or evade a single cent of the tax that he properly has to pay. I think one of the things that happened when we altered the rate schedules recently was that we picked up a lot of people who had two jobs which formerly were worked separately for taxation purposes. It is not quite as payable now that the maximum tax is about 35c m the dollar. Again, I have no sympathy with those sorts of people either. I simply say that of the $16 billion collected in income tax, those contributing $10 billions- five parts out of eight- virtually have no potential to avoid or evade taxation. I should like to refer to what is stated in the explanatory memorandum in relation to private companies. It states:

The provisions that establish when a company is a public company for the purpose of Division 7 of the income tax law are to be amended to overcome artificial arrangements entered into with public hospitals and other public bodies to confer public company status on what are essentially private companies.

I must say that this is an appalling reflection on the moral approach of people who would be disturbed if they were questioned in any way about their morality. What sort of contrivance is it that would persuade the board of a public hospital- 90 per cent of whose funds come out of Consolidated Revenue anyway- to enter into an arrangement with a shrewd accountant or a shrewd lawyer whether in respect of the sale of shares or the management of a company so as to defeat the proper return that should go to the public coffers? I say this in sorrow but what sort of a situation do we have when people with certain skills- skills that we are supposedly we are short of- combine and conspire to defraud the rest of the community? This is what it amounts to. I pose again the proposition that the major part of the taxpayers of Australia cannot avoid a single cent of their legal obligation.

Governments, when formulating their Budgets, determine they have to obtain a certain amount of revenue. If there is a shortfall in one area, it is at the expense of the other areas. This seems to me to be an appalling reflection upon the intellectual integrity of people in the community who have had the advantage- again, mainly at public expense- of better education than the rest of the community. I think it is appalling that these people are prepared to enter into conspiracy and to try to camouflage it, although not by evasion. As Mr Justice Mansfield said, it is the right of any section in the community to so arrange their affairs that they pay the least taxation possible. I believe the Government has the right to rebut that. Those gentlemen who would drive a coach and horse through the spirit of the law can have no resentment when the letter of the law is changed to curb that rapacity. Candidly I think it is an appalling situation that in 1977-78 we in Australia have to do this kind of thing.

As I have said, I believe that insufficient interest is displayed by this House in these matters. This is the last occasion on which I will have the opportunity to address the House on this area. The legislation deals with the major tax which the Government is responsible for collecting. Usually such legislation passes this House with only about three honourable members from either side speaking in the debate. I believe there has got to be a new approach to this matter. We have heard in the debate tonight that one system is better than another. I might say in a kind of reflective spirit that I have always believed that the tax system should provide a basic exemption for everybody. It should provide for what I would call in other days a subsistence allowance.

It costs everybody in the community a minimum sum of money to sustain himself and that part of his income ought not to be taxed at all. There could be arguments about what that level ought to be. There could be arguments about what circumstantial matters one takes into accountwhether people are married or single, whether they have children and so on. But we should not erect a kind of facade which suggests that somehow or other one sort of system, such as the one that is now being applauded, is better than the others. One cannot take into account exemptions only. One must take into account also deductions, the total income structure of a community, indirect as well as direct taxes, and the fact that in Australia we have three levels of government raising taxes. I think it is about time we got rid of a lot of the nonsense.

I have received many letters expressing regret at my leaving this Parliament, but I got one or two rather curious ones whose authors thought they were having their day of retribution. One such letter stated that I was the first Treasurer to tax the old age pension as well as other income. I can see no reason why a person of 75 years of age who has the same income as a person of 25 years of age should pay less in tax than the person of 25 years of age. If honourable members on one side of the House pressed for the removal of the means test more than honourable members on the other, it was those who now sit on the Government side. The Government of which I was a member began to abolish the means test for people aged 75 years and over and we continued to abolish it for people aged 70 years and over. The present Government, which espoused the abolition of the means test in the first place, did not take that matter any further. Personally I was never in favour of the abolition of the means test. But having started it, you cannot stop in the middle.

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

Debate (on motion by Mr Cotter) adjourned.

page 2644

NEW BUSINESS AFTER 11 P.M

Motion (by Mr Sinclair)- by leave- agreed to:

That Standing Order 103 ( 1 1 o’clock rule) be suspended for this sitting.

page 2644

STATES GRANTS (SCHOOLS ASSISTANCE) BILL 1977

Bill presented by Mr Viner, and read a first time.

Second Reading

Mr VINER:
Minister for Aboriginal Affairs · Stirling · LP

– I move:

That the Bill be now read a second time.

This Bill provides for the payment of grants to the States for government and non-government schools in 1978-the first year ofthe 1978-80 rolling triennium. In addition the Bill adjusts grants for 1977 in respect of cost increases. Honourable members will recall that the Government announced in June of this year that it would provide for expenditure in 1978 of $57 lm, in December 1976 prices, for government school programs, non-government school programs, and joint programs through the Schools Commission. The Commission’s report was tabled in the Parliament in September and recently the Government announced its acceptance of the Commission’s recommended allocations for 1978 consistent with the guidelines. The Bill gives effect to those decisions.

I direct the attention of honourable members to the Bill. It provides for the continuation of all existing programs for government and nongovernment schools. These are: General resources programs- general recurrent grants, including funds for child migrant and multicultural education, emergency aid for nongovernment schools, and capital grants; specific purpose programs- disadvantaged schools and schools in disadvantaged country areas, special education for handicapped children including children living in institutions, services and development including education centres, and special projects.

Although the format of the Bill is different from the existing States Grants (Schools Assistance) Act 1976, it contains the same provisions. The new format more closely reflects the way in which the programs are administered. The base program for migrant and multicultural education is the same in total as for 1977, but has been adjusted between States and systems to bring the payments more into line with the actual distribution of migrant children. The provision for development activities and associated staff replacement has been combined into one schedule to provide additional flexibility for the States. Administrative arrangements will provide for flexibility of funding between development activities and the replacement of teachers. A minimum of about 40 per cent will be allocated to each of the activities and replacement elements of this program with the balance able to be used for either activities or replacement.

The Bill provides for funding of $3.7m for special projects of which some $3m is for school based innovations projects and $700,000 for national level projects. Details of the 1978 allocations for individual programs in each State are given in Schedules 1 to 8. The grants specified in these Schedules have been adjusted to June 1977 prices, except for the non-government schools general recurrent program which includes some allowances for estimated future cost increases. On this basis the cost of programs for 1978 amounts to an estimated $6 11m, of which $28.3m will be provided under the ongoing States Grants (Schools) Act 1972.

In accordance with the Government’s guidelines for the 1978-80 triennium, these grants will be adjusted in subsequent legislation for cost movements to the end of 1977 and for increases in wages and salaries components of recurrent grants during 1978. As I have indicated, the Bill also adjusts the grants for 1977 from December 1976 prices to June 1977 prices. In line with normal practice the non-government schools general recurrent program includes final provision for cost increases to the end of 1977. The additional cost of these adjustments is $22m. Amending legislation will be introduced in the 1978 autumn sittings ofparliament to finalise the supplementation of 1977 grants. I commend the Bill to the House.

Debate (on motion by Dr Klugman) adjourned.

page 2645

ADJOURNMENT

Mr DEPUTY SPEAKER (Mr Lucock)Order! It being 10.30 p.m., in accordance with the order of the House of 10 March 1977 I propose the question:

That the House do now adjourn.

Question resolved in the negative.

page 2645

STATES GRANTS (TERTIARY EDUCATION ASSISTANCE) BILL 1977

Bill presented by Mr Viner, and read a first time.

Second Reading

Mr VINER:
Minister for Aboriginal Affairs · Stirling · LP

-I move:

That the Bill be now read a second time.

The purpose of the Bill is to provide financial assistance to the States for universities, colleges of advanced education and technical and further education for 1978. The Bill gives effect to the financial recommendations contained in the report of the Tertiary Education Commission for 1978. The House was informed recently of the Government’s decision to accept these recommendations which result in the allocation of an estimated total of $1, 136.5m in June 1977 prices for institutions in the States. The amounts provided for each of the three tertiary education sectors are as follows:

It will be recalled that the guidelines for 1978 provided for base levels of grants at the same real levels as for 1977 in the case of universities and colleges of advanced education and an increase of 10 per cent in real terms for TAFE. The amounts now provided in the Bill take into account the small adjustments to capital expenditure recommended by the Commission in the light of its assessment of likely cash flow for the advanced education sector building program in 1978. The full building program proposed by the Advanced Education Council and recommended by the Commission is incorporated in the legislation to enable all projects to commence in 1978. In accordance with the Government’s guidelines for the 1978-80 triennium, these grants will be adjusted in subsequent legislation for cost movements to the end of 1977 and for the increases in wages and salaries components of recurrent grants during 1978.

In the past, separate Bills have been required to implement the approved programs of the three tertiary education sectors. Following the establishment of the Tertiary Education Commission, replacing the three previous commissions concerned with tertiary education, it has been possible to consolidate the necessary legislation in one Bill. In so doing, a common approach to the terms and conditions applied to grants for the three sectors has been adopted wherever appropriate.

The new arrangements will permit a greater degree of flexibility in the administration of approved programs, thereby assisting the Commission in its functions of co-ordination and rationalisation for the tertiary education system. In particular, the Government believes it is necessary, in order to achieve efficient expenditure of the funds available, for there to be flexibility in the administration of the capital programs for the three sectors. Under the Bill, the Minister will be given power to effect transfers of capital funds between sectors and between States after advice from the Commission. Such transfers between sectors will be subject to consultation with the States concerned and, where any transfers between States are contemplated, will be made only with the agreement of those States.

The capital programs set out in the Bill will appropriate the total cash flow for 1978 approved by the Government under the guidelines. Provision has therefore been made in the Bill to limit appropriations under previous legislation to those which are required to fund the capital programs until the end of 1977. The effect of this provision is to withdraw appropriations for projects for which the States are not seeking support and for four projects in the advanced education sector which were included in the review of capital projects not under contract which was conducted by the Commission at the request of the Government under the guidelines for 1978-80. Any of these projects can be considered for inclusion in the 1979 program.

In addition to appropriating funds for 1978, the Bill amends the States Grants (Universities Assistance) Act 1976, the States Grants (Advanced Education Assistance) Act 1976 and the States Grants (Technical and Further Education Assistance) Act 1976 to provide for adjustments to approved programs of grants for 1977, for movements in costs between December 1976 and June 1977. The additional funds provided are $24m for universities, $10m for colleges and $3.4m for TAFE. I commend the Bill to the House.

Debate (on motion by Mr Lionel Bowen) adjourned.

page 2646

NOTICE OF INTENTION TO PRESENT BILLS

The Clerk:

– Notices of intention to present Bills at the next sitting have been received as follows:

From the Minister for Primary Industry-

A Beef Industry Incentive Payments Bill

A Brigalow Lands Agreement Amendment Bill

An Australian Rural Bank Bill

From the Minister for Transport-

An Australian Shipping Commission Amendment Bill

From the Minister for Environment, Housing and Community Development-

An Environment (Financial Assistance) Bill

page 2647

GOVERNMENT BUSINESS: PRECEDENCE

Notice of Motion

The Clerk:

– Notice has been received from the Minister for Primary Industry that at the next sitting he will move that Government Business shall take precedence over General Business tomorrow.

page 2647

INCOME TAX (RATES) AMENDMENT BILL (No. 2) 1977

Second Reading

Debate resumed.

Mr COTTER:
Kalgoorlie

– It gives me pleasure to be able to speak in this cognate debate, but I should like to confine my remarks principally to the Income Tax Assessment Bill (No. 3). The Bill provides for the reinstatement of the income tax exemption in respect of income derived from the sale, transfer or assignment of the right to mine for gold or certain prescribed minerals and metals. The exemption provision, formerly known as the section giving exemption to the income of bona fide prospectors, will provide for exemption along the same lines and in respect of the same minerals and metals as the earlier exemption. The reinstated exemption will apply in respect of income derived after 25 October 1977, other than income derived under a contract let on or before that date. Together with gold, the metals and minerals that will come within the scope of the new exemption are those prescribed in income tax regulation 4AA for the purposes of the former exemption under paragraph 23 (p). I seek leave of the House to incorporate in Hansard the list of minerals so prescribed.

Mr DEPUTY SPEAKER (Mr Lucock:

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

The document read as follows-

Asbestos, Bauxite, Chromite, Emery, Fluorspar, Graphite, Ilmenite, Kyanite, Magnesite, Manganese Oxides, Mica, Monazite, Pyrite, Quartz Crystals (piezo-electric quality), Radio-active Ores, Rutile, Sillimanite, Vermiculate, Zircon.

Ores of- Antimony, Arsenic, Beryllium, Bismuth, Cobalt, Columbium, Copper, Lithium, Mercury, Molybdenum, Nickel, Osmiridium, Platinum, Selenium, Strontium, Tantalum, Tellurium, Tin, Tungsten, Vanadium.

Mr COTTER:

– It is fairly well known that paragraph 23 (p) of the Income Tax Assessment Act was done away with by the previous Government about 1973. This caused a great deal of concern in the mining and mineral industries throughout Australia. It had the result that over 18 months approximately 120 exploration companies left Australia for countries such as Fiji, Brazil and Argentina, claiming that there was a more stable form of government in those countries than we had in Australian between 1972 and 1975. It had a dramatic effect on the minerals industry. It had a dramatic and devastating effect on prospectors for base metals, minerals and gold throughout Australia. It is with this in mind that the present Government is reinstating that exemption. This was an undertaking given by the Government prior to the 1975 election that it is now honouring.

The previous Labor Government paid scant regard to the windfall income which was derived by the prospectors and which was exempt from tax under the previous paragraph 23 (p). The chances of obtaining this windfall reward were something like 1,000 to one. The previous Government took no heed of the many years- in fact, in most cases the lifetime- of hardship and deprivation of living in the bush and looking for minerals. If one in those thousand was fortunate enough to find a viable ore body, then previously under paragraph 23 (p) the sale of the mining rights to that ore body were exempt from taxation. Between 1973 and 1975 they were not exempt, and this caused a downturn in mining and a tremendous downturn in exploration activity, with the result that the mining industry was turned back some years.

Basically the proposed new paragraph 23 (pa) will give the same exemption as the former 23 (p). The new exemption will provide for income otherwise exempt under paragraph (pa) to be limited to the excess of that income over the deductions allowed or allowable under Division 10 in respect of exploration and prospecting expenditure in the relevant area. It will also provide that the exemption under the new paragraph 23 (pa) does not apply where either the vendor or the purchaser of the mining right has the power to control the activities of the other party to the transaction or where any person has the power to control the entry into the transaction of both parties to the transaction. As with the former paragraph 23 (p), this latter limitation will apply in respect of the sale, et cetera, of a right to mine a prescribed metal or mineral but will not apply in respect of a sale, et cetera, of a right to mine gold.

Sub-clause 3 (2) provides for the commencing date of the new exemption. It will apply in relation to income derived after 25 October 1977 from the sale, et cetera, of a right to mine, other than income derived in pursuance of a contract made on or before that date. I think this is a very reasonable approach to the subject. There is no retrospectivity attached to the reinstatement of 23 (p). Proposed new paragraph 23 (pa) will give great impetus to the exploration scene throughout Australia. There is already evidence that exploration for minerals, gold and metals is picking up throughout Australia primarily because of the taxation incentives already offered, particularly to companies. But most of these exemptions and incentives are not available in their present form to the ordinary, everyday prospector. It is well known that the bulk of mineral deposits throughout Australia have been found over the years by the individual prospector. Very few have been found by highly specialised companies. Mostly the prospector finds the ore bodies, and they are subsequently developed by companies. The prospector has been able to achieve a once in a lifetime windfall reward by selling mining rights to those areas. I am of the opinion that there are still vast areas of minerals and gold to be found in Australia. This measure should offer sufficient incentive to give prospectors that little bit of extra kick to keep the minerals industry viable for many years to come.

It is with great pleasure that I take part in this debate in favour of the reinstatement of paragraph 23 (p) which was a Government undertaking given in December 1975. 1 make it quite clear that this was a policy undertaking and is not something that has been thought of quickly or brought on in a rush prior to another election. I comment briefly on a couple of remarks made by the honourable member for Melbourne Ports (Mr Crean) in relation to the taxation system in the few minutes which I have at my disposal, The revolutionary new tax rate or flat tax system will benefit all taxpayers in Australia. Despite what the Opposition is saying on this matter it is quite clear that every taxpayer in Australia will pay less tax under the new system when compared with the old. There is no question about that. In fact, approximately 90 per cent of taxpayers will pay only 32c in the dollar. This is a very significant benefit to the taxpayers of Australia. The figures cited by the honourable member for Melbourne Ports in fact graphically illustrate the need for a new tax system. It is this new tax system that will be applauded by Australians in the corning weeks and in the future in great anticipation of it being implemented in February.

The investment allowances which were criticised by the honourable member were of great benefit and were one of the major factors in allowing for the development of the North West

Shelf gas project in Western Australia. Without those incentives it is unlikely that the North West Shelf project would have been viable. The main criticism coming from the Opposition in relation to these Bills seems to be because the Government has made a tremendous amount of progress in bringing the economy under control, in allowing for incentive, in allowing for that little bit of personal initiative so that the individual who wants to work a little harder and earn that little bit more will not be unduly penalised by additional tax levels. He now has that incentive.

Dr KLUGMAN:
Prospect

-Tonight we are debating cognately eight income tax Bills. I address my remarks specifically to the Health Insurance Levy Bill 1977 and matters related to it as well as to the general propositions which have been raised in the debate. I think it might be more appropriate for those who have been following the debate if I first deal with the general propositions raised by the honourable member for Kalgoorlie (Mr Cotter) who has just concluded his contribution. The main point he made- apart from the proposals dealing with matters affecting his electorate specifically- was that everybody was better off under the new tax scheme. He repeated the phrase used by the Treasurer (Mr Lynch) in his second reading speech on this legislation. In referring to a previous speech, the Treasurer said that the system is revolutionary, that it is simple and, above all, by a reduction of tax at all levels of incomes it goes a long way towards restoring incentive and so on. They are exactly the phrases used by the honourable member for Kalgoorlie. The second point that the Treasurer made was that, if I remember rightly, some 225,000 would-be taxpayers would now be exempt from taxation. This is of course a fictitious figure, as honourable members know. Every year a new number- this year the number is lower than usual- are exempt from taxation. The lower income earners, just the same as other income earners, have an increasing income and the same people are exempted year after year. I quote from the Budget Speech made by. the honourable member for Oxley (Mr Hayden) in 1975, when he was the Treasurer.

A sad feature of Australia’s personal tax system is that for decades many people in real poverty have been obliged to pay quite substantial tax bills. The new system removes from the list of taxpayers, and relieves of all tax almost half a million taxpayers on the lowest incomes.

He exempted half a million taxpayers in that particular year. Since then, about 200,000 have been exempted each year. They are always exactly the same people. They are exempted one year, their income rises slightly, they are then included in the tax schedules, the taxation schedules are raised slightly, and those people are again exempted. We get this pretence by this Government that some new group of people has been added to those in the community who are exempt from taxation. In fact additional people have been added to the tax system.

It is ridiculous for this Government to pretend that people are paying less tax, that they are better off. Let us look at the actual figures. Budget Paper No. 4 reveals that pay-as-you-earn income tax collections per head of population in 1975-76, in the so-called Hayden Budget, amounted to $515. In 1976-77 it was $609, and in this current year it is estimated to be $707. There are fewer people working now than there were then. So those who are paying tax are paying much more tax. If we take not only those who are paying tax on the pay-as-you-earn basis but also the self-employed, the income tax per head of population in the Hayden Budget in 1975-76 was $677. In the first Lynch Budget it was $790. This year it will be $91 1-an increase of $234. In the two years since this Government has come to power, there has been a $234 increase per head of population in the tax collected. For the average family consisting of a husband, a wife and two children, this means an increase in income tax of $936 yearly since the Fraser Government promised to reduce taxation. It is no wonder that Fraser and Lynch are considered deceitful.

Mr Yates:

- Mr Deputy Speaker, I rise on a point of order. I distinctly heard the honourable member say that the Prime Minister has been deceitful. I request that that remark be withdrawn.

Mr DEPUTY SPEAKER (Mr Giles:

-Order! If the honourable member said that the Prime Minister is deceitful, I think that is probably going a little too far and I ask him to withdraw.

Dr KLUGMAN:

-I would, of course, but what I said was that it is no wonder that the Prime Minister and the Treasurer are considered deceitful. . Mr Yates- Not good enough.

Dr KLUGMAN:

– Well, it might not be good enough but there is certainly a lot of evidence for it.

Mr Yates:

– Better than your gang of four, anyway.

Dr KLUGMAN:

– The honourable member for Holt has just come back from China so he ought to be an expert on the gangs of four. Let me quote from an article by Mr Ross Gittins, an economics writer in the Sydney MorningHerald -not exactly one of the most pro-Labor newspapers in this country. When speaking about the Budget and income tax, Mr Gittins said:

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, rattier than a step forward.

The first big improvement for people with dependent 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 the taxpayers with dependants . . .

He goes on to say:

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

The justification for this change was that a bachelor earning, say, $ 1 70 a week has a much greater capacity to bear the tax burden than does a man supporting a wife and children on the same amount.

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.’

It abolished child rebates and instead significantly increased the rates of child endowment payments, which it renamed ‘family allowances.’

The switch left the income of most families pretty much unchanged, but its significance was that it provided greatly increased assistance to about 300,000 families with very low incomes.

Mr Gittins said that Mr Fraser’s reform drew wide acclaim for that particular reason and also because it looked good in the beginning. He continued:

Its beauty, 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-

And this is the important thing- has come this year-not by what the Government did, but by what it didn’t do.

It didn’t increase family allowances to allow for the effects ofinflation.

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 of money one year later.

To illustrate just exactly what happens as far as the Government is concerned and as far as the disadvantage for families with children is concerned, I ask for leave to incorporate in Hansard a table which I have prepared.

Mr DEPUTY SPEAKER (Mr Giles:

-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 to $226 last year and to $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 p resent family allowance of $8.50, representing a loss of $2.60 a week. Similarly, with three children the loss will be $3.40 a week and with four children the loss will be $4.45 a week. 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 updated. The important point to emphasise is that every taxpaying family with children is worse off.

The Treasurer, in introducing the Bills we are debating tonight, emphasised how many people will now be exempted from taxation and how much people will be better off with the indexation of the phasing-in point. A person with a dependent spouse and, say, three dependent school children, who has a taxable income of $5,943 a year, will now be paying just under $150 tax a year, or about $3 a week on a weekly taxable income of $115 or $120 a week. Under the socalled Hayden Budget of two years ago, before indexation was introduced, that person would not have paid any tax. There was a tax exemption on incomes up to $5,943 for a person with a dependent spouse and three dependent school children. At present that person has to pay the Medibank levy applicable to incomes over $5,087, amounting to 2.5 per cent of about $900, plus tax on income above $5,484. Such a person is much worse off than he was previously.

I would like to deal very quickly with the health insurance levy. I note that the Treasurer in his second reading speech has stated:

The rate of levy remains at 2.5 per cent of taxable income, subject to unchanged ceiling amounts of $300 for taxpayers with dependants and $ 150 for those without dependants.

The Treasurer went on to say:

One change, dealt with in this Bill as well as in an earlier Bill, will exempt from the levy the income of a deceased estate to which no beneficiary in the estate has a present entitlement.

It was obviously a peculiar thing to have happened in any case and was fairly typical of the rushed wayin which the Government introduced the previous legislation, that a deceased’s estate still had to pay the Medibank levy for the person who was already deceased. It was unlikely that the person who was deceased would get any further medical -

Mr McVeigh:

– It has been altered now.

Dr KLUGMAN:

– Exactly, but that was in force for a year. I now want to draw the attention of the House to another anomaly which has not been dealt with and that is the anomaly that it is accepted by the Taxation Office that, because of some mistake in the drafting of the original legislation, where two persons are living together, either in a married or a de facto relationship, each is considered to be a dependant on the other and has to be adequately privately insured, otherwise the levy is imposed. What happens on a number of occasions is the two persons who marry have had different kinds of cover as single persons. One of them may have been paying the Medibank levy and the other mayhave been covered by Medibank Private or by one of the private funds. They assume that they are still two people, living now in a married state, and that they are adequately covered. What happens at the end of the year is that the person who was paying the levy suddenly finds that he or she now has to pay the levy up to the $300 ceiling instead of $150 because, as I said earlier, it is taken that -

Mr Bourchier:

– Is that unreasonable?

Dr KLUGMAN:

-On top of that, the other person is paying for private insurance. For example, A is paying into the Medical Benefits Fund of Australia or the Hospital Benefits Association Ltd in the honourable member’s State, and is fully covered privately. B pays the levy. At the end of they year they have to pay the levy for two people even though one of them -

Mr Bourchier:

– Only if they want the extra cover.

Dr KLUGMAN:

-No. I agree with the honourable member that it is a ridiculous proposition but that has been the ruling of the Taxation Office. I do not think that it was the intention of the people in the department connected with Medibank but it is deplorable that the Government, when introducing this legislation, has not taken the opportunity to alter the regulations or legislation which make this sort of collection necessary.

I conclude by paying tribute to the honourable member for Melbourne Ports (Mr Crean) who spoke in this House tonight, certainly for the last time on income tax legislation and possibly for the last time. I have been associated with the honourable member for Melbourne Ports since I entered this Parliament eight years ago and have served with him on committees. I have found him to be by far the most rational of all economic spokesmen on all sides of this House. To my mind he has the greatest ability to explain rationally the issues in a problem, whether we are dealing with taxation or another economic matter. Maybe the people on this side of the House did not take enought notice of him. It is obvious that those on the other side did not take enough notice of him.

Mr Viner:

– Why was he sacked?

Dr KLUGMAN:

-The important point is that there would be nobody on either side of the House who thinks that the present Treasurer has anywhere near the grasp of economics that the honourable member for Melbourne Ports has. I do not believe that questions dealing specifically with what other Treasurers have done are appro- priate for me to answer at this time but I would li ke to pay a special tribute to the honourable member for Melbourne Ports. The number of rational people in this Parliament is not very great. The number decreased very considerably following the 1975 elections. Hopefully, following the elections on 10 December, there will be a significant increase in the number of rational members of Parliament. Certainly the people who are interjecting at present will not be among them.

Mr Bourchier:

– That is unfair.

Dr KLUGMAN:

– I pay special tribute to the honourable member for Melbourne Ports.

Mr DEPUTY SPEAKER (Mr Giles:

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

Mr BRAITHWAITE:
Dawson

– It is a pleasure to follow in this debate on the taxation legislation the honourable and irrational member for Prospect (Dr Klugman) who talked about Medibank and budgets of the past. These Bills are significant for quite a few things. They are intended to close loopholes, the tax avoidance that has been practised for some years in some areas, and to implement reduced tax rates. Viewed together, they increase revenue by closing loopholes and reduce taxation in order to provide incentive. Consequently this can be called complementary legislation. Over the past few years we have seen many artificial devices used in private enterprise to avoid paying a just proportion of taxation and I think that this legisation is timely. I believe it was the honourable member for Melbourne Ports (Mr Crean) who mentioned that only a proportion of our taxpaying public could take advantage of these loopholes and arrange their taxation affairs in such a way that they paid the minimum tax. The large proportion of taxpayers- salary earners and professional people- do not have this facility available to them. There is an inequity in the tax system because it allows these manipulations to be practised.

The Government sees this as part of its tax reform program. I think it is most desirable that the Government should press on with this program so that there can be equity through our tax reform systems. By changing the way in which personal income tax is calculated, the Government has gone a long way to restoring incentive to a section of the community which traditionally has been the most creative and productive. The tax changes are an indication of a deep change in government thinking, a change in the philosophy of the balance between the public and private sectors. In effect, the tax changes represent a recognition that individuals are more entitled to the fruits of their own labour than is the State. The changes acknowledge that there are limits to the claims any State can make on the private finance of its citizens and still maintain incentive.

I would like to deal with aspects of incentives within these taxation Bills before I deal with avoidance procedures. One is the extension of the investment allowance from 1983 to 1985 at the rate of 20 per cent. I believe this will give security to long term investors in capital plant which takes a fair while between the programming stage and the ordering stage before the plant is available for productive or income earning purposes.

Mr Millar:

– The sugar industry.

Mr BRAITHWAITE:

– This applies to the sugar area but more particularly to the mining industry. The extension until 1985 will ensure that for plans made now, the plant and equipment will be available at a 20 per cent investment allowance. I think this will be a stimulus to capital acquisitions and also extensions. I might mention also that there is perhaps an area where incentives are required desperately and that is in the accommodation and travel industries. Perhaps the Government might look in its new terms- I am sure it will have them- to an investment allowance of some kind on buildings which are used for productive income earning purposes, particularly in regard to the accommodation industry. With regard to the averaging of incomes within clause 12 of the Income Tax Assessment Amendment Bill (No. 2) I believe this is the best advantage ever to come to primary producers throughout Australia. It is an advantage they richly deserve and which would have been denied them to a large extent had the original Budget speech been adopted without amendment. I believe there is equity in a primary producer being able to average his income because of its fluctuating nature. Certainly if it was not for the effects of the averaging, primary producers would pay a greater percentage of their income than a normal person without that same fluctuation.

Mr McVeigh:

– Carrying the burden again.

Mr BRAITHWAITE:

– This, of course, brings up the argument in connection with tariffs, a large proportion of which is borne within the rural industries. I think it should be recognised that, within this averaging of incomes, some of the penalty through tariffs is being returned to primary producers. This is only just and proper. I reiterate that averaging of incomes now represents the best advantage ever given to the rural industry in this regard. We should recognise that it reinstates the losses caused by the Hayden Budget. The honourable member for Prospect talked about the great Hayden Budget. The great Hayden Budget took $40m to $50m from rural producers throughout Australia as a result of the effect of the averaging provisions and the changes brought about by the rebate system. This legislation goes a long way towards reinstating the situation prior to that time but it improves the situation even beyond that because it gives additional benefits that have previously not been allowed or provided for. These are four in number. The primary producer is permitted during this year of income to return to the average that he had previously opted out of. That is one benefit. There is also the fact that there will be no detriment to a rural producer on a falling income when that falling income is below the average income. This, again, was a loss under the old system that will not be suffered under the present system. Also, there is the removal of the ceiling of $16,000. There has been no change in this ceiling since 1966 and rural producers nave been subject to the ravages of inflation, particularly in the Labor years, without amendment to the ceiling. Again, I think the removal of this ceiling is just and equitable. That is particularly so when we realise that the zero tax rate is to be included in the averaging calculations. All this adds up to a $100m benefit for rural industry in one year of operation. I think this allows the income equalisation deposits to be recognised for what they should be. They are stabilisation schemes and not tax reduction deposits. I feel that had these income equalisation deposits been available in the years when the cattle industry was at its height with good markets and prices instead of the drought bonds which were available to it we would not see the lack of liquidity which is prevalent in that industry today.- 1 suggest to any producer in any rural industry who sees himself on top of prices- there are very few of them in Australia today- that he should look at these income equalisation deposits as personal stabilisation plans and take the utmost advantage of them.

There is one point in regard to the income equalisation deposits I would like to mention. An 80 per cent test is placed upon the income of the primary producers in determining whether they can take advantage of the income equalisation deposits. I suggest that perhaps this test might be applied also to the averaging provisions to ensure that Pitt Street farmers and Collins Street farmers are denied the benefit that should be available only to genuine primary producers. Perhaps this suggestion might be taken into account. In fact, T see that abuse could occur in the new provision for the averaging of income equalisation deposits. Perhaps that area should be looked at more carefully. As I mentioned before, this is just one way in which we can assist the rural industry in the recovery of that tremendous tariff cost which it bears every year.

Mention has been made of amendments to income tax rates. The previous speaker in the debate, the honourable member for Prospect, mentioned that the tax base seemed to be rising all the time to the extent that taxpayers in the same tax bracket were being named continually as those who would not pay tax in the future. No Budget placed more low income people into a tax burden situation than did the Hayden Budget. There were no tax indexation provisions in that Budget. I ask the House to bear in mind also that it was a Labor Government that denied tax indexation benefits to the people. What the new tax rates mean, above anything else, is that those taxpayers, including pensioners with minimal income rising above the basic taxable income limit, will now be able to earn up to $3,750 as from 1 February 1978 without that income attracting taxation as has been the case during the last 2 years. This means that such people can receive an income in excess of $70 a week. The tax rates also recognise that such people are able to earn the minimum amount, still receive a full pension and pay no tax. I believe that this in itself has been of great assistance to the pensioners in the community. No doubt the measure will provide a great deal of relief in that quarter.

I also pay tribute to the honourable member for Melbourne Ports. I am sorry to know the speech he delivered tonight is probably the last speech he will deliver on tax Bills. One comment he has always made in connection with indexation is that if we index everything, have we indexed anything? I believe that the reformed income tax rates which we have been able to place before the House indicate that we are free from the tax indexation bind for the first time in two years. We are able to give equity in areas where it is more applicable and in areas where a tax indexation could not give that equity. The new tax scales will allow a person to predetermine his tax liability without the mutlitude of steps which applied previously. They certainly

S resent an improvement and a big advance,ey are part of our tax reform deal. I believe that they will be well accepted on 1 February 1978, the introduction date. I pay tribute to the attitude of responsibility displayed by the Treasurer (Mr Lynch) in rebuffing the pressures that have been placed upon him to institute these schemes earlier. Tax reforms and tax reductions must be matched in terms of financial responsibility. I believe that the Treasurer has shown that in this regard -

Mr Carige:

– Who is the member who keeps on trying to talk down the economy?

Mr BRAITHWAITE:

-Unfortunately it is another one from Queensland, whose presence we do not particularly like to acknowledge, who talks down the economy. This is the sole province of the honourable member for Oxley (Mr Hayden).

Mr McVeigh:

– An economic ostrich.

Mr BRAITHWAITE:

– That is your comment I would like to make some comments on the company tax rate. The rate has been increased to 46c in the dollar. Unfortunately this is retrospective to the year ended 30 June 1977. While this is unfortunate possibly because of the way tax commitments fall it is impossible to do anything about it, but it is a pity that the increase is retrospective. I would like to see introduced the rating system that was in the Income Tax Assessment Act some decade ago in connection with private companies being subject to a graduated rate of tax. This would acknowledge the difficulties faced by companies with smaller taxable incomes being subject to a high rate. I believe this would help small businesses particularly if private company tax rates or incomes up to a certain threshold could be reduced.

Many people have criticised the increase in company tax rates. I think we should look at this in retrospect and we should look at it as it presents itself to us. Some have said that the increases will offset the advantages of indexed stock valuation and the investment allowance. If this is so I think there is some equity in it because I would like to see business accounting principlesthis applies to private companies as well as the public companies- accepted by the authorities in relation to tax deduction claims. Indexed stock valuation was introduced last year at a rate of 50 per cent of the expected consumer price index increase. This is the start of acknowledging accounting principles. What we have to do is to introduce the other 50 per cent; acknowledge the full rate of stock valuation indexation. We should also acknowledge indexation of plant depreciation allowance and it would be a happy day for me in this place to see amendments to the taxation allowance provisions under the Companies Act relating to such matters as holiday pay accrued, long service leave accrued, deferred maintenance accrued and, of course, the depreciation of business buildings. If these things were accepted tax deductions in line with accounting principles it would then be fair enough to say that in order to return the same amount of income company tax should be increased to 50c or 55c in the dollar. At least that would be equitable and it would be preferrable to the present system under which companies and people are denied deductions for actual expenditure. I would like to see the recommendations in the Mathews report further pursued. The accommodation industry and the tourist industry would be helped if they could get some advantage just on depreciation of buildings that are used within the industry.

The legislation in connection with company proprietaryship and the abuse involving public hospitals as charities would be unnecessary if Division 7 of the Act were removed and the retention allowance extended to the full amount. I believe that if this part were removed from the Income Tax Assessment Act it would not be necessary to close the loophole to prevent the type of abuse that is being practised now. In fact those types of things help only one type of people and they are the professional people in private enterprise who make a living thinking up these schemes and encouraging people to go into them but before long people find that these things are closed in their faces.

The trust provisions are another loophole. This will be closed under this legislation. I particularly deal with deceased estates. Abuse in this area has been prevalent in the southern States but certainly not in Queensland. We would not do a thing like that there. There is real abuse in this area and I believe that a tax of 60c in the dollar is a fair and reasonable penalty to impose on these trusts. But I believe the tax on certain other trusts should not be retrospective. I know that the Treasury could argue this because it was mentioned briefly in the Budget Speech, but I believe that retrospectivity is unwarranted at any time. If a government is going to bring in legislation it should make the provisions in the legislation applicable at the time the legislation is brought down. Certainly I do not believe that retrospectivity applied in the treatment of some of the trusts. Certain trusts were brought up to the level of 32c in the dollar of income. Of course, the payment of 60c in the dollar on deliberate tax avoidance schemes is justified.

The health insurance levy was dealt with at great length by the honourable member for Prospect. What he did not say was that the national health scheme introduced by the Labor Party was paid for by every Australian through inflation at the rate of 16 per cent a year. Now, he talks in terms of a 2.5 per cent tax which, in effect, is necessary to bring down die rate of inflation. Nothing fuelled inflation as much as the national health scheme- a scheme which Australians could not afford. This legislation will remove some anomalies in respect of deceased estates. I could not agree more with the honourable member when he asked what effect would paying a Medibank levy have on a deceased person. That is one of the anomalies which has been removed. There are other aspects which have to be looked at. De facto relationships are not recognised within the Income Tax Act for the purposes of dependent deductions and I believe that they should be treated likewise for Medibank purposes. I believe that an anomaly already exists within that Act in respect of the non-recognition of the zone allowance rebate in calculating the amount of taxable income on which the levy is paid.

On this aspect of the health insurance scheme I support a suggestion which was made, I think last year, by the honourble member for Tangney (Dr Richardson) that, while we should maintain a national health scheme for those people within Australia who need it, such as the poor, the pensioners and the like, we can bring responsibility back into our whole national health scheme only by making the patient and the medical practitioner more responsible. The only way I can see this being done is by allowing a taxpayer the benefit of first $ 100 or $200 in every year s medical and hospital expenses and to insure only as a last resort to cover long hospitalisation.

It is not enough for any government merely to change the rates of tax ana to alter the means by which taxes are collected. There must be an acceptance by the community at large that if we are to have reductions in taxes we must at the same time reduce our expectation of handouts from government. We must appreciate the truth that government has no resources of its own. Whatever it gets and whatever it provides comes from the community. The same community which expects and demands government services also must pay for those services.

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

Debate interrupted.

page 2655

SITTINGS OF THE HOUSE

Notice of Motion

The Clerk:

– Notice has been received from the right honourable Leader of the House (Mr Sinclair) that on the next day of sitting he will move:

That Standing Order 103-the 11 o’clock rule-and the sessional order of 10 March relating to the adjournment of the sittings be suspended for the remainder of the session.

page 2655

NOTICE OF INTENTION TO PRESENT BILLS

The Clerk:

– Notice has also been received from the Minister representing the AttorneyGeneral that at the next day of sitting he will present an Australian Capital Territory Supreme Court Amendment Bill and a Northern Territory Supreme Court Amendment Bill.

page 2655

INCOME TAX (RATES) AMENDMENT BILL (No. 2) 1977

Second Reading

Debate resumed.

Mr WENTWORTH:
Mackellar

- Mr Deputy Speaker, there has been -

Motion (by Mr Bourchier) agreed to:

That the question be now put

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2655

INCOME TAX ASSESSMENT AMENDMENT BILL (No. 2) 1977

Second Reading

Debate resumed from 20 October, on motion by Mr Lynch:

That the Bill be now read a second time.

Mr DEPUTY SPEAKER (Mr Lucock:

-I call the honourable member for Wentworth. I am sorry; I call the honourable member for Mackellar.

Mr WENTWORTH:
Mackellar

- ‘Senator Wentworth’ is what you had in mind, Mr Deputy Speaker. Let me say in regard to this Bill that there is one matter which the Australian Labor Party has brought forward and with which I find myself in entire agreement. I feel that some of the Labor Party amendments are not in the best interests of the country, but there is one thing in which it -

Motion (by Mr Bourchier) agreed to:

That the question be now put.

Original question resolved in the affirmative.

Bill read a second time.

In Committee

The DEPUTY CHAIRMAN (Mr Ian Robinson)- Is it the wish of the Committee to take the Bill as a whole?

Mr Wentworth:

– No. I have an amendment to insert a new clause after clause 16.

Mr Bourchier:

– Are we taking the Bill as a whole?

Mr Wentworth:
Mr Bourchier:

– I move:

That the debate be now adjourned.

The DEPUTY CHAIRMAN- We are in Committee. Progress would have to be reported to do that.

Mr Bourchier:

– Good.

The DEPUTY CHAIRMAN-The honourable member for Mackellar can move his amendment.

Mr Wentworth:

– I want to speak to a new clause which I propose to move be inserted after clause 16. What has happened is that the Government -

The DEPUTY CHAIRMAN- May I just make a technical point? We will be taking the Bill as a whole and accepting the amendment for consideration.

The Bill.

Mr WENTWORTH:
Mackellar

-Thank you, Mr Deputy Chairman. That will be suitable to me. I put it to the Committee that the Labor Party has been right in criticising the Government for its failure to index family allowances, but I think it has been wrong in attributing to the Government a hardness of heart on this aspect. I do not believe that the Government could have failed to do this except by mistake. I believe that when this matter is put before the chamber in a specific way the Government will change its mind. Unless it changes its mind it will be convicted of the most appalling hypocrisy. I believe that the Labor Party has been quite wrong. I do not think that the Government has realised what it has done. I do not believe that people who realise what they are doing could act as the Government has acted in this matter.

Let me put the thing firmly on the line. In 1 976 the Government said that it would change the method of income tax rebates and family allowances so as to help the people in the community who were worse off. This is what it said. It is very commendable. I am sure it meant this. Yet now, while nearly everything else in the Income Tax Assessment Act is being indexed, the family allowances are not. I do not think the Government could have done this deliberately. I do not believe that it could be so hypocritical as to do this. I believe that it was done simply by an oversight. When it is put squarely on the line with an amendment, as it will be in a moment, I believe that the Government will have the decency to accept the amendment and reverse what has been done, I am sure, just by oversight. It could not have been done deliberately. The Government is not as hard hearted and as full of duplicity as that. In a moment I shall put forward an amendment to the Income Tax Assessment Amendment Bill (No. 2) 1977 which puts the position where I believe it should be and where I think the Government would have it if it realised what was decent, right and proper.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– They have been tricked by the Treasury bureaucrats.

Mr WENTWORTH:

– My friend says that the Government has been tricked by the Treasury bureaucrats. He may well be right. I do not believe that the Treasurer always understands what he is doing. He is far too much in the hands of his advisers. Incidentally, let me discomfit my friend the honourable member for Hindmarsh (Mr Clyde Cameron) at this moment. They are the same advisers who tricked the Labor Party when it was in office. He was one of the Ministers who was similarly deceived and misled by the same people.

I suggest that we should reinstate the allowance for children at a figure which would compensate for the change in price levels which have affected the real values of family allowances. I do not think that this is the most satisfactory solution but it is the only solution available to a private member in this chamber. If the Government would bring forward a more acceptable solution we could take it, but it is not possible for a private member in this chamber to initiate matters on that level. In a moment I shall move an amendment. It will be an acid test of two things. Firstly, it will be an acid test of the sincerity of the Government. Does it believe the things it has said? Does it have real consideration for people at the bottom of the income scale? Does it believe in fairness and decency? I still believe that the Government will be sufficiently decent to accept the amendment. It will be an acid test of the sincerity of the Government. If it takes points of order and does something which is not usually done on an Income Tax Assessment Bill it will stand convicted. If the Labor Party will not stand by me on a motion to amend Standing Orders it will also be convicted of insincerity. Let us see whether there is some kind of conspiracy between the two main parties to do injustice and to try to exploit, for political purposes, those people who are perhaps least fortunate in our community. We shall now see where the truth lies in the chamber both in regard to the Government and in regard to the Opposition. I move:

After clause 1 6, insert the following new clause: ‘ 1 6a. Section 1 59j of the Principal Act is amended-

by omitting from sub-section (1A) “class 3 or”;

by omitting from column 2 of the table in sub-section (2) ‘ (not being a student) ‘; and

by omitting from column 3 of the table in sub-section 2: ‘ In respect of 1 such child-$226

In respect of each other such child -$ 1 70 ‘ and substituting: ‘In respect of each such child-$50’.”.

The effect of this amendment will be that there will be restored, in addition to the family allowance, an income tax rebate in respect of children. That income tax rebate, at $50, is just about the amount that family allowances have been short changed by the rise in prices and the failure to adjust them. This is the one thing which more than anything else requires adjustment. This House, to its shame, for a long time has forgotten the real interests of the family man. It is no wonder that we have moral trouble throughout the community and it is no wonder that our birthrate is falling and so on. For years now this House has condemned, by its financial operations, the sanctity and integrity of the Australian family. Now the Government has a chance to change this situation. Now, gentlemen, you have a chance to change it. I suggest that this amendment should be carried if there is any decency at all in this Government. Alternatively I would regard this as a better course of action- the Government here and now should say that before the Parliament rises for the election, family allowances should be adjusted in line with the change in prices. Let us have one thing or the other. Let us see whether the Labor Party is sincere. If it is, it will support my amendment.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I raise a point of order. I waited until the honourable member’s time had expired before raising it. Is it in order for a nonministerial member of the Parliament to move an amendment to a Bill that will have the effect of altering revenue?

The DEPUTY CHAIRMAN (Mr Ian Robinson)- The amendment is in order.

Mr HURFORD:
Adelaide

– It will take me only one minute to explain to the honourable member for Mackellar (Mr Wentworth) that it is not the Government that is naive; it is he who is naive. The fact is that the Government realised full well what it was doing when it took away from families the benefits which should be theirs. That is why the Opposition stated so clearly earlier in this debate,in its amendment to the motion for the second reading, that this Bill fails to take measures to alleviate the increase in family tax burdens which has arisen as a result of the Government’s failure to index family allowances. We have had our say on that particular measure. It is no good the honourable member for MacKellar thinking that he can move an amendment like this to achieve his purpose. His amendment will not achieve that purpose. If he knew the taxation Act as well as I know the taxation Act, immodest though I am in saying so- I realise, of course that immodesty does not become me- he would realise that in doing this he is decreasing the value of the zone allowance to the many people in Australia who deserve more in the way of the zone allowance. He is reducing the benefit for the first child from $226 to $50 and the benefit for the second and further children from, I think $170 to $50. So this is not the way to achieve what we in Opposition want to achieve, namely greater benefits for the family. That is why the Opposition cannot support the amendment in its present form.

Mr WENTWORTH:
Mackellar

– What piffle! This is complete hypocrisy on the part of the Opposition. Honourable members opposite are now shown up for what they are. There are no friends of the family on either side of this House and it is time people realised it.

Motion (by Mr Bouchier) agreed to:

That the question be now put

Amendment negatived.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

– I seek leave to move the third reading forthwith.

Mr DEPUTY SPEAKER (Mr Lucock:

-Is leave granted?

Mr Wentworth:

– No.

Motion (by Mr Viner) agreed to:

That so much of the Standing Orders be suspended as would prevent the remaining stages being passed without delay.

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

page 2657

INCOME TAX (INDIVIDUALS) BILL 1977

Second Reading

Debate resumed from 20 October, on motion by Mr Lynch:

That the Bill be now read a second time.

Mr WENTWORTH:
Mackellar

– I think I should make a protest about the way in which legislation is being rushed through this House without debate.

Mr DEPUTY SPEAKER:

– I suggest that the honourable member for Mackellar resume his seat. When debate began the House agreed to a cognate debate on these Bills.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2657

INCOME TAX (COMPANIES AND SUPERANNUATION FUNDS) BILL 1977

Second Reading

Debate resumed from 20 October, on motion by Mr Lynch:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Mr WENTWORTH:
Mackellar

-Mr Deputy Chairman, I do not think it is right -

Motion (by Mr Bourchier) agreed to:

That the question be now put.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Motion (by Mr Viner)-by leave- proposed: That the Bill be now read a third time.

Mr WENTWORTH:
Mackellar

-Mr Deputy Speaker, I think it is very bad -

Motion (by Mr Bourchier) proposed:

That the question be now put:

Mr Wentworth:

-Mr Deputy Speaker, I rise to take a point of order. It is not right that these Bills should be put through without them being considered in Committee.

Mr DEPUTY SPEAKER (Mr Lucock:

-No point of order is involved. I remind the honourable member of the decision that was made by the House. The honourable member was in the chamber when that decision was made.

Question resolved in the affirmative.

Mr Wentworth:

– I rise on a point of order, Mr Deputy Speaker. You have misstated the position. The House agreed to a cognate debate, as you said, on the motion for the second reading. It did not agree, prior to the contingent motion being moved, to take the Bills through without them being considered in Committee. It is very bad indeed when all honourable members want to get out because they have some kind of -

Mr DEPUTY SPEAKER:

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

Mr Wentworth:

– It is very bad indeed all the same.

Mr DEPUTY SPEAKER:

-Order! The honourable member for Mackellar will resume his seat. If the honourable member for Mackellar continues to carry on as he is doing, I will name him.

Original question resolved in the affirmative.

Bill read a third time.

page 2658

HEALTH INSURANCE LEVY BILL 1977

Second Reading

Debate resumed from 20 October, on motion by Mr Lynch:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Motion (by Mr Viner) proposed:

That the Bill be now read a third time.

Mr WENTWORTH:
Mackellar

- Mr Deputy Speaker, I simply wish to ask the plain question: Does anybody in this House know what he is thinking of?

Mr DEPUTY SPEAKER:

-Order! The honourable member for Mackellar will resume his seat. I have warned the honourable member. I will not warn him again.

Question resolved in the affirmative.

Bill read a third time.

Mr Wentworth:

-Mr Deputy Speaker, that is -

Mr DEPUTY SPEAKER:

-Order! The honourable member for Mackellar is a great exponent of the Standing Orders. I accept the fact that the rights of an individual member must be protected, but there is also the matter of disrupting the business of the House. That also is covered by the Standing Orders. I suggest that, if the honourable member does not Know that already, he should remind himself of that fact.

page 2658

INCOME TAX (FILM ROYALTIES) BILL 1977

Second Reading

Consideration resumed from 20 October, on motion by Mr Lynch:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2659

INCOME TAX ASSESSMENT BILL (No. 3) 1977

Second Reading

Consideration resumed from 26 October, on motion by Mr Lynch:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2659

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT BILL 1977

Second Reading

Consideration resumed from 27 October, on motion by Mr Viner:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2659

ADJOURNMENT

Industrial Relations

Motion (by Mr Viner) proposed:

That the House do now adjourn.

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

– During the session just ending the Fraser Government has twice rammed divisive and reactionary industrial Bills through each House in less than one day. On Wednesday week the Minister for Employment and Industrial Relations (Mr Street) said that the measures gave effect to the coalition’s industrial relations policy, which was overwhelmingly endorsed at the last election.

I wish to direct attention not only to the sinister intentions but also to the sinister origins of these measures. They were formulated when the present Prime Minister (Mr Malcolm Fraser) was the Opposition’s spokesman on industrial matters in 1974 and was given a research assistant paid for by Mr Keith Compton Gale, the man who has bilked one of Australia’s oldest, best established and most respected companies to the extent of over $900,000 and who presided over the greatest company crash in Australia’s history.

On 4 May last I asked the Prime Minister, without notice, whether it was in accordance with the Liberal Party of Australia’s code that in no circumstances would a member of parliament accept services such as free research assistance for his own staff or political needs. He replied:

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

On the previous day- 3 May- I had placed the following question on the Notice Paper for the Prime Minister:

What have been the dates, nature and purpose of his contacts with Mr Keith Compton Gale who, according to reports submitted by Mr John Spender, Q.C., pursuant to appointments by the Lewis, Willis and Wran governments under the Companies Act, borrowed over $900,000 in August 1974 and subsequent months from the Gollin companies while he was managing director for his private purposes and for quite impermissible uses.

On 16 August the Prime Minister provided this answer

These contacts related to an offer of assistance to the Liberal Party in the preparation of industrial relations policy. That assistance was provided for a limited period.

Mr Speaker would be in a better position than anyone else to judge the truth or otherwise of these answers. The fact is that he, as Leader of the Opposition, knew that he told the honourable member for Wannon to have nothing to do with Gale. He knew that the Liberal Party secretariat did not have the assistance of the research officer- the man provided by Gale- in the preparation of its official industrial relations policy. He would not have a bar of it. The research officer was working directly Tor the honourable member for Wannon and was responsible only to him and to his real employer, Mr Gale. The speech which the honourable member for Wannon made to the ANZAAS Congress in January 1975 was based on a paper prepared by this person. That paper contained the basic proposals for the Industrial Relations Bureau, gaol sentences for union members as well as officials- the whole apparatus of intimidation and confrontation and all the other provisions of the new Bill which have been rammed through this Parliament during the session.

The Prime Minister must reveal the full extent of his obligation and his party’s obligation to Mr Gale. He must tell us exactly what services Mr Gale provided to him. He must tell us whether any part of the $900,000 misappropriated by Mr

Gale found its way into Liberal Party funds. The community will not have a bar of an industrial policy so conceived and so fostered. It knows the tainted origin of an industrial policy deliberately designed to provoke and prolong strikes and to divide the people of this country, poisoned in its origins and poisonous in its intentions. The Prime Minister once proclaimed:

It is not only what is done but the way it is done that is important.

The Australian people can judge him by the company he keeps, by the men who advised him on industrial policy.

Question resolved in the affirmative.

House adjourned at 12.2 a.m. (Wednesday)

Cite as: Australia, House of Representatives, Debates, 1 November 1977, viewed 22 October 2017, <http://historichansard.net/hofreps/1977/19771101_reps_30_hor107/>.