31st Parliament · 1st Session
Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 10 a.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Honourable Speaker and Members of the House of Representatives in Parliament assembled the petition of the undersigned citizens of Australia respectfully showeth:
That it is necessary for the Commonwealth Government to renew for a further term of at least 3 years the States Grants (Dwellings for Pensioners) Act 1974-77, renewed for one year expiring on the 30 June 1 978.
The demand for dwellings has not slackened as the waiting list (all States) of 12,060 single and 4,120 couples as at the 30 June 1977, showeth.
Your petitioners respectfully draw the attention of the Commonwealth Government to the Report of the Committee of Inquiry into Aged Persons’ Housing 1975 under the Chairmanship of the Rev. K.. Seaman (now Governor of South Australia) which recommended additional funds to State housing authorities to meet the demand for low-rental accommodation in the proportion of $4 for SI with the proviso that the States do not reduce their existing expenditure and
That the Act include married pensioners eligible for supplementary assistance and migrants as specified by the Seaman Report and that particular consideration be paid to the special needs and requirements of the prospective tenants in the location and design of such dwellings.
Furthermore, your petitioners desire to draw the Government’s attention to the hardship of many pensioner home owners caused by the high cost of maintenance.
The Social Security Annual Report 1976-77 shows that 24.6 per cent, or 283,000 home owning pensioners, have a weekly income in excess of the pension of less than $6 per week.
Your petitioners strongly urge the Commonwealth Government to establish a fund whereby loans can be made to means tested pensioners for the purpose of effecting necessary maintenance to their homes. Such a loan to be at minimal interest rates sufficient to cover administrative costs and to be repaid by the estate upon the death of a single pensioner before probate or upon the death of the surviving spouse in the case of married pensioners or where two pensioners jointly own the dwelling. Administration to be carried out by local government bodies.
And your petitioners as in duty bound will ever pray. by Dr Edwards, Mr Goodluck, Mr Keith Johnson, Mr O’Keefe and Mr Ian Robinson.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned members and ex-members of the Citizens Forces of Australia respectfully sheweth:
Your petitioners therefore humbly pray
Your Honourable House take appropriate action to resume the award of the several distinctive Reserve Forces Decorations and Medals for Long Service and Good Conduct to members of the Royal Australian Naval Reserve, Army Reserve (CMF) and the RAAF Citizens Air Force. by Mr Lionel Bowen, Mr Goodluck, Mr Shipton and Mr Thomson.
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 we believe that the Minister of Health should support the principle that Australians have the right to seek Immunotherapy treatment for Cancer and support any moves to expand research into, and setting up Clinics for, Immunological management of Cancer within Australia.
Your petitioners therefore humbly pray that all support be given to the establishment of Immunotherapy Clinics in Australia thus giving Australian Cancer Patients a choice in the management of this disease. by Mr Cotter.
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:
And your petitioners as in duty bound will ever pray. by Dr Everingham.
To the Honourable Speaker and Members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
And your petitioners as in duty bound will ever pray,
Petition received. by Mr Fry. Petition received.
To the Honourable the Speaker of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth respectfully showeth.
That we, citizens of the Commonwealth, earnestly request our Government to protect the interests of Australian grape growers by:
And your petitioners as in duty bound will ever pray,
Petition received. by Mr Giles. Petition received.
To the Honourable the Speaker of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Commonwealth respectively showeth:
That the Australian Broadcasting Commission (ABC), has purchased episodes of the American television programme known as SOAP for screening in Australia, on the national network.
The aforesaid program was thought to be so pernicious and ethically offensive by the American population that it generated much unfavourable press, and caused no less than eleven sponsors to withdraw their support from the commercial stations broadcasting it. This program purports to generate irresponsible merriment by shamelessly exploiting the tragedies of adultery, homosexuality, transvestism, impotency, incest, crime and senility. Such a program broadcasted on the Australian national network can only be detrimental to the welfare of the Australian society in as much as it will either cause or aggravate problems in the areas of emotional stability, delinquency, harmonious human relations, the unity of the family, and furthermore, the program is an insult to the Christian creed and to those upholding it.
Your petitioners therefore humbly pray that:
And your petitioners as in duty bound will ever pray.
Petition received. by Mr Goodluck. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth objection to the metric system and request the Government to restore the imperial system.
And your petitioners as in duty bound will ever pray, by Mr Goodluck. Petition received.
To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That we, the Executive members of the Aboriginal Education Foundation of South Australia Inc., strongly protest against the proposed takeover of the Mornington Island and Aurukun settlements by the Queensland State Government, which is in direct contravention of the expressed wishes of the Aboriginal residents of these settlements.
Your petitioners accordingly request that the Federal Government do all in its power to ensure that the rights of these people are protected and further; that the Government immediately proceed with legislation to give Selfdetermination to all Aboriginal Reserves and settlements in Queensland.
And your petitioners as in duty bound will ever pray, by Mr Hurford. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia, electors of the State of South Australia respectfully showeth:
That we are most concerned with the standard and content of Television Programmes shown during Childrens prime viewing time, as recent studies have proved
Your petitioners therefore humbly pray that:
And your petitioners as in duty bound will ever pray,
Petition received. by Mr McLeay. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of undersigned citizens of Australia respectfully showeth:
That we abhor the concept of retrospective tax legislation and the dangerous precedent it may well set.
Your petitioners therefore humbly pray that retrospective tax legislation not be enacted.
And your petitioners as in duty bound will ever pray, by Sir William McMahon Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth:
That the citizens of Australia totally reject communism and call upon the Government to:
And your petitioners as in duty bound will ever pray, by Mr Shipton. Petition received.
– I direct a question to the Minister for Post and Telecommunications. I refer to a series of questions asked of him yesterday in reply to which he said that he would look into the matter and provide what information he could. I ask the Minister whether he has seen a report quoting the Acting State Manager of Australia Post in Queensland, Mr Ken Hathenden, in confirmation that the Australian Postal Commission bought land at Bundall in January last year for $280,000. Is it a fact, as stated by Mr Hathenden that this land had become available for purchase ‘rather unexpectedly’? Did Mr Hathenden also say that he would leave this remark to the Minister to explain?
– I have seen some reports in the Press this morning about the matters which were raised with me in this House yesterday and, as I have already said, I will provide answers to honourable members on this matter as soon as possible. The allegations implied in the honourable member’s questions and subsequently in some of the Press reports are serious allegations and therefore they must be examined very carefully. One of the files on the matter arrived from Queensland only last night. My Department is preparing a report for me on the files which are being made available from various parts of the Department and the Australian Postal Commission. I will consider that report as soon as it is made available to me by my officers and I will discuss with my colleagues what action should be taken as a result of the report.
-I direct a question to the Minister for Aboriginal Affairs. In considering the need for interpreters and translators to be provided to ethnic groups has the Government given any thought to the extension of such a service to Aboriginals?
– I am pleased to advise the honourable gentleman that, in the examination by the inter-departmental working party of the provision of interpreter and translation services, very serious consideration has been given to the position of Aboriginals. In many parts of Australia English is not the first language of Aboriginals. During the Prime Minister’s visit to Alice Springs last week his speech had to be interpreted into three languages. That situation is multiplied in many other parts of the Northern Territory, as well as in Western Australia and Queensland. Therefore it makes good sense and it is necessary that the Government look not only at the need for interpreter and translation services for migrants whose first language is not English, but also at the needs of Aboriginal people. Within the inter-departmental working party an Aboriginal planning group has been established to look at this question. I am quite sure that out of the examination and the recommendations of that planning group will come some very worthwhile recommendations to extend the Government’s planned interpreter and translation services to Aboriginals throughout Australia.
-I direct my question to the Prime Minister. Is it a fact that the Organisation for Economic Co-operation and Development has reported recently that, of 15 countries with comparable economies, Australia has the highest proportion of people under 25 years of age competing for jobs in the work force and the lowest proportion undergoing education? Is it a fact that the OECD reported that Australia had 620 of every 1,000 people under 25 years competing for jobs compared to 540 out of a 1 ,000 in the United States of America, 530 in the United Kingdom and 450 in Japan? Would he agree that these figures indicate that Australia employs too high a proportion -
-Order! The honourable gentleman is not entitled to suggest the answer to his own question. He may ask a question and seek information.
-Is it a fact that these figures indicate that Australia employs too high a proportion of its young people and educates and trains too few? If so, will he discuss the OECD report with the Minister for Education, the Minister for Employment and Industrial Relations, the Schools Commission, the Tertiary Education Commission and the State governments to discuss a national approach to the implications of the report so far as they relate to youth employment.
-The honourable gentleman is right to be concerned about youth unemployment as I believe are all honourable members in this House. At this stage I can neither confirm nor quarrel with the actual comparisons that he made because I do not carry those figures in my mind. However, they can be checked against the records of the Organisation for Economic Co-operation and Development. We know that there is a problem of youth unemployment. The programs that have been devised by my colleague the Minister for Employment and Industrial Relations in consultation with the Minister for Education have provided opportunities for training and opportunities for work to tens of thousands of young Australians. Indeed, over recent times the various training programs have been assisting up to 200,000 or more young people. For example, the Community Youth Support Scheme, an experimental program for unemployed youth, helps young people who may never have had anyone concerned for them before that program began. I am quite sure that that group of people has always been present in the Australian community but only now are programs being specifically designed to assist it. We have said on many occasions that funds will not arbitrarily limit the scope of these programs or the number of people who might be assisted by them. The Ministers concerned are constantly seeking to improve the bases of the programs to assist young people especially.
I should also mention that a long while ago the Williams inquiry into education and training was appointed and we hope to receive its report quite soon. In addition, the Minister is negotiating with the States to appoint an inquiry into teacher training because what happens in the final years at school is very important to the capacity of young men and women to take a useful and productive place within the Australian community. The concern shown by the honourable gentleman is certainly shared by the Government. I am quite certain that, in addition to the measures that are being undertaken and that are under examination, the Government would certainly be receptive to any constructive suggestions from members on either side of the House or from the community generally.
– Can the Prime Minister inform the House whether a successful negotiation of a nuclear safeguards agreement with Iran has been carried out?
-The short answer to the honourable gentleman’s question is no. We have so far been unable to complete a safeguards agreement with Iran to the point of initialling that agreement. Iran has found it difficult to enter into an agreement where Australia’s position on reprocessing uranium remains reserved in accordance with the policy I announced in this Parliament nearly a year ago. Iran has sought to find out the conditions under which Australia would agree to reprocessing. Apart from this point, however, the Iranian delegation was fully prepared to accept Australia’s conditions. It was explained to them that a decision on Australia’s prior consent in relation to reprocessing was not possible pending the outcome of international discussions including the discussions at the International Nuclear Fuel Cycle Evaluation in which Mr Justice Fox and the Australian delegation are playing, as I believe, such a constructive role. We expect that there will be a further round of negotiations with Iran in due course.
Although it is potentially a major customer for Australia’s uranium, being prepared to purchase 15,000 tons for the period to 1994, the safeguards agreement containing all the elements of our announced safeguards policy is a prior requirement for sales of uranium to Iran or any other country. We will not discriminate against Iran or any other country on safeguards but we are not prepared to erode our safeguards policy for commercial advantage. That was stated when the safeguards policy was announced. It is more important that the world be assured that the trade in uranium will not be a destabilising force, a force that would undermine the present nuclear non-proliferation regime and move us from a safer world. I understand that the United States of America and Iran have also been negotiating on nuclear safeguards and that prior consent on reprocessing has been a significant issue in those negotiations. I expect to take up this specific question when discussing mutual nonproliferation objectives with the United States Vice-President when he visits here next week.
– Is the Minister for Defence aware that postings of Royal Australian Air Force personnel scheduled for May and June have now been deferred until July? Is he aware that such personnel have been caused great personal inconvenience and subjected to financial losses through travelling to their new postings to make alternative housing and education arrangements and in the purchasing of school uniforms? Is he aware that many of these people have already packed their furniture and given away some of their furniture in their present accommodation? Have these postings been cancelled because of the lack of funds in the Department of Defence in the current Budget? Is this decision consistent with the Government’s plans to purchase more VIP aircraft?
– I put to one side the mild polemics in the honourable gentleman’s question. I simply say to him that I am not aware of any particular case causing hardship of the character to which the honourable gentleman has referred. I give him a very firm assurance that if he places before me the facts of any specific case or cases of which he is aware, I will deal with them promptly.
– My question is directed to the Minister for Productivity. In view of world recognition for the InterScan airport landing guidance system, will the Minister inform the House whether similar recognition exists for Australia’s Nomad aircraft? What is the potential of Nomad, in its various configurations, in the world market and what is the present position in respect of sales? How many countries have bought Nomad so far and what other countries may be interested? What do these two successful projects- InterScan and Nomad- mean for Australia in terms of the possible future development of integrated aerospace projects and facilities provided by Australian industry to other countries, especially to our South East Asian neighbours?
– I am pleased to be able to inform the House that the stretched version of the Nomad aircraft this week has received United States certification which is regarded in the aviation world as world recognition. The earlier version, the N22, had previously obtained that recognition. The Prime Minister tells me that he and a Canadian visitor this week were equally impressed with the aircraft. The importance of this, as the honourable member has raised, is that we have sales potential all around the world. The United States certification opens up world potential for this aircraft. In fact, so far orders have been placed for it by the Philippines, Malaysia, Indonesia, Papua New Guinea, Iran and Chile. The United Kingdom and Sweden have options to purchase the aircraft, and leasing arrangements have been entered into in the United States of America. I might mention also that currently negotiations are taking place in many parts of the world, including Poland and India, in regard to the aircraft. That indicates that virtually we are operating our sales teams in all countries, certainly in all continents, and that there is a very great future for potential sales of the Nomad aircraft.
I should say in respect of the second part of the honourable member’s question that in conjunction with the Overseas Projects Corporation we could well market the InterScan airport land guidance system and the Nomad aircraft as a package. One should bear in mind all the other expertise available in Australia, which is at the end of the jet aircraft routes and which services jets from overseas. We have a great deal of skill and technology to provide to the world. I think it is most important that it be recognised that Australia can enter into negotiations with other countries in Asia and in the Pacific region in respect of such matters. Some of these countries may manufacture these products under licence. Certainly, we will train some of the workers in these countries to work with this technology.
I think that there is a great deal of potential in this area. After hearing some of the comments made in the House this week of a very pessimistic nature about future employment prospects, we should think a little about our Australian inventiveness which is here and which is taking place and the marketing potential which we have if we are positive in our approach. This Government certainly will encourage industries to develop new, high technology to provide satisfying jobs and greater export earnings for this country.
– The Prime Minister will recall that the Committee of Inquiry into Public Libraries that was established by the last Labor Government reported to his Government in February 1976. He will recall also that in the two years that have elapsed since then no action has been taken on the recommendations in the Committee ‘s report. Will the Prime Minister be in a position today to indicate what action the Government does have in mind, if any, regarding any of the recommendations in the report, and the sort of timetabling the Government is envisaging?
-The Minister for Home Affairs advises me that he has this matter under active consideration.
-Is the Minister for Trade and Resources aware of reports that the next Japanese import quota for Australian beef is likely to be announced soon? Can the Minister indicate the Australian beef industry’s prospects in this important market?
– I expect the Japanese Government to announce the next six monthly quota next week. In the discussions I had during my visit to Japan in March with Ministers and leaders of the cattle industry in Japan, I was assured that there will be a 5,000 tonne increase over the quota for the corresponding period last year. That will take it from 35,000 tonnes to 40,000 tonnes. However, since that visit, because of an increased demand for beef in Japan as a result of the Japanese Government’s maintaining wholesale prices and its measures to reduce retail prices, I believe there is a need for even more beef than was envisaged in our talks. I am hopeful there might even be a significant increase over and above what the Japanese guaranteed me as the minimum. Meeting that requirement augurs well for the industry. I would hope also that a greater share of the global quota might be taken up by Australian exporters. There has been a tendency over the last quota period for Australia’s quota proportion to drop. With more competition and more keenness by our exporters, I certainly hope to see them getting a bigger share than they have had over the past quarter.
-In asking a question of the Minister for Trade and Resources I refer to the honourable gentleman’s frequent statements on the need for wage restraint and his objection to full wage indexation for average wage earners. Is it a fact that 40 positions in the Department of Trade and Resources at salaries between $25,000 a year and $40,000 a year have at the one time been reclassified by up to $3,000 each? How does this decision relate to the Government’s wages policy? By what process does the Minister expect to convert reclassification into improved advice? Has the Minister made any recommendations or has he given any directions that incumbent advisers should not remain in place in reclassified positions?
-There have been discussions between the head of my Department and the Public Service Board on reorganising the structure of my Department. An agreement has been reached on a new departmental structure. Although there may be more top-level positions, the net result of the restructuring is a saving to the Treasury because there will be fewer personnel overall.
– I remind the Minister for Aboriginal Affairs that the Government announced recently that it is examining ways of increasing surveillance of the northern and northwestern coastline of Australia against illegal entries. In view of the number of Aboriginal communities in these areas and having regard to their traditional fishing activities in surrounding waters, what involvement is planned for Aborigines in the area in any surveillance program?
– I am glad to receive this question from the honourable member because a great deal of interest has been shown lately in what my colleague the Minister for Defence may be doing with regard to coastal surveillance. It needs to be recalled, as the honourable member has indicated, that along many parts of the coastline that need to be guarded against illegal entry almost exclusively the population is Aboriginal. It also needs to be recalled that in the last war the Aboriginal population in these areas was of great service to the defence forces of the country.
Against that background, I can inform the House that already I have received from the Chairman of the Northern Land Council, Mr Galurrwuy Yunupingu, and from other people in the northern parts of Australia an expression of interest in directly involving the Aboriginal population in the surveillance of those areas in conjunction with the activities of the Minister for Defence. A committee of permanent heads is currently examining future surveillance requirements of Australia, and after I made representations to my colleague I was advised that the possible involvement of Aboriginals as part of the civil population will almost certainly be taken into account. I was very pleased to receive that assurance. I know from my own discussions with the Northern Land Council and other Aboriginal communities that they are very interested in taking their place alongside other citizens of Australia in seeking to prevent illegal entry across the northern coastline of Australia.
– The Minister for Business and Consumer Affairs will be aware of the recent sentence of six years and eight months, with a non-parole period of only two years and nine months, imposed by a Darwin court on Donald Roy Tait for illegally importing a large consignment of drugs into Australia. In view of Mr Tait’s previous history of drug trafficking, the method he employed in smuggling the drugs into Australia and the quantity of drugs involved, will the Minister indicate whether he considers the sentence to be satisfactory? If not, what action does the Government intend taking in this case? Does the Government plan to review penalties for this type of drug trafficking?
– Donald Roy Tait, a pilot, and Michael Leonard Bartley, his passenger, were arrested in the Katherine area in the Northern Territory after being pursued when in a light aircraft by a Royal Australian Air Force Hercules on 2 1 January this year. It is true that Tait was sentenced in the Darwin Supreme Court on 26 April this year to a term of imprisonment of six years and eight months, with a non-parole period of two years and nine months. Bartley was sentenced to a term of imprisonment of three years and eight months, with a non-parole period of one year and six months. I am concerned about what I consider to be the inadequacy of the sentence, particularly the non-parole period, and I indicate that the Crown would like to appeal, particularly in relation to the non-parole period. There is a question as to whether or not the Crown is able to appeal against the non-parole period imposed, and that matter is at present under active consideration. If it is found in law that we can appeal, then an appeal will be lodged. If not, I will be examining the matter with a view to reporting to the Government on the necessity to amend the law in some way in order to make it possible to appeal in these cases.
The honourable member asked about penalties generally. That matter also is under active consideration by the Government. I plan to have discussions next week in Queensland with State Ministers responsible for penalties in this area. The Government has indicated that the question of penalties needs further review. In the case of marihuana- it was marihuana that Tait had been convicted for importing- the maximum sentence is 10 years, whereas in the case of hard drugs it is 25 years. I give the honourable member and the House an assurance that this question of penalties is being reviewed and will be prosecuted as a matter of urgency, and a report will be placed before the Government in the very near future.
– Does the Treasurer recall saying on a number of occasions- for instance, at a luncheon in Sydney on 20 March- that one of the objectives of the Government is to remove what he describes as the distortion between real wages and productivity? Is it a fact that this distortion, as he defines it, is tabulated in exhibit MA6 contained in the February submission to the national wage and wage index hearing and is shown to be some 10 per cent above the long term trend base as calculated for him and the Government by his Department? Is the clear implication of that, that to achieve the objective he has stated, average weekly earnings will have to be reduced by 10 per cent in real terms or in excess of $20 a week? If this is the objective of the Government, what sorts of effects would such a dramatic reduction have on consumer activity and therefore the general level of activity in the economy? If it is not the objective of the Government to remove concern which flows from the implications of his statement in association with the submission to the national wage case, will he state clearly by what proportion the Government intends to reduce, in real terms, average earnings?
-I do recall making the statement referred to by the Leader of the Opposition at that particular luncheon. I have made it on a number of occasions. I think it is significant that in the recent Organisation for Economic Cooperation and Development report on Australia it is indicated that in the period from 1973 to 1975 the gap between real wages and productivity experienced in Australia was greater than the gap in respect of any other OECD country for which comparable statistics were kept. So the central position that this particular gap has occupied in the economic arguments of the Government has been very strongly confirmed by the recent OECD survey on Australia.
The honourable gentleman asks me whether, from the fact that the calculated gap is 10 per cent, it follows automatically that there are direct implications in removing that 10 per cent gap on real wage levels. I have to say to the honourable gentleman that before responding to that precise question I would want again to examine the statistical and mechanical basis on which the percentage gap is calculated so that I can properly inform myself in order to give an answer. I will do that and I will let the honourable gentleman know whether what he is asserting necessarily follows. I take the opportunity of saying again that the Government adheres very strongly to the view that, although there has been some improvement in the last two years, the gap between real wages and productivity is still one of the basic distortions in the Australian economy.
-The Minister for Primary Industry will recall that in answer to a question asked yesterday on a possible beef sale to Russia he indicated that if a subsidy were necessary to solve the current short-term problem facing the industry he preferred to direct it to the Australian producer rather than to the Russian consumer. That being so, will the Government give urgent consideration to the alternative proposal of the Kellogg rural adjustment unit workshop on beef marketing, namely, that a special slaughter subsidy be introduced in association with special assistance for beef cattle producers trapped in the bluetongue zone of northern Australia?
– Some weeks ago I met a delegation from the Northern Territory who presented to me a very strong and logical case for assistance to the cattle industry in the north, particularly in the control zone but also in that other extended part of the control zone where the bluetongue virus seems to be endemic.
I would emphasise that it is a virus and not a disease. As a result of the identification of the virus there are quite serious problems in maintaining the volume of cattle exports from that area of Northern Australia and there has been an impact on prices paid to cattle producers. In particular, as far as the Northern Territory is concerned, the loss of the Hong Kong market has been quite serious. It provided a worthwhile alternative market. I am sure that price levels paid from meatworks in the north were increased as a result of competition received last season from live cattle exports. This season those live cattle exports have not been possible, at least to date, and that has seriously affected the returns going to cattle producers. About a fortnight ago I concluded my own recommendations on the question of assistance to those cattle producers and I would hope that the Cabinet will be able to consider those recommendations in the near future. I will ensure that the Kellogg Research Institute’s recommendations are also taken into account by the Government when it looks at the whole proposition. It seems that there is a particular disadvantage for those producers as distinct from the disadvantages that regrettably still affect many other cattlemen elsewhere in Australia. Certainly I am most sympathetic to the problem which they face.
– I ask the Treasurer a question supplementary to the one I asked of him earlier. Is it not a fact that the wage overhang, as it is rather clumsily called, measured by the wage productivity index I was quoting before, will tend to overstate the level of wages in relation to productivity in times of depressed economic activity? Is it not true that one of the substantial causes of this arises from the fact that there is a large degree of unused capacity in the industrial sector of the economy? Is it not a fact that with carefully controlled expansionary measures idle capacity will be utilised and accordingly productivity will pick up without necessarily an increase in the wage cost and therefore the socalled wage overhang will contract? Is not the conclusion from that very simply that the Government’s single-mindedness emphasis in its attack on wages is misdirected and that, accordingly, if it is really worried about the so-called wage overhang the most successful way to overcome the problem is to provide careful stimulatory measures in the economy to expand it mildly so that productivity can pick up?
-I do not accept that the Government is over obsessive about the relationship between productivity and real wages. I make no apology and no member of the Government makes any apology for the central importance that has been placed upon this issue in the Government’s economic strategy. I should have thought that the evidence I referred to in answering the honourable gentleman’s earlier question indicated that in relative terms Australia did have a particular disability in this area. The honourable gentleman suggests that selective stimulus designed- I think I do him justice in saying this- to improve productivity through greater utilisation of unused capacity might help just as much as reducing real wages. I point out to the Leader of the Opposition that in asking that question he exhibits, I think, the error into which a number of commentators and observers on the Australian economy fall and that is using over-simplistic labels to describe our economic policies either as restrictionist or expansionary.
The fact is that this Government has in a number of areas taken deliberate action designed to stimulate economic activity. 1 refer to the personal taxation cuts which came into effect on 1 February; I refer to the Government’s decision on export incentives which were specifically designed to improve capacity utilisation and activity in export industries, particularly in the manufacturing sector. If the honourable gentlemen is saying to the Government that its economic policies should be a sensible mix of restraint and stimulus respectively in those areas where restraint and stimulus are required, I would agree with him. I suspect that the honourable gentlemen is not saying that. The honourable gentlemen is rather trying to persist with the absolutely fatuous proposition that there is no serious problem in this country so far as the level of real wages is concerned. That is demonstrable economic nonsense and will not be accepted by the Government.
– My question is directed to the Minister for Post and Telecommunications. In view of complaints still being received in respect of a minority of citizen band radio users, will the Minister advise when extra staff will be engaged to handle interference problems, as it is obvious that some CB operators refuse to co-operate with their neighbours, let alone with the Government? Due to the limited powers available to the inspectors, when might legislation be introduced to give greater powers to control the problems which exist?
– I thank the honourable member for his question. It was a good question. I also thank him and a number of other members of the House who have assisted me in attempting to resolve the problems of interference created by a minority of citizen band radio users. A number of things can help with these problems. At the moment we are in the middle of recruiting a considerable number of new radio inspectors. Perhaps that is the first things to say. The Department- I am personally heavily involved in this- is involved in discussions with the National Citizens Radio Association about a major revamping of the regulations governing the usage of CB in Australia. I hope that we shall make real progress in this matter in the weeks ahead. I believe that with revamping of the regulations we will take another long step towards reducing the problems of interference, particularly to television, posed by a minority of CB users.
– I ask the Prime Minister a question which follows the reply he gave concerning Iran nuclear safeguards. Whilst the Opposition would like to accept the bona fides of the Prime Minister’s answer, to do so I ask the Prime Minister: Will he table the model safeguard agreement so that a comparison can be made between it and the final agreement which the Government intends to table when it finally signs the agreement with Iran, if indeed it does so? We on this side of the House have asked this on a number of occasions. In the light of the Prime Minister’s answer we are now requesting the Government to table the model agreement.
– I have nothing to add to what the Foreign Minister said on that subject.
-Is the Prime Minister aware of the bitter controversy surrounding the proposed revolutionary daylight freight sea container service between Victoria and Tasmania by Mr Gordon Barton, which is to be known as the ‘Tiger Line’? As that project will cost an estimated $30m, of which $15m will be guaranteed by the Tasmanian Government, has the Government been involved in discussions with the Victorian and Tasmanian Governments? Further, will the Prime Minister give urgent consideration to earlier suggestions that a fast sea passenger link between Western Port in Victoria and the nearest port in Tasmania should be developed on similar lines to the Tiger Line, and forced to help the tourist industry of Tasmania?
-My colleague the Minister for Transport has been consulted about these matters as they have unfolded. I am advised that there is no technological reason to prevent the implementation of the proposals inherent in the honourable gentleman’s question. Improved freight carriage between Tasmania and the other States has been a long and consistent objective of this Government’s policies. As the honourable gentleman well knows the freight equalisation proposals, both north and south, are designed to place Tasmanian industry on an equal footing with industries in other States. Quite plainly, whatever can be done to achieve quicker and faster freight and passenger turnaround is to the advantage of Tasmania and, I believe, to the other States. I believe there would be less difficulty in a faster passenger turnaround than in freight turnaround. Obviously it is easier to move passengers on and off a ship than it is to move cargo. I hope that this kind of development can take place through the normal processes of private enterprise but I will consult with my colleague the Minister for Transport to see whether there is a role for the Government in this matter.
– My question is directed to the Prime Minister. Is it a fact, as reported on the program PM last night, that the Prime Minister flew to Melbourne on a VIP aircraft yesterday to visit his tailor and to attend a private wine tasting with Mrs Fraser and a Canadian friend? If not, could the Prime Minister inform the House why his Press secretary again is misleading the Press gallery? Does the Prime Minister feel that such activity is within the proper and correct range of use of VIP aircraft?
– I went to Melbourne yesterday to work in my Melbourne office and to do some things that had to be done in Melbourne. To my great regret I was unable to take pan in any wine tasting because time did not permit it. My wife took part and as a result of that and the wine tasting generally there will be additional exports to Canada.
– During the visit of the Minister for Primary Industry to the International Monetary Fund meeting in Mexico City last week where he represented Australia, did he see any signs of a lessening in levels of protection which might signal greater access for Australia’s primary produce, especially dairy products and beef, to world markets?
– The International Monetary Fund interim committee meeting which I attended last week discussed a range of problems that affect the world economy. These included the chronic imbalance of payments; the deficit of the United States; the surpluses in Japan and Germany; the problems of inflation; the extent to which unemployment is a major factor in a number of countries of the world; and, of course, the relationship between the developing world and the developed world. As a major part of analysing future trends in the world economy the question of restrictions in trade, particularly trade in agricultural commodities, was a major matter of debate.
From the point of view of the primary producing countries it is necessary that our point of view be expressed in that we have in many ways a community of interest with the developing world which is not always recognised by the major industrial economies. The restrictions that are imposed on access to agricultural commodities are the source of most of the troubles affecting Australian primary producers. There are major problems in trying to maintain access to overseas markets for dairy products and beef- indeed for each of our agricultural exports with the sole exception of greasy wool. I believe it is necessary for us to present our point of view as frequently as possible to ensure that the industrial world accepts that fact.
I cannot say that as a result of the discussions in Mexico City there is any likelihood that there will be an immediate increase in imports of agricultural commodities. I hope that taken in association with the Multilateral Trade Negotiations round, which will be the responsibility of my colleague the Minister for Trade and Resources, and in conjunction with other bilateral contacts that are being made at all levels of this Government, we will be able to ensure that there is an improved access on an escalating plane for those commodities which are so important to Australia’s international solvency. Indeed, the whole bent of our export program is to try to ensure that while the industrial world seeks to lessen the level of tariffs and non-tariff barriers for industrial commodities, it recognises that any such move will be totally inadequate unless it also lessens the barriers that are imposed against their agricultural commodities. I believe that the true regeneration of international trade activity is possible only by providing a freedom of access across the board for all commodities. There will then be a correction of unemployment and a containment of many of the major economic problems that face the world at the moment.
– There has been a report in one newspaper and a radio news bulletin that Vice-President Mondale of the United States of America would not visit Parliament House because the security was not adequate. Neither report is true. The preparations for the visit of VicePresident Mondale to Parliament House during the course of his visit to Canberra are proceeding as arranged.
– Pursuant to section 32 of the Albury-Wodonga Development Act 1973, I present the annual report of the AlburyWodonga Development Corporation for the year ended 30 June 1975.
This annual report has been delayed for more than two years because of the requirement under section 32 to obtain the approval of the Treasurer to the form of the financial statements. After long negotiations with officers of the New South Wales and Victorian Governments this approval was given on 28 September 1977. The Auditor-General’s certificate was issued on 20 October 1977.
Mr HUNT (Gwydir-Minister for HealthPursuant to section 42 of the Health Insurance Commission Act 1973, I present the annual report of the Health Insurance Commission for the year ended 30 June 1977. 1 seek leave to make a statement in connection with the report.
– I invite the attention of honourable members to Note 5 of the notes to and forming part of the accounts of Medibank Private on page 27 under the sub-heading ‘Accounting for Fixed Assets’. This note states that an advising from the Attorney-General’s Department is to the effect that payments by Medibank Private to Medibank Standard in relation to assets purchased prior to 1 July 1976 would be contrary to the terms of the Health Insurance Commission Act 1973. I am taking action to have the legislation amended to provide that payments by Medibank Private to Medibank Standard in relation to such assets may be made. In the meantime, a contingency account is being established so that Medibank Private may meet its commitments when the Health Insurance Commission Act 1973 has been changed in this respect.
This is the first report of the Commission since it began on 1 October 1976 to operate as a registered private health insurance organisation. The report has been delayed because of the need for all interested bodies to be satisfied as to the form of presentation of the accounts and because of the need for the Auditor-General to satisfy himself on the application of the cost apportionment principles adopted and on the principles and calculations of accounts for Medibank Private. Now that precedents on accounting matters have been established, similar delays should not occur in the future. I table the report.
-Mr Speaker, I seek leave to make a very short statement on the same topic.
-The report of the Health Insurance Commission for 1976-77 which has just been tabled shows a number of interesting points. The first is that Medibank Standard underspent its original appropriation by $27m. The second is that the administrative expenses of Medibank Standard are 4.2 per cent of benefits paid whilst the administrative expenses of Medibank Private are 15.7 per cent of benefits paid. The latter corresponds to other private fund figures. This again shows that Medibank Standard, as originally conceived, is much simpler and cheaper to administer. Even so, Medibank Private showed a profit of $ 1.7m over the first nine months of its existence. I would be interested to know how the cost apportionment principles worked and I hope that at some stage the Minister for Health (Mr Hunt) will be able to supply the House with some details.
Finally, even though we have heard a lot about bulk billing leading to cheating and doctors claiming for extra visits and consultations for which services were not rendered, the figures in the report show that, even though 55.6 per cent of all medical claims were bulk billed, they amounted to only 34.9 per cent of the value of all claims; that the number of services per bulk billed claim was 1.28 compared with 2.2 services on other claims; and that the average cost of each service claimed by a bulk billing was $8.80 compared with about $1 1.50 per service on separate accounts. All of this suggests to me that bulk billing is not a cause of excessive costs and that bulk billing is of great benefit, firstly, in keeping down the costs of the claims and, secondly, in keeping down the administrative costs.
– I have received a letter from the honourable member for Blaxland (Mr Keating) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The Government’s insensitive action in the procurement of two Boeing aircraft for the VIP flight at a time of record unemployment and economic hardship.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the Standing Orders having risen in their places-
-The purchase of these new aircraft is yet another example of the personal indulgence of the Prime Minister (Mr Malcolm Fraser) and the Government. This brazen act represents an absolutely new low in insensitivity and bad taste on the part of the Prime Minister. The purchase comes at a time when 1,100 people and 1,100 families associated with Chrysler Australia Ltd will feel the cold wind of unemployment and will be on the street looking for work and at a time when half a million other people are on that same street looking for work. Yet this man, the present Prime Minister of Australia, spends and continues to spend more money on his own vanities and more money on himself than any other Prime Minister has spent in the history of Australia.
Let us just examine what this Prime Minister has spent on himself, because it was only two and a half years ago that he was haranguing the former Australian Labor Party Prime Minister for his supposed extravagances. He is now seeking to purchase two Boeing aircraft costing $ 13m each- that makes at least $26m- for the VIP fleet. He has his own custom-built car for his tripping around in Melbourne- not anywhere else in Australia, just in Melbourne. It is a special length to take his size so that he can move in and out of the body of his car in comfort.
– For his big head.
– Yes, for his big head. He has spent $250,000 on renovations to ‘The Lodge’ to make it more comfortable. He does not intend to suffer it in the way it was under the Labor Prime Minister, or under Prime Ministers McMahon, Gorton and Menzies before him. He has to have a bigger house. In the house he has spent $8,000 on a new crockery set. He was not going to have the old chipped stuff that everyone else had put up with. He had to have a great new set. Of course this man will spend any amount of public money on himself. Even today at Question Time he admitted that he went to Melbourne last night for a wine tasting and to go to his tailor. He then went on to say that he did not go to the wine tasting though he would have liked to have gone. He said that the result of the trip was that we sold some wine to Canada. That was his justification for the trip. Since when is it the job of a Prime Minister to fly around in VIP aircraft in the middle of a parliamentary session selling wine to Canada? The truth is that he was looking after his friend from Canada, the chap who took him on a fishing trip, as he looks after all his other foreign friends when it comes to applications before the Foreign Investment Board, as he looks after Brian Inglis of the Ford Motor Co. or any other person who has his ear.
-Order! The honourable member for Blaxland is not entitled to attack the motives of the Prime Minister except on a formal motion, as he well knows.
– I withdraw the imputation, Mr Speaker. The Prime Minister will spend any amount of money on himself. This man is obsessed with toys. He is a boy who has never grown up. Every second weekend he is into historic racing cars. Every person in the country who has an historic racing car cannot wait to shoehorn him in behind the wheel to give him a trip around one of the circuits. He is also obsessed with Japanese cameras. The Japanese gave him a camera, and now he has all the trinkets. Everywhere he goes he has the cameras around his neck, and he takes pictures. Now of course he wants his very own plane, his very own three- engined jet plane. The two aircraft will be purchased for $26m, at the public’s expense. He is obsessed with toys. He is a boy who has never grown up. He does not behave as a Prime Minister should, and of course he does not practice what he preaches. He is just into spending public money on himself.
These aircraft accommodate 80 to 90 people. What is the Prime Minister suggesting- that in future he will use these VIP aircraft for parties of up to 90 people? We know from confidential sources that the Japanese Government was quite surprised at the size of his last contingent to Japan. On this last trip to Japan he took more people than he did on his official visit to Japan. He took to Japan a group of journalists and staff unsurpassed in numbers in the history of the Commonwealth. It was like a bloated royal caravan. Everywhere he goes he has this great retinue of people to add to the delusions of grandeur which he has about himself. What has he done on all his trips overseas? He always comes back empty handed. He went to Japan, but his visit has not done anything for iron ore contracts, it has not done anything for the cutbacks in trade, and it has not done anything for the coal industry.
He criticised the former Labor Prime Minister. At least that man achieved something. He went to China and established diplomatic recognition of China and diplomatic relations between China and Australia for the first time. He went to the Soviet Union and established a major new trade pact for the first time. What have we seen from this Prime Minister? Just a series of trips which have been of course an absolute failure. We on this side of the House might not be so sensitive to these matters but for the haranguing which the present Prime Minister gave to the former Prime Minister and Labor Party Ministers when we were in government. This Prime Minister has made this point on a number of occasions, the last time to the honourable member for Casey (Mr Falconer):
My predecessor in a period of three years was overseas on 14 occasions. It is not a record that I particularly wish to emulate.
It is true that the former Prime Minister was overseas on 14 occasions in 36 months. This Prime Minister has been overseas already 11 occasions in 28 months. He will make three more overseas trips in the next month, which will bring him up to the former Prime Minister’s record, in 29 months. It took the former Prime Minister three years. Not a bad record for someone who did not want to emulate that number of trips. What have we seen for it? Nothing.
He even went to the point of saying in his policy speech in 1975 that Australia does not need a tourist as a Prime Minister. All of his supporters clapped and waved their signs with the slogan ‘Turn on the Lights’. The truth is that we now have as a Prime Minister the greatest tourist in our history. He just cannot stay at home. Wherever he goes he comes back empty handed. During 1974-75 he asked many questions on notice about the number and costs of trips of the former
Prime Minister and the cost associated with chartering a 707 aircraft. What humbug. He has been travelling around the world costing us a fortune. Now he is not even prepared to do it in commercial aircraft. He will have a 727 aircraft in which to travel. As well as his trips, there have been overseas trips by the Deputy Prime Minister (Mr Anthony), the Minister for Foreign Affairs (Mr Peacock) and former Treasurer Lynch. When the former Treasurer was not constructing tax dodges for himself he was travelling overseas. He was one of the major critics of Ministers of the former Government for doing so.
Let us look at the justification for the purchase of these aircraft. The Minister for Defence (Mr Killen) yesterday said:
Personal contact with governments of other countries is now becoming increasingly important in inter-government relationships. This factor is imposing increasing demands on the Prime Minister (Mr Malcolm Fraser) and his staff to travel overseas . . .
Well, what a recant. Fancy resiling from all of the false charges a couple of years ago. The Minister then had the hide to talk about security, but this Government would not give us the benefit of the doubt when we were in office when we were advised about the security involved in using a 707 aircraft. It was never big enough to concede that, but now it explains its actions away by saying that it has been advised by Sir Robert Mark. We were advised too, but this Government did not take any notice of our advice. It was quite happy to pour the bucket all over us. Imagine the front page headlines if the former Prime Minister had purchased these aircraft. The headlines would be: ‘Two Planes for Gough’. Today there are no front page headlines about this purchase. The Herald has an article on page 2, and the other newspapers have it buried towards the back because they are not prepared to shift this person out of office. The are not prepared to demonstrate to the Australian people what a two-faced person we have in the Prime Ministership of Australia.
-Order! The honourable gentleman will withdraw that statement.
– I withdraw it, Mr Speaker, but the imputation is there.
-Order! The honourable gentleman will withdraw it in an unqualified manner.
– I will withdraw it unreservedly Mr Speaker. It is the double standards to which we on this side of the House object. We took the abuse and vilification on these matters without any foundation for three years. Yet all we have seen is our accusers doing exactly the same things but in a much better and grander way than we are ever supposed to have done them.
Let us look at the selection of the aircraft. These 727 aircraft are not the recommendation of the VIP fleet nor indeed of the Royal Australian Air Force. The RAAF has pointed out that 727 aircraft cannot be integrated with its fleet in times of emergency. When they are not used exclusively for VIP purposes they cannot be integrated into that fleet. As well as that, they are just not suitable. The present BAC-1 1 1 aircraft, for instance, has a range of 2,000 nautical miles yet the 727-200 series aircraft has a range of only 2,300 nautical miles. We are buying two aircraft which have a range of only 300 nautical miles more than the aircraft we presently have. The 707 aircraft, which can be bought in just about in any second hand car yard throughout the United States of America because nobody wants it, has a range of 6,S00 nautical miles. It seems to me that an aircraft with four engines and a range of 6,500 nautical miles would have been a more suitable aircraft. Yet the Government wants a modern plane and one with three engines. It has decided to purchase two 727 aircraft.
Before I rose to speak in this debate I checked up with some brokers around Australia with respect to the availability of second hand 727 aircraft. Throughout the world there are no suitable 727 aircraft currently for sale on a second hand basis that will meet the noise standards set by the Australian civil aviation authorities. The only way in which the Government can obtain a suitable second hand aircraft is if it says that the aircraft is for defence purposes so that it can get through the noise limitation problems. There are no DC9s available. That means that the Government must buy new aircraft, each of which, without spares, will cost $13m- a total of $26m for the two aircraft. The Government has announced that not only will it spend $26m on the VIP fleet but that this is part of a $40m reequipment program. It is just a disgraceful abuse of the privileges of the public purse. It is a luxury in which the Prime Minister and the Government are indulging. It is a disgrace, considering the import of its policy and its statements at the last election and at the 1975 election. It is an abrogation of another election promise. No matter what rationale the Minister for Defence would like to put, it does not absolve the Government from the blame that this Prime Minister will spend any amount of money on himself to justify his own glories and vanities while half a million people in Australia are living at subsistence level.
That is the contrast. Any amount of money will be spent for the Prime Minister while half a million people in Australia do not have jobs. We on this side of the House condemn the Prime Minister and the Government for their insensitivity and bad taste. The best thing they can do is to drop the whole program.
– Honourable members have just listened to what may be described as one of the most graceless speeches ever heard. The honourable member for Blaxland (Mr Keating) has used very strong language and he has used remarkably unreal language. What seems to disturb the honourable gentleman immensely is what he describes as the indulgence of the Prime Minister (Mr Malcolm Fraser).
– That is right.
– The honourable gentleman repeats the charge. As an illustration of that, he refers, of all things, to the modifications to the Lodge. Honourable members will recall that that was one of the thrusting arguments used by the honourable gentleman. The Lodge has been modified, ergo this is an example of the indulgence of the Prime Minister. The simple fact of the matter is that the alterations to the Lodge were made on the recommendation of a committee representative of all parties in this House. What was the nature of the alterations? They were made to improve the living facilities for the employees who work at the Lodge. It seems to me to be passing strange, coming from a person who holds himself out as having fierce egalitarian ideas, that those trade unionists who work at the Lodge should live in circumstances that would promote a strike in any run-down shearing shed. The honourable gentleman went on to talk about Japan.
– Will you indicate who carried out the repairs in the shearing shed?
– I inform the honourable member for Newcastle who interjects that I am talking about the argument put by his colleague. I am not talking about pterodactyls. The honourable gentleman gaily dismisses the living circumstances and standards of those people who work at the Lodge. I would not know of one honourable gentleman who can recall the appalling conditions that existed at the Lodge and who would have thought for one moment that it could ever be described as a waste of public money to fix them. Let me illustrate the level of the argument which the honourable member presses on the House today. He then turned to deal with the Prime Minister’s official visit to Japan, almost conveying the impression that my right honourable friend had gone on a fishing trip. The fact of the matter is that the Prime Minister visited Japan for quite crucial talks regarding this country’s circumstances–
– We saw the results.
-The honourable gentleman dishes it out. He cannot find the stomach to take it.
– Dish it back. I am waiting for you to do it.
-Order! The honourable member for Blaxland has participated in the debate. I ask him to remain silent.
- Mr Speaker, before this paragon of virtue interrupted me I was adverting to the fact that the Prime Minister’s talks in Japan were of crucial importance to this nation and to the trading position of this nation. The honourable gentleman gaily dismisses that fact. He says, as a consequence, that this is a further example of the Prime Minister’s indulgence. I think that the Prime Minister would share my view in regard to flying. I have done so much of it that I take the view that it is a pity the Wright Brothers were ever sired. Anybody who thinks it is possible to get any joy out of flying to Japan under the conditions that the Prime Minister did and then to return to Australia seems to me to have a very strange sense of humour.
The honourable member for Blaxland has sought to ignore purposefully what is the central argument in this dispute. Before I turn to that central argument and invite the honourable gentleman to devote what cerebral processes he can muster to consider it, I want to turn to what I regard to be one of the meanest arguments that the honourable gentleman employed. I derive no pleasure out of adverting to this sort of argument but I am bound to do so because the honourable member for Blaxland pressed it upon the House. The honourable member referred to the visits abroad of the present Prime Minister and he said that they represented a further indulgence. I want to cite the statistics on this matter to the honourable gentleman. I have no relish for it because I do not think they show very much, but they do show up in stark relief how utterly contemptible was the honourable gentleman’s submission to the House this morning. Ministers in the present Government have completed a total of 96 visits overseas involving 1,147 days. During a similar period of the Labor Government, there were 130 visits overseas by Ministers involving 1,776 days.
– We are talking about the Prime Minister.
– I will come to deal with him. That is the first comparison for the honourable gentleman to consider. Let us take the case of the present Prime Minister. Since he became Prime Minister, he has undertaken 10 visits abroad -
– He has undertaken 10 visits involving 96 days at a cost of $480,000. During the term of the honourable member for Werriwa (Mr E. G. Whitlam) as Prime Minister, he undertook 14 visits abroad involving 16S days at a cost of $1,515,000. The figures speak for themselves. I only hope that the honourable gentleman will reflect on those figures and take a more sensible and rational view of what has taken place. When I made the announcement on the purchase of these aircraft to the House yesterday, I described the basis upon which the proposal rests. It rests on the security aspect. It is sad to assert it, but it is true to say that the world has reached a stage at which it is virtually impossible for the Prime Minister of this nation, no matter what his kidney of politics may be, to travel abroad other than in a Service aircraft.
– Was not that the case two years ago?
– I want to deal with that. If the honourable member for Blaxland would compare the security report which was presented to the Government in which he served for a period with the security report which I tabled in the House yesterday, he must be prepared to concede, despite his obstinacy, that it is like comparing chalk with cheese.
– You would not concede that two year ago.
– What a rude little man the honourable member is.
– What a silly man you are.
-Order! The Minister will resume his seat.
– What a one-eyed man you are.
-Order! The honourable member for Blaxland has been interjecting constantly. I will not ask him again to cease interjecting. I call the Minister.
- Mr Speaker, I come to what is the central argument in this matter; that is, the security aspect. Honourable members can dismiss, if they like, the reports of the officials. But I would hope that the honourable gentleman would be prepared to. summon the members of the Press Gallery as neutral witnesses in this matter. I think it is a pretty fair test to ask the Press Gallery.
– Who were they?
– I will not reveal the names.
– You paid off Fairfax.
– No. I am speaking of senior working journalists who have travelled with the Prime Minister and who travelled with the honourable member for Werriwa (Mr Whitlam) when he was Prime Minister. I want to give three examples that have come from a senior, a highly respected member of the Press Gallery. He says that on a Qantas flight to America in mid- 1976 the Prime Minister’s party was in a first-class part of the plane. During the flight the Prime Minister went back to economy class to talk to some members of the Press and also to a member of the Royal Australian Air Force. During this conversation and quite without warning, another passenger who was in a certain condition- if I describe him as being Mozart and Liszt, I think everyone will understand what I am talking about- came up to the Prime Minister, put his hand on his arm and started to talk to him.
– You should be able to do that.
– I beg my friend the honourable member for Newcastle to listen to this. The journalist goes on to say that that is a simple illustration of how easy it is for any person to attack a prime minister when he is travelling in an aircraft. The second illustration he gives is that on the Prime Minister’s flight to London in May 1976 there was a change in aircraft at Singapore.
– That is understandable, is it not?
– I am delighted that even the mind of the honourable member for Shortland can run to that. That cheers us enormously. There is hope for him yet. The Prime Minister of Singapore came to the aerodrome to meet the Australian Prime Minister. The security people were worried because of knowledge that some Japanese Red Guards were in the vicinity. As a result, some 2,000-odd passengers from several jumbo jets had to be searched individually. I regret that that is the sort of world in which we are living. The journalist goes on to say they were told to be at the airport three to four hours before the flight took off to undergo a security search.
The last illustration he gives is that when the Prime Minister visits, say, the United States of America and lands at a commercial airfield, an enormous strain is placed on American security resources to implement protective measures at the airport. This involves the use of hundreds of security personnel, disruption, and inconvenience to other passengers. That is the argument. If harsh assessments have been made in the past, I will walk to Canossa. The fact of life today is -
– You could still charter aircraft.
– No. I say to the honourable member for Newcastle that on every inquiry that has been made regarding the chartering of aircraft one runs into a brick wall. They are not longer available at short notice.
– It is a case of one for you and nothing for the rest.
– The facts can be placed before the honourable gentleman. It is a sad world in which we live, for to embrace the sentiments pressed upon the House today by the honourable member for Blaxland would mean saying, in effect, to the Prime Minister of this country, no matter who he might be, ‘You can no longer travel abroad’. One may express the deepest sense of regret that we have lived to see the day in this country when the Prime Minister would never be a welcome passenger in an aircraft of one of the great airlines of the world. But that is the case. The strain placed on Qantas in the fuelling, refuelling, servicing and victualling of aircraft, and the boarding of aircraft, is intolerable. Any senior executive of Qantas will say that that is the case.
It has been an ungenerous, mean argument, that the honourable member for Blaxland has sought to put to the House this morning. The honourable gentleman has done no credit to his party. He has shown impoverished understanding of the facts of life in the world today.
– I shall not use strong language, but accurate and precise language. Let me, after having listened to the plaintive pleading from the Minister for Defence (Mr Killen), simply draw to his attention a statement by his own Prime Minister in this House just two years ago. At page 1000 of Hansard of 25 March 1976 the Prime Minister said:
On my own visits overseas, commercial aircraft will be used as far as possible. The argument that Qantas cannot provide adequate security for a Prime Minister is a specious argument and false.
No more need be said of the case put by the Minister for Defence.
Let me advert quickly to what has been done at the Lodge to show the priorities of the present Government. I remind the House that $250,000 has been spent on luxurious furnishings there. Who did that furnishing? Is it a fact that the furnishings for the Lodge were supplied by the firm of Mark Shane Interiors of Yass? Is it a fact that that firm is operated by a relative of the Prime Minister? Is it a fact that tenders were not called for the supply of those furnishings?
The Prime Minister has said that we are lucky; that Australians live in a lucky country and take too much for granted. Some Australians, such as the Prime Minister, are lucky. What this Government is doing at the moment is indulging the peculiar idiosyncrasies of the Prime Minister, including his penchant for fast cars and luxurious aeroplanes. Only the day before yesterday we had the news that 1,100 workers at Chrysler are to be sacked. The Government turned its back on them, saying it was a commercial decision. It was said to be a case of rationalisation. Rationalisation means the same to me as the dirty fourletter word s-a-c-k. The Government has done nothing to provide for these men. It has shown no compassion, no concern for them. Yet it is willing to spend $40m for the luxury and personal extravagance of this Prime Minister. The nation is in the hands of a corrupt government.
-Order! The honourable gentleman is not entitled to make that accusation in debate.
– I propose to show why I say that. I understood from previous rulings by the Chair that I may say such things when I am referring to the Government as an entity, not to individual members of it.
-Every member of the Government is entitled to take offence at such a statement. I ask the honourable gentleman to withdraw the words ‘corrupt government’.
– On a point of order, Mr Speaker, when you were Leader of the Opposition on numerous occasions you said that the Labor Government of 1972-75 was a corrupt government, and on not one occasion did you withdraw that statement.
– I was not asked to withdraw the term, if I did use it. I am unwilling to permit that sort of language in the House. I ask the honourable member for Shortland to withdraw it.
-I withdraw it. The Government has little concern for proper public morality. Its first priority is to squander money and indulge the life style of the Prime Minister, who seeks to meander round the world like a
Middle East oil magnate at the taxpayers’ expense. Yet young Australians sleep in the streets of Melbourne because they cannot find work. The Government is not concerned. Sick and aged pensioners in hospitals are worrying about being turfed out because of the increased health service charges by this Government and because of the brawl between the Government and its supporters in the health insurance funds. Unfortunately, we are in the grip of a dishonest government, led by a power-hungry, fear-stricken Prime Minister.
-Order! For the reasons that I would not permit the use of the word ‘corrupt’, I will not permit the use of the words ‘dishonest government’. I ask the honourable member to withdraw.
– I withdraw. We are in the grip of a government lacking in honesty, with a Prime Minister who is fear-stricken, who has an obsessional fear for his personal safety. We in the Opposition want something done for the 500,000 Australians who are seeking work but are being denied the right to work and the right to make their own careers. Around this Government there is a smell of dishonesty. Let me quickly tabulate some of the charges: Minister charged with involvement in vote buying; Minister charged by his own colleagues with being involved in rigging electoral boundaries; Minister involved in murky land deals.
-Order! I do not like to interrupt the honourable gentleman continually, but if he will depart from the matter before the Chair, I must interrupt him. The matter under discussion is a matter of public importance, namely the Government’s insensitive action in the procurement of two Boeing aircraft for the VIP fleet at a time of record unemployment and economic hardship. There is no reference whatsoever in that matter to other Ministers.
-Yes, Mr Speaker. I was developing the background to this insensitivity and lack of concern by the Government. I will refer quickly to the abuses of the VIP flight: The wine flight; the strawberry flight; Fraser’s delight, the Opera House flight as the Sydney Sun described it; the Press conference flight for $3,000 for the Minister for Environment, Housing and Community Development to hold a Press conference; the trips to the tailor; and now the Government’s refusal to provide any information at all on the cost of overseas travel by Ministers of this Government. A few moments ago we heard the Minister for Defence detailing some figures that sought to show that less had been spent on overseas travel by this Government than by the previous Labor Government. If that is the case, why is the Prime Minister refusing to provide any information whatsoever as to the details of travel overseas by Ministers and the cost of that travel? The Australian dealt with the subject clearly in March of this year when it said in relation to the VIP aircraft:
Once used sparingly VIP planes have become something like ministerial taxis- an unacceptable situation, particularly at a time of dwindling oil supplies and the need to cut all unnecessary government expense.
Dealing with a few more headlines, in the SunPictorial in June 1977:
It ‘s a corker for PM ‘s men.
That was the charter flight to Belgium when they drank the plane out of champagne supplies within 40 minutes. In the Australian Financial Review on 1 6 June last year.
Fraser Cabinet invades Washington.
In the Melbourne Age in October last year.
PM tops trips overseas.
What is the Government up to in this exercise? Using the flimsy disguise of security, which I have already rebutted with the Prime Minister’s own words, the Government is embarking upon a program to purchase not only two Boeing 727s but three Grumman Gulfstream luxury executive jets. Five aircraft in all are involved. That is the submission that went before the Government and the Government decided to support it. Where did the idea for the Gulfstream executive jets come from? I will go back to the Canadian trip in 1 976 and the Melbourne Herald
PM jets in, thanks to Pru.
Prime Minister Malcolm Fraser flew into Montreal this afternoon aboard a luxury chartered executive jet owned by the Prudential Life Assurance Corporation.
The ‘ man from Pru ‘ took four hours and forty-five minutes to fly non-stop from San Francisco aboard the sleek Grumman American Gulfstream II executive jet.
There is the other side of the story. There is the balance of the $40m. What we want the Government to do is to put first the interests of people who are seeking work, people who are sick, pensioners who are worried about how they are going to be cared for in hospital. We want the Prime Minister and his coterie of Ministers to put up with the hardship, the little bit of difficulty, the little bit of added inconvenience, the little bit of added discomfort, for a while longer. We want them to give first priority to the people who are out of work in this country, to the small businessmen who are facing bankruptcy under this Administration.
If $40m is available to purchase five new luxury aircraft, the first priority for that $40m should be to stimulate the economy, to provide job security, to get the shipyards back to work, to get the men at Chrysler back to work, and to secure our economy. There is no justification whatsoever, in the view of the Opposition, for proposing the expenditure of $40m on luxury executivetype jets. Two of the aircraft each seat 150 people and three are Gulfstream II sleek executive jets. The Government stands condemned before the people for putting forward such an extravagant proposal. There is no justification whatsoever for it in these times of enforced austerity, when life is not meant to be easy. If it is not meant to be easy, it is not meant to be easy for all, not for all except the Prime Minister.
-Order! The honourable member’s time has expired.
– The first point to make in a debate such as this is that its importance should be measured by the spokesmen the Opposition chooses for the occasion. We had firstly today the honourable member for Blaxland (Mr Keating), whom one newspaper article described as one of the young members of the Labor Party with some potential for leadership, until one of his more experienced colleagues said to the reporter: ‘That may be so, but the trouble is that the fellow is a young pup and he has no chance of growing up’. I do not want to make any judgment about the honourable member for Blaxland. Time alone will tell. Then we had the honourable member for Shortland (Mr Morris), and I suppose that the best way I can describe his contribution to the debate and the standard he brought to it is by quoting from an article that I understand appeared in the Newcastle Morning Herald on 25 May 1975:
Four preselections, wholesale fraud, blackmail, corruption and bribery were needed before the Left’s candidate finally won endorsement for the seat . . .
– I raise a point of order, Mr Speaker. What relevance have the Minister’s comments to the matter before the Chair? None at all. If you are to be consistent with the ruling you gave previously, his comments have nothing to do with the matter before the Chair.
– On the point of order, Mr Speaker, I find the remarks of the Minister at the table offensive. I invite him to make them outside the House so that he can pay me some money, as his colleague the former member for Mackellar has done in the past.
-Order! I ask the Minister for Transport to withdraw that statement. The fact that it has been said elsewhere does not make it parliamentary when used here.
– I was unaware of that, Mr Speaker. I thought it was quite appropriate because it was in an article in the Newcastle Morning Herald. However, on your request, I will do so. If that is not capable of being used -
-The honourable gentleman withdraws the imputation?
-Yes, Mr Speaker. Let me put it in another context. Perhaps the honourable member for Shortland might best be described by his predecessor in the House, Mr Griffith, who declared at the time that he was amazed and disillusioned by the Tammany Hall practices that had been perpetuated in the New South Wales Australian Labor Party.
– I raise a point of order, Mr Speaker. The Minister is still not being relevant to the matter before the House.
– I uphold the point of order and ask the Minister to deal with the matter of public importance.
– The second thing that has to be done in the debate, having set the pattern by the standard of the speakers the Labor Party has put up, is to look at the terms of the matter of public importance before us, which state:
The Government’s insensitive action in the procurement of two Boeing aircraft for the VIP flight at a time of record unemployment and economic hardship.
Insensitive is right, in the terms put forward by the Labor Party, when one recalls that when Labor came into power in 1972 there were 126,000 people unemployed and when it went out of power in 1975 there were 328,000 people unemployed. That was an increase of more than 100 per cent in the unemployment figures during that time, and the inflation rate stood at 19 per cent. Hardship and difficulty were created for the community unknown since the days of the Great Depression. That was the background against which the then Prime Minister of Australia, the honourable member for Werriwa (Mr E. G. Whitlam), undertook a number of his great and important trips overseas. I had something to say at the time, and it is a wonder that it was not quoted to me today. I found it very interesting indeed.
Mr colleague the Minister for Defence (Mr Killen) quoted the number of trips taken by the previous Prime Minister and his Ministers in a comparitive study of the trips of the present
Prime Minster (Mr Malcolm Fraser) and his Ministers. Let me repeat the figures. Ministers in the present Government have completed a total of 96 visits overseas covering 1,147 days. The total cost for these visits, whilst not yet completed, are estimated at about $ 1 .2m. During a similar period under the previous Government 130 visits were completed covering 1,776 days and a total of $2. 62m was expended. The previous Prime Minister set a new record, as Prime Minister of this country, in the extravagant way he travelled. He was never prepared to use ordinary commercial aircraft. Rather he went to Qantas and took from them a Boeing 707 and chartered it. He took with him on his trips a whole retinue of people, down to his own car driver, who he thought needed a six weeks’ holiday, along with a couple of other people to handle the baggage. He spent $ 1. 5m on one trip. Not one benefit resulted from that trip. He came back absolutely empty-handed of anything of value to this country.
– Is that when he saw the Greek ruins?
– He visited Knossos. I have no doubt that at the time of the Darwin cyclone Tracy disaster those ancient ruins would have been of historical interest to him. He flew back to Australia for two days and then returned to Knossos to complete his study of those ruins, having left the ruins of Darwin. That showed a totally insensitive approach to the problems of Australia and the people of Darwin and to the hardship that was created at that time.
The Labor Party has come into this House today and told us that there is something improper about the purchase of two 727 100s for the VIP fleet at a time when the whole world is entering a new era of security problems, at a time when studies show that, both for the protection of the Prime Minister and his party and, equally importantly, for the protection of those people who travel on commercial aircraft, it is much simpler if the Prime Ministers of the world today travel on separate aircraft. Difficulties are created for commercial operators in having to carry VIPs of the standing of Prime Ministers. For example, Qantas has to go to enormous trouble to provide the required level of security for the Prime Minister both at points of take-off and at points of landing. When a Prime Minister has to travel on our own airlines and then join other airlines of the world, it is more difficult for those airlines to provide the levels of security which are required and deemed necessary, both for the Prime Minister and his party and for the travelling public.
What we have done is to take a very careful look at the options available to the Government to meet this heavy responsibility of looking after the interests of a Prime Minister who must meet his international obligations by travelling overseas. We looked at a variety of aircraft. We have considered carefully what might be the best option to take in overcoming this terrific and horrific problem of security for the Prime Minister when he undertakes his very necessary trips. We have settled on two 727 100s. I put it to the House that a 727 100 is quite a modest aircraft in comparison with the Boeing 707 which the previous Prime Minister used. The fact is that the 727 100, with its three engines, provides the necessary level of safety. Spare parts can be obtained and servicing can be facilitated because the domestic airlines in this country are outfitted with similar aircraft. The 727 100 aircraft, with its long range fuel tanks, has the capacity to reach the distant destinations from an isolated country such as Australia.
Having taken those options into account, having looked at the matter coldly, and having recognised the difficulties we create, not only for the travelling public but also for the Prime Minister himself by asking our Prime Minister to travel on Qantas, we took the decision properly and responsibly that something had to be done about the situation. We have purchased two aircraft, which are modest by any international standard, to add to the VIP fleet. I do not think anybody in this country would be critical of that decision if he or she recognised and realised that we have to hand today reports on security which demand that we, as responsible members of parliament and Ministers of the Crown, provide for those VIPs who visit Australia and for our own Prime Minister when he leaves Australia a level of security which equates with the level of security provided to other Prime Ministers around the world.
For the Labor Party to come into this place and to try to make cheap politics out of a serious situation like this just shows the depths of despair to which it will plummet and sink. For the Labor Party to take up the time of the House on a matter of this nature when there are other important matters to be debated again demonstrates the paucity of the Labor Party’s policy proposals.
What we have done is to look at the requirements of Australia and Australia’s Prime Ministers for the next 15 or 20 years. We have faced up to a heavy responsibility in the transport area. The whole world is demanding that VIPs be provided with proper security. We have taken steps to ensure that the ordinary commercial travelling public and the tourists are not embarrassed by the fact that our Prime Minister, who undertakes these very important trips for Australia’s benefit, is on board their aircraft. We have taken this step so that the Prime Minister can alter that situation.
-Order! The Minister’s time has expired. The discussion is now concluded.
-On behalf of the Leader of the House (Mr Sinclair), I move:
That, in accordance with the provisions of the Public Works Committee Act 1969, leave be granted to the Parliamentary Standing Committee on Public Works to meet during sittings of the House up to and including Thursday, 1 1 May 1978.
The Leader of the House has asked me to point out that other than in this particular case, it is not the intention of the Government to have the Committee meeting during the sittings of the House. The Government does not believe that it is a good principle that committees meet while the House is sitting. However, there is a particular need in this situation to clean up some outstanding business before the end of the session.
-The Opposition supports the motion. I shall illustrate why the motion has been proposed. Last Monday it was necessary, in order to try to overcome the load of work levelled on the Parliamentary Standing Committee on Public Works, for the Committee to sit from 9 a.m. until 1 1 p.m. I think all honourable members would be sympathetic towards members of the Committee for having to sit those hours in order to overcome the current workload. We have to listen intently to the evidence that is presented to the Committee. That is the reason why the Committee asked for this concession from the House.
Question resolved in the affirmative.
Bill presented by Mr Street, and read a first time.
That the Bill be now read a second time.
It gives me great pleasure to submit for consideration of the Parliament this Bill and the associated Bill which are designed to give legislative expression to the Government’s commitment to upgrade the Commonwealth Employment Service- CES- into a modern and effective manpower service. The provisions contained in the Commonwealth Employment Service Bill 1978 are designed to establish the CES as a unified, clearly identifiable organisation, to provide a legislative framework for the CES which is appropriate for its development as a modern manpower service, and to make provision for the establishment of an advisory committee structure at the national, regional and local level.
As honourable members will know, the existing legislative basis for the CES is to be found in the Re-establishment and Employment Act 1945. The provisions in the Commonwealth Employment Service Bill 1978, if accepted, will necessitate the 1945 Act being amended, and the Re-establishment and Employment Amendment Bill 1978 proposes the repeal of Division 5 of Part II. The 1945 Act sets out the then Government’s policy for re-establishing discharged men and women, and re-settling civilian war workers. In order to facilitate this process, and against the background of the Government’s commitment to establish and maintain a high and stable level of employment, and the assumption by the Commonwealth of responsibility for the administration of unemployment benefit, the Act provided for the formal establishment of a decentralised Commonwealth Employment Service. The CES was therefore one of the earliest- and has remained- one of the most significant expressions of the commitment to high and stable employment. Indeed, throughout Western industrialised countries public employment services have remained the cornerstone of the involvement of governments in the operation of the labour market.
In Australia, few organisations are so visibly present as the CES and offer such a wide range of services and programs. Every day the CES interviews and refers thousands of job seekers or provides specialist advice and information. In 1977 the CES made over 1,200,000 referrals to vacancies and effected over 400,000 placements. At the same time CES services the various labour market needs of employers and during 1977 received some 600,000 new job vacancies.
However, the environment surrounding the operations of the CES has changed considerably since its formal establishment. In particular, the evolving labour market conditions, particularly the greater incidence of structural imbalances and the trend towards the tertiary sector, have influenced the role and performance of the CES.
The CES has also been the delivery vehicle for many of the increased activities undertaken by government in respect of labour market training. Our expectations as to the performance and objectives of a public employment service have also altered. It was against this background that the Government in October 1976 commissioned Mr J. D. Norgard to make a comprehensive and detailed examination of the CES. This was the first major review of the Service since its inception in 1 946. Mr Norgard submitted his final report to the Government in June 1977.
As honourable members will know, the report was highly critical of the service the CES was providing to jobseekers and employers. It referred to the CES as ‘a 1946-model organisation trying to cope with 1977-style problems’. The Norgard report contained a large number of recommendations and suggestions for improving both the operations and performance of the CES over several years. After detailed examination by my Department and the Government I announced, against the background of a general commitment to upgrade it into a modern manpower organisation, a number of decisions vital to the CES. Briefly these were changes to the organisation and management structure of the CES, designed to establish a unified, identifiable CES and improve management and performance control; a substantial intensification of the program of staff training; the provision of ground floor, shop front accommodation for the CES in central business districts; the associated introduction of a more effective and differentiated system of placement assistance; and an examination of computerised employment systems. In recommending these decisions, I indicated the Government would reinforce the changes in the organisation of CES by introducing appropriate legislation. However, before outlining the legislation, there are a number of general points I should like to make.
Firstly, and most importantly, the Government remains firmly committed to defeating unemployment. Our underlying strategy for achieving a sustained reduction in unemployment in Australia has been outlined on a number of occasions. Briefly it involves achieving a sustained reduction in inflation and creating the environment both internally and externally for an expansion in the private sector. These goals will not be easily achieved, but there are sufficient indications to confirm that the strategy will achieve a sustained and permanent improvement in Australia’s economic performance. Within this general framework, the Government will continue to place high priority on employment and training schemes, particularly those directed at young people, and on making the CES a more effective national manpower organisation. If the CES can effect the job placement of people more speedily, this could lead to significant savings. For instance, Norgard in his report makes the point that if each unemployed person found work only one day earlier the gain to central revenue through savings in unemployment benefit would be of the order of $ 18m per annum.
Secondly, the Government does not intend the CES to have a monopoly of the vacancy-filling business. Private and informal contacts, newspaper advertising and recruiting agencies all play a significant role in local labour markets. However, the Government in accordance with International Labour Organisation obligations is committed to providing a national and comprehensive manpower service. Further, we are concerned that the CES operates with maximum effectiveness in meeting the labour market needs of both jobseekers and employers. In addition, the CES has the added responsibility of providing specialised advice and assistance to the particular groups in the labour market, such as Aboriginals, handicapped persons, migrants et cetera, and more general occupational information and guidance. We are also concerned that the CES efficiently delivers manpower programs to ensure the attainment of not only individual private gains, but also the wider economic benefits arising from an improved functioning of the labour market. In upgrading the CES we will nonetheless be conscious to ensure that the CES services are developed in the most cost effective manner.
Thirdly, the upgrading program will take place over several years. This program will not only require the provision of the necessary additional resources, but also the support and cooperation of CES staff, employers and jobseekers. A 1946-style organisation cannot be changed overnight. However, the framework is being laid and these legislative proposals are an important part. I am confident that in the years ahead the CES will provide an effective service to all employers and jobseekers and represent an important element in the improved operation of the labour market.
I turn now to the Commonwealth Employment Service Bill 1978 itself. The Bill has three main elements: The establishment, functions and powers of the CES; the position and responsibility of the National Director of the CES, and the status of the staff; and the establishment, functions and membership of a national advisory committee on the CES, and provision for the establishment of regional and local advisory committees. Of particular importance in the detailed list of functions specified for the CES, is the responsibility to ‘promote and implement approved manpower programs and other measures designed to ensure a high level of employment in the community’. The changing nature of the labour market in Australia, particularly the emergence of structural imbalances, has required successive governments to introduce manpower programs such as the National Employment and Training scheme- NEAT- aimed at overcoming labour market problems suffered by particular groups within the community.
On most occasions the CES has been the delivery arm for these programs and frequently this has meant channelling resources away from the more traditional functions of the CES. The Government is now positively stating that the CES has an extremely important role to play in both promoting and implementing manpower programs and that this must be integrated into the traditional functions of the CES. The Government is particularly anxious for the CES to develop properly into a national manpower organisation capable of offering effective placement services and of efficiently administering a battery of manpower programs designed to ensure that the labour market operates as effectively as possible.
It will also be seen from the Bill that the CES now has the explicit function of assisting employers in meeting labour requirements. In the present labour market situation, the Government is concerned that the CES places appropriate emphasis on securing the confidence and therefore the vacancies of employers. As the Norgard report noted ‘vacancies are the lifeblood of the CES’ and the intensification of staff training which I have announced will be an important element in this process.
The CES will, of course, continue to carry out its important and traditional function of assisting jobseekers to obtain employment, placing particular emphasis on those in need of special assistance such as Aboriginals, migrants, handicapped and young people. The CES will also provide jobseekers with relevant occupational information and vocational assistance. Further, the CES will continue to register persons for unemployment benefit purposes, publish labour market and employment service information and collect statistics and other labour market information. The CES will also undertake the training of its staff members. The CES will, at the direction of the Minister, have the power to establish and maintain offices for the performance of its functions.
Of particular importance in the Bill are the provisions in Part III. The Norgard review pinpointed major weaknesses in the management of the CES above the State level, and concluded that the CES needed to be a closely integrated and singly identified organisation. The review found that the CES as such did not have its own head or a head office, but merely a series of officers in the central office of the Department of Employment and Industrial Relations who dealt to a greater or lesser extent with the management and operations of the CES. In order to create a unified service, a clear identity at the national level is imperative. To this end the Government has decided that there shall be a National Director of the Commonwealth Employment Service within the Department of Employment and Industrial Relations who shall be responsible for the administration of the Service and for the implementation of approved manpower programs. The National Director may exercise any powers or perform any duties which are by the Bill conferred or imposed on the Service.
In line with his responsibilities, the National Director will be required to prepare and furnish to me, the Minister, for presentation to the Parliament, an annual report on the operations of the Service. I will require that this report be available to me by 3 1 August in each year so that it can be presented in the Budget Session of the Parliament. The Government believes this approach represents the most effective means of resolving many of the management problems which the Norgard report identified, and at the same time preserving the necessary integration between the development of manpower policies and their implementation and development.
Finally, I have indicated a number of times that the CES exists to provide a service to individual job seekers and employers. The real test of its effectiveness therefore depends on the ability both to recognise and to satisfy the various requirements of job seekers and employers. To assist in this task the legislation makes provision for the establishment of advisory committees at the national, regional and local level to advise on the operations of the CES. At the national level, the Bill proposes the establishment of a national advisory committee consisting of two union representatives, two employer representatives, the National Director and a representative of the Department of Employment and Industrial Relations. At the regional and local level the advisory committees will include appropriate representatives of employer and employee organisations. In conclusion I would like to reiterate that the Government is determined that the CES will become an effective manpower service. These legislative proposals are an integral part of this upgrading and I commend the Bill to the House.
Debate (on motion by Mr Young) adjourned.
Bill presented by Mr Street, and read a first time.
– I move:
This Bill provides for the repeal of Division 5 of Part II of the principal Act which I foreshadowed in my speech on the Commonwealth Employment Service Bill. It will enable the Commonwealth Employment Service to be established within a more appropriate and updated legislative framework. I commend the Bill to the House.
Debate (on motion by Mr Young) adjourned.
-Mr Deputy Speaker, I wish to make a personal explanation.
-The honourable member may proceed.
– Last night I made a technical error at the conclusion of the debates on the third reading of both the Environment Protection (Alligator Rivers Region) Bill and the Environment Protection (Nuclear Codes) Bill. I intended that we should oppose the third reading of both these Bills. With my lack of knowledge of procedures, I assumed that our opposition would be recorded. This was not the case. I indicated that we would not divide on the motions for the third reading of both those Bills, assuming that our opposition would be recorded at the conclusion of each third reading. This is a little embarrassing for me because I did not realise that my assumption was not correct. I want it recorded in Hansard that we intended to oppose the motions for the third reading of both those Bills.
-You indicated that.
-The Minister recalls that I did indicate that and I said that after all the divisions which had been called I would not call for a division on the motions for the third readings of those Bills.
Debate resumed from 7 April, on motion by Mr Howard:
That the Bill be now read a second time.
-In July last year the Sydney Press carried reports of what it described as the years biggest party, which it said was thrown by a millionaire in a mansion almost as big as the Ritz. This lavish $25,000 function was in fact a party for the staff of a man who was said to have had a staggeringly successful year. The staff were reported to have been entertained on the boss’s yacht, flown around in a helicopter to admire his stud and cattle properties and dined like kings in his Gold Coast mansion. His businesses had indeed boomed in 1976-77. The gross revenue of his publicly listed company had almost quadrupled and profits had doubled to reach two-thirds of a million dollars, which was entirely untaxable. His several unlisted companies were reputed to have fared just as well. Since then the man involved has bought a $4m property on the Queensland Gold Coast on which to build his own mini city, has acquired expensive race horses and has set up a horse breeding establishment with one of Australia’s leading jockeys. I need hardly add that this man owes his success to being at the forefront of Australia’s leading growth industry, namely, the tax avoidance industry.
Tax avoidance is the major aspect of the legislation now before the House- the Income Tax Assessment Amendment Bill 1978. At long last the Government has decided to take some action to slow the pace of this runaway industry which, if allowed to develop much further, would surely undermine the whole basis of the tax structure in the very near future. Our tax structure is supposedly built, at least in respect of direct taxation, on the principle of capacity to pay. But that principle has been greatly eroded in recent years. The increased sophistication of the tax lawyers and accountants, with the immense assistance of the attitude taken by the High Court in its interpretation of the taxation legislation, has enabled many loopholes in the legislation to be opened up in recent years, with the result that high income earners have been able to reduce their taxation liabilities drastically. Thus the nominal progression of the income tax schedule has been severely eroded.
Such loopholes are not generally available to wage and salary earners. Such people would, in any case, find the fees payable to the promotors of these schemes far too high for the tax savings they could make on their incomes, even if the schemes were nominally available to them. In practice, the schemes are really available only to highly remunerated business and professional people. Their successful and increasingly widespread use means that the real, as distinct from the nominal, tax schedule has less and less to do with the principle of capacity to pay.
The Labor Party is implacably opposed to such regressive developments. What these people, both the promotors of the tax avoidance schemes and their clients are doing is- in fact if not in law-defrauding the revenue and thus overburdening the ordinary wage and salary earners. Each dollar they succeed in keeping from the Australian Taxation Office is, in the long term, another dollar the ordinary taxpayer must pay to that Office. When, as we are now informed is the case, hundreds of millions of dollars are riding on just one scheme, it is clear that drastic action has to be taken to prevent the continuance of such patent inequities in our tax system. However, the Government’s motives, it would appear, are less concerned with equity than with the blowing out of the deficit. Recently we read reports of a prospective deficit for next financial year of a possible $6m, or only $3m if there is no increase whatever in government expenditure. Of course, even $3m would be well above the scheduled deficit for this financial year.
After all, this is a government whose leaders have openly admitted that they have family trusts, which are nothing more than tax avoiding arrangements, and whose ex-Treasurer, whilst threatening to take action against taxation avoidance, was revealed to have been minimising his tax liabilities through the device of a family trust. If such tax avoidance is being practised by the nation’s leaders, is it any wonder that this lucrative pastime has become so popular in the community generally? On 23 November 1977, speaking on the radio program P.M., the Prime Minister (Mr Malcolm Fraser) said:
I think it is entirely appropriate for people to have family trusts.
With the Prime Minister of the country openly advocating the use of a device to reduce income tax by sharing business income with members of the family and to reduce estate duty, is it any wonder that tax avoiders have felt free to go hell for leather? The example comes from the top.
Such comments also demonstrate this Government’s lack of concern for equity in the tax system. Its motivation for introducing the legislation that it has now put before the Parliament clearly is its anxiety as to the effect on the deficit of allowing the continuation of those schemes. The fault that it sees with these schemes is not that they are tax avoidance schemes per se but that they have become such enormous drains on the revenue that even a sympathetic government must take action to end them. Thus, although dozens of loopholes are advertised openly and must be known to the Government only six have been legislated against in this Bill and notice has been given of action to close too additional loopholes relating to prepayments of rent and interest.
We can also expect no effective action against trusts. Although the Government introduced some minor tightening of tax exemptions applying to distributions to minor beneficiaries in a trust, I am informed that they are easily avoided by making distributions under section 26B rather than under Division 6. The Government’s lack of seriousness in this matter is shown by the operative dates it set for the closing of the five tax avoidance arrangements other than the current scheme. The Treasurer (Mr Howard) introduced this legislation on 7 April and concluded his second reading speech at 4.40 p.m. In respect of the non-current schemes he provided for their termination after 7 April. That means that promoters of these schemes had the rest of 7 April to process such schemes. I understand that the time was very well utilised. In Perth they had until 2 a.m. Eastern time so the focus of activity was in that city. Some reports have it that $ 100m worth of tax avoidance business was done on 7 April, not that the smart operators would have had to wait until the Treasurer had made his second reading speech. One major operator in the tax avoidance field told me that he had full details of the legislation by 7 a.m. on the morning of 7 April. Nevertheless, disregarding the extensive leaking of the legislation, the question must be asked: Why did the Government bring in legislation on 7 April but not outlaw the schemes until the next day, thereby giving the industry time for one last glorious fling? Was it some sort of square-off or an attempt to placate Government supporters who would be annoyed at the ending of some of their favourite schemes. Whatever the reason, the Parliament needs to be told why the Government needlessly allowed many millions of dollars to slip through the net. All it needed to do to prevent that happening was to state that the legislation would apply from 7 April, not after that date.
A further reason for doubting that the Government ‘s motives in introducing this legislation had much to do with equity but rather were motivated by concern at the enormity of the prospective loss of revenue is its action in setting different operative dates for the clauses closing off various schemes. Honourable members are very well aware that, as a result of intensive lobbying by the tax avoidance industry, the clauses dealing with the current scheme will come into effect from 17 August 1977 whilst others, as I have mentioned, are operative from 8 April. By taking the current scheme back to 17 August the Government clearly is trying to give some validity for the then Treasurer’s action in giving notice on Budget day 16 August that action would be taken against tax avoidance schemes. However, he failed to specify any particular schemes and the point has therefore been made by those lobbying against any retrospectivity that the Lynch statement provides no basis for singling out one particular scheme for operation from that date. Insofar as it provides any justification for a retrospective date of operation it should apply to all of the schemes involved, not just to one of them.
We on this side of the House can see some validity in that argument but we do not accept the next step of the tax avoiders’ argument that therefore there should be no restrospectivity for any scheme. Rather, we would say that all of them should be backdated. The real reason for the Government’s differential treatment of the current scheme quite clearly is its concern at the enormity of the loss of revenue involved. The Treasurer estimated that several hundred million dollars of revenue could be lost on this one scheme and even those who have claimed that the Treasurer has greatly over-estimated the sum involved still consider that well over $100m of revenue is involved in this one scheme. The Opposition also is alarmed at the magnitude of such tax dodging. The millions of ordinary people in this country who dutifully, if not joyfully, pay their taxes each year and never consider trying to put a fast one over the tax authorities must be amazed to learn that through such schemes as this people with incomes far higher than their own have been able completely to avoid paying tax not only for one year but for years into the future. I understand that the magnitude of tax losses engendered under some current schemes is so enormous that not only will it enable all tax liability to be avoided for the next seven years but that by use of trusts- those hallowed tax havens which this Government maintains are quite proper and respectable- the tax obligation can be wiped out for an even greater period of time. This follows from the fact that trusts are not subject to the seven-year time frame for the recoupment of losses. Even so, the question remains whether the extent of tax avoidance involved in a particular scheme provides a sound basis for differential treatment as to operative dates for probititive legislation.
In the view of the Opposition it is a rather vague and uncertain basis for such discrimination, especially as the Commissioner of Taxation has an inadequate knowledge at this stage of the income year as to the extent of the various schemes in operation. He will not know what the situation is in that regard for this income year until January or February 1979 when the tax returns for this current income year ending 30 June are filed. It may well be that very large sums are involved in some of the other schemes as well. The prepaid rent and interest schemes which are apparently much simpler to operate than the current scheme are reputed to have been used extensively this year yet the date of closure for these schemes will not be until 20 April. Thus the principle of backdating a scheme which seems, on the basis of inadequate information available to the Commissioner for Taxation, to be very extensively used and letting the rest of the schemes operate until the date of announcement of legislation against them seems to us to be a very unsatisfactory mode of operation. I do not wish to imply by this that we are worried about inequities for tax dodgers who punted on the wrong scheme but rather that we do not see such ad hoc methods as being effective in limiting tax avoidance. Under the Government’s approach if the industry keeps some sense of proportion and does not make the mistake it made with the current scheme of going into it too heavily, it can expect that the Government will close off the scheme only from the date of announcement of its intention to legislate. Such an approach by governments ensures the tax avoidance industry of continued prosperity and the tax dodgers of continued success.
By the time the tax authorities discover a scheme it is almost certainly being used extensively. It may well be that it is in its second year of operation since, as I have explained already, the tax authorities do not receive tax returns for the year ended 30 June until the following January or February. By the time they discover a scheme it may well have been used in respect of two financial years. However, the tax authorities can find out about these schemes by less formal means and, hopefully, may discover them in the first year of operation. Thus, by accepting the approach that the Government should generally abide by the principle that it legislates against the scheme only from the time it discovers it and decides to legislate against it, one is conceding a massive advantage to tax avoiders. They will always be in front. Tax avoidance will always be rife and the equity of the tax system will be permanently impaired. We on this side of the House therefore take the view that the Government should date all legislation to close off tax avoidance schemes from the beginning of the financial year in which they are discovered to be operating.
Such an approach is absolutely essential if tax avoidance is to be minimised. At the most it would mean that tax avoiders would get away with a scheme for one year only, provided the Government was diligent, and if the tax authorities were really quick off the mark they could wipe out a scheme before it had been successfully in operation for even one year. In this respect the action the tax authorities are taking now to investigate tax payers whose professional returns are markedly reduced, so as to find out how they justify such a reduced return, is the sort of action that could well discover schemes in the first year of operation. The application of such a principle would doubtless be claimed to involve retrospectivity and therefore to break a fundamental principle that legislation should not be retrospective. In this regard we would argue that it is debatable whether such action would, in fact, involve retrospectivity. A tax liability does not arise until the end of a financial year and it should be open to governments to change the tax law in respect of that financial year before the year has ended and the tax liability been incurred.
It would of course be unfair to change the tax laws in respect of ordinary commercial operations and date them from the beginning of the financial year as that could affect the basis on which a normal commercial transaction was undertaken. But we are not talking about ordinary commercial transactions. We are discussing totally artificial transactions, the sole or overwhelming motivation for which is to reduce or wipe out entirely a tax obligation that arises at the end of that financial year. In those circumstances it is quite feasible to argue that dating the operation of legislation designed to block a tax avoidance scheme from the beginning of the financial year, does not involve retrospectivity. Even if one does not accept that argument, such a procedure is in our view thoroughly defend - able. One must balance against the general principle of non-retrospectivity the need to maintain equity in the tax system.
There have been various examples of retrospective legislation in our past which put beyond doubt the power of the Parliament to pass such legislation but, more importantly, the courts have recognised that such legislation may sometimes be the most socially desirable solution. In this regard I draw the attention of the House to the High Court judgment of Mr Justice Isaacs in 1923 in which he said:
What may seem unjust when regarded from the standpoint of one person affected may be absolutely just when a broad view is taken of all who are affected. There is no remedial Act which does not affect some vested right, but, when contemplated in its total effect, justice may be overwhelmingly on the other side.
This statement eloquently expresses the view of the Opposition on this matter. But, unlike the Government, we do not say that this principle should be used only on isolated occasions but rather on all occasions when tax avoidance schemes are found to be operated since, no matter how much money is involved, they are all a blatant attack on the equity of the tax system and an imposition on the rest of the populace who are left to bear a larger proportion of the tax load.
We will therefore move in the Committee stages of this debate for the operative base for all of the clauses blocking off avoidance schemes to be after 30 June 1977. 1 also give notice here and now that the future Labor government will adopt and rigorously implement the principle of dating all anti-tax avoidance legislation as from the beginning of the financial year in which it was discovered and intention to legislate against it was announced. A Labor government would also ensure, by clamping down on tax avoidance schemes, that the Australian Taxation Office had available adequate resources to enable it effectively to undertake its task. At present we understand the Taxation Office to be less than adequately manned which of course greatly inhibits its ability to tackle the sophisticated and wealthy tax avoidance industry.
Mr Deputy Speaker, in view of the enormity of tax avoidance in this country, it is quite remarkable, given that the Income Tax Assessment Act completely forbids such practice, that we have this enormous tax avoidance industry. Section 260 of the Act would appear on the face of it to give the tax avoiders no chance. If I may summarise section 260, it says that every contract, agreement or arrangement shall so far as it has or purports to have the purpose or effect of:
The ordinary layman, on reading that section, would conclude that such an annihilation clause, as it is known, would absolutely prevent tax avoidance schemes and so render legislation such as we have now before us quite unnecessary. After all, it expressly says that schemes which have as their purpose or effect the avoidance of any duty or liability imposed by the Act shall be absolutely void. That would surely seem to be saying: ‘Tax avoidance schemes are out’, but such is not the case. The annihilation clause has itself been annihilated by the High Court which has given this seemingly catch all section a very restricted interpretation. I quote from the Australian Master Tax Guide:
It would seem clear that the potential scope of operation of section 260 is very limited.
This being the case, it would surely be worthwhile for the Government to re-draft section 260 in such a way that it did effectively prevent blatant artificial tax avoidance schemes. A major problem with continually legislating against individual schemes is that the tax law becomes more and more complex. It is already exceedingly complex and the more legislation that has to be passed to plug loopholes, the more incomprehensible it becomes to all but professionals in the area and, of course, the more loopholes there are for the smart operators to open up. If the Government is really serious about preventing tax avoidance, it must re-draft section 260. A tax avoidance legislation may from time to time still have to be passed, but nowhere near as often as will be the case while section 260 remains in the castrated form to which it has been reduced by the High Court.
The role of the High Court is indeed worthy of mention not only in respect of section 260 but also for its impact on other sections of the Act. It is amazing to the layman that the High Court can find that a transaction which netted a profit of $2,783 through the purchase and sale of shares could somehow bring the trader involved a tax loss of $188,217, but that is what the Court found in Curran’s case. A number of amendments that are now before us have been made necessary by the High Court’s decisions upholding the legality of a particular scheme, or the likelihood that it would do so. Thus the High
Court has been very closely involved in the development of the tax avoidance industry in this country. Its decisions have opened up vast loopholes. It would appear that the present and recent members of the High Court, with the odd exception, have had little regard to the dictum to which I referred earlier enunciated by Mr Justice Isaacs in 1923. Rather, they seem to have ignored the effect of their’ decisions on the community as a whole and thereby dealt a severe blow to social justice in our community.
In this regard also it is enormously disturbing to note that a leading promoter of tax avoidance schemes in this country openly boasted recently that one of his top clients was a High Court judge. The claim, as reported in the Australian Financial Review, on 6 February was made by Mr Ian Gooch who is a major promoter of cattle leasing schemes and a close associate of the leading tax avoidance promoter to whom I referred earlier. If there is any truth in this allegation it does in our view raise a quite serious question of impropriety, since the major motivation for indulging in cattle leasing is tax avoidance. High Court judges who are continually called on to adjudicate on tax avoidance issues should surely seem to be above such schemes. The Opposition will not oppose the second reading of this Bill. We will, as I have suggested, propose amendments in the Committee stages of the debate to provide that the operative date for all of the tax avoidance legislation is as from 30 June 1977. We do not oppose the other aspects of tax legislation contained in the Bill.
-I listened intently to the speech of the honourable member for Gellibrand (Mr Willis). I regard him as one of the more sound members of the Opposition. However, I was concerned when in one of his statements he said that our Government has a lack of concern for the tax system. I suggest that if we had a lack of concern for the tax system we would not be here today debating this amendment. The Opposition had ample opportunity during the period 1972 to 1975 to really show that it practised what it preached. During that period it had the opportunity of bringing in legislation such as this. It had the opportunity to show the Australian people that it believed that the taxation burden should fall squarely on the shoulders of all people, but it did not take that opportunity. The honourable member for Gellibrand bases much of his argument on the fact that this legislation is too late. I agree with him, but is not all tax avoidance legislation too late? The reason why tax avoidance legislation is brought in is that something is already happening. It will always be too late. I suggest that this Government, led by the Prime Minister (Mr Malcolm Fraser), is not as late as the honourable member’s Government was.
Could I explain briefly the Bill that we have before us today. It does what the Opposition claims the Government is not doing. It overcomes much of the tax avoidance practice. I admit that there is much more going on. Everyone who knows anything about taxation will admit that there will always be loopholes. New loopholes will become evident. It is the Government ‘s job to keep those loopholes to a minimum or, if it were possible to do so, to eliminate them. Although the main thrust of the argument associated with the Bill is in relation to retrospectivity and the Curran scheme, the Bill incorporates many other anti-avoidance measures. First of all it rectifies one of the serious tax avoidance exploitations. I refer to gift provisions. It also rectifies the situation regarding share trading losses and particularly the valuation which enterprises and people have been able to place on shares and debentures. I am pleased to say that this Bill will mean that trading items such as those now need to have a commercially realistic value.
The Bill also rectifies another avoidance situation that has been rife for some time. I refer to dividend stripping. This is a complicated matter, and I will not try to explain it. The Bill also rectifies the situation of reimbursement of dividends or loan back arrangements under Division 7 of the Income Tax Assessment Act. That is where a private company has to distribute so much of its profits each year under Division 7. This Bill virtually outlaws arrangements made for some form of a loan back to the company or some arrangements whereby the company theoretically pays out the dividend but the money does not really go from its books. The Bill also rectifies the situation where the primary producer’s tax averaging provisions are being exploited by people who are not bona fide primary producers. One has only to look through some of the newspapers of recent months to see blatant advertising encouraging people who are not bona fide primary producers to take advantage of these provisions.
The main part of the Bill deals with bonus shares- the Curran scheme. That matter has been receiving a great deal of publicity throughout Australia over recent weeks and has been the main cause of members of Parliament receiving 10, 20 or 30 letters and telegrams from people who either have been selling Curran schemes or are associated with the Curran scheme. In the time available to me could I explain briefly what is a Curran scheme. We have all heard about it, but I do not think that many people realise just how it works. What happens is that someone buys a normal company that has assets. These assets are capital and accumulated reserves. In a normal situation a company, after a number of years of trading, has accumulated reserves which usually exceed its capital. In other words, if a company has one thousand $1 shares its paid up capital is $1,000. It may have accumulated reserves of $10,000, making the total assets of the company $11,000. Someone may come in and buy that company for $1 1,000. He then makes a bonus issue of shares equivalent to the reserves of the company and then sells the original shares, which have now been watered down to a value of only $1,000. In other words, there has been an alteration in the ratio of shares to the total assets of the company. In a situation such as that, he ends up with the same amount of money he started with and he has a tax loss situation.
I do not know how anyone can justify a situation in which somebody could start off one morning with, say, $1 1,000 and, through a series of financial manipulations and bonus share issues, at the end of the day end up with the same amount of money he started with and a tax loss of $10,000. No one can tell me that that is being fair to the Australian people. I might add that anyone can produce whatever tax loss he wishes. I have given an example of a tax loss of $10,000, but it could run into millions of dollars. People have come to me who have manipulated loss situations of $300,000 and $400,000. Those people are not only avoiding some of their tax commitment but also creating a situation in which they will not pay any tax for years. No one can tell me that the Australian people should accept such a situation.
I have always been a strong supporter of this legislation, knowing full well that there is little excuse for the delay in this legislation being brought before Parliament. I also realise that only a vague and passing reference was made to tax avoidance by the former Treasurer in the August 1977 Budget. It is unfortunate that action was not denned in a clearer manner at that time. However, warning was given, and persons involving themselves in schemes such as the Curran scheme must have realised the high risk factor. In this regard I welcome the recent statements by the Treasurer (Mr Howard) indicating clearer guidelines as to how such situations will be handled in the future. As he has already shown in the case of the forward payment of interest and the forward payment of rents, as he has already given indication that the Government intends to bring in legislation dealing with these two schemes, in this case and in the future legislation will be back-dated to the time when the announcement was made. This is the continuation of this Government’s thrust to make sure that taxation is fairly accepted by all members of the Australian community.
– Why are they not going to make it retrospective to Budget Day in future?
– We did not say that. The Opposition said that. Honourable members opposite do not practise what they preach. The small band of vocal people who have been sending letters and telegrams to members of Parliament, at considerable expense, in the main have no alternative but to agree with the thrust of the legislation. The only thing on which they can base their objection is that they are concerned that a principle is being established for retrospective legislation. I think that that argument is pretty weak. In the many government decisions with which I have been involved over the three years in which I have been a member of this Parliament I have never concerned myself with former principles. My decisions have always been made on what I consider is right and what I consider is wrong. If my judgment of what is right and what is wrong is not correct and if the judgment of the Government is not correct, the Government and I expect to be judged by the people every three years when an election takes place.
Many people on low incomes who came to me for assistance in completing their tax returns last year found that after I had worked out their tax returns they ended up having to pay $50. Those people showed great dissatisfaction and concern when I said, ‘Here is your tax return, you will receive a bill for about $50 ‘ knowing full well that I knew that $50 was a lot of money to them. If this legislation is not made retrospective I do not know how I will face those people when they come to me this year and ask for assistance in preparing their tax returns and look in horror when I tell them that they will have to pay a small amount of money to the Taxation Office. What will I say to those people when they say, ‘I have to pay $50 that I cannot afford and yet the Government allows people to get away with millions of dollars? We will not tolerate that situation and that is why we are doing something about it now.
A few people have suggested to me that there will be a loss of confidence in the business community as a result of the uncertainty of retrospective legislation. I would suggest that the effect of that legislation would be to the contrary. The majority of taxpayers in Australia who are meeting their obligations fairly and rightly, people from all walks of life including the business community, will welcome the Government’s action in its attempt to cut out the tax loopholes. The loopholes are usually available only to those privileged few people on high incomes, to whom the honourable member for Gellibrand has referred, who are best equipped to pay tax but who choose to seek costly .assistance from some accountants and solicitors in re-arranging their affairs so as to avoid their rightful tax obligations.
I also refer to the degree of retrospectivity in this legislation and what I feel is the opinion of the majority of Government supporters. In this instance the legislation is not made retrospective to the same degree as has been discussed in previous legislation. Last year when discussing the trading stock valuation adjustment this Government decided against retrospectivity but in that instance we were discussing legislation that would have been made retrospective from one financial year to a previous completed year. In this instance I can hardly term it retrospective legislation because it will be made retrospective to a date in the same financial year. In other words, the legislation is being backdated to August of last year, which is in the current financial year, which still has a few months to run. if people choose, they can take advantage of the opportunity to put their affairs back to the previous situation. We are backdating legislation only within a financial year which has not yet finished.
– And there is no penalty.
– As one of my colleagues mentioned, there is no penalty. I would also like to refer to some Press reports about this retrospectivity and allegations that have been made, particularly about some sort of back bench revolt. From stories in the Press there would seem to be some great problem in the Government in bringing this legislation before the House. I can assure this Parliament, the people and the Press that there was never any back bench revolt. Unfortunately our Press today appears to want to report what is sensation rather than what is fact. The majority of Government supporters are behind this legislation and the vast majority of the Australian people will hail it as being fair.
The other point I want to mention is how sickening it must be to those Australian people who believe in a fair go to look through a newspaper and see certain advertisements. They must scratch their heads as to what they all mean. In any one newspaper on any one day one will see many advertisements of blatant schemes. For example, some advertisements that I have here are titled, ‘Loss company for sale- $90,000 worth of losses’, ‘For sale current year loss $900,000’, ‘Income tax shelters unaffected by 7 April amendments’ and so on. The public can look through the newspapers every day and see these advertisements. As I said, how sickening it must be to people when they see this, the majority of the people who are meeting their tax obligations fairly. I do not know what these people think and I find it difficult to face them as their member of this Parliament.
There is no doubt about my strong support for this legislation. I make no apology to the people who have come to see me although I have been prepared to listen to their arguments. After reading 20 or 30 letters from legal firms throughout Australia, after having been interviewed by the same number of people and after having been pulled up in the street and in other places by people suggesting that this legislation should not be so, I make no apologies. I fully support this legislation. I think that this legislation and the thrust of this Government’s policies will create much confidence in the Australian community. Finally, I would like to say that many members of the Opposition have suggested, and probably many will suggest in this debate, that we are closing this loophole and backdating this legislation only because we have a deficit and it will help to overcome that deficit. I point out that the legislation is a result of the thrust of this Government in rectifying tax avoidance schemes; it is not because we have a deficit or for any other reason. It enables this Government and will enable this Government to continue with tax reform for the Australian people. Although unfortunately we will never reach the situation in which there will be no tax avoidance, if we could make tax avoidance negligible I would think that the taxation rate throughout Australia could be cut by as much as 20 per cent. That cut would be appreciated fairly by all taxpayers and not only by the privileged few who have the opportunity, the know-how and the money to become involved in these complicated avoidance schemes. I strongly support this legislation.
-Basically the Opposition supports this legislation but, as the honourable member for Gellibrand (Mr
Willis) mentioned, we will move amendments in the Committee stage so that all tax avoidance schemes involved in this legislation will be made retrospective to 1 July last year. The legislation provides that retrospectivity only in respect of the Curran scheme and it will be backdated only to the Budget date of last year. When some loopholes were closed last year the tax avoiders immediately became involved in the Curran scheme and other schemes. I compliment the Treasurer (Mr Howard) for introducing this legislation, my only complaint being that on a number of counts it does not go far enough. Not enough tax avoidance schemes have been closed. Furthermore, we are concerned that this legislation should be backdated to 1 July last year for all tax avoidance schemes. The Opposition is supporting this legislation because we wish to establish a precedent- a precedent which Labor in office will follow- that whenever a tax avoidance scheme is discovered it will be legislated against and backdated to 1 July, in other words, to the beginning of the financial year. This will be a signal or a warning to all the tax avoiders and tax dodgers to beware that when they hop from one scheme to another they will find themselves caught. That is the basis of the Opposition’s principle on the matter and that is why we will be moving amendments. It is one area in which we disagree with the Government.
The honourable member for Gillibrand mentioned that during the Committee stage the Opposition will be moving amendments to back date to 1 July last year all of these proposals being legislated today. It could be argued quite validly that retrospectivity is not involved because this is being done in the income year or in the financial year in which the schemes were discovered. Various estimates have been made of the amount lost to revenue through tax avoidance. The Treasurer in his second reading speech referred to the Curran tax avoidance scheme involving some hundreds of millions of dollars. We have heard it suggested that $ 1,000m could be the amount of tax which will not be collected in this financial year alone. This will be the sum avoided by the wealthy, not the ordinary guy who has to pay his taxes. All these schemes are schemes designed for the wealthy. The Small Business Newsletter speaks of 25 tax avoidance schemes. It asks its readers to take its advice on such schemes. Family trusts are included as an example of these tax avoidance schemes. We had an example of the use of family trusts given to us by the former Treasurer, the present Minister for
Industry and Commerce (Mr Lynch), who himself engaged in a family trust to avoid taxation. It was a tax avoidance scheme.
– You are utterly and completely wrong.
– There is no doubt about it. That has been shown to be the case right throughout. The Minister engaged in that scheme for one purpose. The chief tax gatherer of the nation, the man who made sure that he had wrung every single penny of tax out of the ordinary person, was engaging in a tax avoidance scheme in his own financial affairs, by the use of a family trust. We also have an example of the Prime Minister (Mr Malcolm Fraser) himself. Honourable members may not remember an article that appeared in the Nation Review back in November 1975. It is called ‘The Fraser Connection’. It points out what happened with the establishment and how a very involved group of companies and firms are closely interwoven. Some of the names mentioned are very interesting. A solicitor concerned was a man named Rupert Hamer, the Premier of Victoria. We have the Prime Minister, his wife and other people involved in this matter. After reading this article, I thought that at a later stage I would try to get the matter updated. I had a few searches made at the Companies Office or the equivalent of the Companies Office in Melbourne. I have some of the documents with me now. It is interesting to note that at the time the newspaper article was written the financial returns of the company known as Fraser Properties Pty Ltd -
– Fraser what?
– It was known as Fraser Properties Pty Ltd. There are quite a number of companies. The financial returns of Fraser Properties Pty Ltd were submitted to the office and therefore could be searched and become public information. But as from the time of that article, section 165 of the Companies Act 196 1 of Victoria- that is the audit section- was utilised to ensure that the financial returns of the company would not have to be lodged and therefore could not be made public. In other words, from the time that article appeared the shutters were put down. In the following financial year, 1976, it was not possible to obtain a copy of the company’s financial returns. I would like to quote one or two statements in respect of this matter. Some people might say that the Prime Minister would not do such a thing. But I wish to quote from a transcript of the PM radio program of 23 November 1977. The Prime Minister was asked:
Mr Prime Minister, do your private family companies and private family trusts have the effect of lowering the rate of income tax that you pay?
The transcript shows that the following answer was given:
Mr Fraser: Family trusts are designed to help keep the family’s assets together, yes.
The Prime Minister used the word ‘yes’. That was an admission by the Prime Minister that he is utilising these family trusts to reduce the amount of tax that he pays. I have before me some interesting documents. They include a search of the Nareen Pastoral Co. which, of course, is interwoven with Fraser Properties Pty Ltd. At that stage, the people who had ceased to carry on the business in the business name was Una Arnold Fraser and Harry Vincent Samson. The persons who commenced to carry on the business did so in the business name of L.J.W. Nominees Pty Ltd. L.J.W. Nominees Pty Ltd is an interesting company. Of course, the persons who previously registered the company and who continued to carry on the business were John Malcolm Fraser, Tamara Margaret Sandford Fraser, Sandford Robert Beggs and Rupert James Hamer. Honourable members can see that it is very much a case of the establishment staying together. These are the people who avoid tax in this country. These are the people who make sure that the little person pays his tax but who utilise every possible angle they can to avoid paying tax themselves.
– Why not table the documents?
– I would be very happy to table them. Mr Deputy Speaker, I seek leave to table the documents.
-(Mr Ian Robinson) - I have listened very carefully to the remarks of the honourable member for Chifley. Of course, he has departed to a great extent from the subject matter before the House. I think that attention must be drawn to -
– This is what it is about. This is a debate about tax avoidance and that is the subject about which I am speaking.
-Order! Attention must be drawn to the fact that certain matters cannot be debated except upon a substantive motion which admits of itself a distinct vote of the House. Of course, this is directly in conflict with the approach being taken by the honourable member for Chifley. I advise the honourable member that unless he proposes to move a substantive motion on the matter I must rule that his approach is out of order.
- Mr Deputy Speaker, I have asked for leave to table documents. I am dealing with matters that relate to the Bills under discussion. They cover tax avoidance schemes. They close up some of the loopholes. But there are other loopholes which are not closed up. One of the most blatant loopholes not closed up is the use of family trusts which are costing this nation heaven knows how many hundreds of million dollars a year. That is the issue we are debating and that is what I am debating right now. Once again, Mr Deputy Speaker, I seek leave to table these documents.
– Leave is refused.
-Order! Leave is not granted.
– It is obvious that the Treasurer does not want these documents tabled because he knows that they would then become fully public documents and that they would indict the Prime Minister.
-Order! I draw the honourable member’s attention once again to the fact that the conduct of an honourable member of this House can be attacked only upon the moving of a substantive motion.
- Mr Deputy Speaker, I will refer to a prominent individual who, like so many prominent individuals in this country, is utilising a family trust. I include in those comments a former Treasurer who was utilising a family trust as a means of tax dodging. I think that it is a tragedy these documents which are so very important are not allowed to see the light of day. Deliberate attempts are being made by the Government to try to cover up this scandal.
Sitting suspended from 1 to 2.1S p.m.
– Prior to the suspension of the sitting I was referring to the fact that the Opposition supports these measures to close various tax loopholes, but feels they do not go far enough on a number of counts. Firstly, we emphasise that they should be backdated to 1 July last year. That is a principle that we will set, and when Labor comes into government all tax avoidance schemes will be legislated against as soon as they are found out, and the legislation backdated to 1 July of that financial year. I went on to point out that a number of schemes are not being closed and many hundreds of thousands of dollars, probably millions of dollars, in revenue is being lost to the nation because the Government is not proceeding against them. The particular scheme I was referring to at that stage was the use of family trusts to split incomes to avoid taxes. I referred to certain prominent individuals who had utilised this sort of scheme very effectively including the Prime Minister himself, but unfortunately I was pulled up.
Mr DEPUTY SPEAKER (Mr MillarOrder! I again draw to the attention of the honourable member for Chifley the fact that if he wishes to challenge the conduct of a member of this House, he should do so on a substantive motion.
– I was just making a point. I was not going further, if you will hear me out. I felt it was unfortunate that I could not table the documents I wanted to table, because I was going to go on and give details of a search concerning L. J. Nominees Pty Ltd which is tied up with Nareen Pastoral Co.
I will now deal with another method of tax evasion about which I am deeply concerned. It is a fact that the recent amendment to the income averaging provisions for primary producers has the effect in the years ending 30 June 1977 and 30 June 1978 of ensuring that a rate of tax applicable to a primary producer can be no more than that relating to a taxable income of $16,000. This means that the so-called Pitt Street and Collins Street farmers and other wealthy persons will pay a rate of tax approximating only 32c in the dollar on their annual incomes- that is not just on annual incomes from their farms, but indeed on the whole of their annual income. This is the bad part of the amendment proposed by the Government. It means in some cases a saving to the taxpayer of hundreds of thousands of dollars. It is important that this loophole be closed. I agree that a genuine primary producer should be able to average his income, but under the amendment now proposed the averaging provisions will apply not only to the income a primary producer may get from his property, but to all other income he may have. For example, doctors, lawyers, and all these people who are buying properties now will be able to average their incomes.
– And politicians.
– And politicians who buy properties. It simply means that they automatically reduce the rate of tax they are paying to approximately 32c in the dollar. I do not have to tickle the memories of honourable members for them to know those to whom I am referring. Some prominent people in this Parliament are primary producers who earn a great deal of income from other sources as well. I think most honourable members know to whom I am referring.
– If you have the documents, why not have them incorporated in Hansard?
– I will come to that in a moment. The Prime Minister, the Deputy Prime Minister and the Leader of the House are farmers, and they have other income. Accordingly, they are getting considerable tax concessions. For those reasons it is important that this tax loophole be closed. It is tax dodging, but it is called tax avoidance because it is legal.
– Are you talking about the averaging provisions?
– I am talking about averaging the income of the primary producer. I support averaging of the income the primary producer gets from the farm, but not of the income he gets from other sources. Under the averaging provisions, a doctor’s income from his practice and the lawyer’s income from his practice, and their income from shares or investments, are averaged also. Those incomes should not be subject to averaging. Averaging should apply to income derived from working a property. What is going on is a ramp. There is no doubt about that. It taxes the credibility of the Government in particular that this should be so because many members of the Government benefit from it, and this Government introduced those provisions. The loophole should be closed.
– That is awful nonsense.
– The right honourable member will have his opportunity in a moment. He should not get excited. Equally, the use of family trusts for tax avoidance should be legislated against. I know that many people are using this method, but they are all the wealthy people, those of so-called substance in this community, those who can afford to pay tax. If all these loopholes were closed, the rate of tax being paid by the great mass of the people of Australia, the ordinary workers of this country, the people who are the basis of our community, would be reduced dramatically. I very much regret that the Government has refused to allow me to table certain documents. I can come to no other conclusion than that it is a deliberate cover-up.
– What are the documents?
– They are documents relating to searches of company records concerning the Prime Minister. I am indeed sorry that the Government will not allow me to table the documents because in my view that constitutes a cover-up in order to protect very influential people in this community, not only here in Canberra but also in the Victorian Parliament. For these reasons the Government ought to reconsider this matter. After all, one Minister has recently resigned.
– He was forced to resign.
– He was forced to resign in order that his credibility could be tested properly. These sorts of things, where legal methods of tax avoidance are used by prominent people, simply cannot be allowed to continue. The Government ought to reconsider its position and allow these documents to be tabled so that the whole thing can be brought out in the open, and properly considered and investigated, to ensure that loopholes in the tax law are no longer used by people who can afford to pay the tax but, by taking the action they are taking, force a higher rate of tax to be paid by the average salary and wage earner in the community.
– I want to debate what has been said by members of the Opposition and also by one honourable member on my side of the House. But I prefer to deal with the objections I raise to their statements in the body of my speech rather than now so that I will not take up more time than I think is desirable.
My attitude to the Bill has been very clear, and I have made it public on several occasions. I think it is right that we should terminate each and every one of the taxation avoidance procedures and schemes that have been mentioned in the second reading speech. Equally do I believe that that should apply to two other measures that have been mentioned by the Treasurer (Mr Howard). The first relates to loss companies being taken over by another company, and the second to the pre-payment of rent and interest rates. What I do object to is retrospectivity, and it is with that matter that I shall deal in the body of my speech.
Secondly, I draw attention to clause 3, which will insert a new section 6ba, and to clause 9, which will insert a new section 62a. I believe that not only are the powers of the Commissioner for Taxation being unduly extended contrary to everything in which I have ever believed in political life, and something that I would not permit myself as a Treasurer, but contrary also to Liberal Party philosophy. It is right that I should make a declaration of pecuniary interest, for as one of those who is moderately well off, I should say exactly where I stand with regard to these sorts of schemes and retrospectively I have no pecuniary interest of any kind, nor does any member of my family, in any of the schemes that are now before the House or will come before the House.
– What sort of schemes do you use?
– You shut up, because you are a bit of a dumbwit and I do not want to have to deal with you.
– I raise a point of order, Mr Deputy Speaker.
Mr DEPUTY SPEAKER (Mr Millar)Order! I ask the right honourable member for Lowe to withdraw that expression and to address his remarks to the Chair.
– I withdraw. If I could go a little further, until I heard the word ‘retrospectivity’ mentioned, I had never heard of the Curran case. I knew of no person involved in a Curran type case nor do I know of any person involved in any of the other schemes mentioned by the Treasurer. I dislike the lot and, even if I had been informed of them, I could not have been persuaded to join one.
I take up this matter in a much wider perspective than dealing solely with retrospectivity. I believe in what Lord Hailsham has said during the course of the last few days. He is a man who has to be admired for his liberal principles and his liberal attitude to life and his wish to ensure that democracy survives. I well remember that, not so long ago, we had to deal with a case concerning whether there could be political interference with the administration of justice by the senior law officers of the Crown. I was horrified when I heard what had been attempted, but regrettably to me the then Attorney-General resigned. I believe that that episode ended any prospect in the future of political interference in the administration of the law, at least while this Government is in power. There will not be any further attempts at interference.
Let me return to the matter of retrospectivity. I want first of all to quote Lord Hailsham about retrospective taxation. He has said that there are two fundamental principles of the rule of law. Those who want to be informed, must have read his book relating to liberalism in the Conservative Party. I read it years ago and I read it again only the other night in order to ascertain his views. This is what he said -
-Who is he?
– If you do not know, you had better go back to school. Lord Hailsham said:
A man cannot be punished or penalised for doing something which is lawful at the time it is done.
That is a principle I believe in. It is exactly what I have believed in while I have been in the Liberal Party. The principle applies both to criminal and taxation law. I turn to my own Party. I am a believer in the Liberal Party. I am a believer in its platform and policies. I believe all Liberals are morally committed to the platform and policies. The platform and policy of the Party is binding on all of us if we have a conscience. It says:
The platform is the statement of essential principles based upon the Liberal philosophy.
The policies are detailed statements of specific programs of action derived from the platform.
If one looks at that part relating to taxation, it states:
The rights of the taxpayer are safeguarded by . . . minimising discretionary powers . . .
I have referred to the powers of the Commissioner of Taxation as contained in this Bill. But more importantly, the document states: . . . ensuring that taxation adjustments do not have retrospective effect.
There is no qualification of those words. Later on it is stated that taxation avoidance schemes will be eliminated. We heard some mutterings not so many days ago about something else being contained in that part, but on a second look I could not find anything else. Now let me deal with the responsibility of Liberal members. I believe that that is of importance to us. I quote now from the Prime Minister (Mr Malcolm Fraser) in one of the most eloquent and, I believe, dramatic speeches he has made since he has been Prime Minister. He comments about the principles and attitudes of Sir Robert Menzies, who was the founder of our Party. This is what the Prime Minister has said about it, and I believe that it applies with particular emphasis to members of the Liberal and National Country Parties and to what we do in Parliament:
The security provided by the rule of law . . . is that security to which a man may confidently and calmly appeal even though every man’s hand may be against him; the law’s greatest benefits are for the minority man- the individual . . .
I add: The individual against the State. I believe it is the responsibility for each of us to fight for the basic principles of the Liberal Party. Let me come now to the very difficult question whether there is a presumption against retrospectivity. It is being claimed regrettably by the Government that if one reads the Budget Speech it is too clear that it was intended that retrospectivity would apply or that is implied anyhow; I will quote from the Budget Speech in a few moments but let us look at the law. Lord Ashbourne in Smith v. Callander, 1901 Appeal Cases, puts it this way:
It is obviously competent for the legislature … to make the provisions of an Act of Parliament retrospective–
I agree with that: . . . but before giving such a construction . . . one would require that it should appear very clearly in the terms of the Act or arise by necessary and distinct interpretation.
I defy any member of this House with clarity of thought and objectivity of reason to show me where it is set out very clearly. I defy them to show me where there is a necessary and distinct interpretation in the Budget Speech. I will deal more fully later. If we want an argument even more impressive, let us turn to the opinions of probably the greatest justice ever appointed to the High Court, Chief Justice Owen Dixon, a man very well known to me. In Maxwell v. Murphy, reported in 1956-57 Law Reports, he said:
The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred . . .
That is what I believe the Liberal Party stands for on the rule of law and the proper way in which the law should be administered. On that I stand, and I believe that the Government has abused those principles- not only the common law but the platform and policies of my own Party, principles that I believe are essential if democracy is to survive in the way in which we people in the Liberal Party and National Country Parties desire.
Now may I turn to those arguments that have been used officially to support the Government’s case. First, I should say that as I read through the second reading speech of this Bill I was a little ashamed to think that I as a Treaurer or Prime Minister could have made such a second reading speech. It is sloppy. It omits to mention facts that are essential, such as the law. It omits facts that would help a member to make up his own mind. It is deficient in fact and in law. Few members of the back bench have had the proper opportunity to know what it is all about.
– Those who are paying know.
– You are not paying.
– I will give you enough evidence to prove to you that I am paying.
– I do not know what you are talking about. I will deal with the first question: Is it retrospective? Many honourable members spoke to me immediately after the
Bill was brought down. They said that it is not retrospective and they gave me reasons. I do not doubt that they believed those reasons at that moment, but I believe that those who say that it is not retrospective- and they continue to say itmust be incapable of understanding. I do not know what is the proper word to use. If one looks at the second reading speech on this Bill we find:
The Government acknowledges that retrospectivity is involved . . . We make no apology for acting retrospectively to protect the public revenue.
So I have to dismiss that argument. Then there is the question of the public interest. The basic idea of this legislation is to protect the public interest- that is exactly what is said- and to protect Government revenue. When one introduces a phrase such as ‘public interest’, which can have a thousand different meanings to a thousand different people, one introduces a principle into the law that anyone can decide on any grounds that comes into his head. Anything goes. The fellow from Chifley who spoke wanted not only retrospectivity in taxation, but also to abolish family trusts. He made a ghastly error- he mucked it up altogether- in relation to averaging of income. Because what he said was absolutely idiotic and wrong. So if the intention is to allow anyone to make up his mind about what ‘the public interest’ is, it will be a bad day for parliament and, much worse, a very bad day for the people of this country.
The next point concerns the difficulties connected with the amount of tax foregone or lost. One thing which disturbs me is that we have never been able to learn the precise amount of money involved. At first I heard that it would be $50m hard. Immediately afterwards it became $500m to $2,000m. What the people have not been told, what has not been disclosed, is that if there is a loss to revenue to the extent of $500m or if $2,000m, there must be taxable income of $4,000m. It is totally idiotic that nobody should ever think of such a sum. The best people I could ask were solicitors and counsel involved in these cases. They told me that the amount involved could not be more than $120m to $130m. Next, were the warnings adequate? Let us look at the Budget Speech- I refer the House to the warnings given in the Budget to see whether or not retrospectivity was implicit in it. Is any very clear definition given? Does it mention the Curran schemes and say that retrospectivity will apply as from that date? By any stretch of the imagination, is there a necessary and clear implication of retrospectivity? I do not believe that one can; in fact, I am fairly certain that no such implication can reasonably be made.
Let me go a stage further. Only last year we had before us proposed changes to section 36a of the Act. They related to the ownership or disposal of stock in a business. What happened? In fact, the retrospectivity clauses were withdrawn, and the clear implication which arose was that we did not like retrospectivity and that we were not prepared to legislate for it. I come to two other matters which must be mentioned. Not so very long ago- in September 1977- Mr R. J. Viner, the Minister Assisting the Treasurer, wrote to the joint accounting bodies of the Institute of Chartered Accountants. Some of them are the people who are promoting various schemes. We have got to ask ourselves whether we can say they were put on warning. This was actually said in a letter prepared by the Treasury:
Indeed you will be aware that the Government decided in line with your views that it should remove any element of retrospectivity from the amending legislation. The provisions of section 31c and the first of the amendments to section 36a as finally enacted now apply from April 21 1977, the date on which the Bill was introduced into the Parliament.
Far from putting the public and people on warning it had the opposite effect. The Treasurer said that he did not know of that letter. Was he deceived by the Treasury? If they did not tell him of the contents of that letter, it is a very sorry outlook for us. I have warned him of the necessity always to check their advice. There is other evidence that investors were lulled into believing retrospectivity was out. On 30 March of this year an open forum was conducted in Sydney with the Institute of Chartered Accountants and was attended by two very important members of the Taxation Office. Immediately after the forum they said, in the presence of other people who were answering questions, that there was little likelihood of retrospective taxation being introduced.
The question may well be asked: Why did we not announce retrospectivity in relation to the Curran case when we came into government, when we had weeks and months in which to do it? Why did not the Labor Party do it, as the honourable member for Gellibrand (Mr Willis) would have us believe it ought to have done? He also said that we should have done it. Why did not the Labor Government do it after the then Labor Treasurer Mr Crean made his celebrated statement.
I mention this to you, Mr Deputy Speaker, I mention it to the House, and I mention it to the Treasurer. The Treasurer will remember that on 5 April the Australian got in touch with him and informed him that it had been told that legislation would be introduced in relation to a certain case and would be made retrospective to 16
August 1977. If that were so, why did he not say that that was so? Why did he not let us all know what the legislation was to be and say it would be retrospective? There was no reason for secrecy. There was every reason to make a statement immediately his mind was made up as to what would be done. I go a stage further. He will remember saying in my presence that there had been a leak and that he had suspicions about the source of the leak. The very next morning it was learned from the Australian- some people may care to call it a leak, but I do not like to use that term- that the briefing came from the Treasury.
– I will send the newspaper clipping to the honourable member and then he will be ahing. I wish to comment about the Curran type transactions, because mistakes have been made about them this morning. My own view is the same as the reasons for opposition to retrospectivity legislation as the Canberra Times. That newspaper dealt with the objection to retrospectivity in these words:
The great danger in making retrospective laws is that or using a lame administrative device to enforce a political decision, to cover up inexcusable administrative neglect or to give a semblance of legitimacy to political decisions that have none at all.
I have already referred today to what was said by Lord Hailsham in regard to the survival of democracy. We in the Liberal and National Country Parties have the sacred trust of ensuring that it survives in the critically important conditions that exist today where throughout the world communism is dominating one country after another, against the will of the people. For that reason I support the rule of law. The Communists know no rule of law. For that reason also I support very strongly that part of the rule of law which deals with nonretrospectivity. Secondly, if provision for retrospectivity is introduced then I would have to agree with the leader which appeared in the Sydney Morning Herald in relation to retrospective laws. It was in these terms:
They are bad because they impair the right of the individual to have confidence in the certainty and predictability of the law as it stands when he makes a transaction or a decision.
I go further, they know not what retrospectivity will involve. What precedent is created. What a pandora’s box we will open if we abandon the common law and Liberal principles. Only today we heard the Opposition taking retrospectivity back one stage further. What is to prevent Labor from taking it back even further or introducing retrospectivity in relation to any matter it wishes? One honourable gentleman opposite said that he would not only backdate retrospectivity, but would introduce it in relation to family trusts. Family trusts are designed to protect the family alone and not to be an avoidance type scheme. If we want confidence, if we want predictability in business, if we want to sustain democracy, if we want to ensure that those methods which protect the family interest are upheld, we must not introduce retrospectivity. Retrospectivity works against each one of those objectives and principles. Therefore it is objectionable to me. I will be voting against this legislation, and I will be seeking to divide the House on it.
Mr DEPUTY SPEAKER (Mr Millar)Order! The right honourable gentleman’s time has expired.
-I was very interested to hear the right honourable member for Lowe (Sir William McMahon) speaking of the responsibilities which are thrust upon the Liberal Party to protect the rule of law. I suggest that he probably would have made that statement in a better fashion had he said ‘to protect the existing establishment’. After all, the role of the Liberal Party is to protect the establishment. As everybody knows, the establishment is comprised of those who have got it and who intend to hang on to it, irrespective of what happens. That is the role of the Liberal Party and of the present Government. The right honourable gentleman’s role as Treasurer was noteworthy for the fact that during the whole time he held that office, not one piece of legislation was introduced, to my knowledge, which attacked the very people the Liberal Party represents- the establishment.
I turn now to the Income Tax Assessment Amendment Bill 1978. I remind honourable members that the Bill was introduced on 7 April 1978. It seeks to counter a series of tax avoidance schemes, as well as to introduce certain necessary technical amendments.
The main tax avoidance scheme which this Bill seeks to counter is what is commonly called the Curran scheme whereby share traders seek artificially to create a tax deductible loss, thereby reducing their normal taxable income. I emphasise that it is an artificial device. It is the artificial creation of a loss but no actual loss is incurred at all. There is no loss in the accepted sense. It is purely an artificial device utilised for the purpose of avoiding or evading income tax. This Bill seeks also to backdate the amendments countering this scheme to 16 August 1977, the date of the introduction of the Budget when the Treasurer announced, in rather vague terms, that the Government’s intention was to counter certain tax avoidance schemes, without specifically mentioning them.
This decision to take retrospective action has caused a great deal of furore in the Press, a great deal of controversy and a great deal of letter writing by people who class themselves as protectors of the rule of law, notably the people who prepare these tax avoidance schemes and therefore have a vested interest in them. They now cry out and throw their hands in the air and say that the Government seeks to destroy a lucrative source of income that they have hitherto enjoyed. That is how it seems to me. I suggest that most of these legal theorists have a personal axe to grind because tax avoidance is not only lucrative for tax avoiders but also for tax planners. They get more cheeky as time goes on. They take a deep interest in tax avoidance schemes and call themselves tax planners. They have absolutely no morality at all in seeking to transfer to some other person the obligation of an income earner to pay tax. That is basically what they are doing.
Before dealing with the specific matters in this Bill I think it opportune to say a few words on the morality of tax avoidance. Since taxation was introduced there has been a constant battle between the taxpayer and the tax collector. In biblical times the tax collector was the most despised of men though I would suggest that it was only because the taxes being collected by him were for the conquering nation, which in those days was the Roman Empire. In fact St Matthew was the first of the known tax collectors and he is their patron saint. At least there has been a saint amongst tax collectors. I do not think the same sort of attitude of despising tax collectors applies in present times. If anyone should be despised it is not the tax collector but the tax avoider because that person seeks to transfer to someone else his obligation to contribute towards the costs of government.
On previous occasions I have used harsh words about tax avoiders and have said that they are bludging on the rest of the community. Indeed, that is what they are doing. The tax avoider is completely lacking in any morality because the additional tax burden is invariably thrust upon some other person who is financially less capable of carrying that burden. Unfortunately the question of financial morality never seems to receive due consideration by the courts which seem to be concerned only with a legalistic approach. The courts seek to put a blessing on tax avoidance as distinct from tax evasion. The dictum of Lord Tomlin is often quoted in support of that distinction. In the case Inland Revenue
Commissioner v. Duke of Westminster Lord Tomlin said:
Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result then however unappreciative his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay the increased tax.
To my mind that is putting a blessing on tax avoidance. It certainly does not class tax avoidance in the eyes of the learned justice as something that should be frowned upon, nor does it suggest that the person who does avoid tax should be frowned upon for making someone else carry his burden. The learned justice called it an ingenious trick and said, ‘however unappreciative his fellow taxpayers may be of his ingenuity. ‘ In other words, he is saying that it is an ingenious trick and he sort of compliments him for it. While ever we have this attitude in the judiciary it does not lend a serious example to the rest of the community as to where obligations should lie. Unfortunately, from various High Court cases I have read in recent times the same attitude seems to have crept into the Australian High Court of treating as ingenious these acts and devices which are practised by people to force someone else to pay their share of the tax.
Maybe the tax avoider cannot be compelled to pay increased tax but surely there is a question of morality in this whole issue. To my mind there is no difference between tax avoidance and tax evasion, other than legalistic difference. They are both morally wrong and destroy any equity in the payment of taxation. If I may use a simple illustration, it is the same as a homicidal maniac saying, ‘I did not murder the man, I only put him out of his misery’, and then seeking to justify his murderous action in that way. I put the same distinction between the act of a homicidal maniac and the act of a tax evader.
With regard to the retrospective action which this Government proposes to take to combat the Curran scheme, namely, by backdating it to 16 August 1977, the Opposition does not consider that this goes far enough. It considers that the amendment should be retrospective to at least the beginning of the financial year, 1 July 1977. An amendment will be moved at the Committee stage of this Bill to apply not only to the Curran scheme but also to all the other tax avoidance schemes mentioned in this Bill. I say this advisedly, that in fact a case may be put for making the Curran scheme amendments retrospective not to 1 July 1977 but to 1 December 1974. It was on that date that the then Treasurer, the Honourable Frank Crean, announced that the Labor Government would introduce legislation effective from that date to combat the tax avoidance schemes practised by Curran. However, the legislation was not introduced as from that date as other events interposed, and I do not need to go into the basis of them. They culminated in a change in government in December 1975. However, since then the present Government has had plenty of time to bring down the necessary legislation to close off the Curran scheme but it has chosen to make this amendment effective only from 16 August 1977 and introduced the legislation only last month.
This Bill seeks also to counter other tax avoidance schemes such as those which exploit the gift provisions under section 78 and those in respect of dividend stripping arrangements. I note that legislation to counter dividend stripping arrangements was first brought in by a Labor government but apparently it was ineffective and additional provisions are included in this Bill. The Bill seeks also to counter manufactured or artificial losses from certain trading stock which includes shares and debentures by ensuring that for tax assessment purposes such trading stock is valued at commercially realistic values. I commend the Government for doing that.
The measure will counter the exploitation of the primary producer averaging provisions, a device used quite widely in the community. The Opposition agrees with these amendments in principle and in practice but believes that the date of operation should be 1 July 1977 and not 7 April 1 978, the date on which it was introduced into this House. At the Committee stage the Opposition will move amendments which will have the effect of backdating the legislation to 1 July 1977. By taking this action the Opposition is putting tax avoidance planners on notice that when Labor returns to government- which will not be too far in the future- tax avoiders will receive no sympathy at all from the Labor government.
I listened to the honourable member for Chifley (Mr Armitage), who earlier in this debate spoke of various tax avoidance devices which were used by some prominent members of the Government- I hesitate to say that they included the Prime Minister (Mr Malcolm Fraser) and the former Treasurer -
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member would be well advised to hesitate in continuing to do so.
– I wonder how sincere the Government is in its statements regarding its attempts to close off the various tax avoidance devices which are in existence. Of course, the main supporters of this Government are those people who have a vested interest in tax avoidance schemes or in tax evasion. They are the only ones with sufficiently high earnings to make it profitable for them to engage in these tax avoidance schemes. Honourable members will notice that these tax avoidance schemes are not practised by the ordinary working man- the man on wages. He does not have the opportunity to practise these schemes. I think he has a higher morality than the person with money. The ordinary person has no way of getting out of paying his fair share of tax. The men and women with money and the big companies who practise these devices pass their share of taxation on to the person who can least afford to pay it.
I know the pressures not to close off the loopholes that the Treasurer (Mr Howard) must be under from members within his Party and from Liberal Party supporters. I only hope that the present Treasurer- I limit myself to him- is stronger than his predecessors in LiberalNational Country Party governments who succumbed to pressures not to close off these various tax avoidance loopholes. Between 1969 and 1972 in this Parliament I pressured the then Government to bring in legislation to close off the tax avoidance loopholes which were costing hundreds of millions of dollars in revenue. Absolutely no action was taken in that period. We had to wait until a Labor government came into power in 1972 for the necessary legislation to be introduced to close off a series of tax avoidance loopholes. I realise that it is a never-ending battle.
I know how hard it is for the senior officers of the Australian Taxation Office constantly to keep up with these smart alec lawyers and smart alec accountants who should display a greater morality. There are such people as doctors who take the Hippocratic- sometimes called the ‘hypocritic’- oath. I often wonder whether people in the legal profession acknowledge the fact that they have a responsibility to the community as well as to their clients. We are the community and we, as members of the community, are responsible to pay for the upkeep of government. We are living under a democratic system. One of the few responsibilities we have under a democratic system is to pay for that system. Without that democratic system the society in which we live would crumble. As I have said, between 1972 and 1975 the Labor Government did introduce legislation to close the taxation loopholes. It has taken a long time since 1975 for any other legislation to close tax loopholes to be introduced.
As mentioned by the honourable member for Gellibrand (Mr Willis), who led for the Opposition in the debate on this Bill, it is not much use the Taxation Office attempting to close off each and every loophole as it is brought to its notice. It is my considered opinion and the considered opinion of the Opposition that effective action should be taken to redraft section 260 of the Income Tax Assessment Act to make it operative. In recent years the High Court has placed a very restrictive interpretation on that section. This has led to the situation where at the present time section 260 is pretty well inoperative. Well known cases such as the Slutzkin case really reduced that section to mediocrity.
If section 260 is not operative to combat these schemes, I suggest quite seriously that the Government should take action to bring in effective legislation to close off these schemes at their source instead of introducing individual pieces of legislation each and every time a fresh scheme is utilised by smart taxation planners. It should not be necessary for this type of legislation to be brought in each and every time a loophole is found. I commend to the Government a scheme of discussing this matter with its advisers. I know that its advisers in the Taxation Office and the Department of the Treasury would be only too happy to bring forward proper legislation which would close off these schemes at their source. Not only would this protect the revenue; it would also lead to much better government.
-It has been commonly acknowledged that two things in life are certain: One is the payment of taxes; the other is death. Certainly it is the Parliament and the government of the day that have a lone hand in contributing towards the first, namely, the taxes. We are often accused of contributing to the second by way of our taxes. I should like to discuss the politics of the main issue in this Bill, which no doubt relates to the Curran scheme and to how politics brought into being this Income Tax Assessment Amendment Bill before us today. Certainly what I have to say will not be new because debate on these measures has been running ever since April 7, when these measures were introduced into this Parliament. I think that we, Government and Opposition, should look very closely at this to find out where the politics on this matter lie.
It has been said that the comments made last August by the then Treasurer and the declaration made by Mr Crean in December 1974 were sufficient to claim that there is no retrospectivity provision in this Bill. I cannot agree with that. For that to be so, I believe the flagging of what this Government intended to do should have been made much earlier. Certainly the flag which was waved at that time did not indicate to any member of the public that the Curran scheme would be one of those which would be marked down, although the general impression might have been that that might be so.
We have heard Labor’s philosophy on retrospectivity; it is quite open about it. Labor members would be prepared to make any taxation legislation retrospective to 1 July 1977. Some would prefer to go back further. That in itself is retrospectivity. I do not believe that they can argue against that. Even though this legislation only affects taxation up to June 1978, it does change past events. So the Labor philosophy in this regard is on record. It has been laid down in this debate. The Government’s policy on taxation is outlined in various policy statements. It includes equitability between taxpayers; the system should not be abused; and legislation should not be retrospective. I should like to quote what I said on 13 September 1977 during the Budget debate. It outlines my feelings on this matter. I stated:
While speaking about the Budget and on the subject of tax I earnestly recommend to the Treasurer (Mr Lynch) that any proposals to clamp down on tax avoidance be spelt out clearly and quickly in order to let the public know just where it stands. While I cannot accept deliberate attempts by taxpayers to avoid their lawful responsibilities, I can accept retrospective legislation less and the unnecessary procedures involved which keep taxpayers in suspense and unable to properly plan their affairs through legitimate machinery purely because they are uncertain of the Government’s intentions. I suggest that any plans in this regard be quickly communicated and implemented.
I do not consider that advice given in April was a quick communication. I think it could have been given earlier. So, to my mind, this legislation is retrospective. Certainly this Bill has other functions. The quantity of tax which could be avoided has been argued to be from $500m to $2, 000m. These amounts cannot be substantiated, so it is not a factor which should be placed before honourable members in order that they might determine a policy on the matter. I cannot find any substantiation of the figures or that they apply to the Curran scheme alone. I doubt whether officers of the Taxation Office would make a statutory declaration to the effect that those figures represent their estimate of the minimum or maximum avoidance. The departmental rights in this matter should have been carefully examined. For instance, the Curran scheme was originally undertaken by a chap who was a stockbroker and share trader. I suggest that the Taxation Office could win in opposing this scheme before either a board of review or the
High Court I suggest that a number of the Curran schemes- in fact the majority- would be found to be illegitimate and would be cast aside. That additional technicality was not explored.
I do not believe that the Crean statement or the Budget statement- the former was not acted upon and the latter was not specific enoughallowed us to say that this legislation should not be retrospective. I mention those points to show my attitude to this legislation. Probably it is very well wrapped up in the comment that was made to me in the form of a letter. I received many letters and telegrams- again I discard about 90 per cent of them- from people with pecuniary interests. But I know that the writer of this letter does not have a pecuniary interest and I feel that I should read portion of this letter into Hansard for the record.
– Was it from Billy McMahon?
– No, it was not from Billy McMahon. The letter states:
I do not believe that this inertia by the Taxation Department and Government in legislatively preventing such schemes justifies the principle or retrospectivity in any act, particularly one concerning income tax. I understand that the Taxation Department is producing what must be unsubstantiated estimates of the loss to the revenue. Instead of taking responsibility for this loss, they are endeavouring to convince Government that some ‘blame’ attaches to taxpayers that can be remedied by the introduction of retrospectivity: whereas in fact the blame lies with the Department and the Government permitting for many years, a state of affairs which the High Court publicised.
In this letter ‘Government’ refers, of course, not only to this Government but also to the previous Labor Government, As has been indicated already, the Labor Party does argue on retrospectivity. I am happy to say that out of this has come a precedent and precedents are often talked about in connection with this decision. The precedent is that the Treasurer has since flagged at least one other tax avoidance scheme and stated that it would be removed from the date of the advice. I believe that this in itself sets new policy for the Government and the Treasury in making sure that these abuses are stamped out immediately, expeditiously and thoroughly.
With regard to the moral issues of this legislation, as a former practising public accountant, I can say that I have never advised or agreed to schemes such as these being implemented because they are obvious and blatant and they distort the tax equity between taxpayers. I do not in any way agree with or have sympathy for the people who practise these schemes. In fact, those who as a profession sell and support these schemes for profit are nothing less than parasites.
Those within the legal and accounting professions must carefully examine their ethics and their consciences in connection with this matter to see whether they are worthy of the profession they assume to represent. It is interesting, if we are to take $50Om as the minimum cost to revenue, to note that this amount is shared by so few throughout the continent yet the massive reorganisation of our tax scales that was undertaken on 1 February 1978 gives an equivalent amount of $500m to be spread over all taxpayers in Australia. I cannot condone that an equal amount, even an estimate, be given to a few whereas it is the many who are forced to share the other cost.
The Opposition has made some comments in connection with family trusts. Family trusts only blossomed because of the inequitable tax scales imposed upon the taxpaying public during the period of the Labor Government. That is where the real family trust situation came about. Trusts are probably the oldest form of legal identity and in themselves are no new device exploited by the taxpayers. They are an old device. They are legal and I see nothing wrong with them, particularly in view of the fact that this Government has indicated in the past that Division 7 might be waived for private companies so that people may elect to be assessed as partners in a partnership and not necessarily as a private company. When this did not come about perhaps it was a legitimate step then to move into a trust situation which would give that benefit to them as against the disadvantages of a company situation. The honourable member for Banks (Mr Martin) claimed also that we represent the Establishment. That is ironic because we are moving most definitely in this regard, although belatedly, and the people who represent these schemes in the community must be regarded as the Establishment. After all, the Labor Government had a similar period of three years in which to move if they had so wanted against the Pitt Street farmers, family trusts and so many other things.
I do not want to canvass this legislation clause by clause. It is fair enough to say that we are closing the gaps on abuses. Anybody who thinks we can keep ahead of the professional parasites in this regard does not realise that this can never be done. Let us look at the anomalies in this legislation. Division 7 deals with private company taxation and refers to such aspects as taxpayers using the alternative of trusts; the average application to other taxpayers, not just in the rural industries, who have fluctuating incomes; the rents received by a person who, on transfer, is taxed but who does not receive deductibility for rents paid in new residences and who must pay tax on subsidised rentals additional to the tax already paid. There is also the aspect of self-employed superannuation. There are many areas in which equity is yet to be given and I think we ought to be looking at these anomalies as we go along. I can only agree with the honourable member for Banks that perhaps section 260 should be looked at carefully so that we can have an overall mechanism to be able to put a clamp on these devices very quickly or at least to have the threat of that course. Whilst the honourable member discussed the fact that although the old time tax inspectors did not have the confidence of the public -
– Certainly not enough of them.
– I was going to make the point that self-praise is no recommendation because all honourable members realise that the honourable member for Banks was a tax inspector himself.
– I rise to support the Bill in principle. I am happy that at least the Government has taken some positive steps to discourage tax dodging by the wealthy which is endemic throughout the community. In the application of income tax law one could be forgiven for passing the aphorism, that ‘you are guilty until proven rich’ or, as Professor Stone was want to put it: ‘It seems to be arranged so that people who call the shots do not have to bear the full risks’. There is a lot of talk about the Curran case but I suggest that we ought to devote a little time to the recent High Court case of Slutzkin v. the Federal Commissioner of Taxation which means now that there is practically no barrier to the well-advised tax dodger against dividend stripping. I have raised this matter on a number of occasions in the House.
The people concerned in the celebrated Curran case are, in fact, share brokers and share traders. I will give a simple example so that people can understand it. Let us suppose that Curran purchased 100,000 shares of a company at $1 each. That is $100,000. Subsequently a revaluation of assets was made and Curran received, say, 100,000 bonus shares from the revaluation assets reserve. He then proceeded to sell 200,000 shares for $100,000. In his return of income he claimed a $100,000 loss on the basis that the bonus shares had lost their face value. That is simply put. The Commissioner of Taxation refused to allow this loss as he considered, quite rightly, that the cost of the bonus shares was nil. The High Court accepted Curran ‘s argument, despite previous decisions to the contrary. This left it wide open for tax dodgers to obtain the benefit of fictitious share losses. It is an outrage.
Section 260 provided broadly that all schemes or arrangements for the avoidance of tax shall be void against the Commissioner of Taxation, although legal for all other purposes. For years this was interpreted on a reasonable basis by the High Court and in effect section 260 was designed- and obviously did so for some 40 years- to block access to tax avoidance schemes. However, I regret to say that since the elevation of Sir Garfield Barwick the High Court’s interpretation has changed. Perhaps I could put it more succinctly. This provision is being viewed in a narrow, legalistic and technical sense and with an interpretation quite contrary to the spirit of the legislators when the legislation was first enacted, and certainly to the spirit in this House at the moment. At present it would seem that the court works upon the principles- if I may be forgiven for saying so- that if there is a loophole in any section of the Act it offers the taxpayers a choice of taking advantage of the loophole and section 260 has no effect.
I support the retrospective application of the provisions which will attempt to remedy the mischief created by the majority decision of the High Court in Curran ‘s case. However, I deplore the efforts made by some of the conservative members opposite. As I recall only too vividly, they were extremely vociferous when it came to dealing with dole bludgers. They seem to have a total reluctance to deal with their wealthy clients who seem to be very concerned about facing up to the reasonable level of taxation imposed upon them. The portion of the Bill that deals with retrospectivity has received general acceptance from more responsible taxation experts. I quote from a report in the Australian of the statement of Mr Eric Risstrom, the federal secretary of the Australian Taxpayers Association and a responsible critic of taxation law. He said:
The big income earners had a pretty good time, for a long time. People who undertook the scheme were lucky that closure was not back dated further to 1974 when Mr Crean first announced that the loophole would be closed.
I am pleased to say that a leading newspaper in my State- the Advertiser- also supported, in its edition of 1 1 April 1978, retrospectivity. Some of the schemes are so blatant and unreal that they constitute, obviously, a fraud on the revenue. I feel it is about time that some thought was given to taking actions against the nefarious characters who sell the schemes and against the participants in the schemes, on the grounds that they are conspiring to defraud the revenue. Possibly, action of this type could be taken under the Crimes Act.
At the moment the Government is taking strong action against a section of the migrant community which is accused of defrauding- that is the word used- the sickness benefits and invalid pension provisions of the Social Services Act. However, this fraud is minimal compared with that being perpetrated by tax dodgers. On the one hand the loss to revenue admittedly would amount to tens of millions of dollars, but on the other hand the fraud implemented by scheming lawyers and nefarious accountants amounts to hundreds of thousands of millions of dollars. Frankly, I cannot see why equally strong action should not be taken against the millionaires as is being taken against the poor migrant. Probably it is the usual case of one law for the rich and one for the poor. It is an outrage to the millions of our people who with a sense of conscience, a sense of decency and a sense of honesty are willing to meet their fair share of the cost of keeping the country going, only to find that they are being battened upon by the unscrupulous who wish to keep their gains, many of which have been ill-gotten in the first place.
The Curran decision was a majority decision, with the Chief Justice, Sir Garfield Barwick, and Mr Justice Menzies constituting the majority, and with Mr Justice Stephen dissenting. We ought to recall that the majority judgments completely ignored previous decisions in the High Court cases of Bjelke-Petersen- a name with which we are all familiar- v. the Federal Commissioner of Taxation and McRae v. the Federal Commissioner of Taxation. In these cases it was unequivocally found that in essence the cost of a bonus share was nil. Honourable members will appreciate the conflict between those decisions and the decision in Curran ‘s case where the majority found that the cost of a bonus share was its face value.
It would seem to me that the approach by the Chief Justice is not unusual, as he appears to put to one side all High Court precedents in tax cases, particularly those relating to section 260. It would seem to me- I am only a layman- that in his view the only valid precedents are those that he has created. He has consistently ignored cases which come under section 260- for instance, Newton’s case, Hancock’s case, Peate’s case and others. If I may be forgiven for saying so, his attitude to section 260 may be tempered by the Newton case in which he appeared before the Privy Council as counsel for a taxpayer and, regrettably for him, he was completely rebuffed by the Privy Council.
Judges of the High Court are fully entitled to refuse to follow the decisions of their predecessors. As I understand the position- I could be proved wrong- legislators have not altered or sought to alter in any way at all for the past 40 years the regulations. Apparently the Court previously endorsed its decision- we would expect it- that the intention of the legislation would be given the force of law. However, it is customary to give reason for dissent and not to disagree by inference, as the High Court is presently doing under the leadership of Sir Garfield Barwick. Great former Judges of the High Court- their Honours Dixon, Kitto and Fullagar- are being ignored and, if I might say so, their judgments are being thrown on the scrapheap. This situation and the complete abnegation of section 260 by the present High Court has resulted in the loss of thousands of millions of dollars of revenue and the need to close the loopholes on a piecemeal basis as is being done in this Bill. I have previously pointed out in this House that the wage and salary earners and the company directors are paying the far greater proportion of income tax. If we look at the report of the Australian Taxation Commissioner last year, we see that 60 per cent of income tax revenue comes from wage and salary earners and company directors. They have no way of avoiding their level of tax.
I draw the attention of honourable members to an article published on 4 April by Edward Nash, the economics writer for the Adelaide Advertiser in which he dealt with the Curran loophole. If ever the situation was put succinctly it was in this very short aphorism which stated:
These days, paying tax is optional.
If this statement is correct it is an indictment of our whole taxation system. It seems that those who cannot, because of the law, or will not, because of conscience, dodge tax, must bear the whole burden of tax while those most able to afford to pay the tax go free. I remind honourable members that the genesis of some of the most bitter and bloody revolutions in history stemmed directly from the opposition of the wealthy to meet their fair share of the tax burden. The classic example is the French Revolution. The first and second estate, the glorious clergy and aristocracy, refused to accept any income tax impost at all. They were happy so long as it was imposed on the third estate- the peasants. Their attitude was: ‘Do not inflict it on the wealthy’.
The estimate of tax lost so far in the 1 977-78 year varies from $500m to $ 1 billion as a result of the use of the Curran tax scheme. If the former figure is correct this represents an approximate loss to each individual taxpayer of about $65. However, if we take the total as being $ 1,000m the loss would represent $150 or $130 to each taxpayer. I am certain that honest taxpayers would be more than happy if their tax was reduced by about $130. As a layman, I feel that the amending provisions are certainly complex. It seems to me that they could be much simpler. I suggest to the Minister by way of example that it might have been possible to amend section 44(2) of the Income Tax Assessment Act to something simple, as follows: ‘For the purpose of this section, the cost of a bonus share shall be deemed to be nil.’ Probably this would be too simple as it might catch some of the tax dodgers whom the Government wishes should escape the net.
– That is a disgraceful comment.
-I do not think it is. The gift scheme seems to be even more blatant than the Curran scheme. I cannot see how any responsible court apart from the High Court could accept this scheme as legal. It seems to me that this is a case of looking at the substance rather than at the form. In my view, a genuine gift is one in which the charity gets into its funds precisely the same amount as the donor takes out of his pocket. In other words, we ought to look at the actual cost to the donor, ignoring any payment to the entrepreneur who has instigated the scheme. Surely it is incumbent on any court to look behind the facade which disguises the transaction, to discover the facts. However, knowing the reluctance of the High Court to look at substance rather than form and knowing its preoccupation with choice- that is, permitting the taxpayer a personal choice as to whether or not he pays tax- I accept that the law has to be amended to ensure that fraud does not continue.
I wonder v hat action, if any, is being taken against those charities which have conspired with tax dodgers and their fraudulent advisers to defeat the revenue. I appreciate that this is a difficult problem, as the Taxation Commissioner would be prevented by the secrecy provisions of the law from advising the Treasurer of the names of the charities. Notwithstanding that problem, I feel that, if it is at all possible, the relevant charities should be made to pay some penalty. It appears to me that the views on tax matters of many of the present members of the High Court have been coloured by their experiences prior to joining the Bench. Most of the present members of the High Court had flourishing private practices which included a substantial amount of tax work. I suggest that having worked in this environment for a great part of their lives, their approach in appeals on tax questions has tended to favour the tax dodgers with whom they have been in contact for so long. As I understand it, it is a well known phenomenon amongst lawyers who work in the field of criminal law that they develop a persecution or defence mentality. Some members of the High Court have developed a tax dodge mentality. Despite the neutrality and impartiality that they are expected to display, they simply cannot help themselves in giving judicial approval to some artificial scheme to defraud the public purse.
It is interesting to note how the High Court, under the leadership of Sir Garfield Barwick, has been prone to accept the arguments of people who feel that they have found loopholes in taxation laws to lessen their taxation liability. I seek leave to incorporate in Hansard a table comparing decisions of the High Court and decisions of the State Supreme Courts in taxation cases.
The table read as follows-
– In summary, the table shows that the Commissioner of Taxation has a 42 per cent success rate in appeals to the High Court of Australia and a success rate of over 70 per cent in appeals to other courts. When we take that fact together with the High Court’s failure in recent years even to recognise the existence of precedent, unless it suits its view, I think that we must ask whether the High Court is a suitable court to be hearing taxation appeals. As Mr Justice Isaacs once said, it is better that the High Court be ultimately right than consistently wrong. It only confuses the law. If the court believes that previous decisions are wrong, it should overrule them. It should not ignore them.
Let me make one constructive observation for the benefit of the Minister. It relates to the need for effective legal proceedings against decisions of the Taxation Commissioner. I suggest that because of the narrow, legalistic and technical interpretation of the Act one way to overcome this bottleneck could be to remove the High Court’s tax jurisdiction. As I understand it, the taxpayer has a fair opportunity to have his day in court. He can go first to the Taxation Board of Review- I have appeared before the Taxation Boards of Review- then to the Supreme Court, from there to the Federal Court and finally to the High Court. This seems to be an unnecessary duplication of effort. If we must have an appeal to a court, why not limit the appeal to one avenue, say, direct to a special division of the Federal Court or Supreme Court, and that would be the end of the matter? Perhaps an even more progressive innovation would be to remove tax questions entirely from the judicial arena.
There appears to me at any rate, and I am only a layman, that there is no legal reason why an appeal to a court from a decision of the Taxation Commissioner must necessarily be provided. It would probably lead to much simpler legislation, more efficient collection of tax and more equitable distribution of the tax burden if the Commissioner were to be granted much wider discretion. This would be subject to appeal to some expert appeal tribunal such as the Taxation Board of Review. This Board should be raised to a completely independent judicial status and be kept at arm’s length from the Taxation Commissioner. It would surely lead to a decline in the excessive legalism shown in the recent decisions of the High Court, whose only beneficiaries, I regret to say, are nefarious lawyers and accountants and wealthy tax dodgers who devise schemes to avoid the proper contribution to the revenue according to the spirit and intent of the tax legislation. I support the legislation but, more importantly, I support the attitude taken by the former Australian Labor Party Government that it is necessary constantly to update and enact legislation to ensure that tax dodgers do not have a field day.
-In supporting this legislation I would like first of all to comment on two points made by the honourable member for Hawker (Mr Jacobi) towards the end of his speech. The first point- when I first heard it I thought that it was rather interestingwas that the Commissioner of Taxation has had a much lower success rate in appeals to the High Court than in the lower courts, where the success rate is 70 per cent. In the High Court the success rate is only about 40 per cent. I would have thought that the reason for that might be that by the time the cases had reached the High Court it would be known whether the Taxation Commissioner–
– I take a point of order, Mr Deputy Speaker. May I remind the honourable member that the statistics which I incorporated in Hansard came from the Attorney-General’s office.
-That is not a point of order.
-I appreciate the fact that it was not a point of order, Mr Deputy Speaker, and I am not questioning the motives of the honourable member for Hawker. I am just pointing out that the figures do not demonstrate as obviously as he contends that the High Court does not conscientiously carry out its role in deciding what is right and what is wrong in this case. The second point that he made was that he would like the Taxation Commissioner to have wider discretion. I suppose that if it could be guaranteed that the Commissioner could be perfectly fair minded one would not mind that prerogative being extended but the average taxation expert- I include in that category mainly the accountants in this country- will say that at times the Commissioner has too much discretion because oftentimes he holds up the repayment of moneys which are reasonably due to people. That has been commonplace recently. The people who talk to me tell me that they worry about the Commissioner’s discretion even at its present level. For that reason I do not think it would be reasonable to suggest that the remedy to taxation problems would be a widening of the Commissioner’s discretion.
The previous speakers tended to speak very much about the specifics of the problems that face us. They spoke about the specific changes to be brought about in the tax law. The honourable member for Barton (Mr Bradfield) who spoke this morning was able to enunciate some of the details of the tax avoidance schemes. I understand that he has been an accountant. It is good that people should hear or read in Hansard about the ways in which people are able to contrive schemes within the tax law in such a way as to load the burden on to other people. That is the net effect of any tax avoidance scheme. It loads the burden on to somebody else. We know that, whilst the law needs to be upheld by the Government, the sense of the law is often not upheld by people who enter into such schemes knowing very well that, as citizens of the community, they are due to pay a reasonable amount of tax. Perhaps some accountants should remember that.
I do not intend to extend the debate on the case of retrospectivity that has arisen with respect to the so-called Curran scheme. I can appreciate the points made by the right honourable member for Lowe (Sir William McMahon). I appreciate the soul searching through which he has been in prosecuting his particular point of view. I must say that I do not go along with it. I do not see that the application of retrospectivity in this case constitutes the removal of a benefit from taxpayers for which a cost has already been paid in the making of these schemes. It would seem to me that the Curran scheme is one particular example, as the Treasurer (Mr Howard) stated, of a blatant and contrived scheme to get out of paying tax, which most people in the community would reasonably reckon should be paid. The right honourable member’s points revolved around his political philosophy. That philosophy is respected very sincerely by members of this side of the House but he obviously cannot see his way clear to recognising the proposal in the way that most of us have; that is, that this is a special case.
It is not as if people had entered into arrangements in which a cost had been paid in the present year that would not be able to be retrieved. The only cost that this retrospectivity will affect will be fees that people in some cases have paid to taxation consultants. I understand that some of these fees were paid with a money back guarantee if not satisfied. I understand that some of the carpetbaggers in this country who have been enticing people into these schemes in a great rush in recent months have been offering money back if it does not work, which probably reinforces the point of view that the schemes really are very much a try-on and a way, as I said before, of shifting the burden from the people who would be due to pay a reasonable amount of tax to somebody else. Of course that somebody else might just be a person on a low income. That might mean that the Government cannot afford to carry on some of the programs that it considers important.
In my electorate of Eden-Monaro the reaction by and large to the prospect of this legislation being made retrospective has been a happy one. As I usually do with any legislation that is either controversial or which reflects very squarely on my electorate, I have contacted a number of accountants who deal on a day-to-day basis with people’s taxation problems. In only one case did I hear a violent reaction against this legislation. I did not ask whether that person had been recommending these schemes but certainly all the other cases in my electorate- I am not trying to say that the accountants in my electorate are not intelligent and industrious in looking at possible tax avoidance schemes- have said that they regarded these schemes as being too blatant for them to recommend them to people. They regard them as an unfair shifting of the tax burden.
The reaction from the Opposition with respect to retrospectivity has disappointed me somewhat. I would have thought that the old rattling that we hear from the other side about the rich and the poor might have given way to a sensible debate in some cases. I cannot help noticing that the Opposition again uses this opportunity to jump in and criticise people for being tax dodgers when perhaps all they have done was a reasonable amount of tax avoidance. I point out that even amongst very low income earners tax dodging is going on all the time. Everybody knows that money from cash transactions in some cases is hidden from the tax collector. That is well known. I know from experience that this must go on. It happens not only with people who spend money to work out contrived schemes. Tax avoidance is a reasonable attitude to take within reasonable bounds. I suppose in the last two years I have heard on dozens and dozens of occasions the Opposition trying to show that it is a party that tries to look after people on low incomes. It uses this sort of opportunity to knock the people on higher incomes. I always think that it is unfortunate in a country such as ours that there is a party that still has that attitude- the attitude that it is terrible to make a profit and terrible to be rich. I would hope that in this country we may have the opportunity to bring thousands and thousands more people up to a higher income level, either for their own good or perhaps for the good of people to whom they may be able to distribute their income. The idea of saying that we have to try to make everybody poor so that we can have a government with big taxation reserves does not gel with me. I suppose that the attitude of members of the Opposition- I say this in a reasonably kind way because I appreciate that they have a different philosophy from the Government especially on taxation matters- that that retrospectivity is bad and is not sacred is one of the reasons that so many people were frightened away from this country during the time they were in office and the reason that so many overseas investors knew that they would not know where they stood with respect to arrangements that they had had in this country.
There is a problem always- I suppose this is pan of the basic philosophy of taxation- in having different sectors pay for other sectors in the economy. One of the main reasons for having a taxation system in the first place is to enable transfer payments from the rich to the poor, from the healthy to the unwell and from the advantaged to the disadvantaged. Members on both sides of the House have always recognised that there is great merit in a taxation system that provides greater equity. It also provides a means for the public purse to be able to pay for expenditure for merit wants, that is, those wants that the Government is able to satisfy and which people as individuals cannot satisfy. I am not trying to run away from the question that taxation has to be raised; I am just saying that we should not say that retrospectivity is a good thing if it catches more and more so-called tax dodgers. I think that retrospectivity basically has to be retained as a sacred cow and I hope that people who are listening to this debate realise that the Treasurer meant it when he said that retrospectivity is a sacred cow. This is a special case- I am referring to the Curran scheme- because of the size of revenue which is required for those reasons I have just given; namely, for transfer payments and for the public purse to be able to carry out reasonable programs required by the public. There is a problem always in knowing when avoidance in moral terms really means evasion. I have no doubt in my mind that some of the schemes that are being outlawed in these amendments are morally evasion schemes which up until now have been within the law and in terms of semantics could have been considered avoidance schemes. Certainly many people shunned the Curran scheme because they regarded it morally as an evasion scheme.
On the other hand, as I said a few minutes ago, we know that it is important for people, acting within the law and within reasonable bounds, to avoid tax. I am reminded of one of the earlier and great philosophers, Thomas Aquinas who said very clearly that it is every man’s duty to minimise his tax within the law. As a point of philosophy, I think that that is quite reasonable. But now carpetbaggers are going into the towns of Australia, opening up their bags and saying to tax consultants, ‘Look, you can tell your clients that there is no need to pay any more tax’. That sort of attitude was referred to by the honourable member for Hawker (Mr Jacobi) a few minutes ago when he referred to an article in an Adelaide newspaper. When these events occur and when we find that there is an attitude that people can get around the law so that the burden of taxation is shifted, these practices need to be stopped.
There was an example last year of this sort of attitude when amendments were made to section 36a of the Income Tax Assessment Act. When the first amendment was passed, it was found that it was not tight enough. The Government found that there were quite blatant advertisements in newspapers such as the Australian Financial Review stating, in effect: ‘Get in while the going is good. The Government still has not closed off this loophole’. It makes me angry when this occurs. I know that it is within the law but it is a case where tax avoidance is really tax evasion. A basic problem exists- we can see this from the fact that the Government needs to introduce so many amendments to the taxation laws to plug the loopholes- because of the way that the taxation law is constructed. That is probably one of the reasons the Taxation Review Committee stated in its report of 1975 that, as a matter of logic, more simple taxes would be possible if indirect taxes were introduced and there was no personal income tax. The simplicity of this case is self-evident. The report stated:
Were simplicity and efficiency the only objectives, one might aim at a system overwhelmingly dependent for revenue upon a single broad-based tax on goods and services set at a very high rate, with some simple additional taxes on, for example, alcoholic drinks, tobacco, and motoring to serve the specific interventions in the private market needed for efficiency purposes.
If such a system were introduced, we would find that people would not be able to dodge the payment of their taxes very easily. There would be very little work for accountants. Perhaps that would be good in a social sense. But we would run into a problem in that the burden of taxation in many cases would fall on to the wrong people. Of course, this Government could not support that sort of taxation simplicity, nor did Mr Justice Asprey. He pointed out that in order to achieve its ends, Australia has a very complex taxation system. Because of that complex taxation system, loopholes exist. I wonder whether we could not think of a different way to collect taxes. I speak on the subject as a layman, as did the honourable member for Hawker. But it seems to me that the taxation law deals with the payment of tax and then accepts a whole number of non-payment provisions such as those contained in section 26 of the Act. Perhaps we should define only those areas in which tax will be paid. That sort of approach would be, as it were, a zero base approach to taxation. Perhaps that sort of approach has been looked at over the years. But in Australia we seem to say that tax will be paid on everything but that the payment of that tax can be avoided by taking certain action. It is these certain actions that provide the loopholes. Certainly, I can see an on-going problem for the Treasurer (Mr Howard) under the existing type of taxation system. I would say this also in mild reprimand of the Taxation Office. Perhaps one of the problems of the Treasurer in this case and one of the reasons there has been so much flack in respect of this matter is that the Taxation Office was not able to monitor the extent to which the Curran schemes were enabling the avoidance of taxation. I wonder whether the Taxation Office could have given the Treasurer a little more notice on this matter. It was stated that the Office did not know all these practices were going on. Perhaps it could have found out the position a little earlier and warned the Government.
In conclusion, I reiterate a general principle: This is a Government of low taxation. It has shown that by its tax reforms introduced in February of this year. Honourable members opposite have raised some matters such as the Medibank levy. But if they look at the present position of taxation in this country, they will see that it is in sharp contradistinction to the efforts of the previous Labor Government. If this is to be a Government of low taxation, it must be a Government that looks at the taxation loopholes and tries to plug up the inequitable ones in order to cut down on the taxation paid by the average man in this country who we believe should be allowed to make a quid for the benefit of his family.
-I have often criticised the Treasurer (Mr Howard) for his complacency in a stagnating economy. I commend him for the intentions, if perhaps not for the achievement, of the Income Tax Assessment Amendment Bill. In particular, I think that he deserves commendation for standing up to the tax bludgers and their morally obtuse entrepreneurs. A reading of the letters from these people leads one to understand quite clearly that they are part of the natural constituency of the Liberal Party of Australia. However, the Bill clearly does not go far enough. It is good in its intentions but there are problems with its achievement because primarily, with one exception, it continues to play the game by the old rules. For this reason, I move on behalf of the Opposition the following amendment:
That all words after ‘That’ be omitted with a view to substituting the following words: ‘whilst denying the Bill a second reading, the House is of the opinion that the operative date for all the clauses in the Bill terminating tax avoidance schemes should be I July 1977, and that the Government should adopt as a matter of principle applying to all such amendments in the future that the operative date should be the beginning of the financial year in which the Government announced its intention to legislate’.
There are possibly some redeeming virtues in the economic system under which we live. But there are absolutely no redeeming virtues whatsoever in the schemes struck at by this Bill. None of the schemes makes any constructive contribution whatsoever to the system under which we live. Indeed, in the whole deluge of letters which all honourable members have received from profiteers and their operators, there is not a single argument to defend any of the substantive tax avoidance measures. No one writes those letters to defend the measures themselves. Indeed, a stench of hypocrisy hangs around most of these letters. I wish to read one from a self-confessed operator. He writes:
Being an operator in the tax avoidance business, we agree -
I emphasise the words ‘we agree ‘- . . . that prompt legislative action is required. Indeed, the growth of the tax avoidance industry over the last four years has been caused by the ineptitude of the Government and /or the administration in their failure to take appropriate action.
I would have thought that the chief reason for these activities was the people who, in fact, designed the schemes. I think that I could sum up the situation by saying that the technical ingenuity of these measures are equalled only by their moral squalidity.
Yet, it is these profiteers and the designers of these schemes who, in their clubs and in their counting houses, are the greatest advocates of strict work tests for the unemployed. They say: ‘Let us keep an eagle eye on any malingering on the dole’. Honourable members know that. They have heard them in the clubs to which I am occasionally admitted. They are the people who say: ‘There should be full repayment of any minimal overpayment of pensions and benefits ‘. They are the people who claim that there should be proper incentives kept for unemployment benefits and therefore keep them below the poverty line. The people at whom this Bill is aimed, the tax bludgers and the devisers of these rackets, are simply parasites on our economic system. We need a strong purgative to expel them, like the tapeworm, from the system. The chief purgative employed in this legislation is retrospectivity. I want to say a few words about the purgative. On retrospectivity we have heard much high cant. The people whose moral squalidity I have sketched have suddenly taken to high principles.
– High camp or high cant?
-High cant. First of all, we read in one of the letters that Magna Carta has been undermined by this measure of the Treasurer; that the liberties of the Australian people are in danger; and that their human rights are threatened by this retrospectivity. I would say that the people who write these lettersthe tax bludgers and their parasitic entrepreneurs- have no moral status whatsoever to make such claims. Their very actions have denied them the right to pose as moral authorities.
There is an issue of high principle involved in retrospectivity, and we cannot avoid it simply because the victims themselves are squalid and unsavoury. That is, we have to ask ourselves whether in these circumstances retrospectivity is right, reasonable, just and defensible. First, let us note that whilst opposition to retrospectivity is a general legal principle in Britain and Australia, it is not an inviolable principle. It can be subject to pragmatic considerations. That is, there is a presumption against but not a total prohibition of retrospective legislation. Indeed, on the very issue with which we are concerned today- tax and retrospectivity- we have the peculiarly relevant comment of Lord Greene, Master of the Rolls, in a major English tax decision in 1942. In commenting on the law that had been passed he said:
The fact that the section has to some extent a retrospective effect appears to us of no importance when it is realised that the legislation is a move in a long and fiercely contested battle with individuals who well understand the rigour of the contest.
There are Australian precedents for the procedures adopted. If one looks at the Income Tax and Social Services Contribution Assessment Bill (No. 3) of 1952, one sees an element of retrospectivity there. I think, though it is more debatable, that there is an element of retrospectivity in the Income Tax Laws Amendment (Royalties) Bill of 1976. But there is an even clearer parallel at the moment, and that is the British precedent in the Budget brought down on 12 April 1978 by Mr Healey, who is much more ambitious and sweeping in dealing with exactly the same sort of problem as is faced by the Australian Treasurer. Mr Healey said that tax avoidance: has emerged recently in a new form which involves marketing a succession of highly artificial schemes- when one is detected the next is immediately sold- and is accompanied by a level of secrecy which amounts almost to a conspiracy to mislead. The time has not only come to stop the particular schemes we know about but to ensure that no schemes of a similar nature can be marketed in the future.
Therefore there are precedents and parallels for action, but above all retrospectivity is necessary because it is the only effective sanction against the proliferation of tax avoidance schemes. That was the very reason why Mr Healey made his move to prevent the growth of other schemes. It is the only effective sanction against the problem because essentially what we are faced with is what I might call quickies- that is, devices that last for one or two years. They are shot down, and a new scheme is busily devised. The only effective sanction generally against that is the use of retrospectivity. Otherwise the only sanction is on the ingenuity of the devisers of new schemes. We need something more effective than reliance on a lack of ingenuity. This point was clearly recognised by Lord Greene in the judgment I quoted that again retrospectivity was a necessity in relation to the devising of these schemes.
Indeed, if we do not have retrospectivity, we will simply go on with a game: ‘We got you this year. You devise a new scheme next year. We will chase that up in a couple of years’ time and catch that one’. I believe that the issue of tax avoidance in all of western society has now become a much more serious one and can no longer be treated as the game it has long been regarded as being. If we want to do real battle with tax avoiders, if we are really concerned to do war with these parasites, retrospectivity is an inevitable adjunct to what we have to do. It is a necessary weapon in the battle. For this reason we in the Australian Labor Party would urge a much more sweeping retrospectivity. We would urge that the legislation on all six or eight schemes be made retrospective to the beginning of the financial year, 1 July 1977. We would go further: We would establish that as a basic principle of the taxation system. We are moving for its adoption at this stage simply because the amendments we moved originally were ruled out of order under the Standing Orders and therefore we are required to lay down the principles of those particular amendments in a secondreading amendment. The first advantage of treating all schemes in the same manner is that we respond to the complaints of the tax dodgers themselves. When I get these letters I find them saying to me:
The Government is acting selectively with regard to Curran schemes as compared with people who entered into other arrangements which were just as artificial but did not have the endorsement of the High Court.
Somewhere else I read:
If you are relying on the then Treasurer, Mr Lynch ‘s, 1 6 August 1977, Budget Speech as the day on which to back date the legislation, then why did you not back date the other legislation embodied in the present Bill to that date also?
Let us greet them with an affirmative response to those questions. Let us prevent any discrimination and date them all back to 1 July 1 977.
The second advantage of such a procedure is that we would establish a general principle, removing all uncertainty and all the pedantic debates about which Treasurer said what in which debate. If we establish the date for retrospectivity as the beginning of the financial year, we will no longer have the continuing debate: ‘Mr Crean said that then. That is pretty strong. Was Mr Lynch strong enough on this occasion? Was the present Treasurer clear enough at times?’ We would avoid all those disputes by the adoption of such a principle. Above all, we would establish an effective deterrent to the further proliferation of schemes whose sole raison d’etre was the avoidance of tax. The Economist, which is not a peculiarly pro-Labor journal, commenting on Mr Healey ‘s Budget proposals said:
These will deal a lethal blow at all tax avoidance schemes.
That is what we want to do here, to deal a blow, not just at particular schemes we have identified, but indeed at all schemes which are devised solely for tax avoidance purposes.
Allied to the kind of effective sanction provided by an established rule of retrospectivity is the need to re-write section 260 of the Principal Act, which has been gutted by what can only be described as the Byzantine decisions of the High Court. I quote from the Asprey report, because two years ago it offered clearly to the Labor Government and now to the Liberal-Country Party Government a proposal for clarifying and amending section 260. It said that the section should: be amended to reflect the following principles. If any arrangement had or was calculated to result directly or indirectly in the type of tax advantage described in the lettered sub-clauses of the section, the Commissioner should have the right to disregard it for taxation purposes, unless the arrangement was an ordinary business transaction creating rights or obligations that would normally be created between business people dealing at arm ‘s length in a transaction of the nature in question and effected by means normally employed in such a transaction, or was made in the ordinary course of making or changing an investment, or was a bona fide arrangement of a person’s or a family’s affairs, and the Commissioner was satisfied that the arrangement was not entered into solely or primarily for the purpose of obtaining the tax advantage or that one of its main objectives was to obtain the tax advantage.
It seems to me that if we followed that suggestion in regard to the Principal Act, we would have the other part of the weapon needed for use against tax avoiders. A revised section 260, plus the sanction provision I have outlined, would provide the taxation authorities with weapons against the parasites who erode the struggle to create an equitable tax system in this society. It would turn the game we now play with the tax avoiders into the war that should be waged against them.
-Is the amendment seconded?
– Yes, Mr Deputy Speaker.
-Apart from the emotive words, the honourable member for Bonython (Dr Blewett) made some interesting points, particularly in respect of the profession of tax dodging. He quite properly pointed out that tax dodging is taking a great deal of the talent of sections of the accountancy profession and is involving a large number of bureaucrats within the government service in a continual game. I think that was his expression. There is no doubt that never before in the history of Australia have we seen such concerted attacks on the revenue as have taken place in recent times. Never before have we seen such enormous volumes of revenue at risk as have been at risk in recent times. Those volumes are reaching such extraordinary heights that it has been suggested to the Government that the amount of money at risk in Curran schemes- I say at risk because I understand the Commissioner has lodged disallowances on all Curran schemes, although they may not be upheld- exceeds the amount of money that will be coming back to the taxpayers of Australia as a result of the very significant tax benefits that were introduced from February of this year.
There is no doubt that the problem facing the Government is serious. The big question is whether the emotive actions, along with the emotive words, recommended by the honourable member for Bonython are the correct methods of dealing with this problem. One wonders whether it is innocence or incompetence that leads the Australian Labor Party- I suggest it is incompetence, because none of its members has had much commercial experience- to believe that all one has to do to counter a tax dodging scheme is to introduce a law banning it. Apparently members of the Labor Party are unaware of the fact that the phrasing of the legislation involved is a very difficult process. It must avoid preventing quite proper commercial transactions which have a quite proper purpose but which may be affected accidentally by incompetent, blundering legislation such as the style of legislation that we were accustomed to during the period from 1973 to 1975. That kind of legislation must be avoided at all costs.
While the Labor Party was in government its own Treasurers found themselves unable to provide legislation that would deal effectively with one of the tax dodges that we as a government are dealing with today. Whether one should say that the Treasurer who intended to introduce it, the Honourable Frank Crean, was remiss in not bringing forward legislation to block this loophole I suggest is a matter for oneself to judge. The facts are that he was forced to resign within a few days because he refused to participate in a disgraceful cheat and fraud on the Australian public by pretending that a loan of $4,000m was for temporary purposes. He was sacked. As a result of that, his warning that he was going to introduce legislation could not be carried out by him. The next Treasurer apparently had his mind on other things, or was it another thing? The Treasurer after that- still in the Labor Government- was the Treasurer who eventually realised that his predecessors had brought an economic disaster. He thought that it might be an idea if he tried, no matter how ineffectively, to do something about it. So his attention was directed slightly away from the tax dodge situation. Recognising that the warning of Frank Crean had been taken to heart by the profession, as I understand it, the volume of what I would term evasion under the Curran scheme was very small indeed.
Then came the Liberal-National Country Party return to office. I regret to say that it took until the second Budget before this matter was dealt with, and I can understand why. The volume of disaster in the economy was so huge that, naturally, the Treasurer’s attention was directed towards matters of more immediate moment than chasing a tax dodge scheme which, on the advice at that time, was not being used by the profession, by the people who have been so emotionally described by the honourable member for Bonython. I thought that the honourable member had an opportunity to make a much more serious contribution than he did. He used an extraordinary volume of emotional words. He had a chance, but I think he blew it.
The other point that I think is worth mentioning is that it was only as a result of the evidence of an enormous volume of avoidance schemes coming under the banner of the Curran scheme that the Government took a decision which is totally opposite to the principles of good government, and on that I support Sir William McMahon. We were obliged to take the decision only because of the presence of an even greater principle, and that is the principle that the tax laws and taxation generally must be applied fairly over the whole community. The volume of assault on the revenue represented by the Curran scheme has been such as not only to dent that principle but also to destroy it. I suggest that in this case, where we have a conflict of principles, it is essential that the major principle be supported.
That is why so many members on this side of the House, who totally opposed the concept of retrospectivity when it was suggested to us last year in the matter of section 36A, found it intolerable to accept the proposition that people who had so damaged the principle of the fairness of application of taxation should be allowed to get away with it. Nevertheless, it means that this Government and members on this side of the House could not possibly tolerate the disgraceful suggestions being made by honourable members opposite that commercial transactions, even of a very reasonable nature, should be carried on at risk of continual retrospective legislation, which is what the party opposite is now presenting to us in this amendment.
It is extraordinary that a party which when in government succeeded in destroying the confidence of business, destroying the gross domestic product, bringing about the greatest rise in unemployment in our history, has not yet discovered why all that happened. It is still taking the view that to govern is simply to wave a magic wand and everything will happen, that if it shakes the money tree the goodies will fall out. It is not only incompetent, it is naive, it is stupid. It is a return to the great days of the Whitlam era when there was such incompetence in government and in handling the affairs of state, and it is disappointing to see that no lessons have been learned. Once again the Opposition threatens that if it ever gets back into government it will create a climate in which commercial decisions can be made and then, when in fact the laws under which the decisions are made are clear and unquestioned, change those laws, after the event, to make ineffective decisions which were made.
Let us recognise the fact that when a corporation or a group of individuals makes a decision which is acceptable before the law and before the Commissioner and then finds, after the event, that the decision is reversed, it may well be placed in a disastrous situation. It may have committed the benefits of that arrangement into the future. It may have tied themselves up in expansion, such as commercial expansion, for example, in order to employ people. Let us face the fact that one of the reasons why so many businessmen terminated the employment of people during the days of the Labor Government was that they did not know what on earth would happen next. That is the situation to which the Labor Party wants us to return. It is only because of the massive principle involved, namely, the equality in tax of every person in Australia, that the action against the Curran scheme is to be allowed with limited retrospectivity. I stress the word ‘limited’ because it certainly is to apply within the same tax year, for example.
– Well, so is everything that we are proposing within the tax year.
– That is absolute nonsense. You are taking it back to the beginning of the financial year. If you want to read your own amendment, please do so.
– That is the same tax year.
-(Mr Jarman) - Order! Honourable members will address their remarks through the Chair.
– So attempts by the Opposition to wipe out the whole of the tax year are apparently beyond its wit to understand. That probably underlines its incapacity to cope with the area of tax. Let us face the fact that the Labor Party was in government for quite some time after December 1974 but it was incapable of solving the problem which this Government is solving now. I want to make a serious point as well about the level of debate which has come from the Opposition.
– I am glad the last one was not serious.
– I said ‘as well’, but I presume it is beyond your capacity to understand that.
– You want to make a serious one ‘as well’.
-Order! I have made it quite clear while I have been occupying the Chair, and so have other Deputy Speakers, that all remarks must be addressed through the Chair. I ask that that ruling be upheld.
– The interesting manner in which debate has progressed this afternoon is of great distress to me in that I have been appalled at the level of vicious personal attack on various High Court judges. The comments that have been made do the Opposition no merit whatsoever. I think it is disgraceful to imply, as in fact did the honourable member for Hawker (Mr Jacobi), that High Court judges have a tax dodge mentality. The honourable member said that they cannot help themselves. He suggested that the High Court was not the proper place to carry out tax appeals. I agree that I have found the decisions of the High Court on tax matters not to be attractive; I disagree with them strongly. I find it a fairly appalling method of debate in this chamber for honourable members to accuse, as did the honourable member for Hawker, members of the High Court of having a vested interest in finding against tax matters. I believe that that kind of disgraceful conduct should merit an apology and a withdrawal. Whether or not we agree with the High Court’s tax decisions- I must say that I do not- I believe that that kind of debate does this House no merit whatsoever. Certainly in the case of the honourable member for Hawker it represents an even lower standard of debate than he has shown himself capable of so frequently in the past.
There are some points which should be made about the legislation. I agree with the motives behind the right honourable member for Lowe (Sir William McMahon) in relation to one area which is of obvious concern to him. He wants a clear reduction in the level of discretion available to the Commissioner. To that end I ask the Treasurer (Mr Howard) whether he can ensure that as soon as possible a very clear statement is made of the manner in which the Commissioner plans to exercise his discretion, because there is no doubt that there are very substantial areas of discretion in this legislation. I would think that there is a risk of some uncertainty occurring in the business community, particularly in respect of genuine transactions, if such a wide range of discretion exists. I believe also that it is unfortunate that there is a necessity for discretion. I do not know the way out of it. I do not think the Opposition has any awareness of how to solve the problem. I suggest that perhaps we could considerI ask the Treasurer to consider this proposition- having a very serious look at section 80 of the Income Tax Assessment Act, that section being the one which allows losses to be carried forward.
It may well be that one of the best ways of handling the tax avoidance industry which has grown up is not to adopt this swinging axe technique espoused by subtle honourable members opposite but to have a serious look at methods by which we can prevent the continued rape of the revenue by schemes once they are discovered. All we have to do in that situation is to legislate in such a way that a scheme, once discovered, will not carry forward into the following year. Clearly I believe that we will then effectively destroy a large section of the tax avoidance industry with its immense waste of resources and waste of brilliant minds, both within the government and outside it. On the one hand, there are minds which spend their time trying to prevent the rape of the revenue and, on the other hand, there are minds which try to prevent the rape of the taxpayer, particularly following the enormous increases in taxation which took place under the administration of our predecessors. 1 ask the Treasurer to examine the possibility of altering section 80 of the Act in order to cope with this problem.
We have to face the fact that the major problem in dealing with tax avoidance is to define the specific scheme under which tax avoidance is taking place. The definition must be exact and must be specific. That is one of the reasons why I have always been nervous of statements made by Treasurers well in advance of the introduction of legislation, because the broad sweep of the statement made by the Treasurer may not in fact be backed up by the specifics of the legislation. I submit that where there is a large gap between the warning and the law governments are in fact governing by threat rather than by legislation. I find that to be a most unsatisfactory situation.
I believe that the Opposition has exposed one of its major flaws in its own philosophic position by continuing to confuse the word ‘avoidance’ with the word ‘evasion’. Evasion is illegal. I submit that there is no argument, from this side of the House, or from anywhere else, with the proposition that evasion must be severely dealt with. But tax avoidance is something in which every honourable member of this House, including honourable members opposite, takes part. Whenever honourable members submit a claim for expenses in their tax return, whenever they seek a deduction they are avoiding tax which would otherwise be paid. Surely their intellects can grasp that simple point. Yet some honourable members have been saying today that both avoidance and evasion are equally morally wrong. What nonsense.
I wonder how many members of the Opposition have avoided, in a proper and legal way, quite a considerable amount of taxation simply by filling in their tax forms and showing that they have incurred various expenses in relation to wives, dependants and so on. That is avoidance. Every person has a duty on behalf of his family and himself to avoid the amount of tax that he can avoid. But, every person has a duty to the State to meet the taxes he should pay. This Government through this legislation is doing something to bring about a fair level of taxation in Australia, something which the Labor Government failed dismally to do.
– It is always amusing to hear the paragon of economic genius, the failed entrepreneur from Macarthur (Mr Baume), lambasting members on this side of the House suggesting their absolute lack of any business knowledge, pouring scorn upon us for our low level of intelligence and decrying the fact that we would even have the gall to debate a tax Bill. One thing is sure: Shareholders associated with the honourable member for Macarthur will not have to worry about a Curran scheme. They will never need a Curran scheme to pay tax or to avoid paying tax, because they will not have any to pay.
I support the amendment moved by the honourable member for Bonython (Dr Blewett). I am reminded that the honourable member for Dawson (Mr Braithwaite) referred to the old saying that in life two unavoidable happenings are death and taxation. That is probably true. However, there was a well known Australian philosopher- at least I call him a philosopher, a homespun philosopher by the name of Ken Howard- who used to say that there are three certainties of life; death, taxation and the fact that the punters will eat the paint off the walls. I would add a fourth certainty and say that the little people of Australia, the workers, the small people, the people of my electorate, will pay more than their equal share of the tax burden because of the policies adopted by people who support members opposite, the high earners in Australia, the doctors, the lawyers, the very rich, the rich people on the land, who not only minimise their tax but also avoid paying it. That is what this measure is all about.
The people of Parramatta whom I represent would be disgusted if I did not make these facts known in this Parliament. The people of Parramatta are, like a lot of other people in Australia, little people who earn their salary or wage and pay their full share of the tax burden without any need to turn to a device to avoid paying tax. In fact, they cannot afford to engage corporate lawyers and accountants. They cannot afford to get expert advice which might enable them to avoid paying their equal share of the tax bill. That is all that members on this side of the House want Australians to do. No matter what their income level, everyone should pay a proper share of the burden.
– Why did not Labor legislate in that way when it had the opportunity to do so?
-We are trying to help the Government to do it now. The Government says it will cut off tax avoidance schemes. Maybe it will but let us look at this Government. The former Treasurer (Mr Lynch) in August of last year made a statement with regard to taxation schemes. He is the high priest of taxation evasion, a man who was concerned not only in accumulating money in dirty land deals, ripping off young people in Victoria who wanted to buy a block of land -
-I ask the honourable member for Parramatta to withdraw the term ‘dirty land deals’.
-I withdraw the word dirty and substitute the word suspect.
-Order! I ask that that word be withdrawn, also.
– I withdraw that word and merely say land deals. Having gained this illgotten wealth, he avoided taxation in a very considerable way by -
-Order! I ask for the withdrawal of the word ‘ill-gotten ‘.
– The former Treasurer avoided tax on these gains by resorting to the old ploy of family trusts. There are several people on the Government side of the House who confess to employing family trusts to minimise or avoid taxation. That is the ludicrous part of this debate.
– How much tax have you avoided?
– I have never avoided sixpence and I am pleased to say so.
– You have never put in a claim?
-Order! I remind honourable members that earlier in this debate I asked that all remarks be addressed through the Chair. I ask that that request be complied with.
– The fact is that as an individual I have never avoided paying even sixpence in tax and I am proud to say so. I am sure that that goes for all members on this side of the House. We are quite happy to pay our taxes. We are quite happy to share the burden of the net that this Government must use to garner the amount of money it needs to run government. We are prepared to pay our share. I wish Government supporters would be likewise. Of course, the people who supply wealth and patronage to the Government are not customarily used to paying their share and these are the people who revert to use of schemes such as the Curran scheme. I noted with some interest that the honourable member for Eden-Monaro (Mr Sainsbury) quoted some obscure saying of Saint Thomas Aquinas.
– A fabricated quotation.
-I think it was probably a fabricated quotation. He sounds like a Mafia tax-collector. Bearing in mind the Government’s attitude to the Curran scheme and its attempts to eliminate it the honourable member would have been better off quoting Saint Augustine who once said, ‘Lord, make me virtuous, but not yet’. Of course, the phrase ‘but not yet’ is the critical part of that quotation. Sure the Treasurer said in August last that the Government would eliminate the Curran scheme or taxation evasion schemes, but that was in the afternoon. For all of that day people- in Perth particularly- had an opportunity to implement Curran schemes and did so to the extent that we know of $ 100m being invested in one day. Of course it was a matter of ‘but not yet’. If it is to be retrospective why not make it retrospective to the date on which the statement was made, 7 August 1977, and not the day after? If that were done it would catch a lot of people who took advantage of that lapse of time to involve themselves in a Curran scheme.
The Curran scheme is only one of many devices used by people to avoid tax. There is no need to detail them all. One interesting arrangement is an avoidance scheme that has arisen in relation to contributions to charities. We have heard stories from a taxation official of entrepreneurs who generously take 98.8 per cent as their share of a deal. For instance, a donation of $10,000 is made. The charity gets $120, the donor gets a tax saving on $10,000 and the entrepreneur gets a mere $9,880- a nice little dividend for his efforts. Also there is a wealth sharing ruse that people use in primary industry by averaging their income over seven years. If they were to use trusts, as they do, an even longer period could be involved. Members on this side of the House are disturbed that this has been allowed to continue.
Presumably the Government will not accept the Opposition’s proposed amendment which would require that when a scheme is recognised and identified by a statement by the Government, any legislation enacted would be retrospective to the start of the financial year in which the scheme was discovered. All legislation on tax evasion should be pre-dated to the beginning of the financial year. It is obvious that that could not be construed as retrospectivity because tax is not paid until the end of the financial year on money gained within that financial year. It would be morally sound to pre-date the legislation to the previous 1 July and so eliminate tax evasion in relation to any schemes that might be discovered. The Opposition asks the Government to accept this proposed amendment. The
Opposition considers that to be a morally proper amendment.
In essence the Opposition would probably like to see retrospectivity back to 1974 when the then Treasurer, Frank Crean, made a statement with regard to these schemes. It is sad that something was not done about it when Labor was in office. I do not deny that. But we would have had trouble getting the legislation through the Senate anyhow. The quicker honourable members opposite recognise that, the quicker they will be facing up to the truth. The point is, nothing happened. But at least a clear and definitive statement was made that the Curran scheme was recognised as evil and as a blot on the Australia economy. At least this legislation operates retrospectively to last August. But we ask the Government to consider with some seriousness the morality of going back to the start of the financial year. Implicit in that plea is a demand that all future legislation of a similar type also be back dated to the financial year in which the schemes are discovered.
We on this side of the House have no compassion at all for tax evaders. The Government has undertaken a constant blood hunt against people who have been accused of being dole bludgers- the odd percentage of people who have been unemployed and who perhaps have been ripping off the unemployment relief scheme. I do not think any honourable member would deny that that has been occurring. But the same ardour which the Government has shown in pursuing people who have been ripping it off for pennies should be shown in pursuing the people who have been ripping the economy off for millions of dollars. May I add: If only the Government had exhibited the same ardour in attacking the doctors who have been ripping off Medibank as it has shown towards the ‘dole bludgers’- to use the Government’s term! We are very concerned that the Government starts chasing the tax bludgers.
When we talk about the Curran scheme and other tax avoidance schemes we are not talking about tax minimisation; we are talking about absolute tax avoidance. We can read plenty of histories of people earning a quarter of a million dollars a year: Some doctors, some industrialists, some corporate lawyers, some stockbrokers and some corporate accountants who have been entrepreneurs in the Curran scheme. These preservers of decency who have instituted these immoral schemes have been earning enormous incomes and have been paying not one cent of tax. If any honourable member can defend them with some hollow cant about the evils of retrospectivity I should be glad to hear it, as would the people whom I represent, because they pay their share of income tax. However small their incomes, they pay every cent they are obliged to pay. We consider it morally indefensible that any Australian, no matter what his background or profession might be, can face up to the people of Australia and say: ‘I am earning this sort of money but I am not paying any tax ‘.
The honourable member for Gellibrand (Mr Willis) produced a very good example. He mentioned the case of a well known land developer in Brisbane who has done just this. Over the past few years he has accumulated millions of dollars worth of assets and, by using the Curran scheme, he has not paid one cent in tax. How he lives with his conscience, I do not know.
– Richard Nixon did the same.
-The honourable member is right. Richard Nixon did the same. That is probably a fairly good comparison. We on this side of the House have to face up to the people who support us. We are supported by the workers who pay their fair share in tax. All we want to ensure for them is that the rest of Australia does likewise. The Government needs a certain amount of revenue to run the country. It is an undoubted fact that, if a certain patronised percentage of the population is not paying any tax at all, the people at the other end- the small income earners, the people who do pay their tax- have to pay an inordinately large share of the tax burden to square up the accounts. I am defending these people because they are the people who sent me to this House.
– So are we.
-Probably in your case, Mr Deputy Speaker, and in the case of the honourable member who interjected, that is quite correct. I have a lot of respect for the gentleman who interjected. We on this side of the House find morally indefensible people who avoid paying tax. Not one word can be said in their favour. Whatever hollow cant is produced to justify the avoidance of tax by saying that people who do so are only manipulating the law, does not wash with us. We are concerned with true morality and true honesty. We are concerned that a government is seen to ensure that every person in Australia subscribes to those ethics because they are the ethics upon which this country was built; they are the ethics upon which we want it to continue. It will not continue to be based on those ethics while the sorts of taxation minimisation schemes about which we are talking are allowed to exist.
We compliment the Treasurer (Mr Howard) for having the courage to go on with this legislation. I agree with the honourable member for Bonython and hope that pressure is not brought to bear upon the Treasurer by all the people who have been sending us letters, obviously Liberal Party supporters who no doubt will be very keen to see that this legislation is not enacted. We defend the Treasurer for his stand but we ask the Government to support our proposed amendment. We feel that it will provide a more effective way not only of stopping the tax minimising schemes which presently exist, but also enabling, given a certain amount of morality, these schemes to be stopped in the future.
-In speaking in the debate on the Income Tax Assessment Amendment Bill, I wish to make specific reference to the Curran scheme. There has been some debate in this House about both the principle involved in the Government’s decision to legislate and to make the legislation effective from 16 August and, more from speakers from the Opposition side, about the effect of the Bill in wiping out these tax evasion schemes.
I want briefly to detail the Curran scheme so that we know exactly what we are talking about. The essential elements of the scheme are that taxpayers who seek to be treated as share traders can artificially create a tax deductible loss which can then be offset against their normal taxable income. I give a short example. A person pays $ 1 90,000 for shares with a face value of $ 10,000. After accumulated profits attaching to those shares have been capitalised by the issue of bonus shares to a face value of $190,000, the total parcel of shares is sold for $ 195,000. Under a Curran scheme the person claims to have incurred a loss of $185,000 whilst, in commercial terms, a profit of $5,000 has in fact been made. Such a scheme can be used to create almost whatever loss is required by the taxpayer to eliminate his tax liability completely. Quite clearly, the scheme is totally without commercial merit. It creates an artificial loss, which is not an economic or commercial loss. I believe that this procedure is outside the bounds of commercial reality.
What of the arguments concerning the effect of the Government’s decision to backdate to the August Budget the legislation in regard to the Curran scheme? I do not want to talk about the warnings which have been given to practitioners and individuals about the scheme or about the amount of money involved. Rather, I want to look at the reasoning behind the so-called principle of retrospectivity. Surely the basis of that principle is that those people who are undertaking normal commercial decisions should not have those decisions interfered with by Government legislation which is backdated. I make a distinction here between what we have done and the basis of the retrospective principle.
Let us take the example of the investment allowance. If we gave an investment allowance in the form of, say, a 40 per cent depreciation allowance in August last year and a taxpayer went out and bought, say, a tractor in October last year, then in February this year we realise that the scheme is costing us too much and we decide to scrap it retrospectively. That is what the Opposition is arguing for in its proposed amendment. That would mean that those people who have bought their tractor have lost the tax allowance which was given to them and have been put into a worse position than they ever contemplated. There is no way that the Government could put those people back into the position they were in before they undertook the contract.
I believe that the will now be under our legislation is quite different. Our legislation will affect only people who have entered the Curran scheme this financial year. It will affect only people who have not yet paid tax. In fact, in most cases it will relate to tax which is payable next March. Most of them would be taxpayers who pay provisional tax so they will not have paid the tax. If the Commissioner of Taxation is thinking about exercising his discretion to penalise people who have varied their provisional tax on the basis of entering a Curran scheme this yearthose people whose provisional tax will now be much too low, that is, more than 20 per cent less than it should have been- and who could be said to be affected by the retrospectivity of this legislation, I suggest to the Government and to the Commissioner of Taxation that the Commissioner’s discretion ought to be exercised and that in those cases no penalty ought to be applied. If that were done I would suggest that this legislation would not adversely affect the people who have entered into the Curran scheme but would merely put them back into the position they were in before they entered the scheme. I refer for a moment to the argument advanced by the honourable member for Lowe (Sir William McMahon). The honourable member quoted Lord Hailsham, who said:
A man cannot be punished or penalised for doing something which is lawful at the time it is done.
That was the basis of the argument put forward by the honourable member for Lowe. The argument is that a man cannot be punished or penalised for something he has done legally in the past. Have we in fact done that? I have said previously that the effect of this legislation will be to put him back into the position he was in before he entered the scheme. Obviously we have not punished him, but have we penalised him? I refer to the Concise Oxford Dictionary which defines ‘penalise’ as: ‘To subject to penalty or comparative disadvantage’. Have we put these people in a position where they are at a comparative disadvantage? I would say that we have put them in the same position as the rest of the taxpayers in Australia. They have not been disadvantaged, they have been brought back into line. Have these people been given any warning? Of course they were given plenty of warning, but I do not think that is the basis of the difference between the retrospectivity which applies here and the principle that we on this side of the House consider should not be breached in normal circumstances. I refer to some of the advertisements and documents which have been handed round by those who have been promoting the scheme. I have said that I do not believe that those who have entered into the scheme will be any worse off after this legislation is passed than they were before. They have lost a tax deduction which they thought they might get but which they have not received in this financial year. They have had no chance to invest the money because they have never had to pay it. I shall quote from one of the documents which was promoting the scheme. I am trying to show that perhaps they have not even lost what they paid to the promoters of the scheme to get the scheme going. One of the documents I have states:
The fee payable for membership of a ‘Curran’ Partnership is 1 S per cent of the loss which you require to achieve:
TA per cent on commencement of the partnership
TA per cent on the issue of your assessment in which the Curran Loss is allowed as a deduction.
If amending legislation is passed so that you cannot benefit from the Curran Loss, any fee already paid will be refunded.
They will not have even lost the money that they paid to the promoters of the scheme. These people have been put back into exactly the same position they were in before they entered the scheme. I think that is a very basic distinction between this retrospectivity and the sort of retrospectivity about which the Opposition and the honourable member for Lowe have argued in this House. I believe they are clearly distinguishable. I asked lawyers in Adelaide about the scheme and I could find none who suggested to their clients that it was a scheme that ought to be entered into. A small group came to me last week and stated that they had suggested the scheme to their clients. I would say that nearly all legal practitioners- I have not asked accountantscertainly in South Australia strongly advised their clients against undertaking the scheme. The warnings were clear. The principle has not been breached, and I strongly support the Government’s legislation.
-In all of this voluminous opposition to the retrospectivity provisions to which we have all been subjected lately, really the only possible valid argument is one expressed by the Opposition. Why were the amendments foreshadowed in that statement not brought forward in the Budget Sitting, as proposed by the Government? The Government has had ample knowledge of the extent of tax avoidance arrangements generally and of the extent of Curran arrangements in particular. For many months now it has known of that scheme and has had ample opportunity to announce clearly and unambiguously its intention to introduce appropriate amending legislation effective from the date of such announcement. Why has it not done so? It is the Government’s clear responsibility promptly to amend the law if it produces undesired effects. If the Government chooses not to do so, having had notice of those effects, it has clearly failed in its responsibility. Those are the terms of one of the whinging, sanctimonious pleas putting the objections to the proposal to introduce retrospectivity and to outlaw the Curran scheme.
That is the one major area where it is possible that these people have a case. I suppose they are at least entitled to ask- these silvertail supporters of the Government- why the Government did not act sooner. I think that is quite a valid question, because the Government has had some 2lA years now to act. I will say little about the actual mechanics of the subterfuge schemes. From the time the Treasurer (Mr Howard) dropped his proverbial bucket on 7 April it seems that every newspaper, periodical and lobbyist in Australia has had something to say about this. Let me just say that there is something really sick about a tax system in which, under the Curran scheme, after financial juggling with bonus shares being taken into account, a minor profit of $2,780 can be held by the so-called learned judiciary to be a loss of $188,000 for taxation purposes. Of course it is obvious that one has to be in the $100,000 plus bracket before it is practicable to seek the help of these parasitic promoters. One could go on md list all the quasi legal nonsense regarding bonus shares, share trading losses, deficits, stripping, abuse of averaging provisions and so on that these fertile minds have devised to defraud the national exchequer. Perhaps the most objectionable subterfuge is when charities, in addition to the public purse, are defrauded by use of the gift provisions scheme wherein a $10,000 gift provides only $120 to the charity concerned, puts some $1,400 into the pockets of the promoter and provides the rest as a tax saving to the original defrauder. This scheme, I am told, is especially designed to suit the needs of individual high income earners.
The audacity and cheek of these super high income tax spivs is breathtaking. They have already been the beneficiaries of tax restructuring, at the expense of low and middle income earners, in the last Budget. One could say that their lack of appreciation is exceeded only by their arrogance. I refer to the regressive tax scales introduced in the last Budget of 32 per cent standard rate on income up to $16,000, 46 per cent on income to $32,000 and 60 per cent thereafter. This means- let me repeat this for the benefit of the people who are listening today- that a person earning $195 per week saved $2.95- a magnificent sum. For a person earning $500 a week the saving was $26.75. When we go a little higher to $1,000 per week, the saving is $74.82; on an income of $1,500 a week the saving is $99.82; and on an income of $2,000 a week the saving is $124.82.
Why do these people have to resort to these nefarious activities? What could be more regressive and slanted against low and middle income earners who, in the main- this is the point- have little hope of doing anything else but meeting their full tax responsibilities? It is the very people who received these tax handouts in the last Budget who are the worst offenders against the nation’s taxation laws. The National Times stated on 24 April:
Over the past 1 8 months a large proportion of the volume has been achieved by processing incomes of people around the $100,000 to $250,000 mark. These are the small fry.
Good heavens. They could not keep quiet so they brought themselves undone. The article continued:
Because they were handled in large numbers in a sausage machine basis, they attracted too much attention. Many of them boasted and gave the secrets away- many in the tax avoidance industry are now looking to cater for clients who have much larger incomes to process over $ 1 m per year.
So there we see what they think about it and about what is going to happen. As many Opposition speakers before me have said, we are canvassing legislation which would be retrospective on all counts to 1 July last year. As soon as these schemes are discovered the tax should be retrospective to the beginning of that financial year. I hope the Treasurer (Mr Howard) will take note of this and perhaps be just a little more adventurous. Although we applaud the fact that he is going back to 16 August for the Curran scheme, let him be a little more adventurous and close off the loophole entirely.
In the face of this massive tax evasion by shareholders and high income earners, how incongruous it is that wage earners and pensioners cannot escape paying tax on such items as- these are listed in the income tax return applicable to the poor old ordinary salary and wage earnerliving away from home allowances, travelling allowances, even tips they may receive in the course of their employment and interest on savings bank deposits, fixed deposits and credit union deposits. They cannot avoid paying tax on that income. It is certainly most unfair that low income earners and pensioners must pay income tax on interest earned from these ordinary savings, whilst Treasury has simultaneously tolerated such unmitigated embezzlement of taxpayers’ funds as outlined in the Treasurer’s speech on 7 April 1978. In a sense, ordinary wage and salary earners and pensioners have been subsidising these parasites.
In a period of high inflation- I want the Treasurer to listen carefully to this- most interest rates are, of course, negative in the sense that when inflation at, say, 9 per cent per annum exceeds a 7 per cent interest rate, the investor’s real capital is surely declining. Yet this interest rate, which is needed to preserve real capital value, is taxable when it is in no way at all real earnings. Pensioners, of course, are taxed on their pensions plus earnings when the additional weekly income of a couple exceeds approximately $29 or the yearly income exceeds approximately $1,500. As the means test still operates for those under 70 years of age, it is understandably common for many aged pensioners to invest their savings in accounts with lower interest rates in order to maintain tax viability and still qualify for a pension.
However, when they accept the lower interest rate to qualify for a pension they are still taxed on the meagre interest earned. What a contrast to the leniency which has been extended to those tax avoiders working on a grand scale. It seems that until now Treasury policy has worked under the principle of the bigger the fiddle the more it is tolerated. There is a strong case that interest earnings on bank and credit union deposits to around $30,000 should be taxable only to the extent that the annual interest rate exceeds the annual inflation rate.
Now that the Government and Treasury appear to have grasped the nettle on at least one aspect of tax evasion, they should also act to prevent tax evasion of another kind which occurs because of the Government’s inaction. I refer to the failure of the Government to legislate to impose a resources or super tax on excessive profits made on the extraction of our non-renewable mineral and energy resources. For instance, the Government has reduced the coal export levy to $3.50 per tonne and is committed to removing it altogether in the next Budget. If it does so, it will ‘ be forgoing revenue to the extent of $200m a year. Where are the plans to replace it with a resources tax? By all means let the Government cut down on tax avoiders, but why allow tax avoidance of this kind by default? The Government has said that it is flirting with the idea of a resources tax to replace the crude oil levy of $3 per barrel and also a resources tax on uranium profits, if they ever get that industry off the ground; that is, if the new mines are ever developed. But it has expressed opposition to a super tax on other profitable mining developments such as coal mining. Why? If Utah Development Corporation sends $126m to its United States shareholders without paying a resources tax, it is just as serious a loss to the national Treasury as funds forgone from other types of tax avoidance.
It is essential that a resources tax on profitable mining ventures be implemented at an appropriate after company tax threshold level of, say, 1 5 per cent, which would allow a fair rate of return on capital invested. After this level of profitability, a resources tax of some 70 per cent should be applied to these super profits. Utah enjoyed an inflated 32.6 per cent return on funds employed during 1976 and 36 per cent on funds employed during 1977. If a resources tax were applied at 15 per cent on investment threshold and 70 per cent thereafter, it would generate an extra $120m to $130m a year from Utah Development Corporation alone. That would be enough to finance in two years under public ownership the proposed Norwich Park Mine which has a stated capital development cost of $250m. The Government states it is cracking down on tax avoiders whose activities raid the national Exchequer. Let the Government now state exactly where it stands on this equally serious form of tax avoidance by default. Where does it stand on the matter of a super tax or resources tax on the minerals extraction industry, particularly the super profitable industries?
I have searched in vain for a notification in Treasury statements and in the Treasurer’s speech of a precise estimate of funds forgone as a result of these tax avoidance schemes. The Treasurer did give a Treasury estimate of $500m loss as a result of the Curran scheme claims made since 16 August last. This figure has been refuted by those who have their axes to grind as of course they would refute it. I refer to the promoters and the users of these subterfuges. I will take the Treasurer at his word. On this basis it is reasonable to estimate that the total yearly loss of the schemes outlined by the Treasurer on which he proposes to crack down is currently in the vicinity of $ 1 billion a year. The mind boggles at this figure and at the wastage of possible national achievement that it represents. As William Blake once said: ‘What is now proved was only once imagined’. Take age pensions, for instance. What could we have done with this billion dollars a year? The estimated number of age pensioners during 1977-78 is 1.263 million. This $1 billion worth of wasted revenue would represent, in terms of income redistributed to pensioners, another $15 a week or a 30 per cent increase to every age pensioner in Australia. Would that not be a significant contribution to total Australian consumer power and of real benefit to economic recovery?
We are constantly told by the Government of the need for overseas investment and equity in national development projects. Take the North West Shelf natural gas development and exploration plan. It is said that total capital expenditure will be in the vicinity of $3 billion, virtually all of which will come from overseas with a significant loss of Australian control. We are told that the $3 billion will generate some $30 billion worth of revenue over some 25 years with a total estimated profit to the companies involved of some $8 billion to $10 billion. I oppose this plan as it now stands mainly because I believe that it is against the national interest to export some 60 per cent of the total yield of the North West gas fields when there are clear indications that Australian oil and natural gas reserves will be severely diminished within the next 50 to 60 years. The real point of my argument is that if the Government had cracked down on these tax avoiders when it first came to office over two years ago we would already have saved twothirds of the estimated capital expenditure of developing this North West gas development under the name of the Government.
One can go on. The enormity of this haemorrhage of national funds can be understood when one considers that in the last Budget a total of only $390m was made available to the States for welfare housing which funds State housing commissions and terminating building societies.
What a boost it would be to the national building industry and the economy if only one-half of those total tax avoidance funds had been spent on additional payments to the States for housing. Let us go further into this wistful examination of what might have been. In the last Budget $844m was allocated to transport and communication, including a total of only $478m in grants to the States for roads in 1977-78 and a total of only $92m for rail transport expenditure. Yet tax avoidance accounts for $1 billion a year. With that money we could have more than doubled our expenditure on transport.
The importance of this matter should be stressed, for a marked feature of the current Australian depression is the decline in domestic consumption of steel. For instance, total Australian domestic consumption of new railway lines produced at the Australian Iron and Steel Pty Ltd Port Kembla works, which are within my electorate, has fallen from 116,000 tonnes two years ago to 60,000 tonnes in the year ended 3 1 March 1 978. One can argue logically that the loss of revenue due to tax avoidance contributed to continued stagnation in steel and the economy. We in the Opposition give qualified support to the Government’s measures, as far as they go, to clamp down on these measures but we want the Government to go further, as outlined by the honourable member for Gellibrand (Mr Willis). I conclude my speech on this note: I certainly hope that the friends of these economic vandals, who are so obvious in the Government’s ranks in this place and in the Senate, are unsuccessful in giving comfort to the silvertails who have continued to wax fat on the national exchequer and on the backs of the Australian workers.
– in reply- In concluding the second reading debate I intend to direct most of my comments to the criticisms which have been made in this debate and also by some people outside about the decision of the Government to apply the so-called Curran amendment from 16 August 1977. 1 think it is fair to say that, despite some of the rhetoric coming from the other side of the House, there is general support for the substantive provisions of the Bill, and I will be dealing with a number of more specific matters during the course of the Committee debate.
An amendment has been moved by the Opposition. I regard it to be as blatant, contrived and artificial as the Curran scheme itself. The truth of the matter is that the Opposition has tried to have it both ways. From the time this Bill was brought out the Leader of the Opposition (Mr Hayden) was saying ‘Oh, of course I am opposed in principle to retrospectivity’ and then the Australian Labor Party decided to be totally cynical about it and moved an amendment at the second reading stage requesting that all of the remedial provisions of this Bill be back-dated to 1 July 1977. I make it clear that the Government will have no bar of that for the simple reason that the Government still adheres generally to the principle that it is opposed to retrospective legislation. However, there are special circumstances which I shall deal with in a moment which distinguish this case from other cases. I also make it clear that this Bill and subsequent decisions which have been made by the Government since the Bill was introduced represent the most determined attempt by any government in 20 years really to eliminate and reduce tax avoidance on a wide scale.
On behalf of the Government I say that the Australian community can no longer afford a situation where, through schemes which are totally devoid of commercial merit, schemes which amount to nothing other than a series of clever and contrived paper entries, massive amounts of tax are evaded and avoided. This Government has committed itself to a course of taxation reform. The greater its success in eliminating tax avoidance the greater will be the level of relief that it can give to the entire community of Australian taxpayers. Unless the Government is prepared to do this and to attack tax avoidance in a major way it will be failing not only in its duty to low income earners in this community who do not have access to these types of avoidance schemes but also it will be failing in its duty to a large number of high income earners who had both the opportunity and the financial incentive to enter into these schemes but who have consciously chosen not to do so.
During this debate we have had a few judicial quotes. The right honourable member for Lowe (Sir William McMahon) gave us some judicial quotes and so did the honourable member for Gellibrand (Mr Willis). So perhaps I can be allowed one in defence of the proposition that I am putting regarding the Curran case. I rely on Halsbury’s Laws of England. Coincidentally or ironically enough one of the authors of Halsbury’s Laws of England was Lord Hailsham, the father of the Lord Hailsham to whom the right honourable member for Lowe referred. I quote from the third edition which was edited by Lord Simonds. On page 426 is a reference to a fairly well-known tax case which, ironically enough, is the case of Lord Howard de Walden versus Inland Revenue Commissioners, 1942, 1 Kings Bench 389. Lord Greene, a very eminent equity judge in the United Kingdom said:
That fact that the section has to some extent a retroactive effect appears to us of no importance when it is realised that the legislation is a move in a long and fiercely contested battle with individuals who well understand the rigour of the contest.
How appropriately could that be applied to those promoters of Curran schemes who, as the honourable member for Barker (Mr Porter) and the honourable member for Macarthur (Mr Baume) indicated, were not only unable to give to those who entered these schemes any real assurance that their arrangements would remain undisturbed by future legislation but in fact offered money back guarantees. Who can deny that those people, in the words of Lord Greene, ‘well understand the rigour of the contest’ and demanded a guarantee that the rigour would not catch them out. In respect of the rule of law argument I put down that quote from Lord Greene. There are other references but I do not in any sense retreat from the general policy of the Government against retrospection in tax or any other legislation. There has been reference in this debate to the Federal platform of the Liberal Party of Australia. I wonder whether the honourable member for Gellibrand will give me leave to incorporate in Hansard the section of the Liberal Party’s Federal platform concerned with taxation, to which the right honourable member for Lowe referred.
The document read as follows-
While recognising the key function of the tax system in providing revenue to finance government expenditure, the Liberal Party also recognises its significant roles in relation to economic management, minimising social hardship, and encouraging or discouraging specific areas of activity. The system must be easy to understand, simple and inexpensive to administer, fair in appearance and in practice, and subject to continuing review.
The achievement of these objectives requires a tax system in which-
Individual incentive is encouraged particularly by ensuring that
The rights of the taxpayer are safeguarded by
-I thank the House. A part of the preamble reads:
The system must be easy to understand -
I think this is no disrespect to the Australian Taxation Office, the Treasury or anybody else: . . . simple and inexpensive to administer -
I think probably everybody would agree that we still have a fair way to go in achieving that objective: . . . fair in appearance and in practice . . .
I put it to honourable members on my side and particularly to the right honourable member for Lowe: How can one seriously argue that a taxation system is fair in appearance and in practice when the estimate of lost revenue through the use of this scheme given to me by the Commissioner of Taxation as being by no means out of the question is $500m? If that is the case, we have the sobering thought that the amount of revenue at stake if this action had not been taken by the Government in fact would have exceeded by almost $ 100m the total value of the February tax cuts to the entire Australian community in this financial year. How can anybody under those circumstances argue that our taxation system was fair in either appearance or practice?
The Government does not by this action signal in any sense that it would generally embrace retrospection in taxation legislation. I have recently indicated that the Government intends, whenever evidence of the emergence of a tax avoidance scheme is sufficient to give details, to announce forthwith that it intends to introduce legislation and that that legislation will operate from the date of that announcement. That practice has already been implemented twice in recent weeks. It has been implemented in respect of the announcement in my second reading speech regarding current year losses- I can indicate to the House that the legislation giving effect to that announcement will be introduced during this session- and, secondly, in respect of an announcement about prepaid interest and prepaid rent schemes. That will be the practice of the Government.
The decision regarding this legislation was not taken lightly and was not taken without due regard to the genuine views of some people in this community who do not have a financial interest in Curran schemes but are nonetheless disturbed about the possible breach of principle involved. There are people in that category. It is easy for members of the Opposition to say that everybody on our side of politics who may have reservations about this legislation has a financial interest. That is a lot of nonsense. I know a number of people who would have had no more desire to go into a Curran scheme than thousands of other high income earners. Nonetheless they have worries and doubts about this legislation. I can understand that. It was not a decision taken lightly but ultimately, as the honourable member for Macarthur said, the Government had to put two competing principles into balance. It had to put into balance the principle of nonretrospectivity against the principle of the overall equity of the tax system. The Government put those two principles into balance, having regard to the official advice that was available from the Commissioner of Taxation regarding the potential threat to revenue involved in this scheme and also, in a subsidiary sense, having regard to a specific warning by a former Treasurer, Mr Crean, in 1974, and the more general- certainly I acknowledge that I have never said otherwisenon specific announcement of a crackdown on tax avoidance by my predecessor in the last Budget Speech. Taking all of those factors together but overwhelmingly putting into balance the two competing principles of the equity of the tax system and its objection generally to retrospectivity, the Government came to the conclusion that the public interest would best be served by taking the decision that it took in respect of this case.
I must say that I was surprised when listening to the speech of the right honourable member for Lowe- and I did pay him the courtesy of coming into the House to listen to his speech- to hear him criticise the fact that the Government was concerning itself with public interest. He saidand I do not think I do the language of the right honourable gentleman violence by saying thisthat really it is very dangerous for governments to get mixed up with public interest in matters like this. I should have thought that if there is one thing governments have to get mixed up in it is public interest. I should have thought that the overwhelming responsibility of Ministers in this or any government is to concern themselves with the public interest.
It was out of that concern for the public interest that the Government decided to take the action that it has taken on this occasion. So it was overwhelmingly on the basis of having to put into balance the two competing principles of the equity of the tax system and non-retrospectivity that the Government decided on this occasion as a special case that the principle of the equity of the tax system should have greater weight.
There has been considerable reference both here and outside to the question of precedent. People have said that this is a dangerous move for a government on our side of politics to make because it establishes a bad precedent for less trustworthy people in the future. That is a serious argument. I will try to answer it seriously. It is easy to raise the cry of a bad precedent. I put it to the House in all sincerity that the question of whether this or any other government in the future can successfully invoke the cry of precedent does not depend ultimately on the quality of the precedent it tries to invoke but rather upon the merits of the particular decision it may take in the future which it seeks to justify by a resort to precedent. I simply do not accept the argument that if a future government were to pass legislation having retrospective effect regarding a normal commercial transaction that government could persuade me or the overwhelming majority of the Australian community that what this Government is doing now and what it is determined to do on this occasion could be invoked as a suitable precedent. I can appreciate the understandable concern of people about the issue of precedent. I do not take their argument lightly. I believe it is just not simply a case of invoking the cry of bad precedent. One has to look at the merits of the future action which it is sought to justify by resort to precedent.
There have been suggestions both here and outside that there has been an over-estimation of the volume of revenue at stake regarding these schemes. I can do none other than repeat the official advice which has been given to me by the Commissioner of Taxation, namely, that several hundred million dollars of revenue is involved and that the figure of $500m is not out of the question. I think the right honourable member for Lowe suggested that it means that one would need $ 1,000m of income in order to support a figure of $500m.
– Of taxable income.
– It is $ 1,000m of capital reserves, not $ 1,000m of profit that is involved. I remind the right honourable gentleman that according to figures of the Reserve Bank, in 1974 and 1975 the total capital reserves of private companies in Australia was $6,000m. I also remind honourable members and anyone else who doubts the possible veracity of the figures given to me by the Commissioner of Taxation that there are many and varied ways by which the capital reserves of both public and private companies can be altered. They can be altered by the revaluation of goodwill; they can be altered by all sorts of other methods and devices. We all know that that occurs.
The insinuation was made in this debate that in some way there was not the capital reserves capacity or in fact the economic capacity in companies for these types of arrangements to support a loss to revenue in the order of $500m or more. I reject that argument. I do not believe that it has any substance, and I would have thought that the remarks I have made support that rejection.
This is an important measure. It is important not only in terms of anti-tax avoidance legislation generally but also to honourable members on this side of the House because we have taken a decision which we believe, in the words of our platform, will give greater fairness both in appearance and in practice in our tax system. We believe that in this Bill we have struck a blow not only for the low income earners in our community but also for the many high income earners in our community who detest the level of tax avoidance which is practised by many people. I make it clear that the Opposition does not have a monopoly on the detestation of tax avoidance. If the Opposition imagines that it has seriously acquitted itself as an Opposition in this debate by trotting out these limp and shop soiled arguments about the rich and the poor, it has made a very serious mistake.
This legislation represents the most comprehensive anti-tax avoidance measure that has been brought before this Parliament for 15 years or more. This Government has done something about tax avoidance. The Labor Government which was in office for three years did nothing about tax avoidance. Let that simple fact be put into the record of this debate. Members of the Opposition leave this debate with no credit. They leave this debate having moved an artificial, blatant and contrived amendment at this second reading stage. They leave this debate as members of the party which when in government, did nothing about tax avoidance while professing a concern for the way in which the tax system ground down the average man. Let it be remembered that it is this side of politics that has done something about the equity of the tax system. It is this side of politics which, through its program of tax reform, has done something about lightening the tax burden for–
-On the rich.
-This Government has done something about lightening the tax burden on the whole community. Of course, if the tax system is reformed, the dollars saved by a high income earner are greater than the dollars saved by a low income earner. It is also the case that the dollars paid by a high income earner in the form of taxation exceed the dollars paid by a low income earner. It is a matter of elementary logic that a reduction in taxation reduces in absolute money terms the amount of taxation paid by the high income earner.
The introduction of this legislation is based upon a sober decision taken by the Government, it having put two principles into balance. The Government made a decision which it believes gives greater fairness both in appearance and in practice to the tax system. It is a decision which is in the public interest. I believe that it is a decision which can be defended thoroughly and absolutely, as I have been prepared to do. So have other members. I thank other honourable members who have done so also. (Extension of time granted) I will conclude my remarks within two minutes. There is one other matter that I would like to mention at this stage. I should indicate to the House that during the Committee stage of the debate I will be dealing with a couple of other matters that have been raised in this second reading debate, particularly those matters raised by the honourable member for Macarthur. I will be speaking also to the amendment which has been circulated dealing with the rebate systems regarding off-shore companies. 1 would like to tell the House and those people in the community generally who are interested in this matter that since the legislation was introduced the question has been raised by a number of honourable members on this side of the House and by other people as to whether taxpayers who, between 16 August 1977 and 7 April 1978, entered in a Curran scheme and who prior to the latter date applied for a reduction in 1977-78 provisional tax in reliance on the scheme, will be penalised for making the application in circumstances in which they might have anticipated when lodging the application that their Curran scheme would be effective for this purpose. I referred this matter to the Commissioner of Taxation. He has informed me that the short answer to that query -
-Order! I ask the Minister to resume his seat. It being 5.30 p.m., in accordance with the sessional order, I propose the question:
That the House do now adjourn.
– I require that the question be put forthwith without debate.
Question resolved in the negative.
-The short answer that has been given to me by the Commissioner of Taxationas honourable members will be aware it is his discretion and not mine- is that there will be no such penalty. A taxpayer who applies to reduce his 1977-78 provisional tax and whose estimated taxable income is less than 80 per cent of his 1976-77 taxable income and also less than 80 per cent of his 1977-78 taxable income may, when the return for 1977-78 is assessed, be liable to a statutory additional tax penalty. The Commissioner has told me that I may be assured, and the House may be assured, that he will in those cases exercise the specific power given to him to remit the penalty in whole. I think, given the circumstances, that is a very proper and reasonable approach to be taken. I simply conclude my remarks by thanking honourable members on both sides of the House who participated in the debate. I believe that this legislation, when it goes on the statute books, will be widely welcomed by the entire Australian community. I think it will strike a massive blow against tax avoidance practices throughout this country. I think it will be a symbol of this Government’s absolute conviction that the Australian community can no longer afford the type of abuse which this legislation is designed to destroy.
-I wish to make a personal explanation.
– Does the right honourable gentleman claim to have been misrepresented?
– Yes, I do. I listened to the Treasurer (Mr Howard) through the broadcasting system downstairs. He said that I did not think the Government should take into consideration public interest. I did not use such a phrase. What he said was totally untrue and unwarranted. The point I was making was that unless the definition of the word was clear the interpretation could be different for different people and that therefore there must be a precise definition. There was not in fact any definition at all. Then, reference was made to the words I used about the necessity to have a taxable income of a certain amount. This was messed up a little by the Treasurer. I said that if there were a loss of revenue of $2,000m there must be a taxable income of at least $4,000m. Why the Treasurer should introduce the idea of capital reserves I do not know. It was not used by me. Lastly, the Treasurer talked of all the arguments about the methods of tax avoidance. Nobody is arguing about that. It is a long argument with no purpose. I am interested in retrospectivity and too great powers for the Taxation Commissioners.
-The question is that the Bill be now read a second time. Those of that opinion say aye, to the contrary no.
– I think the ayes have it.
- Mr Speaker, might I ask that my ‘ no ‘ vote be noted in Hansard so that my attitude to the retrospectivity part of the law will be on record?
– There is no provision in the Standing Orders for a member’s vote to be recorded but the fact is that Hansard will have taken down what the right honourable gentleman said.
– I was well aware of that and I want to thank the officials for the advice they gave me on the matter.
– May I also have your indulgence, Mr Speaker, to make the point that the Opposition in order to allow time for debate, did not divide the House on its amendment. However, we want it recorded that the fact that we did not call for a division does not mean that we do not feel strongly about the amendment we moved to the motion for the second reading of the Bill.
– Likewise, there is no provision in the Standing Orders for that fact to be recorded, but the remarks of the honourable member for Adelaide will be recorded in Hansard for those who make a study of Hansard.
Question resolved in the affirmative.
Bill read a second time, and committed pro forma; progress reported.
Wartime Executions in New Guinea- Alleged Land Deals in Queensland- Cyclone Alby
Motion (by Mr Howard) proposed:
That the House do now adjourn.
-The war-time hanging by the Australian Army administration in 1943 and 1944 of at least 34 natives of New Guinea has been the best kept and the darkest secret in modern Australian history. I have known about the mass hangings since about 1960 when the late Dr Alfred Cordon first told me about them, but the documents detailing the trials of the natives have now been destroyed. I referred to the hangings in my book The Penalty is Death in 1968 but at that stage I knew of only 16 hangings. In his answer to my question on notice No. 879 the Minister for Home Affairs (Mr Ellicott) suggests that the relevant documents have been culled, lost, burnt, are incomplete, or otherwise destroyed. The whole affair is in danger of falling into a collective national memory hole. Were the documents systematically removed, perhaps years ago, to protect the reputations of people who have held high judicial office in Australia but who were involved in incidents they later wanted to forget?
Dr Hank Nelson of the Department of Pacific and South-east Asian History at the Australian National University has done some independent work on the hangings. He has accounted for at least 34. Many people were charged with murder, others with treason. All were alleged to have been involved in assisting Japanese troops in incidents which led to the deaths of Australians, some of them civilians. Several books, including volumes of the Australian Official War History, Hell and High Fever and Itambu by Mr Justice Selby, refer to the Japanese atrocities but there is absolutely no reference to the trials and executions of the 34 New Guineans. Twenty-two of them were hanged on two successive days at Higaturu in September 1 943, five on one day and 1 7 on the next.
The New Guineans all lived in a small area to the east of the Owen Stanley Ranges, near the point of cultural ‘interface’ where territory was successively occupied by Germans, Australians and Japanese. If there was any lesson that these people and their families must have learned, it was that foreigners- whether German, Australian or Japanese- wearing a uniform and an air of authority were in a position to enforce their wishes and had to be obeyed without question. Treason is a highly conceptual crime involving an understanding of legal obligations to the Australian State or the British Crown, and the significance of breaching them. In the first batch of trials the sentences were referred to and apparently confirmed by the General Officer Commanding the 1st Australian Army, LieutenantGeneral Sir Edmund Herring, later Chief Justice of Victoria, in his capacity as Administrator of the Australia-New Guinea Administration Unit. The trials and sentences were never referred to the Australian Government for confirmation.
On 20 April 1945 the Reverend Dr John W. Burton, Secretary-General of the Methodist Overseas Missions, wrote to the then Prime Minister, the Right Honourable John Curtin, advising that he was informed that 28 New Guineans had already been hanged by the Army and that 50 or 60 more were under sentence of death. John Curtin ordered an immediate investigation and Cabinet on 4 June 1945 ordered that all sentences of hanging and whipping be commuted. After some initial hesitation, Lieutenant-General V. A. H. Sturdee, the General Officer Commanding 1st Army, complied.
There is so much that we do not know about the trials and executions and presumably never will know. It is ironic that the executions- which outnumber the hangings of war criminals at Nuremberg, eleven, and Tokyo, seven- should have occurred at precisely the time that the Australian Press was promoting the idea of the Fuzzy Wuzzy Angels. If the idea behind the hangings was to deter potential collaborators, why were they not publicised? But of the trials themselves these questions need examination. First, who defended the New Guineans or were they undefended? Secondly, did they understand the nature of the offences they were charged with? Thirdly, how was the prosecution evidence evaluated or corroborated? Fourthly, who reviewed the sentences? Fifthly, was there a right of appeal? Sixthly, why were the sentences not referred to Canberra? Seventhly, was the Australian law of treason regarded as appropriate for unsophisticated indigenes? Eighthly, why have virtually all the records disappeared? Ninthly, why has the incident gone unrecorded by historians and other writers of the period?
The matter needs further investigation and it indicates the great importance of maintaining the security and integrity of our national archives.
-I draw the attention of the House to a scurrilous, false, defamatory and malicious article that appeared in this morning’s Sydney Morning Herald headed in bold type, ‘Robinson linked with $40,000 “windfall” Queensland land deal’. The ordinary man in the street and the ordinary reasonable man in the community on reading that statement would come to the false conclusion that Mr Eric Robinson, the Minister for Finance, was up to his elbows in the till into which the supposed windfall found itself. That profound libel was supposedly based on questions asked in this House yesterday by the honourable member for Batman (Mr Howe) and the honourable member for Chifley (Mr Armitage). The worthless questions are worth repeating if only to lay bare any assertion that the heading to the article has any validity. At page 1774 of Hansard of 4 May the honourable member for Batman asked the following question:
My question is directed to the Minister for Post and Telecommunications. Is it a fact that in February last year the Australian Postal Commission purchased land at Bundall on Queensland ‘s Gold Coast from Ron McMaster Pty Ltd for $280,000? Is it also a fact that less than four weeks previous to that Ron McMaster Pty Ltd had bought the land from Watkins Ltd for $240,000? What discussions, if any, did the Postal Commission have with the former Minister for Post and Telecommunications about the matter before it was finalised?
At page 1775 the honourable member for Chifley asked the following question:
My question without notice is directed to the Prime Minister. Is it normal practice for the Government to provide windfall profits of $40,000 to its political supporters as a result of land purchases by Commonwealth departments or authorities? What procedures exist to ensure that land bought on behalf of government departments and authorities is not bought from land speculators who have access to inside information?
From those questions I say that it clearly emerges that the matter of which I complained is without any foundation whatsoever because I allege it appears that the heading for the article is supposedly based on those two questions. This is a subject that could be referred to the Privileges Committee. I am of the opinion that the writer appears to be in contempt of the Parliament. I urge the Minister to sue the Fairfax group for substantial punitive damages as that organisation is richly deserving of severe censure and the organisation has a solemn duty to publish the facts, not tortious innuendoes.
-I rise to speak to the matter referred to by the previous speaker concerning the land at Bundall on the Gold Coast. Questions on this matter were raised yesterday with the Minister for Post and Telecommunications (Mr Staley) and a further question was put to him today. The Minister said yesterday that he would give an answer as soon as possible, and in response to the further question today the Minister said: ‘I will provide the answers to the honourable member’s question as soon as possible. The allegations implied in his question and subsequently in some Press reports are serious.’ Despite those assurances, I read in this morning’s Courier Mail that apparently the Minister for Administrative Services (Senator Withers) has been investigating the matter and at least is in a position to have his views reported in the Press.
The facts upon which the questions have been raised by the Opposition are plain and can be documented. Simply, they are these: A parcel of land, just over two acres in size and located in the suburb of Bundall on the Gold Coast, was sold on 10 January 1977 by Watkins Ltd, a firm of Queensland builders, to Ron McMaster Pty Ltd for $240,000. Subsequently, three weeks later on 4 February 1977, the same parcel of land was sold by Ron McMaster Pty Ltd to the Australian Postal Commission- to the Australian Government, one might say- for $280,000, enabling Ron McMaster Pty Ltd to make a windfall profit of $40,000 in less than a month. Those are the facts and they can be documented. I have with me photostat copies of the notifications of change of ownership from the Valuer-General’s Department, and I ask leave to table those documents.
-Is leave granted?
– Leave is not granted. I have not seen the documents.
-Mr Deputy Speaker, am I required to obtain leave to table the documents?
-Leave has been refused to have the documents incorporated. Do you seek leave to table them?
– I seek leave to table the documents.
-Is leave granted?
-Leave is not granted.
– Further, it is suggested in an article in this morning’s Courier Mail that the document covering the first change of ownership from Watkins Ltd to Ron McMaster Pty Ltd put the date of contract at 18 October 1976. That in turn suggests at least the possibility that the option to buy may have been taken only when it became clear that a purchaser was available at the right price It is quite clear in anyone’s terms that Ron McMaster Pty Ltd bought the land just prior to its sale to the Australian Postal Commissionto an Australian Government authority- at a profit of $40,000. As members of the Opposition have been suggesting throughout the afternoon, we are concerned about taxpayers ‘ money. We are concerned here primarily because it appears from the facts available that taxpayers’ money has been spent in a way that warrants the closest and speedist examination.
As the Minister has suggested, this is a serious matter. Implied in the questions are serious allegations. Is there just a possibility, in the circumstances I have described, that the seller of land to the Australian Postal Commission, to the Australian Government, to the Australian taxpayer, may have had inside information? That is the concern of the Opposition, and it is that concern on which the Minister has remained silent for 36 hours. Surely the basic facts can be established in that time. The Government came to power in December 1975 on the slogan: ‘Vote For Honesty’. We want to see honest government. We want to have it established that this Government is carrying out its affairs with the utmost propriety. That is what these questions are about. Why for 36 hours has the Minister remained outside this House, unable to answer the questions, unwilling to bring forward proper answers to them? I again seek leave to table the documents.
-I had not intended to speak in the adjournment debate until I had heard the speech by the honourable member for Batman (Mr Howe). I would like to make my own views clear to the House: I regard it as a disgraceful performance, especially considering the views just expressed by the honourable member for Phillip (Mr Birney) as to a newspaper article which appeared this morning. I support the view that it was a grossly misleading heading and that there was grossly misleading material within the body of the article. I condemn the action of the honourable member for Batman. The Minister has quite clearly guaranteed to honourable members that he will carry out a full investigation of this matter- not an unduly short one but one which will determine all the facts- and come back in a reasonable time to the House with those facts. I think it is unfair that the honourable member for Batman should examine and canvass the matter further so that it may possibly again be reported in tomorrow’s Press.
Had the honourable member for Phillip not specifically drawn attention to this morning’s very badly headlined article in the Sydney Morning Herald, I would not have felt this way about it. Honourable members opposite had every opportunity to ask questions, quite properly, in the House this morning and the Minister has, quite properly, said that he will investigate these matters and report back to the House. I do not think honourable members opposite would describe the Minister concerned as one who would treat the matter lightly. The Minister himself said that it was a serious allegation and he would look into it. I would therefore hope that those gentlemen of the Press who have witnessed this particular incident would, in reporting these matters in tomorrow’s Press, take into account the information that was brought before the House by the honourable member for Phillip and thus disregard the further canvassing of this matter for the honourable member for Batman. I hope they will wait until the Minister comes back with a responsible explanation to this House.
-During the Grievance Debate on Thursday, 13 April, I spoke to the House of the damage caused to the south western corner of Western Australia by Cyclone Alby, which struck that area on Tuesday, 4 April. It is now nearly a month since Cyclone Alby brought the trail of destruction through the south west of Western Australia and it is only now that a full picture of the damage emerges. On 13 April the Insurance Council of Australia reported that claims totalling $7m had been received, and that the final pay-out was expected to double this figure. Damage to public works, public buildings, port installations and foreshores and to the railway have been assessed at a total of $2,321,000. The State Energy Commission has lost $906,000 in repairs to lines and loss of sales. The Forest Department estimates direct fire fighting costs of some $250,000, whilst tree clearing and other public works could cost some $280,000. Some $5m worth of timber was contained in pine plantations affected by storm and fire. Although timber worth $lm may be salvaged, the cost of recovery will be some $600,000.
It is in the rural sector that the most savage effects have been felt, and it is here that they will be felt longest in the form of continuing income loss to primary producers. Loss of apples in the Donnybrook-Bridgetown-Manjimup area is put at $2,500,000. Of an estimated 1,290,000 cases of apples in these three centres, only 490,000 remain on the trees. Of those remaining, no more than one third are suitable for export, so it becomes uneconomic to sort through the apple crop, and the export crop for this year becomes a total loss.
Other statistics of the Western Australian Agriculture Department tell their own grim story- 40,000 hectares of pasture, 1,000 kilometres of fencing and 1 50,000 bales of hay were lost, and 450 cattle and 9,000 sheep perished. It is really remarkable that the losses were so small, considering that at the height of the storm some 78 fires were raging, with winds driving them at anything up to 140 kilometres per hour. Twenty farm houses and 75 sheds were destroyed. Such cruel damage to farmers affects the whole rural community. I note that 100 fruit pickers at Donny brook alone were reported laid off on 20 April. Of course, some damage to farms cannot even be assessed. The storm was a dry storm and the loss of topsoil over vast areas, as I say, cannot be assessed. One estimate of lost future production through loss of nutrients in the soil goes as high as $40m. That amount divided among 5,000 farmers works out at each receiving about $8,000. This loss of topsoil creates serious problems in such areas as Katanning in the eastern section of my electorate, but that area did not really suffer fire damage.
It is of some regret to me that the enormity of the damage and the tragedy caused by cyclone Alby has not been recognised throughout the community at large, especially the community in the eastern States. The loss of life, the flooding, the fires, and the severity of the winds led to a situation in which for many days in many areas there were no communications. Before these areas were back in communication the national Press had lost interest in cyclone Alby. I made personal representations to all the lord mayors of Australia in an endeavour to establish a lord mayors’ fund in each State. Their judgment, perhaps quite rightly, was that, because there was a lack of information in the eastern States and a lack of awareness of the tragedy, they did not think that they could successfully run a lord mayors’ appeal. I know that the Federal Government is acting in a proper manner in making arrangements with the States in relation to national disasters such as this. But there are many areas in which the Government cannot play an effective role.
Mr DEPUTY SPEAKER (Mr Millar)Order! The honourable member’s time has expired.
– I commend the honourable member for Forrest (Mr Drummond) for raising the matter of the damage caused by cyclone Alby. I do not think he quite reached the point of the issue that he was raising. The fact is that there is a vacuum in this country in the provision of effective disaster relief. I do not know whether it was the intention of the honourable member to point the bone at the Federal Government, State governments or local governments. I know that his intention was more in the way of seeking to get some redress and some compensation for the people affected. This is not an isolated case. The people of this country respond in a most spontaneous and generous way when disasters reach significant proportions. Notable, of course, is the Darwin disaster, the last report in relation to which was made available to us only this week. However, there are many instances of the type to which the honourable gentleman referred and about which other honourable members know. Those incidents which have occurred throughout the length and breadth of this country need effective accommodation, but they are not effectively accommodated under the insurance arrangements which exist in Australia today. We have had many assurances that consideration will be given to widening the disaster relief program.
In the area north of Wollongong, for example, which is in my electorate, we have a very high incidence of land sinking and land slippage caused by geological faults and also by coalmining activities. Of course, the unfortunate people who are often involved in these situations are the people who have bought land in good faith from developers and estate agents. It has been land which has been approved by local authorities. These people have invested their life savings in their home. Of course, when the slippage occurs that investment is totally written off. I am talking about perhaps 30 or 40 cases which have occurred around my own region and in relation to which people have been unable to obtain redress from any authority at all. It is not the normal inclination of an ordinary home purchaser to insure against something like land slippage or land sinking. One does not normally take that into account. Since it is a disaster, I hope it will receive attention.
-Order! It being 6 p.m., the debate is interrupted. The House stands adjourned until Monday next at 2. 1 5 p.m.
House adjourned at 6 p.m.
The following answers to questions upon notice were circulated:
am asked the Prime Minister, upon notice, on 22 February 1978:
– The answer to the honourable member’s question is as follows:
am asked the Minister for Immigration and Ethnic Affairs, upon notice, on 22 February 1978:
How many (a) Chileans, (b) Vietnamese and (c) Timorese came to Australia as refugees in 1977 (Hansard, 2 June 1977, page 2487).
– The answer to the honourable member’s question is as follows:
asked the Prime Minister, upon notice, on 1 March 1978:
– The answer to the honourable member’s question is as follows:
asked the Minister Assisting the Prime Minister, upon notice, on 7 March 1 978:
– The answer to the honourable member’s question is as follows:
Attorney-General’s Department (2 officers) Department of Defence Department of Foreign Affairs Department of Industry and Commerce Department of Overseas Trade
Department of Transport Industries Assistance Commission Public Service Board.
Australian Paper Manufacturers Ltd.
Freehill, Hollingdale and Page, Solicitors, Sydney
ICI Australia Ltd.
Mallesons, Solicitors, Melbourne
Shell Australia Ltd.
Department of Science: Domestic Air Travel (Question No. 458)
asked the Minister representing the Minister for Science the following question on notice on 8 March 1978:
What sum was paid by the Department of Science, or by Departments formerly encompassing the functions now performed by the Department of Science, to each airline for air travel within Australia during 1 976-77.
– The Minister for Science has provided the following answer to the honourable member’s question:
Payments in 1976-77 as shown in the accounting records of my Department were:
asked the Prime Minister, upon notice, on 8 March 1978:
– The answer to the honourable member’s question is as follows: ( 1 ), (2) and (3) It is my Government’s view that Australia has been and will continue to be well governed by having as Head of State the Constitutional monarchy provided for in the Constitution. I have no intention of approaching the
British Government to seek any changes to the Crown as an institution.
asked the Prime Minister, upon notice, on 15 March 1978:
– The answer to the honourable member’s question is as follows: (1), (2) and (3) The information sought by the honourable member may be obtained by an examination of documents available to the public, such as Commonwealth legislation, tabled annual reports, and Votes and Proceedings of the House of Representatives.
am asked the Prime Minister, upon notice, on 5 April 1978:
Which of the positions in his Department have been identified as those where at least 10 per cent of the occupant’s time is spent dealing with clients in a language other than English (Hansard, 2 June 1977, page 2529 and 4 April 1978, page 969).
– The answer to the honourable member’s question is as follows:
The position of Interpreter- Receptionist, North West One Stop Welfare Centre, Coburg, Melbourne.
am asked the Minister for Immigration and Ethnic Affairs, upon notice, on 5 April 1978:
– The matters referred to by the honourable member fall within my portfolio. The answer to the honourable member’s question is as follows:
Australia on Letters of Authority. The Australian Commission in Hong Kong deals with most of the applications lodged by Taiwanese seeking entry to Australia. The Australian Commission in Hong Kong issued Letters of Authority in respect of Taiwanese as follows:
am asked the Minister for Immigration and Ethnic Affairs, upon notice, on S April 1978:
When did the consultations conclude between his Department and the Department of the Attorney-General on the regulations which must be made under Section 1 1 1 of the Family Law Act 1 975 to enable performance of Australia ‘s obligations under the United Nations Convention on the Recovery Abroad of Maintenance signed on 20 June 1956 (Hansard, 22 March 1977, page 470).
– The answer to the honourable member’s question is as follows: 31 March 1977.
asked the Prime Minister, upon notice, on 5 April 1978:
What has been his response to representations made to him on 28 October 1977 by the NSW Local Government Community Workers’ Association in which concern and dismay was expressed about the drastic curtailment of funding for the following Government responsibilities: (a) welfare workers under the States Grants (Home Care) Act, (b) Family Law Court Counselling Service, (c) education programs, including after school care, child care and other family care programs, and migrant classes for adults, (d) health care services including community health centres, domiciliary care services and women’s health centres, (e) unemployment and unemployment relief schemes, (0 housing, in particular housing for the aged and invalid people, (g) pension and benefit reductions in real values and proposed transfers of responsibility for these, (h) 470 community programs funded under the Australian Assistance Plan, (i) programs for the handicapped, (j) the Legal Aid Commission Bill, (k) Aboriginal affairs, (1) grant in aid services for migrants and interpreter services, (m) Australian Government printing services, (n) national co-ordinating bodies for youth affairs, (o) women ‘s refuges subsidies reductions and (p) Australian Bureau of Statistics processing.
– The answer to the honourable member’s question is as follows:
Mr D. R. Efraemson President, NSW Local Government Community Workers’ Association wrote to me on 28 October 1977 conveying a resolution passed at a conference of his Association held on 9-10 October 1977.
The representations followed the announcement on 27 October 1977 of arrangements for the dissolution of Parliament and a general election. On 2 1 November 1977, after an acknowledgment had been sent to Mr Efraemson. I presented the Government’s election policies which clarified the Government’s views on most of the matters raised in the letter.
asked the Minister for Immigration and Ethnic Affairs, upon notice, on 6 April 1978:
– The answer to the honourable member’s question is as follows:
am asked the Prime Minister, upon notice, on 6 April 1978:
– The answer to the honourable member’s question is as follows:
asked the Minister for Trade and Resources, upon notice, on 7 April 1 978:
Has his Department received any complaints about alleged dumping of New Zealand peas and beans which is contrary to the spirit of NAFTA and the special Pea and Bean Panel; if so, what action has been taken?
– The answer to the honourable member’s question is as follows:
In recent months the Department of Trade and Resources has been approached by members of the Australian pea and bean industry who have expressed concern regarding the quantities of frozen peas, and to a lesser extent frozen beans, likely to be imported from New Zealand in 1978 and the pricing policies of certain New Zealand exporters.
Information available to Australian officials indicates that imports from New Zealand have been increasing rapidly in recent months and that some of these are being sold at prices considerably lower than current Australian prices.
There is a long history of co-operation and consultation between Australia and New Zealand on trade in frozen peas and beans involving the industries as well as Governments. Officials of both countries have been working with the respective industries to obtain the full facts of the current situation.
At the NAFTA Ministerial Meeting in Canberra on 18 April 1978 1 brought to the attention of New Zealand Ministers the concern expressed by the Australian industry regarding recent imports of frozen peas and beans from New Zealand. It was agreed that a further meeting of the Joint Pea and Bean Industry Panel could discuss this question.
Increase in Number of Members of Federal Parliament (Question No. 891)
asked the Prime Minister, upon notice, on 7 April 1978:
Has his attention been drawn to the public statements of the Deputy Prime Minister, for example, at Horsham, Victoria, on 24 February 1978, that Australia’s population growth justifies a significant increase in the number of members of the Federal Parliament; if so, what plans does the Government have to implement this view.
– The answer to the honourable member’s question is as follows:
There are no plans to increase the number of members of Federal Parliament.
asked the Minister representing the Minister for Education, upon notice, on 7 April 1978:
– The Minister for Education has provided the following reply to the honourable member’s question:
No EPUY courses were conducted in South Australia during the financial year 1 976-77. In the first half of the financial year 1977-78, only one course was conducted in South Australia, at Port Adelaide. In the current six months, five courses, each of 20 weeks duration, are being conducted- at Port Adelaide, Adelaide, Salisbury, Whyalla and Morphett Vale.
The Morphett Vale course (in the Electoral Division of Kingston) commenced on 24 April and is being conducted at 24 Lyndhurst Road, Seaford. Thirty students have been enrolled and they will be paid living allowances at the rate of S42 per week if under 18 years, and at $57.45 per week for those over 18. The operating cost of the course has been estimated at $37,400.
am asked the Prime Minister, upon notice, on 1 1 April 1978:
– The answer to the honourable member’s question is as follows:
Major Inquiries, Task Forces and Reviews Initiated by the Government (Question No. 73)
am asked the Prime Minister, upon notice, on 22 February 1978:
Will he bring up to date the information he gave on 26 May 1977 ( Hansard, page 2019) concerning the major inquiries, task forces and reviews that have been set up by his Government and the publication of their reports.
-The answer to the honourable member’s question is as follows:
The following details relate to the major inquiries that have been set up by the Government:
Cite as: Australia, House of Representatives, Debates, 5 May 1978, viewed 22 October 2017, <http://historichansard.net/hofreps/1978/19780505_reps_31_hor109/>.