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 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 Braithwaite.
To the Honourable the Speaker of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth respectfully showeth:
Petition to be presented to Federal parliament:
We the undersigned residents of the Riverland call on the Federal Government to compensate grapegrowers to leave this years surplus grapes on the vine, to stop all subsidised wine and brandy imports until the surplus grape problem is solved, to stop taxing the grapegrower out of existence, and to reduce excise on Australian brandy.
And your petitioners as in duty bound will ever pray. by Mr Giles.
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:
Your petitioners most humble pray that the House of Representatives in Parliament assembled will:
And your petitioners as in duty bound will ever pray. by Mr Les Johnson.
To the Honourable, the Speaker and the Members of the House of Representatives in Parliament assembled. The Petition of the undersigned citizens of Australia respectfully showeth:
We mothers of Penrith and the Outer Western Suburbs feel most vehemently that a childrens hospital should be established within this area, operating on the same principles as Royal Alexandria Hospital, Camperdown, allowing mothers to remain with their children for the duration of their hospitalisation. If a Childrens Hospital were not feasible then we would submit that Nepean Hospital should be extended to provide these facilities ‘.
And your petitioners as in duty bound will ever pray. byDrKlugman.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of undersigned citizens of Australia respectfully showeth:
That the existence of a system of double taxation of personal incomes whereby both the Australian Government and State Governments had the power to vary personal income taxes would mean that taxpayers who worked in more than one State in any year would:
Your petitioners therefore humbly pray that a system of double income tax on personal incomes be not introduced.
And your petitioners as in duty bound will ever pray. by Mr Morris.
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 State Grants (Dwellings for Pensioners) Act 1974-77, renewed for one year expiring on 30 June 1978.
The demand for dwellings has not slackened as the waiting list (all States) of 12,060 single and 4,120 couples as at 30 June 1 977, 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 Reverend 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 $ 1 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 Mr Morris.
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.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned citizens of Australia respectfully showeth:
That Item 6469 of the standard Medical Benefits Table is the means by which payment is made for the slaughter of thousands of unborn babies every year.
Your Petitioners therefore humbly pray that the Government should ensure that Item 6469 is removed from the standard Medical Benefits Table.
And your petitioners as in duty bound will ever pray. by Mr Willis.
To the honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of undersigned citizens of Australia respectfully showeth:
That ‘The family is the natural and fundamental group unit of society and is entitled to protection by society and the state’.
Your Petitioners therefore humbly pray that the government initiate a national family policy and use the concept of family impact statements as a means highlighting family needs.
And your petitioners as in duty bound will ever pray. by Mr Wilson.
-The Minister for Defence will recall saying yesterday that Air ViceMarshal Jordan received a briefing last year in the United States about United States intentions at North West Cape but that he did not properly communicate the policy implications of that briefing to his Department. Was another member of that mission present, a Mr Mathens, Assistant Director, Science and Technology, Joint Intelligence Organisation? Did he communicate the policy aspects of that briefing to the appropriate areas of the Department of Defence? Was another member, a Mr Pritchett, First Assistant Secretary, Strategic and International Policy Division, and now head of the Policy Co-ordination Division, also present? Did he convey the policy implications of that briefing to the appropriate areas of his Department and was that information conveyed to the Minister?
-Yesterday I undertook to find out for the honourable gentleman who else was present at the briefing. I trust he will forgive me when I say that I have not yet had an opportunity to do that. Speaking subject to correction, my understanding is that Mr Pritchett was not present. If the honourable gentleman will leave the matter with me, I will seek to convey an answer to him by lunch time today.
– He was in Washington, though.
– Yes, he was in Washington at the time but I do not know whether he was physically present at the briefing.
-Has the Minister for Primary Industry examined recommendations made by the Prices Justification Tribunal regarding costs and charges in the wool industry? Will the Government again look at changes in wool marketing?
– The Prices Justification Tribunal has concluded its inquiry into prices charged by a number of woolbrokers and has delivered very significant findings as far as the wool industry is concerned. The recommendations, of course, are now for action by the brokers of Australia. I hope it might be possible that significant cost benefits will flow through to Australian wool growers as a result of brokers adopting the recommendations of the PJT. It is true that the whole of the circumstances of the presentation and sale of the Australian wool clip have changed fairly significantly as a result of the large stock holdings of the Australian Wool Corporation and the reserve price plan operated by the Corporation. Indeed, the significantly firmer market tone that has prevailed in the last few months has given the wool industry a preeminent role among Australian exports this year. I understand that once again this financial year wool will be supreme in value terms amongst Australian exports, including those of the mining industry. At the same time as the Australian Wool Corporation developed its reserve price scheme it put in a marketing plan and it has been subject to a good deal of discussion. A limited offer to purchase scheme was introduced in both Victoria and Western Australia this year. The scheme in Western Australia has been going very effectively. I understand it has not been quite so effective in Victoria.
The marketing plan proposes very significant changes in the handling of the Australian wool clip. I have had discussions with wool producer organisations, with the Australian wool industry policy committee, the Australian Wool Industry Conference and indeed with a great many other individual groups about the wool plan. There are obvious difficulties, if the plan is going to change completely. Once these changes are implemented the Australian wool marketing system will not have any chance of reverting to that system. It is for that reason that the limited offer to purchase scheme proposals seem to be a worthwhile step in the direction of market change. As the honourable member knows, the Australian Wool Corporation and the Bureau of Agricultural Economics are looking at wool marketing. I do not propose, therefore, to take any further immediate steps with respect to wool marketing until receipt of those recommendations. After they have been received I shall be discussing them with the Australian Wool Industry Conference policy committee and with producer organisations. I shall make whatever recommendations I feel fit to the Government at the appropriate time.
-My question is addressed to the Minister for Defence. Yesterday the Minister referred to his Department being responsible for a significant blemish in its handling of North West Cape base matters. Who were responsible for this breakdown in responsibility to the Government and what action has been taken against them? Will the Minister conduct an exhaustive inquiry to establish how widespread this failure to inform the Government is within the Department, and take action to bring the Department under ministerial control?
– The honourable gentleman gives a very free translation of what I said yesterday. I remind him that every day of the week literally hundreds of discussions are held all over the world by officers of the Department of Defence with various officers of other countries. I also remind the honourable gentlemen that it becomes -
– Do not shout.
– One has to raise one ‘s voice in order to penetrate through the honourable member’s concrete mind. I also remind the honourable gentleman that I -
– You cannot take the pressure, Jim.
– I cannot take the pressure! I am bound to say to the honourable gentleman that if I have offended him I withdraw. I suppose the most charitable thing one could say is that his mind is a museum of defects. I also remind the honourable gentleman that yesterday I pointed to the profound human difficulty of characterising as to when technical discussions should properly be referred for policy decisions. If the honourable gentleman is genuinely having difficulty in understanding that, after Question Time if he accompanies me I will buy him a cup of tea and try to sort him out.
– My question is addressed to the Minister for Employment and Industrial Relations. In view of the deepening national concern over youth employment, including that expressed by the trade union movement, what steps do the Minister, the Minister for Education and the Cabinet propose to take concerning the introduction of a national community youth cadet scheme both at home and overseas? What steps has the Department of Employment and Industrial Relations taken to assist the special committee on youth employment appointed by the Government party committee to investigate the situation during the parliamentary recess and to make recommendations in the national interest?
-The Government of course is very concerned at youth employment problems. Our manpower programs, including the range of training schemes, are fundamental to our employment strategy. They are particularly directed towards the problems of young people. Moreover, we have made it plain that the availability of finance would not limit the provision of training to young people who meet the criteria of those schemes which ensure that young people are better equipped to enter the work force.
I have received over a period a number of representations for additional measures designed to assist the employment of young people. Many of them have been along the lines of the scheme just suggested by the honourable member. I can assure him that they are all carefully examined. Schemes which provide appropriate training and /or work experience can be a very useful first step in helping young people to obtain stable employment. We have been concentrating on strengthening the opportunities for young people to gain work experience, particularly under the Community Youth Support Scheme. The honourable member will be aware of the improvements that have recently been made to that scheme and of a greater emphasis on access to work experience in local projects. I have no doubt that as this scheme develops more opportunities will be provided for young people along the lines that would be provided by the sort of body, a youth service cadet scheme, that the honourable member has proposed.
The honourable member has also raised with me the question of the establishment of the special sub-committee on youth employment. A great deal of work has already been done in this area. Consequently, a fair amount of information is available. I can assure him that I stand ready to help him and the committee in any way I can over the winter recess period.
-I ask the Prime Minister Is it true that he will be touring Europe, Asia and America or any one of those places during the winter recess? How many countries did his Department contact seeking invitations and how successful was it? Is it a fact that the Prime Minister has been exhaustively courting an invitation from President Carter for more than a month? Is there any truth in Press reports that despite these attempts the President will not see him during his forthcoming visit to the United States?
– I think that the honourable gentleman knows- or if he does not, he should know- that during the course of this year trade decisions will be made which will be of far-reaching consequence and which might well set the pattern of trade over the next 10 years or for the rest of this century. If the decisions made at the multinational trade negotiations are the wrong decisions the possibilities of renewed 1930s type protectionism from Europe or from other countries could be very real indeed.
We already know that the European Economic Community is concerned about access into its markets of commodities other than agricultural ones. We know the actions that have been taken about steel and the actions that have been taken against Australian steel. The Tokyo round of trade negotiations which began in 1973 and which is designed to be brought to culmination through the course of this year- on the United States objective, in June- therefore will be very important indeed. Are they going to hold the line against unreasonable protectionism and unreasonable growth of non-tariff barriers, or are they going to have a negative result and move the world backwards into a very dangerous trading position?
The Australian Government, as a significant trading nation, has an obligation to its own citizens and also to the international community, to try to make sure that the decisions made through the course of this year not only at the multinational trade negotiations but also at the United Nations Conference on Trade and Development in relation to the Common Fund in which Australia has taken a leading position and a leading role are as sensible and constructive as can possibly be devised. All the weight that Australia has is being used in that direction. Next month I shall be visiting the Prime Ministers of
Britain and France and the Chancellor of Germany to discuss these matters. I believe that they are matters of concern to all those countries. It is particularly important to have those discussions before the major decisions are made at the multinational trade negotiations, and also it is very useful to have the discussions, as I did with the Prime Minister for Japan, before the Bonn summit meeting is held in July. If the honourable member had any concern for the well-being of Australia and for the well-being of the trading world he would try to establish a national position in matters as important as this.
– Has the Minister for Trade and Resources seen reports that the United States expects to increase exports of high quality beef to Japan by 10,000 tonnes this year? Does that mean that America is to receive special treatment at the expense of Australian beef producers?
– In January of this year the Japanese Government announced that it would endeavour to increase its imports of high quality beef by 10,000 tonnes a year. This flows from high level negotiations that had taken place between the United States and Japan in order to try to reduce the imbalance of trade between those two countries. The Australian Government has made it quite clear that it is concerned that if there is to be any increase in this quota, it be of a global nature enabling all countries to tender, instead of being exclusively for the United States. During my visit to Japan in March I questioned various Japanese Ministers and officials on this matter, because it is a matter for concern to Australia if there is to be an exclusive arrangement for United States meat. I was given an assurance by those people that it would be an open quota, allowing Australia to tender. However, there have been reports that the specifications for the tendering arrangements that are being drawn up will give a preferred position to the United States. This is a matter that Australia cannot take lightly. It is a matter that will be discussed at the joint ministerial talks which will take place in June between Australian and Japanese Ministers.
-I direct my question to the Prime Minister. Yesterday did the Prime Munster have lunch with members of the Metal Trades Industry Association? Did those members make submissions regarding an expansion in growth of Australian industry? During the course of the discussions did the Prime Minister tell those members that he was favourably disposed towards a tariff cut proposal? Is there a proposal to be placed before the multinational trade negotiations that Australia should cut its tariffs by 40 per cent? If that is so, what are the implications for Australian industry in respect of such tariff reductions, and when will the Prime Minister make a statement to the House about this matter.
-Australia has never adopted an inflexible attitude in multilateral trade negotiation discussions. The Government has been examining closely the offers of other countries and seeking to make sure that Australia contributes to the maximum extent towards a constructive result in those discussions. I have said on other occasions that the 40 per cent tariff cut proposal of the major industrial countries at first sight seems to be a major significant proposal and one that could have dramatic effects on the expansion of trade. But when one examines in detail the nature of the proposal and the qualifications that are hedged around it, one finds that it is a proposal that would affect less than 20 per cent of world trade. All the intraEuropean Community trade, for example, has to be exempted because it is not affected by the proposal. One finds also that the proposal is designed not to start until 1980 and since the average level of tariffs from the major industrial countries is about 10 per cent it results in a reduction of about 0.5 per cent a year for five years and that reduction, if accepted, would be mandatory. The other three or four years of the proposal would be optional depending on the economic circumstances of the time.
A number of countries have indicated that they are prepared to consider that proposal so long as the starting date for its operation goes back to 1972 or 1973. In other words, they are prepared to accept it if any changes in their tariff structure since that time are taken into account as credit against the 40 per cent tariff cut. In addition a number of countries have also indicated that there will be substantial areas of exemptions where the 40 per cent proposal would not apply. It is against that background and against the background that the 40 per cent proposal is nothing like as substantial and as far-reaching as it appears at first blush, that Australia has been concerned to see that the multilateral trade negotiations are successful. Therefore, if there is to be a real forward move in the multilateral trade negotiations, that move must embrace agriculture, commodities and a better consideration of Third World and developing countries.
I think it is noteworthy that in the past, in the Kennedy Round discussions and earlier discussions under the General Agreement on Tariffs and Trade and in other forums, the rules that have been established have generally involved rules in relation to trade in manufactured goods, pushing aside agricultural commodities and the developing Third World. Australia has a very strong view that the Third World developing countries’ agriculture and commodities must be included if there is to be any realistic effort in getting a broad based approach in the multilateral trade negotiations that can do something for world trade- It is against that total background that Australia has been examining its own position in relation to these matters to see whether there is something more that Australia can do to contribute towards a constructive solution.
I note in that regard that the decisions we made in relation to the Common Fund, which were far in advance of those of the other B group countries and in which we said that the Government would subscribe to the fund and support other measures in relation to the fund, which advanced the debate quite significantly, created a situation that was largely endorsed by the regional meeting in Sydney of Commonwealth Heads of Government and also by a meeting a few weeks ago of over 30 Ministers from Commonwealth countries. That also is part of the general approach that we have towards seeking a better trading situation from 1978 onwards. On a number of fronts Australia will be continuing with these efforts. At the meeting yesterday with representatives of the Metal Trades Industry Association the broad concerns that we have in these areas were expressed and we also indicated that we wanted to do what we could to achieve an overall beneficial result, recognising that in the longer term if that leads to a stronger Australian economy it will lead to a stronger industrial economy in Australia.
-The Treasurer will be aware that people in remote areas of Australia have expressed concern at moves by the Australian Taxation Office to update the implementation of section 26E of the Income Tax Assessment Act. Can the Treasurer confirm that the Government supports the Taxation Office in implementing the tax laws equitably and with commonsense and reason throughout Australia? Is there a special case for people living in very remote areas not to have the section relating to housing rent subsidy apply to them? What discounting factors are taken into consideration when assessing housing rental value? Would the Treasurer consider updating the remote area zone allowances or replacing them with some form of disadvantage rebates?
– I can assure the honourable member for Kalgoorlie that the Government does support the effective administration and implementation of the Income Tax Assessment Act in all its respects and certainly in a practical, realistic and common-sense manner. A number of honourable members have raised with me the question of the application or the enforcement of section 26E of the Income Tax Assessment Act which, as I think many honourable members will know, has been in the Act for a great number of years. Action being taken by the Taxation Office at the present time should not be regarded as action taken other than in the normal course of the administration, monitoring and enforcement of the Act and should not be construed as a result of any specific direction or invitation from the Government that certain matters should be undertaken with greater zeal and greater vigour.
The administration of the Income Tax Assessment Act has always been and will remain, so far as its particularity is concerned, a matter for the Commissioner of Taxation and his officers and not a matter which is the subject of ministerial or government intervention in respect of particular items. The honourable member raises the question of what discounting factors apply in respect of remote areas. I can inform him that there are a considerable number of discounting factors. I will not weary the House with all of them, but they include making allowance for any onerous conditions which might attach to the occupancy of particular premises, such as the need to be available during irregular hours to look after the premises. I can also inform the honourable gentleman that in assessing values, the Commissioner of Taxation takes account of regional disabilities to which people are subjected, and that assessments of values made by the Commissioner of Taxation are not final. It is only through administrative convenience that the Commissioner has adopted the practice of assessing various groups in various parts of the community. Each individual taxpayer has the capacity to object in the normal fashion to assessments of value made by the Commissioner of Taxation.
I can certainly understand the interest of the honourable gentleman in the matter. The purpose of the section is to ensure equity of treatment of taxpayers because in most cases taxpayers do not receive any accommodation subsidy in terms of their salary and benefits. But in other cases they do. In ordinary equity, it is only natural that a section such as this one should be included in the Income Tax Assessment Act. The honourable gentleman asks whether the Government will give consideration to some revision and updating of the zone allowances. I can inform the honourable gentleman that in accordance with not unknown practice I have arranged for these matters to be listed for consideration in the context of the forthcoming Budget.
– I direct a question to the Minister for Immigration and Ethnic Affairs. Has the Minister heard or seen reports of statements by his colleague, the Minister for Productivity, about the attitude of employers towards immigration to Australia? What was the essential point of those remarks and were they in conflict with the Minister’s own approach, particularly in relation to solving Australia ‘s economic problems?
– I did see reports, particularly in the Melbourne Age, of remarks which were attributed to my colleague the Minister for Productivity. Naturally, we were in contact about those remarks. My colleague informs me that the impression given by the report particularly in the Age was most significantly different from the tenor of the remarks that he made on that occasion. As I understand the situation, my colleague was referring to mass migration of the sort which took place in the 1950s and particularly in the late 1960s when a large number of unskilled and semi-skilled people came to Australia. I have never advocated an immigration program which at this stage would result in a large number of semi-skilled and unskilled people being brought to Australia. If the honourable member discusses the matter with my colleague I think he will find that my colleague and I are in very great agreement as to the sort of immigration program Australia needs at this stage.
-My question is directed to the Minister for Aboriginal Affairs. What steps are being taken to ensure that the Queensland Local Government (Aboriginal Lands) Act is being put into effect so as to honour the Commonwealth commitment to the principles of selfmanagement and security of use and occupancy of the land for the two communities of Aurukun and Mornington Island?
– I thank the honourable member for his question. I know of the interest that he has shown right from the beginning of this issue concerning Aurukun and Mornington Island. It is important to the Commonwealth that steps are taken right from the start to see that the Commonwealth’s policy of self-management is implemented effectively in these two communities under the legislation which has been passed by the Queensland Parliament. I have already advised the Queensland Ministers, Mr Porter and Mr Hinze, that in the Commonwealth ‘s view the first step should be the appointment of the advisory committees for each community, for those committees are intended to assist the communities in their role of self-management. If this legislation is to get off to an effective and early start it is necessary that those committees be established immediately.
I also inform the House that officers from my Department are already in both communities and working actively with the councils there, seeing that they are fully informed of the Commonwealth’s views and the assistance that the Commonwealth can give in the implementation of this legislation. It is of the utmost importance that both governments keep in the closest contact and communication with each community so that they are fully informed of the intentions of both governments. Unless that is done the legislation might well get away to a shaky start, and I know that both governments are anxious that it get away to an effective start.
The other important part of the honourable gentleman’s question concerned security of tenure. That, of course, is vital to both communities. It requires the issue of 50-year leases on the terms and conditions stated in the legislation. I am anxious that the leases be issued at the earliest possible date so as to ensure that the two communities have the security over their land which they desire. I am personally keeping in the closest contact with what is happening. I am getting daily reports from both communities. I am aware that they are concerned to know how the legislation will be implemented. From communications that I received yesterday I know that they are anxious to be fully informed by both governments of the intentions of each government.
– Is the Treasurer, in his ministerial responsibility for taxation matters, aware that two companies, Allan Walsh (Chatswood) Pty Ltd and Allan Walsh (Hornsby) Pty Ltd, did not file tax returns for the successive fiscal years 1972 to 1975 inclusive even though they had a previous long-standing trading history. Will he indicate what action, if any, was initiated by the
Commissioner of Taxation to gather revenue from these companies when they first failed to submit returns? Is it a fact that the Commissioner has allowed the companies to declare a quarter of a million dollar misappropriation as a tax deductible loss? Is it customary for the accounts of such companies to be audited by his inspectors to ensure that taxable income, for instance, in those years I referred to, was in fact overstated by the amount of the misappropriated funds? If not, will he confirm that this action will occur?
-In asking that question, the Leader of the Opposition exhibits total misunderstanding of my responsibilities in respect of the administration of the taxation Acts. Of course, I have not been apprised of the details of a particular taxpayer’s financial affairs. I hope every member of this House would believe very strongly in the preservation of the secrecy provisions of the taxation Acts. I am astonished that somebody who once had ministerial responsibility in this area should ask such a question. The Leader of the Opposition asked me whether, in respect of my responsibilities for the administration of the Taxation Act, information regarding an individual taxpayer had come into my hands. The answer is no. I will investigate the other parts of the honourable gentleman’s question to see whether any appropriate response consistent with my responsibilities and powers can be given.
-My question which is directed to the Minister for Health concerns the Minister’s recent announcement on health insurance arrangements and the Press coverage of it. Is it a fact that when bulk billing is abolished for all but pensioners with pensioner health benefit cards and their dependants, other people will have to pay their doctor in cash at the time of treatment and meet the full cost of medical benefits? Further, when will the Government negotiate with the States on hospital bed charges?
-The answer to the first part of the question is no. Of course certain honourable members on the other side of the House would try to terrify some disadvantaged people into believing that with the abolition of bulk billing they will have to have cash in their -
– Why don’t you go to a doctor’s surgery and look at its size? Then you would not talk this nonsense in the House.
-The honourable member for Port Adelaide will cease interjecting.
– Why does he not tell the truth?
-The honourable gentleman will cease interjecting or I will deal with him immediately.
– Perhaps the honourable member should have a sedative prescribed for him.
-The Minister will not refer to the interjection when I am calling the member to order. It only encourages further interjections.
– I repeat, for those who did not hear my comment, that certain members of the Opposition are engaging in a campaign to try to terrify certain disadvantaged people in the community into believing that they have to have cash in their pockets in order to go to a doctor’s surgery to get attention. That is nonsense. People will go to the doctor’s surgery and, when the service has been rendered, the doctor will provide that patient with an account. That patient will refer the account either to Medibank or a health insurance fund, and a ‘pay doctor’ cheque will be sent.
– You must believe in fairies.
-Order! If the honourable member repeats that interjection he will be allowed to go out and look under his own pillow. I would ask the House to settle down and listen to the answer. The matter is very important to hundreds of thousands of Australians. I therefore call upon members on my left to listen to the answer. If they disagree with it they will be able to use the forms of the House to express their disagreement. It is not a form of the House to maintain that continual row.
– I take a point of order. The interjections are provoked because there is some doubt as to the validity of what the Minister says. Could the Minister include in his answer the names and addresses of the doctors who will give the service that the Minister is now telling the House will be given.
-There is no point of order.
-I repeat that the ‘pay doctor’ cheque principle will apply as it has done for some considerable time. Some 1.68 million people, including pensioners and their dependants, will be excluded from the abolition of bulk billing. I am certain that the majority of the medical profession will continue to treat each case according to its circumstances. If a doctor feels that a patient is unable to meet the gap, I have no doubt that he will not ask for the gap, as he does not ask for it at the present time. Let us be quite frank about the situation. The majority of doctors in the community do not bulk bill, so we are not talking about a very large percentage of people who will be affected by the abolition of bulk billing. Quite frankly, I think it is idle to say that the abolition of bulk billing will bring great hardship on people in this community.
The other part of the honourable member’s question related to hospital bed charges. The Government does not intend to proceed to consider any increase in bed charges for hospitals in Australia until such time as it has been able to conclude its negotiations with the States about the rationalisation measures that were announced in my statement to the Parliament this week. Furthermore, we believe that we need to investigate the desirability of having a uniform benefit level for bed charges throughout Australia. There are quite distinctive differences in bed charge costs as between the States. For instance, the estimated cost of a bed for 1977-78 is $ 1 1 1 in Queensland, in South Australia it is $144, and in Western Australia it is $159. So there is a great variation between bed costs in the States, and indeed within the States, and the Government wants to discuss with the States a new basis upon which to strike a charge for bed costs. Until we have had satisfactory negotiations with the State governments there will be no thought on the part of this Government of increasing bed charges. As to the Press reports this morning that they will in fact be increased in the Budget, that is pure speculation. It is not in the mind of the Government.
-I ask the Minister for Immigration and Ethnic Affairs: Does he appreciate the embarrassment suffered by honourable members on both sides of the House when they are approached by illegal immigrants who have overstayed their visas in Australia and been directed by his Department to leave? In view of the continuing flow of illegal immigrants from Vietnam, will the Minister consider allowing another brief amnesty to illegal immigrants now in Australia who meet normal immigration qualifications?
– I must say that I find it difficult to imagine the honourable member being embarrassed in any circumstances. Apart from that, there are a couple of points that I would like to make clear. In Australia, as in all other countries, there are at any one time a number of people who come into the category of illegal immigrants- they have overstayed their visas or they may have entered illegally- and a number of them seek the advice of members of parliament. I get a great number of representations about this situation from honourable members on both sides of the House. However, leaving that aside for the moment, let me make one thing absolutely clear: The people who have made trips to Australia in small boats are not illegal immigrants. They have made unauthorised trips to Australia but as soon as they arrive they are processed in the normal way and are given valid entry permits, so they are not illegal immigrants. There is a real distinction between those unauthorised arrivals and people within the community who do not hold valid entry permits.
Many people would seek a further amnesty and I have considered this matter very deeply. Let me just put the arguments to the honourable member and the House. A great number of people- more than 300,000 people in any one year- in the world at present seek to come to Australia as migrants and they go through the normal, proper channels. There are people within Australia who seek to circumvent the normal migration procedures and thereafter seek to gain advantage from that. I think we should not advantage people who have broken the law as against those people who seek to stick within the law. The amnesty in 1976 was announced for a particular reason, the reason being that the easy visa scheme which was brought in under the Labor Administration -
– It was a tragedy.
– It was a tragedy; the honourable member for Newcastle is absolutely right. I am grateful for his interjection. It was a tragedy. The amnesty in 1976 was brought in to deal with that particular situation. I made it absolutely clear at the time that there would not be a further amnesty. I have considered representations put to me on a number of occasions. If there is any hint of a future amnesty the word gets overseas very quickly and we find unscrupulous people overseas advocating and encouraging people to visit Australia and not tell the truth about their visit in the hope that there will be a further amnesty. I want to make it absolutely clear that I am not considering a further amnesty and I do not see the reason for one at present.
– Is the Minister for Employment and Industrial Relations aware of the problems being created for Community Youth Support Scheme administrators by the long delay in the introduction of the 12-month approval period, first announced by the Minister on 23 March this year? In particular, what can be done to assist the large number of CYSS groups in Victoria that responded to the Minister’s announcement by making submissions for a 12-month period beginning 1 July? Is he aware that they have all been advised that submissions for funding on a six-month basis only will be accepted and that, unless all these submissions are approved at the State committee meeting on 9 June, their funding will lapse? Can the Minister reassure these groups that funds will not be allowed to lapse and that 12-month funding will be introduced as soon as possible?
– I am aware that the delay in issuing the new guidelines for the Community Youth Support Scheme has created some uncertainty in the minds of those people who are involved in the scheme. However, some delay was inevitable because the new administrative arrangements which I announced some time ago had to be discussed with the various State committees so that appropriate new guidelines could be issued. I am happy to tell the honourable member that that process is almost finished and the new guidelines are expected to be released very early in June. Even though the detailed guidelines have not yet been issued, the State committees have power to approve the continuation of projects for up to 12 months, provided of course that the requisite information is available and the committee is satisfied that the situation in the community concerned and the success of the scheme in helping unemployed young people warrant this extension. I make it quite clear, if it was not clear to the honourable member from that comment, that that approval for a 12-month period applies to continuing projects only. New projects will be approved only for a period of six months so that a proper assessment can be made as to whether they are meeting the criteria of the scheme.
In relation to submissions made by local Community Youth Support Scheme committees for 12 months funding starting from 1 July, I can say that provided the required information is made available and the submissions are received at the Victorian regional office of my Department before Friday, 2 June, such submissions can be considered by the State Community Youth Support Scheme committee which will be meeting later in the month. In these circumstances, any local CYSS committee which has made a submission for a continuation of a project need not be concerned that the application may not be successful merely because the detailed guidelines have not yet been announced.
– For the information of honourable members I present the report of the Australian delegation to the 32nd session of the United Nations General Assembly held in New York during the period 20 September 1977 to 2 1 December 1977.
– For the information of honourable members I present the monthly report of the Darwin Cyclone Tracy Relief Trust Fund for April 1978.
-I raise this matter with your indulgence, Mr Speaker. Will you inform the House whether any further developments have taken place relating to the announced Cabinet decision on accommodation within this building and arrangements for changes in the accommodation?
-I am not aware of any announcement of any accommodation changes or any decision taken by Cabinet. The position in relation to accommodation is that all members of the House of Representatives, as I have indicated before, for the first time in history now have a room to themselves. There is need for much more accommodation. This matter is being examined by the Presiding Officer in the Senate as well as by me and our officers. Certain recommendations have been put to the Executive for its consideration. Let us understand this: While the building is under the control of the Presiding Officers, the provision of funds for any extension to the building or to build any new building remains with the Executive. Likewise, we may ask for buildings which are owned by the Executive and which are within the disposal of the Executive when they are free. If the Executive agrees, they would become parliamentary property and would be under the control of the Presiding Officers. I think there is an urgent need for decisions to be taken. I am not aware of any decisions having yet been taken by the Executive. I intend shortly to ask the Executive for the result of their consideration. I believe the matter is urgent. I indicate to the honourable member for Corio (Mr Scholes) that the Joint Committee on the New and Permanent Parliament House will be reporting next week. While that is a separate issue because it does not relate to immediate accommodation, it is a matter which must be taken into account generally.
– With your indulgence, Mr Speaker, I ask that when you have a reply from the Executive you circularise members of this House and of the other place with the range of options which are available to you and to the Presiding Officer in the other place so that honourable members may have an opportunity to express what options they feel would be most satisfactory.
-I have discovered that a committee of two- that is, the President of the Senate and myself- reaches decisions much more quickly than a larger committee.
-Mr Speaker, may I raise another matter of procedure in this House. What are the rules concerning attendance of Ministers at Question Time? There were a number of gaps on the front bench today, including that left by the Minister for Industry and Commerce. I wondered whether any new rule had been notified to you.
-I do not appreciate the honourable member for Adelaide using my indulgence to make a political point. I give indulgence for an honourable member to make clear anything on which he has been misrepresented or to raise a matter on which he seeks guidance. The honourable member knows that the matter he raised is a political issue. I do not appreciate him using my indulgence for that purpose. The attendance of Ministers in the chamber is solely a matter for individual Ministers. It is their responsibility and they are accountable to the Prime Minister. A Minister is also a member and all members are accountable to themselves and to the House generally for their actions.
-Mr Speaker, I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– You may proceed.
-I have been widely attacked and my integrity has been impugned for having raised the issue of the disappearance of relevant archives, particularly records of trials leading to the hanging of New Guineans by the Australian Army during World War II. On 4
May the Minister for Home Affairs (Mr Ellicott) provided a comprehensive answer to my question on notice number 879. I proposed to raise the question of the archives in the debate on Appropriation Bill (No. 3) which was debated on -
-Order! I should explain to the honourable member for Lalor that if he wishes to make a personal explanation about a misrepresentation he is required first to state what is the misrepresentation. Having established that it is a misrepresentation, he may then state what is the truth, but he has no right to debate the matter.
-Mr Speaker, the misrepresentation was the false allegation last night that there had been an attack on me in the Papua New Guinea Parliament by the Papua New Guinea Minister for Defence. I had assumed that the security and integrity of our national archives would have the support of all honourable members and that there would be no difference between the Liberal Party, the Australian Labor Party and the National Country Party members on this issue. It was not until the attack on me last night by the honourable member for St George (Mr Neil) that any politician had injected political controversy into this difficult subject. This is deplorable. Does anyone defend the disappearance of the archives? I do not think so.
The starting point of the attack by the honourable member for St George was the statement alleged to have been made in the Papuan New Guinea Parliament by the Minister for Defence, the Honourable Louis Mona, M.P. I advise the House that this statement was never made. The Minister was due to make a ministerial statement on the matter last Tuesday and the proposed text was released in an embargoed form. The Australian, together with other newspapers, received copies of the proposed statement. However, Mr Mona rejected the material which had been prepared, presumably because he felt, as I did, that it was ‘silly’. When his Parliament met on Tuesday he did not proceed with his statement. This is the reason why no other Australian newspaper printed the alleged ministerial statement. The Australian alone broke the embargo. In a front page story in the Australian of Thursday, 25 May it says that Mr Mona attacked me ‘last night’that is, on Wednesday night.
– On Thursday night.
-No, on Wednesday night. Yesterday’s newspaper refers to a statement ‘last night’, that is to say, Wednesday night. The Papua New Guinea Parliament did not sit on Wednesday. When the Papuan New
Guinea Parliament resumed on Thursday Mr Mona did not make the proposed ministerial statement then either. Mr Mark Baker, the correspondent for the Age in Port Moresby, confirmed this when I telephoned him last night. I congratulate Mr Mona on his good sense. I cannot say the same thing for the Australian which has revealed an alarming credulity on the subject and has been persistently inaccurate in its reporting. My reference to the possible destruction of archives in six different locations by ‘programmed silverfish’ was intended as irony, a quality unfamiliar to the reporter from the Australian or to the honourable member for St George who, I notice, is not in the House. I point out to the honourable member for St George that if he attempted-
– Order ! The honourable gentleman cannot point out anything. He is now debating the issue.
-If the honourable member for St George attempted to lead evidence like this at the Bar he would be struck off the roll.
-Order! I have indicated to the honourable gentleman that he cannot debate the subject. He has stated the misrepresentation. He has now made the correction. I think he should leave it at that.
-There was an additional misrepresentation that I wanted to correct.
-Archbishop Sir Philip Strong, formerly Bishop of New Guinea and later Primate of Australia, was widely quoted after he appeared on This Day Tonight and said that my action in raising the issue was ‘mischievous’. In a letter dated 16 May the Archbishop wrote to me as follows:
At the end of my interview I expressed to those who had interviewed me my regret at having used that word and my hope that it might be deleted from the transcript. Evidently it was not found possible to do this and I am sorry about it. I do therefore apologise to you for using the word ‘mischievous’ and I assure you that it was in no way meant to be a personal attack and do regret any wrong it may have done you.
With my best wishes,
Philip Strong, A/bp.
In conclusion let me say that I do not believe in the infallibility of human judgment- my own least of all.
-Order! I ask the honourable gentleman to resume his seat.
– by leave- I deal in this statement with the consular services provided for Australians overseas. This is a major function of my Department and of our overseas posts. Together with the issuing of passports in Australia, it is the principal across-the-counter service of the Department. Recent and prospective growth in the consular workload and the notoriety of several current and regrettable cases overseas make it timely for there to be a ministerial statement. Australia does not have a separate consular service or a distinct consular stream in its foreign service. It is, however, our aim to train a larger number of experienced consular officials. The other side of overseas representation work, international negotiations, political and economic reporting, export promotion, migration, information activities and the many aspects of representational work, make more recognised contributions to the national interest than routine consular work. But it is the routine consular work which, for the Australian public, is the immediate and tangible benefit of the overseas representational services.
There have been dramatic developments in the volume and nature of consular work in the past two decades. These developments have been world wide and closely related to the increase in travel. No developed countries have escaped increases in their consular responsibilities. Basic consular services are not optional. They are essential. If our own consuls are not in a position to act, others must act for us. Clearly we cannot respond by proxy to the one million Australians already going overseas each year. The number of valid Australian passports on issue is nearly 1.7 million.
It has been assessed that Australia stands on the verge of a travel explosion. According to travel projections, in less than ten years’ time some three million Australians will be leaving Australia each year for overseas destinations, an increase of more than 200 per cent. Obviously I applaud and encourage such a development. What better force for international understanding than the first hand knowledge of other countries cultures, aspirations and problems which can result from such travel. As well as increased traffic, there have been other changes. Twenty years ago most Australians who travelled abroad made their destinations Britain and western Europe. Australians now travel more widely around the world and by air rather than by sea.
The character of today’s travellers has also changed. More than 50 per cent of Australians who travel abroad are under the age of 30 and a substantial proportion of the remainder are in their advanced years.
Unfortunately some of our nationals behave overseas in ways that would not be acceptable in Australia. The increase in Australians being arrested overseas for drug offences in particular is a matter of great concern to the Government on consular and other grounds. Although the majority of these unfortunate arrests occur in South East Asian countries the problem is by no means confined to that area. Our consular resources are coming under identifiable strain as a result of narcotics offences alone and I have given detailed personal attention to the administrative consequences of significant numbers of arrests of Australians overseas. Amongst other considerations we cannot afford to have the services available to law-abiding Australians overseas curtailed because our consuls are preoccupied with the problems of those arrested.
This increase in arrests coincides with stiffer penalties for drug offences. Long prison and death sentences, which might become mandatory, have been introduced in countries close to us, such as Indonesia and Malaysia, the very countries many younger Australians are more inclined to visit. Increased offences mean an increase in the number of prison visits, arrangements for bail and legal representation, attendances at hearings, communications with family and, if the person arrested is imprisoned, a continuing interest in his or her welfare, sometimes for many years, under arduous prison conditions. Alongside a reasonable consular concern and natural sense of compassion for those convicted and punished overseas, there must, however, also be a balanced view of the significance of many of these drug offences. We cannot condone, and indeed can only condemn, the actions of those proven to have played a part in drug trafficking.
At the Commonwealth Heads of Government Regional Meeting the Government made a new commitment to examine the possibilities of further regional co-operation to suppress the illicit drug traffic. It is very welcome to us that Malaysia is convening the working group on illicit drugs set up for that purpose. We shall participate fully in the work of the group as we do in relation to other international measures in this field. In this connection I draw to the attention of honourable members the recent useful visit by the Director-General of the United Nations Fund for Drug Abuse Control. In relation to drug offences, and generally, we have sought to take the preventative measures open to us. My Department issues with each passport a booklet- Hints for Australian Travellers- outlining difficulties and dangers inherent in travel overseas. I am pleased at the publicity the Press has given to the contents of this booklet. Many of Australia ‘s major newspapers are continuing to perform a public service through thoughtful and helpful articles on consular problems documented by actual case histories known to my Department. This publicity will assist the Government in its efforts to prevent the more avoidable occurrences and make Australians realise that they can turn to their consulates in times of genuine need.
More and more Australian travellers fail to make proper arrangements to purchase return tickets, to cover risks through insurance or to take adequate funds with them. Last year over 700 Australians had to be helped and sometimes repatriated at public expense. Repatriation is approved only as a last resort on the basis of an undertaking that all costs will be repaid and much of this money is recovered. This provision is exercised strictly but compassionately. The amount of public funds used for distressed Australians has remained fairly constant in the last five years, rising only in exceptional circumstances such as the emergency in Cyprus. The funds necessary will however inevitably increase.
I mention next the problems of dual nationality. Many migrants who are naturalised Australians, or in some cases their children who are natural born Australians, may be regarded by their country of birth, or their parents birth, still to be citizens of those countries. Such dual nationals can be subject to laws of the country of their first citizenship, who may claim jurisdiction over them in such matters as military service or taxation. My Department, and the Department of Immigration and Ethnic Affairs, attempt to make dual nationals aware of the problems they might encounter on return to their country of birth.
Assistance to dual nationals, however, necessarily becomes a growing part of consular work as more foreign bom Australians return to visit their former homes. The problems of dual nationals cannot be overcome by citizens simply asserting that they do not accept their other citizenship. In some cases formal acts of renunciation are possible, but in other countries, no such provisions exist; the requirements should be carefully established in advance. It is for the individual to ascertain and bear the consequences of coming within the jurisdiction of another country which claims his or her citizenship, whether the individual, or the Australian Government, recognises that claim or not. Our consular officers can advise, but beyond a strict limit, they cannot assist when, in these circumstances, the jurisdiction of another country is being asserted.
My predecessors have not placed on record a general description of Australian consular functions and services, and although there are some difficulties of definition, I believe it would be helpful to do so. Broadly speaking, they fall into two parts: The provision of notarial and documentation services, and the protection of Australian citizens. The first requires that Australian consular officers perform functions including the following: Notarial acts, oaths, affirmations and declarations such as the authentication or legalisation of various documents, from wills and contracts to school certificates and driving licences; the issue and renewal of passports and visas; the solemnisation and registration of marriages; payment of or advice on social security provisions including medical benefits; advice on the importation and registration of motor vehicles; advice on acquisition or loss of citizenship, particulary on dual nationality problems; provision of information on Australian Customs’ requirements; the provision of facilities for voting in Australian elections overseas; the administration of regulations arising from the Navigation Act in regard to seamen; liaison with overseas legal authorities on instructions from Australia to arrange extradition; advice on exchange control and currency matters for personal or investment purposes; serving of writs and taking evidence; advising visitors to Australia of health and quarantine requirements and reporting on outbreaks of diseases in foreign countries.
The second part, consular protection, arises from international practice of sovereign states recognising an obligation to protect the civil and legal rights of their citizen when abroad. An important consular duty is to ensure that Australian citizens arrested overseas are treated with due process in accordance with the laws of the state where the offence may have occurred and that they receive the same benefits of the law which the foreign state affords to its own subjects. We must ensure that an Australian arrested overseas knows his rights under local law and how to obtain legal assistance if he wishes it. Protection services also include assistance arising from the deaths of Australians abroad, including funeral arrangements, return of remains to Australia and the protection of estates and property willed to
Australians. In addition to its internationally accepted obligations the Australian Government provides a range of services which are designed to assist Australians in trouble and distress of various kinds and which come, generally, within the scope of protection work. This assistance includes: Inquiries relating to the welfare and whereabouts of Australians; repatriation and financial relief of distressed Australians in the form of a repayable loan as already mentioned; welfare visits to persons in gaol, hospital or in an asylum; assistance in natural disasters or emergencies; and making available to Australian citizens who have been arrested a list of local lawyers who may be able to assist them.
I have spoken in general terms of the wide range of these duties because of the difficulty of drawing lines beyond which protection will not be provided. The standards to be applied may differ from country to country depending on such factors as language and cultural differences, the opportunity for self-help and the local availability of social, charitable or welfare services. In the interests of economy and efficiency, my Department will seek to limit approved assistance while at the same time preserving the consul’s flexibility to respond to individual human problems. Obviously not every limitation encountered in our consular services will be the result of economy measures. Indeed the investigation of complaints frequently reveals that assistance has not been provided either because it is prohibited under international convention or practice, or because the matter could be adequately dealt with privately, without official help. There is in fact something of a natural tendency for those overseas not to seek private assistance, for example the advice of a local lawyer, and to appeal instead for official help.
As I stated earlier, not only are more Australians travelling overseas, but they are visiting a wider range of countries. It follows that, increasingly, there are requirements for assistance in places where we have no Australian consular office. Where the United Kingdom is represented and we are not, and it is not practicable to send in a consular officer, or the case needs continued attention, we have long turned to British representatives for consular assistance. I pay the warmest tribute to successive British governments and to the numerous British consuls, who have traditionally extended such assistance to Australians. A great many Australians owe the United Kingdom their thanks on this score, and I here express their cumulative gratitude. This service so far has been offered freely. We must, however, count on it being contracted in future and plan on the basis of assuming greater responsibility for our own people.
Consular sharing, or the rationalisation of consular services between several countries is, on the face of it, an attractive proposition. There are however, issues of sovereignty and conflict of interest inherent in this kind of arrangement. The possibility of greater use of locally-engaged staff is limited by the provisions of the Vienna Convention on Consular Relations. The question of honorary consuls is one that has been examined but on which no definitive view has yet been reached. Although such appointments can be of help in tourist resorts or in ports where shipping and related cases are likely to occur, there are problems innate in the practice and, of course, there would still be some costs to be borne. On whatever basis, the prospect is for expanded Australian consular services in more centres at inevitably increased costs, not to provide a travel service for a privileged few, but in order to provide a truly public service for a large and growing proportion of the Australian people. I remind the House of the projection of 3,000,000 Australians travelling abroad annually in less than ten years’ time. Other countries expect us to look after our nationals. Only second class countries ignore their citizens in time of need. Our geography is such that, with the exception of a few destinations, when an Australian travels overseas, he travels far. We do not just cross one of a number of contiguous borders in our own cars as in Europe. When we do travel in our own geographic region we do so in most cases to countries of very different cultures and levels of development.
There have traditionally been charges for many of the consular services we provide overseas. It will be recalled that the report on Australia’s Overseas Representation’ by the House Standing Committee on Expenditure, tabled on 2 June 1977, included a recommendation that the Government give serious consideration to means of minimising the impact of the huge growth expected in overseas travel by Australians in the coming decade, and in particular to the feasibility of recovering the costs of appropriate consular services provided by our embassies, high commissions and consulates, by charging for them. As the House was informed on 12 April this year the recommendation has been accepted and my Department has in hand a study of the range of and charges for consular services. The issue of passports is one of the major aspects of consular work. In a statement on 2 March 1978 I indicated that the Government had reviewed its policy and procedures for passport issue. As an outcome of that review I will at the appropriate time introduce important amendments to the Passports Act. At this point I wish only to note that the possession of an Australian passport is proof of entitlement to consular services. Many travellers value it more properly when they face difficulties overseas. It is because of this direct relationship that the costs of consular services can be offset to a large extent by revenue generated by passport fees.
A substantial part of the consular work detailed in this statement is routine. But much of it is critical and immediate. We must have the means to respond to an anxious parent in search of a missing child, to a pensioner whose social security benefits have been erroneously held up or in the aftermath of a disaster involving Australian citizens overseas. Because young Australians are arrested in another country with marijuana in their possession, are they to be treated as pariahs and offered no consular assistance on gaol conditions that they may find physically and emotionally unable to tolerate? In all the circumstances I have outlined, the Government has an inescapable responsibility to provide and plan for a growing range of consular services. Resources must be found notwithstanding requirements to contain expenditure and to maintain reasonable staffing ceilings. In our passport we ask other Governments to allow our nationals ‘to pass freely without let or hindrance and to afford him or her every assistance or protection of which he or she may stand in need ‘. We can ourselves do no less.
I present the following paper:
Consular services provided for Australians overseasMinisterial Statement, 26 May 1978.
Motion (by Mr Adermann) proposed.
That the House take note of the paper.
– The Opposition welcomes the statement made by the Minister for Foreign Affairs (Mr Peacock). It is a timely statement of some length and it mentions the great problems facing Australians when they travel overseas. It clearly indicates that the problems will increase. The Minister correctly says that many Australians now are travelling, many of whom are young and many of whom are elderly. He forecasts that there will be an increase in travel of 200 per cent in the next 10 years and it is deemed that fifty per cent of the travellers will be under the age of 30 years and that the greater proportion of the remainder will be in the pre-geriatric age group. Obviously we will have problems in this regard from the point of view of the young people and also from the point of view of the elderly, whose problems are more likely to be in the health area.
We are anxious to support the Minister’s statement. It appears from the last paragraph that this is a preliminary Cabinet submission which needs outside support and the Opposition is anxious to comply. The Minister says that he has outlined the inescapable responsibility of the Government and that resources must be found. All the signs are that something has to be done with Treasury and we can well understand that. From that point of view we say that there is a motivation and we would like to think that he could say that he has the Opposition’s support because in the public interest it needs that support.
However, I would like to deal with some matters to which I do not think the Minister has addressed his mind in the detail that we would like. The Minister has told us about the problems. I want to summarise some of the points that he has made. He made the point, with which the Opposition does not disagree, that the consular function is valuable and that it has not been given due recognition. He said that the consular service requires more staff and it certainly requires more financial resources. It appears pretty clear that Cabinet has not approved of any of those matters as yet. Of course, the question is whether Australians will be charged more fees. At this stage, we are not too clear about what those fees will be. We welcome the fact that the Minister rejects some of the ideas of Sir Henry Bland- for example, that Australia should be represented overseas by Great Britain as an economic measure. We thank the Minister for rejecting that.
Let me comment on some of the difficulties in respect of consular functions. As members of parliament, we all are aware, particularly from our constituents, of the extreme importance and value of these functions. All members of parliament have constituents travelling throughout the world, and they express to us from time to time their appreciation of the services that have been rendered. Also from time to time they tell us of many difficulties that they experience which perhaps in some respects we are not able to deal with adequately. But it is important that we recognise that the consular service is a 24-hour- a-day job, 7 days a week, by the very nature of the services which have been outlined at length by the Minister. The staff have performed their functions very well. They do not always receive thanks or recognition. It would be even more appropriate if the Government were able to say today that it had identified the problem. I am advised that the problem is along these lines:
The consular function and the consular personnel in the Department of Foreign Affairs are treated virtually as a second stream- a lower grade- compared with that ‘high grade’ group that will be the ambassadors of the future. The personnel who make up the consular and administrative side of the Department of Foreign Affairs represent less than five per cent of the top structure of the Department. They represent less than five per cent of the Second Division. We hope that recognition of the consular function will mean that there will be recognition of the real value and worth of the people involved in it.
I am advised that in the early 1970s there was an integration in the salary relationship between the consular and diplomatic staffs. But that is all that happened. There are two streams within the Department: There is the A stream and the B stream. The poor old consular group comprises the B stream. It is important that we should do something about this problem because other governments have done something about it. Other governments operate successfully without this sort of class distinction within their departments. It seems to be pretty evident from the Minister’s statement that his Department is more overloaded with people doing what we might call the political and economic reporting than with people who are able to deal with the problems of Australians overseas. Extra resources need to be provided and there needs to be a reallocation of resources. We ought to be giving our junior diplomatic personnel experience in a wider field. It is important that they should deal with the human side of life. As in the case of medical practitioners, it is important that they should have the ability at the commencement of their profession to understand what the human problems are. They should not just go into the rarefied A stream without first having to think about the problems of their fellow men. I think that this is a weakness of the present system. The Department of Foreign Affairs could benefit if more of its diplomatic staff stepped out into the normal atmosphere of life and dealt with the problems of people as we as politicians understand them.
Let us look at some of the other matters that the Minister raised. It seems that the Minister is having to face up to a problem concerning the present arrangements that apply to his Department. I think that he is confronted with the difficulty of having to deal with the Prime Minister (Mr Malcolm Fraser) in many areas, from the point of view of what is important and what is not important. It apppears that the Prime Minister in many cases is taking the running from the
Minister. We do not altogether approve of that. We think that the Minister can do an admirable job in many areas, and I say this on behalf of the Opposition: We do not want to see that sort of atmosphere preventing the Minister from getting the right sort of allocation and the right sort of impetus in respect of this report when it goes before the Cabinet. I make that statement on this basis: We think that the Minister can adequately represent Australia in any aspect of world affairs, although the Opposition could do that better than he does. Nevertheless, the fact is that we do not want to see the Minister supplanted all the time by the El Supremo on the Government side. When the Minister goes before the Cabinet on this matter, he will do so with the knowledge that the Opposition is anxious to assist him in that regard.
I wish to raise two other matters. They relate to the very fundamental points which the Minister mentioned. I refer to the problems that Australians face, particularly in the drug addiction field. Those of us who are interested in the matter know this as a recognised fact: It is obviously important that we should tell our young people when they go overseas or are about to go overseas of the enormous penalties they can faceeven death- in respect of drugs. The Minister has adverted to that matter adequately and properly. But it must be mentioned again. We cannot readily prevent the laws of other countries from being applied to these people. I welcome the fact that more publicity is being given to this matter. There would be nothing more tragic than to think of Australians being executed or given life terms of imprisonment in respect of this drug addiction problem which is basically a medical one. Not all the people involved in it have been interested only in obtaining money. As we know, in many cases they are addicted to drugs and are drug pushers. They have to sell some of the drugs to other people in order to obtain more money. A medical problem is involved. We cannot solve it and we are not likely to solve it unless we have a better understanding of it. Governments in other countries will continue to impose harsh penalties. Of course, it is very significant that the harshest penalties are imposed in the countries where the drugs originate. Perhaps we can accept that situation. But our young people are involved. The position will become worse and we must be more active in alerting them to the very basic problems of what this matter is all about.
In Australia, we must try to set an example in dealing with the drug problem. We cannot do this by imposing gaol sentences or massive fines as a deterrent because the person concerned may be in need of medical treatment.
– We should look at their bank accounts.
-As my helpful interjector says, in many cases we can trace the person involved by looking at where there is an accumulation of assets. I will not go into that except to say that we do not want to pass over the problem of drugs because many people in Australia at this stage are very aware of it. The question of how it is to be dealt with often becomes a hot political potato. In our view, we are not dealing with the real issue, that is, that the people involved need medical assessment and an understanding of their responsibilities.
Let me also remind the Minister of a matter that the honourable member for Prospect (Dr Klugman) has mentioned to me. Many Australians travelling overseas, particularly because of their age, often undergo hospitalisation which they do not welcome. For example, I am told that in the European Economic Community countries hospital bed costs amount to $140 a day. The only Medibank or medical fund refund that can be received is $40 a day. There is a gap of $100 a day. I am told that the services are applied strictly on the basis that the money has to be paid virtually in advance of the hospitalisation. Perhaps we could think about this matter and talk about how some more effective arrangement could be made which covers the hospitalisation of Australians overseas. If this is not done, many of them will be in real trouble. It could not be expected that this sort of finance would be available unless satisfactory arrangements were made in advance. I thank the honourable member for Prospect for drawing that matter to my attention.
I state in summary that the Opposition welcomes the statement. We understand that some legislative arrangements will be made in respect of the Passport Act. We await that submission and we wish the Minister well in his endeavours to obtain the resources that he needs.
- Mr Speaker, in a few moments I want to put the position on the other side of the coin to the Minister for Foreign Affairs (Mr Peacock). One of the weaknesses of our system -
-Order! The honourable gentleman is not entitled to the call.
-The call is on the other side of the House.
Debate (on motion by Mr Hodges) adjourned.
-Mr Speaker, you interpreted my intervention earlier about ministerial attendance at Question Time as a political one. I am sorry that I gave that impression. I want you to know that it was and should be a tradition of this House that Ministers attend all Question Times until the House decides otherwise. I felt that only you, with your authority, could uphold this tradition, and I felt that perhaps the appropriate opportunity had arrived to do so. Perhaps the new development is a result of the four-day sitting week. I simply draw this matter to the attention of the House.
-I gave the honourable member for Adelaide an opportunity to make clear his intention. I follow it up by saying that I believe all Ministers should- and I believe they do- attend the House, especially at Question Time, on those occasions when they are able to do so. But it does necessarily follow that there will be occasions when a Minister, in the execution of his duty, needs to be absent. Indeed, this morning the staff of a Minister contacted me to inform me that the Minister could not be in the chamber because he had a duty to perform. One must expect that on occasions Ministers will not be able to be present. But, as a general rule, I expect all Ministers to be present at Question Time.
– For the information of honourable members I present the report of the Aboriginal Land Commissioner made to myself and to the Minister for the Northern Territory (Mr Adermann) on the Borroloola land claim. I seek leave to make a statement in connection with the report.
-I draw the attention of the House to the fact that the report of the Aboriginal Land Commissioner I am presenting is the first report submitted by the Commissioner since the Aboriginal Land Rights Act has been in force. Members will recall that the Aboriginal Land Rights Act, which was passed late in 1976 and proclaimed on Australia Day 1 977, provided for the appointment of an Aboriginal Land Commissioner whose functions include the preparation of reports on applications made to him on behalf of Aboriginals claiming to have a traditional land claim to an area of land being either unalienated crown land or alienated crown land in which all estates and interests not held by the crown are held by or on behalf of Aboriginals. The Commissioner also has other functions, including inquiring into the likely extent of traditional land claims in the Northern Territory, the establishment and maintenance of a register of traditional land claims and to advise myself or my colleague, the Minister for the Northern Territory, in connection with matters which might be referred to him by myself or my colleague.
A leading member of the Western Australian Bar, Mr John Toohey, Q.C., having been appointed a judge of the Supreme Court of the Northern Territory, was appointed as the Aboriginal Land Commissioner on 7 April 1977. (Quorum formed). The Northern Land Council, on behalf of Aboriginals claiming to have a traditional land claim in the Borroloola area of the Northern Territory, submitted a claim to the Aboriginal Land Commissioner on 27 July 1977 and the hearings of the application began in Darwin on 27 September last and hearings continued in Darwin and Borroloola until 15 December. The Commissioner invited persons and organisations to appear before him and, as a consequence, apart from the Northern Land Council on behalf of the claimants, Mount Isa Mines Limited, Dampier Mining Company Limited and persons holding leases or licences on areas the subject of the claim or adjacent thereto, appeared before the Commissioner. As well, such organisations as the Northern Territory Commercial Fishermen’s Association, the Northern Territory Fishing Industry Council, M. G. Kailis Gulf Fisheries Pty Ltd, and the Northern Territory Cattle Producers Association appeared or were represented before the Commissioner and submissions were presented to the Commission by the Commonwealth and by the Department of the Chief Secretary of the Northern Territory.
The areas claimed covered vacant crown land known as the Borroloola Town Common which, as will be seen from the map in the report, surrounds the town of Borroloola, vacant crown land known as the Sir Edward Pellew Group of Islands and vacant crown land on the Robinson River pastoral lease which had been excised from the pastoral lease many years ago with the intention of creating an Aboriginal reserve. With the exception of a large portion of South West Island in the Sir Edward Pellew Group and the proposed Aboriginal reserve on the Robinson River pastoral lease, the Commissioner found that the claimants were the traditional Aboriginal owners of the land claimed. Concerning the exceptions, the Commissioner was unable to find that there were traditional Aboriginal owners.
The Commissioner has recommended that Vanderlin Island and West Island be granted to a land trust and that the unalienated crown land on the Borroloola Town Common be granted to a land trust. I have accepted the Commissioner’s recommendations and will, accordingly, establish these land trusts and will recommend to the Governor-General that a grant of an estate in fee simple for that land be made under the Aboriginal Land Rights Act to the land trusts as set out above. The Commissioner had to consider whether an occupation licence or a grazing licence constituted an estate or interest under the Act. Section 50 of the Act provides that the Commissioner may hear an application relating to land which is unalienated crown land. Unalienated crown land is, in the Act, denned as meaning:
Crown land in which no persons other than the Crown has an estate or interest.
The Commissioner, whilst indicating that in this particular case he did not need to determine the matter, expressed the opinion that ‘neither form of licence constitutes an estate or interest in the land and each, therefore, is unalienated crown land’. This matter has been considered by the legal advisers to the Government and consideration is being given to the views expressed by the Commissioner. The Commissioner gave consideration as to whether any grant of land in respect of the Islands should extend to the high water mark. Taking into account the fact that the Land Rights Act had provided for the low water mark as the boundary for land in Schedule I of the Act, the Commissioner has similarly fixed low water mark in his recommendations. I accept his recommendation.
I should point out to honourable members that two paragraphs in the Commissioner’s report, which give details of an agreement between Mount Isa Mines and the Commonwealth, have been deleted from the published document in view of the confidentiality of some of the material included in these paragraphs.
The Commissioner gave consideration to the need to provide access corridors across the Borroloola Town Common to provide for movement of stock and for any future requirements for the movement of minerals should the McArthur River deposit be developed by Mount Isa Mines. The Commissioner commented that these needs could be satisfied by the reservation of a strip, approximately one kilometre wide, to provide a transport corridor and to provide holding yards, et cetera. I have sought some further information on this matter and will make an early decision on the need for such corridors in the light of this further information.
I might add as a matter of interest to honourable members that the Land Commissioner is about to complete his hearing of the second claim to come before him- that of the Warlpiri people of the Tanami Desert. The claim covers the Tanami Desert Wildlife Sanctuary and unalienated crown land to the north and west of the Sanctuary, as well as a smaller area of unalienated crown land to the north of Haasts Bluff Reserve. Honourable members will see that the operations of the Aboriginal Land Rights (Northern Territory) Act are underway and continuing. In conclusion, I would indicate to honourable members that I would intend to table all future significant reports of the Aboriginal Land Commissioner for the information of the House. I present the following papen
Aboriginal Land Rights: Report on the Borroloola Land Claim, Ministerial Statement, 26 May 1978.
Motion ( by Mr Hunt) proposed:
That the House take note of the paper.
– On behalf of the Opposition I commend, as has the Minister for Aboriginal Affairs (Mr Viner), the report of Aboriginal Land Commissioner, Mr Justice Toohey, as a landmark determination and a review of a totally new judicial procedure. We acclaim the Minister’s promise to table such reports but we trust that he will be more prompt in doing so in the future. However, we have some misgivings over the deletion from the report of paragraphs giving confidential details, as the Minister describes them, of an agreement between Mount Isa Mines Ltd and the Commonwealth.
We hear frequent and strident complaints from members and senators on the Government side about who is running the country. Accusing fingers are pointed at unionists who are forfeiting all their pay to try to get an arbitration hearing or a conference, and charges of disloyalty are wildly laid on union leaders who are struggling night and day to persuade wildcat strikers to go back to work. Blame and abuse are hurled at Mr Bob Hawke and the Australian Council of Trade Unions although he and the ACTU have more than once ironed out major disruptive stoppages, sometimes with ugly and dangerous possibilities, which the Government sought only to foment by provocative, ill-informed comments from a distance. Her Majesty’s most loyal Opposition, when it happens to be a Labor Party in any parliament of Australia, is accused of irresponsibly wrecking the economy, the country, law and order and national security; yet Labor Party governments have done more than any conservative government, or its closest friends among the media, to set up schools, tribunals, conciliation and public awareness of the facts about who is running the country.
We have conservative governments making secret deals with major foreign developers, like Mount Isa Mines, Aurukun Associates, the Iwasaki-Sangyo company and others. Those companies are held to no guidelines as to the national interest by their great and powerful friends on our Treasury benches except for a few watered down guidelines inherited from the Whitlam Government and which were brought in against entrenched resistance. Let one Labor Minister so much as have breakfast with a foreign investor and the Press and the capital establishment which is now in the political saddle call for his blood, demand his demotion or haul him to court.
But here we have a secret land deal involving traditional Aboriginal land. The details of all Aboriginal plans and claims, even the sites of some of the religious sanctuaries, must be made public to achieve recognition. Yet the adversaries at law of the Aborigines are protected from the public gaze and the Press will probably do nothing about this but respectfully doff its cap and lower its eyes as befits a loyal serf.
The Commissioner has done his job well in putting Mount Isa Mines in its place and its claims in proper perspective. Let me quote a few extracts from pages 96 to 10 1 of the report on the Borroloola land claim. The first reads:
If any of the claims are acceded to it will make no difference to the activities presently carried on by Mount Isa Mines and in that sense no detriment will result to it. The company’s real concern lies in the facilities it will require if it proves worthwhile to develop the mine.
Further on it states:
The following comment was made in the report about the evidence of Mr Zorn:
Mount Isa mines cannot expect to launch a viable mining operation.
The Commissioner went on to say:
And I do not think the company would dissent from that proposition . . . the company is confident that at some time in the future … it will be able to go ahead. Clearly enough the future of the mine can be no more than a matter of speculation, particularly since no attempt was made by the company to counter Mr Zorn ‘s assessment.
After a quick glance through the report- it was made available to the Opposition only this morningthe only reference I found to the Bing Bong pastoral lease is on the map at the end. This is a highly significant omission. Because the Bing Bong pastoral lease is deemed at law to be an alienation of Crown land the Commissioner is unable to consider Aboriginal claims to it. But the Minister will be aware that the pastoral land is the choicest part of the Aborigines’ claim to both the pastoral lease and the unalienated land. It is central to their traditional land, and to that of other Aborigines. It is used by one of the widest networks of traditionally associated Aborigines in Australia.
The lease can be acquired by the Aboriginal Land Fund Commission, an entirely different mechanism from that adopted to acquire the unalienated land, as the report has outlined. I would welcome the Minister’s confirmation that he has approved moves by the Commission to acquire it. I also draw his attention to question No. 1307 which I placed on notice yesterday and which indicates how many vital questions remain unanswered. I believe that the Minister acted with some alacrity to give the Aboriginal Land Fund Commission authority to investigate a purchase after getting a letter this month, but this leaves grave doubs about the competence and dedication of someone in his administration. Mount Isa Mines, and the Aborigines, even earlier, both indicated their interest to the Government. That busy man, the then Treasurer, acted with commendable promptness to approve the purchase of Bing Bong by Mount Isa Mines, but apparently some people were derelict in their duty in not presenting much earlier the Aboriginals ‘ counter claim.
The area of Bing Bong is important. It is a coastal region which separates the islands, considered by the Commissioner, and which the Minister now accepts as being, land to which Aboriginals are entitled, from the Borroloola town common, which is the other part of the land acceded to Aborigines by the Minister’s statement and by the report. The Bing Bong area is the land used most intensively by Aborigines in the region. The acquisition of the area is fundamental to the success of land rights policy insofar as that policy has any socio-economic aims at all. I think the Minister would concede, if he reads the Aborigines’ case, that without Bing Bong they have less than half a loaf. That is the effect of the present decision.
The Yanyula and Mara Aborigines living at Borroloola, Ngukurr and Numbulwar have been interested in acquiring Bing Bong station since at least 1975. 1 think that if the Minister communicates with the Foreign Investment Review Board, the Aboriginal Land Fund Commission, with everybody who is concerned in this rather dilatory approach by some people to the acquisition of the Bing Bong station for Aboriginals, he will find that even as far back as 1973 there is something on his departments files about this area. The coastal area can provide a stable source of culturally valued and nutritious high protein foods throughout the year. Access to the coastal area cannot be obtained in the wet season without going through Bing Bong. Because of the unemployment in the wet season the Aboriginals are thrown into a pretty depressed financial situation and are dependent on the less nutritious store foods. This affects the health of the community. John Avery, who has been living in this area with the Aborigines for some years- he is an anthropology student- believes people have died as a result.
The choice Yanyula and Mara camping areas at Borroloola are flooded in the wet season and this restricts housing development. Bing Bong is the logical place. It is a choice site and it has been commercially developed to some extent by white people. Obviously it is the Aborigines’ choice for a settlement. There they could develop economic as well as subsistence activities such as a pastoral industry, fishing, crabbing, gardening- with the use of the bore water on the station- tourism, but under their control, and tourist fishing. Their religious and ceremonial activities are most important. This area is the centre of them. These uses have been keenly advanced by Aborigines. They see these enterprises as making use of the skills of young educated people. The present under-use of these skills is a cause of concern to them, and rightly so, as it is of concern to all Aboriginal people and as the Minister has conceded.
Relocation at Bing Bong would allow them control over alcohol, which is purchased from the Borroloola Inn. Obviously these problems are not going to get any less while the Aborigines feel constrained to stay in the Borroloola town area, subsisting all too often on store food, with no access to their traditional nutritious food and active way of life. Living in the town, the Aborigines feel there are unwarranted intrusions in that Europeans have interrupted ceremonies, entered their camps at night and even their dwellings, and molested women at times. The tourists in the area have a subtle and unpleasant effect on the lives of the Aborigines which surely could be better controlled if the Aborigines felt that they were masters of their own destiny and of tourist entry to the area.
The 87 people listed as traditional Aboriginal owners of the town common at Borroloola and the islands to which the report refers include traditional owners of Bing Bong station lands, and the traditional land rights as distinct from ownership usufruct of the land for various purposes, extend to a much larger group. They use the land as a natural resource and, as I have indicated, as a spiritual centre. There are owners of other territorial estates at Bing Bong which were not brought to the attention of the Land Commissioner. The Kunapipi estate on the western most part of the station is an area used for one of the most important cult ceremonies performed in the Gulf of Carpentaria, and indeed in Arnhem Land. The Goanna Dreaming estate, to the south and east of the Kunapipi estate, and other areas have been nominated. The acquisition of Bing Bong for local Aborigines would have farreaching and beneficial significance to Aborigines in western Queensland, the Barkly Tablelands and an area to the east, including southeast Arnhem Land. It would significantly strengthen the infrastructure of the wider Aboriginal community. If it is lost to Aboriginal control there will be a steady decline of Aboriginal social institutions and self-determination throughout the area.
A full survey of sites on Bing Bong has not been undertaken, but John Avery says that there are well over 150. Even those he has visited were too numerous to list in his seven-page statement. There is some probability that the Kunapipi cult originated in this area and spread westward to large areas of the Northern Territory, roughly about the time of European colonisation. So these sites may well have national historic significance. In the Land Council submission to the Land Commissioner, John Avery described 10 places on Bing Bong which were used extensively or frequently, and he detailed their uses. The most enduring camps were on the eastern side of Batten Creek and the Carrington River. They are not subject to the surveillance of the station caretaker and are some of the few sites the Aborigines feel safe to occupy while there is a caretaker on the pastoral lease. The subsistence activities and the exchanges which arise from them are the basis of the women’s society, which is able to mitigate to some extent men’s control of ritual life. Without the bush resources economy, as
John Avery has called it, the position of women in the community would deteriorate, and the assimilation of local Aborigines to the position of wage labourers would be advanced at the cost of a breakdown of community life.
The relocation of Aborigines at Bing Bong would allow a more even, flexible and ecologically sound use of the land. At the moment it is in the hands of caretakers rather than managers. It is a couple of years since there has been even one Aboriginal employed there. There are wild cattle and buffaloes and only a handful of high class stock. I am not casting doubt on the Minister’s motives. I believe that he will take up the points I have mentioned, but I think he will concede that in statements he made before he became Minister he spoke frequently of mineral rights. The more the phrase ‘mineral rights’ rears its ugly head, the more I am afraid that we will want prompt action to indicate that they will not override Aboriginal rights.
Debate (on motion by Mr Hodges) adjourned.
-Mr Speaker has received a letter from the honourable member for Prospect (Dr Klugman) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The increasing cost burden on the sick and the poor due to the Government’s further dismantling of Labor’s comprehensive Medibank scheme.
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-
-Before launching into the matter of public importance, I should like to refer to a statement yesterday by Mr Speaker that we are entitled to put subheadings into our speeches. Could I suggest to Hansard four sub-headings: ‘Government Attacksthe Poor’, ‘Government Attacks the Sick’, ‘Prime Minister Stands Over Minister’, and ‘Government Lies Exposed’. I do not mind where they are put in. I am sure that the Hansard staff is good at editing and will be able to put in the appropriate sub-headings.
This is not intended to be purely an attack on the Minister for Health (Mr Hunt) because I know that the Minister does not believe in the policy that he had to announce on Wednesday. We know that the Prime Minister (Mr Malcolm
Fraser) stood over him and insisted on this policy. It is interesting to note that the Prime Minister does not even allow the Minister to have his own Press Secretary attending his Press conferences and doing the work for him. He is accompanied by Mr Baurdino and Mr Gaul, Mr Baurdino being the representative of the Liberal Party, and the Minister does not even belong to the Liberal Party. That is an example of the Minister being completely under the thumb of the Prime Minister and the Liberal Party.
The statement by the Minister for Health was true to form. It was long on words and good intentions but short on substance. Our own claim that the Government is shifting the cost burden on to the sick and the poor is shared by many people in the community who normally do not support us. May I quote from a representative of the Australian Medical Association, in this case one of its most conservative representatives. Dr Hart, the State President of the AMA in Queensland said:
The Federal Government’s decision to increase the cost of visiting a doctor would inflict hardship on low-income groups, the chronically ill and those with large families.
Dr Hart also said that the changes would cause health care costs to rise in the long term. An editorial yesterday in the Age stated:
Their main effect-
That is the Government’s proposed changes- will be to shift some of the burden of health-care costs from the public to the private sector, from higher to lower income earners, and from those in good health to those who are sick. This is a notable retreat from the concept of a universal health insurance scheme that most Australians have approved.
This is also a fraudulent policy. For example, it pretends that there is no increase in the levy, but there is a real increase. The levy will continue after 1 July at the same rate as it is now. Yet for that levy a patient will get a return of only 75 per cent of his medical fees instead of 85 per cent. Obviously if he is paying the same amount for a lesser return there is a real increase in the levy. The Minister himself has argued that the funds should reduce their contribution rates by 46c a week. If the funds have to reduce their rates by 46c a week surely the levy should be reduced. After all, people are getting less for their contribution. The figures produced by the Minister are wrong, of course, and I will be interested to see whether he will finally produce some detailed figures. The reduction of 46c suggests a 10 per cent saving to private funds arising from a reduction of refunds. But Medibank paid out about $600m for medical fees last year, and a 10 per cent saving would be $60m. Why are we talking about only a $24m or possibly a $17m saving to the Government?
The documents which accompanied the Minister’s speech on Wednesday- I particularly refer to page 2 of a background paper called ‘Costs of Private Health Insurance’- contain fictitious figures, prepared by Mr John Gaul or Mr Bob Baurdino hopefully not by the Department because I hope that it is not involved in such fraud -suggesting a 46c reduction in medical insurance rates in every State, making it easy for the newspapers which would report it without checking it. After all, the reporters here are not the brightest. It was suggested that there would be a 46c reduction, from $5.75 to $5.29 in New South Wales, and the same reduction, from $3.60 to $3.14 in Western Australia. This obviously cannot be right. The gap is to be increased from 15 per cent to 25 per cent in every State. If the real cost of medical insurance is only $3.60 in Western Australia and $5.75 in New South Wales, obviously the reduction in medical insurance must be proportionate. It must be greater in New South Wales than it is in Western Australia. The figures supplied by the Liberal Party’s fraud squad- I do not mean ‘fraud squad’ in the sense of a State police force fraud squad which looks for fraud, but people who actually go in for fraud, such as Messrs Baurdino and Gaul- are obviously fraudulent. The Government is providing $750,000 to sell this scheme to the Australian public. Soon we will see advertisements with the Minister smiling happily telling the population at large what the changes mean. Some $750,000 will be spent to enable us to see the Minister smiling on television and in the newspapers. Maybe his photograph will not be used; maybe the photograph of the Prime Minister (Mr Malcolm Fraser) will be used. Obviously the changes shift the cost burden to the individual, especially the poor and the sick.
Let us look at the three proposed changes. I shall look at the abolition of bulk billing first. This is the most cynical change. It will mean that bulk billing- or direct billing, as it is often called-by Medibank will be available only to pensioners holding pensioner health benefit cards- in other words, those pensioners who are entitled to full fringe benefits- and their dependants. According to the Minister, this is designed to reduce the over-provision of services, and fraud. He has produced no evidence to show that direct billing encourages over-provision. On the contrary, Medibank has found that direct billing patients on average account for fewer medical services each year than do those people who are billed individually. As for fraud, bulk billing fed through the Medibank computer has been the principal means of detecting fraud, and its abolition will make it harder to track down abusers.
This change will also mean that many low income earners, other than the pensioners covered, will pay much more for medical care. Patients for whom doctors directly billed Medibank paid nothing for medical services. In future they will have to meet the 25 per cent gap between the medical benefit and the schedule fee, plus whatever margin the doctor charges above the schedule fee. Thus in a single sweeping change the Government will increase the burden on the poor, boost doctors ‘ earnings and weaken an important means of monitoring medical services and incomes. At the same time it will increase the cost of running Medibank by millions of dollars a year- yesterday it was claimed that the increase would be $7.5m and last year or the year before it was claimed that it would be $ 10m- because the expense of processing individual claims is many times that of meeting monthly accounts from every doctor. That is the result of the abolition of bulk billing.
As I pointed out the other day, more than 750,000 social security beneficiaries plus their dependants will no longer be entitled to bulk billing. The other poor people will also not be entitled to bulk billing. What the Minister argued in reply to a question yesterday from the honourable member for Dundas (Mr Ruddock) about Aborigines and in reply to another question today is that the doctors will render accounts. He suggested that these poor people will then take those accounts, fill in Medibank refund forms, send them in, get refunds from Medibank, complain if the refunds are not appropriate and send the refund cheques back to the doctors. He does not believe that, and I do not believe it. I do not believe it will be possible for many of these people to deal with it in that way, even if the doctors were prepared to take that sort of a risk. After a short time, even those doctors who might want to take that risk- I am not suggesting that all doctors are hard-hearted people who are just after the money- will find that they will receive only a small proportion of those cheques because the people are incapable of getting the money from Medibank. The doctors will then insist on being paid cash. The same applies for Aborigines and many migrants. It is impossible for many people in our society to complete the appropriate application forms.
Let us deal with the second proposal of this Government: A reduction from 85 per cent down to 75 per cent in refunds. As I said earlier, this is of course a real increase in taxation via the levy because patients will still pay the same amount but will receive a smaller refund. It will be extremely costly for the poor and the sick- they often overlap- and for those people with large families. All kinds of questions arise: Will the Australian Medical Association advise the doctors, and will the doctors take notice of that advice, that they should accept 75 per cent of the schedule fee from now on?
– They should do.
-I am not arguing that they should not do so.
– They did it for nothing once.
-I do not know about doing it for nothing but they used to do it for approximately 62 per cent before Medibank was introduced. They ought to do it for 75 per cent now, but whether they will is extremely debatable.
– I would hope so.
-I share the Minister’s hope but I do not believe that they will do it. They certainly will not do it generally. What will happen to those pensioners, even those pensioners entitled to fringe benefits? What will happen in other cases? In New South Wales and in some other States there is a system of modified fee for service in country hospitals without resident medical officers. The system has worked on the basis that private doctors attending hospitals receive at present 85 per cent of the scheduled fee. That amount is called the modified fee for service. Will those doctors agree to accept 75 per cent? I doubt it. It will be interesting to see what happens in the Minister’s electorate. Many of those sorts of hospitals are in his electorate, so we will see whether the doctors there agree to that reduction.
Let us look at the third proposition which has been floated, and that is the question of frontend deductibles. It is interesting to note that the voluntary funds- certainly through their spokesman, Mr Moon- have implied that they will not accept the proposition. I noted that Senator Baume in an interjection to Senator Grimes in the Senate also implied that the funds will not in fact accept it. What would be the consequences of introducing front-end deductibles? I think they would be disastrous. It will remove the healthy people from the health insurance pool and put them in a special pool so that they will pay a slightly lower premium. The spokesman for the Australian Natives Association in Victoria, Mr Munro, claimed that a $ 100 deductible will save a person $35 a year. But then all the sick people, the high risk people, will be together in another pool and they will have to pay significantly increased premiums because they will not receive the benefit of the contributions of the young, fit people, as at present. It means that the poor and the sick people will be paying a lot more money than they are paying at present. I think that is wrong. It is a question of equity. I hope that all of us in this society see a need for those people who are better off and who are well to contribute towards meeting the costs of other people.
It is also a question of equity with regard to tax deductions. The person who takes out the deductible, the person who is well off and is healthy can deduct medical expenses from his taxation if something goes wrong and he incurs those expenses. In effect it is a government subsidy of, say, 32c, 46c or 60 per cent, depending on the person’s income. The person who is paying his contribution cannot claim a tax deduction for those contributions. Again, there is a question of equity. People who are already better off, people who are well, will be helped further by the Government. Others will be further disadvantaged. As we know, the Government is now proposing a 50 per cent increase in hospital fees. This will cost a lot of money. I conclude by quoting from two editorials in newspapers that do not normally support us. The Sydney Morning Herald of yesterday, in an article about the Government’s proposal stated:
In fact, instability has been a curse of the Australian health system. It was chronic before the introduction of Medibank Mark 1, and has reappeared since the present Government’s confusing and badly explained changes of 1976; for at least the rest of this year, uncertainty will continue to reign supreme. Once upon a time non-Labor politicians used to complain loudly and bitterly of the onset of ‘creeping socialism. ‘ What the Federal Government is now doing might well be called creeping anti-socialism- the gradual undoing of a taxfunded system of univeral health insurance, very widely approved when Labor introduced it.
I ask for leave to have incorporated in Hansard a significant proportion of the editorial in today’s Australian Financial Review, starting with the words, ‘That is really the essence of what is so objectionable’, to the end of the editorial.
-Is leave granted?
– So long as I get leave to incorporate the Australian editorial later.
The document read as follows-
That is really the essence of what is so objectionable in the Government’s approach to health insurance. It is entirely concerned with minimising the political damage of what is admittedly an awfully difficult policy problem.
At no stage is any serious attention paid to the actual policy. Prime Minister Fraser is anxious to do a cosmetic job on the Consumer Price Index. Mr Hunt wants to be loved, or at least not vilified. The conservative politicians are paralysed with fear of the political clout of the medical fraternity, especially in rural areas, where they have created mini health industries dominated by people whose incomes are underwritten with public funds.
Consequently we have, as we had again this week, a charade of public policy formulation.
Mr Hunt’s statement characterised all the worst aspects of contemporary politics in Australia. It was an insult to the intelligence of the electorate. It did not address itself to the problems of health costs, even as they have been identified by Mr Hunt himself in his more honest moments.
It reeked of cowardice in taking the huckster’s advice of being structured to mislead and in being unprepared to come to grips with the two major areas of cost increase, medical practitioner exploitation of the system and woefully inefficient hospital administration.
The specifics of Mr Hunt’s statement are being unravelled, interpreted and mostly criticised by the various interest groups in the health industry.
Without in any way commenting on the merits or otherwise of their remarks it can be said that Mr Hunt has further devalued the fragile reputation of our politicians with his approach to what is a truly difficult area of public policy.
He has treated the question of health policy solely as a public relations exercise in minimising political damage, using some transparently dishonest means of doing so. Government is too important a business to fall into the hands of the hired flaks.
-Order! The honourable member’s time has expired.
– What a nit-picking exercise the honourable member for Prospect (Dr Klugman) has engaged in. His unfounded allegations about the Prime Minister (Mr Malcolm Fraser) standing over me, as Minister for Health, and about my not supporting a statement he made, are a lot of rubbish. The honourable member has forecast that I will engage in some big publicity campaign, with my photograph in the newspaper and so on, to sell what the Government has done. What a lot of rubbish. There is much in the speech that I feel does not deserve a response. I remind the House once again- because I believe the Opposition needs to be reminded of its own sins as much as possible to try to reform it and to help it in the future- that the great health cost explosion began in the time of the Australian Labor Party Government. Let nobody have any doubt about that.
It is nothing short of humbug for the Opposition to come into the Parliament time and time again complaining and weeping about the health cost problem which we have inherited, which we are trying to arrest, and which the public is at present bearing. It was the Federal Parliamentary Labor Party which caused the fundamental problems to the Australian economy, which generated unemployment, which let loose the worst inflation in history, and which has hurt the poor and the needy more than any other section in the Australian community. More than any other single issue it was the Federal Parliamentary Labor Party that caused the health cost crisis. The Labor Party traded on falsehoods, it gave people false hopes, it lifted the expectations of the people and it cheated the Australian electorate and, indeed, its own supporters. It was the Labor Party that generated high cost levels through its crazy wage policy and economic mismanagement. One of the great falsehoods that the Labor Party generated was that it would provide a free health care system through what it called Medibank. Even the name chosen tended to give the impression that the Labor Party had created some benevolent institution, such as a bank, which would supply the money which was needed to pay the bills not only of the poor or the chronically ill but also of the rich. What an incredible misconception. It is rather extraordinary that this is a motion which was moved by the honourable member for Prospect and yet only six members of the Opposition were in the House while he was speaking. That is how interested honourable members opposite are in their own motion. Their system was an incredible misconception. The Labor Party led itself to believe that there was no limit to the money it could throw about to all and sundry. It threw money about like chicken feed. Needless to say the strongest and the fittest got the most out of the benefits. Who benefited most from the Opposition’s health scheme in money terms? It was the doctors and the health professionals. During the term of the Labor Party doctors fees rose by over 56.6 per cent and their incomes increased at a rate far greater than the rise in average weekly earnings. To that I say: Brilliant. What the Labor Party did was to stuff doctors’ mouths with gold while the doctors kicked it in the teeth. That is how brilliant honourable members opposite were. So much for their so-called free health servicethat had a capacity to gorge the social dollars in this country.
The Labor Government’s approach to paying for health care and hospital costs was typical of its general approach to the economy, which was the money-no-object philosophy. When the Opposition emptied the well by its various costly schemes it took all sorts of drastic, frantic measures in order to try to recover its position. It tried to recover by printing money, by increasing the tax take and finally by borrowing money through dubious characters from Middle Eastern sources. We all remember the debacle. How can honourable members opposite hold themselves up as the great fount of wisdom? They proved that they had no wisdom whatsoever. The Labor Party’s health insurance scheme was comprehensive. It covered all and sundry, regardless of means. Let us see how the bill soared as a result of its efforts. In 1971-72 the Commonwealth met 30.2 per cent of all health expenditure. The private sector met 43. 1 per cent. Yet only four years later, in the last year in office of the Labor Government the taxpayers, through the Commonwealth revenue pool, was meeting 52 per cent of health spending and the private sector was meeting 22.6 per cent.
– What is wrong with that?
-That is assisting those who can afford to help themselves by meeting bills that they should be meeting and by misdirecting resources to other than the needy sections of the community. In the five years from 1971-72 to 1976-77 health costs exploded from $2,232m to $6,254m.
-They are still going up.
– Yes, but at a much slower rate of acceleration than they did during the Labor Government’s term of office. During that time despite very rapidly rising financial burdens of the community, no real evidence was available to indicate that there was a decline in illness. The effect of the changes on the average person in New South Wales, to which the honourable member for Prospect has addressed himself, will on average result in the payment of an additional 90c per consultation. Sixty-two per cent of all services rendered are general practitioner consultations. The cost in Western Australia will be 80c; in South Australia 80c; in Queensland 80c; and in Victoria and Tasmania 85 c. That is additional out-of-pocket expenses per consultation. Whether the gap is charged is a matter for the doctor and the patient to determine.
– Does the patient get a lot of say?
– As a practitioner of the past the honourable member for Prospect would know about doctors generally. I have a much better impression of the sense of humanity of the people of his profession than he apparently has. I like to think with some generosity towards a very important profession in the Australian community. It was the honourable member for Prospect and his Government- when the Opposition was in Government- that quite clearly destroyed a lot of the goodwill that was available to the Australian community from the medical profession.
When the Opposition was in government it destroyed millions and millions of dollars worth of honorary service given through our hospital system. We will never turn the clock back. It destroyed goodwill- professional goodwill. If the Government can do anything to restore that goodwill for the medical profession to the Australian community, we will endeavour to do so. The honourable member is quite deliberately trying to terrify people in the community by making them believe that they must have cash in the pocket before they go to the doctor.
– That is true.
– That is not true in every case. I hope that where it is happening the doctors will refrain from doing it. Once bulk billing is abolished, except for pensioners and their dependants who are covered by health benefit cards, other people will be able to send doctors’ accounts either to Medibank or their private health insurance fund. They will receive a ‘pay doctor’ cheque which in normal circumstances the patient will hand to the doctor. It is then a matter for the doctor to decide whether the person can afford to meet the gap or he will simply accept the ‘pay doctor’ cheque as payment in full for the service that he has rendered. I repeat that doctors generally for many years have judged each case according to the circumstances of the individual. I hope that the medical profession will continue to show the same sort of compassion and consideration for disadvantaged individuals. Bulk billing of course will still apply to 1.68 million people- age, invalid and widows’ pensioners and their dependants; but it will not apply to other people and the processes that I have mentioned will apply in other cases.
-Will the HBA still be able to bulk bill?
– No, indeed not.
– How can you decide that?
-We have decided that bulk billing is to be abolished.
– How can you tell that to the private funds?
– We have not altered the principle of the gap; that is, the difference between the amount payable and the benefit received. The Australian Labor Party when it was in government of course endorsed that principle. It supported a benefit level at 85 per cent and it endorsed the gap principle. So it is idle for the Opposition to say that it does not approve of or agree with the principle. What we have done is widen the gap from $5 to $10- the gap having been set at $5 in 1969, which was nine years ago. If one does calculations one will find that in real terms the adjustment is fair and equitable. We have gone further than the Labor Party would have ever thought to have gone; that is, to provide a subsidy to those people in the lower income groups who wish to take out hospital insurance to cover themselves for doctor of choice in hospitals and we have kept hospital insurance down to levels which these people can afford to pay in order to exercise that choice. We have certainly ended the abuses and excesses that came about because of the open ended nature of the scheme the previous Government introduced. The cost of Labor Medibank did most to harm the sick and the poor and it would have done so even more had we left it in operation.
This Government is restoring the balance that Labor destroyed. People in need are either exempt from any cost or they have access to Medibank standard for the payment of a levy which they pay according to their means. So it is hypocritical to talk about the Government isolating the sick and the poor. The very structure of the present health insurance arrangement is designed to assist and to enable those in the lower income group to pay according to their means. If their means are very low they do not pay at all. Labor allowed the rip-off from Medibank. Labor’s inflation damaged mostly the very people it claimed to represent- the sick and the poor. By contrast, the Government has righted many of the inequities of Medibank and will continue to make reviews as necessary. We have indexed social security pensions and we have introduced family allowances. We have more than halved inflation- inflation which hurts the poorer sections of the community more than the richer sections of it.
I shall put some questions to the Opposition which it might answer in due course. What does the Opposition want? Does it want reductions in medical contribution rates denied to hundreds of thousands of ordinary people? Does it want to see the opportunity provided to the health insurance funds to devise systems that are acceptable to the community? Front end deductibles in themselves may not be the option that the health insurance funds will take. Other options could well take the form of providing rebates or credits for contributors if their benefits do not exceed those for a specified number of services. They could result in the deletion of certain items or in a form of lower contribution rates based on contributors following a particular lifestyle. One fund in particular is apparently interested in pursuing that line. We are not making such proposals compulsory but we have decided to provide some flexibility to the health insurance industry to come up with schemes that give some encouragement to people to care for themselves. Does the Opposition want to go back to the days of unchecked cost explosion of which the greatest beneficiaries were the well-off and the medical profession? Does it want to go back to the previous situation? I really think this whole exercise has been a phoney, nit picking exercise by the honourable member for Prospect and the Opposition. The changes that the Government has made I think have disappointed the Opposition. The honourable member for Prospect was making all sorts of predictions that the Government was about to embark upon a lot of draconian measures.
– Spreading panic in the community.
– Yes, spreading panic in the community. I dare say his speech was prepared a week before the event.
– You were leaking the stories to the Press.
– The honourable member says that I was leaking stories to the Press. This is untrue. It is a lie. That is a nonsense. I think the honourable member for Prospect has been disappointed.
Mr DEPUTY SPEAKER (Mr Millar)Order! The Minister’s time has expired.
– I think that the most perceptive words that have been uttered on the recent changes in health costs were uttered by the Minister for Health (Mr Hunt) five weeks ago. On 1 1 April, chiding my colleague the honourable member for Prospect (Dr Klugman), and accusing him of being clairvoyant, he indicated clearly that he was not clairvoyant when in relation to health costs he said:
I am not aware of any predetermined view of the Prime Minister or any other Minister at this stage.
I suggest that the most charitable interpretation that can be made is that the Minister for Health is still not aware of the predetermined views of the Prime Minister on health costs. Otherwise, how does one explain the incomplete, ill conceived, half-baked set of measures that have been dribbling out through the week- Medibank mark 2½ as it has been derisively called in the Press? How else can we explain the kind of buildup that we had and then the proposals that we got? How can we explain the fact that even today new bits are dribbling out, new threats have been made?
One of the difficulties therefore is that it is almost impossible for the Opposition to make any overall assessment of what is being done to Medibank mark 2.I do not suppose that worries the Government very much but the community is in exactly the same position. It does not know what is happening to the Medibank schemes because there was one batch of announcements in Parliament and new proposals were dribbled out over the next few days. Let it be clearly said that it is the Minister who is creating panic in the community by the inept and clumsy methods with which all the announcements have been handled. I had considerable respect for the Minister until last week. It is difficult for me even to believe that he himself adheres to many of the proposals he is putting forward. Only five weeks ago, with reference to front end deductibles and similar schemes, the Minister said:
It is true to say that we have not yet a really accurate statistical profile from the time when changes were made on 1 October 1976 to be able to make some of the more radical changes that have been put to us by people who have written to us and are referred to in some of the opinions spelt out in this paper.
That is, the Government did not have the information to make changes like introducing front end deductible schemes, five weeks ago. It is true that it is impossible to make any accounting at the front end deductibles announced in the Ministerial Statement. But we now have the proposals for which five weeks ago the Minister said he did not have statistical information to make. There is no evidence in any of the documents he provides of new statistical information to provide the profile that he talked about as being necessary. When the Sax report came in some weeks ago the Minister gave a reasonably sympathetic response to that document. Yet of the four concrete proposals he put before the Parliament in his statement two of them are clearly rejected by the Sax Commission. Two of them it recommends; the other two are rejected. I am beginning to think that for the learned men who write reports for this Government, that if they want their views accepted they should argue against them. The chances are very good indeed that the proposals argued against would be accepted by this regime.
Finally, and I do it because I was provoked by the Minister’s speech, I shall read two paragraphs from the Australian Financial Review:
Mr Hunt’s statement characterised all the worst aspects of contemporary politics in Australia. It was an insult to the intelligence of the electorate. It did not address itself to the problems of health costs, even as they have been identified by Mr Hunt himself in his more honest moments.
It reeked of cowardice in taking the hucksters’ advice of being structured to mislead and in being unprepared to come to grips with the two major areas of cost increase, medical practitioner exploitation of the system and woefully inefficient hospital administration.
I must say that, given much of the Minister’s speech in the House today, the same words apply to the early part of his address.
Let me take up the one point about spiralling health costs. The interesting thing about spiralling health costs, as the Minister’s own documents prove, is that such costs are something that every advanced industrial society has suffered in the 1970s and, unless I am mistaken, they did not all have Whitlam Governments. It is a universal problem which cannot be explained away by attacking the Whitlam Government. Again, the Minister asks the Opposition what we wanted. Clearly, two of the things we want are, firstly, a real investigation, a real tackling of the way in which the system has been exploited by the medical profession- as the Minister himself acknowledges and, secondly, a very serious consideration of the hospital situation. I know that in his statement there are a series of remarks or proposals as hospitals but they are vague, vacuous and ill-defined, and already they are producing enormous conflict. They are not concrete proposals for change in that field.
It is important that we be clear about what the Government is doing. That means first looking briefly at Medibank Mk II because this week’s events are the second stage whereby a simple, efficient, universal, equitable and comprehensive health scheme is gradually being destroyed. We need to look at what was done in the first stage and then at what has been done in the last week. I quote from the Minister’s statement this week:
That is the changes of the 1 October 1 976- . . have already resulted in a decline in the rate of acceleration in health costs.
There is just no reliable evidence to sustain that claim. There has been a deceleration in costs. We all admit that. I think this primarily arose from economic changes in the economy as a whole. But the Minister is arguing that those very Medibank modifications have led to the deceleration. If we are honest we have to say that we just do not know. I am not saying that they have not done so but, on all the evidence provided to honourable members by the Minister, we just do not know. Indeed, even the meaning of the single, specific piece of evidence advanced- that there has been a fall in the use of medical services per person- is debatable. Might it be just a fluctuation against the trend, as occurred in 1973-74? Is it due to the modifications, or is it due to other factors? Dr Sax, who had all this information before him, exactly the same information as the Minister has, concluded:
Whether utilisation rates have changed recently is not known, except again for the conventional wisdom which is that elective surgery is being deferred.
Quite possibly these movements occur for general economic reasons having nothing whatsoever to do with the changes made in the health scheme in October 1976.
Why do honourable members not know what is occurring? Why does Dr Sax not know? Why does the Minister not know? For the reason that he laments every time he stands up in the House, the statistics are not available, and they are not available because of the changes that were made in October 1976. That is why we have not got the information to make major changes to our health schemes. Again, Dr Sax makes this point:
The opting out arrangement provided in October 1 976 has deprived the authorities of the automatic acquisition of this information for more than one-third of all medical services.
It is not just a lack of adequate medical information. The whole thrust of the changes in October 1976 was to make health provision less simple and less efficient. I quote Dr Sax again:
The changes did so at some cost to simplicity and efficiency.
Any changes in simplicity, making schemes more complex and less efficient, are clear ways of raising the costs of those schemes. All the evidence we have is that if you make a scheme more complicated and less efficient you raise the costs.
The way the Government did it meant that we are returning rapidly to the bad old preMedibank days. It produced again a whole clutter of competing private organisations- and the troubles this week have very much derived from that- and added to total administrative costs. For instance, the cost of Medibank administration in 1975, when it covered everyone, was exactly the same as it was a year later when it covered only one-third of the population. Administrative costs have been pushed up by the changes in October 1976. The elaborate procedures that are now involved in checking eligibility as a result of the opting out procedures, as with unemployment checks, for instance, will be more costly than the gains made. And the Government is going to add to that by the abolition of one of the most administratively efficient aspects of the whole scheme. It is going to remove bulk billings. I shall quote from the man who knows most about bulk billing, the Deputy General Manager of Medibank. He said:
There is no substance in the claim that bulk billing contributes to over-servicing. Direct billing patients seem to get fewer services than others and fraud is more easily detected.
– He knows nothing about it, like you.
-That is a splendid response; that the man who is the Deputy General Manager of the organisation knows less about it than do the members of the Parliament. That is a measure of the arrogance-
Mr DEPUTY SPEAKER (Mr Martin)Order! The honourable member’s time has expired.
– Initially I shall take up a couple of points made by the honourable member for Bonython (Dr Blewett). He roundly criticised the Minister for Health (Mr Hunt), who stated some time ago that there was a lack of statistics on which to make major changes, and then referred to the front end deductible scheme which is optional in the changes just announced. I ask the honourable member why the Labor Government, when it was in power from 1972 to 1975, introduced Medibank when it had an abundance of statistics that clearly indicated that Medibank should not be introduced in this country. One only had to look at the soaring medical costs in the United Kingdom, not to mention the United States of America and Canada.
– That is not a reasonable argument, is it?
– It is a good argument because Australia is a Western world country, as is the United Kingdom. The experience was clearly there in the United Kingdom, the United States and Canada that a universal scheme of that nature was not satisfactory. After all, Medibank, introduced by the Leader of the Opposition (Mr Hayden) who was then a Minister in the Labor Government, was modelled on schemes overseas.
– I take a point of order. The figures supplied by the Minister earlier this week showed that in the United Kingdom the total health expenditure . . .
Mr DEPUTY SPEAKER (Mr Martin)Order! There is no point of order.
– . . . was 5.2 per cent of the gross domestic product compared with 7.5 per cent -
- Mr Deputy Speaker, just before you proceed may I point out a habit of Opposition members. Every time you tell them there is no point of order they keep talking in order to try to get their political points across. It is about time honourable members opposite were forced to observe the forms of the House.
-In response to what the honourable member for Bendigo has said, it is a common habit on both sides of the House, particularly on the part of honourable members who should know better, including senior members, to take points of order which are not points of order.
– To take up my point: The Labor Party, when in office, flew in the face of all the overwhelming information that was available from a number of years of experience overseas and proceeded to establish Medibank. It had to pursue an ideology. It was a scheme which ran riot. The Labor Government made no attempt to contain the costs as that scheme ran rampant. The operative words in the matter of public importance put forward by the honourable member for Prospect (Dr Klugman) are the increasing cost burden on the sick and the poor’. It is amazing that the Labor Party should seek to create in our community the impression that it is the champion of the underdog, the little person, the disadvantaged or the underprivileged. I ask members of the Labor Party to reflect on inflation and the damage that inflation did to the small people of this country, the low income earners, the disadvantaged. It is a fact of life that over three years inflation ran riot in this country and did more harm than any changes we have made to Medibank. The honourable member for Bonython (Dr Blewett) referred to the fact that we had made major changes to the scheme. They have been gradual changes, not major changes, aimed at the containment of costs. I am surprised that any political party in this country would not want to see a containment of costs in this area.
– That is why you voted against it in Opposition.
-I draw attention to the amount of suffering the Labor Party when in government brought to the small people of this nation and the fact that it allowed a wages explosion which put out of work tens of thousands of people- all those people in whom they now claim to be so interested. On the other hand let me examine what the Liberal and National Country Parties did in government over many years, what they are doing now and what they will continue to do for the next two decades or more in an uninterrupted fashion. They introduced a wide range of social security benefits; indeed, if we look at the total program that is in operation at the moment we will find that Liberal and National Country Party governments instituted most of those programs. Social welfare, I suggest, is a right and a privilege not to be taken lightly or abused, extended or increased only when the nation can sustain the cost. That is the basic difference between the Labor Government and this Government. We will make extensions and increase social welfare in this country but only within the context of the ability of the people to meet that cost.
I believe that Australians suffer a hand-out mentality and that hand-out mentality was encouraged at length by the Labor Party when in government. It is an attitude that I believe must be altered. I return to those operative words: The increasing cost burden on the sick and the poor’. I am rather bewildered by the statements that come from the Opposition that people must have money in their pockets in order to go to see a doctor. There seems to be a grave concern about that. Of course they should have money in their pockets when they go to see a doctor. Honourable members opposite should go to a hotel and try to buy a beer or go into a supermarket or try to run a motor car and see how far they get without some money in their pockets. They should try to see their dentist or benefit from any other services or obtain goods that they want to purchase without having money in their pockets. Of course one should have money in one’s pocket when one goes to see a doctor. I think this propaganda that comes from the Labor Party in relation to visits to a medical practitioner is quite outrageous.
I want to examine the reduction of medical benefits from 85 per cent to 75 per cent and the increase in the gap to $10. What will it do to the underprivileged people, the sick and the poor? As far as the pensioner patient and that pensioner’s dependants are concerned, there will be no change. Let us look at the effect it will have on famines, including low income families. They will now pay an increase of about $ 1 per ordinary or standard visit to the doctor. But, if there is a chronically ill person or persons in the family, they can insure by gap insurance and that will not mean much greater hardship to those people. If we look at the low income families and the pensioners with whom I take it the Opposition is concerned, we find that there is no difference in the case of pensioners and only a small amount of difference in the case of the low income family.
I turn to the question of direct billing. Bulk billing in this country has cost this nation a tremendous amount of money. Now the pensioner will be able to stay in the position as he was in when bulk billing applied. I refer again to the medical profession. In my opinion the doctors should and, I believe, will accept 75 per cent of the common fee. I reiterate what I said to the honurable member for Prospect (Dr Klugman), that many of these services were provided in this nation by him and his colleagues for so many years at no cost to the individual. I believe that the medical profession will assist by accepting 75 per cent of the common fee and that it will show restraint.
Let us examine the effect this will have on the ordinary or low income family. Medibank Standard is there for those people if they so desire. It is there in relation to the introduction of optional deductibles. The low income family, if it wishes, can remain in Medibank Standard and the change will have absolutely no effect on those people. I submit to honourable members that the extra $ 1 that they will have to pay for a standard visit is an identifiable cost. I believe that there has to be a greater identifiable cost. If the user pays principle applies more than it has in the past- and I believe it has to- without burdening those people to excess, then I believe there has to be a greater identifiable cost.
Mr DEPUTY SPEAKER (Mr Martin)Order! The honourable member’s time has expired. The debate is concluded.
Debate resumed from 1 1 May, on motion by Mr Howard:
That the Bill be now read a second time.
-The Bill now before the House essentially does two things. Firstly, it changes the name given to the bank established at the end of last year just before the election, the Australian Rural Bank. It changes that name to the Primary Industry Bank of Australia. It does that because there was a conflict with the name of the Rural Bank of New South Wales and also with the name of the Rural and Industries Bank of Western Australia. In New South Wales the Premier had threatened High Court action if the Government did not change the name of this new Federal bank. The second thing that the Bill does is to amend the condition on which the Commonwealth Government may make grants or loans to this Primary Industry Bank. The second provision is a matter of some concern to the Opposition. We of course do not oppose the first provision.
The second provision relates to the granting of funds from the Commonwealth to the bank. The original provision in section 7(1) of the Australian Rural Bank Act reads:
Notwithstanding anything contained in any other Act, but subject to sub-section 4 (8), the Treasurer may, from time to time, on behalf of the Commonwealth, make grants or loans to the Rural Bank on such terms and conditions as he determines.
The Bill now before the House changes that provision in that it substitutes for the words ‘as he determines’ the words ‘as are determined by the Treasurer and agreed to by the Bank’. The essential difference lies in the words ‘. . . and agreed to by the Bank’. Why has there been this change? The only reason given by the Treasurer (Mr Howard) is that it conforms with other banking Acts- the Commonwealth Banks Act, the Reserve Bank Act, and so on. But in our opinion this Bank is in quite a different situation from that of either the Commonwealth Bank or the Reserve Bank. The Primary Industry Bank will be controlled by the banking industry which has opposed its establishment from the outset. The Treasurer revealed in his second reading speech that the trading banks would be given control of the Primary Industry Bank when he announced the composition of its board of directors. The Act passed last year was very imprecise about the composition of the board. The only comment made about that was in part III of the Schedule to the Act which stated:
The directors of the Rural Bank are to include-
A person designated by the Treasurer to be the Chairman;
A person designated by the Treasurer to represent the interests of the Commonwealth; and
Two persons designated by the Treasurer to represent the interests of primary producers.
We see that four persons are mentioned. Clearly, there was provision for other persons to be appointed because the Act simply states that the directors of the Rural Bank are to include various people mentioned. It leaves scope for other people to be added to the board of directors. The Treasurer told us in his second reading speech who these other people will be. He stated that there would be seven people representing the trading banks and one person representing the State banks. So we have altogether a board of directors composed of 12 people with eight of those 12 people representing the banks of this country, six of those banks being private trading banks. This puts an entirely different perspective upon one’s attitude towards the bank. Clearly, it will be a banker’s bank and not a primary producer’s bank. It will be controlled by the banks of this country. Even if one takes the point that the private trading banks have only half the numbers on the board, that still represents a very large proportion. It only needs one of the other six members to vote with them to give control to the private banks. I suspect that on some issues they would not find much difficulty in that.
This is a very important point. It means for the primary producers of this country that the bank which is established in their name will be in effect, a bank in their name only, because it will be controlled by the organisations with which they have always been in some sort of conflictthe trading banks. The reason that the trading banks strongly opposed the establishment of this new bank was that they thought they might lose profitable business through its operation. Now, they are virtually assured that this will not happen because they will control the bank’s business at both ends. They will control or at least heavily influence the new bank’s policies through their numbers on the board of directors and at the customer end they will have charge of the new bank’s operations. The new bank will not lend directly to farmers but will lend to banks and lenders which will on-lend those funds to specific customers.
This is a perfect situation for the trading banks of this country. They may be able to pass over and certainly will want to pass over to the new bank all the marginal business that is not very profitable or is fairly risky but which does not qualify for rural reconstruction assistance. There is some doubt about the extent to which they will be able to do this, and I will come back to that point later in my speech. It is a possibility. This is a fear which is very much in the minds of representatives of primary producer organisations. For instance, the Australian Wool and Meat Producers Federation has expressed grave anxiety on this point. Mr O’Brien, the President of the Federation, issued a Press release on 23 Maythat is, on Tuesday of this week. He said:
AWMPF clearly indicated extreme concern in the following areas -
The second area he mentioned was this:
Extreme concern over the Banker dominated Board in that the Primary Industry Bank could only serve as a tool for the present Banking structure to ‘offload ‘ its high risk investment in agriculture to the Primary Industry Bank.
I point out that Mr O’Brien expressed that concern the day after he saw the Treasurer to discuss the whole matter of the Bank. Clearly, we see that nothing was said by the Treasurer to allay his fears in that respect. Also, the National Council of Wool Selling Brokers of Australia has expressed concern about the composition of the board of directors. The Council wrote to the Minister for Primary Industry (Mr Sinclair) on 19 May. I wish to quote a few excerpts from the letter. It stated:
Earlier this year representations were made to you in which this Council asked that members be allowed to participate in what was then known as the Australian Rural Bank.
It was stated further on in the letter:
You replied on 6 February 1978 to the effect that you noted the interest of the pastoral houses in the operation of the Australian Rural Bank and the assurance given that their interest would not be overlooked was accepted.
The Council received an assurance from the Minister for Primary Industry that the interests of its members would not be overlooked. The Council took that to mean that it would have representation on the board of directors. In fact, that has not been the case. The letter also stated:
Naturally, members were disappointed that no further advice was received from you.
Further on, the letter mentioned a breakdown in communication apparently between the Department of Primary Industry and the Treasury and concluded by stating:
It is proposed to ask that an opportunity be given to this Council to nominate representatives to the board, either by having the legislation amended to provide additional directors, or possibly to replace some representatives already intended to take their seat on the board of directors of the new institution. Surely it should be appreciated that some of the large pastoral houses have branch facilities far greater than those of some of the State banks and perhaps one or more of the trading banks.
In the same letter the Council also made the point that the pastoral finance houses provided some 9 per cent of total rural finance. It is clear that there is considerable resentment in rural organisations- not just the producer organisations but the finance organisations as wellabout the composition of the Board, and rightly so. Both of those groups may well feel that they have been sold out by the composition of the board of directors which has now been revealed by the Treasurer. Because the Opposition feels strongly about this matter, I move the following amendment:
That all words after ‘That’ be omitted with a view to substituting the following words: whilst not opposing the passage of the Bill, the House is of the opinion that provisions should be made for (a) the number of persons representing the Trading Banks on the Bank’s Board to be no more than four, (b) the number of persons representing the interests of primary producers to be increased to four and (c) one person with special qualifications in such areas as non-bank rural financing, rural reconstruction or related fields to be appointed ‘.
The effect of that amendment would be to reduce the representation of the trading banks from seven to four and to double the number of primary producer representatives on the board from two to four. It would also allow one position on the board for which rural finance organisations or rural reconstruction bodies could nominate a person. We feel that this would be a much fairer board composition. It would mean that the trading banks would not control the board of directors and that there would be a good balance of the various interests involved. The amendment should be supported by this House. The Government has given no reason whatever for making the decision to give control of the Bank to the trading banks of this country. In that situation- with no argument being put forward for it and with every good reason for that not being the case- we think that the House should accept the amendment to the motion that the Bill be read a second time and instruct the Government that it is the opinion of this House that the board of directors should be altered in order to bring about a much fairer composition.
The Government’s cave-in to the trading banks causes us real concern. The proposal now before the House is to alter the conditions upon which funds may be granted or loaned by the Government to the Bank. By providing that such funds must be agreed upon by the banks- the provision I mentioned earlier- the Bill gives further control to the trading banks. Unless our amendment is accepted by the Government or some better reason given for making this alteration to the provision of funds to the Bank than has been given so far, the Opposition will vote against that clause in the Committee stage.
We have some other criticisms of the way in which the Bank will operate, from what we can gather at this stage. Of course, the legislation contains nothing in respect of interest rates, and there is nothing in the original Act which says anything of any detail about interest rates. During last year’s Federal election campaign, the Government made two key promises about the Australian Rural Bank. The first one was that the Australian Rural Bank, for which the legislation was passed in the last Parliament, would be established without delay.
Sitting suspended from 1 to 2.15 p.m.
– Prior to the suspension of the sitting I was discussing the election promises of the Government parties in respect of the Australian Rural Bank. I had mentioned that one of those promises was to pass legislation establishing such a bank without delay. The second promise was that such a bank would provide, in conjunction with the banks and the other lenders, long term credit to viable borrowers for up to 30 years at concessional rates of interest. These promises were widely repeated around the country. There is little doubt that those producers who are not cynical about the establishment and operation of the Bank believe that low interest rate funds over a long term will be available. But what is the reality, firstly, in respect of the Bank being established without delay? The fact is that we are now headed towards the middle of this calendar year and we are now dealing with legislation which amends the name of the Bank and makes other changes to it. But the Bank has yet to be established, despite what the Minister for Primary Industry said when speaking to the National Agricultural Outlook Conference in Canberra on 24 January of this year.
It is expected that the ARB -
That is, the Australian Rural Bank- will be in a position to make its first loans in the second quarter of 1978.
Of course, that simply will not be the position. It may be in a position to make loans some time in the third quarter of 1978. But much more important is the Government’s promise in respect of interest rates. As I have mentioned, there is nothing about interest rates in legislation which has been passed to this date or in the legislation which is now before us. We are not told anything in that legislation about what the interest rates will be or what the lending policy will be. Yesterday the newly appointed chairman of the new Bank, Mr Ives, who previously was the head of the Department of Primary Industry, spoke out on the subject at the National Rural Press Club. He was asked about concessional interest rates to be provided by the bank. From the information provided to me, his answer was along the lines that there would be either long term finance or marginally lower rates of interest. So it was an either/or’ proposition. If that is to be the case, it means that the Government has broken its election promise, because it promised long term loans at concessional interest rates. It was not an either/or’ situation in the promise, but it appears that the reality is that it will be that way.
Mr Ives went on to explain that marginally lower interest rates would stem from the passing on to primary producers of the small differential which would arise through the ability of the new bank as a refinancing institution to raise funds at slightly lower rates of interest than can the other trading banks. So it is clear from that that the Government has no intention of subsidising interest rates. Secondly, the concessional interest rates, insofar as they exist, will not mean much. That will be particularly so if, as it is rumoured, the trading banks seek to make charges on the operations of the Primary Industry Bank. Fear has been expressed that such charges could be as high as 2 per cent.
I refer again to the Press release of Mr O’Brien, the President of the Australian Wool and Meat Producers Federation, issued last Tuesday after he had been to see the Treasurer for the purpose of discussing this matter with him. Point 1 of the Press release reads:
Interest rates at current overdraft rates would be prohibitive to the vast majority of agricultural producers.
The fourth point reads:
Concern over the charge by the present Banking System on operations of the Primary Industry Bank.
The Press release goes on to state:
Mr O’Brien said that an overall charge or 2 per cent by the Banks will effectively prevent lower interest rates to producers.
I have mentioned that this statement was made after Mr O’Brien had been to see the Treasurer. So clearly he was very worried about the way in which this Primary Industry Bank is to operate. He does not see there being any chance of a concessional interest rate if the Bank operates in the way in which he understands it will operate, following his discussions with the Treasurer. That is, there will be something like current overdraft rates applied to interest and additional levies will be imposed by the trading banks or the pastoral finance houses, or whoever the other lender is, on the primary producer for any loans that he gets. This will mean that there will be no concessional rates of interest at all.
It is clear from all this that the Government has in effect perpetrated a fraud on the primary producers of this country. When they become fully aware of what the Government intends, the high expectations that they have for this Bankexpectations which were fanned by the Government parties at the last election- will be shattered. The only benefit they will- be able to see in it will be the provision of long term loans. But if these are at normal rates of interest, the benefit to farmers will clearly be minimal. On this point, I wish to quote again what Mr O’Brien has said, but this time it is what he said in an interview on the Australian Broadcasting Commission’s National Farm Report program of Tuesday, 23 May, which is the day on which he had been to see the Treasurer. Mr O’Brien was asked the question:
Look a long term loan today it is not very difficult to get a loan for up to 10 or 12 years, particularly in the overdraft set up which has been, or was and still is the way land has been settled. When you talk solely about a term, if you are talking on a rate of 10V4 per cent and you are talking on a term of 30 years, this is looking at a figure of about $330,000 to repay $100,000 loan, now that sort of money is not in Primary Industry, I think all Ministers and all people would be well aware of that.
So clearly Mr O’Brien was very sceptical of any benefit coming from long term loans at current overdraft rates, which appears to be the picture. He did not see that as being of much benefit to primary producers.
Now that we can see how this new bank is to function and how minimal the benefits to primary producers will be, it is clear that it would have been much better to do what we understand was recommended by the Commonwealth Bank, namely, for the Commonwealth Development Bank to cease to be a lender of last resort and therefore enable primary producers to have direct access to it rather than having to go first to a trading bank or pastoral finance company and being able to turn to the Commonwealth Development Bank for assistance only if they are unable to obtain finance from that source. That at least would have been some improvement in financing arrangements for primary producers, and although it would not have been as great an improvement as they have been led to expect from the Primary Industry Bank, it would have represented more substantial assistance than they will in fact receive from the operations of this new bank, as we understand it is to operate.
Of course, that would not have suited the private trading banks which would prefer to keep control of as much of the rural finance as possible. Hence their original objection to any bank being established at all. When they could not prevent that, they did the next best thing by somehow pressuring the Government into giving them control of the bank, at both the policy and operational levels. The possibility of the banks being able to off load high risk customers, as I have already mentioned, seems to us to be a real danger. Mr Ives, when speaking at the National Rural Press Club yesterday, asserted that that would not be the case. I think it is very much worth while taking note of what he had to say. I shall quote from the transcript of proceedings. He was asked:
Can you see any danger of the private banking system unloading high risk rural debts on to the new Primary Industry Bank?
Not within the reference that has been drawn up. The Primary Industry Bank of Australia will be a refinancing institution and the basis of the operation will be that an impending borrower will go to his own bank and if that bank decides that his proposition is viable then that bank will go to the Primary Industry Bank and ask for the funds.
This next part is tremendously important:
But the prime lender takes the risk. That is the safeguard. Under those conditions I would think that propositions that are wheeled up will be soundly examined before they are put forward.
That is a tremendously important statement because what Mr Ives, the newly appointed chairman of the Primary Industry Bank, is saying there is that the private trading banks will not be able to offload their high risk customers on to the Primary Industry Bank because they will have to bear the risk for any customers who obtain funds through the Primary Industry Bank. If that is the situation, the Primary Industry Bank is a total charade. The private banks would have absolutely no incentive whatsoever to send customers to that bank or to obtain any funds for customers through the Primary Industry Bank simply because they would receive no profit from the deal but would bear all the risk. What possible reason would there be, if this is to be the way in which the Primary Industry Bank operates, for any private trading bank to obtain any funds whatever for any one of its customers? It would be absolutely absurd for a private trading bank to do so. It would not make any commercial sense. The private banks might do so out of a sense of good heartedness but they are not noted for that so much as their commercial operations.
We see this as being a quite remarkable development. It this is to be the way in which the Primary Industry Bank operates- the Chairman said only yesterday that it is to be the way the Bank will operate- we see the Bank exposed as an absolute and total charade which simply will not work. It will not be of any benefit whatever to primary producers if it works in this way. On the other hand, if the Government sees what is involved and decides it cannot allow this provision to operate and that the Primary Industry Bank will have to take the risk, the private trading banks will be able to off-load the risk- they will have every incentive to off-load their high risk customers- to the Primary Industry Bank. So, either way, we see this operation as being fraught with all sorts of dangers. Certainly it gives little prospect of help for the primary producers of this country. Concessional interest rates will not be available. We have been more or less told that. We gather, in the way in which the Bank will operate, that it is highly unlikely that there will be much in the way of funds for concessional interest rates anyway.
Certainly, the Bill represents an amazing sell out to the private trading banks by this Government. As I mentioned, it has given the banks control over the policy end by giving them eight positions out of 12 on the board of directors. By giving them control at the operational level the banks will be able to ensure that the primary producers of this country do not obtain any benefits at the expense of less profits to the private trading banks. The Government should be re-thinking the whole situation again. The Bill clearly represents a stumble from one position to another. The Government has not thought the matter out properly. It would have been far better to do as we suggested and proceed with expanding the powers of the Commonwealth Development Bank in the ways I have mentioned by making it no longer a lender of last resource than it would have been to go on with this Primary Industry Bank. It is, in fact, exposed as a complete political gimmick which will be of no help to primary producers or, at best, only very marginally helpful. It will shatter enormously the expectations of the many people in rural areas of this country who expected great things from this Bank.
Finally I refer to the amendment which I moved earlier to the second reading of the Bill. To remind the House, the amendment provides for a change in the membership of the board of directors. The Opposition is indicating to the Government what it believes should happen. We propose that the number of trading bank representatives be reduced from seven to four, the number of people representing the interests of primary producers be increased from two to four and that one person be on the board representing rural finance or rural reconstruction interests. Such a procedure should be supported by all those who say that they represent primary producer interests in this Parliament. If members of the National Country Party really and truly believe that they represent those interests, they have every reason to support the amendment to the second reading of the Bill and to instruct the Government that it should not sell out this bank to the private banks, that it should look after primary producers by ensuring that they have adequate representation on the board and that the board should be a balance of all the interests involved and not one which is just taken over by the private banks to be used for their benefit rather than the benefits of the primary producers of this country.
-Is the amendment seconded?
– I second the amendment and reserve my right to speak.
-The attitude of the Opposition as expressed by the honourable member for Gellibrand (Mr Willis) and by the amendment he has moved shows the complete hypocrisy of the Labor Party on rural credit. When the Labor Party was in government- it was in government for three years- it saw no need at any time to increase the rural credit facilities for primary industry. The Labor Party said there was no need. After seeing no need for an increase in rural credit facilities when they were in government, the Labor Party is now critical of anything we try to do to provide this essential need of a better and more specialised credit facility. The amendment provides for more primary producer representatives on the board of the Primary Industry Bank. When the Labor Party was in power, for the first time in the history of any Federal government it reduced the number of primary industry representatives on all the statutory marketing boards which it revised.
Whilst the Labor Party is saying that the Government is not providing enough say for primary producers, when it was in government it did exactly that; it reduced the number of primary producer representatives. Once again this shows the Labor Party’s completely hypocritical approach to rural industry. The Labor Party also says that long term lending is of no great value. The great lack in rural credit in this country is that there is no ability to borrow money for long periods in order to provide the repayment arrangements necessary for long term investment in the purchase and the paying off of a farm. Seven years is the average period. If one looks at what money can be borrowed over seven years through overdraft or short term rates and at the interest rates which would be charged if money were to be borrowed for 25 to 30 years, as envisaged by this legislation, one notes the interest rate concession. But that still misses the critical point. If a person borrows a certain amount of money over 25 years, which will be possible with this Bank, one thing becomes readily apparent, the annual repayment schedule is halved when compared with repayments on a seven year loan. This is a critical factor in two ways. The first important point relates to the assessment that is made of the ability of the borrower to repay a loan. That influences the decision in favour of the person receiving the loan. The second important point is that by halving the effective annual repayment limit the borrower is left with more money, more disposable income, as well as being able to repay the loan in principal and interest. One of the big problems for rural people at present is their inability to pay and service their credit commitments and to have money on which to live at the same time. I believe that rural Australians will take more notice of the Labor Party when it takes a genuine interest in the credit problems of rural Australia rather than displaying the contradictory and hypocritical interest that it has shown here today.
The Primary Industry Bank Amendment Bill 1978, as indicated by the honourable member for Gellibrand, amends the Australian Rural Bank Act 1977 in two ways. The most obvious is to change the name of the Australian Rural Bank to that of the Primary Industry Bank of Australia. The Treasurer (Mr Howard) in his second reading speech and Mr Ives at the Rural Press Club luncheon yesterday both indicated that satisfactory progress is being made to meet the mid-year starting point for the Bank. The second reading speech also referred to some of the things which are necessary to be done before the Bank is actually in operation. The Bank board has yet to be named. I congratulate the Minister and the Government for appointing Mr Walter Ives, retiring head of the Department of Primary Industry, as Chairman of the Bank board. I believe his appointment as Chairman will do much to give credit to the new institution and assist it through the difficult formative period. I believe that two primary industry representatives are close to being named by the responsible Minister.
The second reading speech goes on to point out that aspects of the Bank’s operations- its lending policies, interest rates and so on- will not be determined until after the Board has been established and relevant consultations have been held with the Government. The Minister went on to say:
The precise range and types of lenders, in addition to the participating banks, to be granted access to the re-financing facilities of the Bank have also not yet been determined but I re-affirm that it is the Government’s intention that there be wide participation. In particular, it is envisaged that the Commonwealth Development Bank of Australia will be able to re-finance loans to primary producers through the new Bank.
As I said earlier, I believe that Mr Ives’ comments at the Rural Press Club luncheon indicate that we are moving towards commencement in the middle of the year.
The board of the Bank will have a difficult task. Firstly, the creation of a completely new financial institution is in itself difficult. Secondly, the concept of the Bank has been greeted by considerable cynicism in the bush. It is believed by some that the trading banks have beaten the Government. I do not agree with that view, but it does mean that the board of the Bank will have to demonstrate, and very visibly demonstrate, that that is not the case. In the first place, it will have to prove that more credit will be provided and that there will not be simply a transfer of trading bank risks to the new Bank. In addition, the assessment of credit-worthiness should be more in line with the length of the loan than is the case under the present criteria used by bank managers. Here we do have the accountability or the honesty mechanism of the Commonwealth Development Bank and other institutions acting as agents as well as the traditional trading banks. If a person is in trouble with his own bank he has somewhere else to go.
The third point is that substantial amounts of capital for long-term lending should be marshalled, and marshalled quickly, so that the Bank can be shown to be effective. Fourthly, the interest rate must be shown to be lower than would be the case with present lending for the same term, and I emphasise that point. Finally, the Parliament must accept the responsibility of ensuring that the Bank, meaning the Board and the agents but principally the trading banks, is seen at the grass roots level to be fulfilling the purpose for which it was established. Rural members of parliament have a particular responsibility to assess the Bank as it progresses. If that progress is not considered to be satisfactory and is not in line with the stated purposes, then it is up to this Parliament to ensure that the legislation and the policy is changed.
The Primary Industry Bank is only part of a general rural credit policy being developed by this Government. In the 1975 policy speech it was announced that the Government intended to proceed with the Young Farmer Establishment Scheme. Various ideas are being floated at the present time concerning mortgage guarantee schemes and variable mortgage repayment arrangements. The recently released Industries Assistance Commission report on rural income fluctuations gives support to the concept of variable mortgage repayments. Incidentally, the New Zealanders are also very interested in this concept. Of course, New Zealand has gone further than Australia with rural credit facilities and I intend to talk about that a little later. When dealing with our overall rural credit policy I should also make reference to the rural adjustment program, which is a special rural credit faculty, firstly, for carry-on loans, and, secondly, for adjustments either for debt or farm size.
New Zealand provides a good comparison with Australia because it has a similar farm situation, but New Zealand has a very well developed special rural credit system. This has been brought about partly by the less significant role played by the trading banks in that country and a less developed commercial credit market, and partly, I believe, by an earlier recognition by government of the special credit needs of agriculture. I am pleased that the Government in Australia is recognising the need for special credit facilities, not only through a primary industry bank but across a range of rural credit arrangements in Australia. For example, New Zealand has had a rural bank by name since 1972. It has actually had a rural bank through the State Advances Corporation since 1 898. The 1977 New Zealand Budget provided for the expenditure of $ 163m through the Rural Bank in that country this financial year. That $ 163 m will have a number of inputs. One-third of the money will come from revolving funds through the ongoing nature of the bank. The Government will make special grants for the livestock incentive scheme and will make other special arrangements. It will also be putting in money to subsidise the interest rate through the Rural Bank. Borrowings will be made by the Rural Bank from post office savings accounts for re-lending to farmers.
There are many aspects of lending through the Rural Bank in New Zealand. The standard settlement scheme is the equivalent of our Primary Industry Bank. The special settlement scheme is the equivalent of our proposed young farmers scheme. There is the farm development scheme which one could say comes closest to one aspect of our rural adjustment scheme. The livestock incentive scheme is a part of the New Zealand Government’s policy to increase livestock production, one that we do not have here. There is a whole range of other schemes covering sharefarmers, suspensory loans and farm workers, but standard settlement is the closest comparison. In New Zealand standard settlement settles about 1,000 farmers a year on their first farm- approximately one-third of first farm purchases in that country. Preference is given to those who show farm management skills but are unable to acquire a farm or additional land from their own ordinary commercial credit or family resources. Hence lessees, sharefarmers, managers, second and subsequent sons on family farms, et cetera, have preference. Loans of up to $50,000 are provided for a dairy farm and up to $70,000 for a grazing property, at Vh per cent interest, with a repayment period of up to 25 years. I would like to see our Primary Industry Bank match that interest rate. New Zealand’s inflation rate is higher than ours and its interest rates should therefore also be higher.
In spite of the well developed Rural Bank and the standard settlement scheme, the New Zealand Government has found it necessary to establish a special settlement scheme of a more generous nature to ensure that young people are given a chance to become farmers in sufficient numbers for the future. The special settlement scheme was introduced in October 1976, and I studied it in January 1977 and again in February of this year at the completion of 12 months’ operation. There are three special aspects of the special settlement or young farmers scheme in comparison with the standard settlement or Rural Bank scheme. Firstly, higher loans are provided- up to $90,000 for a dairy farm and $150,000 for a grazing property. Consequently, there is a lower equity requirement from the purchaser of the property, theoretically as low as 15 per cent. There is effectively a cheaper interest rate of about2½ per cent by comparison with the standard scheme. Finally, it is a very selective and restrictive scheme, and I think the best comparison in Australia would be the single unit soldier settlement arrangements made after the Second World War and the very limited civilian scheme operating in South Australia. The aim is to settle about 100 young farmers a year, and in fact in the first year of operation 97 were settled.
The Bank in New Zealand is adopting a very cautious approach, partly to prove that it can be done, and its selection process therefore has to be very good. With the special concessional rates attached to the scheme, if too many people had the opportunity to buy land the price of land would be affected, which would certainly be counter-productive to the whole concept of land settlement. The loan percentage provided relative to total farm costs works out at below 8.5 per cent because of the real problem of repayment, even though the scheme is very attractive. For the first year the average for dairy farmers was 62 per cent and for sheep or grazing properties it was 72 per cent. The loans advanced were over $9m in the first year. Under the scheme the Bank is looking for a successful sharefarmer rather than a farmer’s son. In fact, the farmer’s son is restricted until all the other applications have been considered. The maximum age for application is 40 years and the average age of successful applicants is 32, but there appears to be a tendency to move a little towards the 40 years of age group. I think that the slightly older age group is due to the fact that a farmer’s equity must be more than 15 per cent for him to have the chance of a repayment schedule.
The sheep special settlement schemes, because they usually involve larger amounts, are generally more closely supervised by the Bank, and it is quite common to have special budgetary control exercised by the Rural Bank. In an area that I visited around Hamilton, the centre of the dairying industry in New Zealand, applications for a special settlement loan open in November, about a month after most dairy farms to be sold are put on the market for delivery in the following May and June. For both the standard settlement and the special settlement schemes auction sales are not permitted; sales must be private. The Bank then goes through the proposals, the selection process, and the decisions are usually announced by the end of January. I want to reemphasise, though, that even in New Zealand the majority of loans to young farmers or, if one likes, first farm purchasers are made through the standard settlement or the Rural Bank scheme.
In New Zealand at present farm development still has a higher priority with the Rural Bank than farm purchases, because of that Government’s policy of increasing livestock production. In the 1977 New Zealand Budget that I mentioned there were some other innovations in the rural credit area. A vendor mortgage scheme was introduced, which provided taxation concessions or inducements to encourage people selling properties to leave a certain amount of investment in the property and thus allow a better opportunity for young people to purchase the property and to be able to repay the loans. The New Zealand authorities, as I said, are studying a variable mortgage scheme, and I would hope that the board of the Primary Industry Bank, when it is established in Australia, will also closely study the advantages of a variable repayments system, which means that the client would pay less at the beginning of the period, because of the difficulties in meeting the repayments at that time, and more when, generally, he should be better able to do so.
As I mentioned, New Zealand also has share milker loans, suspensory loans, farm worker loans, agricultural contractor loans and farm ownership savings accounts. One could go on listing the loans. In fact, the New Zealand authorities put out pamphlets about the types of credit facilities available. Perhaps of interest to us in another area is the fact that the New Zealand Government provided in this 1977 Budget also a whole new range of loan provisions to encourage the development of the fishing industry in that country. That is something we should and I hope will be doing in this country. Also New Zealand promotes its schemes very well. I would hope that when the Primary Industry Bank is established it will produce the necessary, well presented, clear and simple but accurate pamphlets on the purpose of the Bank, the way to go about obtaining a loan, and so forth.
We still have a long way to go to reach the same level as the developed, comprehensive, special rural credit policy of New Zealand, but the introduction of the Primary Industry Bank is the major pivot of any rural credit policy. I am glad that at last we are introducing this Bank. I welcome its introduction. Its board particularly has a challenge to meet, and I hope it will be up to meeting that challenge so that the concept of the Bank and its purpose will be fulfilled and fulfilled to the advantage of rural people.
That the words proposed to be omitted (Mr Willis’s amendment) stand part of the question.
The House divided. (Mr Deputy Speaker- Mr P. C. Millar)
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 7- by leave- taken together.
– I rise to speak on this Primary Industry Bank Amendment Bill at the Committee stage. As we have heard, the Bill is concerned mainly with changing the name of the Australian Rural Bank established by legislation in 1977. The change of name of course does not greatly concern me or most people within primary industries. But there are some questions which give me and participants in the industry considerable concern. I am sure that the appointment of Mr Walter Ives as Chairman of the Primary Industry Bank will be welcomed by the Parliament and also the people within the industry. We wish him well in this most important position. However, the membership of the board of the Bank has not yet been announced and primary producers all over Australia are awaiting to hear its membership and policy. Interest rates on long term lending will be of major interest to all but the importance of tying interest rates to or reflecting them in some indicator such as the bond rate cannot be overstressed.
Primary industries are most desirous that the Bank does not become the repository of ‘hard core’ debt. We all would agree that the capacity to provide long term loans to primary producers for the development of their enterprises must be retained. It is important for the Bank to develop a system of reporting to primary industries. A possible method would be through the monthly Reserve Bank Statistical Bulletin. It is also important that the Bank should retain a flexible approach to financing, particularly in times of monetary retraint. The industry is particularly affected by the vagaries of mother nature. For a great many years the pastoral houses of Australia have been assisting primary producers in times of stress. At 30 June 1977 advances by pastoral finance companies stood at $247m. At this date rural indebtedness to the major trading banks stood at $ 1,397m. The major trading banks of course are more committed in the financing of primary industries. However in looking at these figures we can see that the pastoral houses are playing a significant part. I was interested to hear the honourable member for Gellibrand (Mr Willis) support the case of the pastoral houses. I sincerely hope that the Bank will continue discussions, which I understand are now under way, with pastoral houses to enable them to participate as lenders under the terms of the Bill.
I realise that the Bank must be given an opportunity to perform before one can offer constructive criticism or suggestion. However, there is a great deal of uncertainty within primary industries as to the ability of many of the banks and lending institutions properly to assess potential customers. The Commonwealth Development Bank has an excellent pool of rural officers who have training and experience in primary industries as well as banking. Other banks and lending institutions have similar officers and do a very good job of assessment. However, many more do not have this capacity. I cannot stress too strongly the feeling right throughout primary industries on this important factor. The assessment of the potential client is so terribly important. Over previous years we have found in rural areas that the manager of our small country bank has not been trained in this field and has not had to carry out a true type of assessment. Therefore we are worried about how the Primary Industry Bank will be able to succeed. This Bank could possibly bring about the turning point in relation to one of the major problems in our rural industries in Australia. The capacity to fund will be so very important. I support the Bill in its present form and recommend it to the Committee.
– I want to say just a few words on this legislation at the Committee stage and perhaps more importantly to explain the reason why I voted against the second reading of the Bill and in favour of the amendment moved by the Opposition to what appears to be legislation that would be favourable towards rural industries and the primary producers of this country. I did so for two reasons. Firstly, I have always argued that there is no necessity to establish such an institution and that this legislation sets up only another monolithic institution. I believe that the Commonwealth Development
Bank could have had its charter extended and that it would have been able to cover everything that it is intended that the Primary Industry Bank should cover. If honourable members look at clauses 1 to 7 they will find justification for the opinion which I am now expressing.
Secondly, I am also a little disturbed about some of the factors relating to the administration of this new Bank. I fear that it will become only another banking institution and will not do the job that it is supposed to do, that is, to help people in primary industries. The Committee will recall that on a number of occasions I have criticised the Development Bank because of its lack of capacity really to assist where the need is for the man on the land and the men in country areas. That is why I supported the Opposition’s amendment. I do not oppose the principles of the Primary Industry Bank, but I fear that it will not fulfil its purpose. Unless there is a broader and more sympathetic approach by those in control perhaps there will be the same frustration with this organisation as there is with the Commonwealth Development Bank. As I have said, I do not know why we were not able to extend the charter of the Development Bank to use State instrumentalities which are already established and which are doing great work.
I hope that this Bank will be effective. As I have said, if one studies clauses 1 to 7 I do not think one is greatly encouraged, but I hope the Bank will fulfil the desires and the hopes of people in primary industry because at this stage they need all the assistance and help it is possible to give them.
Clauses agreed to.
Clause 8 (Commonwealth may provide funds for Bank).
– I wish to indicate very strong opposition by the Australian Labor Party to clause 8. Although it concerns only a couple of words they are of tremendous importance and they affect the whole control of the Bank. Under the original Act the Treasurer had the authority to provide funds for the Bank by way of grant or loan from the Government and, of course, the Treasurer being responsible to the Parliament, it meant that the Bank had a direct responsibility to the Parliament. Where the Act now reads ‘as he determines’- meaning the Treasurer- the amending legislation substitutes as are determined by the Treasurer and agreed to by the bank’. We all know from other amendments that when we say ‘agreed to by the Bank’, what in effect we are saying is ‘as agreed to by the majority of private bank representatives on the board of the Primary Industry Bank’. That is an outrageous proposition and it was the basis of the amendment moved by the Opposition in the second reading stage of the debate.
I must congratulate the honourable member for Lyne (Mr Lucock) as being the only member of the Government who was prepared to stand up for his principles. When we moved an amendment that the primary producers’ representation should be increased he was the only member of the Government to cross the floor and vote with the Opposition. Where is the loyalty of the National Country Party members when we moved an amendment to increase their representation on the board and they reject it? There were only about 50 of 90 members of the Government parties in the chamber anyway. But it was good to see at least one of those members prepared to stand up to his convictions and support our amendment seeking greater primary producer representation. I hope that the constituents of these so-called representatives of the primary industries are aware that an amendment moved by the Labor Party to increase their representation was rejected by their own representatives. It is a shameful situation.
In his second reading speech the Treasurer (Mr Howard) attempted to assure honourable members that there is no change in the objectives which the new Bank is intended to achieve. Throughout the history of this legislation, first as the Australian Rural Bank Act, now to be the Primary Industry Bank Act, there has been nothing but vague and confused assertions about the objectives and aims of the Bank. On 2 November 1977 Mr Lynch, the then Treasurer, said that the Government’s general aim was to keep interest rates to primary producers as low as practicable- which, of course, says nothingconsistent with relevant considerations. That is typical Treasury jargon. According to Mr Lynch the precise range and type of lenders granted access to the funds would be a matter for consideration. What does that mean? Honourable members can understand it is very difficult to judge whether there has been any change in objectives because we never quite knew what the objectives were.
Mr Lynch at the time did tell us something about the original Act when there was some forethought about the present amendment. We were told that the Bank would not lend directly but would borrow funds for lending to other financial institutions which would in turn on-lend funds to farmers. Mr Lynch said that the Bank would work through existing institutions and not in competition with them. We have been told now that this Bill is unique in the way in which it works with private banking institutions. It is certainly unique; it is far more than unique. It is outrageous that a government should amend this Act to give the private banking representatives a majority on the board of a government Bank. It is something that everybody should be objecting to particularly the members of the National Country Party.
– Who is putting up the money?
– Whether we get any money will depend on what the private trading bank members on the board think. If they do not want us to have money they have the power to stop us from having money. That is the whole point. This is precisely the point that the honourable member for Lyne made- what is the point of having the Bank when there are plenty of other institutions available to do the same thing? It is a facade.
– Rot. That is why it was put up in the first place.
– I know that it is uncomfortable; I know that you do not like it but the facts are there. The Government has tried to stack the board with the interests of the private trading banks. It has been under pressure from them and it has deferred to their wishes. The Bank could have been effective. If the Government had provided the Bank with an expert field valuing staff as operates in the Rural Bank of New South Wales and let those people determine who gets a loan, we may have achieved something. But there is no expert staff whatsoever in this Bank. We are entirely dependent on the decisions of private banks and they will use the same sort of yardsticks as they have always used. They sit in their offices and they use the rule of thumb method that one gets 60 per cent or two-thirds at the most of their valuation on one’s property. They allow a very wide margin of safety and this will not be of any help whatever to the farmers who are in real need.
All that will happen is that the private banks will have the opportunity of off-loading their weak customers. They will off-load their biggest risks on to the funds available in the Primary Industry Bank. The Government has put the private trading bank representatives on that board to ensure that that is what happens. That is what they will do. So in effect all that the Bank will do is subsidise the profits of private banks. They are doing all right now and they will do a little better under this arrangement. I notice that all the banks are doing fairly well. The Bank of New South Wales, despite the recession and everything else, a couple of weeks ago announced that it had increased its profit by 22 per cent. So everything is left in the hands of the private banks and instead of using specialists in valuation to make the Bank of some real assistance to primary producers, the Government has handed it over to the private banks. There is no question about that.
There are a number of other matters to which I want to refer. A very minute amount of money is to be provided for the Bank initially. I do not know how much money the Government is aiming to use. There is no indication of the amount of money to be made available; there is no indication of the interest rates and there is no indication of the terms of the loans. There has been some indication that they will either be at low interest rates and over short terms or at high interest rates and over long terms. Of course, what is needed is both. The primary producers need low interest loans and they need long term loans. This applies particularly to the cattle industry which, as everybody knows, is a very long term cycle industry. It takes several years, perhaps a decade, for the industry to go through a particular cycle. It is going through an extremely bad cycle at the moment and I do not think this Bank will have the funds to assist it. Cattle producers were in a bad way before the bluetongue situation arose and now the bluetongue situation has placed the whole of the livestock export from the northern States at risk. It has almost ceased. There is very little export of livestock being carried on. The sale of frozen meat has virtually finished; the producers have had very little share of that Here they are with highly stocked properties and a very dismal outlook.
This has been brought about in many ways by the lack of Government action in relation to bluetongue. The Government could have sent an officer overseas to try to keep these markets open and it refused to do so. Bluetongue is a tremendous potential threat to Australian primary industries. It is not that it is killing cattle or that there is anything obviously wrong with the cattle afflicted, but we all know that the danger is that the bluetongue virus will get into the sheep country. If that happens it will be a calamity for Australia. It has already been identified in the Northern Territory and in Queensland and I suggest that it is only a matter of time- it could happen at any time- when it will be identified in New South Wales in the sheep country and that could be disastrous. These are the sorts of very difficult situations with which this Bank may be called upon to deal and it will not have the facilities to do so.
Many producer organisations are opposed to this Bill. They see it as a facade. In its total concept it is a charade, and a very costly charade. It will cost money to administer and all it will achieve is that private banks will be able to unload their weak customers. It is patently obvious that this is a second rate piece of window dressing. It is a band-aid type response to a difficult problem in terms of responsible legislation, which it is not. The structure of the board is outrageous. It is a complete sell-out to the private banks and will be seen as such by responsible organisations.
The DEPUTY CHAIRMAN (Mr Giles)Order! The honourable member’s time has expired.
Clause agreed to.
Remainder of Bill- by leave- taken together, and agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Mr Adermann)- by leaveread a third time.
Debate resumed from 10 May, on motion by Mr Groom:
That the Bill be now read a second time.
-The new agreement will not meet the crisis that confronts the public housing sector in Australia. In no way will the agreement reduce substantially the backlog of families waiting for Housing Commission homes- a backlog of nearly 100,000 families. Those people have no other chance of obtaining shelter for their families. If the present extreme economic circumstances continue the position will become worse in the future. The agreement is consistent with the Fraser Government’s downgrading of the public sector. To show how much conservative Governments have downgraded public housing one only has to examine the number of dwellings built by the conservative governments of the early and mid 1950s. In 1953 a conservative government built over 16,000 homes. In the following year more than 17,000 homes were built. In 1955 the Government built nearly 1 8,000 dwellings. Of all housing built in 1955, 22 per cent was built under a similar type of housing agreement as the one before the House. Last year, in 1977, the Government built only 1 1,400 dwellings, or 7.9 per cent of all houses built. By this agreement even less houses will be built in 1978 than were built in 1977.
People may make their own judgments about this sectional and class biased government. Even if it built 1 1,000 dwellings in 1978, with new applicants running at more than 50,000 a year and a backlog of nearly 100,000 people waiting on the Housing Commission lists, it will take years to overcome this tragic problem. I say ‘tragic’ because Australia has skilled men and the materials available to build houses. All that is needed is a government that will make a decision to overcome the tragic position. Therefore I move:
That all words after ‘That’ be omitted with a view to substituting the following words: whilst not opposing the Bill, the House is of the opinion that
the Commonwealth Government should meet the cost of rental rebates to a minimum uniform level agreed to jointly between the State and Commonwealth Governments;
rents charged for Housing Commission dwellings should be set
for persons with incomes up to 1 35 per cent of average weekly earnings at not more than 85 per cent of the rates of rental on the open market, and
for persons with incomes in excess of 135 per cent of average weekly earnings at the rates of rental on the open market;
the interest rates charged for Home Purchase Account ‘on lent’ to other lending authorities should rise in line with capacity to pay;
the Commonwealth Parliament should have the opportunity annually to debate the appropriation to determine the progress made on the spirit of the understanding contained in the Bill;
the Housing Authorities in co-operation with the Commonwealth should develop a strategy as part of overall urban and regional planning to ensure a social mix in housing estates as well as ensuring that public housing tenants have access to social and cultural amenities and job opportunities; and
the Commonwealth should provide sufficient funds to Housing Authorities to ensure that a target completion rate of15,000 dwellings a year to overcome the backlog on the Housing Authority wailing lists can be met’.
The new housing agreement increases the interest rate on housing at a time when the Fraser Government is boasting that it intends to reduce interest rates, particularly on housing. The interest rate on advances determined annually by the Commonwealth for rental housing constructed by the Housing Commission will rise from 4 per cent under the former Labor Government’s agreement to 5 per cent under the proposed new agreement. Eligibility to register for a Housing Commission home under the old agreement was restricted to people with incomes of less than 85 per cent of the average weekly earning. By the new agreement that restriction is to be abolished. Home purchase assistance on advances determined annually by the Commonwealth will remain at the same interest rate of 4½ per cent, as was the case under the former agreement.
An administrative charge will be made by the lending authority. That was the situation under the old agreement and the same position will apply under this agreement. But, under the new agreement, after the first year the interest charge will be increased by half a per cent each year until it reaches one per cent below the long term bond rate. At the present time the long term bond rate is 9.2 per cent. Under the previous agreement an applicant for this scheme could earn up to 95 per cent of the average weekly earnings and still be eligible for assistance. Under the present agreement that means test will be abolished. The agreement is for 3 years compared with the previous agreement which was for 5 years. Under the previous agreement homes purchased from the Housing Commission were financed by the State housing authorities. Under the new agreement sales of Housing Commission homes will be for cash. Therefore the purchasers have to find outside finance wherever they can. Under the Labor Government agreement of 1 973 a maximum of 30 per cent of Housing Commission homes could be sold. By the new agreement there is no restraint on the proportion of dwellings to be sold but at least 40 per cent must be sold by the third year of the new agreement.
Clause 18 of the new agreement provides for Housing Commission rentals to rise to market related rents. That provision will create a great deal of hardship within the community. The new agreement provides for a new pensioner housing arrangement to replace the earlier Dwellings for Pensioners Scheme. Under the new scheme the Commonwealth Government makes nonrepayable grants to the State to provide rental accommodation for pensioners. The new scheme allows married pensioners to be eligible.
I turn to give details why the Opposition asks the House to support its amendment. I shall now deal with the first amendment which reads:
the Commonwealth Government should meet the cost of rental rebates to a minimum uniform level agreed to jointly between the State and Commonwealth Governments;
The Commonwealth Government is forcing State housing authorities to increase rents to the market rental. That will increase the number of housing authority tenants seeking housing rent rebates. The increase is directed at those people who are at present living in housing commission homes and whom the Federal Government believes are able to pay market rentals. There is a plan which will make this group vacate housing authority dwellings. These dwellings when vacated will be occupied by tenants on low incomes who will need rental rebate assistance. It may be that the more needy will be accommodated. This will place severe strains on the finances of the State housing authorities and possibly on State Treasury resources. There is strong evidence to support the view that rental rebates will prove very costly. Already many States have begun to move towards rental rebate.
Let us examine the situation in Queensland. In February 1978 rents rose, on average, about 42 per cent over the levels that they were 19 months previously. This has resulted in a most significant increase in the number of tenants receiving rebates as well as in the total cost of the rebates. From the end of September 1977 to the end of April 1978 the number of tenants receiving rebates grew from 3,500 to 5,800, an increase of some 66 per cent. The annual rebate costs rose from $2.4m to $5.75m, an increase of some 140 per cent. The proportion of lettable dwellings on which rebates were paid rose from 23 per cent to 41 per cent of the total. At this rate the rebate cost will absorb about 19 per cent of the total Commonwealth advances to Queensland in 1977-78. In New South Wales the experience has been similar. In July 1977 prior to the introduction of market related rents and a new related formula, about 1 5 per cent of tenants received rebates. But by the end of April this figure had risen to 26 per cent.
In October 1977 in Western Australia rents were pushed up significantly. At the end of June 36 per cent of tenants were receiving rebates. After the rent increases in December 1977 almost 43 per cent of tenants were receiving rebates. It is obvious from the evidence that the move towards market related rents will significantly increase the total expenditure of rebates. The situation may be that those in need are being helped, but it also means that considerable costs are being incurred in financing the rebates. Such a situation will lead to considerable effects in relation to the provision of welfare housing.
The very high costs of rebates may encourage housing authorities, particularly under conservative State governments, to cut back on rental stocks and thereby cut rebate expenditure. They may become more interested in the construction of nouses for sale, particularly under these new agreements, because under them they can sell as many homes as they like. Also, according to the Act, it is possible for the authorities to use Commonwealth funds to finance these rebates. This would in turn mean less funds being available for the construction or purchase of dwellings for rental accommodation. Both situations could lead to less rental accommodation being provided. It would be most undesirable if these effects were to occur. More rental accommodation is needed, not less, if the waiting lists for welfare housing are to be reduced on an overall basis.
There is a need to establish a uniform minimum standard for welfare housing, regardless of the State in which a person in need may live. Just as pensions do not vary between States, neither should access to and cost of housing vary to those in need. Housing costs account for a large proportion of the income of tenants of welfare housing. The rental rebate concept assures that no more than a certain proportion of the income is spent on housing. But the Bill allows this proportion to vary between the States. For example, this means that tenants who are pensioners will have different amounts of after-housing income depending on the State in which they live. To overcome these inequities an agreement should be reached between the Commonwealth and the States on an agreed minimum level of rebates to ensure that those in need are required to spend no more than, say, 20 per cent of their income on rent. The cost of the rebate would be paid by the Commonwealth Government, just as it now meets the cost of other uniform welfare payments. We question why housing is excluded. Why cannot the Commonwealth meet the same situation across the board as it does in relation to welfare payments. If the States wished to raise this minimum standard, which would be equivalent to a lowering of the proportion of income spent on housing, they could do so from their own resources.
Let me now deal with that aspect of our amendment which, if accepted, will mean that rents charged for housing commission dwellings will be set. Firstly, persons with incomes of up to 135 per cent of average weekly earnings will pay not more than 85 per cent of the rate of rental on the open market and, secondly, persons with incomes in excess of 135 per cent of average weekly earnings will pay the rate of rental on the open market. Under this housing agreement the Commonwealth is forcing the States to charge market rentals on all housing commission dwellings. Those tenants who do not come within the category pf being eligible for a rental rebate will find it difficult in the extreme to meet these increased charges. They are already finding it extremely difficult as the purchasing power of their incomes has been reduced by at least $14 a week during the last two years under the Fraser Government, due to decisions of the Australian Conciliation and Arbitration Commission. That does not take into consideration the increased costs of health, medical and petrol charges, let alone the fall in living standards due to cut-backs in public sector spending.
The concept of a market rent is an artificial meaning in an economy where funds for housing are severely restricted from time to time because of the requirements of short term management of the economy. These restrictions of monetary policy have reduced the availability of housing funds as well as pushing up their costs. This has limited the amount of rental housing available in the private sector and as a consequence has pushed up rents in the private market. Government policy on finance has aggravated rent increases on the open market. For example in New South Wales, particularly in metropolitan Sydney, a large number of flats that were formerly available for renting are now being sold with strata title. Other examples are of young people coming together and renting flats and houses. The rent they are prepared to pay is far in excess of what a normal family could afford. This all adds up to a false and inflated level of market rent.
Our amendment seeks to amend the Federal Government’s hard line position to allow those people earning up to 135 per cent of average weekly earnings to pay only 85 per cent of market rental. I think that is a reasonable proposition. This group already has been hard put, particularly if it lives in metropolitan Sydney or metropolitan Melbourne. A single income family finds it extremely difficult to purchase a home in its own right. A new 10 square home in the western suburbs of Sydney and land costs about $35,000. If those earning up to 135 per cent of average weekly earnings, which is $277 a week, were to purchase such a home and they sought a $30,000 loan to be repaid over 25 years at 10 per cent, the monthly repayment would be $272. The lending authorities would not give a loan if the repayments exceeded 25 per cent of a person’s income. So it can be seen that most people with incomes below 135 per cent of average weekly earnings, particularly if they live in metropolitan Sydney or Melbourne, are in a hopeless position to obtain their own cottage. Mr Deputy Speaker, I seek leave of the House to incorporate in Hansard a table which I have had prepared by the statistical service of the Commonwealth Parliamentary Library. It shows the monthly repayments and total repayments of loans of $20,000, $25,000 and $30,000 together with the various interest rates.
The table read as follows-
-I thank the House. The amendment moved by the Opposition is reasonable. The Government ought to give it serious consideration. I think that it is false and wrong for honourable members opposite to talk about making housing commission rentals equal to the full market rental. It is fair to make the rents equal to 85 per cent of the full market rental in the case of people earning up to 135 per cent of average weekly earnings. I think that this is fair and the Government should seriously consider this proposition.
Let me deal quickly with the homes purchased under the home purchase account. Under the old agreement, an interest rate of 4½ per cent plus administrative charges was charged. It remained at that level for the period of the housing loan. If the loan were for 30 years, that was the level of interest paid except if the Government determined another policy. Under this Bill which covers the new agreement, interest rates for onlending to State authorities will remain the same as those under the old agreement for at least the first year of a person’s loan. But after the first year, the interest increases by a half of one per cent a year until it reaches a level which is one per cent below the long-term bond rate. This rate of increase in interest is far too steep. For example, let me cite the position in respect of a $25,000 loan repayable over 30 years with an interest rate of 5% per cent- that is, 5 per cent for the fund and three-quarters of one per cent for management. In the first year, a weekly repayment of $33.91 would be required. In the second year, at an interest rate of 6% per cent, a weekly repayment of $35.73 would be required. This represents an increase of 5.4 per cent. In the third year, with an interest rate of 6% per cent, weekly repayments would amount to $37.55, an increase of 4.8 per cent over the level of the second year’s repayments. These rates of increase are too rigid, although borrowers probably could accommodate the rate of increase in payments of this magnitude at the current rate of inflation. However, severe difficulties would be faced if the inflation rate fell to, say, 3 per cent or 4 per cent per annum.
– It will.
– The Minister for the Northern Territory says that it will. Frankly, honourable members on this side of the House also hope that it will. But, having said that, the Government will make this situation even more difficult. Therefore, the Government should cast off its dogmatism and listen to some of the rational propositions the Opposition is putting before the
House. It would be better if the interest rate increase were geared to the capacity to pay which will vary over time rather than adhere to a rigid and fixed rate of increase as set down by this Government.
I now refer to the unsatisfactory position of having nearly 100,000 families on the waiting list for public authority houses at the present time. The present rate of construction, about 11,400 dwellings a year, has not proved sufficient to overcome this most serious backlog. The Commonwealth and the States should set a target rate of completing 15,000 dwellings a year, or a 25 per cent increase on the last 5 years, for the three year duration of this agreement. The industry has the capacity to support a building program of this magnitude in the public sector. There are many reasons for saying that we need to build more houses under this agreement. We must eliminate the grave social problem which is a scar on our society. We also need to use this building program as a stimulus to our stagnant economy. We have unused resources, both men and materials. We have thousands of skilled building workers unemployed and it is about time that we got them back to work. A stimulus of this type would have a flow-on effect to other sections of industry- the supply of cement, fibrous plaster and related products, asbestos cement sheets and mouldings, bricks and tiles and other earthenware products, porcelain and terracotta products, glassware, sawn timber, plywood and veneers, other processed wood wall and ceiling boards, aluminium building materials and plastic building materials. In addition to those capital expenditure items, a number of ancillary industries are involved in the supply of furniture and furnishings, light fittings, white goods, cutlery, et cetera.
It can be argued that what is good for housing is good for the Australian economy. I think that it is about time that our policies were returned to that sentiment because we need this stimulus. If the housing industry is healthy then a great deal of other sectors of industry will be healthy. All honourable members are aware that the industry is under-utilised in all respects. If we examine the advance for housing under this agreement as a proportion of total Commonwealth revenue outlays, we find that it is the lowest proportion for at least five years. In 1973-74, the advance represented 1.79 per cent of Government revenue. In 1974-75, it rose to 2.16 per cent. The figure for this financial year has now fallen to 1.4 per cent. Mr Deputy Speaker, I again seek leave of the House to incorporate in Hansard a table dealing with this aspect prepared by the Commonwealth Parliamentary Library.
The table read as follows-
-I thank the House. Let me now give further evidence to reveal how the Fraser Government’s priority for public sector housing has fallen very substantially. In 1974-75, $385m was advanced to the States by the Commonwealth for welfare housing. Repayments of advances in that year amounted to $19m. An amount of $88m was repaid in interest. Therefore, the net amount available for housing in that year was $278m. That amount, based on the implicit price deflator at constant 1966-67 prices, is reduced to $ 139m.
Let us now examine the purchasing power of the moneys advanced by the Commonwealth to the States in 1977-78. Gross advances amounted to $390m. Repayment of advances from the States to the Commonwealth amounted to $27m. Interest repayments amounted to $133m. Net funds available totalled $22 9m. Again taking the 1966-67 prices as an indication of the actual real money that is spent on housing this year, we obtain a figure of $79m. This represents a fall in expenditure of 49 per cent between 1974-75 and 1977-78. 1 notice honourable members opposite shaking their heads but I have had these figures checked. With the permission of the House I wish to have a further table incorporated in Hansard. It was drawn from Budget Paper No. 7 of 1977-78.
The table read as follows-
-I thank the House. I have shown in written form the real value of the money for welfare housing this financial year. This is an area of the Australian economy that needs an urgent stimulus and there are social problems facing people who need housing for their families. Our nation as a whole needs this stimulus. We need it to get the work force in the housing industry working again. It is for these reasons that I ask the Government to accept our amendment. I will give further details about the position in the discussion on the agreement when we reach the Committee stage.
-Is the amendment seconded?
– I second the amendment and reserve my right to speak at a later stage.
-The Government completely rejects the proposition put on behalf of the Opposition by the former Deputy Leader of the Opposition. The Government has approached this matter in a way in which the Opposition has not. First of all, the Government has endeavoured to assess the needs of people requiring accommodation. It has tried to assess the objectives of people requiring shelter and what is most beneficial for them, by seeing and talking to them and by finding out their needs. Without exception, people who have been interviewed regarding their family’s requirements and the requirements of the community for housing listed certain matters as of importance. Home ownership was given primary importance. They considered it to be an Australian’s right. There must be more involvement in a community if home ownership is to be achieved. There must be a greater sense of security for any group of people who have a permanent home which they own themselves. Home ownership provides an inbuilt protection from old age. There is more power over one’s life and a pride in one ‘s family if home ownership can be brought about by any mechanism which is open to governments, whether it be by the instrument we have before us today or whether it be by instruments which are available to the Government through economic measures or any other measures. It gives families something to work for, and it also gives people a capacity to improve their lifestyles and their surroundings.
The Commonwealth-State Housing Agreement has been in existence for many years. I contend that this is the most enlightened legislation that we have seen in the House regarding the Commonwealth-State Housing Agreement. It is termed the Housing Assistance Bill. The Housing Assistance Bill proposes assistance in two areas to families of low income. Firstly it provides assistance for home ownership, and secondly it provides for rental assistance for low income families. The Government supports both areas. It seeks to extend the capacity of people to provide shelter. It uses a government mechanism which operates through the Commonwealth to the various State governments. I am sure that all State governments have accepted this as being the most innovative and advanced program for housing that we have seen. At this point one must feel that the Government must be congratulated, as must be the Minister for Environment, Housing and Community Development (Mr Groom).
– They are enthusiastic about it.
– There is enthusiasm in the States, as my colleague says. There is enthusiasm for the ability this provision gives for State governments and individuals living in the States to provide shelter and accommodation for themselves and their families.
The affordability of homes and the cost of housing in Australia are being examined by the Government at the moment. I refer the House to a document prepared by the Housing Industry Association for the twelfth national convention of the Association. The document is entitled Productivity and the Affordability of Houses’. The Housing Industry Association talks about the factors involved in affordable houses and mentions factors that comprise the cost of housing to the community. It covers home design, construction, the improved productivity that we are now seeing in Australia and the matching of construction techniques to material and design concepts. There have been many innovations in that area over the last five years which have reduced the term of the construction process.
-Order! The honourable member for Cunningham is conversing with strangers in the Gallery.
– There are more strangers in the Gallery than there are members in the House.
– I suggest that members on the Opposition side are more like strangers than honourable members on this side of the House. (Quorum formed.) Before I was interrupted I think there were three members of the Opposition involving themselves in this very important debate on housing assistance in Australia. This legislation is the most innovative and progressive that the Government has produced during its term of office in regard to assistance for people on low incomes to provide for themselves shelter and accommodation. The legislation provides almost complete freedom for State governments to apply funds in the way that they think best to assist people to acquire their homes and to obtain rental accommodation for their families.
The Bill makes provision for loans to be made by State governments to terminating building societies or co-operative housing societies. I pay tribute to the fine role which is played in the building industry by the co-operative movement. It is a sensible, well structured organisation which is effectively administered by State governments. It seems to me that the additional funds which will now be made available to the terminating building societies and which will increase the proportion of the total Commonwealth housing assistance program to cooperative housing societies will be of great benefit to those organisations and the people who support them. It also extends the capacity of State governments, where they wish to do so, to provide funds for a lending authority of the State approved by the State Minister. Indeed, the State Minister has a capacity to go outside the traditional avenues and can go to registered cooperative organisations- this does not include permanent building societies- and other bodies and organisations, including permanent building societies, as are from time to time agreed upon between the Minister and the member State. It seems that this proposal will allow a greater access to funds by those people seeking to borrow. It will allow a greater access by those people who need to have support at low rates of interest. The conditions under which these loans will be made have been varied to ensure -
– I raise a point of order. The honourable member for Mitchell earlier referred to the number of Opposition members who were not present to listen to his speech. I point out that it is the function of the Government to maintain a quorum.
-(Mr Giles) - There is no point of order involved. ( Quorum formed).
– It is good to have interjections being made and quorums being called by the man who holds the record for being the most long-standing leader of an opposition in Australia. This shows the sort of success that we have in this House in trying to speak in support of legislation which seeks to assist the people who cannot achieve for themselves the capacity to purchase or rent homes. This legislation provides for housing assistance in a most sympathetic and innovative way. Before the interruption, I was saying that the capacity to purchase has now been changed in such a way that continual low interest rates are not available to everybody who wants to purchase a home through the former Home Builders Account. This decision was taken by the Government after it was made aware of reports, such as the report of the Henderson Inquiry into Poverty which pointed out the substantial inequities involved in current public housing policies. The inquiry found that most of the poor were not public tenants or public owners and that most of the public tenants were not poor. Now the Government seeks to allow people who have an increasing capacity as wages improve and their own personal means improve to move outside the traditional terminating loans and to come on to the market as full members of society, as traditional borrowers, the same as the rest of the community.
This legislation strikes an interest rate of 5 per cent per annum until the end of the first financial year. Thereafter the interest rate will increase at half of one per cent per annum. This will allow, over a period, the amount of repayment that is undertaken by an individual who is receiving assistance to purchase his home to increase. I suggest to the House that as an individual’s capacity to earn more increases- as his substance improves and as his capacity to repay improves- he should be required to contribute more substantially to the repayments of the funds that the Commonwealth and State governments have provided for his home ownership. It is an interesting fact that home loans under these conditions are normally paid out over a period of 13 years. With the falling interest rates of today, I am sure that it will be only a short time before the Government needs to look again at the legislation. The interest rate of 5 per cent per annum provided for in this legislation may very soon be approaching the standard interest rates in Australia.
The provisions that allow for an increase in interest rates will also assist in making greater provision for those people who are really in need. It is a commitment of this Government that those individuals who do not have a capacity and who, at the moment, are being held outside the provisions of housing assistance, should have the opportunity of coming within the provisions that have applied for so long and have been so successful throughout Australia. It is an unfortunate feature of the program that a considerable number of people who are not within the program should be within the program. Many people within the program have a personal earning level, a personal financial capacity, far greater than is warranted for them to receive subsidies and assistance in the way they are receiving it.
State governments have applauded these measures. They are enthusiastic about them. The Bill gives State governments an opportunity to administer in a more flexible manner. It gives them a capacity, in cases of hardship, to allow a continuation of low interest rates to those families who cannot afford normal interest rates. The Bill also provides for State governments to investigate and to adopt escalating interest loans, with income geared starts. It provides for deferred interest payment loans, income geared repayment loans, high start loans and second mortgage loans. The wide range of programs that can be adopted by State instrumentalities under this imaginative legislation is hard to calculate. I can understand why the honourable member for Reid (Mr Uren) who has just spoken in the debate is so disturbed about the Bill. When one looks at his amendment one sees that he is grasping to try to find some areas in which he can criticise the Government. He says that the Commonwealth Government should take greater control and should prescribe exactly which people are eligible to receive loans. He wishes to prescribe their weekly earnings. He does not wish to include the half of one per cent per annum increase for those people who are drawing funds from the terminating societies.
There are plenty of opportunities for this House to discuss matters of this nature which involve home ownership and low income families seeking to acquire their own accommodation. It is completely strange that such provisions to allow greater debate should be enshrined in any piece of legislation. The Government cannot accept that sort of legislation. When one looks back one sees that under the former Government there were increasing provisions to control the whole of the housing industry throughout
Australia. In this Bill we are giving power to the States. I say to the honourable member for Reid, the spokesman for the Opposition in this matter, that a few moments ago one of his State colleagues was in this chamber. The people who are administering this sort of legislation are pleased with their increased capacity to make decisions.
I draw the attention of the House to the fact that we have had this matter before us for nearly 18 months. Mr Newman, when he was Minister for Environment, Housing and Community Development, made the original announcements. In fact he negotiated the agreement between the States and the Commonwealth. I read to the House a small extract from the Australian Financial Review of 1 5 February last year:
Mr Newman apparently recognises, but the State Labor Premiers do not, that welfare housing aid should be separated from Government assistance to other forms of housing. If the poor are to be given the maximum help, as the former Priorities Review Staff noted, that to the non-poor must be minimised.
This legislation seeks to increase the capacity of State governments. It provides for greater flexibility of approach. It provides for people either on rental or purchase programs to achieve their objectives. It provides, first of all, for increased home ownership. Secondly, it provides for assistance at a sensible level, a level that can be met by families. It provides support, subsidy and assistance for rental programs. This is a major breakthrough for the Federal Government, a major breakthrough for housing in Australia. I hope that in its consideration of the program’s progression the Government will see its way clear to providing funds on a 3-year basis to enable a greater process of planning by State governments and to enable the innovations introduced to be properly fulfilled.
-Order! The honourable member’s time has expired.
-The Housing Assistance Bill will have very important consequences for the people of this country. It is a Bill that provides funding and the principles for that funding for the next three years. But a leopard never changes its spots, and I think one can confidently predict that regardless of all the frilly-dilly contributions that are made to the debate and the smorgasbord of enticing potential that is outlined in the legislation, this LiberalNational Country Party coalition will show no more concern for the future housing needs of underprivileged people than it has in the past. The first thing to be said is that the great queue for housing assistance will only get longer, certainly not shorter, as a result of the passage of this legislation. When we talk of funding we can take the fundamental view that this is a very key issue. It is certainly not an issue that is defined in the legislation. At this stage no figure at all is involved in respect of the Housing Assistance Bill. There has been no Government commitment to any increase in funding welfare housing in real terms.
The new agreement will result in rental increases for thousands of State housing authority tenants, some even to market rent levels. I do not think that anyone on the other side of the House would dare to contradict that contention. The admission of housing authority tenants on a priority basis according to the application of means test criteria has been abandoned in this agreement. The result will be that admission standards will vary from State to State. Relatively affluent applicants will be joined in competition for homes with the 100,000 applicant families whose incomes are under 85 per cent of average weekly earnings. The agreement which the Labor Government negotiated and which this agreement replaces had as a fundamental cornerstone the allocation of funds. After all, we are talking about subsidised housing funds, and the Labor Government was concerned to ensure that those funds went to the most deserving people in our community. I can tell the House from first-hand experience that our efforts to ensure the application of that principle met with great hostility in some of the States, which were anxious to widen the means test range of eligibility so that the more affluent could seek to qualify. The State waiting lists and waiting times obviously will get longer and longer as a wider range of income categories compete for probably the same and possibly a lesser amount of money.
The new housing agreement is limited to a 3-year period rather than the usual 5-year period. That change could possibly disadvantage the States in their long-term planning. No good reason has been given for the traditional 5-year agreement being reduced to three years. Implicit in the new agreement is the abandonment of the special provision for pensioners by way of the States Grants (Dwellings for Pensioners) Act, which for many years has facilitated payment to the States of $ 10m per annum for the provision of pensioner housing. Hereafter pensioner applicants will take their chances in competition with all other applicants. Honourable members opposite do not seem to realise that it is possible for pensioner families to receive assistance under the provisions of the Commonwealth-State Housing Agreement. That has always been the case, but the purpose of the States Grants (Dwellings for
Pensioners) Act and the $10m made available annually was to meet the special problems of single pensioners, who predominate among pensioners with housing problems. One cannot be sure that that category of pensioner is going to receive the same consideration in the future. The fact is that pensioners will now go into the melting pot with everybody else. This is an enticement that is set out in a great schedule but in respect of which there is no guarantee of adequate funding.
I turn now to the question of the sale of dwellings. By removing the restriction which prevented more than 30 per cent of dwellings being sold in any one year, the stock of inner city dwellings can be sold off, forcing housing commission tenants out to perimeter suburbs where long travel distances and expensive fares will become a very serious problem. I know that there are provisions in the agreement that require the authorities to use the proceeds obtained from selling a home for the acquisition of another home. There is no question about that; I understand it perfectly. But the regrettable fact is that the trend evidenced in recent years whereby housing commission tenants are forced out to places such as Mount Druitt, with 1 7 and 20 mile railway trips from the centre of the city, is going to continue. Often the people accommodated in the State housing commission homes are those who work in the city- the waitresses, the taxi drivers, the cleaners, the lift drivers. It is regrettable that we are adopting a course of action that will result in the selling o£F of those homes. Of course, after they are sold, often they will be razed to the ground by the private entrepreneur and replaced by medium density dwellings that will be beyond the capacity of many low income people.
I come now to the question of rental rebates. The rental rebates to be provided to families who are unable to meet the new requirement of market rent levels are undetermined, to the point where a generous policy can prevail in some States and insufficient support be given in others. In other words, the Commonwealth has virtually abdicated from expressing an effective policy in this regard. There has been some airy fairy talk about the Commonwealth seeking to come to an agreement with the States at some time in the future as to the level of support for the rental rebate scheme. But it is apparent that for some time to come there are going to be varying policies in the States, and I believe that that is an extremely regrettable development. I am fully aware of the relative lack of sympathy in evidence in some of the Liberal-National Country
Party-dominated States as far as these matters are concerned.
There are fundamental philosophical attitudes on questions of this kind. Many people on the other side of the House simply take the view that life was not meant to be easy, that it is your job to look after yourself and you cannot expect support from anybody else. Where governments are dominated by such a rental philosophy and no interest is evinced by including provisions in legislation of this kind, while the Government does not avail itself of the provisions of section 96 of the Constitution to make grants available on conditional terms, on terms of high principle, then we are going to find a degeneration of those great ideals that characterised the last housing agreement. I am simply making the point that I am concerned that no effective criteria are outlined in this legislation in regard to the rental rebate policies to be pursued in the various States. For that matter, neither is there any indication of the extent of support that the Commonwealth Government will give to those States which implement effective rental rebate policies. I shall deal now with the question of conditions of sale. Clause 26 (2) of the Schedule in the Bill states that the conditions of sale are such that assistance to purchase will be given only to the following people:
In other words, the State housing authorities become the lenders of last resort, but only to the extent of the funds available. I know the wellestablished mesmerisation of this Government. It slightly raises the amount in money terms, in many instances over and above the level of allocations in a previous year, but in real terms, taking inflation into account, undoubtedly fewer funds will be available for housing than in the past.
Let us look at the question of interest charges. Loans made available under the home purchase assistance account through various agencies will involve high interest charges and in many cases will exceed the capacity of people to pay. An annual interest rate increase of 0.5 per cent will be made until purchasers will ultimately have to pay interest equal to one per cent less than the ruling bond rate plus a management charge, which, by today’s standards, could take the interest rate to more than 10 per cent. That is the fact of the situation. Interest rates on home purchases under this agreement will go beyond 10 per cent and to a level in excess of the capacity of many people to pay. In contrast to what this Government is proposing in terms of this high interest rate policy, clause 20 (2) of the agreement which I negotiated on behalf of the former Labor Government stated:
The interest charge which shall include an element for the cost of administration by the housing authority of the contract of sale to purchasers of dwellings shall not be less than 3 per cent per annum nor more than 534 per cent per annum.
I believe we have gone backwards in respect of these concepts which I have outlined. We have had five years of great achievement in terms of the implementation of the five-year Commonwealth-State housing agreement. The Labor Government’s achievement in housing reached a record level when the funding provided by it, the product of its economic policies, resulted in 16,153 housing completions in 1976. Of course in previous years completion levels were about 12,000 and 13,000 houses. In the face of very great difficulties the Labor Government had this record result.
In terms of finance, total advances were running at the level of $168m under the LiberalCountry Party Government. In 1972-73 the Labor Government increased advances from $168m to $196m. In the next year advances increased to $2 18m and in 1974-75 to $385m. Then there was a decline to $364m; then an increase marginally to $375m; and in 1977-78 the figure is $390m which, although a larger amount than in the several preceding years, is a drop in real terms having regard to the savage rate of inflation in those periods. I know there was always the contention that Labor was never interested in home purchase but the home builders account provided finance for home purchase. In 1973-74, 10,053 loans were made; in 1974-75 the level was 13,218; and in 1975-76, when there was a change of government, loans nosedived immediately to 9,624 loans. The number has dropped consistently since then until the current year, 1977-78, in which the very pathetic number of 8,190 loans has been approved. So it goes on.
If one takes a great schedule of figures one will consistently find this revelation: The Labor Government has shown a lot more concern about the housing needs of low income people in this country. The once achievable objective of owning one’s own home has slipped further away from the means of the average Australian. Nowdays new home ownership is increasingly restricted mainly to the top 30 per cent or so of income earners, families with two incomes acceptable to lending institutions, and those people fortunate enough to inherit money or a substantial share in a family home. The causes of the problem can be identified as the high cost of lending, the drastic reduction in the Federal Government’s home building program, inflationary interest rates and the difficulty of obtaining access to finance through traditional means of financing.
In the last two years the Fraser Government has deliberately refused to stimulate activity in the building of new dwellings. It has failed to create jobs and to satisfy housing needs. This new Bill before the Parliament represents the only initiative taken by the Fraser Government in the housing area.
The Government has not indicated the amount of money it intends to make available. The Fraser Government’s record indicates that housing does not rate highly in its list of priorities. For example, the Government has dropped expenditure on housing, in real terms, by a mammoth 57 per cent in just two years. This means that the Commonwealth Government’s outlays on housing, which include spending on defence service homes, housing for people in need, housing grants to the States, housing for Aboriginals and migrants, as well as expenditure on urban renewal programs and growth centres, has been virtually cut to the bone. The building industry is in a crisis. The number of new dwellings commenced during the March quarter 1 978 fell by 10 per cent compared with the previous quarter and by 23 per cent compared with the March quarter of last year. The Budget deficit of the Fraser Government is expected to exceed calculations by a mammoth $800m yet no extra spending has gone into housing to reduce the waiting lists for welfare housing and to create new jobs. More than 90,000 applicants in Australia are on lists waiting desperately for housing because the existing private enterprise system does not allow them to obtain finance.
– How many?
-More than 90,000 Australian family applicants. More than 43,000 Australians have lost their jobs in the construction industry in the last three years and no panacea has been proposed to come to grips with that unfortunate development. The difficulty of obtaining access to finance through traditional means can best be illustrated by the following: In 1970 the average price of a house and land was $15,500 and average weekly male earnings were $81.10. The maximum loan available, based on the income of the borrower, varies from institution to institution and according to the duration of the loan. But if the weekly repayment was not to exceed 30 per cent of take-home pay, $11,500 was the maximum loan available, leaving a balance of $4,000. By 1977 the average price of a house and land had risen to $47,300 and average male weekly earnings to $183.40. On the same basis, $25,500 would be made available, leaving a balance of $2 1,800. The clear fact is that housing is getting beyond the reach of the people more and more as each day goes by. So the CommonwealthState Housing Agreement looms up more significantly as the only means by which the housing needs of the people can be met. In those circumstances one can only be disappointed by the terms of this agreement.
Mr DEPUTY SPEAKER (Mr Millar)Order! The honourable member’s time has expired.
Debate (on motion by Mr Baillieu) adjourned.
House adjourned at 4.26 p.m.
The following answers to questions upon notice were circulated:
asked the Minister for Productivity, upon notice, on 8 March 1978:
What sum was paid by his Department, or by Departments formerly encompassing the functions now performed by his Department, to each airline for air travel within Australia during 1976-77.
– The answer to the honourable member’s question is as follows:
Payments in 1976-77 as shown in the accounting records of the Department of Productivity were:
Trans Australia Airlines, $90,520.
Ansett Airlines of Australia, $54,745.
Staff Canteens (Question No. 566)
asked the Minister for Trade and
Resources, upon notice, on 8 March 1 978:
– The answer to the honourable member’s question is as follows:
The Department of Trade and Resources does not operate any staff canteens.
asked the Minister representing the Minister for Social Security, upon notice, on 13 April 1978:
– The Minister for Social Security has provided the following answer to the honourable member’s question:
At 3 1 December 1977 there were 44 South Vietnamese or Cambodian children and 62 Timorese children for whom payments of special benefit were being made. It is not possible to identify how many of these children were granted permanent residence in Australia since 1 July 1977.
There were at 3 1 December 1977, 577 migrants in hostels or accommodation centres in receipt of special benefit, but the proportion of that number who were of South East Asian origin, or could be classified as refugees, is not known.
In addition to special benefit, permanent migrants with children become entitled to family allowances from the pay day after their arrival.
asked the Minister representing the Minister for Social Security, upon notice, on 2 May 1978:
– The Minister for Social Security has provided the following answer to the honourable member’s question.
asked the Minister for Immigration and Ethnic Affairs, upon notice, on 3 May 1978:
– The answer to the honourable member’s question is as follows:
I welcome this opportunity of again giving the assurance that the Australian Government thinks highly of the significant contribution made by people of Greek origin to Australia. It is quite unfair to blame a whole community because a small minority of that community may have been involved in something unlawful.
Ministerial Travel Overseas (Question No. 1021)
asked the Minister representing the Minister for Science the following question on notice on 3 May 1 978:
Has the Minister travelled overseas since 1 1 November 1975.
– The Minister for Science has provided the following response to the honourable member’s question:
Yes. Antarctica in January 1976. (Noumea, privately, in December 1976).
Ministerial Travel Overseas (Question No. 1022)
asked the Minister representing the Minister for Science the following question on notice on 3 May 1978:
Has the Minister travelled outside Australia by aeroplane or ship since 1 1 November 1975.
– The Minister for Science has provided the following response to the honourable member’s question:
Yes. By aircraft as stated in Question No. 102 1.
asked the Minister representing the Minister for Social Security, upon notice, on 4 May 1978:
– The Minister for Social Security has provided the following answer to the honourable member’s question.
asked the Minister for Immigration and Ethnic Affairs, upon notice, on 9 May 1978:
– The answer to the honourable member’s question is as follows:
(1)118, (2) $13,459.
asked the Minister representing the Minister for Social Security, upon notice, on 10 May 1978:
– The Minister for Social Security has provided the following answer to the honourable member’s question:
asked the Minister representing the Minister for Social Security, upon notice, on 11 May 1978:
– The Minister for Social Security has provided the following answer to the honourable member’s question:
(a) November 1974-by $1 a week, i.e., from $4 a week to $5 a week;
am asked the Minister for Trade and Resources, upon notice, on 2 March 1978:
– The answer to the honourable member’s question is as follows:
Trade Agreements signed but not in force
In addition to the above agreements there is a number of agreements concluded by Britain, applicable to Australia, which contain clauses providing for reciprocal mostfavourednation treatment for certain goods. In some cases Australia has assured the foreign country concerned that reciprocal most-favoured-nation treatment will be accorded. These Agreements are still in force and are listed in the Australian Treaty list of 1 970.
Germany, Democratic Republic of
Union of Soviet Socialist Republics
Joint Trade Committees
China, Peoples’ Republic of Czechoslovakia India
Korea, Republic of
Committee of Representatives
Joint Consultative Council on Forest Products
Cite as: Australia, House of Representatives, Debates, 26 May 1978, viewed 22 October 2017, <http://historichansard.net/hofreps/1978/19780526_reps_31_hor109/>.