House of Representatives
15 August 1978

31st Parliament · 1st Session



Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 2. 1 5 p.m., and read prayers.

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DEATH OF HIS HOLINESS POPE PAUL VI

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– I move:

With the death of Pope Paul- the spiritual leader of the world’s 700 million Roman Catholics for the last 15 years- the world lost a great religious leader and a messenger of peace. In many ways his papacy came in an unique age. It coincided with an upsurge of the ecumenical movement and far-reaching and fundamental changes in society throughout the world. It was an age, too, of challenge to the traditional spiritual authority of the Church.

Pope Paul sought to maintain the essential body of doctrine of his Church, and to uphold its institutional character. He saw his duty as being to steer a middle course within the Church, between those elements calling for change and those who defended continuity. Pope Paul handled these challenges calmly and wisely, with moderation, tenacity and courage.

Pope Paul made strenuous efforts to encourage the ecumenical movement for Christian unity. He actively encouraged contact and fraternity within Christianity and between the major world religions. He sponsored ecumenical meetings for Christian unity, held numerous meetings with leaders of other churches, and looked forward to the eventual resolution of disunity.

Pope Paul also will be remembered for his important reforms to the organisation and structure of the Church. The implementation of the Vatican Council’s decision to allow celebration of the mass in the vernacular was an historic event of his reign. There were important changes initiated by Pope Paul in the field of international affairs. He strove tirelessly for world peace and for higher ideals in the conduct of world affairs.

Under him, the Vatican enhanced its already high stature in international diplomacy. It became a notable contributor to conferences such as those on world food problems, population, humanitarian law in armed conflict, and security and co-operation in Europe. Foreign policy concerns of the Holy See under Pope Paul included: Disarmament and the non-proliferation of nuclear weapons; improvement of social welfare; assisting the development of the poorer countries; evolution of relations with Marxist regimes; and a desire to expand official communications with the communist, Islamic and Asian world to ensure maintenance of freedom of Christian observance. He emphasised peace as the most essential need of our time, and this was reflected in his innovation of the observance of 1 January as the world day of peace.

I recall with warmth and appreciation my private audience with Pope Paul only last year, during which he gave expression to his concern for and promotion of peace amongst all the world ‘s citizens, and expressed at the same time a special concern for underprivileged developing nations. Pope Paul travelled widely, disregarding risks to his person, and became the first reigning Pontiff to visit all continents. We remember the affection generated by his visit to Australia in 1970. It was during his reign that Australia opened diplomatic relations with the Holy See. These have proved of great value in the conduct of Australia’s foreign affairs. Mr Speaker, Pope Paul was a man whose great strengths and personality became clearer the longer he remained Pope. His death saddened this country. It is a supreme loss for his Church and a real loss for all mankind. I commend the motion to the House.

Mr HAYDEN:
Leader of the Opposition · Oxley

– The Opposition joins with the Government in its expression of condolence at the death of His Holiness, Pope Paul VI. Pope Paul VI began his reign in the shadow of his predecessor. Pope John was not an easy man to follow in office. As well, Pope Paul reigned at a time of change both within and outside the Church. His efforts to protect the Church from the radical changes occurring outside while at the same time in a sense allowing for those changes, earned him the respect of the world. Pope Paul, in fact had become known for his compassion towards all men long before he became head of the Roman Catholic Church. His relentless efforts during World War II to aid displaced persons and political prisoners, and the impartiality with which he dealt with diplomatic representatives of all nations, won him much admiration.

In the critical days at the end of the War he served as the liaison between the Holy See and the Americans sent to Italy to establish the Catholic relief services. After the War he continued in his efforts to relieve the suffering of the homeless. Pope Paul never lost sight of the role of his Church in the international sphere. He reigned with great dignity during a period of considerable turbulence and change in international affairs. Not without sympathy I noted the problems he had to resolve in Vatican Council arising from differences between the progresives and the conservatives, or, as popular idiom might have it, between the left and right wings of the Council.

Among the more notable achievements during his regin was the celebration of mass by Roman Catholics in their own language, replacing the traditional all-Latin mass. Pope Paul was a healing Pope. The rift between the Eastern Orthodox Church and the Roman Catholic Church- the Great Schism of 1054- was healed. The Anglican and Roman Catholic Churches came closer together. As spiritual leader for 15 years of 600 million people, his influence in the cause of peace and wise counsel helped shape the events of our time. He will be remembered too for his heartfelt appeal to the United Nations- ‘No more war; never again war’. The sense of loss in the Catholic Church caused by the death of this compassionate and gentle man will be shared by all Australians.

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

– I would like to associate the members of the National Country Party with the expressions of regret made by the Prime Minister (Mr Malcolm Fraser) and the Leader of the Opposition (Mr Hayden) on the Death of Pope Paul VI. Pope Paul died in the 1 5th year of his pontificate. In those 15 years, he experience developments and changes which no Pope before him had seen. Pope Paul’s reign saw not only great changes in his own Church but in the views and standards relating to many facets of life. He had to face up to many difficult and controversial issues and he did so with courage and resolution. He fought for the improvement of social welfare and development. He travelled widely to promote peace and goodwill. He visited not only christian countries but also opened up communication between the Vatican and communist countries. Pope Paul travelled to many countries throughout the world, and in Australia in 1970 he was greeted warmly by people of all faiths. His Australian visit was the first ever undertaken by a Pope. It contributed to bringing closer together Australian Christians and church leaders- an objective Pope Paul pursued throughout his time in office.

During Pope Paul’s 1 5-year reign, there were challenges by many Roman Catholics throughout the world to some of the centuries-old principles embodied in the activities and dogma of the Church. His determinaton to face these challenges firmly and without equivocation won him great respect, if not always agreement. One of the principal achievements of Pope Paul was to arrange the Second Vatican Council. Pope Paul worked tirelessly to re-unite the whole Christian Church. He will be remembered for important changes within the Church, for his untiring efforts and contributions to peace and for his humanitarian understanding of world problems and conflicts. Prior to his death, he asked that no monument should be erected to him, but Pope Paul established his own monument in the 15 years of his office. The world is saddened by his death.

Mr LYNCH:
Minister for Industry and Commerce · Flinders · LP

– On my own behalf and as a member of the Catholic community in this country I want to join with the Prime Minister (Mr Malcolm Fraser) and the Deputy Prime Minister (Mr Anthony) in expressing my deepest regret at the death of His Holiness Pope Paul VI. Pope Paul VI will long be remembered for what he did as head of the Catholic Church over a period of some 15 years and for what he sought to do in so many different areas during the whole of that period. In a world of massive change, His Holiness sought to place continuing emphasis upon the need for morality. He was an outstanding churchman, a great spiritual leader and a man of peace. I take this opportunity to join with the Prime Minister and the Deputy Prime Minister in expressing my sympathy.

Question resolved in the affirmative, honourable members standing in their places.

Mr SPEAKER:

-I thank the House.

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ELECTORAL DIVISION OF WERRIWA

Mr SPEAKER:

-I inform the House that on 3 1 July 1978 I received a letter from the Honourable Edward Gough Whitlam, A.C., Q.C. resigning his seat as member for the electoral division of Werriwa. I have this day issued a writ for the election of a member to service the electoral division of Werriwa in the State of New South Wales to fill the vacancy caused by the resignation of the honourable gentleman. The dates in connection with the election were fixed as follows: Date of nomination, Friday, 1 September 1978; date of polling, Saturday, 23 September 1978, date of return of writ, on or before Friday, 27 October 1978.

page 3

PRESENTATION OF MACE TO LEGISLATIVE ASSEMBLY FOR THE NORTHERN TERRITORY

Mr SPEAKER:

-I wish to inform the House that His Excellency the Governor-General has advised me that, in reply to a joint address concerning the presentation of a mace to the Legislative Assembly of the Northern Territory, Her

Majesty the Queen was pleased to direct that a mace be presented by and on behalf of the Parliament of the Commonwealth of Australia to the Legislative Assembly of the Northern Territory to mark the conferring of responsible selfgovernment on the Northern Territory.

page 3

PETITIONS

The Clerk:

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

Royal Commission on Human Relationships

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

That because the Report of the Royal Commission on Human Relationships and especially its Recommendations-

  1. Have been widely condemned for its support of tinAustralian, anti-family, anti-child behaviour and morals such as incest, promiscuity, abortion, pornography, homosexuality, prostitution and brothels, etc. (Note: Refer quotations reverse side).
  2. Have been strongly criticised by the medical profession for the absence of any medical practitioner on the Commission or on its staff of 3 1 persons, and for the Commissioners action in rejecting or ignoring relevant medical evidence.
  3. Have been discredited as irresponsible in adopting a new definition of the family, i.e., ‘a varying range of people living together in relationships of commitment’, which has effectively confused the real meaning and intentions of the Report where it refers to the ‘ family ‘ ‘.

Therefore the Parliament has a responsibility to the families of Australia not to adopt this controversial Report and its Recommendations.

Your petitioners therefore humbly pray:

That the Australian Parliament will:

  1. Simply receive the Report and not adopt its Recommendations,
  2. Set up a Select Parliamentary Committee along the lines of the New Zealand Select Committee to conduct a public inquiry into the ways and means of supporting and strengthening family life and providing adequate protection for children from physical and sexual abuse before as well as after birth in accordance with the UNO Declaration of the Rights of the Child as part of Australia’s support for the Year of the Child.

Your petitioners therefore humbly pray that your honourable House will take no measures concerning the Royal Commission on Human Relationships Report that will further undermine and weaken marriage, child-care or the family which is the basic unit of our society.

And your petitioners as in duty bound will ever pray. by Sir William McMahon, Mr Carlton, Mr Fitzpatrick, Mr Gillard, Mr Graham, Mr Hunt, Mr Charles Jones, Dr Klugman, Mr Lucock, Mr O’Keefe and Mr Stewart.

Petitions received.

Medical Benefits: Abortions

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

  1. Your petitioners desire to draw to the Government’s attention that removal of Section No. 6469 on Health Refunds would transgress a woman ‘s right to the rebate available via Medical Health Insurance.
  2. Furthermore, as Section 6469 on Health Refunds is the item for abortion and to remove Medical” Rebate for Item No. 6469 would be penalising thousands of women.

Your petitioners strongly oppose the removal of No. 6469 from the Medical Rebate list.

And your petitioners as in duty bound will ever pray. by Mr Lynch, Mr Bourchier, Mr Falconer, Mr Garland, Mr Roger Johnston, Dr Klugman, Mr McLean, Mr Short and Mr Viner.

Petitions received.

Medical Benefits: Abortions

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 Ellicott, Mr Howard, Mr Les Johnson, Mr Ian Robinson, Mr Short, Mr Staley and Mr Stewart.

Petitions received.

Pensions

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 those who have retired and those who are about to retire, are being severely and adversely affected by inflation and Australian economic circumstances.

The continuance of the Mean’s Test on pensions causes undue hardship to them.

We call on the Government to immediately Abolish the Mean’s Test on all Aged Pensions.

To ensure a pension for all on retirement, and a guarantee that All Australian Citizens will retire with dignity.

Acknowledge that a pension is a: ‘Right and Not a Charity’.

And your petitioners as in duty bound will ever pray. by Mr Hyde, Mr Martyr, Mr Shack and Mr Viner.

Petitions received.

Citizen Forces: Long Service and Good Conduct Medals

The Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The humble petition of the undersigned members and ex-members of the Citizens Forces of Australia respectfully sheweth:

  1. . On 14 February 1 975, the then Australian Government deprived the Officers and men of the Australian Citizen Naval Military and Air Forces of the distinctive and historic Decorations and Medals for long service and good conduct, namely the Reserve Decoration, the Efficiency Decoration, the Air Efficiency Award, the Efficiency Medal and Long Service and Good Conduct Medals, awarded for long and meritorious voluntary service in the Citizen forces.
  2. The proposed substitution of the National Medal for these Decorations and Medals varies the principle of selective recognition of efficient voluntary service in the Citizen forces in that it recognises the period of service only and embraces also full time service as well in the defence forces as in the police, fire brigade and ambulance services.
  3. This deprivation caused and is continuing to cause serious discontent amongst personnel of the Citizens Forces who willingly and cheerfully give of their spare time outside their normal full time civilian careers, to serve Her Majesty and Australia.
  4. The Reserve Forces of Australia have been recognised by the present Government as a valuable- and costeffectivecomponent of the Defence Forces. Anomalously, whilst the Government is actually supporting recruiting for these Forces it has imposed and continued this deprivation which as foresaid has depressed the morale of the Citizen Forces.

    1. Her Majesty has not cancelled the said Decorations and Medals.

Your petitioners therefore humbly pray.

Your Honourable House take appropriate action to resume the award of the several distinctive and historic Reserve Forces Decorations and Medals to members of the Royal Australian Naval Reserve, Citizens Military Force (Army Reserve) and Citizens Air Force.

And your petitioners as in duty bound will ever pray, by Mr Aldred and Mr Hayden. Petitions received.

Radio and Television Programs

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

That because television and radio:

  1. affect our social and moral environment,
  2. are family media watched and heard by many children at all times, and
  3. ) present too much explicit violence and sex,

They therefore need stonger control than other media and the existing standards need stricter enforcement in both national ABC, and commercial sectors.

Your petitioners therefore humbly pray:

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

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

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

Petitions received.

Sales Tax

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 flight training ground simulators were not generally available when Section 119(a) of the Sales Tax (Exemptions and Classifications) Act 1935- 1973 was drafted and in consequence, by not being specifically mentioned, were excluded and;

That by reason of sales tax being included in the costings of pilot training charges for such simulators the cost of pilot training is higher that it would otherwise be and;

That because the use of ground training simulators adds considerably to the safety of and effectiveness of training and to the quality and efficiency of pilots in Australian skies and;

That while several large Australian commercial air transport organisations have imported such ground based simulators as ‘general aircraft parts and equipment’, the Act as presently framed effectively discriminates against small, general aviation pilot training organisations who cannot so do, thus being forced to unfairly pay heavy sales tax;

Your petitioners therefore humbly pray that:

The Sales Tax (Exemptions and Classifications) Act 1935-1973 be amended to include exemptions for flight ground simulators, together with all other types of parts and equipment for aircraft.

And your petitioners as in duty bound will ever pray, by Mr Lucock and Mr O’Keefe.

Petitions received.

Lone Parents Pensions

To the Honorable the Speaker and Members of the House of Representatives in Parliament assembled.

The humble petition of the undersigned citizens of Australia respectfully say that we are concerned about the discrimination which exists against the children of those parents who are in receipt of the Supporting Parents Benefit in comparison with children of Single Parents who receive the Widows Pension. Your Petitioners therefore humbly pray that Parliament take immediate steps to ensure that this year’s budget allow for Lone Parents to be given the right to receive a pension with the same benefits as are given with the Widows Pension, and we also request that Parliament take immediate action to instigate one (1) category of Lone Parent Pension to eliminate the discrimination currently experienced.

And your petitioners as in duty bound will ever pray, by Mr Porter and Mr O’Keefe.

Petitions received.

Pre-school Centres: Subsidies

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

A Petition from certain citizens of the Commonwealth of Australia to the Minister for Social Services, requesting that Federal funding to the States for the purposes of subsidising pre-school centres, be restored to the real levels of value that were experienced prior to 1976, and that all attempts to erode the real value of the subsidies be resisted at every opportunity.

And your petitioners, as in dury bound, will ever pray, by Mr Lionel Bowen. Petition received.

Family Allowance

To the Honourable Mr Speaker and Members of the House of Representatives in the Parliament assembled.

We the undersigned protest very strongly with regard to the press reports that a means test will be put on the Family Allowance. We feel our allowance should be indexed as are all other Social Service payments, not reduced to make it ever more difficult for the women of Australia to make ends meet in regards to the needs of our families.

And your petitioners, as in duty bound, will ever pray, by Mr Lionel Bowen. Petition received.

English Classes for Migrants

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

We, the undersigned citizens and/or taxpayers of Australia, speaking for ourselves and on behalf of the many who cannot become citizens because of their inability to speak English, request the House of Representatives to give immediate attention to the totally inadequate provision of English classes for migrants by the Australian Government.

Our intention is to impress upon the House that inability to speak English means discrimination- discrimination in the field of employment, in education and in social and political life.

And your petitioners, in duty bound, will ever pray, by Mr Lionel Bowen. Petition received.

Immunotherapy Clinics

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

The humble Petition of undersigned citizens of Australia respectfully showeth:

That we believe that the Minister for Health should support the principle that Australians have the right to seek Immunotherapy treatment for Cancer and that we support any moves to expand research into, and the setting up of Clinics for Immunological management of Cancer within Australia.

Your Petitioners therefore humbly pray that all support be given to the establishment of Immunotherapy Clinics in Australia thus giving Australian Cancer Patients a choice in the management of this disease.

And your petitioners as in duty bound will ever pray, by Mr N. A. Brown. Petition received.

Deportation of Chileans

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned electors of Australia respectfully showeth that we humbly pray:

That we protest against the threatened deportation of Chilean people from Australia, considering the threat to their safety if they are forced to return to Chile. The estimated number of persons missing in Chile is 2,300, excluding the thousands of recognized political prisoners in Chilean jails.’

And your petitioners as in duty bound will ever pray, by Mr Clyde Cameron. Petition received.

Commando Expeditions: Award of Medal

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Humble Petition of undersigned citizens of Australia respectively showeth:

  1. . In 1 943 and 1 944 two small scale raids were undertaken by Australian and British Commandos on shipping in Singapore Harbour.
  2. The first operation named ‘Jaywick’ reached Singapore in September 1943 from a base in Australia using a captured Japanese vessel known as ‘The Krait’, sank seven (7) ships, a total of 39,000 tons and returned to Australia. This was the longest successful small scale raid in the history of War.
  3. The second operation named ‘Rimau’ attempted to repeat that raid in September 1944. The raid was detected in the entrance to Singapore Harbour and the commandos were forced to retire. A submarine sent to pick them up did not keep the appointed R.V. and the raiding party was forced to set out for Australia in their canoes.
  4. Many of the commandos were killed by Japanese search parties near the Indonesian Islands. Three commandos in an incredible feat of endurance and heroism, paddled two thousand five hundred (2,500) miles from Singapore to Romang Island only 400 miles from Australia. This journey was one of the most fantastic in the history of war- in the history of the sea.
  5. All the Commandos who had not been killed were finally captured, court martialled and ceremoniously executed in Singapore by Samurai Sword only 39 days before the Japanese surrender.
  6. The Commandos were ceremoniously executed because the Japanese considered-

It would be a disgrace to the fine spirit of these heroes if we thought of saving their lives. ‘

Major Kamiya the prosecutor at the Japanese Court Martial who made the above comment went on to say, inter alia-

These heroes must have left Australia with sublime patriotism flowing in their breasts and with the confident expectation of all the Australian people on their shoulders.

As we respect them, so we feel our duty of glorifying their last moments as they deserve, and by doing so the names of these heroes will remain in the hearts of the British and Australian people for evermore. ‘

  1. Due to the secrecy surrounding operation ‘Rimau’ its members were completely ignored and received no recognition at all. No attempt was made by the authorities to inform the relatives of the circumstances of death. The only official notification was that they had been killed in action in 1945. It was not until the publication of a book called ‘The Heroes’ by Ronald McKie in 1960 that the relatives read for themselves of the manner in which the commandos died.
  2. To date, the exploits and deaths of the ‘Rimau’ commandos have not remained undying in Australian history as the Japanese expected, following the ceremonial execution. They have been forgotten and ignored by Australia. They are the Forgotten Heroes.
  3. On Saturday 8th July 1978, the 33rd Anniversary of the end of operation ‘Rimau’, the members of the 1 Commando Association held a memorial parade to honor the memory of these gallant men, and of the men of ‘Jaywick ‘ many of whom were also members of the ‘Rimau’ raiding party. The parade was held before the Great War Memorial in Hyde Park Sydney. Relatives of the men of ‘Jaywick’ and ‘Rimau’ were flown from all parts of Australia to be present.

A specially commissioned March called ‘The Forgotten Heroes’ was played for the first time by the Band of the New South Wales Police Force.

  1. At the Memorial Parade a medal in the form of the drawing reproduced hereon was presented on behalf of each of the members of operation ‘Jaywick’ and ‘Rimau’. The medal was designed and presented because repeated requests by the 1 Commando Association at all levels of Government to obtain some official recognition for these men had been refused.

Your Petitioners humbly pray that the members, in the House assembled, will take the most urgent steps to approve the conferring of the medal on the men of ‘Jaywick’ and Rimau’ on behalf of the people of Australia to honor the memory of these gallant men so that future generations of Britain and Australia will know and admire what these men did and their memory will remain in the hearts of the British and Australian people for evermore.

And your petitioners as in duty bound will ever pray, by Mr Carlton. Petition received.

Medical Benefits: Abortions

To the Right Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

A petition of the undersigned respectfully showeth:

That withdrawal of Government benefits under Schedule 6469 for first trimester abortion would discriminate against and disadvantage the least privileged in our society.

Your Petitioners most humbly pray that the House of Representatives, in Parliament assembled, should:

Under no circumstances withdraw Government benefit under Schedule 6469 of first trimester abortion.

And your petitioners as in duty bound will ever pray, by Dr Cass. Petition received.

Taxation: Subsidised Accommodation

To the Honourable Speaker and Members of the House of Representatives assembled, this humble petition of the citizens of Western Australia will showeth that the undersigned are shocked by the reported decision of the Federal Government to enforce legislation to give powers to impose a tax on residents of subsidised accommodation.

Your petitioners humbly pray that the House takes note of our strongest objection to this proposal.

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

Petition received.

Aboriginal Land Rights

To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled.

The humble petition of the undersigned citizens of Australia respectfully showeth:

  1. That the Federal Government recognize land rights in the States, such as Queensland, in a similar manner to the recognition of land rights in the Northern Territory, i.e. enact an Aboriginal Land Rights Act for Queensland;
  2. That the Federal Government support the abolition of the Aborigines Act (Queensland) 1971 and the Torres Strait Islanders Act (Queensland) 1971 and take such action as they may deem necessary to ensure that the provisions of the Queensland Discriminatory Laws Act 1975 and the Racial Discrimination Act 1975 be enforced in so far as they relate to Aborigines and Islanders;
  3. That the Federal Government assume responsibility for Aboriginal Affairs in Queensland under the powers given them by the Referendum of 1967. The State Department of Aboriginal and Islander Advancement Queensland should be abolished and Aboriginal and Island reserves in Queensland should have the choice to be self-governed with local government status.

And your petitioners as in duty bound will ever pray. by Dr Everingham.

Petition received.

Rural and Urban Roads

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

  1. Australia’s extensive road system is a national asset wasting because of inadequate Federal and State funding.
  2. Commonwealth Government funding of roads has fallen over the last six years from 2.9 per cent of all Commonwealth outlays to 2.3 per cent.

Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled, should ensure:

THAT the Commonwealth Government adopts the recommendations of the Commonwealth Bureau of Roads for the funding of rural local roads and urban local roads in New South Wales for the triennium 1 977- 1 980.

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

Petition received.

Metric System

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled: The petition of the undersigned citizens of Australia respectfully showeth objection to the Metric system and request the Government to restore the Imperial system.

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

Petition received.

Broadcasting: Radio 3CR Melbourne

To the Right Honourable the Speaker and Members of the House of Representatives in Parliament assembled, the petition of the undersigned respectfully showeth:

That radio 3CR Melbourne, be made to adhere to the required standards of broadcasting, as laid down for all other radio stations.

Your petitioners therefore humbly pray that the Government will enforce the required standard of broadcasting as laid down for all other stations, on community radio 3CR call on Federal Government to legislate against incitement to racial hatred and violence.

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

Petition received.

Medibank

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

That the proposed changes to the Health Insurance Act discriminate against the poor and sick.

Your petitioners therefore humbly pray that the Government should ensure that Medibank is restored to its original status as a universal health care fund, and to withdraw the changes to health fund legislation currently being processed.

  1. 1 ) Bring back bulk billing for all patients, not just old age and widow pensioners.
  2. Make health funds pay a full rebate on the most common fee charged by doctors, not just the 85 per cent paid now or the 75 per cent in the new legislation.
  3. Don’t allow ‘optional deductibles ‘-the system by which Health Funds can refuse to cover people for certain aspects of health care such as abortions, or any other service the Health Fund wants to exempt.

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

Petition received.

Atomic Reactor

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

That they oppose the construction of any additional reactor at the Australian atomic energy establishment at Lucas Heights in New South Wales.

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

Petition received.

Taxation: Sullage Removal

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned citizens of the Commonealth do humbly pray that the Commonwealth Government:

  1. Recognise that the practice of disallowing taxation claims for sullage removal is discriminatory as tax payers owning property in sewered areas are entitled to a concessional allowance of up to $300 for sewerage services rendered.
  2. Take steps to remove the provisions of the Income Tax Law which prevents approval being given for taxation claims for sullage removal unless the charges are annually assessed.

And your petitioners as in duty bound will ever pray, by Mr Les Johnson. Petition received.

Aged Persons Accommodation

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

  1. a ) That surveys reveal a substantial percentage of adults over the age of 55 years in the LoftusEngadineHeathcote and Waterfall areas of the Hughes electorate, are in urgent need of special housing and nursing home accommodation.
  2. That many families in the area are experiencing difficulty in the placing of their aged parents in suitable nursing care; many cases having to be placed in care many kilometres from their families and consequently causing great strain on the relatives concerned.
  3. That this problem is aggravated by this area’s geographical and public transport isolation from the rest of the Sutherland Shire.
  4. ) That Government subsidised nursing homes in other parts of the Hughes and Cook electorate have long waiting lists and in fact, have closed their lists to further inquirers.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled will:

  1. . Acknowledge that there is a need for the construction of an aged persons complex in this area as already acknowledged by the Federal/State Co-ordinating Committee for Nursing-Home accommodation in N.S.W.
  2. Take immediate action to provide sufficient funds in the current financial year to finance the construction and maintenance of an aged-persons complex, providing hostel and nursing bed accommodation in this area.

And your petitioners as in duty bound will ever pray, by Mr Les Johnson. Petition received.

Medibank: Physiotherapy and Chiropody Costs

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

That as Section 44 (iv) of the Australian Constitution declares that ‘any person who holds any pension payable during the pleasure of the Crown out of any of the revenues of the Commonwealth shall be incapable of being chosen or of sitting as a Senator or a member of the House of Representatives ‘, persons in receipt of Social Security payments including aged pensioners seem to be barred from nominating for Parliament unless the pension is surrendered. We request that the Attorney-General be asked to give a ruling on the eligibility of persons in receipt of Social Security payments to nominate for Parliament without having to surrender their pensions.

That in order to retain the living standards of citizens in receipt of the Age, Widow and Invalid Pensions that the respective Acts of Parliament be amended to provide for the indexation of entitlement to Health Benefit card and other fringe Benefits, and for the indexation of the following subsidies: Domiciliary Nursing Care Benefit, Funeral Benefit and Rent Subsidy, such indexation to be retroactive from the last adjustment, and that in particular, Funeral Benefit payments be increased immediately to $500.

That in order to maintain the health and mobility of elderly people, we request that the National Health Act and the Health Insurance Act be amended to include, under Medibank Standard health insurance cover, physiotherapy and chiropody costs incurred by Aged Pensioners.

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

Petition received.

Child Endowment

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

That we are most strongly opposed to the taxing and or removal of any or all of the Child Endowment currently due to Mothers of Australia.

And your petitioners as in duty bound will ever pray, by Mr Morris Petition received

Public Libraries

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

That the Public Library Services of Western Australia are inadequate both in quality and quantity and that the burden of provision is placed too heavily upon Local Government. Your petitioners therefore humbly pray that your honourable House will ensure the implementation of the Recommendations of the Report of the ‘Committee of Inquiry into Public Libraries’ as a matter of urgency.

And your petitioners as in duty bound will ever pray, by Mr Shack. Petition received.

Royal Dutch Airlines: Services to Australia

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned (electors of the Division of Grey) respectfully showeth:

That there is a possibility that KLM Royal Dutch Airlines will be given notice by the Australian Department of Transport to terminate its service to and from Australia. Your petitioners therefore humbly that as KLM have provided this service for fourty (40) years that no action be taken by the Department of Transport to terminate such service.

And your petitioners as in duty bound will ever pray, by Mr Wallis. Petition received.

National Family Policy

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.

Petition received.

page 9

MINISTERIAL ARRANGEMENTS

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– I inform the House that on 7 August 1978 Senator Withers ceased to be Minister for Administrative Services, Vice-President of the Executive Council and Leader of the Government in the Senate. On the same date Senator Durack was appointed Minister for Administrative Services. Senator Carrick has been appointed Leader of the Government in the Senate and His Excellency has approved his appointment as Vice-President of the Executive Council. Senator Durack is also Deputy Leader of the Government in the Senate. On 4 July the Minister for Special Trade Representations, Mr Garland, resigned the portfolio of Veterans’ Affairs and the Minister for the Northern Territory, Mr Adermann, was appointed to it. Mr Adermann will continue as Minister for the Northern Territory until 1 October during the first three months of self-government in the Territory, after which it is intended that the portfolio will be abolished and its residual functions included in the portfolio of Home Affairs.

page 9

QUESTION

QUESTIONS WITHOUT NOTICE

page 9

QUESTION

ELECTORAL REDISTRIBUTION INQUIRY

Mr HAYDEN:
OXLEY, QUEENSLAND · ALP

– I ask the Minister for Finance: Did he give evidence to the McGregor Royal Commission that on three separate occasions, including 17 January and 23 April, Senator Withers, in his presence, told the Prime Minister of his telephone conversation with the Chief Electoral Officer about a change in the proposed name of the Gold Coast electorate? Does the Minister recall those occasions as clearly now as he did when he gave that evidence?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-I gave evidence before the Royal Commission. If the Leader of the

Opposition and other honourable members want to read all that evidence I point out that there are about 100 pages of it in the transcript. I have nothing to add to the evidence I gave.

page 9

QUESTION

TELECOM AUSTRALIA INDUSTRIAL DISPUTE

Mr BAUME:
MACARTHUR, NEW SOUTH WALES

– The Minister for Employment and Industrial Relations will be aware of the substantial reduction in telephone services, particularly for subscriber trunk dialling and people in country areas such as in the electorate of Macarthur as a result of the current dispute between the Australian Telecommunications Employees Association and Telecom Australia, and the very great effect that this is having on the community. As the matter has become confused by a host of accusations, will the Minister advise the House what are the facts of the dispute?

Mr STREET:
Minister for Employment and Industrial Relations · CORANGAMITE, VICTORIA · LP

– I welcome the honourable gentleman’s question because I feel it is high time that attention was focused on the facts of the dispute rather than on the apparently clouded public relations exercise in which the union has been engaging in the last couple of days. I say that because I am not surprised that the union would try to obscure the real issues involved.

In answering the honourable gentleman’s question it is necessary to go back over some recent history. On 30 June the Australian Telecommunications Employees Association imposed work bans in three States in an attempt to press its claims for promotion of some of its members without the qualifications necessary for them to gain that promotion through the normal internal structures of the Australian Telecommunications Commission. For the Commission to have agreed to those demands would have meant abandoning the necessary qualifications standard. The dispute was the subject of proceedings before Commissioner Clarkson on a number of occasions before it was adjourned indefinitely, and it needs to be understood why it was adjourned indefinitely. The reason was the refusal of the union leaders to accept a working document prepared by all parties to the dispute as a basis for examining the classification structure of the Telecom Australia staff. On the recommendation of the federal executive of the union, the work bans and industrial disruption were then widened. At the time of the union ‘s action Commissioner Clarkson said:

It seems to me that if you -

That is the union- persist with the action which your members are now engaged in that you are inviting a confrontation . . . While you have got the bans on you are dosing the doors; nobody else is; and the simplest and most effective way of getting this dispute fixed is to lift those bans.

Those were the words of Commissioner Clarkson a couple of weeks ago. He concluded:

All in all, the situation is a mess, the quickest and easiest way of cleaning up the mess is to lift the bans.

Last Friday Commissioner Clarkson again sought to convene discussions. He proposed, inter alia, a 2 1-day cooling-off period. That evening Telecom communicated to the union its general acceptance of this proposition. The next day the Federal Executive of the union decided to reject the Clarkson proposals in the full knowledge of the Telecom general acceptance of them. That was made public before Commissioner Clarkson yesterday.

I would like to emphasise that Telecom has acted responsibly at all times and has sought to have this dispute settled through the proper processes available to it. On the other hand, the union has rejected any attempt to negotiate and has chosen to revert to strike and ban action designed to impair the effectiveness of the nation’s telecommunications network. I would like to say that the Government supports Telecom in the action it has taken, following the normal negotiating procedures. It has taken all reasonable steps to resolve this dispute.

Mr Hayden:

- Mr Speaker, I take a point of order. The Minister is reading from a document. There are many pages to it. It looks like a prepared text. He is reading from a speech rather than answering a question. The tactic is obvious- it is to limit the number of questions that the Opposition wishes to raise on a rather embarrassing topic to this Government.

Mr SPEAKER:

-There is no point of order. I ask the honourable gentleman to resume his seat.

Mr STREET:

-Mr Speaker, it was important to quote verbatim some of the material that I have given the House because it was from transcript- and that I have done.

Mr SPEAKER:

-I ask the Minister to continue his answer.

Mr STREET:

-Thank you, Mr Speaker. I think it is also important to note that officials of Telecom have repeatedly assured the union that there would be no retrenchments as a result of the installation of the new equipment.

Mr Charles Jones:
NEWCASTLE, VICTORIA · ALP

- Mr Speaker, I take a point of order. As the Minister is quoting from the document, I ask that it be tabled.

Mr SPEAKER:

-I will ask the Minister to do that at the end of his answer.

Mr STREET:

– I have no objection whatever, Mr Speaker.

Mr Uren:

- Mr Speaker, I raise a further point of order. It is consistent with your rulings that Ministers be short in their replies. This is obviously not a question without notice. The Opposition would make time available to the Minister after Question Time to make a statement. The Minister is now taking up precious time of the Question Time period. Your rulings have always been that Ministers should make their replies short. The Minister has been speaking now for over five minutes.

Mr SPEAKER:

-I call the Minister.

Mr STREET:

– Finally, Telecom has assured the ATEA that it would facilitate the training of its members to reach the new standards which would enable them to get the higher classification that they have been claiming. So the inconvenience caused by this dispute rests fairly and squarely on the shoulders of the Federal Executive of the ATEA, as indeed Commissioner Clarkson has pointed out. It is high time the union stopped clouding the issue and sat down to negotiate a settlement of the dispute in the proper area- and that is the Conciliation and Arbitration Commission.

page 10

QUESTION

ELECTORAL REDISTRIBUTION INQUIRY

Mr HAYDEN:

– I ask a question of the Minister for Employment and Industrial Relations. I am sure the reply will be more brisk and to the point than the last answer.

Government supporters- Oh!

Mr HAYDEN:

– Well, let us see.

Mr SPEAKER:

-The Leader of the Opposition will ask his question.

Mr HAYDEN:

-Does the Minister recall whether he was present at a meeting of Ministers at The Lodge on 23 April, as stated in evidence before the McGregor Royal Commission? Does he recall Senator Withers informing that meeting that he had telephoned the Chief Electoral Officer suggesting a change of name for the proposed electorate of Gold Coast?

Mr STREET:
LP

– Yes, I was at the meeting to which the Leader of the Opposition referred and I recall Senator Withers raising the question of his communication with the Chief Electoral Officer on that occasion.

Mr Innes:

– So you knew too.

Mr STREET:

-There was no secret about that. It was presented before the Royal Commission.

page 11

QUESTION

AURUKUN AND MORNINGTON ISLAND ABORIGINAL COMMUNITIES

Mr FALCONER:
CASEY, VICTORIA

-Does the Minister for Aboriginal Affairs recall my question without notice on 1 3 April this year concerning the role of the Uniting Church in Australia in the new local government arrangements applying to the Aboriginal communities at Aurukun and Mornington Island? Does he recall, in reply, giving an assurance that as self-managing authorities, the communities would be in a position to seek the assistance of whomever they want? In the light of the forcible ejection of advisors from a recent meeting between the Queensland Premier and the Aurukun Council, can he say whether the Queensland Government is adhering to the original agreement? Is the Minister now in a position to repeat his assurance that the communities will be self-managing authorities and be able to seek the assistance of whomever they want?

Mr VINER:
Minister Assisting the Prime Minister · STIRLING, WESTERN AUSTRALIA · LP

– I recall the honourable gentleman’s question and the answer I gave at that time. The Government’s position with regard to that matter is the same now as it was then. We have a firm commitment to see that these communities can become self-managing communities under the local government legislation. Over recent weeks I have maintained continuous contact with my counterpart in this regard, Mr Hinze, the Minister for Local Government, to iron out difficulties that had arisen and to see that the legislation has an opportunity to work.

As to the specific instance referred to by the honourable gentleman arising out of the visit of the Queensland Premier to Aurukun last week, I am assured that my officer, Mr Kaufman, was not forcibly ejected. I cannot speak for the other gentleman, Mr Purcell. The position is that the communities, through their shire councils, are in a position to employ whomever they wish to advise them and work for them in pursuance of their self-management functions under that local government legislation.

page 11

QUESTION

ELECTORAL REDISTRIBUTION INQUIRY

Mr LIONEL BOWEN:
KINGSFORD-SMITH, NEW SOUTH WALES

-I ask my question of the Minister for Finance. I direct his memory to the evidence he gave before the McGregor Royal Commission on 6 June last where he indicated on 3 occasions that the then Minister for Administrative Services, Senator Withers, had told the Prime Minister, in his presence, of a conversation with the Chief Australian Electoral Officer in respect of the change of name of the Gold Coast electorate. I refer the honourable gentleman to the evidence where he said:

I can clearly remember a meeting on 23 April -

This was the last of the three meetings to which he referred-

  1. . and present at that meeting was the Prime Minister, Mr Nixon, Senator Durack, Mr Street, Senator Withers, Mr Anthony and myself.

I ask the honourable gentleman whether his recollection is still accurate and whether the evidence then given is in accordance with the present situation?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-In answer to the honourable member I repeat that the evidence was sworn evidence given at a royal commission. The record of that evidence has been read out correctly. I have nothing to add to that evidence.

page 11

QUESTION

PRICE OF SUGAR

Mr THOMSON:
LEICHHARDT, QUEENSLAND

– My question is directed to the Minister for Trade and Resources. In view of the present world price of sugar, which remains very seriously depressed in spite of a recent price increase, can the Minister indicate what action the Government is taking to try to bring about some improvement in the world sugar market?

Mr ANTHONY:
NCP/NP

– There has been very great concern about the lowering of the world price of sugar, particularly since we negotiated an International Sugar Agreement last year with the hope of improving the price. The main reason that the price has not responded has been the delay in the United States ratifying the International Sugar Agreement and the European Economic Community not becoming associated with that Agreement and restraining its exports to the world market. This year the EEC has given approval for 2.9 million tonnes of sugar to be exported with an export subsidy in excess of $700m. This, of course, is having a very disruptive effect on the world price and the operations of the International Sugar Agreement.

While in Geneva I had discussions with senior officials, both of the United States Government and the EEC, and asked that they take appropriate action. I also spoke to the Secretary-General of the United Nations Conference on Trade and Development to obtain the support of the developing countries, which are greatly concerned, so that they may use their influence and pressure. I also called a meeting of the International Sugar Council executive so that it might confirm its desire that America and the EEC take action. I believe that all of these steps are leading to a situation where the American Congress will ratify the Agreement. This probably will not take place until next month. If it does not ratify it, I believe that will have very serious consequences for the International Sugar Agreement, for

UNCTAD, for the integrated commodity program and for the Common Fund. So it is very important that the United States ratifies it and that the EEC becomes a member.

page 12

QUESTION

ELECTORAL REDISTRIBUTION INQUIRY

Mr LIONEL BOWEN:

-I direct a question to the Prime Minister. I refer to the findings of the McGregor Royal Commission on the impropriety of one of his Ministers. When did the Prime Minister first become aware that Senator Withers had telephoned the Chief Electoral Officer suggesting a change of name for the proposed electorate of Gold Coast?

Mr MALCOLM FRASER:
LP

-At an appropriate time the report will be tabled and at an appropriate time a statement will be made about it.

Mr Charles Jones:
NEWCASTLE, VICTORIA · ALP

– Make it now.

Mr SPEAKER:

-Order! The honourable member for Newcastle has interjected constantly today. I warn him to cease interjecting.

page 12

QUESTION

AUSTRALIAN CITIZENS IN LEBANON

Mr YATES:
HOLT, VICTORIA

– I ask a question of the Minister for Foreign Affairs. In view of the fact that the families of some of my constituents have lost their lives in bombardment by the Syrian forces in Lebanon and in view of the fact that three relatives of my constituents are in Lebanon and cannot get to the international airport to fly back to Australia, despite their being Australian citizens, will the Minister inform the House of the situation in Lebanon and advise what these Australian citizens should do to get to the airport?

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

-From the honourable member’s question it appears that some of his constituents are visiting Lebanon. If he will give me the specific information about those constituents and their relatives to which he has referred, naturally I will have inquiries made. I recall discussing with officers of my Department last month the desirability of warning Australians about travelling in Lebanon. This tragedy has been recurring for some time now. The ceasefire that came into effect on approximately 10 August appears at present to be holding, but the reality is that it is one of a series of ceasefires that have collapsed since the outbreak of major fighting in February. The latest accord may have a better chance of success since it reportedly contains provisions aimed at a disengagement of forces within the city of Beirut. The Australian Embassy, which is in West Beirut, has been keeping the Department fully informed of developments on a day to day basis. Naturally the Government welcomes the ceasefire and hopes that in the interests of the inhabitants of Beirut law and order can be restored and a peaceful political settlement arrived at as soon as possible.

I ask the honourable member to give me details of the matter he has raised specifically and I shall have investigations made to ascertain what we can do. His concern for his constituents is a by-word amongst Government members, and I reiterate that we share the concern for not only his constituents but also people in the wider community who have suffered grievously and tragically in Lebanon.

page 12

QUESTION

ELECTORAL REDISTRIBUTION INQUIRY

Mr HAYDEN:

– Is the Prime Minister aware of the sworn evidence of the Minister for Finance, which the Minister confirmed today, that Senator Withers told the Prime Minister on 1 7 January of his telephone call to the Chief Electoral Officer regarding the change of name of the proposed electorate of Gold Coast? Does he deny the accuracy of the Minister’s evidence?

Mr MALCOLM FRASER:
LP

-The honourable gentleman could not have heard what I said a moment ago. At an appropriate time the report will be tabled and at an appropriate time a statement will be made about it.

page 12

QUESTION

UNITED STATES BEEF IMPORTS

Mr O’KEEFE:
PATERSON, NEW SOUTH WALES

-Is the Minister for Primary Industry aware of a report on the Australian Broadcasting Commission news this morning that President Carter has stated that he will not allow any further beef imports into the United States this year and that there will be no unrestricted flow of beef into the United States next year? Can the Minister advise the House whether this announcement will mean a cutback in access for Australian beef to the USA? Will any new restrictions apply to the additional quota that Australia gained earlier this year?

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

– I do not think that any issue affects the profitability of the Australian meat industry more than the question of access to the United States market. Hence the reported statement by President Carter at Columbus, Missouri, yesterday and its implications for future levels of Australian beef imports in to the United States is of profound concern to Australian producers and certainly to the Australian Government. Indeed, since the so-called Bentsen counter-cyclical proposals passed the United States Senate and were referred to the House Ways and Means Committee the Government has been particularly concerned to ensure that there is understanding by the average consumer in the United States of the level of imports into that country. In fact it represents only about 7 per cent of the domestic consumption. Yet to a country such as Australia such imports are quite critical in being able to maintain overall national and international economic programs. In the multilateral trade negotiations, at which Australia has been led by the Deputy Prime Minister and supported by the Minister for Special Trade Representations, Australia and the United States have generally taken a line stressing the necessity to include agricultural products with industrial products in any conclusions reached with respect to a lessening of trade barriers. Therefore it seems paradoxical that within the United States itself people should be making statements which suggest the need for further restrictive legislation, particularly pertaining to agricultural products.

As far as the level of United States imports is concerned, it is true that recently there has been an increase of 200 million lb in the restraint levels for this year. That will increase the actual quotas to the highest point ever. But against that it needs to be said that in 1972 and 1973, when no quotas were applied, the level of Australian beef exports to the United States was even higher. So the prevailing level of beef imports, although somewhat better than the position in preceding years, is certainly not as satisfactory as it was in 1972 and 1973. Of course this has a very marked effect on the prices paid by American consumers and, in an election year in that country, one would hope that members of the Congress would be concerned to listen not only to the American cattlemen but also to the American consumers. I understand that there has been some reduction in the prices paid on the average for beef consumed in United States households since the relaxation of imports but it is still true that price levels there are significantly higher than they are anywhere else in the world.

From the Australian producers’ point of view, the Australian Government is pursuing every possible course to ensure that no further restrictive legislation is imposed by the United States Congress and, certainly, that before any such legislation is passed the American Administration realises the implications for its own country, for the negotiations that the United States is pursuing in the MTN and for countries such as Australia which are so heavily dependent upon continued access to the United States market. I believe that the American Administration generally is conscious of many of these forces. Through visits to the United States by individual Ministers and approaches by representatives of the Australian Government, we are trying to ensure that there is recognition not only by the American Administration but also by members of the Congress and the Senate of the implications of any new moves to restrain beef imports to their country.

page 13

QUESTION

ELECTORAL REDISTRIBUTION INQUIRY

Mr HAYDEN:

– I ask the Prime Minister: Is it a fact that in the discussion of the McGregor Royal Commission’s report on 8 August the Prime Minister told Senator Withers: ‘You are in trouble’? Is it a fact that Senator Withers responded: ‘You mean, we are in trouble’? Is the Prime Minister aware that this widely reported account of their conversation was disseminated to journalists by Senator Withers in a series of briefings last week.

Mr MALCOLM FRASER:
LP

– I refer the honourable gentleman to my previous two answers on this subject.

page 13

QUESTION

AIR SAFETY

Mr BURR:
WILMOT, TASMANIA

– My question is directed to the Minister for Transport. In view of the crash of a light aircraft at Essendon, which led to considerable loss of life, and the near collision off Sydney of two Boeing 747 aircraft, can the Minister inform the House what action has been taken to ensure Australia’s continued high standard of air safety?

Mr NIXON:
Minister for Transport · GIPPSLAND, VICTORIA · LP

– Officers of my Department automatically swing into operation as soon as incidents, such as those mentioned by the honourable member, occur. The Air Safety Investigation Branch began an immediate investigation and it will eventually report to me on each of those incidents. Insofar as the general question of air safety is concerned, I am able to tell the House that in terms of statistics- mark you, statistics are never satisfactory to those people who are involved in incidents of this nature- the fact is that there has been a declining trend over the last 10 years in incidents of this nature. In terms of manpower of the Department and funds made available for expenditure in areas which fall within my responsibility, each year I have made sure that, despite budgeting difficulties with which the Government might be faced, appropriate funds are found for the continuance of a program of maintenance of air safety. In fact, I have said on occasion after occasion that I am not prepared to prejudice air safety because of budgeting difficulties. If the honourable member waits until tonight’s Budget he will see that an appropriate amount of money has been made available for air safety and for the maintenance of air facilities. Incidents of this nature are a very vexed problem. When the reports on these incidents come to hand I will, of course, table them in the Parliament.

page 14

QUESTION

ELECTORAL REDISTRIBUTION INQUIRY

Mr LIONEL BOWEN:

-I direct my question to the Prime Minister. I would like him to answer it now. It refers to the McGregor Royal Commission. Why did the terms of reference of the McGregor Royal Commission drafted under the supervision of the Prime Minister’s office and announced on 24 April exclude any reference to the involvement of Senator Withers in the electorate name change, which was known both to the Prime Minister and to the Attorney-General at that time and which was later found to be an act that was improper?

Mr MALCOLM FRASER:
LP

– I again refer the honourable gentleman to the previous answers on this subject.

page 14

QUESTION

DISCOUNTED AIR TRAVEL

Mr JULL:
BOWMAN, QUEENSLAND

– My question is directed to the Minister for Transport. Can the Minister confirm reports that agreement has been reached between Australia and Great Britain on the level of a discounted air fare, possibly $570? If so, when will that fare be officially announced? Will the fare be restricted to travel on Qantas Airways Ltd and British Airways only? Because of some confusion in the travel industry when will the full report of the International Civil Aviation Review be available to the Parliament?

Mr NIXON:
LP

– The negotiations with the British Government in respect of cheaper air fares in and out of this country have been proceeding very satisfactorily. The British team returned to the United Kingdom about a week ago to report to the Government there. The next step is for me to arrange for negotiations to be undertaken with other countries of Europe, Asia and America that have airlines coming in and out of Australia. A team will be leaving for America towards the end of this month. There have been a number of reports stating that for some reason the Australian Government has got the axe into KLM, JAT, Lufthansa, UTA and, I suppose, Alitalia. A great number of representations have been made to me, particularly about KLM.

As I have said, the facts are that we will be sending a team to negotiate with the Dutch Government and other governments of Europe within the next couple of weeks. Those governments can make their own judgments about the proposals that we have. I point out to the House that on a previous occasion when there was an opportunity for KLM to pick up a cheaper air fare which British Airways and Qantas had negotiated and agreed to, KLM showed no interest in that particular air fare. Therefore, I am unable to make a judgment as to whether KLM will be interested in the sorts of proposals that we have before us. A great variety of figures has been chosen by media writers and others speculating about the air fares. I can confirm for the honourable member that the figure chosen will be of great interest to the members of the Australian travelling public. It is certainly much cheaper than any fare available today. However, I am not able to disclose the actual figure because it is part of the negotiations and it would be improper for me to confirm a figure that as yet has not been conveyed to other governments. I know that the honourable member will understand my sensitivity on that point. I hope to be in a position to table at an early date the report of the International Civil Aviation Review.

page 14

QUESTION

ELECTORAL REDISTRIBUTION INQUIRY

Mr HAYDEN:

– I direct a question to the Deputy Prime Minister. I refer him to his statement on the PM radio program of 10 August, namely:

The first I knew about the name change question was when the Attorney-General reported it to us- I think the Prime Minister and myself. All I know is that I was aware of the question of the name change when the Attorney-General reported it to us.

On what date did the Attorney-General report on the change of name of the Queensland electorates to the Deputy Prime Minister and the Prime Minister? Was this prior to the establishment of the McGregor Royal Commission?

Mr ANTHONY:
NCP/NP

-As the Prime Minister has said, he will be making a statement on this matter. With respect, that will give a satisfactory answer to the question.

Mr Lionel Bowen:

– On a point of order, Mr Speaker, I submit that the Deputy Prime Minister was asked what he knew. It is beyond the comprehension of this House to imagine that the Prime Minister would be able to indicate all that is in the mind or not in the mind of the Deputy Prime Minister.

Mr SPEAKER:

-Order! The honourable member will resume his seat. There is no point of order.

page 15

QUESTION

CAM RANH BAY NAVAL FACILITIES

Mr CONNOLLY:
BRADFIELD, NEW SOUTH WALES

– I direct a question to the Prime Minister. Is the Government aware of reports that the Russian Navy may gain access to the naval base facilities at Cam Ranh Bay on the coast of Vietnam? Would he agree that such access would affect seriously the strategic balance in the South East Asian and Pacific region?

Mr MALCOLM FRASER:
LP

-During the course of the Vietnam war the United States of America built up a major sea and air base at Cam Ranh Bay which was one of the major naval installations, certainly in the Pacific theatre, and I believe that it is a major naval installation by any standards in the world. Concern has been expressed from time to time since the end of the Vietnam conflict that Russia might gain access to Cam Ranh Bay as a major addition to its own shore based facilities, thus enormously increasing the Soviet Union’s strategic reach into the Pacific and linking up the Soviet facilities at Vladivostok and in the Indian Ocean. Of course, we know that the Soviet Union has a great capacity to maintain ships at sea for long periods and can reach into any part of the world from its present facilities. But another major land based facility at Cam Ranh Bay would enormously increase the Soviet Union’s capacity to reach out with great strength.

This Government has been concerned for the maintenance of balance in the Indian Ocean. We have been concerned for the maintenance of balance, albeit at the lowest possible level. But activities of recent times by the Soviet Union have not given us great cause to be confident that the Soviet Union shares that particular objective. In addition, the countries in the Association of South East Asian Nations have policies designed to make sure that the military activities of the major powers do not impact on the region. We have always supported the ASEAN nations very strongly in that objective. I am quite certain that the ASEAN countries would not want to see additional incursions of any kind that would upset the present situation. A major development at Cam Ranh Bay by the Soviet Union would be such a development.

In addition to that unsettling factor, we have the fact that the move would inevitably tend to push Vietnam towards closer and closer links with the Soviet union in contradistinction with its relations with China. That would impose additional stresses and strains on the region which it could well do without. All in all, in terms of stability and strategic balance, there is nothing whatever to commend such a movement of Russians into Cam Ranh Bay. It would upset the balance of the region, it would unsettle the politics of the region, and it is a move that would need to be condemned. I think it is symptomatic, knowing these concerns and knowing very much that they are shared by the ASEAN countries, that they have a concern about the future directions of the policies of some countries, even though in recent times there have been encouraging moves and encouraging developments which I think ought to be applauded. They are concerned about events such as those to which the honourable gentleman drew attention that could lead to instability.

I think it is worth noting that the Leader of the Opposition indicated during one of his recent excursions overseas that in his view such a move would not involve any instability whatsoever. I can only say that that is typical of the view that has been taken by the Leader of the Opposition and by his predecessors over a great many years- that an extension of power and influence by the Soviet Union does not create instability. I wonder how many countries in Africa or how many observers of Africa one could ask that question of and get the same kind of answer. That kind of attitude in relation to the extension of the Soviet Union’s influence needs to stand in stark contrast with the Opposition ‘s general criticism of the efforts of the United States whenever that country undertakes initiatives designed to maintain balance. We know quite well the arguments about North- West Cape which have been going on for a long period- arguments that have been revived in the last couple of years. We know quite well its opposition to the development of facilities at Diego Garcia. I think it is just as well that not only this House but also the people of Australia should be reminded from time to time of the natural inclinations which are carried through from past Leaders of the Opposition to this particular Leader of the Opposition. If this Government has to make a choice, in blunt and plain terms, between naval facilities under the control of the United States and those under the control of the Soviet Union, I guarantee that we would prefer those facilities under the control of the United States. We do not wish to see an extension of major facilities under the control of the Soviet Union that would upset the strategic balance and which would, at the same time, be viewed with great disfavour by ASEAN countries and which would lead to the possibility of political instability of a very serious kind.

page 16

ELECTORAL REDISTRIBUTION INQUIRY

Suspension of Standing Orders

Mr HAYDEN:
Leader of the Opposition · Oxley

– I move:

I move this motion out of necessity. It is obvious-

Mr SPEAKER:

-I interrupt the honourable gentleman. The motion has to be in writing.

Mr Malcolm Fraser:

- Mr Speaker, I might be able to help the honourable gentleman. I would be delighted to make a statement about the Royal Commission report forthwith.

Mr HAYDEN:

– Yes, but will you allow me time to reply forthwith?

Mr Malcolm Fraser:

– We will allow the honourable gentleman plenty of time.

Mr HAYDEN:

-That is excellent.

Mr SPEAKER:

-Does the Leader of the Opposition wish to seek leave to withdraw his motion?

Mr HAYDEN:
OXLEY, QUEENSLAND · ALP

– Yes, indeed. I understand that the Prime Minister will make a statement. He is such a devious man that I would like to make sure.

Mr Malcolm Fraser:

– I would like to make a statement.

Mr HAYDEN:
OXLEY, QUEENSLAND · ALP

– Will the Prime Minister do it? Senators Withers cannot trust him; why should I have to trust him?

Mr SPEAKER:

-Order! The Leader of the Opposition will resume his seat. Is leave granted for the Leader of the Opposition to withdraw his motion?

Leave granted.

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

That so much of the Standing Orders be suspended as would prevent, firstly, the Prime Minister forthwith presenting to the House a copy of the report of the Royal Commission of Inquiry into Matters in Relation to Electoral Redistribution in Queensland in 1977 together with certain related documents and, secondly, the Prime Minister moving a motion in relation to those papers and debate on the motion proceeding forthwith.

page 16

QUESTION

REPORT OF THE ROYAL COMMISSION OF INQUIRY INTO THE ELECTORAL REDISTRIBUTION OF QUEENSLAND IN 1977

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– For the information of honourable members I present the report of the Royal Commission of Inquiry into Matters in Relation to Electoral Redistribution, Queensland 1977, and maps Nos. 1 to 4 attached to the report.

I also present the following for the information of honourable members:

A copy of a letter dated 21 April 1978 from the former Minister for Administrative Services to the Attorney-General; a copy of a letter dated 23 April 1978 from the Attorney-General and the Solicitor-General to the Prime Minister; a copy of a letter dated 24 April 1978 from the Chief Australian Electoral Officer to the AttorneyGeneral; a copy of a letter dated 11 May 1978 from the Attorney-General to Mr Justice McGregor, a copy of a letter dated 1 1 May 1978 from the Attorney-General to the honourable member for Fadden; and a copy of a letter dated 12 May 1978 from Mr Justice McGregor to the Attorney-General.

I move:

It may be helpful to honourable members if I briefly set out the key events leading up to the setting up of this royal commission. Allegations were made by the present honourable member for Fadden (Mr Donald Cameron) on 21 December 1977 that one of his parliamentary colleagues had had an undue influence on the redistribution in that State. It soon became apparent that the person to whom the honourable member was referring was the Minister for Finance (Mr Robinson).

I discussed this matter on 1 7 January with the Minister for Finance and the Minister for Administrative Services and it was decided that a meeting should be held in my office on the following day attended by me, those two Ministers, and the honourable members for Fadden, Lilley (Mr Kevin Cairns) and Bowman (Mr Jull). As a result of the meeting on 1 8 January, and with the agreement of the Minister for Administrative Services and the Attorney-General (Senator Durack), I requested the Attorney-General and the Solicitor-General to examine the complaints which had been put forward. The honourable member for Fadden had a lengthy document, which he showed me briefly, about his allegations. He did not leave a copy with me but agreed to discuss it with the Solicitor-General.

I rang Senator Durack to tell him what happened at the meeting, and at my request Senator Withers, as the responsible Minister, reported further to Senator Durack on the matter. The law officers’ advices of 9 February and 15 February were referred to by Senator Withers in the Senate on 28 February. In summary, that advice was that the matters complained of neither required nor warranted Government action.

The issue was raised again on 7 April. On that day the law officers’ advice was tabled after the honourable member for Fadden had again adverted to his allegations. The honourable member for Fadden referred to some statutory declarations which were additional to the material the Attorney-General and the SolicitorGeneral had previously considered.

There were several discussions between Ministers on 10 April at which both Senators Withers and Durack were present, to decide what action should be taken and it was again decided that this additional material should be submitted to the law officers for further advice. On the same day, the original memoranda of advice of the Attorney-General and the Solicitor-General were incorporated in Hansard.

On or about 11 April the Chief Electoral Officer, Mr Pearson, read the memoranda for the first time in Hansard. After discussing the matter with Senator Withers, he spoke to the SolicitorGeneral. Mr Pearson informed the SolicitorGeneral that in mid-September Senator Withers had discussed with him the naming of the electorate of the Minister for Finance and that at Senator Withers’ suggestion, Mr Pearson had spoken to the chairman of the Queensland distribution commissioners, Mr Coleman, on this matter.

The Attorney-General was informed of this orally by the Solicitor-General on 14 April. Senator Durack approached Senator Withers who confirmed what Mr Pearson had said. Senator Durack then told me on 16 April of the telephone conversations between Senator Withers and Mr Pearson, and between Mr Pearson and Mr Coleman.

Now let me make one point quite clear. This was the first occasion on which I became aware of Senator Withers’ intervention. While not reflecting in the slightest on the evidence of the Minister for Finance, I have absolutely no recollection of the matter being raised in any previous discussions. It is also fair to say that in his evidence to the royal commission, Senator Withers has no clear recollection of raising the matter with me on 17 January, nor has there been any suggestion that the matter was raised in the lengthy discussions Senator Withers and I had with the honourable member for Fadden. If I had had any relevant information relating to the inquiries of the law officers, eitheron 1 8 January or 10 April, I would have referred it to them. I state that categorically and absolutely.

Both the Attorney-General and I were concerned that this information, which was clearly relevant to the allegations against the Minister for Finance, was not made available to the law officers in January and as a result their original advice was deficient. There were further discussions between Ministers on 17 April. On the following day I left for Japan. From there I requested that a report of the Attorney-General and Solicitor-General be ready for discussion upon my return.

On 2 1 April, Senator Withers wrote to Senator Durack confirming details of the telephone conversations and his reason for making them. Mr Pearson also wrote to the Attorney-General supporting Senator Withers’ letter. Both these letters have been tabled. On 23 April, a meeting was held at the Lodge of a number of Ministers to consider the report from the law officers which I had sought to expedite while in Japan. This report resulted from the Government’s reference to the law officers of additional material on 10 April. The report was incorporated in the letter dated 23 April which I have tabled and advised that further investigation was required and that a judicial inquiry would be preferable. The Ministers agreed that a royal commission should be appointed forthwith, so that the allegations could be examined fully and publicly.

The Ministers discussed proposed terms of reference and the precise form was settled the following day and is set out in the letters patent of 24 April. The letters patent referred specifically to the change of name of the electorate and were quite wide enough to allow all the relevant evidence to be heard, and I emphasise that point as one of substance. It was not unnatural that as the only allegations which had been made concerned the Minister for Finance and the Queensland distribution commissioners, then, as to the commission’s findings, the terms of reference referred to those persons for these were the matters in Ministers’ minds. These were the matters subject to examination. The telephone conversations of Senator Withers and Mr Pearson were raised at the meeting.

The Attorney-General’s advice on 23 April was that in his view these telephone conversations were not contrary to the Electoral Act, a view subsequently confirmed by the royal commission, but constituted evidence relevant to the charges against the Minister for Finance and should come forward at the hearings of the royal commission. Ministers agreed with this advice. As soon as the royal commission had been appointed, the Attorney-General arranged for papers to be made available to counsel assisting the royal commission including details of the telephone conversations between Senator Withers and Mr Pearson, and between Mr Pearson and the chairman of the distribution commissioners. In this way, the AttorneyGeneral made absolutely sure that the details of the telephone conversations would be disclosed in public evidence before the commission.

All the Government’s actions, it can be seen, were prompted by a desire to have all the facts brought out at the royal commission. Allegations were then made, supported by statutory declarations, relating to alleged statements by the Minister for Finance on the Government’s decision on uranium mining. The Government decided that the terms of reference should be widened to cover the uranium allegations and revised terms of reference were drafted by the law officers. New letters patent incorporating the revised terms of reference were issued on 10 May.

The following day and before any evidence was heard by the commission, the AttorneyGeneral wrote to the royal commissioner indicating that the Government was willing to extend his terms of reference further if any matters came to his notice indicating that in the course of the redistribution any person had acted improperly or in breach of a Commonwealth law. On the same day, Senator Durack wrote to the honourable member for Fadden urging him to place before the counsel assisting the royal commissioner any further material he had which supported his allegations. I have tabled these two letters from the Attorney-General, together with His Honour’s reply on 12 May.

On 15 May, Mr Pearson, and on 22 May, Senator Withers, gave evidence before the royal commission about the telephone conversations. On 26 May, Senator Withers answered questions in the Senate directed to whether he had misled the Senate in statements he made on 4 November 1977 concerning the naming of the McPherson electorate. On 28 May, a meeting of a group of Ministers and officials from my Department and the Attorney-General’s Department met to consider the situation.

In accordance with the Government’s policy throughout this matter, as reflected in Senator Durack ‘s letter to Mr Justice McGregor of 11 May, to have all allegations of illegality or impropriety in the course of the McPherson redistribution fully heard and determined, Cabinet decided on 30 May to have the terms of reference widened again so that the royal commission could make a finding on whether any breach of the law of the Commonwealth or any impropriety had occurred on the part of any person in the course of the McPherson redistribution.

I now turn to the findings made by the Royal Commission. Mr Justice McGregor entirely exonerated the Honourable Eric Robinson of allegations concerning the Queensland redistribution. His Honour said:

No breach of a law of the Commonwealth or impropriety occurred in the course of the redistribution in 1977 of the State of Queensland into Electoral Divisions for the election of Members of the House of Representatives, including the change of the name of a proposed division from ‘Gold Coast ‘ to ‘ McPherson ‘ by reason of

anything said or action taken by or on behalf of the Honourable Eric Robinson;

any action taken by (he Distribution Commissioners or any of them as a result of anything said or action taken by or on behalf of the Honourable Eric Robinson; or

any communication by the Distribution Commissioners to the Honourable Eric Robinson.

On the issue of allegations about statements made by Mr Robinson on uranium, the Commissioner reported:

On 26 July 1 977 at Beaudesert in the State of Queensland, the Honourable Eric Robinson made a statement concerning the likely decisions of the Commonwealth Government in relation to the mining or uranium in Australia to the following effect-

The Government will be making a decision about mining and export of uranium early in the Budget session which commences in about three weeks’ time.

If the Government is satisfied that all interests requiring protection can be protected, I would expect the Government to authorise mining and export of uranium.

This was a statement to which no exception can be taken. Accordingly, I wrote last week to Mr Robinson asking him to resume his portfolio as Minister for Finance. The Royal Commission similarly exonerated completely the Chief Electoral Officer and the three Queensland Distribution Commissioners. The Royal Commissioner thus concluded that the drawing of the boundaries of the McPherson electorate was carried out without any illegality or impropriety on the part of any person.

With respect to Senator Withers, the Royal Commissioner found that the Minister had done nothing illegal, but that in respect of his involvement in the naming of the electorate, in the words of the report:

The action of Senator the Right Honourable R. G. Withers constitutes impropriety within the meaning of the Letters Patent dated 30 May 1978. Senator Withers used his position to further a political purpose by an approach (not open to members of the public) to the Distribution Commissioners. That purpose was not made known to them, and it was foreign to the matters which were proper for their consideration. Had the Commissioners been made aware of what was behind the approach, they would not have entertained it.

However, believing they were being invited merely to correct an error on their part, they went along with the suggestion which was put to them. Whilst Senator Withers did not seek to influence, or influence, the Commissioners in any way about how they should perform their duties of distribution of the Electoral Divisions in Queensland, he did seek to influence them, and he did in fact influence them, through an intermediary, as to something which they proposed to say in their Report, that is to say, the names which they tentatively attached to two Electoral Divisions. What he did, having regard to the purpose with which he did it, in myjudgment constitutes impropriety.

Mr Justice McGregor thus found that an impropriety had been committed not because of Senator Withers’ act of communicating with Mr Pearson about the name of the electorate but because of ‘the purpose with which he did it’. The Commissioner exonerated the Chief Electoral Officer who was a party to the same act but who did not have, in the judgment of the Commissioner, and was not aware of in the view of the Commissioner, the motive which the Commissioner found to be the real reason for Senator Withers’ telephone calls.

Senior Ministers considered carefully what should be done in the light of this finding and of the judge’s definitions of impropriety. We had no doubt that our first and foremost responsibility was the maintenance of the high standards of propriety set and maintained by this Government. We were of the view that we had no option but to accept Mr Justice McGregor’s report and accepting it had inevitable consequences in respect of the finding of impropriety. In coming to decisions on these particular matters, it was necessary to have in mind the answers given by Senator Withers in the Senate on 4 November and 26 May in the light of the evidence which emerged at the Royal Commission and the findings of the Commission. As I said in my statement when the report was released on 8 August:

The community rightly demands a high standard from the Ministers of the Government.

The judgments on Ministers are more exacting and sometimes more harsh than the judgments which might be passed on those outside the sphere of public life.

If these high standards were not upheld, the people’s confidence in Government- a confidence which is fundamental to Australian democracy- would be undermined.

The Government has an obligation to uphold them even though the cost can be and is in this instance, a high one.

Thus on 7 August I recommended to His Excellency the Governor-General that he should determine Senator Withers’ appointment as Minister for Administrative Services.

Throughout this whole matter, the Government has consistently acted to have the allegations examined by the law officers, and then, in their recommendations, by the Royal Commission. Twice, when new allegations and issues were raised, the Royal Commission’s terms of reference were widened. The totality of the Government’s actions was designed to elicit all the facts on the allegations which had been made. I remind the House that the terms of reference were sufficiently wide to encompass findings in respect of any other Minister, public servant or person. The decisions we made were difficult and not without pain. Senator Withers has a fine record as a Minister and as Leader of the Government in the Senate. It is with a considerable sadness that matters have concluded as they have. Senator Withers’ energy, ability and experience will be greatly missed by the Government.

Mr HAYDEN:
Leader of the Opposition · Oxley

– If the impropriety committed by Senator Withers is so serious that he should be peremptorily dismissed from ministerial office by the Prime Minister (Mr Malcolm Fraser) then the Prime Minister too should stand down. The Prime Minister is as deeply implicated in this matter as Senator Withers. The events associated with this affair cannot be dismissed in the way the Prime Minister has suggested today. The Royal Commission report deals with only one narrow aspect which, despite its importance, is one of the lesser concerns of this Parliament. The central issue for this Parliament and for the community at large is the conduct of the Prime Minister, not of Senator Withers. The evidence given before the Royal Commission, not just its report, raises many serious questions which must be answered before the Parliament can discuss the matter in a meaningful way. The Prime Minister obviously is seeking to avoid these questions and to avoid meaningful debate. He is hoping that he can bury the issues beneath the weight of publicity for the Budget. He is terrified of the mounting tensions within the Government parties. He is terrified of the challenge to his own position.

Mr Shipton:

– That was last week ‘s script.

Mr HAYDEN:

– Whistling in the dark to prove you are brave will not reassure anyone. In the tactics he is attempting today the Prime Minister is demonstrating his contempt for this Parliament in the same way that he demonstrated it over this affair throughout the first half of this year. Let me state now that we are not prepared to let the matter rest at this point. We intend to raise it tomorrow, the day after and next week, and after that again if it is appropriate. This matter is going to continue to haunt the Prime Minister, and properly so. We are being asked today to whitewash a conspiracy. We will have no part of that proposition; nor, we believe, will the Australian people. Events and facts already on the public record challenge the basic credibility of the Prime Minister and his Government. They challenge the fitness of the Prime Minister and his Government to hold office. It is absurd to suggest that they can be brushed aside with a statement that ignores the fundamental issues and attempts to paint a tainted government as the virtuous defender of probity in public life. I repeat: We do not intend today to explore fully all of the matters that concern us on this issue. I reaffirm that we will be raising this matter tomorrow, and the Prime Minister can prepare himself for that, the day after that and next week too. It is our belief that the Prime Minister has established by his conduct in this matter that his behaviour is not the behaviour of an honest man. He ought to resign.

Let us look at some of the matters we will be exploring in the course of the next few days. How can the Prime Minister ignore the statement of the honourable member for Lilley (Mr Kevin Cairns) in this Parliament on 3 November last year? Whatever differences the Opposition may have with the honourable member for Lilley, it concedes his integrity and his determination to serve a principle. He is not a double dealer; he is not a dissembling representative in this Parliament. He is also not given to exaggeration in an effort to make a case, least of all a case that is damaging to his own team. On 3 November 1 977, the honourable member for Lilley said: . . I am of a mind that the redistribution in Queensland was a dishonest redistribution. I am certainly of a mind that section 21 of the Act was not adhered to in that redistribution. To put it bluntly, I believe that some cheating went on.

He continued:

They-

That is, the distribution commissioners- got a message from on high, perhaps by way of a telephone call.

That is prescient in the light of what has transpired. There was no guesswork there. But backbenchers already knew the felony that was afoot on the part of the top people in government. The honourable member for Lilley continued:

But they made a significant change in names such as has not occurred before in redistributions . . .

It was improper conduct; corrupt conduct. The former Minister for Administrative Services was party principal to it and Mr Big was the Prime Minister who knew all along of the implication of the Minister for Administrative Services. Now no one is going to suggest seriously to me that any comment from a senior member of the Government, with the standing and respect that the honourable member for Lilley enjoys bipartisanly in this House would be ignored and that the Prime Minister would fail to make some sort of inquiry when such a serious and damaging allegation was made against the Government of which the honourable member for Lilley, who was previously a Minister in a conservative government, is part.

There are the statements of the Minister for Finance- sworn testimony before the Royal Commission- that on 17 January, 23 April and some time in between, with other Ministers present, Senator Withers on three occasions told the Prime Minister of his implication in this matter. The Prime Minister is seeking in the House today to tough it out. No one believes him when he says that he took no notice of the allegations of the honourable member for Lilley and no one will believe him when he suggests that he cannot recall at all the serious statement of the Minister for Finance. It is a case of convenient amnesia. He seeks a tabula rasa of the guilty man wanting to make a fresh start, but he has gone too far. We cannot let this matter rest here. I ought to mention in passing that the Prime Minister complained that the honourable member for Fadden (Mr Donald Cameron) did not leave a copy of the document- the basis of his allegations- with him when the honourable member raised the matter. We all know why. It is because the honourable member for Fadden said- this is on public record- that if he left it with the Prime Minister it would be put through the shredder. His own team does not trust him. They are late arrivals at this position. We could have advised them earlier not to trust him. The Prime Minister said that on 16 April Senator Durack told him of Senator Withers’ intervention and that this was the first time he had heard about it. He has this case of convenient amnesia afflicting his recollection until that day.

But let us not quibble about that today because we intend to explore these matters further. Let us settle on his admission of today. If he really stands by that then there are serious implications flowing from that statement which require a defence from him. Why is it that the Prime Minister set up terms of reference for a royal commission of inquiry on the night of 23 April- a week later- which specifically excluded consideration of the role of Senator Withers in this matter? The role of Senator Withers went right to the heart of the complaint of the honourable member for Fadden. Honourable members will recall that the complaint was that the name of the electorate of Gold Coast, as proposed, was improperly changed to that of McPherson, and that that was a very significant change. Indeed the royal commission makes that clear, as does the evidence of Sir Alan Hulme, the evidence attributed to the Minister for Finance and the evidence attributed to Mr Sparkes, the State President of the National Country Party in Queensland. The Prime Minister knew that complaints were being made that improper conduct was responsible for that change of name. He knew that it was Senator Withers who was responsible for the improper intervention. He was aware, however, that while his backbenchers knew there had been an impropriety, they were, perhaps wrongly, blaming the Minister for Finance and not correctly blaming the Minister for Administrative Services. So, secure in the knowledge that the Minister for Finance could not be found guilty of something done quite wrongly by the Minister for Administrative Services, the Prime Minister set terms of referencethat was his responsibility in administering the Royal Commission Act- which specifically excluded the Minister for Administrative Services. The honourable member for Fadden, the honourable member for Lilley and the honourable member for Bowman (Mr Jull) all knew that something wrong had been done, but they got the wrong man and they were going to be played for suckers by the Prime Minister who set down limited terms of reference. The royal commission would have found nothing if it had not been for the persistence in this House of the honourable member for Fadden, of the Opposition and of the Press in this country. They exposed the quite improper behaviour not only of Senator Withers- he is the scapegoat in thisbut also of the Prime Minister, who used Senator Withers in the hope that he could keep some scars off his own political hide. The Prime Minister has to answer the question: Why was it that he limited the terms of reference, knowing full well that limiting them in the way he did wouldhopefully on his part- preclude the proper finding of guilt of the Minister for Administrative Services? The Prime Minister never recognised what a clumsy witness the former Minister for Administrative Services would prove to be. The dog that went in to bark ended up biting itself.

There is another matter raised by the Prime Minister which causes a great deal of concern here. It reflects again the tendency of the Prime Minister to put the stiletto in the hand of someone else to do the back-stabbing within his own party. He proposed to Mr Justice McGregor that, if he considered fit, he ought to expand the terms of reference for the inquiry. Now that is a very happy arrangement, if one can get Justice McGregor to be foolish enough to take the responsibility to expand the terms of reference to net the Minister for Administrative Services. One anticipates what the plot was. There would be sympathy for Senator Withers later from the Prime Minister but as for now his attitude would be: ‘Stiff luck old boy, you cannot trust those judges. They do not know when to stay bought. He extended the terms of reference on you’. But it did not work out that way. The Prime Minister had to do his own dirty work again and, as you know Mr Speaker, he is not loath to do his dirty work when it will serve his own particular interest.

Mr SPEAKER:

– Order!

Mr Sinclair:

- Mr Speaker, I take a point of order. If I heard the Leader of the Opposition correctly, he suggested that a member of the judiciary had been bought. If that expression were used, I suggest that it is totally contrary to the practise and rules of the Standing Orders of this place. Therefore it should be withdrawn.

Mr HAYDEN:

– I did not suggest that. I suggested that the thought might have been harboured in the mind of the Prime Minister. Certainly his behaviour suggests it and if that is so, it is offensive.

Mr SPEAKER:

– I did not understand the Leader of the Opposition to allege that the judge had been bought. I understood him to be making an allusion to that possibility.

Mr HAYDEN:

– The reason the Prime Minister came somewhat clean today in the House- he is a long way from being lily white, and I think that task is impossible on his record in this Parliament- is that he was forced into a corner by the private briefings the former Minister for Administrative Services, Senator Withers, was giving the Press about a week ago.

Mr SPEAKER:

-Order! I ask the Leader of the Opposition to resume his seat. I have allowed the debate to proceed in a quite different fashion from that which a motion that the House take note of the paper would usually encompass. I remind the honourable gentleman that under Standing Orders he is not permitted to make the sorts of allegations he is making, without a substantive motion which goes to the character of the person against whom he is making the allegations.

Mr HAYDEN:

-We will be doing that this week.

Mr SPEAKER:

– Quite, but this is a motion which is being debated now, not later this week.

Mr HAYDEN:

– I thought you would welcome the news, actually.

Mr SPEAKER:

-Order! The honourable gentleman will resume his seat. There is no point in those smart remarks to the Speaker when he is calling attention to the Standing Orders. If the honourable gentleman does it again, I will have to ask him to withdraw.

Mr HAYDEN:

-Senator Withers has disclosed that on 4 August he spoke to the Prime Minister. The Prime Minister said: ‘I have good news and bad news. The good news is that the Royal Commission has exonerated the Minister for Finance, , our colleague, Eric Robinson’. No doubt Reg Withers said: ‘What is the bad news?’ The Prime Minister said: ‘The bad news is that you are in trouble ‘. To that Senator Withers replied: ‘ We ‘re in trouble.’ That is the evidence, among many other matters of fact, which we intend to explore in this Parliament.

Senator Withers has implicated the Prime Minister in this matter. In his new political newsletter entitled The Laurie Oakes Report, Laurie Oakes, the Prime Minister’s favourite author, has pointed out that Senator Withers lifted the lid on the Prime Minister in these private briefings to journalists about a week ago, with about 20 journalists present taking notes. According to the report Senator Withers pointed out to the Prime Minister that he would be in trouble for being conveniently unable to recall the evidence of the Minister for Finance about Senator Withers’ statement on 17 January, and Fraser replied that he would deny this. According to the report Senator Withers then said that that would be tantamount to accusing Mr Robinson of perjury, and Mr Fraser said that he would say he had no memory of this event. The Prime Minister has shifted some ground but he is trying to stick on that. It is our intention to budge him from it. I reassert that the behaviour of the Prime Minister is not the behaviour of an honest man. He should not be in this Parliament.

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

– The Prime Minister (Mr Malcolm Fraser) today has made a statement setting out the facts relating to the findings of the McGregor Royal Commission concerning serious allegations that had been made -

Opposition members interjecting-

Mr SPEAKER:

-Order! The Deputy Prime Minister is entitled to be heard in silence. I ask that interjections should cease.

Mr ANTHONY:

-The Prime Minister has made a statement regarding the serious allegations that had been made concerning the redistribution in Queensland relating to the electorate of McPherson. I believe that that statement shows clearly that the Government has acted properly and reveals all the facts related to this situation. Today the Opposition and, to a degree, the media have tried to present the whole situation dramatically but 1 think it is fair to say that the view of the Australian public is one of massive indifference since the Prime Minister announced the Government’s decision relating to the findings of the Royal Commission. I suppose it is a fairly common thing for those who sit in this place and for those who look down upon us in judgment to see our actions as being a lot more important and significant than they really are. Nevertheless, we would be wrong to fail to recognise, as did the Sydney Morning Herald in an editorial of 9 August, that the issue involved in the matter we are now discussing is one of principle.

The principle, of course, is that Ministers are expected to act not merely in accordance with the law but in accordance with standards of ethics and conduct of a high order. When a royal commission declares that a Minister has acted with impropriety, there is no alternative but for the Prime Minister to ask for the Minister’s resignation or, if necessary, to remove him from the Ministry. The Prime Minister must take this action no matter what he or his ministerial colleagues or anyone else for that matter might think of the findings of the royal commission. The Prime Minister must take this action no matter what the degree of guilt involved and no matter what the political and other consequences of his action might be. When a finding of impropriety is embodied in the report of a royal commission the Prime Minister is left in the most unenviable position of having to embark upon a course of action which allows no half measures. As a journalist in the Press Gallery put it, there is no way you can have a half hanging even though the crime may not be a hanging one. When the

Prime Minister is a man who has consciously and properly set great store on integrity and probity in government, there can be no doubt whatever as to the course he must follow.

Perhaps it would be worth taking a couple of minutes to ask ourselves what the consequences would have been if the Prime Minister had not responded to the findings of the Royal Commission in the way he did. The criticism which the Opposition has already directed at the Government would be nothing compared with its criticism if the Prime Minister had failed to take the course of action he took. Yet today honourable members opposite are desperately trying to manufacture other issues, to imagine conspiracies and what have you. The Leader of the Opposition (Mr Hayden) says that he will continue to bring up this matter day after day, month after month. If he does I think it will show the inadequacy of the Leader of the Opposition in coping with his job. The matter has been resolved properly and clearly and, I believe, to the satisfaction of the Australian people. When this matter became an issue of significance about 10 days ago there was a question in the minds of some people as to whether the Prime Minister should accept the findings of the Royal Commission and take the course dictated by those findings. Certainly there was a great deal of concern and sympathy for Senator Withers. When I became fully aware of the Royal Commission’s findings- as I was away from Australia I did not know of them immediately- there was no doubt in my mind as to what must happen. I made it quite clear to the Prime Minister when I spoke to him from Manila late in the afternoon of Monday, 7 August, that I could see no alternative to what the Government proposed to do and what I fully supported. This should give the lie to the suggestion that I changed my attitude after I returned to Australia on Wednesday of last week or that I was in some way concerned about the attitude of my senior colleagues. These suggestions, which have been reported in a most irresponsible manner in at least one newspaper, are absolutely without foundation or truth. If the Prime Minister had not done what he did there would have been very serious and firm grounds for criticism of him. A royal commission is not established lightly. Its findings are not to be regarded lightly. To do so would be to weaken public respect for the standing of royal commissions as a means of inquiry. To disregard the findings of a royal commission which has been asked to examine specific allegations of malpractice would be to throw into contempt not only the commission directly concerned but future commissions as well. The Opposition and the media would have a real field day claiming, as they would have every right to do, that a government that ignored the findings of a royal commission could not be trusted to respect the findings of any future royal commission it set up.

Every time in the future a government found it necessary to set up a royal commission for one reason or another, the opposition immediately would raise the cry that such action was a farce because the government could not be trusted to respect or act on the findings of a royal commission. The Australian people would have every reason then to be suspicious of the integrity and trustworthiness of the government and the Prime Minister if the Prime Minister failed to take such a course. I hope that those people who, with me, feel very deeply for Senator Withers will bear these things in mind. The question which arises now, according to the Opposition and the media, is why the Prime Minister and other Ministers, if they knew in April or on some earlier date what Senator Withers had done, did not act on the information at the time. Mr Speaker, as you probably know, I had some difficulty recalling with precision what happened on particular dates, or what I learned about particular matters and when. If I inadvertently misled anyone in regard to these matters, I apologise.

The question now directed at me is why, if I learned in April of Senator Withers’ phone call to the Chief Electoral Officer, I did not immediately react as some people are saying now I should have reacted. The Prime Minister has told the House that he first became aware of this matter of a phone call on 16 April. To the best of my recollection I became aware of it the next day. I have to say, quite frankly, that when I learnt of this matter, apparently on 17 April, I was not seized with a sense of outrage, a feeling that something sinister or improper had occurred or a belief that Senator Withers had done something which demanded immediate action on the part of the Prime Minister. Perhaps I should have experienced these feelings. Perhaps it is true to say, to borrow some words from an editorial in the Melbourne Age, that a judge’s conception of propriety is rather stricter than that of the average politician; but the fact is that I did not react as some people now tell me I should have reacted.

On 23 April the Attorney-General (Senator Durack) said that he did not see Senator Withers’ actions as contravening the Electoral

Act, and of course the Royal Commission confirmed that view. But because the information was relevant to the inquiries about the Minister for Finance Ministers decided on 23 April that it should be made available to the Royal Commission. This decision was made one week after the Prime Minister first became aware of Senator Withers ‘ phone call. In that week the Prime Minister was in Japan. To suggest in these circumstances that there had been a cover-up is clearly nonsense. The fact now is that the Royal Commission has found that Senator Withers acted with impropriety not because of what he did but because of the purpose with which he did it. That is the finding from which there is no escape. Many people who discovered after the event that they had some wisdom about the matter are now asking why we were not sensitive enough at the time to recognise the significance of Senator Withers’ action. As I have indicated recently, I did not see any great significance in the electorate name from the point of view of my party. As the chairman of my party in Queensland, Mr Sparkes, said to the Royal Commission, while it was possible the party might have stood a candidate in the electorate such a decision was improbable. He pointed out that there would have been some reaction at the electorate level from people wanting the party to contest the seat but that our normal understanding is not to oppose ministerial colleagues.

In summary, the following points should be made: The Government set up a Royal Commission to investigate serious allegations about an electoral redistribution as it related to the electorate of McPherson. This was seen by the Government as the most satisfactory way of dealing with this matter. A royal commission provided for an examination at the highest level. As soon as it was established the royal commission was advised of Senator Withers’ contact with the Chief Electoral Officer and of the message that was conveyed to the distribution commissioners as a result of that contact. There was no evasion or cover-up on the part of the Government. The terms of reference of the Royal Commission were widened twice to ensure that relevant matters could be examined and findings made. As we know, the most important findings were that there was no breach of the law or impropriety in regard to the redistribution in Queensland in 1977 involving the Minister for Finance, the distribution commissioners or the Chief Electoral Officer. But the Royal Commission also found that an action of Senator Withers constituted impropriety. Those were the findings, and the Government accepted them.

What then was the Government to do? The Prime Minister could not flinch from the resolution of the issue. There was no room for expediency. The principle was clear cut. The Prime Minister and the Government had either to accept the findings of the Royal Commission and act as such acceptance demanded or to walk away from the high principles of government which the Prime Minister has steadfastly demanded and achieved. All of us on this side of the House are saddened by the consequences which had to flow from acceptance of the Royal Commission’s findings, but there can be no doubt whatever that the Government’s decision is in the best interests of the good government of Australia. I believe that the Australian people accepted the decision because it was the right decision. Above all else the people of this country want to see integrity in their leaders. They want to have confidence in their Prime Minister and their Government. Any decision other than that taken by the Government quite rightly would have created doubts about the integrity of the Government.

I believe that the statement made by the Prime Minister today and the decisions and actions taken by the Government clear up this matter once and for all and that there should be no doubts at all in the minds of the Australian public, although I know that we will never convince some people in this House. If the Leader of the Opposition wishes to continue to raise this matter day after day he will show his gross ignorance and futility.

Mr LIONEL BOWEN:
Smith · Kingsford

– The excuse given by the Prime Minister (Mr Malcolm Fraser) and the Deputy Prime Minister (Mr Anthony) is not accepted by the Opposition and could not be accepted by the people of Australia. The one excuse given is that the Prime Minister has no recollection of the matter. Can we trust the prime ministership of this nation to a person who suffers so much from lack of memory? Let us bear in mind the deceit and deception practised by this Government today. The Prime Minister read from a prepared statement of which he gave the Opposition no notice at all, let alone the usual two hours notice. The speech made by the Deputy Prime Minister, which was also a prepared speech, was read out on the basis that members of the Government knew beforehand what they were going to say. We should give credence to what Senator Withers said in a briefing would be said. He pointed out that if the Prime Minister were to disown the Minister for Finance (Mr Eric Robinson) that would amount to saying that the

Minister for Finance was guilty of perjury; and, as to what the Prime Minister would say, Senator Withers said that the Prime Minister would say that he had no memory of the 17 January conversation. It was remarkable perception on the part of Senator Withers that he could give out that information 10 days before we heard it in this House. Ignorance is no excuse. Failure of recollection is no excuse.

Let us consider the evidence given to the Royal Commission by Government people. The Chief Electoral Officer, Mr Pearson, was extremely concerned by what he read in Hansard. He read in Hansard something that he knew was a deception. He knew that it was appropriate and proper that Senator Withers and others should be telling the chief law officers what had occurred in the conversations that Senator Withers had had. Obviously we would not have had any idea of what transpired but for Mr Pearson. Being an honourable man, Mr Pearson was convinced that he should tell the truth about his conversation with Mr Coleman as a result of which in the Queensland redistribution the name of the proposed electorate of Gold Coast was changed to McPherson.

The change had the utmost political significance. If the name had been changed from McPherson to Gold Coast the National Country Party would have been allowed to contest the seat. We must bear in mind that the Minister for Finance had won the seat from the National Country Party some years ago and that Party was very anxious to get it back. The appropriate message was given to this House by the honourable member for Fadden (Mr Donald Cameron) when he indicated clearly that it was a matter of the utmost political significance that by changing the name of a seat in Queensland a threecornered contest would have been invited. That is what this matter was all about. Do honourable members believe that Senator Withers, a senator from Western Australia, on his own initiative would suddenly take a keen interest in the changing of the name of a Queensland electorate? That would have been done because he was prompted to do it on the basis that unless it was done the Minister for Finance would face a contest with the National Country Party which was anxious to get the seat back.

What is the evidence given to the Royal Commission by the Minister for Finance? As recorded on page 1687 of the transcript of evidence, in answer to a question from Mr Gleeson about a meeting in the Prime Minister’s office he said that he could not be specific about the date but would make it clear that Senator Withers had raised the matter with the Prime Minister three times in his presence. He said that he thought one occasion was the day before 18 January, because that was the day of the Cabinet meeting, and that there were two other occasions after that. The Minister for Finance said that the matter was raised three times, and the Prime Minister has said that he has no recollection! Can we honestly believe that? Is that the truth that the Australian people will swallow? We come to the position that if the Prime Minister knew on 1 7 January that Senator Withers had acted improperly it was his duty to sack Senator Withers on that day. There has to have been a cover-up because no action was taken. A further complication arises when one looks at the evidence of Senator Withers. What did he say to the Royal Commission? He said that a number of meetings were held. As far as he was aware the matter was certainly raised in January and it was raised with the Prime Minister. But the Prime Minister still has no recollection. Senator Withers said:

There were a number of meetings about this whole vexed business … I think we had six or seven meetings over a period of months.

Six or seven meetings were held but the Prime Minister still cannot recollect it. This is the point. Senator Withers was asked about who was present at those meetings. He replied that a group of Ministers were at The Lodge and the change of name was taken up following what had been disclosed by Mr Pearson. If these six or seven meetings were held at The Lodge, surely the Prime Minister cannot say that he has no recollection of them. Senator Withers was then asked who was at one of those meetings. He replied that the Prime Minister was there, the Deputy Prime Minister (Mr Anthony) was there, Mr Sinclair was there, Mr Nixon was there, Mr Street was there and Senator Durack was thereand I think Mr Robinson was there. Senator Durack is the Attorney-General.

This is the point; there had been a number of meetings at The Lodge and at the Prime Minister’s office from about 1 9 January onwards. They seemed to be occurring almost weekly. Are we to accept the statement given today that the Prime Minister knew nothing of this matter? Nobody could possibly believe that to be the true situation. Nobody could accept it as being the truth. It is fundamental to democracy in this country that we should be able to say to the people of Australia that we have fair distributions, that everything is honest and above board and that we guarantee that our electoral commissioners are not subject to any influence. The Electoral

Act states this very thing and it makes it a criminal offence if anybody attempts at any stage to influence the commissioners outside the procedures of the Act.

I remind honourable members to look at the advice given to the Prime Minister by the Solicitor-General, Mr Byers, and the AttorneyGeneral, who seems to be under a cloud because of the evidence that has been given to the Royal Commission. That advice makes it very clear that the matter involved section 22 of the Electoral Act. That section prevents any unsolicited tender, outside the procedures pf the Act, designed to influence the determination of the Commissioners in the performance of their duties. An unsolicited tender of information was made through Mr Pearson. The advice continued:

Although it may be difficult to say that the offence-creating provisions such as section 1 70 apply to section 22 of the Act, we do not doubt that a breach of the section is likely to give rise to criminal liability . . .

This is not a matter for a court of petty sessions in which one can plead guilty and hope to be let off on a bond. Influencing electoral commissioners for political advantage is the basic point to consider. If the Prime Minister is a man of honour, he would be able to say: ‘I knew about this matter in January but I made a mistake; I should have taken action then but I did not’. But he came in here today and said: ‘Look, I knew nothing about it’. That is the easiest way out. I do not know what the other Ministers are going to say. Have the six or seven other ministers had lapses of memory too? Did they know nothing about the matter? What about the AttorneyGeneral who knew about the matter and apparently did not advert to it in his advice to the Prime Minister? It was left to Mr Pearson to tell the Commission on 15 May about the conversation. When he did so other people suddenly had to come clean.

Let us go back to the terms of reference for the Commission which the Prime Minister said were so wide in the first instance. Normally they would have encompassed the matters that related to Senator Withers but they did not do that at all. They were drawn up by, among others, the Attorney-General who had full knowledge of the conversation that had taken place between Senator Withers and Mr Pearson. They were drawn up in such a fashion that they were aimed solely at the Minister for Finance. He was the one person mentioned in those terms of reference. The terms of reference were:

  1. anything said or action taken by or on behalf the Honourable Eric Robinson;
  2. any action taken by the Distribution Commissioners or any of them as a result of anything said or action taken by or on behalf of the Honourable Eric Robinson; or
  3. any communication by the Distribution Commissioners to the Honourable Eric Robinson.

That is the position. In no way were the terms of reference going to encompass Senator Withers. They were aimed at the Minister for Finance, perhaps because it could be thought that the evidence would be covered on the basis that Mr Pearson would not tell the whole truth about that conversation. That is the fundamental error of the statement made today. Mr Pearson told the truth about what happened. We in the Opposition say, and the people of Australia should know, that Ministers, including the Prime Minister, were all involved in this conspiracy to cover up, to gain political advantage from a change of electorate name, and they tried to make out that it was innocuous. It was not innocuous in Queensland. The Commissioner has found that it is a matter of the utmost political significance. The Deputy Prime Minister adverted to the evidence given by the National Country Party. It made it very clear that it was very unhappy with the Liberal Party in Queensland. It was very upset that Mr Small, the Country Party candidate, had been opposed and defeated in the election. Background evidence was presented as to what was wrong if the name of Gold Coast was to remain. It would have meant that a Minister of the present Government could have been in jeopardy in a contest. That is why influence was exerted.

One other most disquieting matter ought to be looked at by any responsible government but it will not be looked at by this Government. I refer to the reference by the Royal Commissioner to an exhibit which is called a ‘political analysis’. The political analysis originated in the office of the Minister for Administrative Services and, by his direction, was forwarded to the commissioners in Queensland before they finished their deliberations. Could there be anything more scandalous or more criminal in its content than that sort of action? It was called Exhibit AAH. On the front of the exhibit are the following words:

Frank

We are sending a copy of our analysis for each State to the Chairman concerned . . .

It was signed ‘R. G. Withers’. The political analysis was given to the commissioners to show how the distribution was really going to assist the Government. There was no need to worry about it. The conclusions in the document state:

The Division of McPherson into two seats has created an additional safe . . . seat (Gold Coast). The position in the other nine non-metropolitan divisions is almost unchanged . . . Oxley has been somewhat strengthened . . .

Under the proposed boundaries, as at present, the position of the N.P. is less favourable than that of the L.P. The N.P. would lose three seats . . . in a uniform swing of 4 per cent as against the L.P.’s one . . . There is, however, the possibility, albeit unlikely, that the N.P. rather than the L.P. might win McPherson.

Given the creation of an additional safe . . . seat (Gold Coast) and the slightly improved position of the L.N.P., in the metropolitan area, it appears that the redistribution favours the coalition parties as against the A.L.P.

What about honest government? That was sent by the Minister who deserved to be sacked on the first count and who should never be returned to office on this count because of the political analysis given to the commissioners showing what they were doing to favour the Government. People expect commissioners to be above any influence. The Electoral Act guarantees that they should be away from any such influence and the Royal Commissioner himself was not at all impressed with this sort of evidence. The political analysis showed that a redistribution would be less safe or safer for a government. How in the name of fortune could this evidence be given to a commission? The Royal Commissioner said:

I consider the questions of advantage or disadvantage to political parties are alien to the proper subjects for their consideration.

He took the same position in his following statement:

I do not regard Mr Coleman’s views-

Mr Coleman gave some tame cat sort of evidence and said he thought he was helping the people who were doing the redistribution in Queensland by giving to his fellow commissioners this political analysis. The Royal Commissioner continued:

I do not regard Mr Coleman’s views about the justification for having recourse to such a document as correct.

That statement shows the insidious influence of this Government over the whole Queensland redistribution. If it was not so scandalous, it would be laughable to think that the Government of Australia can say in here today: ‘Look, something might have gone wrong. There might have been a criminal act but the Prime Minister has no memory of it. ‘ But other Ministers were at the meetings. We have the evidence of Robinson and Withers in the witness box that they had clearly discussed this matter at six or seven meetings over a period of months and that day in and day out they were saying: ‘Look, what are we going to do about this matter? We have obviously to face up to the fact that a telephone call went through to the Commissioners and that as a result of that the name was changed’. It is just not an innocent matter. It is a matter of the Government being guilty of the vilest corruption, using political influence to get the best results possible for a party in Queensland. The Government got those results. It was left to a back bencher- the honourable member for Fadden, who was sacked from the position of Deputy Government Whip some time ago- to raise again the matter of why the truth was subverted. The honourable member for Lilley (Mr Kevin Cairns) says it was a dishonest redistribution and he was right. It was left to two men on the Government back bench to try to raise this matter.

Mr SPEAKER:

-Order! The Deputy Leader of the Opposition ‘s time has expired.

Mr LYNCH:
Minister for Industry and Commerce · Flinders · LP

– On 6 May the New South Wales Premier was reported as telling a group of United States businessmen: 1 think we can forget the possibility of a national Labor Government for these two elections, say six or seven years.

After hearing what the Leader of the Opposition (Mr Hayden) has had to say it is not difficult to see why. The Opposition is totally unable to understand simple facts even when they are presented in the clearest terms. The Leader of the Opposition has disregarded them. I might say that he has been in the Australian Labor Party for too long. It has affected his thinking. He sees everything in the same light as the rest of the Labor Party. They see conspiracies at every corner, cover-ups at every turn. It is part of their political way of life. It is no wonder, knowing their recent history. I will come back to that in a few moments.

The Prime Minister (Mr Malcolm Fraser) has set out the key events leading up to the establishment of the Royal Commission. These facts are clear. It is sad that the Leader of the Opposition is unable to grasp what has in fact been put forward by the Prime Minister. To help the Opposition I shall run through the essential facts again. On 2 1 December of last year the honourable member for Fadden (Mr Donald Cameron) made certain allegations about the Queensland redistribution. On 17 January the Prime Minister discussed the matter with the Minister for Finance (Mr Eric Robinson) and the former Minister for Administrative Services, Senator Withers, whose portfolio encompassed the Australian Electoral Office. On 1 8 January the Prime Minister, the former Minister for Administrative Services and the Minister for Finance met the honourable member for Fadden, the honourable member for Lilley (Mr Kevin Cairns) and the honourable member for Bowman (Mr Jull) in Canberra to discuss the allegations. Following that meeting the Attorney-General (Senator Durack) and the Solicitor-General were asked to examine the complaints of those honourable members. On 9 February the law officers reported. They stated that in their opinion the matters complained of neither required nor warranted government action. On 7 April the honourable member for Fadden again referred to his allegations. On the same day the Leader of the House (Mr Sinclair) tabled the reports from the law officers.

Allegations had been made in the House, the Government had the matter investigated by the most senior law officers of the Crown and the law officers had reported. Their advice was tabled the same day as the allegations were made. The honourable member for Fadden, in his speech on 7 April, referred to some new evidence- some statutory declarations. On 10 April it was decided that this additional material should be submitted to the Attorney-General and SolicitorGeneral for further advice. On 16 April the Attorney-General told the Prime Minister about Senator Withers’ telephone conversations with Mr Pearson, the Chief Electoral Officer. This was the first time the Prime Minister became aware that Senator Withers had played a part in the change of names. The Opposition is now endeavouring to assert that the Prime Minister knew about Senator Withers’ involvement at some earlier time.

No one on this side of the House who knows the Prime Minister has any doubt whatsoever about the Prime Minister’s total integrity and propriety at these meetings. If the Prime Minister had been aware, he would have immediately informed the law officers. It is a nonsense to suggest otherwise. His fundamental concern for propriety has been shown time and time again. The facts of this case show that as soon as the Prime Minister became aware on 16 April immediate steps were taken to ensure that the law officers were asked to take that into account in their report. That was the proper course and that was the course that was taken.

On 23 April there was a meeting at The Lodge of a number of senior Ministers. It was agreed then that a full public inquiry- a royal commission- should be established. The next day the Royal Commission was appointed. The letters patent specifically referred to the change of name of the electorate and details of the telephone conversations between Senator Withers and Mr Pearson and between Mr Pearson and the chairman of the distribution commissioners were made available by the Attorney-General. When the honourable member for Fadden made further allegations on 4 May about uranium the Royal Commissioner’s terms of reference were widened to cover them. Following the evidence given by Senator Withers and Mr Pearson and Senator Withers’ statement on 26 May that he might have misled the Senate, Cabinet decided to have the Royal Commissioner’s terms of reference widened again so that all allegations might be fully heard and determined.

Where is this asserted cover-up? The plain fact is that there is not one. It never existed. It is a myth. It is a figment of the Opposition’s fevered imagination. The truth is that the Opposition is in a fix and it knows it. Its members do not want to work on devising new policies because that is too hard for them. They have not produced a single new policy this year. The Opposition claims that there has been a cover-up. Too right there has been a cover-up! All this year members of the Opposition have been trying to cover up their failure to produce a single constructive idea to put before the Australian people. They have been trying to cover up their total inability to come to grips with all of the basic issues confronting the working men and women of Australia. The Labor Party knows it is in real trouble and so do honourable gentlemen opposite. They do not know what they stand for. The Government is saying that the posturing by the Opposition is a matter of complete and utter hypocrisy.

Let us examine the manner in which the present Government has approached this matter. Throughout all aspects of this matter the Government has consistently sought to get the truth. When allegations were first raised the two most senior law officers of the Crown were asked to investigate. The matter was referred to in the House and their reports were tabled. When further material was brought forward it was again referred to the law officers for their advice. When the Prime Minister became aware of Senator Withers’ conversation with Mr Pearson the law officers were asked to include that in their report. When the report was received the Royal Commission was established and positive steps were taken to ensure that evidence about the telephone calls was put before the Commission so that the facts could come out. When it became apparent that the terms of reference should be widened, this was done. There was no attempt to cover up. At all times in this matter the Government has acted as it should have acted. I believe that the Opposition has learned to its cost that this Government is one of the strongest and most united governments that Australia has had for many years. The Prime Minister and the Deputy Prime Minister (Mr Anthony) have led the coalition parties to the two most massive electoral victories in Australia ‘s history. I want to put beyond doubt that the coalition team stands squarely behind the Prime Minister and his Ministry.

The tactics of the Opposition in this debate are clear. They are to forget about the real issues confronting Australia and forget about developing alternative policies and to concentrate instead upon the peripheral issues, the trumped up allegations, the smears and the innuendoes. The Opposition recognises, just as the people of Australia recognised last December, that this Government’s policies are succeeding in pulling the country out of the economic quagmire into which the Labor Party dragged it. But members of the Opposition, for their part, want to distract public attention from this Government’s solid record of achievement on the economic front. The Opposition’s approach, of course, is completely negative and it has been shown by the people to be completely negative. That is not surprising given the leadership that the Opposition has at the present time. The Opposition should have learned during its period in government. The truth, of course, is that the Opposition’s leader is a leader in name only and no one would follow him except out of a misguided sense of curiosity.

All honourable members on this side of the House representing the Liberal and National Country parties have been completely appalled by the manner in which the Opposition has sought to distort the findings of the Royal Commission. There has been a royal commission. The findings have been handed down. Honourable members on this side of the House have lost an experienced and most valued colleague. As the Prime Minister has indicated, Senator Withers has a fine record as a Minister. He was an exceptionally able leader in the Senate where his affability and unflappable nature, which are his hallmark, did much to serve the national Parliament. His advice and counsel will be very much missed around the Cabinet table and will be missed by me. At the same time, we are delighted that every single allegation made against the Minister for Finance has been found to be totally without foundation. We welcome him back to the front bench.

The Australian Parliament rightly demands the highest standards in the conduct of its national affairs. Those standards are fundamental to our parliamentary system. The guardianship of the public trust is a responsibility which this Government takes most seriously.

Mr Charles Jones:
NEWCASTLE, VICTORIA · ALP

– You wouldn’t put your conduct before a royal commission.

Mr LYNCH:

– Those people who scoff, as the honourable member for Newcastle apparently does, and the cynics on the Opposition benches, I believe bring no credit on themselves or, in fact, on this national Parliament. It is a sad commentary on their perverted perception of politics to see them rating the men and women of this country so low. Democracy is founded on publictrust. The Australian Labor Party was cast into its present political backwater because it lost the trust of the people whom it was supposed to represent.

Mr Young:

– The newspaper proprietorsFairfax and Murdoch.

Mr LYNCH:

– The Government’s stand in relation to this Royal Commission, as the honourable member well knows, has been endorsed very strongly by newspaper and editorial comment throughout the country. This Government and this Prime Minister have shown their basic and fundamental concern for propriety. The actions which the Prime Minister took had the full support of the Liberal and National Country parties. I believe that the Australian public is sick and tired of the Labor Party’s peripheral politics. We reject the distortions, the smears and the innuendoes which have been put forward in this debate. I believe that members of the Australian public outside the Parliament are saying that it is time to get on with the job. The Budget which will be brought down tonight by my colleague the Federal Treasurer (Mr Howard) will represent a further major and most significant step on the path to economic recovery. This Government, in fact, was elected to beat inflation. It was re-elected because it was beating inflation. The Budget will continue that process. This Budget will be a direct response to the mandate which has been given to us in two elections. Honourable members on this side of the House want to get on with the job. We intend to get on with the job and we reject decisively the smears, distortions and innuendoes which the Opposition has sought to put forward.

Mr YOUNG:
Port Adelaide

-This has been a most agonising issue for the Government. We have actually reached this situation on the first day of the Budget session of the Parliament as a result of action that was taken by the Opposition during the period of the first session of the

Parliament. Among the other things that have occurred today, it is nice to see that the Deputy Leader of the Liberal Party of Australia has been resurrected. This is the first major debate in which he has been allowed to speak since he was doing more tricks with the loopholes in the tax system in Australia than a monkey would do on a yard of rope. We have the Deputy Leader of the Liberal Party back in the fray, telling us how he supports his leader. It is absolutely amazing. We can expect to see a bit more of this because honourable members on this side of the House do not expect that the present Prime Minister (Mr Malcolm Fraser) will be in that position for very much longer.

Mr Peter Johnson:
BRISBANE, QUEENSLAND · LP

– There are only six members behind you.

Mr YOUNG:

– The honourable member for Brisbane does not have a very good memory, either. I would not say too much if I were he. The Prime Minister of Australia commenced the debate. I will keep my remarks within the confines of the subject matter of the debate. I take the point that you, Mr Speaker, made with our leader about what he had to say. But these words actually appear in the speech made by the Prime Minister of Australia. He stated:

I have absolutely no recollection of the matter being raised in any previous discussion prior to April the 1 4th.

The Prime Minister of Australia is telling us that he is to be forgiven because he cannot remember the matter being discussed in his presence. I remind the Prime Minister that on 27 November 1975 he said: ‘We will maintain Medibank’. Are we to forgive him because bis memory does not serve him correctly and now he forgets about that promise? What absolute nonsense it is for Government members to tell us in the Parliament today that the matter is all finished, that the Royal Commission has cleared the Minister for Finance (Mr Eric Robinson), has found the former Minister for Administrative Services guilty of impropriety and that that is the end of the matter. As I said, what an agonising event this has been for the Government.

The honourable member for Fadden (Mr Donald Cameron) raised the issue and on three occasions in this Parliament the Government gagged the Opposition when it wanted to debate the matter. As I said previously, this matter was not initiated by the Opposition. It was initiated by the honourable member for Fadden, the honourable member for Lilley (Mr Kevin Cairns) and the honourable member for Bowman (Mr Jull). Colleagues of honourable members on the Government side, including the

Minister for Finance, initiated this investigation. But on every occasion that we requested some parliamentary debate on the matter and on every occasion that we wanted this issue to be discussed, in came the heavy boots of the Government with its vast majority. It said that the Parliament could not deal with this matter. Now it comes to light why we could not deal with the matter. It is convenient for the Prime Minister to say that he does not remember. I wish we all had that privilege. If only every member in the House of Representatives could say to his constituents: It might have been a mistake; I am sorry, I do not remember doing it’. I wonder whether the Prime Minister could bestow that privilege on every member of the national Parliament. I wonder whether this will be the guiding light for all Government Ministers when they make a mistake. I wonder whether the Minister for Aboriginal Affairs (Mr Viner) now does not remember saying to the people of Aurukun and Mornington Island: ‘The Federal Government will step in to save you from the Queensland Government’. Is this going to be the practice? Is this going to be the standard for a government which presumed to take office in 1975 to bring integrity back into government in Australia? What an absolute sham this is. Now we have the Deputy Leader of the Liberal Party, Mr Lynch, after eight months on the sideline as the nineteenth man, coming back into the Parliament to tell us about what he will do and about the people of Australia wanting us to talk about the real issues. This matter has been orchestrated absolutely beautifully by the Government. In reply to questions the Prime Minister said today: ‘I will make a statement. I will not say anything at this stage’. The procedures and the decency of this House demand that the Opposition be given two hours’ notice of any ministerial statement to be made by the Government. But on this occasion no statement is issued and no notice is given. No one is notified of the position. The Leader of the House (Mr Sinclair) does not come near Opposition members to say what will happen. We have the Prime Minister saying, ‘I refuse to answer questions on this matter’. But when honourable members on this side of the House pressurise the Prime Minister to say something about the matter, all of a sudden the Prime Minister and the Deputy Prime Minister (Mr Anthony), who recently returned from Manila after making several thousand phone calls to Senator Withers, come into the House with prepared speeches. I ask honourable members: Is it not amazing that the Prime Minister and the Deputy Prime Minister should have prepared speeches in their pockets on the off-chance that they might have to make speeches about Senator Withers and the Royal Commission into the electoral redistribution in Queensland? Why is it done today? No one has to ask the question twice. There are no prizes for guessing why the Prime Minister and the Deputy Prime Minister, acting as decently as they always do, have prepared speeches in their hands without giving notification to the Opposition. They are hoping that tomorrow the people of Australia will be talking about the extra 10c that it will cost to buy a packet of cigarettes or about the price of whisky or petrol or whatever else will be done tonight to try to damage the economy even further. They do not want the Royal Commission into the Queensland electoral redistribution mentioned by the public in Australia tomorrow. They do not want this matter to carry on because it threatens the Government more than has any other issue since the Government came to power at the end of 1 975.

The Prime Minister and the Deputy Prime Minister say: ‘We have meetings of Ministers on several occasions’. The Ministers they are getting together are those who agree to carry out the directions of the Prime Minister. The Minister for Defence (Mr Killen) is left out, the Minister for Social Security (Senator Guilfoyle) is left out, and the Minister for Foreign Affairs (Mr Peacock) is left out. The Prime Minister gets his few friends together to carry out his directions. The meeting of Ministers just adds to the conspiracy charge which is made against this Government. People on the government benches- led by a number of senators- ask what is so serious about Senator Withers ringing the Chief Electoral Officer. It is only that the chief judicial officer in the land says that it is a criminal act. That is what is so serious about it. Trying to influence the electoral commissioners is what is so serious about it. But that is not the only point. The Deputy Prime Minister says: ‘It is not serious because I have just had a chat to our mate in the Country Party in Queensland and we would not have stood against Eric Robinson’. One has to be joking to believe the Country Party. The honourable member for McPherson has been at war with the Country Party for 20 years, but the Deputy Prime Minister expects the national Parliament to believe that sort of claptrap. The Deputy Prime Minister says: ‘It is not serious because we were not going to stand for the seat, irrespective of what it was called’. That is not Queensland politics. The Deputy Prime Minister knows it and certainly the honourable member for McPherson knows it. That is why action was taken.

It is completely unsatisfactory. Who is going to accept that because the Prime Minister has a bad memory everything is clear? These people of such integrity who flew Khemlani out to Australia, went through his briefcases and booked him into the Lakeside Hotel, these people who act with such decency, these people like the Deputy Leader of the Liberal Party who tell us now that the Australians want them to get on with the job, do not have answers to the questions. It is not the end of the matter. The Government has brought on this matter today and hopes that it will be submerged as a result of tonight’s Budget. I completely agree with that. The Budget will be of enormous importance to the Australian people, but the Government cannot get out of this matter because it has raised the matter today and because it has orchestrated the matter in such a way.

Let us examine the background briefing given by Senator Withers after his dismissal because it tells us a great deal about this rotten Government. It tells us about the relationships between Ministers and about the sort of trust that honourable members opposite have in this Prime Minister whom they are defending today. Apparently background briefings will tell us what is occurring in the Government; official statements, handouts and parliamentary speeches do not do so. An article headed ‘Senator Withers secret briefing’ states:

In an extraordinarily frank briefing for journalists a day after his sacking, Senator Reginald Withers accused the Prime Minister of having attempted a cover-up over the Queensland redistribution controversy.

Senator Withers also gave a surprising explanation of Mr Fraser’s motives in dumping him from the Ministry- an explanation which had nothing to do with Mr Justice McGregor’s Royal Commission report.

Malcolm sacked me because I stopped him from sacking Phil Lynch,’ Senator Withers told a group of about 20 journalists invited to his Parliament House office on the afternoon of Tuesday, 8 August.

Those journalists who were there accepted that the briefing was on a background basis- that what was said was not to be attributed to Senator Withers.

In order not to be inhibited by such ground rules I did not attend the briefing. One of those who did attend read me his notes afterwards.

The article goes on. That is the briefing given by Senator Withers. What it goes on to say, of course, is that Senator Withers drafted letters about the investigation which should have been held in January but which the Government refused to hold. We still did not know until this article was printed that the Prime Minister had said:

I don’t want to go down this track. We’ll be able to deal with this internally.

I repeat what the Prime Minister said:

I don’t want to go down this track. We’ll be able to deal with this internally.

When the Deputy Leader of the Opposition, the Leader of the Opposition and I raised this matter time and again in the first few weeks of the Parliament after the matter had been raised by the honourable member for Fadden (Mr Donald Cameron) the Government refused to deal with it because it was acting on the Prime Minister’s instruction that it would be dealt with internally. The meeting that took place in the Prime Minister’s office was not so much a meeting as an instruction from the Godfather to the honourable member for Fadden that he was not to proceed. The Prime Minister found the honourable member for Fadden guilty without a trial. The honourable member for Fadden raised a complaint about what had happened in Queensland and he was dismissed from his position in this Parliament without a trial.

That is the sort of action that was taken by the Prime Minister to clam up this matter. It was not to get out into the Parliament and it was not to get out into the public. Well, it is out in the public and it is in the Parliament. We have a responsibility to see that it continues to be raised until we have a full explanation. We on this side of the House, together with many people opposite will not accept it. Even some of the people opposite who are not being bribed about going into the Ministry, which is old hat, will not accept it. We will not be bribed on the basis that the Prime Minister cannot remember what happened. Is not that convenient? Is not that beautiful? Can honourable members imagine the Prime Minister of Australia talking to an international forum and saying: ‘I am sorry we went into Vietnam. I forgot we went there. It is terrible. I am sorry I said that we would maintain Medibank. I forgot I said it. I am sorry I said that under the Liberals everybody would have a job. I did not mean to say it; I forgot that I said it’.

Here is the Prime Minister expecting 124 of the most seasoned political people in this country to accept that he does not remember and that clears his name. Sacco and Vanzetti would wish they had the Prime Minister representing them. It is not accepted by this side of the House. This is not the end of the matter. It will not end until we have an explanation from the person who leads this Government as to his role in the cover-up of the electoral redistribution in Queensland, about what he was doing, what he said and what in fact, in truth, he recollects.

Mr VINER:
Minister for Aboriginal Affairs · Stirling · LP

– The public could be excused for wondering what on earth it is that the Opposition is trying to do in this debate and what point it is trying to make. It has harped upon the matter of a suggested cover-up when in fact we have had a complete royal commission; a most exhaustive inquiry by an honourable and reputable judge. He heard all the evidence that was available to him or could be sought by him. In listening to Opposition members one could pick out perhaps only one or two matters which they dwelt upon. If, as was said by one honourable member opposite, Senator Withers’ involvement in the change of name of the electorate of McPherson became known only by the action of Mr Pearson in revealing it to the Solicitor-General then all the facts as presented to Parliament and which are Government made sure that the terms of reference of the Royal Commission which it had decided to hold were wide enough to encompass those facts revealed by Mr Pearson and confirmed by Senator Withers. If, as was said by the Opposition, there was political advantage in the change of name then, indeed, that is what the Royal Commissioner found. He found that there was political advantage. It was from that finding of the Royal Commissioner that flowed the finding of impropriety by Senator Withers.

I should like to recapitulate some of the history of this matter and when I have done so it will show the public that there cannot be any substance whatsoever in the allegation of a cover-up. On 18 January at the request of the Prime Minister (Mr Malcolm Fraser) the honourable member for Fadden (Mr Donald Cameron), the honourable member for Bowman (Mr Jull) and the honourable member for Lilley (Mr Kevin Cairns), in company with the honourable member for McPherson (Mr Eric Robinson) and Senator Withers, discussed the allegations of the honourable member for Fadden. Having heard those allegations, the Prime Minister was determined to expose all the facts known to him to the Solicitor-General and to the Attorney-General for their report. That report was in two parts. There was a report dated 9 February and, after further discussion of other matters with the honourable member for Fadden, there was another short report dated 1 5 February. In their joint report the SolicitorGeneral and the Attorney-General (Senator Durack) were firm in their conclusion that, on the basis of the accusations made by the honourable member for Fadden against the Minister for Finance and on the basis of the known facts, there was no impropriety on the part of the Minister for Finance. The report of the SolicitorGeneral and the Attorney-General was incorporated in Hansard on 10 April at the request of the honourable member for Port Adelaide so no doubt he has had an opportunity to read it and understand it, aware of the fundamental point that the accusations were being made against the Minister for Finance.

There was then a hiatus and the matter did not arise again until 7 April when the honourable member for Fadden made a statement in this House. The joint report of the Solicitor-General and the Attorney-General was tabled that day. In other words, there was immediate disclosure by the Government of what had happened from the time when these allegations against the Minister for Finance first surfaced. On 1 1 April Mr Pearson, upon reading in Hansard the report of the Solicitor-General and the Attorney-General, referred his involvement to the SolicitorGeneral. One can understand the anxiety of Mr Pearson in making it known. This was the first time that the matter had come to the knowledge of the Attorney-General who promptly reported it to the Prime Minister. The Prime Minister immediately reported it to his senior Ministers because, as the Prime Minister said in his statement, both he and the Attorney-General were concerned about the relevance of that fact to the accusations against the Minister for Finance.

The House will recall that the Prime Minister immediately went to Japan and was there for the week. While he was there he indicated to the Acting Prime Minister that there should be a report for him when he returned. The Prime Minister returned either on late Saturday afternoon or early Sunday, 23 April and that evening called his senior Ministers together to receive the advice of the law officers of the Crown, the SolicitorGeneral and the Attorney-General. That advice was given in a joint letter by the two law officers and I think it would be of advantage to the House if I read that letter. It reads:

Prime Minister,

Electoral Redistribution of Queensland

We refer to your request for an interim report herein.

We have considered the material which appears in Hansard and certain further matter sent to us by the Honourable the Minister for Finance.

We have written to and received a letter from the Member for Fadden who has neither yet made available to us the Statutory Declaration incorporated into Hansard nor any further declarations.

We have also been recently informed of the existence of further evidence which bears upon our previous report to you.

I emphasise the last paragraph:

It is our view that further investigation is required. The investigation would need to establish the correctness of conflicting allegations and is therefore of a nature we are unable to undertake. Whilst it is our view that the form any investigation should assume is a matter for the Government to determine, we consider that a judicial inquiry would be preferable.

Acting promptly on that report, the Ministers and the Prime Minister decided that a royal commission was the only way to conduct a judical inquiry. Thereupon a royal commission was set up and, upon the advice of the law officers, its terms of reference were deliberately drawn so as to be wide enough to ensure that the evidence of Senator Withers and Mr Pearson would be available to the royal commission. That is a point to be emphasised. It is a point not understood by the Opposition but I am quite sure that it is a point which the public well understands.

As we know, both Mr Pearson and Senator Withers gave evidence, Mr Pearson on 1 5 May and Senator Withers on 22 May. Prior to that there had been an extension of the terms of reference to cover further allegations regarding statements alleged to have been made by the Minister for Finance about uranium. I remind the House that on 1 1 May the Attorney-General wrote to the royal commissioner saying that the Government was willing to extend the terms of reference if the royal commissioner thought at any time that that would be appropriate by reason of any evidence or material which came before him. That is another example of how at all points along this road of events the Government was concerned to see that every opportunity was open to the royal commissioner to have before him all material and evidence bearing upon allegations which, at that time, had been made against the Minister for Finance only. As the Prime Minister’s statement shows, on 26 May Senator Withers answered a question in the Senate concerning a statement he had made on 4 November 1977. On 28 May there was a meeting of Ministers to consider the evidence which had been given by Mr Pearson and Senator Withers and Senator Withers’ statement in the Senate. Resulting from that meeting was a decision to widen further the terms of reference so as to encompass all allegations of illegality or impropriety against any person, whether that person was a Minister of the Crown, a public servant or any other person who might be implicated, so that all allegations could be fully heard and determined. That, I emphasise, is not the action of a government seeking to cover up but the action of a government seeking to expose to the rigour of a royal commission all the known evidence and material, that is, everything known to the Government. I think that needs no repetition. The facts speak for themselves.

If there is one thing that the Opposition needs to remember it is that the currency of the coin of accusation by it is quickly debased by the frequency with which it makes those accusations on baseless grounds. The Opposition may go on day after day, week after week, making its accusations and repeating the same things but always the facts, as disclosed to this Parliament, will be available to show that the accusations are baseless. If that is what the Opposition wishes to do it should not hesitate to do it because the Government can always answer the accusations emphatically, categorically and absolutely.

I think we have already had an indication today, if I heard the speech of the Leader of the Opposition (Mr Hayden) correctly, of the lengths to which the Opposition is prepared to go in making accusations against not only the Government but anybody. I was disturbed to hear, and I think I heard it correctly, the Leader of the Opposition make a veiled attack on the credibility and the integrity of the royal commissioner, a distinguished Queen’s Counsel at the Sydney Bar and a distinguished judge, when he suggested that His Honour Mr Justice McGregor could be bought.

Mr Hurford:

– On a point of order, Mr Deputy Speaker, anybody who was in this House at the time knows, as I am sure you do, that Mr Speaker satisfied himself that the Leader of the Opposition did not make any such attack on the royal commissioner.

Mr DEPUTY SPEAKER (Mr Drummond:
FORREST, WESTERN AUSTRALIA

There is no point of order.

Mr VINER:

– I say again, having listened to the honourable member for Adelaide (Mr Hurford) and the honourable member for Port Adelaide: What were they trying to get at? It is a question that we on this side of the House will ask ourselves again and again, a question that the public will ask again and again. Nothing that has been said today has revealed what they are trying to get at. The public could be excused for wondering just what the Opposition thinks it is doing. As I have said, nothing that has been said in this debate has shown any grounds for attacking any of the actions of the Government or of the Prime Minister in particular in instituting the Royal Commission and in twice widening its terms of reference to ensure that all evidence and all material was before the Royal Commissioner and that he was in a position to make all necessary findings against any person as to illegality or impropriety. Once the Royal Commissioner had completed his job and brought down his report and it was made available to the Government, the Opposition does not deny that the Government acted properly on the report. It does not deny that the Government was bound to accept the findings of the Royal Commissioner and to act in the way in which it did, with the consequences which most regrettably had to fall upon Senator Withers.

No one likes to lose such a close and valued colleague. All of us in Government feel that way about our colleague. But nothing that has been said today by the Opposition has shown that either the Government or the Prime Minister acted wrongly in the course that was taken from the moment this matter was brought to their attention, from the moment it became apparent that some kind of inquiry had to be undertaken, firstly at the hands of the Solicitor-General and the Attorney-General and subsequently at the hands of the Royal Commissioner.

Mr HOLDING:
Melbourne Ports

-In speaking to this matter I want to deal in two ways with the statement made to the House. Firstly, the Opposition is dissatisfied because the statement made to the House by the Prime Minister (Mr Malcolm Fraser) is a totally inadequate, totally dishonest presentation of the facts of this case, and I will illustrate that substantively later on in my argument. Secondly, there is the matter of the Prime Minister’s behaviour. He was asked question after question during Question Time today and he refused to give any answers to the House. It was only on the initiative of the Leader of the Opposition (Mr Hayden) that the Prime Minister eventually chose to make a statement. I say that the behaviour and the evasiveness of the Prime Minister during Question Time was typical of his behaviour right throughout this sorry matter.

Let me deal with the statement of the Prime Minister, his own statement, his own record. He informed the House that this matter was first raised on 21 December by the honourable member for Fadden (Mr Donald Cameron). It was then a matter for discussion on 17 January, although not by the honourable member for Fadden. The first three Ministers who were involved in considering the political and other implications of this matter were the Prime Minister himself, the Minister for Finance (Mr Eric Robinson) and the then Minister for Administrative Services (Senator Withers). Obviously at that stage the Prime Minister must have thought that there was some seriousness in the allegations, that it was a matter of concern, because a meeting was then held, not in the office of the Minister for Administrative Services, not in the office of the Minister for Finance, but in the

Prime Minister’s office. As a responsible political leader he called in all the relevant parties because present at that meeting were the honourable member for Fadden, the honourable member for Lilley (Mr Kevin Cairns) and the honourable member for Bowman (Mr Jull). One may well ask: Was this an exercise by the Prime Minister in order to glean the truth? Was it an exercise by a political leader trying to produce calm within his own party? Or was it the action of a Prime Minister who was concerned to ensure that none of these allegations saw the light of day?

I ask the House to consider the Prime Minister’s own statement. He called a meeting of all the principal persons concerned. The matter was raised by the honourable member for Fadden, who was then the Deputy Government Whip. To use the Prime Minister’s own words:

Mr Cameron had a lengthy document which he showed me briefly about his allegations. He did not leave a copy with me . . .

Here was a serious allegation which goes ultimately to the whole nature of the electoral structure upon which the parliamentary system depends. Here was a Deputy Whip who had a substantive document and the Prime Minister was trying to get to the truth of the matter. However, in the Prime Minister’s own words, although the honourable member for Fadden had a lengthy document he did not leave a copy of it with the Prime Minister. Is that not an extraordinary state of affairs? Is it not likely that the Prime Minister would have said to the honourable member: Give my a copy of your document. I will have it photostated so that we can explore the detail of it’. Would not the Prime Minister have said that? Of course he would have, but nowhere does that statement appear. What we have is a very glib statement by the Prime Minister that the honourable member for Fadden had a document but the Prime Minister never actually saw the contents of it and the honourable member walked away with it. I will deal with the importance of that later on.

The next relevant date is one that is not mentioned in the statement. It was significant for the honourable member for Fadden because on that date his services as Deputy Government Whip were summarily terminated. Those of us in the Parliament who had been impressed by the vigour of this young Deputy Whip were left pondering. How could it be that such a dutiful servant of the Government could be sacked without as much as a smile from the Prime Minister? There would be some who are cynical enough to suggest that when the honourable member for

Fadden would not back away from his allegations and desist from them the Prime Minister used his ever-trusty knife. Either the honourable member for Fadden had to toe the line in terms of party loyalty or he would lose his job. It was the actions of the honourable member for Fadden that produced this Royal Commission of Inquiry, not the Prime Minister’s love of justice or his desire to see that the truth came out. The inquiry was brought about by the honourable member for Fadden and he has paid dearly for his position. He is even referred to by the Prime Minister in his statement as ‘the present member for Fadden’. Obviously some things are going to happen in the future to that unfortunate gentleman.

Turning again to the Prime Minister’s statement, he refers to ‘the best of his belief. The Prime Minister has these strange lapses of memory. He cannot recall details. Senator Withers was one of the first Ministers who discussed this matter with the Prime Minister at the very first meeting that was held but he cannot recall Senator Withers’ involvement in the matter. I should have thought he would recall a phone call from someone as experienced as Senator Withers, a man who knows how the political machine operates and how the numbers operate. The Prime Minister knows the significance of a phone call to an electoral commissioner. Yet what we are asked to believe is that either Senator Withers forgot to tell the Prime Minister or that, if the Prime Minister was told, he forgot all about it. I do not believe that. No honourable member of this House believes it. I venture to suggest that you, Mr Deputy Speaker, being a man of some integrity and capacity, do not believe it either.

When does the Prime Minister say that he recovered from this temporary amnesia? According to his statement, he believes that the first occasion on which this matter was drawn to his attention was 16 April. Accept that as the Prime Minister’s statement. If that were so and he knew about the extent and the depth of Senator Withers’ involvement, why were the terms of the inquiry so narrowly fixed that in order for the Royal Commissioner to glean the truth of the Withers’ involvement ultimately the terms of the inquiry had to be extended further on 30 May? The Prime Minister glibly says about that: ‘Oh well, we were acting on legal advice’. But it is quite appropriate for a government or a Prime Minister or Minister, if he is acting on legal advice, to table the documents and to make them available. What is so secret about them? If, as we are told, the Prime Minister was acting on the best legal advice available to him, why were the documents not tabled as an integral part of the Prime Minister’s statement? The highest level at which one could put the Prime Minister’s statement on his own terms was that he did know on 16 April but that at that date he was not concerned to make the matter either specifically or generally a term of reference of the inquiry. Why? He says: ‘Because we were really concerned about what Robinson was up to. Although we had known that Withers had been on the telephone, we did not want to give that any undue reference. We were really thinking about Robinson’. I do not believe that, Mr Deputy Speaker, and I do not believe that any person who looks objectively at the evidence in this case believes it. That is the best the Government can do in this matter. It is a serious matter and it may well come to the question of the privileges of the Senate.

I turn to the statement which has already been quoted in this House of Mr Oakes, a reputable journalist. Any journalist can misquote a statement or get a fact wrong, but does anybody in this House believe that Mr Oakes would invent a story concerning Senator Withers? Does anybody in this House believe that any accredited member of the Press Gallery would deliberately falsify or invent a story which he said was based on statements that were part of a briefing that went to members of the Press Gallery. Again, I do not believe that, Mr Deputy Speaker, and I do not think that you believe it either. Therefore I think the credibility of the Oakes document is established. All the way through it are very interesting dates and facts which, of course, prove conclusively that the Prime Minister has not given all the facts to the House and that his statement is less than adequate, is purposely evasive and is deliberately misleading and dishonest.

What is the Oakes account of Withers’ recollection of these events? First of all, on the factual question of the time, Withers says that there was a record of his having had this conversation with a senior electoral officer and that that had been shown to the Attorney-General as early as 6 January. Again the involvement of the Prime Minister is clearly indicated because what Withers says occurred was that he was going to write a letter to Cameron saying that his allegations were really a matter for police investigation. It was at that point that it was suggested that the Prime Minister had better look at the letters. What is Withers reported to have said? Having shown these to the Prime Minister, whom we are told is an honourable man who wants all the facts to emerge, we are told that the Prime Minister’s reaction was to say: ‘I don’t want to go down this track. Well be able to deal with this internally’. To quote Senator Withers, it was going to be buried.

Mr Scholes:

– Don Cameron wouldn’t cooperate.

Mr HOLDING:

– The only person who has been buried to date has been the honourable member for Fadden. Certain Ministers in this House today are now as guilty as the Prime Minister. It is interesting to note that the back bench members who have been involved in this matter have not entered this debate to defend the Prime Minister. The men who are party to this conspiracy to cover up were in there saying: ‘Well, all we have to do is accept the Prime Minister’s word and accept that occasionally he has amnesia ‘. I ask the House to consider why it was that the Prime Minister, on being confronted with a lengthy document from the honourable member for Fadden, did not ask him for a copy of it. Of course, that is dealt with again by Withers, who says that at one stage Mr Fraser had asked to borrow the documents to have them photocopied but Mr Cameron had refused permission. According to Senator Withers, he had said: ‘I know what you’d do. You’d put them through the shredder’.

The House, the Parliament and the people of Australia therefore have available to them two quite alternative views of what took place. One is the view that was peddled in this House today, no matter how inexpertly, by the Prime Minister- amnesia and all- and by a couple of Ministers who did their best to bolster him. But it is a view which, on the face of his documents, simply does not hang together. Then, of course, there are the alternative facts, which certainly have the ring of truth about them because the dates coincide. The alternative Withers statement points to the fact that the dates coincide with those in the statement produced by the Prime Minister. He just believed that it would be covered up. What occurred was simply that as the matter got under way someone had to be buried. First it was the honourable member for Fadden. Then it came to a matter of choice. The Prime Minister, having mishandled the situation, decided that if somebody else had to go it had to be Senator Withers. If the situation is such that Senator Withers has been guilty of impropriety, his guilt is no less than that of his political leader, who was party to these discussions and party to these negotiations and who, on this occasion, has grievously misled the House in an attempt to escape his own culpability. When all the facts emerge it will be shown that the Prime Minister has lied to the House.

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

Mr Hurford:

- Mr Deputy Speaker, I seek your indulgence. I know that the agreement was that there would be four speakers from this side of the House and I do not intend to break that agreement. I just want it to be made clear that the Opposition understands that the motion before the chair is that the House take note of the paper. The fact that we are not dividing on this matter in no way suggests that we are happy with the explanation. We will be taking up this subject again at a later time when we hope that the Minister for Finance (Mr Eric Robinson) and the honourable member for Fadden (Mr Donald Cameron) will have an opportunity to join in the debate.

Question resolved in the affirmative.

page 37

BILLS RETURNED FROM THE SENATE

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

Northern Territory (Self-Government) Bill 1978.

Ashmore and Carder Islands Acceptance Amendment Bill

Remuneration Tribunals Amendment Bill 1978.

Lands Acquisition Amendment Bill 1978.

Pay-roll Tax (Territories) Assessment Amendment Bill (No. 2) 1978.

Ombudsman Amendment Bill 1978.

Northern Territory Supreme Court Amendment Bill (No. 2) 1978.

Administrative Appeals Tribunal Amendment Bill 1978.

Administrative Decisions (Judicial Review) Amendment Bill 1978.

Commonwealth Motor Vehicles (Liability) Amendment Bill 1978.

Compensation (Commonwealth Government Employees) Amendment Bill 1978.

Air Accidents (Commonwealth Government Liability) Amendment Bill 1978.

Aboriginal Land Rights (Northern Territory) Amendment Bill (No. 3) 1978.

Wool Industry Amendment Bill 1978.

Wool Tax Amendment Bill (Nos1 to 5) 1978.

Commonwealth Banks Amendment Bill 1 978.

Primary Industry Bank Amendment Bill 1978.

Housing Assistance Bill 1978.

States and Northern Territory Grants (Bluetongue Virus Control) Bill 1978.

Australian Science and Technology Council Bill 1978.

Ministers of State Amendment Bill 1 978.

Aboriginal Land Rights (Northern Territory) Amendment Bill (No. 2) 1978.

Tasmania Grant (The Mount Lyell Mining and Railway Company Limited) Amendment Bill 1978.

States (Personal Income Tax Sharing) Amendment Bill 1978.

Commonwealth Grants Commission Amendment Bill 1978.

Income Tax (Arrangements with the States) Bill 1 978.

National Health Amendment Bill 1 978.

Health Insurance Amendment Bill 1 978.

Health Insurance Levy Assessment Amendment Bill 1978.

Hospitals and Health Services Commission (Repeal) Bill 1978.

Trade Union Training Authority Amendment Bill 1978.

Public Service Arbitration Amendment Bill 1978.

Dairy Industry Stabilization Amendment Bill 1978.

Dairy Industry Stabilization Levy Amendment Bill 1978.

Dairy Produce Amendment Bill 1 978.

Conciliation and Arbitration Amendment (Federal Court of Australia) Bill 1978.

page 37

ASSENT TO BILLS

Assent to the following Bills reported:

Estate Duty Assessment Amendment Bill 1978.

Estate Duty Amendment Bill 1978.

Gin Duty Assessment Amendment Bill 1 978.

Gift Duty Amendment Bill 1978.

International Sugar Agreement Bill 1978.

Loan Amendment Bill 1978.

Environment Protection (Alligator Rivers Region) Bill 1978.

National Parks and Wildlife Conservation Amendment Bill 1978.

Environment Protection (Northern Territory Supreme Court) Bill 1978.

Atomic Energy Amendment Bill 1978.

Environment Protection (Nuclear Codes) Bill 1978.

States Grants (Schools Assistance) Amendment Bill 1978.

States Grants (Tertiary Education Assistance) Amendment Bill 1978.

Acts Interpretation Amendment Bill 1978.

Administrative Changes (Consequential Provisions) Bill 1978.

Loan Consolidation and Investment Reserve Amendment Bill 1978.

Ordinances and Regulations (Notification) Bill 1978.

Statutory Rules Publication Amendment Bill 1978.

Seat of Government (Administration) Amendment Bill 1978.

Parliamentary Contributory Superannuation Amendment Bill 1978.

Appropriation Bill (No. 3) 1977-78.

Appropriation Bill (No. 4) 1977-78.

Supply Bill (No. 1)1978-79.

Supply Bill (No. 2) 1 978-79.

States Grants (Urban Public Transport) Bill 1978.

Customs Tariff Amendment Bill (No. 2 ) 1 978.

Excise Tariff Amendment Bill 1978.

Customs Tariff Validation Bill 1978.

Broadcasting Stations Licence Fees Amendment Bill 1978.

Television Stations Licence Fees Amendment Bill 1978.

Broadcasting and Television Amend ment Bill 1 978.

Conciliation and Arbitration Amendment (Federal Court of Australia) Bill 1978.

Maritime College Bill 1 978.

Pay-roll Tax (Territories) Assessment Amendment Bill 1978.

Aboriginal Councils and Associations Amendment Bill 1978.

Income Tax Assessment Amendment Bill 1978.

Northern Territory (Self-Government) Bill 1978.

Ashmore and Carrier Islands Acceptance Amendment Bill 1978.

Remuneration Tribunals Amendment Bill 1978.

Lands Acquisition Amendment Bill 1 978.

Pay-roll Tax (Territories) Assessment Amendment Bill (No. 2) 1978.

Ombudsman Amendment Bill 1978.

Northern Territory Supreme Court Amendment Bill (No. 2) 1978.

Administrative Appeals Tribunal Amendment Bill 1978.

Administrative Decisions (Judicial Review) Amendment Bill 1978.

Commonwealth Motor Vehicles (Liability) Amendment Bill 1978.

Compensation (Commonwealth Government Employees) Amendment Bill 1978.

Air Accidents (Commonwealth Government Liability) Amendment Bill 1978.

Aboriginal Land Flights (Northern Territory) Amendment Bill (No. 3) 1978.

Wool Industry Amendment Bill 1978.

Wool Tax Amendment Bill (Nos 1 to 5) 1978.

Commonwealth Banks Amendment Bill 1978.

Primary Industry Bank Amendment Bill 1978.

Housing Assistance Bill 1 978.

States and Northern Teritory Grants (Bluetongue Virus Control) Bill 1978.

Australian Science and Technology Council Bill 1 978.

Ministers of State Amendment Bill 1978.

Aboriginal Land Rights (Northern Territory) Amendment Bill (No. 2) 1978.

Tasmania Grant (The Mount Lyell Mining and Railway Company Limited) Amendment Bill 1978.

States (Personal Income Tax Sharing) Amendment Bill 1978.

Commonwealth Grants Commission Amendment Bill 1978.

Income Tax (Arrangements with the States) Bill 1978.

National Health Amendment Bill 1978.

Health Insurance Amendment Bill 1978.

Health Insurance Levy Assessment Amendment Bill 1978.

Hospitals and Health Services Commission (Repeal) Bill 1978.

Trade Union Training Authority Amendment Bill 1978.

Public Service Arbitration Amendment Bill 1978.

Dairy Industry Stabilization Amendment Bill 1978.

Dairy Industry Stabilization Levy Amendment Bill 1978.

Dairy Produce Amendment Bill 1978.

page 38

TARIFF PROPOSALS

Mr ELLICOTT:
Minister for Home Affairs and Minister for the Capital Territory · Wentworth · LP

– I move:

The Customs TariffProposals I have just tabled, on behalf of the Minister for Business and Consumer Affairs (Mr Fife), relate to proposed alterations to the Customs Tariff Act 1966. Proposals Nos 15 to 19 formally place before Parliament, as required by law, tariff changes introduced by Gazette notice during the last recess which implement the Government’s decisions on recommendations made by the Industries Assistance Commission in its reports on metal working machine tools, vices, brassieres, orange juice, domestic refrigerating appliances, et cetera, ball and roller bearings, and hoists, pulley tackle and winches, and the Temporary Assistance Authority in its report on insulators. A comprehensive summary of the changes contained in the Proposals has been prepared and is now being circulated to honourable members. I commend the Proposals to the House.

Debate (on motion by Mr Hurford) adjourned.

Sitting suspended from 5.15 to 8 p.m.

page 38

APPROPRIATION BILL (No. 1) 1978-79

Message from the Governor-General recommending appropriation for proposed expenditure announced.

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

Second Reading (Budget Speech)

Mr HOWARD:
Treasurer · Bennelong · LP

– I move:

In doing so, I present the Budget for 1 978-79.

Since the last Budget, the Australian people have overwhelmingly endorsed the Government’s economic policies and objectives.

Tonight I reaffirm those objectives.

First, both for its own sake and as the only real basis for achieving our other objectives, we are determined that Australia will have still lower inflation.

Secondly, and subject to the constraints still upon the economy, we shall pursue higher levels of economic activity and greater job opportunities.

These objectives cannot be achieved without continued fiscal, monetary and wage restraint and an appropriate external policy.

For this reason, the Budget I now deliver further restrains expenditure and reduces the deficit.

It also contains tax increases and announces significant policy decisions on health care financing arrangements and crude oil pricing.

page 38

THE ECONOMY IN OVERVIEW

The Australian economy is now responding positively to policies directed to its basic problems.

The economic scene is characterised by declining inflation, moderately expanding demand and activity and a more settled and predictable policy environment.

The great success story of 1977-78 was on the inflation front.

I simply record the facts.

For the year ended June 1976, the rate of inflation, as measured by the Consumer Price Index, was 12.3 per cent; for the year to June 1 978, it had fallen to 7.9 per cent.

Through 1977-78, inflation fell much faster than had been predicted in last year’s Budget.

Reduced inflation has relieved pressures and strains throughout the economy.

A start has been made in reducing interest rates.

Lower inflation has also boosted private sector confidence and spending.

Despite these achievements, 1977-78 was not without its disappointments.

The Budget deficit substantially exceeded the original estimate, largely as a result of an unexpected shortfall in revenue.

However, there was no relaxation of expenditure restraint; in fact, actual outlays for 1977-78 exceeded the Budget estimate by only one-half of one per cent.

Many problems still remain to be solved.

High unemployment persists.

Real wages are still too high and this remains a major cause of the unacceptable levels of unemployment.

The inescapable truth which cannot be too heavily emphasised is that the real cost of labour continues to be out of line with its productivity.

Until this is put right, growth in jobs will be held back and unemployment will be difficult to reduce.

The company profit share is still too low, having changed little in 1977-78.

Externally, world demand and activity are subdued and this has had consequences for our trade account and the overall balance of payments.

Nonetheless, the second half of 1977-78 saw a modest resumption of private capital inflow reflecting in part improved overseas perceptions of the Australian economy and its management.

The maintenance and improvement of these perceptions are crucial to the further recovery of our economy.

In a world of subdued demand and fierce competition for markets, our comparative performance in domestic economic management is of acute and increasing significance.

It will not be sufficient for us merely to hold our own with the average performance of our trading partners.

We must do better.

A tougher and more competitive Australian economy means more investment and more job opportunities.

page 39

THE BUDGET TASK

Against this background, the Government decided that adherence to our basic economic strategy called for a substantial reduction in the Budget deficit from last year’s outcome.

We realised this meant that difficult and unpopular decisions had to be taken.

There was no other way of keeping faith with our commitment to responsible economic management.

To explain the magnitude of this task, let me spell out the background.

The forward estimates of expenditure implied, on the basis of existing tax rates, a deficit to the order of $6,000m.

These estimates normally include new spending proposals, which can be more readily put aside.

Nevertheless, it was a formidable task.

A very significant element of this projection was that the Government faced, for the first time in 20 years, a reduction of revenue in real terms.

We began the Budget process with a stringent and painstaking review of our outlays.

In that process, the prospective growth in outlays was cut to less than one half of that suggested by the forward estimates.

They are now expected to grow by only 7.7 per cent in 1978-79.

This will represent the lowest increase in outlays for ten years.

Some might argue that the Government could have achieved greater restraint in expenditures.

Further savings could indeed have been achieved by an actual cut in the money level of benefits such as pensions and family allowances.

But we were not prepared to place a disproportionately large burden upon the recipients of such benefits.

Having completed its review of outlays, which embraced decisions on health care financing arrangements with both expenditure and revenue implications, the Government faced a deficit in the order of $4,500m.

Such an outcome was utterly unacceptable to the Government; anything approaching it would have squandered the hard won gains against inflation and progress towards economic recovery.

It would have reversed our anti-inflationary policy, delivered a sharp blow to business and consumer confidence and put in jeopardy our external account and exchange rate.

The prospect of further interest rate reductions would have been replaced by the certainty of sharp interest rate increases.

Therefore to achieve our deficit target, it was necessary to raise substantial additional revenue in 1978-79.

Our task was further complicated by the need to avoid the imposition of taxes that would have significant effects on business activity and inflationary expectations.

In the final analysis, the Government decided, as an element of this revenue raising effort, to increase the standard rate of personal income tax as a temporary measure.

Let me be clear. This particular decision is a severe disappointment to a Government which has demonstrated better than any of its predecessors its commitment to tax reduction and reform.

I say now to those who might criticise this decision that the alternatives were far more inequitable and would have been detrimental to economic activity and inflation.

Let those who question it demonstrate that a different mix of tax measures or a significantly higher deficit would have been more conducive to the attainment of our economic objectives.

Alternatively, let them argue that a particular group such as pensioners or families should have borne a greater burden.

I turn now to the details of the Government’s expenditure and revenue decisions.

page 40

OUTLAYS

Total outlays are estimated at $28,870m- an increase of only 7.7 per cent- in 1 978-79.

This follows increases of 11.1 per cent in 1977-78, 10.4 per cent in 1976-77 and 22.5 per cent in 1975-76.

Additional detail to what follows is provided in the accompanying Budget documents and in Ministerial statements.

page 40

STATES AND LOCAL AUTHORITIES

Net payments to States and local authorities are estimated at $10,5 12m, about 5 per cent more than in 1977-78.

Payments to States and local authorities under the tax-sharing arrangements are estimated to increase by 10.7 per cent and 8.5 per cent, respectively; these funds can be used for whatever purposes the recipients choose.

The Northern Territory will receive a block grant of $280m in 1978-79 following its attainment of self-government on 1 July 1978.

The Government has decided that, from 1978-79, the States’ base amounts under the natural disaster relief arrangements will be doubled and that each State will be required to meet one-quarter of any expenditure in excess of its increased base amount.

page 40

GENERAL GOVERNMENT EXPENDITURES

In our own spending, the size and cost of the public service will be trimmed back further.

Over the past three years the number of public servants in areas covered by staff ceilings has fallen by 10,650.

The current ceilings imply a further reduction in staff of 2,600, or about 0.8 per cent, during 1978-79; this is after allowing for significant increases in the Department of Social Security to improve services and tighten up existing procedures.

In the public as well as the private sector excessive increases in wages are enforcing- and must continue to enforce- an intensified search for staff economies.

Non-wage administrative expenditures also are being tightly controlled; departments and authorities will be required to exercise the utmost economy and, in some cases, to reduce their activities.

page 40

SOCIAL SECURITY AND WELFARE

This Budget provides over $8 billion for social security and welfare payments.

We have sought to contain these expenditures while maintaining assistance to the most needy.

Indexation of Pensions and Benefits

Subject to two important modifications, all pensions and benefits subject to indexation will be increased from the first payday in November by 3.4 per cent, the increase in the Consumer Price Index in the first half of 1978.

The standard or single rate of social service pensions and benefits, for example, will rise by $1.75 to $53.20 a week while the combined married rate will rise by $2.90 to $88.70 a week.

The two modifications are:

First, in future pension increases for persons aged over 70 will be subject to an income test. This decision will apply to the November pension increase but will not apply to blind pensioners. I emphasise that present levels of pension for persons aged over 70 are not affected by this decision; they will continue in full and will not be subject to an income test.

Secondly, in future unemployment benefits will be automatically indexed only for recipients with dependants. For recipients without dependants, benefits will be reviewed annually at Budget time. The Government does not propose to increase benefits for these recipients in this Budget.

The Government has also decided that, after the November increase, indexation adjustments to pensions will be made annually each November.

This decision has been taken in the light of the significant reduction in inflation which this Government has achieved since its return to office.

Family Allowances

The Government will not subject family allowances for dependent children to a general means test or to taxation.

We have, however, decided that family allowances will be income-tested on the basis of the child ‘s income.

From 1 January 1979, allowances will be paid as at present in respect of each child having an income of $312 or less in 1977-78 but will be reduced at the rate of 25 cents in the dollar on account of any income in excess of $3 12 received by the child.

Parents of children with a separate income above $312 a year will therefore receive a reduced benefit in respect of such children.

Children receiving certain student allowances will cease to be eligible for family allowances but adjustments will be made to the relevant student allowances.

Family allowances, orphan’s pension, handicapped child’s allowance and additional pension or benefit for a child will generally no longer be payable in respect of children who are classed as living abroad on a permanent basis.

Maternity Allowances

The Government believes that maternity allowances have been superseded by health care and family allowance arrangements and has therefore decided to abolish this benefit for births occurring after 3 1 October 1978.

Other Programs

To assist those most in need this Budget in cludes substantially increased provisions for voluntary organisations to provide and maintain facilities for handicapped people and accommodation for aged persons, and for programs of direct assistance to Aboriginals.

Provision is also being made to extend the maximum age for payment of handicapped child’s allowance to handicapped full-time students not in receipt of an invalid pension from 1 6 years to 25 years.

page 41

HEALTH

Although the changes made by this Government over the past 21/2 years have achieved significant economies and improvements in the health care arrangements we inherited, the Government believes these arrangements remain complicated and can be further simplified and improved.

We have therefore decided upon several major changes to existing arrangements which, while producing an immediately adverse budgetary effect, are more consistent with our longer-term objectives in this area and remove much of the confusion and complexity from present arrangements.

These changes keep intact our belief that the Government should provide a certain basic but universal health cover for all Australians.

They preserve our existing commitment to a more generous system of cover for pensioners and socially disadvantaged people.

The changes also reflect the Government’s view that, having provided a basic cover, it should be left to the individual to decide whether he or she wishes to take out further insurance and, if so, the type and quality of that further insurance.

The changes, to be effective from 1 November 1978, are: the abolition of the health insurance levy and associated with that the abolition of compulsory private health insurance for non-levy payers; the entitlement of all eligible residents to a basic medical benefit totally funded by the

Commonwealth from general revenue which is the greater of 40 per cent of schedule medical fees or the amount of schedule medical fees less $20 per professional service; and the termination of the Medibank Standard functions of the Health Insurance Commission.

These changes will not disturb existing arrangements whereby all eligible residents without hospital insurance cover are entitled to standard ward accommodation and treatment in public hospitals at no direct cost to them.

The current arrangements between the Commonwealth and the States for hospital costsharing will continue.

Those desiring shared or private ward accom’modation with choice of doctor or private hospital accommodation will be free, as at present, to take out insurance with registered private health funds. Such insurance will be, of course, entirely optional.

The Government is looking at the level of public hospital bed day charges for shared and private ward accommodation in the course of achieving its stated objective of greater rationalisation and efficiency in hospitals- extensive negotiations with the States are already under way.

The 40 per cent/$20 medical benefit, which will be paid by registered private health insurance funds on behalf of the Commonwealth, will leave substantially unchanged the recently announced arrangements relating to Pensioner Health Benefit card-holders or to people identified by their doctors as socially disadvantaged.

Doctors will continue to bulk bill the Commonwealth in respect of Pensioner Health Benefit card-holders on the basis of 85 per cent/$5.

People identified by their doctors as socially disadvantaged will be bulk-billed on the basis of 75 per cent for all services, regardless of cost.

Fuller details of these changes will be provided by the Minister for Health later this evening.

The immediate significance for existing levy payers is that from 1 November 1978 when they cease paying the levy they can choose, if they wish, to make arrangements either through Medibank Private- whose functions will be continued- or a private health insurance fund to secure cover for part or all of the schedule fee not covered by the Commonwealth’s proposals.

For persons with private health insurance the Government expects a significant reduction in health insurance premiums as a result of these measures.

The new measures will add an estimated $138m to Budget outlays in 1978-79 and $305m in a full year; in addition, abolition of the levy will reduce receipts by an estimated $197m in 1 978-79 and $3 16m in a full year.

Finally, these measures can be expected to substract significantly from the Consumer Price Index for the December quarter.

page 42

EDUCATION

The Budget provides for Commonwealth expenditure of almost $2, 500m on education, 6 per cent more than last year.

Our decisions in this area will maintain current total intakes of students into universities and colleges of advanced education in 1979 and reflect, in a major way, greater support for technical and further education.

In April a Working Party of the Tertiary Education Commission issued a draft report recommending that present arrangements for study leave in universities and colleges of advanced education be tightened up; the Government proposes to take action, effective from 1 January 1979, to that end but will await the Commission’s final report before announcing its decisions.

page 42

HOUSING

Advances to be provided under the new three year Commonwealth-State Housing Agreements, together with funds available from rents and sales, will make possible total State Government expenditure on welfare housing of the same order in 1978-79 as in 1977-78.

Under a new three year scheme, grants of $ 14m- an increase of $4m- will be provided to the States for rental assistance to pensioners, including married couples.

The Budget also includes a capital advance of $10m for Defence Service Homes and $20m for Home Savings Grants; these provisions will necessitate some increase in waiting periods for assistance.

I shall say more later about the general availability of finance for housing.

page 42

DEFENCE

The maintenance of an adequate defence capability remains a high priority for this Government.

Despite stringent budgetary constraints, an amount of $2, 501m has been provided for defence purposes.

This provision implies an increase in spending, in real terms, of about 1 per cent this year.

Expenditure on defence capital equipment is estimated to increase by $40m- or almost 13 per cent-to$355m.

page 43

OVERSEAS AID

Expenditure on Australia’s overseas aid program, virtually all of it under firm commitments made to developing countries and international aid organisations, is estimated to increase by 8.6 per cent to $455m.

page 43

IMMIGRATION

We are committed to contributing to the resettlement of Indo-Chinese refugees; some 10,000 refugees will be re-settled in Australia in 1978-79.

In addition to the refugee program, the Government will fund assisted passages for persons already cleared for passage in 1978-79 and for approved applicants having skills and qualifications which are in short supply in Australia.

In line with the Gal bally Committee recommendations, $6.5 m is provided to increase the scope of post-arrival programs and services for migrants; this includes additional funds for adult and child migrant education, the extension of ethnic radio and $lm for pilot ethnic television transmission.

page 43

TRAINING PROGRAMS

Last year expenditure on training programs increased by 56 per cent to $120m; a further increase of 44 per cent- to $ 173m- is provided for this year.

In June 1978 more than 1 1 1,000 persons were being trained under Commonwealth assisted training programs.

Experience suggests that the Special Youth Employment Training Program is unduly advantaging younger age groups to the detriment of older age groups.

Against this background, the Government has decided to reduce the maximum training period under the Program from six months to four months, and to reduce the allowance paid to employers from $67 a week per trainee to $45 a week.

page 43

TRANSPORT AND COMMUNICATIONS

Transport

Outlays on transport are estimated at $787m and include increased payments for roads, civil aviation services and facilities, and shipping subsidies to Tasmania.

Provision is made also for initial advances under new five year programs to improve urban public transport and to upgrade the national railways network. $60m is provided to meet expected operating losses of the Australian National Railways Commission; we are concerned about these mounting losses and have initiated steps to identify possible solutions.

Full recovery of the costs attributable to airline operations on domestic trunk routes will be achieved within the next two financial years; to this end, attributable revenues from these operations are to be increased by $7. 7m this year.

For general aviation, air navigation charges will be increased by 15 per cent from 1 December 1978.

Light dues levied on shipping will not be increased this year.

Communications

In 1978-79, for the first time, the capital program of the Australian Telecommunications Commission is being financed wholly from internal sources and from non-budget borrowings.

page 43

ASSISTANCE TO INDUSTRY

Rural Industries

Increased provisions are included in this Budget for rural reconstruction and adjustment, wool research and promotion, the control and eradication of cattle diseases, and the underwriting of dairy products. $40m is also included for the continuation of the superphosphate bounty.

The nitrogenous fertilizer subsidy is to be extended for one year from 1 January 1979 but at a reduced rate of $40 a tonne during that period; the cost of this subsidy is estimated at $10m in 1978-79.

The scheme introduced earlier this year to reduce the price of certain petroleum products to consumers in country areas is estimated to cost $40min 1978-79.

Consideration has been given to levying producers to recover a greater share of the costs of providing export inspection services and cattle disease eradication campaigns.

The Government has decided not to increase charges at this stage but will review the situation later in the year in the light of the economic situation of the cattle industry at that time.

The Primary Industry Bank of Australia has now been incorporated and will commence operations shortly.

The Government has decided to offer to assist the Bank by investing with it funds from the Income Equalisation Deposits Trust Account.

Manufacturing and Other Industry Assistance

The policies of this Government have been of major assistance to Australian manufacturing industry.

We have reduced inflation substantially and started to reduce interest rates- developments critical to industry confidence and prospects.

The benefits to industry of the investment allowance and the trading stock valuation adjustment continue.

Our new export incentives scheme has been announced and this Budget provides a total of $58m by way of direct assistance to exporters, $27m more than last year.

Despite the difficult budgetary position, $24m is being provided for industrial research and development grants in 1978-79; $10m more than last year.

This increase will support important new initiatives and is designed to improve the efficiency and international competitiveness of Australian industry.

In addition, over Sim will be provided to support productivity improvement programs in industry.

A community program- to be known as ‘Project Australia’- and designed to increase awareness of Australian industry’s skills, achievements and potential, will be launched in 1978-79. $l.lm has been allocated for the program; further details will be provided by the Minister for Industry and Commerce.

A further $4m will be provided in 1978-79 to expand energy research and development.

The Commonwealth’s share of the costs of developing the Ranger uranium deposits is estimated at $44m in 1978-79; $20m of this will be provided from the Budget, with the Australian Atomic Energy Commission raising the balance through borrowings.

page 44

CULTURE AND RECREATION

Provision is made for important cultural and recreational activities.

In addition to increased allocations for the National Broadcasting and Television Service, the Australia Council, and the National Gallery, $2. 5m is included as the first instalment of the $10m grant being provided to Queensland for staging the 1982 Commonwealth Games.

page 44

MAINTENANCE OF EXPENDITURE RESTRAINT

In each of the past three financial years the Government has aimed to hold Budget outlays within the original Budget estimates; we achieved that aim in 1975-76 and 1976-77 while the small over-run in 1977-78 was more than accounted for by decisions taken after the Budget to meet unforeseen needs.

In line with our firm commitment to expenditure restraint, the Government again will be aiming to hold total outlays within the Budget estimates in 1978-79.

page 44

RECEIPTS

I turn now to receipts.

As already indicated, the Government has found it necessary- despite the most thorough review of our expenditures- to raise substantial additional revenue in 1978-79.

We have chosen to do this in the most equitable and economically responsible manner possible.

I now detail the tax changes.

page 44

INDIRECT TAXATION

Some increases in this area were necessary.

However, in framing our decisions, we were concerned to minimise their impact upon inflation and inflationary expectations as well as their effects on economic activity.

Excises

None of the excises, with the exception of those on petroleum products and crude oil, have been increased since 1975; the ‘real’ rate of such duties during this inflationary period has therefore declined.

For each of the proposed changes in excise, commensurate increases in the relevant customs duties will be made, and existing exemptions will continue to apply.

The new rates will be effective as from tonight.

The increase in excise on beer- only the third in twenty years- will be 12.6 cents per litre; this is equivalent to roughly Vh cents on the price of a glass of beer and is estimated to raise about $194m extra in 1978-79 and $222m in a full year.

The rates of excise on potable spirits will be increased so as to raise the general rate to $ 1 8.75 per litre of alcohol, and bar prices by about 10 cents a nip; this is estimated to yield an additional $12lm in 1978-79 and $139m in a full year.

The rate of excise on cigarettes will be increased by $5.39 per kilogram, to $24.75 per kilogram, an increase equivalent to about 10 cents on a packet of 20; commensurate increases will be made in excises on other tobacco products, to yield in all an estimated $120m extra in 1 978-79 and $ 1 36m in a full year.

Details are provided in Statement No. 4 attached.

The Minister for Business and Consumer Affairs will introduce legislation later tonight to give effect to these proposals.

Sales Tax

We have made no increase in any of the rates of sales tax.

Indeed, we have gone further and have decided to reduce the rate of tax on motor cars and station wagons from 27V4 per cent to the general rate of 15 per cent.

This means that the price of a car now costing some $7000 should be reduced by roughly $530.

The cost to revenue of this change, after allowance for some likely gain in sales, is estimated to be about $155m in 1978-79 and $196m in a full year.

Coal Export Duty

The Government has decided to delay the phasing out of the remaining duty on coal exports.

This duty will now not be abolished until midnight on 30 June 1979.

page 1

DEPARTURE TAX ON OVERSEAS TRAVEL

The Government has decided to introduce a general revenue tax of $10 on adults departing from Australia by sea or air; the tax, which will operate from about mid-September 1978, will be collected both from Australian residents and from overseas visitors when leaving Australia.

The tax is estimated to raise $10m in 1978-79 and $ 1 3m in a full year.

Further details will be given by the Minister for Immigration and Ethnic Affairs at a later date.

page 1

IMPORT QUOTAS

Import quotas have a certain scarcity value and confer on importers who hold them a substantial advantage over those who do notgiving rise, in many cases, to a ‘monopoly’ profit; by contrast, protection provided by the tariff gives rise to increased duty collections rather than increased profits for importers.

The Government has therefore decided to impose, on certain goods subject to tariff quota and import licensing controls, a special additional customs duty of 12 W per cent.

My colleague, the Minister for Business and Consumer Affairs, will be introducing a Bill to amend the Customs Tariff Act later in the evening; this Bill will define the goods which are subject to the additional customs duty.

I would like to point out that it is not intended that these arrangements should have any additional protective effect.

This measure will produce additional revenue of about $65m in 1978-79 and about $75m in a full year.

page 1

CRUDE OIL POLICY AND THE PRODUCTION LEVY

Since the OPEC countries quadrupled the world price of crude oil in 1973-74, Australians have continued to enjoy artificially low prices for crude oil.

While the rest of the world was facing up to the inescapable fact that the days of cheap energy were over, Australians- even after the imposition in the 1975-76 Budget of a $2 per barrel production levy- were continuing to pay less than half of the world price for Australianproduced crude oil.

Subsidized indigenous oil prices encouraged a wasteful use of a key energy resource and inhibited the adoption of more energy-efficient processes and technologies; in recognition of this the Government moved last year towards a more realistic pricing policy for Australian-produced crude oil.

The move towards world prices for producers of ‘old ‘ oil announced at that time was a gradual one, with correspondingly gradual benefits to conservation and improved exploitation of known reserves.

In 1 978-79 the proportion of local crude oil production sold to refiners at less than world prices would have been about 70 per cent, involving, in effect, a subsidy to petroleum product users of some $800m.

In the light both of the budgetary situation and the desirability of improving energy use and the allocation of resources, the Government has decided that all Australian-produced crude oil should, from tomorrow, be priced to refineries at import parity levels; this will mean that consumers of petroleum products will in future pay prices based on world oil prices.

However, the proceeds of the increased price paid by refineries as a result of this decision will accrue in the first instance to the Government; the price to producers will continue to reflect the arrangements announced last year.

These results will be achieved by, in effect, increasing the present productiion levy on ‘nonparity* oil by an amount that will bring the price of such oil to refiners to import parity levels; this will bring the price to refiners of all domestic production to import parity.

The Minister for Business and Consumer Affairs will introduce legislation later tonight to give effect to these proposals; in brief, however, the new arrangements involve the imposition of a production levy at the rate required to bring the price of ‘non-parity’ oil in Bass Strait up to import parity, with variable rebates being allowed to reflect, on the one hand, the maintenance of a net levy of about $3 a barrel on ‘import parity’ oil and, on the other hand, the slight differences between Bass Strait and elsewhere in both import parity prices and non-parity prices.

The net effect of these arrangements will be to increase immediately the production levy on Bass Strait ‘non-parity’ oil from the present rate or $18.90 per kilolitre (about $3 per barrel) to $64.53 per kilolitre (about $10.26 per barrel) for the period ending 31 December 1978; for Barrow Island the net levy on ‘non-parity’ oil will be $6 1 .39 per kilolitre (about $9.76 per barrel).

It is anticipated that this decision will add about Vh. cents per litre to the price of petrol (roughly 16 cents per gallon).

Retail prices for petrol in Australia vary considerably; however, the maximum allowable retail price for premium petrol in Sydney is now 2 1 cents per litre, and even with the increase expected, would remain much lower than the price paid by consumers in most countries comparable to Australia.

For example, during the first quarter of 1978 consumers were paying 49 cents per litre in Italy, 44 cents in France and Japan, and 28 cents in the United Kingdom.

New rates for the standard levy and rebates for the period 1 January to 30 June 1979 will be announced at the appropriate time following the determination of import parity prices for tha* period by the Minister for National Development.

On the basis of existing import parity prices, this increase is estimated to raise additional revenue in 1978-79 of $676m; there will be some offset in excise collections from petroleum products, reflecting the effects of the rise in the prices of such products on the demand for them.

In other respects, the pricing arrangements announced in last year’s Budget will be unchanged.

As then indicated, producers of ‘old’ oil will obtain import parity prices (less the existing levy of $ 1 8.90 per kilolitre) for increasing proportions of production from existing fields, with the proportions specified over the period to 1 980-8 1 and moving to 100 per cent as soon as possible thereafter; only for refiners (and hence consumers) is the inevitable move to world prices being accelerated.

The levy will remain at $ 1 8.90 per kilolitre on import parity’ oil; as the proportion of that oil in total production increases, collections from the new rates of levy will fall.

Those fields currently producing less than 6 million barrels per day, including Moonie, already attract full import parity, and the levy in respect of their total production will remain unchanged.

As announced in last year’s Budget Speech the Government will review, prior to the end of 1980-81, the further progression to be made towards import parity for producers from existing fields.

page 46

INDIRECT TAXATION, THE CPI AND WAGES

The increased costs of petroleum products flowing from the change in crude oil policy are estimated to have a direct impact on the December quarter Consumer Price Index of about 0.7 percentage points, with some further indirect effects in later quarters.

As the Conciliation and Arbitration Commission recognised in its judgment arising out of the December quarter 1977 CPI increase, if the increase in the CPI resulting from these oil pricing policies were to flow through into wages, the Government’s policy objective of more restrained energy use would be thwarted.

Accordingly, at the approatpriate time, the Government will be asking the Commission to again discount the CPI for the effects of the oil conservation policy before considering any wage adjustment.

In the same way, the other indirect tax changes I announced earlier tonight have been introduced to maintain responsible fiscal and monetary management; the Government intends that their net effect should fall on purchasers of the goods involved and not, through the wage determination mechanism, upon employers.

It would defeat that intention if the effect which these taxes will have on the CPI- about half a percentage point- were allowed to flow through into wages.

Consequently, the Commonwealth will also be arguing in the appropriate National Wage Case that the CPI should be discounted, for wage adjustment purposes, for the effects of these taxation measures.

page 1

INCOME TAX

Standard Rate

As foreshadowed, earlier, the Goverment has decided that as a temporary measure for 1978-79 only, the standard rate of personal income tax will be increased by Ite per cent, from 32 to 33te per cent; there will be corresponding increases, to 47 te per cent and 61te per cent, at higher levels of income.

The relevant legislation will be expressed to terminate at the end of the current financial year.

The full-year gain to revenue from this change is estimated to be $5 70m.

It is intended to adjust pay-as-you-earn instalment deductions from 1 November 1978.

The increase is effective from 1 July, and therefore the extra deduction to be made from a taxpayer’s wages or salary after 1 November will be designed to meet his or her additional tax liability for the whole of 1978-79 and not just for the period after 1 November.

The Ite per cent rate increase for 1978-79 will also be reflected in the calculation of provisional tax.

Even after this change, gross PA YE collections in 1978-79 are estimated to increase by 7.1 per cent compared with 7.8 per cent in 1977-78; total collections from individuals are estimated to increase by 6.7 per cent this year, compared with 9.7 per cent in 1977-78.

This temporary increase should also be seen in the light of the cumulative benefits that individual taxpayers have derived from the tax reforms of this Government.

To illustrate, the cost to revenue of full tax indexation in 1976-77 was $990m; in 1977-78 the cost of full indexation and the rate scale reform was $ 1370m; the cost in 1978-79 of half indexation and rate scale reform, after allowance for the temporary standard rate increase I have just mentioned, will be about $700m.

Provisional Tax

The Government has decided to amend the law relating to self-assessment of provisional tax so that additional tax will be payable where the estimated income for 1978-79 or any subsequent years turns out to be more than 10 per cent (instead of 20 per cent at present) below the actual income for that year.

This decision reflects the Government’s concern at mounting evidence of deliberate underestimation of taxable income for provisional tax purposes.

This change will not in any way disturb the discretion now available to the Commissioner of Taxation to remit in whole or in part additional tax otherwise payable in the event that reasonable grounds exist for the under-estimation having occurred.

Taxation of Certain Lump Sum Payments

There will be no change to the existing situation where superannuation and other retirement benefits are taxable as to only 5 per cent of the amount of the lump sum benefit.

However, the Government has decided to alter the existing basis for taxing lump sum payments received on retirement or termination of employment for unused annual and long service leave.

At present, with only 5 per cent of lump sum payments received for unused annual and long service leave subject to taxation on retirement, there is an encouragement not to take such leave during the taxpayer’s working life; we believe that the tax system should not have that effect.

After tonight, the whole of lump sum payments for unused annual leave will be taxed in full as ordinary income.

Lump sum payments in respect of unused long service leave (including payments in the nature of long service leave) for qualifying service after tonight will be taxed at the standard rate of tax (33 te per cent this year); however, such payments in respect of long service leave for service prior to tonight will continue to be taxed under the present arrangements.

The changes will not alter the existing rule that payments on death to a spouse or dependants or legal personal representative of a deceased employee in respect of accrued annual leave or accrued long service leave are not subject to taxation.

The change to the taxation of payments for unused annual leave entitlements is estimated to produce a gain to revenue of $70m in1978-79 and $110m in a full year; reflecting the long phasing-in arrangements that are proposed, the change in respect of the taxation of long service leave payments is estimated to result in a revenue gainof$6m in 1978-79.

Home Loan Interest Deductibility

The contribution of this scheme to home purchase has not been matched by its cost to revenue.

Accordingly, interest on home loans that accrues on or after 1 November 1 978 will no longer be allowable as an income tax deduction; there will be a saving to revenue of $3m in 1978-79 and $3 1 m in a full year.

Commonwealth Post-graduate Awards

Commonwealth awards under the Postgraduate Awards Scheme, which are not means tested, are essentially of an income nature and it is appropriate that they should be taxed like other income.

Accordingly, these awards are to be made assessable income in the hands of the recipient with effect from 1 November 1978 with an estimated gain to revenue of $0.6m in 1978-79 and $ 1 m in a full year.

Social Welfare Payments

The Government has also decided to extend the 1976 decision to subject to tax a wide range of social welfare payments; the other kinds of payments now to be subject to tax, as from 1 November 1978, are:

Rehabilitation training allowance

Rehabilitation livingawayfromhome al lowance

Incentive allowance (rehabilitation)

Invalid pension for persons under age pen sion age

Sheltered employment allowance

Repatriation service pension on account of unemployability or pulmonary tuberculosis for persons under age pension age

Tuberculosis allowance for persons under age pension age, and

Tuberculosis housekeeper allowance.

People in receipt of these payments will not be disadvantaged by comparison with other income recipients; almost all of those solely dependent on the benefit will be below the tax threshold; others will become liable for tax only if they have other income above their social welfare payments sufficient to bring them above the tax threshold.

The gain to revenue from this proposal is estimated at $3m in 1978-79 and $5m in a full year.

Rebates for the Maintenance of Overseas Dependants

The present law allows rebates for the maintenance of dependants overseas- a spouse, parents or parents-in-law and invalid relatives.

In many cases, the dependant in question may have never been to, nor have any intention of coming to Australia; in other cases, the provision has led to flagrant abuse.

In the light of this, the Government has decided to withdraw the rebates for overseasresident dependants as from 1 November 1978; for 1978-79, the maximum amount of rebate claimable for each eligible overseas dependant will thus be reduced to one-third of the present amount.

Withdrawal of the rebates will not affect the rebate claimable for a dependent spouse overseas pending early migration to Australia.

The gain to revenue in 1978-79 is estimated to be $8m and for a full year $20m.

page 48

TAX AVOIDANCE

In recent months the Government has made a vigorous assault on tax avoidance; this will continue in 1978-79.

The time is long since past when Governments or the community should tolerate the blatant, artificial and contrived means whereby certain sections of the community seek to pay little or no tax to the detriment of the general body of taxpayers and the equity of the tax system.

As a further initiative in this area, the Government has decided upon a number of measures designed to curb avoidance of tax liabilities in cases where cash is paid for various forms of services without deductions for tax.

Full details are provided in a separate statement I have released tonight.

The Government has also decided to make some adjustments to the averaging system for primary producers, so as to confine its benefits more strictly to income derived from primary production; under these new arrangements averaging will still apply to taxable income from primary production, and may also apply to a limited amount of income derived from other sources.

If non-primary production income is $5,000 or less in the income year, averaging will apply to all of it; the allowance of $5,000 will shade out by one dollar for each dollar of non-primary production income in excess of $5,000, thus shading out entirely when non-primary production income reaches $ 10,000.

This change will ensure that persons with minimal interests or activities in primary production are not able to abuse the system to reduce their tax on non-primary production income, and will thereby inhibit the use of tax avoidance schemes based on primary producer status.

Further details are contained in Statement No.

The change, which will apply for 1978-79 and subsequent income years, is estimated to raise $ lm in 1978-79 and $27m in a full year.

page 1

BUDGET OVERVIEW

Total outlays in 1978-79 are estimated to increase by 7.7 per cent to $28,870m.

Total receipts, after the measures I have outlined, are estimated to increase by 11.0 per cent to $26,057m.

The overall deficit is therefore estimated at $2,8 1 3m, a reduction of $52 1 m on 1 977-78.

After allowance for overseas transactions, the domestic deficit is estimated at $ 1,669m in 1 978-79, some $782m less than in 1 977-78.

page 1

THE BUDGET, MONETARY POLICY AND WAGES POLICY

In 1977-78 the broadly defined volume of money (M3) expanded by 8 per cent over the course of the year, which was at the lower end of the range projected in last year’s Budget Speech.

The firm control of the monetary aggregates which the Government has put in place since early 1976 has contributed much to the subsequent wind-down in inflation.

The 1978-79 Budget will again contribute to an appropriate monetary environment.

With continuing success against inflation, the Government looks forward to further sustainable reductions in interest rates.

The Government has been careful to ensure that its policy of monetary restraint does not unduly restrict the supply of finance to certain key sectors such as housing.

The policy of monetary restraint will of course strengthen the demand for housing in the longer term through reduced inflation and lower interest rates.

However, the Government has acted decisively with a view to the short term as well.

The banks and building societies are being reminded of the Government’s desire that they lend to homeseekers to the maximum extent.

In addition, to facilitate the provision of housing finance, the regulations relating to savings banks subject to the Banking Act are under urgent review.

To expand savings banks’ capacity to lend for housing in 1978-79, the proportion of savings bank deposits required to be held in public securities and liquid assets will be reduced from 45 to 40 per cent.

As a longer term measure, the present method of controlling the investment of savings banks’ funds is being reviewed with the intention of giving them more flexibility in determining the composition of their assets.

Lending levels will, of course, remain subject to lenders’ own commercial judgments.

These actions should make it easier for homeseekers to obtain finance.

These decisions have been taken within the framework of an overall monetary policy which remains directed at providing adequate funds for sustainable recovery in private sector activity and employment, while continuing to bear down steadily on inflation and inflationary expectations.

In this regard- and despite the acknowledged uncertainties in such projections- I now state that this Budget is consistent with an outlook for financial conditions indicated by growth in the broadly defined volume of money (M3) in the range of 6 to 8 per cent over the course of 1978-79.

Within this monetary projection, the outlook for employment will be affected by the outcome of the wage determination process both within the arbitral tribunals and outside them.

But before I develop this point in more detail, let me say something about the link between jobs and money wage gains.

The sharp increase in labour costs, relative both to the price of output and the costs of other factors of production, which occurred in 1973 and 1 974- and which has not so far been wound back- has encouraged firms to shed as much labour as they can.

They have been replacing workers with machines; replacing full-time staff with part-time; replacing wage and salary earners with selfemployed contract labour; in short, making do with less labour all round.

That is the major reason why employment, especially of wage and salary earners, has hardly been growing at all even while output has been expanding.

This has been to the particular detriment of young people and the unskilled.

For five years now, businesses have been coping as best they can with those excessive labour costs.

Since the wages explosion of 1973 and 1974, there has, it is true, been some closing of the gap between real wages and productivity.

But the partial closure of that gap has been a result of productivity increases, not of real wage reductions.

In accepting this protracted means of closing the gap, we are, as a nation, condemning ourselves to a second-best solution.

A considerably more rapid recovery would be possible- if a greater measure of wage restraint could be obtained.

The Government has been fostering a moderate uplift in economic activity.

However, excessive wages have pushed unemployment to levels that could otherwise have been avoided.

At wage hearing after wage hearing, the Government has sought to demonstrate to the Conciliation and Arbitration Commission the inescapable inter-dependence of economic recovery and wage restraint.

It is regrettable that the Commission has not paid greater heed to the views the Government has put to it at these hearings.

Its failure to do so has, in our view, been costly to the Australian community both in terms of inflation and unemployment.

We cannot, as a Government, regard this situation as satisfactory.

Within the monetary framework which I outlined earlier, there is a limit to wage increases that can be awarded without throwing even more people out of work.

The Government has limited flexibility in monetary policy, which cannot be assumed to passively adjust so as to accommodate money wage decisions inconsistent with the Government’s objective of continuing to bear down on inflation and encourage economic recovery and sustained growth in employment.

Employers also should not assume that the finance to accommodate excessive wage rises will be readily available.

If wages increase faster than responsible growth in the monetary aggregates permits, there will be inadequate scope for growth in real activity.

If this occurs the result will be lower economic activity and therefore higher unemployment than would otherwise be attainable.

Consistent also with this position, the Government will not allow excessive increases in money wages to undermine its own Budget.

The Commonwealth will, as a major employer, act like any other employer.

If wages rise faster than we have budgeted for, we will respond by effecting offsetting economies through a further critical examination of Budget expenditures. This critical examination will include the number of staff employed.

In so doing, we will be seeking to bring the conduct of our own affairs more into line with conditions prevailing in the private sector.

That will also demonstrate, in the most practical way, the vital need to ensure sensible outcomes in the area of wage determination that will permit employers both to preserve present jobs and to make more new jobs available.

The Government will be advising the Commission along these lines at the next National Wage Case.

page 50

ECONOMIC OUTLOOK

As I have just indicated, the outlook for the economy depends heavily on the future course of award wages.

Unfortunately it is not generally recognised that, despite partial indexation, the actual level of real wages has hardly fallen at all in recent years.

Real household disposable incomes rose in both 1976-77 and 1977-78.

Notwithstanding the temporary increase in the standard rate of personal income tax, real household disposable incomes are again expected to rise in 1978-79.

The personal saving ratio is likely to continue to decline and private consumption expenditure can be expected to grow at a healthy pace.

Forward indicators suggest that the buoyant performance of private business investment in 1 977-78 will be sustained in the coming year.

The Government draws considerable satisfaction from this evidence of increasing community confidence in its policies.

While policy has, of course, been looking to the private sector as the source of sustainable growth, total public sector expenditure is again expected to show a real increase in 1978-79, although smaller than last year.

The growth in production is also expected to be strengthened by a turn-around in the stock cycle as stocks begin to rise again during the coming year.

Externally, our export growth will be constrained by the continuing moderate growth of the world economy in 1 978-79.

However, from the point of view of the current account balance and domestic incomes, the sluggishness in export volumes is likely to be offset by a significant improvement in our terms of trade.

The expected build up in stocks domestically will no doubt be mirrored in stronger growth in imports.

On balance, therefore, the external deficit on current account seems likely to continue running at about the rate recorded in the second half of 1977-78, producing some increase for the year as a whole.

Offsetting that, the improvement in the investment climate generally in this country seems likely to lead to a gradual strengthening of the private capital account.

Meanwhile, the Government remains committed to a program of official borrowing overseas to supplement the temporarily depleted levels of private capital inflow and, in the process, to maintain reserves.

Overall, gross non-farm product is projected to grow by around 4 per cent in real terms in 1978-79.

With a return to more normal seasonal conditions there should be a significant recovery in farm product and farm incomes this year.

That would mean stronger growth in total GDP than in the non-farm component.

However, while this growth should be sufficient to ensure an increase in employment, unemployment may well increase somewhat during the year as the labour force continues to grow, unless a better outcome can be achieved on the wages front.

So far as prices are concerned, the indirect tax increases and the move to import parity for domestic crude oil may temporarily slow the deceleration in the broadly-based price deflators.

In terms of the Consumer Price Index, those increases seem likely to be more than offset by the effects of the changes to the financing of health services.

With even reasonably sensible outcomes for wage determination, inflation is expected to be running at an annual rate down towards 5 per cent by mid- 1979.

page 1

CONCLUSION

At no time since its election has this Government pretended that there were quick, easy solutions to Australia’s economic problems.

It has been necessary in this Budget to take difficult decisions to achieve our objectives.

To have done otherwise would have put at risk all that we have achieved to date.

There was no way that this Government would sacrifice economic temperance for shortterm political praise.

In framing all our decisions, we have been guided by a desire to fairly share burdens throughout the Australian community.

This Budget stands for the long term economic stability of Australia.

It is a Budget of reality.

It is a Budget of economic responsibility.

I commend it to Honourable Members.

Debate (on motion by Mr Young) adjourned.

page 53

STATEMENTS ATTACHED TO THE BUDGET SPEECH

Notes:

  1. Any discrepancies in tables between totals and sums of components are due to rounding.
  2. In the tables showing receipts and outlays, the sign in front of the ‘change ‘ reflects the impact of the change on the aggregate concerned. In outlay tables, for example, this means that a reduction in a credit from one year to the next will be prefixed by a ( + ) sign while an increase in a credit will be prefixed by a negative(- ) sign.
  3. The following notations are used:

NEC/nec not elsewhere classified nil

page 54

STATEMENT No. 1 - SUMMARY OF THE 1978-79 BUDGET

Budget Aggregates

The Budget aggregates for 1977-78 and 1978-79 are summarised in the following table: {:#subdebate-58-1} #### Outlays The slowdown in the rate of increase in total outlays evident in the past two years is projected to continue in 1978-79; the estimated increase of 7.7 per cent is lower than any increase recorded since 1968-69. Expressed as a proportion of Gross Domestic Product total outlays remained very steady at 24 to 25 per cent until 1974-75 when the proportion jumped to over 29 per cent, followed by a further rise to over 30 per cent in 1975-76. Since then the proportion has edged back marginally; on the basis of the projected increase in outlays of 7.7 per cent, a further reduction in the ratio can be expected in 1978-79. The table below shows total outlays in 1977-78 and 1978-79 classified according to broad economic types of expenditure. As shown, most types of expenditure are projected to increase less rapidly in 1978-79 than in 1977-78. {:#subdebate-58-2} #### Budget Outlays - By Economic Type {: type="a" start="a"} 0. Changes between 1977-78 and 1978-79 are affected by the financial arrangements consequent upon the transition of the Northern Territory to self government. The items affected most are other current expenditures, capital expenditure and transfer payments to the States, the Northern Territory and local government authorities. 1. Includes unfunded employee retirement benefits. 2. Includes net advances to Australian Telecommunications and Postal Commissions, the airlines, the Australian Wool Corporation and the Australian Shipping Commission, together with net advances to other authorities, the public and overseas. Estimates of outlays in 1978-79, classified by major functions, are outlined in detail in Statement No. 3. The summary table below shows Budget outlays in 1977-78 and estimated outlays in 1978-79 classified according to their main functions or purposes: {:#subdebate-58-3} #### Budget Outlays - By Function {: type="a" start="a"} 0. Changes between 1977-78 and 1978-79 for most functional categories are affected by changed financial arrangements consequent upon the transition of the Northern Territory to self government; for details *see* Appendix and Chapter V, Budget Paper No. 7 - *Payments to or for the States, the Northern Territory and Local Government Authorities 1978-79.* The following comments might be noted: o Slowing inflation has exerted a moderate downward influence on most cate gories of expenditure. o The main above-average increases projected in 1978-79 are in respect of the Health, Economic Services and Not Allocated to Function categories. o The increase of $215 million (8 per cent) in expenditure on Health reflects mainly changes in health care arrangements which are estimated to add $138 million to outlays in 1978-79. o The estimated increase of $148 million (9.2 per cent) in expenditure on Economic Services in 1978-79 is the net effect of many factors including, on the one hand, additional assistance for specific industries and for industries generally (e.g. export incentives, industrial research and development grants) and lower repayments by the Australian Wool Corporation and, on the other hand, the absence of any budgetary provision for the Australian Telecommunications Commission in 1978-79. o The large increase of $944 million (12.5 per cent) in unallocated expendi tures mainly reflects increases in tax sharing entitlements of the States (up 10.7 per cent), local authorities (up 8.5 per cent) and net interest payments (up 15.6 per cent), as well as the global allocation to the Northern Territory ($280 million) and the bulk provision for prospective increases in wages and salaries ($50 million). The estimates point to significantly lower rates of increase in expenditure on Education and Social Security and Welfare in 1978-79. o The estimated reduction of §144 million (28.3 per cent) in outlays in Housing is mainly the result of lower advances to the States under the new housing agreements with the States and of the self-government arrangements for the Northern Territory. {:#subdebate-58-4} #### Receipts Total receipts are estimated to increase by 11.0 per cent in 1978-79, compared with 9.8 per cent in 1977-78 and 17.0 per cent in 1976-77. The projected increase in 1978-79 is lifted substantially by Budget measures; as discussed in Statement No. 4, in the absence of the taxation measures, receipts were estimated to increase by 4.5 per cent. Details of the estimates for 1978-79, including the effects of measures on receipts, are presented in Statement No. 4. {:#subdebate-58-5} #### The Deficit The Budget deficit for 1978-79 is estimated at $2813 million, a reduction of $521 million on the deficit of $3333 million recorded in 1977-78. Allowing for an estimated increase of $262 million in the deficit incurred on overseas transactions - reflecting mainly increased outlays overseas in respect of defence and public debt interest payments - the *domestic* deficit is estimated to decrease by $782 million, from $2451 million in 1977-78 to $1669 million in 1978-79. {:#subdebate-58-6} #### Economic Context An account of the economic context of the 1978-79 Budget, and of the postBudget outlook for the economy, is presented in Statement No. 2. {:#subdebate-58-7} #### Historical Data Historical data on Budget transactions are presented in Statements No. 5 and 6. Statement No. 5 provides a detailed account of the Budget outcome for 1977-78 and Statement No. 6 presents Budget and some broader public sector data for the period since 1968-69, including an expanded section on the accounts of the public sector as a whole. Table 2 of Statement No. 6 shows the proportions of total outlays represented by functional and major sub-functional categories in each year since 1968-69. An Appendix describes the basis of the functional classification of Budget outlays used throughout the Budget Statements. {: .page-start } page 58 {:#debate-59} ### STATEMENT No. 2- THE BUDGET AND THE ECONOMY {: .page-start } page 1 {:#debate-60} ### STATEMENT No. 2 - THE BUDGET AND THE ECONOMY This Statement views the 1978-79 Budget, and macro-economic policy generally, against the background of recent and prospective trends in the Australian economy. Part I concerns economic developments in 1977-78. Part II reviews macro-economic policy and progress in economic recovery, with particular reference to constraints thereon. An analysis of economic prospects for 1978-79 is set out in Part III. Part I Review of Economic Developments in 1977-78 {:#subdebate-60-0} #### Demand and Output The following commentary upon the changes in gross domestic product and its major expenditure components during 1977-78, including the accompanying charts, refers to half-yearly movements. All figures mentioned, apart from full-year changes, are seasonally adjusted and at constant (1974-75) prices. Since the economy is an interrelated whole, to use developments in real expenditures as the starting-point for discussion is, though conventional, to some extent arbitrary. The year began with the economy emerging from a brief period of flat demand and activity. Statement No. 2 a year ago discussed the reasons for this flatness and concluded that: Signs that they were largely transitory, rather than indicative of a petering out of recovery, began to emerge late in 1976-77.' As detailed below, subsequent events have borne out that assessment. The rise in demand and product aggregates during 1977-78 was more even than in 1976-77 (see Chart 1, panels f, h, k, 1), although the recovery continues to be uneven both over time and across sectors. *Private final consumption expenditure* (Chart 1, panel a) was weak in the first half of 1977. It rose more rapidly and consistently during 1977-78 to be 4.1 per cent higher in the June quarter 1978 than a year earlier. The presently estimated increase for the year as a whole of 2.3 per cent was a little lower than in other recent years, but that owed much to the weakness in the first half of 1977. Since private consumption expenditure accounts for nearly 60 per cent of gross domestic product, an examination of its determinants - see Table 1 - is important both for an appreciation of the forces governing economic activity as a whole and as a basis for predicting trends in total consumer spending. In terms of the movements shown in Table 1, real private consumption growth has averaged 2.9 per cent during the past two years, compared with 2.3 per cent during the previous two years. This slight strengthening has occurred notwithstanding a tendency for the increase in gross incomes to slow. One reason is that, whereas in 1974-75 and 1975-76 *disposable* income (i.e. after tax and transfers) grew noticeably less rapidly than gross income, over the last two years disposable income has, on average, grown a little faster. This has mainly reflected the operation of personal tax indexation and the February 1978 tax cuts. The behaviour of the personal saving ratio is also relevant. Since 1975, the saving ratio has fallen - though unevenly, reflecting lags in consumers' reaction to sudden changes in disposable income, particularly those occasioned by tax reductions. Occurring at a time when inflationary pressures were easing, this fall in the saving ratio from its atypically high level in 1974 and 1975 illustrates the important contribution which the control and reduction of inflation can make to strengthening demand and activity. *Private dwelling investment* (panel b) was markedly out of step with other components of final demand in 1977-78, falling by 7.3 per cent for the year as a whole (although signs of an upturn appeared late in the year). Indeed, dwelling construction activity has moved quite differently from movements in domestic final demand (panel f) over a longer period. Private dwelling construction expanded rapidly for six consecutive quarters to the December quarter 1976, producing a trough-to-peak increase of more than 40 per cent. Towards the end of this period, and into 1977, large stocks of unsold new dwellings built up. The subsequent decline in activity reflects attempts to lower these stocks to a more normal level. Why did this sector display a cycle so markedly out of phase with developments in activity as a whole? One reason is that new dwelling construction activity - typically sensitive to credit conditions - was stimulated by the brief but very sharp expansion of housing finance in 1975. It is clear from the stock build-up that the rate of construction of new dwellings in 1976, although no higher than in earlier periods of buoyant activity, moved well ahead of effective demand. Whether the lower level of demand was a reflection of general recession, or more fundamental factors specific to the housing industry, is an important question for policy. While general economic conditions - including the more restrained growth of monetary aggregates since 1975 - have been partly responsible, there are undoubtedly other influences at work. Of primary importance have been basic demographic factors - lower migration and fertility rates, slower population growth (including in the most relevant age groups), fewer marriages, and a reduced rate of household formation - affecting the level and pattern of dwelling demand. In addition, there has been an apparent increase in consumer preference for previously-occupied dwellings, and greater resort to modification of the existing dwelling stock. This is, at least in part, a result of the continuing price advantage enjoyed by established dwellings. These developments carry such weight that an extrapolation of past trend levels of new dwelling construction would substantially overstate sustainable demand today. In marked contrast to the fall in dwelling investment, *private gross business fixed capital expenditure* (panels c and d) rose quite strongly in 1977-78. Expenditure on *non-residential building and construction* registered a significant increase - although unevenly - following persistent falls since the early 1970s while private investment in *plant and equipment,* after a pause in the first half of 1977, showed a return to strong growth. There can be no doubt that the climate for decision-making concerning busi ness fixed investment has improved. As with personal consumption, the lift in spending has coincided with the trend to lower inflation and lowered inflationary expectations. The depression of corporate profitability in 1974-75, as indicated by the decline in the profit share of non-farm product (see Chart 6a), discouraged investment through the reduced availability of internal funds and effects on expectations of prospective profitability and business confidence generally. Although there has been little recovery in gross profitability since that time, tax concessions have considerably improved the internal funds position of the corporate sector taken as a whole and there has, therefore, been some recovery in net profitability. (Part II contains a more detailed discussion of these developments.) Two additional factors underlie the generally stronger revival in investment in plant and equipment. First, the continuing pressure of high real labour costs has induced substitution of capital for labour. Second, the tax incentives just mentioned have borne more directly on plant and equipment. More particularly, the scaling down of the investment allowance to 20 per cent for eligible plant *ordered* after 30 June 1978 was probably a factor in the particularly strong performance of this category of investment in the second half of 1977-78, although the 40 per cent rate will continue to apply to (and hence influence) eligible plant ordered up till 30 June 1978 but put in place by 30 June 1979. The expenditure categories dealt with so far - private final consumption and gross fixed capital expenditure - sum to *private domestic final expenditure.* This aggregate showed moderate but sustained growth in 1977-78. As Table 2 shows, in contrast to the erratic pattern in past years, private domestic final expenditure contributed firmly to GDP growth in both halves of 1977-78. *Government final expenditure* (national accounts basis, all levels) expanded quite strongly in 1977-78 (Chart 1, panel e). Growth for the year as a whole was 3.8 per cent, with current expenditure increasing by 5.5 per cent and capital expenditure by 0.5 per cent. As Table 2 indicates, the direct contribution of public expenditure to product growth was rather greater in 1977-78 than in the two previous years. In fact, the share of total public sector spending in non-farm product has changed little since its rapid build-up in 1974 and 1975 (see Chart 2). *Export* volumes (panel g) recorded strong growth in the first half of 1977-78, making a substantial contribution to the increase in *total final expenditure* (panel h) and product growth (Table 2) for that period. Factors affecting the timing of exports were partly responsible for that strength. This was, however, partly offset by a fall during the second half, and for 1977-78 as a whole exports were only moderately higher than for 1976-77. *Import* volumes (panel j) responded with a lag to the November 1976 devaluation, with a downward trend emerging in the June quarter of 1977. This continued over the remainder of 1977 and, with exports growing strongly, *net exports* made a sizeable contribution to product growth in the first half of 1977-78 (Table 2); the ratio of imports to sales (Chart 3) moved down somewhat. These trends were reversed in the first half of 1978 as exports fell and imports rose strongly; the very rapid growth of expenditure on plant and equipment - a relatively high proportion of which is imported - was presumably partly responsible for the rise in imports, which were, however, also affected by timing factors. {: type="a" start="a"} 0. The ratio of total government expenditure on final goods and services to gross non-farm product at market prices. 1. Published changes in private non-farm stocks are accumulated on a base period level of stocks to construct estimates of stock *levels* used in this ratio. Sales are defined as gross non-farm product *plus* imports *less* changes in private non-farm stocks. Data limitations prevent the calculation of sales for the *non-farm market* sector, which would be a more suitable denominator. 2. The ratio of imports of goods (excluding petroleum, civil aircraft and government imports) to sales. As Chart 3 and panels (i) and (j) of Chart 1 show, there is often a close relationship between the more marked swings in *stock accumulation* and variations in imports. This was so in 1977-78, when the impact on GDP of the stock cycle was cushioned by changes in imports. In the first half the dramatic turnaround from stock accumulation to decumulation was accompanied by a sharp fall in the rate of importing; in the second half renewed growth of imports was accompanied by a return to stock accumulation. The pattern of negative contribution to product growth in the first half of 1977-78 and positive contribution in the second half was present for both the *non-farm* and *farm and miscellaneous* categories of stocks. However, with the very large run-down in stocks- in 1977-78 as a whole only partially offset by the decline in imports, and with exports growing modestly, the *expenditure-based estimate of gross domestic product* (that is, excluding the statistical discrepancy) rose much more slowly than domestic final expenditure in both halves of the year (panel k). In turn, with the statistical discrepancy slightly depressing apparent product growth in both halves (see Table 2), the *income-based* estimate of GDP rose a little less than the expenditure-based estimate; the presently estimated increase in income-based GDP for the year as a whole is 1.4 per cent, compared with 4.0 per cent for 1976-77 and 2.7 per cent for 1975-76. Within total GDP, trends in non-farm and farm components differed markedly. For 1977-78 as a whole *gross non-farm product* increased by 1.8 per cent (panel 1). This compares with increases of 4.2 per cent for 1976-77 and 2.4 per cent for 1975-76. Over the course of the year - from the June quarter 1977 to the June quarter 1978 - non-farm product increased, on present estimates, by 2.2 per cent. *Farm product* fell by 5.1 per cent in 1977-78. In the first half of the year seasonal conditions were poor in many areas. The effect on the supply of farm produce was cushioned by a sharp run-down in *farm stocks.* The *gross value of farm production* (at current prices) was little changed between 1976-77 and 1977-78. However, within the total there was considerable variation: the gross value of *wheat* production fell by about 13 per cent, with substantially reduced output more than offsetting a rise in prices; the value of *sugar cane* cut for crushing fell by about 5 per cent on account of lower prices; the gross value of *wool* production was slightly below a year earlier on account of lower volumes; and the value of *livestock* slaughtered rose by about 18 per cent, reflecting both higher prices and increased slaughterings. The slowing in total product growth between 1976-77 and 1977-78 is therefore partly accounted for by the decline in farm product. The other main factor was the sharp turnaround in the non-farm stock cycle. The slowing does not, therefore, indicate a weakening in total domestic *final* expenditure, which on present estimates rose by 2.5 per cent, compared with 2.7 per cent for 1976-77. Furthermore, total domestic final expenditure accelerated through the year (Chart 1. panel f), rising at annual rates of 2.8 per cent in the first half and 4.6 per cent in the second half following the small decline in the second half of 1976-77. {:#subdebate-60-1} #### Labour Market As Chart 4 shows, over the past three years growth in product has not been accompanied by sustained expansion in employment. Rather, most of it has been reflected in increasing product per worker; over the whole period, employment has increased at an annual rate of about l.per cent. The full-year figures for 1977-78 in Table 3 indicate that, despite a slight apparent fall in the labour force *participation rate,* the increase in the *labour force* outran growth in the number of *employed persons,* which showed little change from 1976-77, and *unemployment* rose substantially. Tracking of labour market trends within 1977-78 was even more difficult than in other recent years. In addition to the problems with seasonal adjustment of unemployment statistics (which led the Statistician, from November 1977, to suspend publication of adjusted unemployment estimates based on the labour force survey), there were substantial changes in the design of the labour force survey, and in the December quarter the Victorian power dispute had marked effects on some series. New estimation benchmarks derived from the 1976 population census were introduced into the labour force survey during 1977-78; there was also a new sample and questionnaire and, with the changeover to a monthly survey from February 1978, a different timing basis. While attempts have been made to iron out resulting irregularities and inconsistencies with earlier survey estimates, discontinuity of survey-based series during 1977-78 may remain. This possibility is underlined by the inexplicable movements in some of the key series in November and February - the months in which the above-mentioned changes were effected. Thus, while the direction of trends during 1977-78 seems clear enough, not much weight should be accorded the precise magnitudes of estimated movements. The recorded figures point to a decline in the participation rate during 1977-78. This cushioned the effects on total unemployment of the slight decline in employment during the course of the year; none the less, unemployment in the second half was still substantially higher than twelve months earlier. In the closing months of the year unemployment appeared to stabilise; movements in the CES series were similar to the seasonal pattern, and were consistent with the ABS monthly labour force survey. The fall in the participation rate in the past two years represents the first sustained decline since 1971-72. On earlier occasions declines in the participation rate have occurred more or less concurrently with the down-turn in economic activity and rising unemployment; on this occasion the apparent fall has appeared well after the onset of high unemployment in 1974. One possible explanation for at least part of this phenomenon is the attraction which much higher real wages (and, perhaps, much higher real unemployment benefits) may for a time have had in holding up participation rates and thereby nullifying the normal 'discouraged worker' effect of a weak labour market. Another factor may have been the different composition of unemployment in this recession; increased job opportunities for women led to a rise in female participation rates while the greater relative decline in the manufacturing sector, in particular, led to a rise in the level of male unemployed, the latter being less likely to leave the labour force. Several other important aspects of labour market experience in 1977-78 deserve mention. First, part-time employment continued to grow and the surveybased estimate of unemployment among the part-time labour force actually declined over the course of the year. Secondly, female employment was again stronger than male employment. Thirdly, among industry groupings, manufacturing and community services recorded the major changes over the year, the former declining and the latter increasing. Fourthly, government employment continued to rise (but showed some flattening in the second half), while private employment continued to fall. Finally, in marked contrast to earlier years, junior unemployment rates rose by relatively less than adult rates. The Special Youth Employment Training Program would seem to have been an important factor in this development, in effect resulting in some substitution of youth employment for employment of other members of the work force. {:#subdebate-60-2} #### Prices and Incomes Movements in prices, costs and incomes are shown, by half-yearly periods, in Chart 5. **Major income** shares are shown in Chart 6. Inflation moderated markedly in 1977-78. Following four years of doubledigit increases, most broadly-based measures of average prices and earnings rose by about 9 per cent for the year as a whole and by less than that over the course of the year. National Wage Case decisions were again the major influence on trends in wages and earnings. Over the year to May 1978, 97 per cent of the increase in average minimum *male awards* was attributable to these decisions; for *females* the corresponding figure was 99 per cent. With the consumer price index decelerating through the year and a preponderance of partial indexation decisions (the weighted average degree of indexation in the four decisions was 76 per cent), award wage rates decelerated during 1977-78 (Chart 5, panel a). For the second half, the annual rate of increase was about *61/2* per cent. Reflecting lags and more rapid increases in over-award payments, *average weekly earnings* did not show this deceleration (Chart 5, panels b, c); indeed the half-yearly increases in the male unit series have varied little from an annual rate of 10 per cent during the past year and a half. The recent lower increases in awards should begin to reflect in the earnings series during the second half of 1978. {:#subdebate-60-3} #### Footnotes to Chart 5 {: type="a" start="a"} 0. Not seasonally adjusted. June 1978 figures estimated. 1. June quarter 1978 ordinary time average weekly earnings estimated. 2. Non-farm wages, salaries and supplements per unit of non-farm wage and salary earner employment. 3. Not seasonally adjusted. 4. Price indexes of materials used in manufacturing and articles produced by manufacturing. Not seasonally adjusted. 1977-78 II is six months to May 1978, compared with six months to November 1977. 5. Implicit price deflators of exports of goods and services and imports of goods and services. 6. Non-farm wage and salary payments per unit of constant (1974-75) price gross non-farm product. 7. Gross operating surplus of companies per unit of constant (1974-75) price gross non-farm product. Following some temporary acceleration in the first half of 1977 - reflecting the direct effects of the November 1976 devaluation - broad price indexes and deflators resumed their decelerating trend early in 1977-78 (Chart 5, panels d, e, f and k). Annual rates of increase for the second half were mostly in the range 7 to 8 per cent. *Foreign trade prices* (panel h) decelerated sharply during 1977-78 from the very high rates of increase that followed the November 1976 devaluation. The terms of trade deteriorated through 1977, with export prices actually falling in the second half of that year. One result of this was a much reduced rate of increase in unit gross surplus (panel j) and a less rapid rise in the implicit prices of domestic product aggregates than in the expenditure deflators. With a strengthening of the terms of trade and some restoration of unit profits in the first half of 1978, the product deflators rose more rapidly than the expenditure deflators for that period. Table 4 presents information on real wages and earnings. It shows that real *award wages* fell by about *H* per cent during 1977-78 - the first noticeable fall since the 1974 wages explosion. Real *earnings* again rose slightly over the course of the year. With productivity growing through the year, *unit wage costs* (Chart 5, panel i) again slowed, generally rising less rapidly than wage rates and earnings. *Unit gross surplus* (panel j) picked up over the year, and with accompanying growth of product this led to an estimated increase of 7.0 per cent in the gross operating surplus of companies for the year as a whole. There was thus a small decline in the *gross profit share* for the year as a whole, but a small lift in the second half (Chart 6a). Average net *farm sector prices* (as measured by the implicit price deflator of gross farm product) rose by about H per cent in 1977-78 following a much larger increase in the preceding year. The increase in prices was more than offset by the fall in the volume of production noted earlier, leaving farm product in current price terms a little lower than in 1976-77. There was a contraction of about 6 per cent in nominal *farm income* and a reduction in the share of farm income in gross domestic product at factor cost from 3.0 per cent in 1976-77 to 2.6 per cent in 1977-78. Moreover, as a result of the sizeable reduction in *assets with marketing organisations* in 1976-77 and the subsequent small increase, *realised farm income* in 1977-78 fell by more than farm income; the decline was 21.5 per cent. {:#subdebate-60-4} #### Chart 6- Profit and Wage Shares 18- 16- 14- {:#subdebate-60-5} #### Average I 1 1 1968-69 1973- to 74 1972-73 {: .page-start } page 1 {:#debate-61} ### I II 1975- 76 i II i r l II 1977- 78 r.70 68 -.66 64 {:#subdebate-61-0} #### Average I 1 1 1968-69 1973- to 74 1972-73 {: .page-start } page 1 {:#debate-62} ### I II 1975- 76 {: .page-start } page 1 {:#debate-63} ### I II 1977- 78 {:#subdebate-63-0} #### Balance of Payments Balance of payments developments during 1977-78 reflected a number of shorter-term influences as well as the continuing effects Of forces which have been operating for some time. (The latter are discussed in Part II of this Statement.) External account developments over recent years are summarised in Table 5. While there was an *overall* deficit of $542 million for 1977-78 as a whole, there was a small surplus in the second half. Total *private* sector external transactions were in approximate balance in the second half of the year compared with a deficit of over $1200 million in the first half. International reserves at the end of the year ($3225 million) were only slightly lower than at the beginning, mainly because the overall deficit was offset by increases in the market value of Australia's official gold holdings and other valuation effects (such effects are excluded for purposes of calculating the overall deficit). The turnaround in the balance of payments position during the course of the year was entirely due to a reversal of private capital movements; an apparent outflow of private capital (including marketing authorities) of over $600 million in the first half of the year was more than matched by an apparent inflow of about $1000 million in the second half, resulting in a small net apparent inflow for the year as a whole. Factors in this turnaround included the improvement in Australia's international competitiveness and the increasingly favourable attitude of overseas investors to domestic economic policies pursued by the Australian Government; a net inflow of trade credit, associated with a weakening of the balance of trade and the seasonal tightening of domestic liquidity conditions in the latter part of 1977-78; and the firm indications by the Government that, pending the resumption of a more normal rate of private capital inflow, it was prepared to undertake substantial official overseas borrowings to help support the exchange rate. Overseas borrowings on official account (including banking arrangements entered into by the Reserve Bank with the Bank for International Settlements) amounted to $1955 million gross (SI 806 million net) in 1977-78, with borrowings fairly evenly spread throughout the year. The trade-weighted average exchange rate for the $A was depreciated by 6.8 per cent during the course of 1977-78. The pattern on current account was the reverse of that on private capital account. The current deficit was appreciably higher in the second half than in the first, mainly because of a decline in the trade surplus, which had increased between the last half of 1976-77 and the first half of 1977-78. For the year as a whole, the current account deficit of $2410 million represented 2.7 per cent of GDP. The deterioration in the trade balance between the two halves of 1977-78 reflected some once-for-all factors, as well as changing domestic and external economic conditions. On the export side, there appears to have been some concentration of sales, notably of sugar, in the first half, so that higher export volumes more than offset the sharp fall in export prices. By contrast, lower export volumes in the second half more than offset the appreciable recovery in export prices, so that the total value of exports declined. On the import side, a concentration of imports of ships and defence equipment contributed to the strong increase in the second half of the year. In addition, demand for imports increased in the second half as a result of increased domestic expenditure both generally and, in particular, on plant and equipment. The net invisibles deficit showed little change between the first and second halves of 1977-78. For the year as a whole the net invisibles deficit was about 9 per cent higher than in 1976-77, mainly as a result of increased net property income payments overseas (including undistributed income). {:#subdebate-63-1} #### Monetary Conditions For a number of years prior to 1976, domestic financial conditions were accommodating to rising inflation. That period also saw large short-term fluctuations in the monetary aggregates and unsettled financial markets. An important element in laying the foundations for sustainable recovery in economic activity has been a return to more stable financial conditions through the achievement of slower growth in the monetary aggregates. With steady progress on that front helping to wind down the inflation rate, there was in 1977-78 a general lowering in nominal interest rates, for the first time since 1972. This was achieved without the volume of money deviating from its projected growth path. The announcement in each of the last two Budget Speeches (and initially in March 1976) of a successively lower projected range for M3 growth in the financial year has contributed substantially to a return to stability and greater certainty in financial markets. The projections have effectively fulfilled their intention of indicating the Government's expectations for the appropriate monetary environment consistent with progress towards its economic objectives. Given the outcomes, it must be judged that these projections have made an important contribution to the success of anti-inflation policy. So far as 1977-78 was concerned, an M3 outcome of 8 per cent (i.e. at the bottom of the projected 8 to 10 per cent range) was consistent with the faster than expected reduction in inflation during the year. In recent years the size of the Commonwealth Budget deficit and, closely related to that, the size of the public sector borrowing requirement, have had a dominant influence on the evolution of domestic financial conditions (Chart 7) and the private sector balance of payments. That influence has derived from the impact both of liquidity and of expectations. The expected financial implications of the 1977-78 Budget were clearly stated when it was brought down. But largely because of the substantially different outcome for the Budget deficit, the elements of liquidity and money formation departed from what was then foreseen. Slowing in the growth rates of the monetary aggregates continued in 1977-78, but the mix of money formation items was less than wholly satisfactory: growth in liquidity on account of the Budget was higher than in any year except 1975-76; a large share of private saving was acquired by the public sector; growth in overall credit from domestic sources remained at about 11 per cent; and private sector foreign exchange transactions were in large deficit. Private external flows have clearly demonstrated some sensitivity to the pace of domestic credit expansion in recent years. This linkage is undoubtedly strengthened at certain times, and particularly when domestic inflation is seen to be out of line with the inflation rates of Australia's major trading partners. The effects can be exacerbated when, as in recent years, a deficit on private overseas transactions has coincided with the seasonally flush period in domestic financial markets associated with the Budget liquidity cycle. Following the Government's policy announcements of an expanded official overseas borrowing program to maintain the level of international reserves, the large private external deficit in the early months of 1977-78 gave way to approximate balance in the second half of the year. Over the full year, however, the deficit in private sector foreign exchange transactions considerably offset the Budget's contribution to private sector liquidity; with strong non-bank demand for government debt, sizeable releases of funds from the Statutory Reserve Deposit (SRD) accounts of the major trading banks were required to support their lending. As shown in Table 6, this marked a significant change in SRD policy compared with the previous two financial years, when increases in the SRD ratio were used to moderate the growth in private sector liquidity and secondary credit creation. Reductions during the September and June quarters of 1977-78 left the SRD ratio at an historically low level of 4.0 per cent at the end of the year. Despite slower growth in Budget outlays, and the re-phasing of company tax instalments, the within-year swings in the Budget's contribution to primary liquidity in the last three years have been markedly larger than in the preceding three years. This has presented problems for policy in endeavouring to ensure that the necessary consequential adjustments to monetary instruments do not run counter to longer-run policy requirements. Details of the financing of the 1977-78 deficit are contained in Table 7 and Budget Statement No. 5. The strong demand for Commonwealth bonds throughout most of 1977-78 owed much to heightened expectations of falling nominal interest rates and consequent prospective capital gains. These expectations reflected a perceived connection with progress in reducing both inflation and the Commonwealth Budget deficit. Expectations gathered strength as the rapid fall in inflation became evident, but were tested towards the end of the year as it became apparent that the deficit would be larger than expected. No doubt with a view to maximising prospective capital gains, demand was concentrated on longer-dated Commonwealth securities. On account of these factors, non-bank take-up of Commonwealth Government securities was again sizeable in 1977-78, maintaining the equivalent established in recent years of about one-half of the domestic Budget deficit. For much of 1977-78, more particularly in the first half of the year, bonds were used more extensively as a short-term financing instrument than Treasury Notes, which give limited potential for capital appreciation. The peak stock of Treasury Notes in non-official hands at the end of the liquidity run-up period was less than half that in 1977, when Treasury Notes were the main instrument employed in preparation for the seasonal liquidity contraction. Australian Savings Bonds continued their useful financing role. Net subscriptions of $401 million, or 32 per cent of total non-bank take-up, were largely concentrated in the seasonally flush period of the year. The large seasonal transfer of funds to the Commonwealth in the June quarter was effected smoothly with the aid of a 2.5 percentage point reduction in the SRD ratio, Reserve Bank purchases of relatively short-term Commonwealth Government securities, strengthening private capital inflow, and only modest Reserve Bank lending to the financial sector. In general, sensitive short-term interest rates increased less than in the preceding two June quarters. At this time last year, some scope was foreseen for easing restrictions on bank lending during the course of 1977-78 following a prolonged period of restraint on banks' balance sheets. In particular, encouragement was given to an increase in lending for housing, and the requirements of small businesses, rural producers and exporters were drawn to banks' attention. Guidelines for major trading bank lending were eased somewhat. The intake of funds by major trading banks had been moderating since about 1975 and, with strong growth in advances in 1977-78, the consequent pressure on free liquid assets became evident, leading the authorities to release funds from SRD accounts. In the event, with bank lending rates remaining attractive to borrowers, loans and advances outstanding of major trading banks increased by 12 per cent. As a consequence of some diminution in demand for finance from the finance companies, the growth of about 13 per cent in loans outstanding by these institutions was somewhat slower than in the previous two years. Housing loan outstandings of savings banks and permanent building societies grew by about 18 per cent, a faster pace than most other financial aggregates. Finance approvals by major mortgage lenders of $45 1 1 million were about 8 per cent higher in value, but 2 per cent lower in number, than in 1976-77. Borrowing and lending interest rates of the major mortgage financiers were generally reduced in the first half of 1978. Over the past several years wider measures of the volume of money have grown more rapidly than M3. A blend of policy instruments that bears most directly on the banking sector results in borrowers seeking funds at more expensive rates from other financial intermediaries. In 1977-78, however, there were signs of an easing in the degree of this disintermediation to more expensive sources of funds. The total public sector borrowing requirement remained high during 1975-76 and 1976-77, and expanded further in 1977-78 on account of increased realised deficits at the various levels of government. In this latest year a larger proportion of the Commonwealth deficit was, in the outcome, financed by increased official overseas borrowing undertaken to maintain international reserves. The monetary implications of this method of financing are broadly similar to those of central bank financing. The increase in the public sector borrowing requirement outside the Commonwealth Budget area appears to have been met in aggregate largely by miscellaneous financing transactions (such as running down holdings of LGS assets and bank balances), with only a modest increase in borrowing from the public through Loan Council programs. Despite other sizeable demands on them, the savings banks were again major subscribers to local and semi-government loans. Sectoral lending is put in historical context in Part II below. Preliminary estimates indicate that in 1977-78 net lending by the household sector may have been much the same as in the previous year - that is, less than the record 1974-75 level, but still fairly high. Tentative estimates suggest that the corporate sector's borrowing requirement fell in 1977-78 from the relatively high level of the previous year. This was a result of continued moderate growth in gross operating surplus, net effects of tax changes and a swing to stock decumulation from the high rate of accumulation of the previous year, which more than matched the call on funds to finance the solid growth in fixed capital expenditure. So far in the recovery, the demand of the corporate sector for bank loan funds has been limited, as has demand for new debt and equity capital. Reflecting the improving overall economic climate, some expected restoration of the corporate profit share, and brighter expectations for inflation and nominal yields on fixed interest securities, both the Sydney Stock Exchange All Ordinaries Index and share turnover rose strongly through 1977-78. In summary, in 1977-78 the borrowing requirements by the public and corporate sectors were met with increased overseas borrowing by the public sector, within slower growth in the monetary aggregates, and within a generally falling interest rate structure. Most of the fall in rates on Commonwealth Government securities was concentrated in the first half of the year, with smaller reductions in the second half. The yields on local and semi-government authority debt fell in step with Commonwealth Government security rates, and these securities were sufficiently attractive for loans to be fully subscribed. Recent movements in Commonwealth Government security rates are shown in historical perspective in Chart 8. The income velocity of circulation of money (M3) has tended to grow over the long term as a result of more efficient financial practices and, at least in certain periods, more rapid funds intake by financial institutions that are not covered by the M3 monetary aggregate. That velocity has been above its trend for some years is an indication of the downward pressure that monetary policy has been exerting on the rate of inflation. Over 1977-78, M3 velocity appears to have increased by one percentage point. Chart 8- Inflation and Nominal Interest Rates (per cent) 24 - *22-* 20 18- 16- 14- 12- 10- 8- 6- 4- 2- {:#subdebate-63-2} #### Implicit Deflator of **Major GNE** Components (a) Theoretical Yield on 10-year Commonwealth Bonds(6) lilli _l_ {: .page-start } page 81 {:#debate-64} ### MJSDMJSDMJSDMJSDMJSDMJSDMJSDMJSDMJSDMJ 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 Part II Economic Policy and Recovery The decline in inflation rates is the outstanding feature of economic developments over the last two or three years. This has been accompanied by growth in economic activity, with a noticeably stronger private sector. At the same time, the demand for labour has remained very subdued and unemployment has risen further. It is natural to ask whether, in all the circumstances, substantially different settings of macro-economic policy would have led to a more rapid restoration of high employment stability. {:#subdebate-64-0} #### Policy Stance and Objectives Economic policy in recent years has been based on the premise that sustained economic growth can be achieved only through a revival in the private sector; within the constraints operating upon the policy framework, policy instruments have therefore been set so as to achieve the *pre-conditions* for a sustained recovery in private sector activity. Central to this has been the endeavour to control and reduce inflation. Some indicators of the broad stance of policy are shown in Table 9. Some of the key features of the Commonwealth's economic policy actions are indicated by the figures in the table: restraint on Budget outlays; a bearing down upon the Budget deficit; notwithstanding that, major taxation concessions both to individuals and to the corporate sector; moderation in the growth of monetary aggregates; and partially successful advocacy of wage restraint before the Conciliation and Arbitration Commission. The higher Budget deficit outcome for 1977-78 represented a marked departure from the lower levels evident since the first half of 1976. The reasons for that outcome, and the deviation from the 1977-78 Budget estimate, are spelled out in Budget Statement No. 5; the prime explanation is to be found, not in any change in the setting of fiscal policy during the year, but in revenue short-falls of a non-discretionary' kind. Macro-economic Constraints The rate of economic expansion, both achievable and achieved, has been inhibited by several deep-seated influences. The degree of unemployment and under-utilisation of capacity that now exists is not primarily the product of deficient demand in the private sector of a kind that can be lastingly boosted to any desired degree by conventional fiscal/monetary stimulus. The following discussion, which examines the shifts in some key economic relationships that have occurred in the 1970s, attempts to elucidate the constraints at present operating on such an approach; it supplements and elaborates analysis which has appeared in this Statement in recent years. {:#subdebate-64-1} #### Inflation Paramount among these constraints is the effect of inflation on private sector decisions. Mention was made in Part I of the depressing effects of inflation on both private consumption and private investment. The easing of inflationary pressures has been a major factor in the recent gradual strengthening of these components of expenditure. However, the effects of high inflation on activity do not stop there: high domestic inflation, and in particular inflation in excess of that abroad, tends both to erode the price competitiveness of the economy's export and import-competing sectors and to reduce their profitability, leading in turn to a contraction in activity and employment in those sectors. A major element of the policy background at present is, therefore, the success of anti-inflation policies. Prices have decelerated to a rate of increase less than half the peak reached in 1974-75. At 7-8 per cent, however, inflation - while now much the same, on average, as in other OECD countries - is still clearly excessive even by past Australian standards (as to the relevance of which today, there is a further question). Furthermore, the community's 'inflation psychology' must be judged highly sensitive to shocks such as would be signalled, for example, by any basic shift in the thrust of policy. It may therefore be regarded as a *necessary* condition for the maintenance of the recovery process that prices continue to decelerate, and be expected to continue doing so. Inflation sensitivity' is not confined within national boundaries. Decisions affecting the balance of payments, particularly through private capital movements, can also be profoundly influenced by the perceptions of decision-makers, whether at home or abroad, of domestic performance and policies. Policies that are perceived as being attuned to the domestic economy's fundamental problems are bound to enhance the likelihood of favourable investment decisions whether by domestic investors or by foreigners. The experience of recent years clearly implies that, under current conditions, an attempt to force the pace of aggregate demand growth would tend to result more in a higher price level and adverse balance of payments responses than in enhanced domestic activity. By contrast, policies aimed at the continued unwinding of inflationary pressures have already begun to lead to positive effects on private sector spending from both domestic and foreign sources. The question is not so much whether these have served to compensate for the lower direct impact effects of those more restrained fiscal/monetary settings, although in fact they appear to have done so. The question has been, rather, whether any alternative course of policy has been open which could have avoided the twin dangers of renewed inflation and growing instability in the external account. The answer to that question has been in the negative. {:#subdebate-64-2} #### Income Shares In addition to inflation it has to be recognised that the sharp factor share imbalance which developed in 1973 and 1974 is still acting as a constraint on the growth of economic activity. While some reduction in the magnitude of this imbalance has occurred since that time, that has not been large - and certainly not large enough. That is to say, and as is elaborated below, at the macro-economic level there remains a *relative* as well as an *absolute* price distortion. This subject, which has attracted growing attention in recent years, is conventionally approached in terms of the shares in non-farm or total GDP of wages, salaries and supplements on the one hand, and gross operating surplus of corporate trading enterprises on the other. The discussion in Part I, which employed these measures (Chart 6), showed clearly enough that despite some corrective movement since 1975, gross income shares remain out of line with their long-term averages. Although sufficient for purposes of general exposition, this conventional approach masks some important detail. First, it ignores incomes other than wages and company profits. Chart 9 seeks to rectify this by presenting information for the whole economy since 1966-67; it is a representation of the breakdown of *national disposable income* into its sectoral constituents on a factor (earned) income basis and is derived from the Australian National Accounts (see footnotes to charts for elaboration). National disposable income is defined as domestic factor incomes *plus* net indirect taxes *less* net income paid overseas (national income) *less* net transfers to overseas. Movements in the profit and wage shares over the period have broadly mirrored each other, but they have not done so exactly. Over the two years to 1974-75 the wage share of national disposable income rose by 4.2 percentage points and the corporate trading enterprise share fell by 2.5 percentage points. Between 1974-75 and 1977-78 the wage share fell by 2.7 percentage points while the corporate trading enterprise share is presently estimated to have shown no change. The main movements in other sectoral income shares making up this latter difference were increases of 1.4 percentage points in dwellings, 0.7 percentage points in government enterprises and 0.7 percentage points in net indirect taxes; the share of unincorporated enterprises fell marginally. Income share analysis should not stop at the breakdown of national income into *factor* incomes; there is a complex *transfer* process of current account payments between sectors. Of particular interest in this respect, given the major changes in personal and company tax and in cash benefit arrangements in recent years, is the set of transfers between *general* government, which does not generate any factor income, and the income-producing sectors. Chart 10 provides the relevant presentation: it shows the sector shares of national disposable income after current transfers involving government. (Public enterprise income is combined with general government to form the public authorities sector in the chart.) The decline in the corporate trading enterprise share in 1973-74 and 1974-75 is similar whether measured before or after transfers with government. Since then the post-transfer basis reveals some recovery, in contrast to no change on the pre-transfer basis. This reflects the influence of tax changes - principally the double depreciation provisions which operated until June 1976, the investment allowance and the trading stock valuation adjustment. On both pre-transfer and post-transfer bases, however, the corporate share remains well below long-term averages (see Charts 9 and 10). After transfers, the income share of households (excluding unincorporated enterprises) reached a peak in 1975-76 a little above the share in 1974-75, a year in which there was a very sharp jump. In the two succeeding years it has changed very little and still remains well above its longer-term average (Chart 10). Movements in the factor income share of unincorporated enterprises (which, after tax payable, are naturally not as great) are strongly influenced by fluctuations in farm income, which accounts for one-third of total unincorporated enterprise income. The relative decline in the size of the farm sector is part of the explanation for the downward trend in the total unincorporated share over the period, but the non-farm component seems also to have trended down. After taxes, there has been a slight rise in the share in the most recent years (Chart 10). {: type="a" start="a"} 0. Net operating surplus for enterprise sectors and for dwellings owned by persons and other components of national disposable income expressed as a proportion thereof. 1. Net operating surplus of public trading enter prises and that part of public financial enterprise income paid to general government. 2. 'Other' includes net operating surplus of financial enterprises less the imputed bank service charge, net income paid overseas and net transfers overseas. The result is negative and the share of 'Other' is indicated by the area below the zero line. The share of net indirect taxes is the sum of the areas above and below the zero line. 3. Factor incomes as in Chart 9 less direct taxation plus current transfers to persons. Taxation is measured on a paid basis for households and unincorporated enterprises and on a payable basis for corporate trading and financial enterprises. Tax receipts in the public authorities sector are treated consistently. {: type="1" start="6"} 0. Includes dwellings and wages, salaries and supplements. The approximation is made that net PAYE taxes and 'other direct taxes, fees, fines, etc' fall entirely on this sector and that it receives all government current transfers (cash benefits). 4. The approximation is made that non-PAYE personal income tax is paid entirely by this sector. 5. Public enterprise income plus indirect taxes plus direct taxation less current transfers. 6. *See* footnote (c) to Chart 9. 'Other' is now net of income tax paid by financial enterprises. The picture conveyed by the household, unincorporated and corporate trading sectors combined is rather more stable than for the individual constituents. This is so on both the factor income and post-transfer bases. The corollary of this is that the public sector share of national disposable *income* has remained fairly stable (see Charts 9 and 10). Since the share of national *expenditure* accounted for by public authorities increased rapidly in 1974-75 and has stayed high since (see Chart 2), the counterpart of the stable income share of that sector has been much higher *net borrowing* (deficit) by it. {:#subdebate-64-3} #### Sectoral Borrowing and Lending The counterpart movements in net borrowing or lending by the other sectors are of interest too, and relevant information for the whole economy is presented in Charts 11 and 12. Net lending is defined as in the Australian National Accounts and, starting with the post-transfer income concept of Chart 10, its derivation is as follows: Income post-transfers with government *Plus* Net current transfers with other sectors *Less* Consumption (non-enterprise sectors) {:#subdebate-64-4} #### Equals Saving *Plus* Depreciation allowances Capital transfers *Equals* Finance of gross accumulation. Finance of gross accumulation' represents the amount each sector has accumulated (i.e. not spent on current purchases and hence 'saved' out of current income) and is available for either capital purchases or lending to other sectors. Then: Finance of gross accumulation *Less* Gross fixed capital expenditure Purchase of existing assets, net Increase in stocks (after stock valuation adjustment) *Equals* Net lending (including statistical discrepancy). Net lending' thus represents that portion of 'finance of gross accumulation' not used for acquiring tangible assets; if it is positive it reflects lending to other sectors, and if negative it implies borrowing from other sectors to finance physical capital acquisition (including increased stocks). Chart 11 shows the ratio of finance of gross accumulation by each sector to the national total (which includes net borrowing from *overseas* as well as depreciation and domestic saving) ; this aggregate is referred to below as *National Capital Funds.* Since the statistical discrepancy is recorded on the 'use of funds' side of the national capital account, the finance and lending figures for each sector include statistical discrepancies. Chart 12 indicates for each sector two ratios: the first is of net lending (or borrowing) to that sector's total finance of gross accumulation - i.e., the proportion of its aggregate 'saving' which it lends to (or borrows from) other sectors; and the second is of net lending (or borrowing) to that sector's capital acquisition - i.e., the proportion of its physical capital acquisition which is matched by lending to (or borrowing from) other sectors. {: .page-start } page 1 {:#debate-65} ### NATIONAL CAPITAL ACCOUNT Chart 11 - Finance of Gross Accumulation by Sector as a Proportion of National Capital Funds *(a)(b)* {:#subdebate-65-0} #### Households {:#subdebate-65-1} #### Corporate Trading Enterprises {:#subdebate-65-2} #### Financial Enterprises Public Authorities ogo Net Borrowing from Overseas(&) 1966-67 1968-69 1970-71 1972-73 1974-75 1976-77 {: type="a" start="a"} 0. Finance of gross accumulation (FCA) represents total capital funds (savings or retained income, depreciation and government grants for private capital purposes) available to each sector (includes a statistical discrepancy). National Capital Funds is the sum of sectoral FGAs plus net borrowing from overseas. {: type="1" start="6"} 0. Net borrowing from overseas was negative in 1972-73. *Source:* Australian National Accounts and Treasury estimates. {:#subdebate-65-3} #### Chart 12 - Net Lending and Borrowing {:#subdebate-65-4} #### Households {:#subdebate-65-5} #### Corporate Trading Enterprises {:#subdebate-65-6} #### Financial Enterprises {:#subdebate-65-7} #### Public Authorities I i 1966-67 1968-69 1970-71 1972-73 1974-75 1976-77 - the ratio of net lending (borrowing if negative) to finance of gross accumulation for each sector. ---- the ratio of net lending (borrowing if negative) to capital acquisition (gross fixed capital expenditure, purchase of existing assets (net) and increase in stocks) for each sector. Several features of Chart 11 are worth comment. The first is the marked increase in National Capital Funds accruing in the household sector. This proportion rose through most of the decade, reaching a peak in 1974-75; the household saving ratio has shown broadly similar movements. Secondly, with the exception of financial enterprises, all other sectors have displayed *trend* movements opposite to the household sector. (As is readily apparent, there have been shorter-term fluctuations. ) The proportion of National Capital Funds coming from overseas has been on average much lower in recent years - although, after the sharp declines of 1971- 72 and 1972-73 (there being actual net lending abroad in the latter year), there has been a subsequent upward tendency. The proportion of National Capital Funds accruing in the corporate trading enterprise sector, after a sharp increase in 1972-73 associated, like the household sector movement, with the external borrowing turnaround, recorded an equally sharp decline in 1973-74 and a further decline in 1974-75. At that point it accounted for only 16 per cent of National Capital Funds, compared with 26i per cent on average from 1966-67 to 1972-73. Since 1974-75, the capital funds position of the corporate sector has improved, mainly finding its counterpart in the household and government sectors. The corporate sector's net borrowing is estimated to be equivalent to about 10 per cent of internal capital funds in 1977-78, compared with an average of 28 per cent for 1966-67 to 1972- 73 (Chart 12), and the peak figure of 56 per cent in 1974-75. During the period 1966-67 to 1972-73 public authorities contributed, on average, 27 per cent of National Capital Funds. In the subsequent five years the proportion has been 19 per cent. Public authorities have not, however, accounted for a reduced proportion of capital spending and, in consequence, there has been a marked shift in their net borrowing (Chart 12). Whereas from 1966-67 to 1973- 74 public authorities borrowed, on average, the equivalent of 20 per cent of their internal finance of gross accumulation (14 per cent of their capital acquisition), the ratio jumped to 85 per cent in 1974-75 (46 per cent of capital acquisition) and has averaged 125 per cent in the period since then. That is to say, *more than half of the public sector's capital expenditure has been financed by borrowing in the years since 1974-75, compared with one-seventh for the period 1966-67 to 1973-74.* This analysis of the income and borrowing positions of the major sectors can now be related more explicitly to the discussion of constraints with which this section is concerned. The general picture is one in which some very sharp movements were superimposed on slowly developing trends in income and capital shares, first in the capital accounts in 1972-73, and then in both the income and capital accounts in 1973-74 and, in particular, 1974-75. These latter shifts have for the most part been only slowly and partly reversed. The household sector continues to command an elevated proportion of national income after current transfers with government; it is still spending a reduced fraction of its income and lending a greater fraction - although both proportions have moderated from their extremes. The corporate income position has been bolstered to an extent by government transfers; but government (at all levels) is not obtaining, by taxation, current income to finance these transfers and its own enlarged spending, but is financing them instead by vastly expanded borrowing. The corporate sector's income position required, for a time, greatly elevated borrowing to support capital expenditure growth; more recently that shift has moderated somewhat, in large part due to those transfers from government. These developments are consistent with many of the characteristics of traditional stabilisation policy - an expanded private *ex ante* propensity to save (in the household sector) being matched by increased public borrowing in order to support the aggregate level of spending in the economy (by government directly and via transfer to the corporate sector). There are, however, aspects with connotations of an opposite kind that deserve at least equal attention. Of particular note is the lift in the household share of capital financing (saving) in 1974-75 *at the same time as,* rather than leading to the response of, a sharp increase in the government's own borrowing (deficit budgeting). The connection is to be found of course in the effect on household behaviour of inflation, inflationary expectations and uncertainty flowing from the policy environment of the time. As the inflation rate has been brought down and a measure of policy stability attained, reflecting both the stabilisation in public net borrowing and the associated conduct of monetary policy, the personal saving ratio has been coming down and the share of National Capital Funds from households falling towards its trend level. Total household spending has in the meantime grown moderately; so has corporate final demand (investment), particularly recently, being financed however with proportionately less borrowing by the corporate sector. That is one illustration of the influence of the structure and share of government expenditure, taxation and borrowing on private sector propensities to spend, save, invest and engage in productive activities. Such influences cannot be ignored, as they typically are by advocates of 'traditional' stabilisation policy, in addressing current economic problems. *Relative Prices and the Labour Market* The sectoral movements just described are part and parcel of what was referred to above as the 'relative price' distortion. Against the background of this analysis of sector shares, specific attention is now directed to the labour market consequences. It was shown in Part I that moderate product growth has been met in large part by increased product per unit of employment; employment growth, particularly for wage and salary earners, has remained sluggish and well below that required to check unemployment. These developments seem to owe much to the continuing process of adjustment of the market for labour to the rise in the real cost of labour over the early 1970s and the particularly rapid rise in 1974 (the unit factor cost counterpart of the aggregate share movements in Charts 9 and 10). Firms have naturally sought to offset this rise in costs by economising on labour input and substituting capital for labour. There has, moreover, been a marked shift within the workforce away from wage and salary earner employment to self-employment and contract labour (a good deal of which is also part-time). This shift reflects among other things the cost savings that can thereby be made by avoiding holiday pay, superannuation contributions, long service leave obligations and other loadings on basic pay rates which, between them, have been steadily pricing labour - and particularly inexperienced or unskilled labour - out of jobs. The influence of the whole framework of 'penalty rates' is also very evident in this area. As noted, the relative unit prices of capital and labour are mirrored in their factor income shares; that the corporate sector's share has been supported through the tax system in the manner discussed above has not negated the consequences of these market forces for labour demand. It is true that, by lifting the post-tax profitability of firms, assistance through the taxation system is providing an incentive to invest and thus to growth in activity and employment in the sector producing investment goods. However, that very incentive to invest is, at any given level of output, favouring capital inputs at the expense of labour inputs and thus reinforcing the consequences for the labour market of the factor price distortion. The possibility for. longer-term reconciliation of this seeming paradox lies in the higher rate of investment yielding greater than normal productivity gains, with these gains (and perhaps the 'normal' ones as well) accruing largely to the corporate sector for the time being. Given time, this would have the effect of correcting the factor share imbalance. There is a strong indication (see below) that a development of this kind has been in train. Indeed, unless there is faster progress through the arbitral tribunals in winding back the excessive level of real wages, the more prolonged route of gradually improving productivity will provide the only effective remedy for the still prevailing real wage/productivity imbalance. Unfortunately this remedy is at the expense of stronger growth in employment. The market's adjustment to correct for the persisting real wage overhang is, one way or another, inevitable. The only way in which the burden for that adjustment can be shifted from the unemployed is for some of it to be borne by those, more fortunate, who are employed - that is, for there to be a reduction in real wages. This is the issue to which, so far, neither the advocates of 'full indexation' nor the Conciliation and Arbitration Commission have been prepared to face up. Statement No. 2 last year presented some measures of the real labour cost/ productivity imbalance - an imbalance which, of course, is also reflected in movements in factor income shares, although as time passes and the economy adjusts, factor shares become a less reliable guide to movements in the real labour cost imbalance. Last year's presentation is repeated in Chart 13 below; the unavailability of requisite employment data prevents updating beyond the December quarter of 1977. The chart shows that the imbalance, though lessening, was still large at the end of 1977; movements in relevant indicators since then suggest no major change in the imbalance. There has been some narrowing in recent years as a result of productivity growth, which is more marked for the non-farm 'market' sector than for the whole non-farm sector (see footnote to Chart 13). Even so, real labour costs remain a powerful incentive to labour shedding and capital-labour substitution. This constraint would seem to provide part of the explanation for the sluggish employment response of recent years, and hence, against the background of a growing work force, for the consequent growth of unemployment. Several other developments also not unrelated to the real labour cost situation - the relative decline in manufacturing, the rapid disappearance of excess demand in 1974 and the high labour force participation rate - also contributed. All in all, it has been noted that, whereas the fall in production in the most recent recession has not been as severe as in the 1951-52 and 1960-61 downturns, the deterioration in the labour market has been greater.'1' Chart 13 - Real Labour Costs and Productivity(a' (Indexes; Base 1966-67 to 1972-73=100) 160-i Female Award Wages(6) ~_ _ Real Labour COStS(C' _ Male Award Wages(rf) Productivity(e) {:#subdebate-65-8} #### Real Unit V Labour Costs (/") 1973 1974 1975 1976 1977 {: type="a" start="a"} 0. Data limitations prevent a full analysis of real labour costs and productivity estimated for the non-farm market sector of the economy, although the information which is available suggests that the broad picture is similar to that illustrated above for the non-farm sector. 1. Average weighted minimum weekly award wages for adult females, deflated by the implicit price deflator of gross non-farm product; June awards estimated. (< ) Non-farm wages, salaries and supplements plus payroll tax per non-farm wage and salary earner manhour, deflated by the implicit price deflator of gross non-farm product; seasonally adjusted. (</) Average weighted minimum weekly award wages for adult males, deflated by the implicit price deflator of gross non-farm product; June awards estimated. («) Gross non-farm product at constant prices per non-farm man-hour; seasonally adjusted. (/) The ratio of (cj to *(e* The inflation rate and the associated gross factor income share distortions and real wage/productivity imbalance have thus been important constraints on economic performance; to reduce these constraints has been a central objective of policy in recent years. As Chart 13 indicates, progress to date has stemmed mainly from productivity growth. As noted above, this is a possible 'capital accumulation' route to rectification of the imbalances. No doubt, *if* the economy could jump to the end of that process there might well be no remaining factor price imbalance even though the real wage might *not* have fallen in the interim. Unfortunately the economy cannot jump in that way: both commonsense and theory would suggest that the process is a slow one, and that there is little that can be done directly, outside the wage determination processes, to speed it up. The events of the past few years bear that out. As has been the case since 1974, what *could* accelerate that otherwise drawnout process is a more rapid winding down of money wage' inflation. In circumstances such as the present, such deceleration might be matched by a more or less equal slowing in price increases so that, on balance, the real wage level might be little affected; evidence of the past few years, particularly in the wake of the 1976 devaluation, does indeed suggest that outcome. However, the lower price inflation rate would, of itself, be conducive to stronger private domestic and net overseas demand through the mechanisms described earlier and would thereby produce more rapid growth in activity and strengthen the demand for labour. This point is not well understood, discussion having usually focused erroneously on the proposition that an award wage increase less than the *inherited* rate of price increase would necessarily imply a reduction in the average real wage. Whether or not money wage restraint gave rise to real wage reductions - and it might well not - it must be judged the most efficacious way in which sustainable recovery could be more speedily achieved. It follows that the stance of fiscal and monetary policy must continue to be supportive of wage and price restraint. Of course, direct government policy influence does not run beyond the general setting of those policies; the desired eventuality of wage increases running below the *inherited* rate of price change for a time lies very much in the hands of the arbitral tribunals. Such a *desideratum* has underpinned the Government's advocacy, for the past two and a half years, of a much smaller degree of wage indexation than that which has, to date, prevailed. As noted in the Budget Speech, it has also led the Government to consider whether it might not be able to exert greater influence in that direction. Australia in the World Economic Situation Chart 14 presents indicators of growth and inflation for the OECD area, and provides comparisons with Australia. In the years of world economic downturn - 1974 and 1975 - product performance weakened less in Australia than in the OECD area generally. Thus, while the OECD area as a whole has recorded a stronger rate of expansion during the subsequent recovery, Australia's performance over a slightly longer span of the cycle compares not unfavourably. Moreover, the growth rate for the OECD area as a whole in recent years is heavily influenced by the strong recovery of the US economy, and to a lesser extent Germany and Japan, since 1975. The more typical experience abroad has been that of a modest and uneven pick-up since 1975; Australia's growth rate has been very similar to that of the OECD area excluding the three major industrial countries. The continuing upward drift of unemployment has also been a common experience; again, the strengthening of the US labour market is atypical. After a later start towards bringing inflation under control, Australia has now succeeded in lowering it approximately to the OECD average. This international perspective adds an important dimension to a review of the Australian economy's current position. With a large degree of self-sufficiency in oil, and with longer-term contracts for a significant proportion of exports, Australia was relatively insulated from the direct effects of the oil price rises and for a time from the 1974 recession in the OECD area. However, the increasing malaise in the world steel industry since 1975, together with the continuing shake-out of international commodity markets generally, has increasingly acted as a constraint on Australia's own recovery. Thus the continuing decline in Australia's terms of trade (Chart 15a), which owes a good deal to external influences in more recent years, has outweighed the strengthening, in volume terms, of the balance of trade in goods and services (Chart 15b). The result has been a widening of the current account deficit and a loss of real income which may well have acted to depress product growth. {: type="a" start="a"} 0. As approximated by ratio of implicit price deflator of exports of goods and services to implicit price deflator of imports of goods and services. 1. Defined as exports of goods and services minus imports of goods and services (national accounts basis). There has also been a reduced need for foreign investment in industries which, for the greater part, meet foreign demand. This has been particularly important, until recently, in the non-energy areas of the mining sector. External prospects are discussed below. It suffices here to observe that, with continued progress in reducing domestic inflation, and given continued economic growth overseas, even at relatively modest rates, the external situation may become rather less of a constraint as the current year progresses. So much for Australia's own position in the world economic situation. However, the international perspective is also important in drawing out the similarities in the conjunctural positions confronting policy-makers in many countries. That is, notwithstanding some progress in terms of policy adjustments and improvements in key indicators, recovery generally remains sluggish, with labour markets continuing to weaken, while inflation remains uncomfortably and unacceptably high. As far as generalisations are possible within such a complexity of particulars, other national administrations are, like Australia's, espousing the reduction of inflation as a high priority in promoting sustainable economic growth. While in international fora some encouragement has been given to reflationary action by some countries, in accordance with the room for manoeuvre allowed by the constraints facing them - their degree of success in reducing inflation and their balance of payments positions - there remains a keen appreciation of the limited scope for such action and the need to avoid any relapse into higher inflation rates. This flavour was embodied in the communique issued on 15 June 1978 following the most recent OECD Ministerial Council meeting: The scale and timing of expansionary action by this group [of stronger economies] should be determined in the light of their internal and external circumstances; in this respect a particular responsibility lies with countries in a strong balance of payments position. Such action should not undermine anti-inflationary policies. All other Member countries who are not currently in a position to take explicit action to expand domestic demand beyond what is now in prospect should concentrate primarily on reducing inflation and improving their balance of payments position.' Part III The Economic Outlook, 1978-79 {:#subdebate-65-9} #### Background Part II discusses the background of economic conditions and economic policy considerations which underlie the Government's approach in shaping this Budget and its immediate predecessors. The Budget is expected not only to contribute directly to the principal objectives of policy, but also to facilitate a further easing of the settings of monetary policy should circumstances unfold as foreseen. The growth of Budget outlays in 1978-79 has been reduced to 7.7 per cent in nominal terms, compared with 11.1 per cent in 1977-78; receipts are budgeted to grow by 11.0 per cent, compared with 9.8 per cent in 1977-78. This yields a deficit of $2813 million, $521 million less than the 1977-78 outcome; the reduction in the domestic deficit is estimated at $782 million. Within the composition of receipts and outlays there are several elements to be noted as background to a discussion of the outlook for the economy. In the absence of new taxation measures it is estimated that receipts would have risen by only 4± per cent. The additional revenue flowing from the new measures is in both the direct and indirect tax areas. There will thus be direct effects on disposable income and on general and relative prices from the Budget measures. These are discussed further below. Real aggregate consumption spending seems unlikely to be greatly affected by the price changes although there could be noticeable short-term responses in the sales volumes of the commodities most affected (petroleum products, alcoholic beverages and tobacco products and, in a positive direction, motor vehicles). On the outlays side, a disaggregation of outlays estimates by economic type is presented in Statement No. 1. In general this indicates firm growth in nondefence current expenditure and transfers to the private sector, a smaller rise than last year in payments to States and local government, and a decline in Budget capital expenditure (see footnote (a) to table on page 4 qf Statement No. 1 concerning the special influences on these statistics). The effects of these developments on final expenditure and on the incomes and expenditures of other sectors are taken into account in what follows. {:#subdebate-65-10} #### Forecasting Assumptions The following assumptions, in addition to those embodied in the Budget estimates, underlie the overall forecast: © The broad aim of the Government's monetary policy remains the provision of adequate funds for sustainable recovery in private sector activity and employment, while continuing to bear down on inflation and inflationary expectations. Given the sizeable reduction now in prospect for the budgetary contribution to primary liquidity in 1978-79, growth in M3 in the range 6 to 8 per cent, which is seen as consistent with that broad objective, would be compatible with an assumption of further gradual easing in monetary ins', ruments during the course of the year. o A return to normal seasonal conditions in 1978-79 should see a fairly strong recovery in farm product after the 5 per cent fall in 1977-78. o The forecasts assume continued moderate growth in economic activity and in most of Australia's export markets, and an improvement in Australia's relative inflation performance internationally. A continued program of Government borrowing overseas is assumed broadly to maintain reserves. e The forecasts adopt a strict 'existing arrangements' assumption concerning centralised wage determination. Following the current hearing into wage fixing principles it may well be that, as the Commonwealth has submitted, the system will involve hearings less frequently than at present. In that event projections for 1978-79 would be modified. Because of timing considerations the extent of the modification to the year-on-year increase in wages in 1978-79 would not be large; it would of course be greater in respect of subsequent periods. The Budget Speech discusses further the relationship between the fiscal and monetary environment and the outcome of the wage determination process. Because of the stage reached in the institutional developments in this area, wage inflation forecasts below are obviously subject to a more than usual degree of uncertainty. The discussion in Part II has stressed the fundamental forces which have been and are still acting to constrain the process of recovery. The Budget, like its immediate predecessors, takes its place in a continuing medium-term policy strategy which is gradually succeeding in loosening those constraints. Given an absence of major unforeseen shocks, some confidence should therefore attach to the *underlying* trends already observable and which will further unfold in the period ahead, although differences of detail will doubtless emerge. {:#subdebate-65-11} #### Expenditures *Private consumption expenditure* is expected to grow fairly strongly in 1978-79. Real household disposable income has been expanding under the influence of changes in the personal tax schedule and the firm recovery in farm incomes. Incomes have a good deal of scope to meet the increase in the standard rate of income tax announced in the Budget and that temporary impost is not seen as affecting real consumption growth more than marginally. The reduction in sales tax on motor vehicles should provide a substantial boost to that component of consumption expenditure; the other indirect tax changes will of course lead to some reductions in the level of consumption of those items. Factors which have lowered the saving ratio in recent years are still at work and the ratio is expected to fall further in 1978-79. *Private investment in dwellings,* after recording a sizeable fall in 1977-78, is likely to pick ut somewhat ever the course of 1978-79. This scenario draws on recent estimates of loan approvals and of dwelling commencements although the strength of the recorded rise in dwelling investment in the June quarter has been discounted in view of the volatility of the commencements data over the past half year. The new degree of freedom for savings bank lending for housing referred to in the Budget Speech will be working to strengthen lending for housing. The growth in dwelling construction for the year is expected to be somewhat lower than the growth in aggregate mortgage lending, as excess stocks of unsold new dwellings continue to be cleared. Borrowers will probably maintain their enhanced preference for established dwellings; reduced rates of household formation, relative prices and locational preferences continue to condition the demand for new housing. After recording real growth of 4.4 per cent in 1977-78, *private business investment* is expected to continue growing strongly in the present financial year. *Private non-residential building and construction investment* increased by 8.3 per cent in 1977-78 in real terms, albeit from a level of activity in 1976-77 that was the lowest for ten years. Activity slowed in the second half of 1977-78 but, on the evidence of approvals and commencements data, further growth in building and construction activity is in prospect for the coming year. Investment in the heavy *construction* area, in particular, should receive a continuing stimulus from new and expanding mining projects. Investment in *plant and equipment* in 1978-79 is expected to rise by more than the 3.1 per cent preliminary estimate for the year just ended. The persistence of the factor price imbalance referred to earlier offers continuing incentive for investment in labour-saving equipment. Corporate cash flows, and financial conditions generally, should provide no impediments. Although the tax allowance for eligible investment was lowered from 40 per cent to 20 per cent from 1 July 1978, the higher allowance still applies to plant ordered prior to that date, provided it is installed by the end of the current financial year. Investment in 1978-79 will consequently continue to reflect the higher rate of allowance. Expanding activity in the mining sector is also likely to contribute to growth in this category of investment. The recorded growth of 5.5 per cent in *government current expenditures* in 1977-78 reflected growth at all levels of government. The Commonwealth Government component was bolstered statistically by the delivery of defence equipment, which will continue to lift national accounts estimates of Commonwealth Government expenditures in 1978-79. Growth in current expenditures for the public sector as a whole is expected to be less in 1978-79 than in 1977-78. *Government capital expenditure,* which rose by 0.5 per cent in 1977-78, again seems unlikely to show much if any growth in 1978-79. The foregoing assessment i; made against the background that, in practice, the distribution by State and local governments of total funds available to them between current and capital expenditures is, to a considerable extent, at their discretion. There is, therefore, some uncertainty as to the mie of public sector expenditures. The *total,* however, is not expected to grow by as much as the 3.8 per cent recorded in 1977-78. The ratio of total government expenditure on goods and services to gross non-farm product (see Chart 2), which peaked at 26.7 per cent in 1975-76, and which is estimated to have averaged 26.5 per cent in 1977-78, is expected to fall to around 26 per cent in the current financial year. A modest underlying decumulation of *private non-farm stocks,* which was masked in the March quarter 1978 by a substantial build-up of sugar stocks (refined sugar is included in non-farm stocks), is thought to have run its course by now and accumulation of stocks throughout 1978-79 is expected. *Farm and miscellaneous stocks,* especially of wheat, were run down substantially in 1977-78, primarily because of the drought and the resulting low levels of production. Stocks of some farm products, especially wheat, seem likely to build up in 1978-79 (largely in the second half) before being reflected in exports. {:#subdebate-65-12} #### Balance of Payments The present financial year is unlikely to see major changes in Australia's balance of payments position. The conjunction of a number of factors is likely to maintain a deficit in private sector external transactions and there will thus be a need for a continuation of the Government's overseas borrowing program, which has indeed already got under way in 1978-79. As the year proceeds, however, further improvement in Australia's relative inflation performance, and continued moderate recovery in overseas economic activity, should bring about an improved balance in private sector external transactions. At current prices, *exports of goods and services* may rise more rapidly in 1978-79 than in 1977-78, although overall volumes seem likely to remain subdued. Assuming continued moderate recovery in Australia's main export markets, non-rural export prices and volumes are expected to show modest growth in 1978-79. Rural export receipts should increase rather more strongly, but wholly on account of substantial rises in average export prices (particularly for meat and wheat); present constraints on the supply of several important commodities are likely to produce a decline in rural export volumes in 1978-79. *Import values* are forecast to rise more strongly than exports for 1978-79 as a whole. This outcome partly reflects the fact that imports at the beginning of the year were well above their average quarterly 1977-78 level. In addition, import volumes are expected to rise during 1978-79 in line with the continued growth in final spending and a turnaround in the stock cycle from decumulation to accumulation. The current account deficit in 1978-79 is expected to continue running at about the rate recorded in the second half of 1977-78. This would result in a higher deficit for 1978-79 than in 1977-78. On *capital account,* it is expected that *net apparent private capital inflow* will strengthen gradually over the course of the year. This assessment is based on the expected growth in investment activity during the year, and the favourable effects of appropriately firm domestic economic policies, including the perceived anti-inflation benefits of those policies, in rekindling overseas interest in Australia as a country with favourable prospects for investment in the years ahead. {:#subdebate-65-13} #### Monetary Conditions Although, as noted above, gradually strengthening private capital inflow is expected, private sector external transactions in 1978-79 as a whole are again likely to remove liquidity from the domestic economy, but to a lesser extent than in 1977-78. As the projected Budget domestic deficit means a lower direct contribution from that other major source of primary liquidity, the increase in private sector LGS and SRD assets in 1978-79, after allowance for other formation factors, could be comparable to the 1977-78 outcome. The approved Loan Council programs for Commonwealth and S'a'.e authorities, together with estimated borrowings by 'smaller' authorities which are not subject to these programs, are about $250 million greater in 1978-79 than in 1977-78 (see Budget Paper No. 7). With the very sizeable reduction in the Commonwealth's borrowing requirement, the aggregate public sector demand for borrowed funds will be smaller than in 1977-78. Corporate profits should show more healthy growth in 1978-79 than in 1977-78. The investment and stock valuation tax allowances will continue to enhance the liquidity position of the sector; thus, even with the projected growth in private investment expenditures and the reversion to stock accumulation, the sector as a whole should have a net borrowing requirement in 1978-79 little different from that in 1977-78. The balance of factors in the demand for and supply of funds can thus be expected to be conducive to interest rates declining gradually as the underlying inflation rate continues to fall. The outcome of policy as a whole and conditions generally should continue to foster an environment in which sales of Commonwealth Government securities to the private non-bank sector remain strong. Growth in the broadly defined volume of money (M3) is projected to be in the range of 6 to 8 per cent during 1978-79; after allowance for the private sector external deficit, domestic credit expansion would be somewhat higher than that. Growth of this order in the money stock, given other elements of the outlook, would imply some continuation of the rising trend in the velocity of circulation observed over the past few years, which has remained compatible with a gradual decline in interest rates. {:#subdebate-65-14} #### Product In contrast to the situation in 1977-78, the outlook described above for the balance of trade on goods and services implies a negative net contribution to product growth in 1978-79 from this source. However, this change should be more than compensated for by the expected move to stock accumulation and the somewhat faster expansion of domestic final demand (which increased by 2.5 per cent in 1977-78) in 1978-79. This combination of factors implies growth in *gross non-farm product* of around 4 per cent for 1978-79 as a whole; growth over the course of the year is likely to be similar. Given the expectation of much stronger growth in real *farm product, gross domestic product* would increase by something over 4 per cent in 1978-79 as a whole. These projections allow for a neutral contribution from the statistical discrepancy to year-on-year growth in product. The volatility and size of that component of the national accounts in recent times makes it difficult to attach any degree of precision to the estimates, and particularly to their pattern over the course of the year. {:#subdebate-65-15} #### Labour Marker With no immediate end in sight to the continuing cost disincentive to the demand for labour, *employment* gains in 1978-79 are likely to be moderate. On the evidence of the past few years, growth in *product per unit of non-farm employment* over the course of 1978-79 could be expected to be at least 2 per cent. As a result of a steady shift towards self-employment and contract labour - much of it part-time - total wage and salary earner employment appears to have shown little growth over the past three years. After allowance for some slowing in this compositional drift in 1978-79, wage and salary earner employment might increase slightly over the course of the year. The projected growth in total non-farm employment is lower than the underlying trend rate of growth in the supply of labour. With the present rates of natural population growth and the likely net intake of migrants, the *labour force* could be expected to grow by at least *H* per cent and possibly as much as 2 per cent over the course of 1978-79. The precise outcome depends on the labour force *participation rate.* As discussed in Part I, while there is some doubt as to the reliability of recent recorded movements in the labour force data, there has been a slight underlying fall in the participation rate over recent times. If that trend were to continue, growth in the labour force would be toward the lower end of the range mentioned above, in which case recorded *unemployment* would show little change in underlying terms over the course of the year. An unchanged participation rate or re-emergence of an upward trend in the rate would be accompanied by a further rise in unemployment. A situation of persistent under-utilisation of available labour resources is, on mounting evidence, a seemingly inescapable consequence if the cost of labour, and particularly some categories thereof, continues to be excessive (see Part II). Only with a break-through by way of a reduction of the rate of money wage increases could a significantly brighter outlook for unemployment in 1978-79 be expected. {:#subdebate-65-16} #### Prices and Incomes As stated above, the wage rate forecasts take as a working assumption continuation of the present wage determination system; they assume continuation of quarterly hearings and adjustment of awards for approximately 75 per cent, on average, of the undiscounted rises in the CPI, an assumption which represents the average of indexation decisions in 1977-78. *Award wages* are projected to rise by about 6 per cent in 1978-79. Some allowance has been made for some increase in overtime hours and some small 'slippage' outside the wage determination guidelines. As noted in the discussion of the revenue estimates in Statement No. 4, the estimate that has been adopted for average weekly earnings is an increase of 7i per cent in 1978-79. That would be accompanied by a less rapid increase over the course of the year. Average weekly earnings are estimated to have risen by 9.8 per cent in 1977-78. The corresponding price forecasts are for a rise in the *consumer price index* in 1978-79 of around 6 per cent, compared with *9t* per cent in the previous year. These forecasts embody a reduction in the December quarter CPI as a result of Budget measures. The indirect price effects of the accelerated move to import parity for crude oil will take some time to flow through into final expenditure deflators but that response can be expected to moderate slightly the deceleration in prices that is foreseen over the course of 1979. Even so, a further steady slowing in the rate of inflation is projected with an on-going rate approaching 5 per cent per annum being attained in mid-1979 or perhaps before that time. Because of different composition and weighting patterns the *consumption deflator* is expected to increase by about 1 percentage point more than the CPI in year-on-year terms; this would mean an increase 2 percentage points lower than its 9 per cent rise in 1977-78. This general picture is also expected to hold for the more broadly defined *deflator of major gross national expenditure components;* however, given the projected improvement in the terms of trade, the *aggregate non-farm product deflator* would not show as marked a slowing. Although the improvement in the terms of trade is expected to be sizeable, offsetting volume movements imply a negative contribution to growth in aggregate incomes in 1978-79 from the external sector. All price estimates allow for some recovery in the gross profit share. More favourable wage developments and/or a slower rise in unit profits would mean lower inflation rates than those mentioned above. {:#subdebate-65-17} #### Overview If the foregoing outlook is realised, at least in the broad, then by mid- 1979 further significant progress will have been made in correcting the imbalances that remain in the economy. The one front on which little early progress is currently in sight is the labour market, an area where improvement depends importantly on participants other than the Government. As discussed in Part II above, it is no coincidence that wage and salary earner employment has changed little over the past several years in the face of reasonable increases in overall activity. The employment, price inflation and activity forecasts described above are heavily dependent on the wage inflation prospect. Should parties to wage determination and the Conciliation and Arbitration Commission place greater weight on the view that wage increases are retarding employment recovery, the outlook would be brighter. If, for example, average awards were to be adjusted during 1978-79 by 50 per cent of past price increases (compared with the 75 per cent assumption mentioned above), and there were a move to less frequent wage hearings, then average weekly earnings could grow by 6 per cent or less in 1978-79. Such an eventuality would strengthen the outlook for activity and employment beyond that suggested in this review. {: .page-start } page 10 {:#debate-66} ### STATEMENT No. 3 -ESTIMATES OF OUTLAYS, 1978-79 {: .page-start } page 10 {:#debate-67} ### INDEX {:#subdebate-67-0} #### Page {:#subdebate-67-1} #### Summary.......................... 102 {: type="1" start="1"} 0. Defence......................... 104 1. Education........................ 109 2. Health......................... 115 3. Social Security and Welfare.................. 125 4. Housing......................... 142 5. Urban and Regional Development nec and the Environment....... 147 6. Culture and Recreation.................... 151 7. Economic Services- {: type="A" start="A"} 0. Transport and Communication............... 155 1. Water Supply and Electricity................ 162 2. Industry Assistance and Development............. 163 3. Labour and Employment................. 183 4. Other Economic Services................. 187 8. General Public Services- {: type="A" start="A"} 0. Legislative Services................... 188 1. Law, Order and Public Safety................ 189 2. Foreign Affairs and Overseas Aid.............. 191 3. General and Scientific Research nec............. 195 4. Administrative Services.................. 198 9. 0. Not Allocated to Function- {: type="A" start="A"} 0. Payments to or for the States, the Northern Territory and Local Government Authorities nec.................... 202 {: type="A" start="B"} 0. Public Debt Interest................... 206 1. Allowance for Prospective Wage and Salary Increases....... 207 {: .page-start } page 102 {:#debate-68} ### STATEMENT No. 3- ESTIMATES OF OUTLAYS, 1978-79 This Statement presents detailed estimates of Budget outlays in 1978-79, classified according to their primary purpose or function. Comparable figures are also shown for 1976-77 and 1977-78; data for the period since 1968-69 are presented in Statement No. 6. {: .page-start } page 102 {:#debate-69} ### SUMMARY The following chart gives a broad impression of the relative size of the major functional blocks of total outlays and recent and projected movements in those proportions. It is emphasized that changes in these functional blocks from one year to another are affected by a number of special factors, such as introduction of family allowances in 1976-77, large repayments by the Australian Wool Corporation in 1976-77 and 1977-78, and changes in administrative arrangements, particularly those relating to the transfer of functions to the Northern Territory as part of the self-government arrangements. Outlays for defence in 1978-79 are estimated at $2500.9 million, an increase of 5.2 per cent over 1977-78 and equivalent to 8.7 per cent of total Budget outlays. This estimate, which is at May 1978 prices (plus June National Wage), does not make any provision for increases in wages and salaries of defence personnel or other possible cost increases during 1978-79; provision for wage and salary increases is, however, included in the separate bulk allowance of $50 million. The total provision of $2500.9 million implies an increase of about 1 per cent in real terms over 1977-78. {:#subdebate-69-0} #### Manpower Costs Provision has been made for a net increase of $59.8 million in defence manpower costs in 1978-79. The main reasons for the increase are the full-year effects of awards and determinations made in 1977-78 and increases in service strengths. Service manpower increases of 220 are provided for the manning of new equipment coming into service. The estimates also take into account a reduction of 425 in civilian personnel, with the rundown occurring largely in the latter part of the financial year. The main factors accounting for the net increase of $16.6 million in the defence forces retirement and death benefits provision are the annual update of pension rates in July 1978 in line with the increase in the Consumer Price Index; and the number of new pensioners, estimated at 1484, about the same number as in 1977-78, who will enter the scheme during 1978-79. Defence manpower costs, including those in this category, are estimated to account for 56 per cent of total defence outlays in 1978-79, about the same as 1977-78. {:#subdebate-69-1} #### Defence Equipment and Stores Outlays on defence equipment and stores are intended to ensure that operational equipment (ships, aircraft, armour, artillery, etc.) are adequate to meet likely contingencies. Outlays on 'capital' type equipment in 1978-79 are estimated at $354.5 million, or $39.7 million more than in 1977-78. This amount makes provision for many on-going acquisitions of new equipment, including 3 patrol frigates, and 15 patrol boats for the Navy; 101 Leopard medium tanks and 20 Rapier surface to air guided missile fire units for the Army; and 12 Hercules CI 30 aircraft, 10 Orion long-range maritime patrol aircraft and ancillary equipment for F111C aircraft for the RAAF. Provision is also made for a start on some new major equipment projects and on other equipment, details of which will be announced by the Minister for Defence in due course. Expenditure on supporting equipment and store;; - such as ammunition, rations, clothing, etc. for the maintenance of the forces - is estimated at $246.5 million in 1978-79, an increase of $19.7 million over 1977-78. Outlays on repair and maintenance of equipment and stores already in service - including periodic refit of naval vessels and overhaul of service aircraft, vehicles, etc. - is estimated to increase by $10.0 million. This category includes most of the periodic payments, estimated to total $156 million in 1978-79, into the Foreign Military Sales (FMS) Trust Account. The FMS Trust Account is an account established and controlled by the US Department of Defense to record transactions relating specifically to Australia's acquisition of military equipment and stores through the US Defense Security Assistance Agency. Payments are made in direct response to billings by the US after taking into account any credit balances existing in the Trust Account at the time. {:#subdebate-69-2} #### Defence Facilities Expenditure under this heading is to provide and maintain facilities, including living and working accommodation for defence personnel. Construction by the States of new houses for servicemen has been reduced by $10.9 million to $11.6 million in 1978-79. Future arrangements for Service housing are currently under examination. The balance of the total reduction of $21.9 million in the Defence Facilities category stems from the priorities accorded to the many competing claims on the funds available for defence purposes. A large proportion of the expenditure envisaged in 1978-79 is for projects that were committed in 1977-78 and earlier years. These include the establishment of a naval supply centre in the former Leyland property at Zetland (NSW), construction of new accommodation for Army personnel at Randwick (NSW), development of facilities at Edinburgh (SA) for the operation of long-range maritime patrol aircraft, and acquisition of large tracts of land at Yampi (WA) for use as a training area and at Puckapunyal (Vic.) for tank exercises. Expenditure on new works projects in 1978-79 is estimated at $15.3 million. Significant works to be commenced include a further major phase in the development of Williamstown Dockyard (Vic); provision of facilities at Garden Island Dockyard (NSW) for the patrol frigates on order, including an upgraded power supply system, a new crane and a comprehensive repair workshop; the first phase of new working accommodation for the Army at Enoggera (Qld); and commencement of new facilities at Pearce ( WA) . {:#subdebate-69-3} #### Industrial Capacity Most expenditure under this heading, which is estimated to increase by $8.9 million in 1978-79, is directed towards the maintenance in government aircraft and munitions factories and in industry of capacity, which cannot be fully utilised in peacetime, for the production of material considered essential for defence purposes. Other expenditures relate to the costs of production/development of special defence projects in government factories, such as the Ikara antisubmarine weapon system and the Turana target drone system, and in industry; the continuing development and production of Nomad aircraft; and the acquisition and maintenance of reserve stocks of essential war material. {:#subdebate-69-4} #### Defence Science and Technology Establishments Expenditure on defence science and technology is aimed at assisting the Services to keep abreast of advances in defence technology and at developing weapons and weapon systems suited to Australia's defence needs. The estimated expenditure of $91.3 million in 1978-79 covers the salaries, other administrative and operating expenses, machinery, plant and works services of defence science establishments and laboratories, and the Woomera range. A reduction in overall manpower levels is planned in 1978-79 but provision has been made for continuation of a modest level of trials activity at Woomera, in conjunction with the United Kingdom in particular. Provision has also been made for funds to enable further development of the Jindalee over-the-horizon radar. The net reduction of $1.9 million in respect of this category of expenditure reflects the transfer of financial transactions relating to Woomera Village to a Trust Account titled 'Defence Support Centre Woomera Trust Account'. Australia's payments to the Trust Account are recorded under General Administrative Expenditure. Defence Co-operation Through defence co-operation the Government aims to help friendly countries in the region to strengthen their own and the region's defence capacity. Estimated expenditure of $24.6 million in 1978-79 includes $6.9 million in assistance to Indonesia for such purposes as survey and mapping work in Irian Jaya, provision of Nomad aircraft, Sioux Helicopters and Patrol Craft, as well as training in support, maintenance and communications skills. Continuing assistance is also provided for Malaysia ($3.6 million) and Singapore ($0.5 million). Bilateral programs with these two countries include the Armed Forces Manufacturing Workshop, the Special Warfare Centre Project, the Defence Research Centre Project (Malaysia) and the Cataloguing Project (Singapore). Training assistance and combined exercising are also important aspects of defence co-operation with Malaysia and Singapore. An amount of $12.0 million is included for defence co-operation activities with Papua New Guinea in 1978-79. The decrease from $14.6 million in 1977-78 reflects the progressive reduction in numbers and support costs of Australian servicemen in Papua New Guinea in line with the continuing localisation of the Papua New Guinea Defence Force. Project assistance in Papua New Guinea includes the provision of Nomad aircraft and communication and radar equipment. A large part of the increased allocation of $1.6 million for 'other countries' is devoted to the development of a co-operative relationship in defence matters with countries of the South West Pacific. Continuing provision is also made for military training and advisory assistance to the Philippines and Thailand. {:#subdebate-69-5} #### Storage and Transport Services This item comprises removal costs of servicemen and their families on reposting, transfer of defence civil staff and their families, and storage costs associated with those activities. {:#subdebate-69-6} #### General Administrative Expenditure This broad category of expenditure covers a range of items including rent, travel, office requisites, postage and telephone services, fuel, light, power and water supply, freight and cartage, compensation payments and medical and dental services. The budgeted increase of $13.7 million largely reflects increases in the costs of these services and small increases in levels of activity. It also includes $2.1 million in 1978-79 as Australia's payment to the Defence Support Centre Woomera Trust Account. Other countries with components at Woomera Village, namely the United States and the United Kingdom, also contribute to the Trust Account. Expenditures on the operation and administration of the Village in the past were recorded in full under Defence Science and Technology Establishments, with payments by the other countries involved being passed direct to Recoveries and Repayments. {:#subdebate-69-7} #### Natural Disasters, Civil Defence and Other Included in this category are estimated expenditures by the Natural Disasters and Civil Defence Organisation, including on salaries and administration ($1.3 million); Commonwealth assistance to State/Territorial Emergency Services through purchases of equipment and stores for those services ($1.2 million); and reimbursement of some salaries paid by the States to their civil defence personnel (amounting to $1.2 million). Expenditure of $1.6 million for maintenance of war graves is also included here. {:#subdebate-69-8} #### Recoveries and Repayments The principal items here are payments made by servicemen under the Defence Force Group Rental Scheme for rent of houses provided for their use, charges made for meals and accommodation provided at Defence establishments, revenues from disposals, and other miscellaneous receipts. {:#subdebate-69-9} #### Loan Act In 1977-78 an amount of $1359 million of defence expenditure was transferred from Consolidated Revenue Fund to Loan Fund to meet a prospective deficit in the .former Fund. Expenditure so transferred was financed from borrowings. The Budget estimates for 1978-79 imply a prospective deficit in the Consolidated Revenue Fund of $1904 million unless action is taken to meet that deficit. The intention is that this potential deficiency should again be met by transferring certain defence expenditures from the Consolidated Revenue Fund to the Loan Fund where they will be financed from borrowings for defence purposes. A Loan Bill to authorise these transactions is to be introduced into Parliament during the Budget Session. {: type="1" start="2"} 0. EDUCATION Total outlays on education are estimated to increase by 6.1 per cent in 1978-79 to $2497.6 million; this total is equivalent to 8.7 per cent of estimated total outlays. The changes in the main components between 1977-78 and 1978-79 are shown in the table below. {:#subdebate-69-10} #### Tertiary Education {:#subdebate-69-11} #### Universities and Colleges of Advanced Education The Commonwealth fully funds the operations of all universities and colleges of advanced education through the Tertiary Education Commission. The estimates for 1978-79 comprise broadly the second half of the 1978 programs and the first half of the 1979 programs. Details of the 1979 programs were announced by the Minister for Education on 9 June. In real terms the base programs for 1979 imply a decrease of about 2 per cent compared with 1978. This reduction will be confined to capital expenditures; recurrent expenditures are expected to increase slightly so as to sustain intakes of students at present levels in 1979, which implies a projected small increase in total enrolments in universities and CAE's in 1979. The Commission has been requested, however, to do what it can to achieve further reductions in intakes to pre-service teacher education courses in view of the present and prospective surplus in the supply of teachers. The Australian Maritime College at Launceston is scheduled to commence offering courses in 1980. Staff recruitment for the College has begun and a training vessel is expected to be acquired in 1978-79. The estimates provide, from within the allocation for tha CAE sector, for recurrent expenditure of $0.94 million and capital expenditure of $3,315 million in 1978-79. The estimates for 1978-79 in the table are in estimated June 1978 prices. The wage and salary components of recurrent grants to universities and CAE's - which make up the bulk of total grants - are subject to escalation in line with increases in wages and salaries. Provision for such increases is included in the bulk provision of $45 million which appears in the table (see below). The Government has decided, with a view to facilitating more orderly planning in the tertiary sector, to reintroduce fixed triennial funding in 1979-81 in respect of recurrent grants other than equipment grants. Under these arrangements recurrent funding (excluding equipment) for universities and CAE's in 1980 and 1981 will be maintained at the same levels in real terms as those approved for 1979. Funds for equipment and for capital works will be determined annually. In July 1977 the Government requested the Tertiary Education Commission to examine study leave and staff development leave schemes in universities and colleges of advanced education and to report on the desirability of modifications to those schemes. A Working Party appointed by the Commission released its draft report in April 1978. The Working Party concluded that the existing schemes require substantial revision to better accord with contemporary circumstances. The Commission has indicated general support for the Working Party's conclusions but, before finalising its Report, the Commission has invited comments from interested persons and organisations. The Commission's final report is expected to be completed shortly. As announced in the Budget Speech the Government also has been considering possible action to change present arrangements for study leave in universities and colleges of advanced education but will await the final report of the Commission before announcing its decisions. *Technical and Further Education in the States* The Commonwealth provides grants to the States to compensate them for not levying fees for vocational courses at technical and further education institutions and to enhance the quality and availability of technical and further education. At the same time the States are required to maintain their own efforts in this area. For 1979 the Government has approved a total program for the States which represents an increase of over 19 per cent in real terms compared with 1978. This follows a real increase of 10 per cent in the 1978 base programs and underlines the high priority which the Government is affording this level of education. The figures shown in the table for 1978-79 are in estimated June 1978 price levels and relevant components will be subject to escalation in the light of actual increases in wages and other costs (see below). The base programs of assistance to the States for technical and further education in 1980 and 1981 will be determined by the Government after consideration of the report of the Williams Committee of Inquiry into Education and Training. This Committee, which was set up to review the performance of the post-secondary education system and its relationship to workforce requirements, is expected to report to the Government in October 1978. *Technical and Further Education in the Territories* The estimates provide $30.1 million for expenditure on technical and further education in the ACT and NT in 1978-79; this represents an increase of 15.3 per cent compared with 1977-78. {:#subdebate-69-12} #### Schools *Schools in the States* The Commonwealth Government provides grants to the States through programs of the Schools Commission for recurrent and capital costs of State Government schools. Payments for recurrent and capital purposes also are made to the States for on-passing to non-government schools. In addition, assistance is provided to the government and non-government schools systems for disadvantaged schools, migrant and multi-cultural projects, schools for handicapped children, teacher development and innovatory developments. Total Commonwealth expenditure in 1979 is estimated to increase by about 1 per cent in real terms in 1979 and, for planning purposes, the Government has decided upon increases of 1 per cent in real terms in 1980 and again in 1981. The estimates for 1978-79 relate to the second half of the 1978 programs and to the first half of the 1979 programs. The estimates are at estimated June 1978 pries levels and will be supplemented in respect of wage and salary increases for non-capital programs (see below). Further details on grants to the States for schools are provided in Chapter IV of *Payments to or for the States, the Northern Territory and Local Government Authorities 1978-79.* *Government Schools and Pre-schools in the Territories* Total outlays for government school and pre-school programs in the ACT and NT are estimated at $140.3 million in 1978-79, an increase of 2 per cent over 1977-78; expenditure is estimated to decrease by 1.0 per cent to $74.6 million in the ACT and to increase by 5.8 per cent to $65.7 million in the NT. Enrolments in government schools and pre-schools in the ACT are projected to increase by 2.2 per cent to 46 200 in 1979. This compares with an increase of 3.5 per cent in 1978. In the NT enrolments are projected to increase by 7.4 per cent in 1979 (to 26 980 students), following an increase of 8.6 per cent in 1978. From 1 July 1979 responsibility for schools in the Northern Territory will be transferred to the Northern Territory. The cost of subsidised bus services for school children travelling to and from school and for approved educational excursions in the Territories is estimated to increase to $3.8 million in 1978-79; $2.0 million is in respect of the ACT and $1.8 million in respect of the NT. *Non-government Schools in the Territories* Assistance for non-government schools in the Territories is estimated to increase by 5.7 per cent to $16.4 million in 1978-79. Enrolments at nongovernment schools in the ACT are projected to increase by 4.8 per cent in 1979 (to 15 250 students) and to remain steady at the present level of about 2200 in the NT (which includes students attending Mission schools). To assist with running costs the Commonwealth provides non-government schools in the Territories with per pupil grants equivalent to the per pupil grants paid to non-government schools in the States, both from the Schools Commission's program and from the State Governments. In addition to expenditure on mission schools in the NT, capital grants are provided for non-government school building projects in the Territories, under a scheme similar to the Schools Commission program of capital assistance for non-government schools in the States. In 1978-79 $1.1 million will be provided under this scheme, compared with $1 million in 1977-78. Additional assistance is provided under an interest subsidy scheme similar to that operating in the States. Under this scheme non-government schools borrow from approved lending institutions for approved building projects and the Commonwealth reimburses interest charges up to 10 per cent per annum for up to 20 years; $20 000 is provided in 1978-79 for this program, compared with $15 000 in 1977-78. {:#subdebate-69-13} #### Cost Supplementation The base programs of the Tertiary Education Commission and the Schools Commission are determined in 'real' terms and are subject to escalation for cost increases which actually occur. In 1977 and earlier years these programs were supplemented fully for cost increases but in 1978 and 1979 supplementation is being limited to wage and salary increases in respect of recurrent grants only (but including the fees reimbursement component in the technical and further education program). The bulk allowance of $45 million included in the Budget figures (roughly $33 million for tertiary sector programs and $12 million for schools) is an estimate of the supplementation which will become necessary during 1978-79 on account of increases in costs of the relevant components. Because of lags in identifying the actual increases, the supplementation payments provided for in 1978-79 will relate mainly to cost increases for the 1978 programs of the Commissions. The comparable provision last year was $75 million. {:#subdebate-69-14} #### Student Assistance The main table indicates the extent of student assistance made available at different levels of education. Total assistance, excluding assistance in respect of Special Groups (see below), is estimated at $197 million, an increase of 11.2 per cent compared with 1977-78. The main schemes in terms of expenditure are: Under the new arrangements relating to family allowances, parents of dependent students in receipt of student allowances will no longer be eligible for family allowances after 1 January 1979. In recognition of this change, however, TEAS allowances for dependent students and certain other student allowances are to be increased by the equivalent of $5.25 a week. The maximum rates of benefit under these schemes, which are to apply in 1979, are shown below, together with the numbers of students expected to receive assistance in 1979: {:#subdebate-69-15} #### Special Groups A total of $66.0 million is provided for the education of special groups in 1978-79, an increase of 16.8 per cent compared with 1977-78. {:#subdebate-69-16} #### Aboriginals A total of $28.1 million is to be provided for assistance to Aboriginals, including: $13.3 million for the Aboriginal Secondary Grants Scheme under which non-means tested assistance is provided to students , of Aboriginal descent attending approved secondary schools or classes; $5.2 million for the Aboriginal Study Grants Scheme under which nonmeans tested assistance is provided to persons of Aboriginal descent undertaking approved courses at universities, colleges of advanced education and TAFE and other institutions; and $9.3 million in Grants-in-Aid and State Grants provided through the Department of Aboriginal Affairs. {:#subdebate-69-17} #### Migrant Education Substantial funds - estimated at $27.8 million - are provided for child migrant education through the programs of the Schools Commission (see above) for special instruction for migrant and refugee children experiencing English language difficulties so as to facilitate their participation in normal classes. Additional assistance (recorded under this heading) is provided to government and nongovernment school authorities to acquire language teaching materials and equipment for migrant and refugee children, and to pay the salaries of teachers involved in providing special instruction for refugee children. Outlays for these purposes are estimated to increase from $0.7 million in 1977-78 to $1.7 million in 1978-79. Provision is also included under this heading for English language tuition for adult migrants and refugees. This program provides for the salary and administrative costs of language teachers, and living allowances equivalent to unemployment benefits for adults attending courses full-time. Expenditure is estimated at $17.2 million in 1978-79, an increase of 38 per cent compared with 1977-78. The increase reflects both the increased refugee intake expected in 1978-79 and the Government's acceptance of the Galbally Committee recommendations concerning upgrading of English language instruction services. A further $618 000 is provided under this heading for the construction of demountable classrooms. {:#subdebate-69-18} #### Soldiers' Children Education Scheme Under this scheme assistance is provided for the payment of fees, fares and allowances, and for books and equipment for the tertiary education and training of children of veterans who died as a result of war service or who are either totally and permanently incapacitated or blind. Allowances also are paid in respect of children attending secondary schools. The cost of this scheme is estimated at $3.4 million in 1978-79, the same as in 1977-78; a slight decrease in the number of beneficiaries is estimated to be offset by the full year effect of the increased allowances effective from January 1978. {:#subdebate-69-19} #### Assistance for Isolated Children The Commonwealth provides assistance under this program to the parents of primary and secondary pupils who, because of their geographical isolation, do not have reasonable daily access to a government school. A basic means-test free boarding allowance of $500 per annum is provided, together with an additional means tested allowance. Further means tested assistance is available in cases of particular financial hardship. For children who study at home by correspondence there is a means-test free allowance of $200 per annum, plus a reimbursement allowance of up to $300 for eligible expenditure by parents. In cases where a second home is established to allow an isolated child to attend school a second home allowance of up to $1275, depending on the number of children, is also available free of means test. For 1978 only, in cases where the family lives in tax zones A or B, an additional $100 has been payable for each child receiving the basic boarding allowance and for the first child in each family qualifying for second home assistance. The total cost of the scheme is estimated at $14.6 million in 1978-79 when some 20 000 children will be assisted. {:#subdebate-69-20} #### General Administrative and Other Expenditure General administrative and other expenditure of the Department of Education is estimated at $20.1 million in 1978-79, including $15.4 million for salaries; also included under this heading is $1.04 million in 1978-79 for the Education Research and Development Committee, which provides support for research in education. {: type="1" start="3"} 0. HEALTH Total outlays on health are estimated at $2913.5 million in 1978-79. This represents an increase of 8 per cent on 1977-78 and is equivalent to 10.1 per cent of total estimated Budget outlays in 1978-79. Responsibility for the provision and financing of health services in the Northern Territory will pass to the Territory under the self-government arrangements from 1 January 1979. So far as the Northern Territory is concerned, therefore, the estimates for 1978-79 in the following table relate only to the first half of the year for outlays other than for hospital operating costs; provision for the second half of the year is made in the global allocation to be paid to the Northern Territory in 1978-79 (see Section 10). {:#subdebate-69-21} #### Medical Services and Benefits {:#subdebate-69-22} #### Medical Benefits Existing arrangements for eligibility for benefits will continue .for medical and optometrical services rendered before 1 November 1978. Legislation will be introduced to authorise the Commonwealth to meet, in respect of services as from 1 November 1978, the cost of medical benefits as follows: pensioners (and their dependants) entitled to Pensioner Health Benefit Cards at 85 per cent of schedule fees, subject to the gap between the benefit and schedule fee for a service not exceeding $5; disadvantaged persons, as determined by doctors, to be bulk billed at 75 per cent of schedule fees for all services regardless of cost; and the rest of the population at 40 per cent of schedule fees, subject to a maximum patient contribution of $20 for any one service in respect of the gap between the benefit and the schedule fee. Existing bulk-billing arrangements will continue for services rendered before 1 November 1978. Thereafter, bulk-billing arrangements, under which doctors will accept the relevant benefits in full payment, will be limited to eligible pensioners and to those patients assessed by their doctors as genuinely socially disadvantaged. Medical benefits for services rendered to eligible pensioners and the disadvantaged will be paid by the Commonwealth. The private health insurance organisations, as agents for the Commonwealth, will pay basic benefits to the rest of the population. Outlays on Commonwealth medical benefits are estimated to increase by $136 million in 1978-79 to $495 million. The increase reflects the eligibility of the whole population for medical benefits as from 1 November 1978. {:#subdebate-69-23} #### Other Medical Benefits This item covers residual expenditures on medical benefits for services that were rendered under the National Health Act prior to 1 July 1975. {:#subdebate-69-24} #### Diagnostic Services This item relates to the running of health laboratories operated by the Commonwealth, including Pathology Laboratories, which provide services to hospitals and medical practitioners. The $2.2 million reduction in estimated expenditure in 1978-79 reflects mainly the full-year revenue effects of the introduction of charges by the Pathology Laboratories. {:#subdebate-69-25} #### Treatment and Allowances for Veterans and Dependants The Commonwealth meets the costs for eligible persons of specialist, local medical officer, paramedical and dental services, of providing and maintaining surgical aids (including spectacles) and of travelling expenses incurred in obtaining medical treatment. So far as the latter is concerned, the Government has decided to limit the payment of subsistence allowance when no overnight absence is involved to meal allowances only payable on the same conditions as Public Service meal allowances. The increase of $4.1 million in expenditure under this heading in 1978-79 reflects increased fees for professional services, together with an increase in demand for treatment. {:#subdebate-69-26} #### Hospital Services and Benefits {:#subdebate-69-27} #### Hospital Payments Commonwealth expenditure for hospitals under the provisions of the *Health Insurance Act* 1973 is estimated to increase by 10.5 per cent in 1978-79 to $1155.8 million. Under the Act the Commonwealth: meets half the approved net operating costs of State public hospitals recognised' under the Hospital Cost-Sharing Agreements. Payments in 1978-79 are estimated to increase by $111 million' to $1057 million. This increase reflects higher costs and greater demand for services. meets half the approved net operating costs of public hospitals in the Territories. For 1976-77 and 1977-78 payments were made in respect of hospitals in both the Australian Capital Territory and the Northern Territory. Because of a recent legislative change no provision is made for a payment from the Health Insurance Fund to the Northern Territory hospitals for the first six months of 1978-79 (they will be funded under other appropriations). Legislation will be introduced in the Budget Sittings to authorize payments by the Commonwealth as from 1 January 1979, when the Northern Territory assumes responsibility for health services. Total expenditure in 1978-79 for the Territories is estimated at $27.8 million, a reduction of $3 million with increased costs in respect of the ACT being more than offset by the legislative change in respect of the Northern Territory. makes daily bed payments to private hospitals of $16 a day. Payments in 1978-79 are estimated at $71 million, an increase of $1.4 million, reflecting increased usage of these facilities. Levy payers and those exempted from the levy on income grounds will continue to receive free treatment in standard wards of public hospitals up to 31 October 1978. Thereafter free treatment in standard wards of public hospitals will be available to all eligible residents without hospital insurance cover. Privately insured patients in public hospitals are currently charged $60 a day for a bed in a single room and $40 a day for shared-room accommodation. The Budget estimates are based on these charges. As announced in the Budget Speech, extensive negotiations with the States on bed charges are already under way. {:#subdebate-69-28} #### Hospital Insurance Subsidy This subsidy is payable to registered health insurance organisations in respect of the contribution rates for basic 'hospital-only' insurance offered to levy payers and those exempt from the levy on income grounds. With the abolition of the levy, legislation will be introduced to abolish the subsidy with effect from 1 November 1978. The estimated cost of the subsidy of $8 million in 1978-79 reflects in part a carry-over from 1977-78. {:#subdebate-69-29} #### Hospital Benefits Reinsurance Trust Fund Under the provisions of the National Health Act, the Commonwealth subsidises private health funds by sharing deficits that arise in reinsurance accounts required to be maintained by registered hospital insurance organisations. The deficits occur from paying benefits to high risk and chronically ill members. In 1977-78 expenditure from the Trust Fund included an amount of $9.5 million carried over from 1976-77; expenditure in 1978-79 is expected to equal the appropriation of $50 million. {:#subdebate-69-30} #### Other Hospital Benefits This item reflects mainly expenditure authorised by the National Health Act on special account subsidies that ceased on 30 September 1976 with the establishment of the Hospital Benefits Reinsurance Trust Fund. Carry-over expenditure in 1978-79 is estimated at $0.3 million. {:#subdebate-69-31} #### Repatriation Hospitals Hospitals and clinics are maintained in each State for the treatment of eligible veterans and dependants; to a limited extent non-repatriation patients also are treated in Repatriation hospitals while some use is made of private and State public hospitals for repatriation patients where this is appropriate. The estimated increase of $10.8 million in 1978-79 reflects higher wages and salaries and operational costs associated with the running of repatriation institutions, as well as additional expenditure on buildings and works. {:#subdebate-69-32} #### Mental Health Facilities Expenditure on mental health facilities is estimated at $6.7 million in 1978-79. Of this amount, $6.2 million relates to medical care and treatment for eligible veterans and their dependants in State mental hospitals. The item also includes payments to the South Australian Government (up to 31 December 1978) for psychiatric treatment in South Australian hospitals for residents of the Northern Territory. Assistance for non-residential mental health facilities is provided under the Community Health Program. {:#subdebate-69-33} #### Hospitals Development As announced at the Premiers' Conference in June 1978, assistance to the States under this Program ceased on 30 June 1978. Amounts provided under this program for the Launceston General Hospital are shown separately. {:#subdebate-69-34} #### Launceston General Hospital The Commonwealth will continue to meet 50 per cent of the approved costs of Stage I of the re-development of the Launceston General Hospital. The estimated amount to be provided in 1978-79 is $5.9 million, $2.6 million more than provided in 1977-78. {:#subdebate-69-35} #### Health Program Grants Health Program Grants, authorised under the *Health Insurance Act* 1973, are payable to eligible organisations to meet the cost, or such proportion of the cost as the Minister may determine, of approved health services, including contract medical services, provided outside of hospitals by medical practitioners employed on a salaried or sessional basis. Eligible organisations impose charges, where appropriate, for services involving privately insured patients. Health Program Grants are also available for research projects that develop and test new forms of health care delivery systems (e.g. Health Maintenance Organisations). Expenditure on Health Program Grants in 1978-79 is estimated at $7.0 million, $2.6 million more than in 1977-78. {:#subdebate-69-36} #### Pharmaceutical Services and Benefits {:#subdebate-69-37} #### Pharmaceutical Benefits - General and Pensioners Except for a flat charge per prescription payable by most patients, which was increased from $2 to $2.50 on 1 July 1978, the Commonwealth meets the costs of a range of drugs and medicinal preparations supplied on a doctor's prescription to any person in the community. PHB (Pensioner Health Benefits) card holders and their dependants are eligible for benefits without charge. The Government has decided to grant to manufacturers of pharmaceuticals covered by the benefits scheme a 5 cents 'across-the-board' increase in PBS prices at price to chemist level (for the PBS maximum quantity or PBS pricing pack if this is larger), effective from 1 November 1978. The increase has been granted pending an in-depth inquiry into the role, structure and viability of the pharmaceutical manufacturing industry and Pharmaceutical Benefit Scheme price policies. The Government has also decided to introduce legislation to permit dentists to prescribe a limited range of drugs under pharmaceutical benefits for dental treatment of their patients. Expenditure on general pharmaceutical benefits in 1978-79 is estimated at $134.4 million, an increase of $6.3 million on 1977-78; the increase would have been greater but for the moderating effects of the increase in the patient contribution. Expenditure on pharmaceutical benefits for eligible pensioners is estimated to increase by $19.7 million in 1978-79, reflecting increases in the number of beneficiaries and in the cost of drugs. {:#subdebate-69-38} #### Pharmaceutical Benefits - Veterans and Dependants The Commonwealth meets the full cost of drug and medicinal prescriptions supplied on a doctor's prescription for eligible veterans and their dependants. Expenditure for this purpose is estimated to increase by $0.6 million in 1978-79 to $34.0 million. {:#subdebate-69-39} #### Nursing Home and Domiciliary Nursing Care Services and Benefits {:#subdebate-69-40} #### Nursing Home Benefits and Payments The following benefits are payable by the Commonwealth for people who are not insured with a private hospital benefits fund, and by private health funds for all members insured in the standard hospital benefits table (or above): Private hospital benefit funds also pay benefits for members who are patients in those nursing homes whose operating deficits are met by the Commonwealth. The benefits, when combined with the statutory patient contribution, were set to cover fees charged in each State to 70 per cent of patients in non-government nursing homes approved under the National Health Act. The levels of benefit will be reviewed during 1978-79 after a survey of nursing home fees. Reflecting the full year effects of the higher benefits and the insurance arrangements introduced on 1 October 1977 and cost increases, estimated expenditure on nursing home benefits and the financing of deficits of eligible nursing homes is estimated to increase by $22.7 million in 1978-79 to $276.8 million. {:#subdebate-69-41} #### Domiciliary Nursing Care Benefit The Commonwealth pays a benefit of $2 a day to persons who arrange for the provision of adequate nursing care for elderly relatives at home as an alternative to institutional care. The elderly relative must have attained the age of sixty-five years and require professional nursing care to an extent that would otherwise justify admission to an approved nursing home. Expenditure on the benefit is estimated to increase by $0.4 million in 1978-79 to $8.3 million. {:#subdebate-69-42} #### Nursing Care {or Veterans and Dependants The Commonwealth meets the full cost of nursing home accommodation required by veterans because of service-related disabilities. It also meets the cost of nursing home care for disabilities not related to service for certain categories of veterans and war widows, subject to payment by the patient of the patient contribution prescribed for other nursing home patients in the community. Free domiciliary care services are provided to these groups as required. Expenditure on nursing home and domiciliary care for eligible persons is expected to increase by $0.7 million in 1978-79 to $30.9 million. {:#subdebate-69-43} #### Other Nursing Services The Commonwealth extends subsidies, estimated to cost $11.8 million in 1978-79, to approved non-profit organisations providing home nursing services. The rate of subsidy was increased with effect from 1 July 1978. For organisations established before September 1956, the annual Commonwealth payment for each nurse who attracts a subsidy was increased from $9600 to $10 200. For organisations established after that date, the annual subsidy for each nurse employed was increased from $4800 to $5100. The increase in the subsidy is expected to cost an additional $1.1 million in 1978-79. The Commonwealth subsidy to any organisation may not exceed that paid to the organisation by a State. {:#subdebate-69-44} #### Community Health Facilities and Services Commonwealth assistance is provided to the States, local government authorities and other eligible organisations for the provision of community-based health services. Some 800 projects have been approved; they include community health centres, day hospitals, community mental health teams and alcoholism and drug dependence centres. Commonwealth assistance for the Program in the States is provided in the form of an annual block grant to each State which allocates the grant among individual projects. Except for women's refuges and projects having an Australia-wide application, the Commonwealth will meet from 1 July 1978 50 per cent of capital and operating costs of projects in the States up to a limit of $48.3 million in 1978-79. (During 1977-78 funding was on the basis of 50 per cent of capital and 75 per cent of operating costs.) An additional $3 million is being provided for funding women's refuges in the States. Up to that limit, the Commonwealth will continue to meet 75 per cent of recurrent costs of those refuges. 'National' projects, for which $6.4 million has been provided in 1978-79, are those which operate in all or most States and are fully funded by the Commonwealth. In all, $57.7 million has been allocated to the Program for 1978-79; this is $15.5 million less than expenditure on the Program in 1977-78 and reflects the revised funding arrangements. In addition, grants to the States (on a $1 for $1 basis rather than $2 for $1 as previously) and to institutions and persons for health care planning and research are estimated at $0.8 million, the same level as in 1977-78. {:#subdebate-69-45} #### Treatment and Prevention of Tuberculosis The provision for 1978-79 is mainly for the payment of allowances to persons (and their dependants) suffering from tuberculosis. Expenditure is expected to decline by $2.4 million in 1978-79 to $1 million, reflecting the payment in 1977-78 of the last outstanding claims by the States for reimbursement of costs for the treatment of tuberculosis. {:#subdebate-69-46} #### Dental Services for School Children In co-operation with the States, assistance is provided for an Australia-wide school dental scheme to provide a free dental service to all primary school children. The children receive comprehensive dental care at local clinics at regular intervals by either a dentist or dental therapist, with an emphasis on prevention and dental health education. In 1977-78 the Commonwealth met 75 per cent of the capital costs of new training facilities and clinics, 75 per cent of the operating costs of training facilities and 50 per cent of other operating costs. In 1978-79 the Commonwealth will meet 50 per cent of capital and operating costs up to a limit of $18.9 million; this compares with Commonwealth expenditure of $23.8 million in 1977-78. Health Services in the Territories nec In the Australian Capital Territory the Commonwealth provides health services of the type provided elsewhere by State and local government authorities. These include two hospitals, public health activities, ambulance services and community health centres. A third hospital, Calvary, is expected to open early in 1979. Until 31 December 1978, the Commonwealth will provide similar services in the Northern Territory, including the operation of five hospitals and a leprosarium. Executive responsibility for health services is to be transferred to the Northern Territory on 1 January 1979 as part of self-government arrangements for the Territory. Thereafter the Commonwealth will meet 50 per cent of net operating costs of public hospitals in the Territory. In 1978-79 an amount of $18.3 million has been allocated for the construction, furnishing and maintenance of public hospitals and other public health facilities in the Capital Territory ($7.1 million) and in the Northern Territory ($11.8 million). Most of the expenditure is for projects such as the Casuarina Hospital (NT) and the central health laboratory (ACT) that were begun in 1977-78 and earlier years. Construction payments for, and commissioning costs of, Calvary Hospital in the Australian Capital Territory are estimated at $2.8 million in 1978-79. Total net expenditure by the Commonwealth in 1978-79 on health services in the Territories is estimated at $75.5 million; this is $25.9 million less than expenditure in 1977-78, mainly because of the Northern Territory transfer as from 1 January 1979. {:#subdebate-69-47} #### Health Services for Aboriginals This heading includes expenditure by the Department of Health ($2.4 million in 1978-79) on hospital facilities, clinics, health centres and the employment of doctors and nurses in areas of high Aboriginal population and for health education and preventive medicine projects. Also included are outlays by the Department of Aboriginal Affairs under its grants-in-aid program ($4.8 million in 1978-79, an increase of $0.9 million) and its States Grant program ($12.7 million, an increase of $0.3 million over 1977-78 expenditure). Under these programs, resources will be provided for the prevention and control of alcoholic abuse; and to develop Aboriginal responsibility for, and involvement in, the improvement of their own health, through the participation of Aboriginals in the delivery of medical/health services, and the development, through training, of Aboriginal expertise in all aspects of health care. {:#subdebate-69-48} #### Other Health Services {:#subdebate-69-49} #### Medical Research Grants Through the Medical Research Endowment Fund, and on the advice of the National Health and Medical Research Council, the Commonwealth Government assists the medical research activities of Commonwealth and State Government departments, universities and other institutions and individual research workers, and the training of medical research workers. An amount of $12.8 million, an increase of $1.1 million, is being provided in support of medical research programs in 1978-79, including support for the Howard Florey Institute of Experimental Physiology and Medicine and the Walter and Eliza Hall Institute of Medical Research. {:#subdebate-69-50} #### Commonwealth Serum Laboratories The Commonwealth Serum Laboratories Commission produces and sells biological products, undertakes research into the production of therapeutic biological products, and maintains stocks of biological products. The provision of $5.5 million for 1978-79 (which includes $4 million for CSL's capital works program) is $1.3 million less than total expenditure in 1977-78. {:#subdebate-69-51} #### Aids and Appliances The Commonwealth meets the cost of supplying hearing aids (and batteries) to children, eligible pensioners and supporting mothers and fathers in receipt of an allowance from the Department of Social Security. It also meets the cost of the supply to civilians of artificial limbs and stoma appliances. Expenditure is expected to increase from $4.4 million in 1977-78 to $5.0 million in 1978-79. {:#subdebate-69-52} #### Isolated Patients Travel and Accommodation Assistance Scheme Under arrangements expected to be introduced from 1 September 1978, the Commonwealth will subsidise the travel and private accommodation costs of persons (and, if necessary, attendants) living in remote areas who are referred for specialist medical attention that is only available at a distance of more than 200 kilometres. For each eligible person the Commonwealth will meet approved travel costs in excess of $20 per return . journey and accommodation costs up to $15 per night for each approved stay. Expenditure on the Scheme in 1978-79 is estimated at $5.2 million. {:#subdebate-69-53} #### Educational Campaigns Commonwealth assistance is provided to support State and national projects of education directed against the abuse of narcotics and other drugs of addiction. An additional $375 000 has been allocated for the National Drug Education Program in 1978-79. Additional funds of $175 000 will be provided for existing State and national projects and $200 000 will be made available for a media campaign to promote the Program and for the development of national guidelines, as part of an overall approach to health education. Total expenditure on the Program is estimated at $1.2 million in 1978-79. {:#subdebate-69-54} #### Blood Transfusion Service and Products The annual operating costs of the Red Cross Society's Blood Transfusion Service in the States are shared by the States (60 per cent), the Society (the lower of 5 per cent of operating costs or 10 per cent of its previous year's income from donations) and the Commonwealth (the balance). In the Northern Territory the Commonwealth provides assistance in accordance with a similar principle; after 31 December 1978 the Northern Territory will be responsible for its share of the annual operating costs. Blood collected by the Society's Transfusion Service is processed into blood fractions, plasma and serum by the Commonwealth Serum Laboratories Commission. The blood products are supplied, free of charge, to hospitals and approved pathologists for use in medical diagnosis and treatment. The Commonwealth reimburses the Commission for the cost of processing the blood. The Commonwealth contributions are estimated to increase by $1.4 million in 1978- 79 to $10.1 million. {:#subdebate-69-55} #### Quarantine Services Human, animal and plant quarantine measures are enforced to prevent the introduction of exotic diseases into Australia. By arrangement, the States administer animal and plant quarantine and their costs are reimbursed by the Commonwealth. Human quarantine is administered by the Commonwealth. As part of a plan to upgrade facilities for the isolation and treatment of new types of human quarantinable diseases, the Commonwealth is meeting the cost of constructing a national high security quarantine unit and associated facilities at the Fairfield Infectious Diseases Hospital in Victoria. Expenditure is estimated to rise from $0.2 million in 1977-78 to $1.8 million in 1978-79. Provision has been made for additional estimated expenditure of $3.9 million in 1978-79 to meet the cost of the quarantine component of the previously announced program for increased coastal surveillance in northern Australia. Net outlays for quarantine services are estimated to increase from $9.6 million in 1977-78 to $14.8 million in 1978-79. {:#subdebate-69-56} #### Other This category includes the Commonwealth subsidy of $2.5 million to the Royal Flying Doctor Service, grants to the States for the Australian Encephalitis Eradication Campaign, reimbursement to the Australian Medical Association of expenses incurred in examining a system of peer review of medical professional standards, and expenditure related to the administration of public health and the Therapeutic Goods Act. {:#subdebate-69-57} #### General Administration This item comprises the general administrative and capital expenses of the Health Insurance Commission (other than its Medibank Private function) and the bulk of the Department of Health. Expenditure is estimated to decrease from $83.2 million in 1977-78 to $82.5 million in 1978-79. The full year effect of salary and other cost increases in 1977-78 ($8.3 million) is expected to be more than offset by savings ($9.0 million) in administering the new health insurance arrangements announced in the Budget Speech. An amount of $3.2 million is included under this heading for commencement of construction of animal quarantine stations on Cocos (Keeling) Island and at Wallgrove, N.S.W. {:#subdebate-69-58} #### Recoveries Recoveries relate to charges met by certain countries for treatment given to their veterans through Repatriation facilities, charges met by departments and authorities for the use of the Department of Health's computer facilities and various other receipts. {: type="1" start="4"} 0. SOCIAL SECURITY AND WELFARE The Australian social security system is intended to protect people from economic hardship caused by events such as loss of earnings through age, invalidity, sickness, unemployment or the loss or absence of a supporting spouse as a result of death, desertion or long-term separation. It is designed also to compensate veterans for war-caused disabilities and the dependants of those whose deaths are war-related and to assist parents with the expenses associated with raising children. Much of this assistance is provided by way of cash benefits. There are selective, or income tested, benefits such as invalid and widows' pensions and unemployment benefits, as well as universal benefits such as handicapped child's allowance. Additionally, assistance is provided, either directly or through State and local government authorities and voluntary agencies, for a wide range of welfare services for people with special needs. The aged, for example, are assisted with their accommodation needs and invalids may be trained so that they can re-enter paid employment. Assistance is provided in a variety of forms for the advancement of Aboriginals. Total direct outlays on social security and welfare are estimated to increase from $7490.3 million in 1977-78 to $8014.7 million in 1978-79, an increase of 7 per cent. Direct outlays on social security and welfare in 1978-79 are equivalent to 27.8 per cent of estimated total Budget outlays. A Review of the Department of Social Security has recommended improvements in the Department's systems and procedures, including those for reviewing entitlements and examining new claims for social security benefits. The Review Team concluded that there was a significant incidence of false claims being made by persons not eligible to receive benefits. The recommendations of the Review Team involve increasing staff, the number of Regional Offices and other resources available to the Department of Social Security in order to tighten up procedures, and are being implemented progressively. It is estimated that this will lead to savings of about $100 million in 1978-79. The additional staff and other resources will cost $6.7 million in 1978-79. The Government has set up a Social Welfare Policy Secretariat which will be responsible for the development of plans and policies .and the review of existing policies and programs in the broad field of health and welfare. Figures for actual outlays on social security and welfare in 1976-77 and 1977-78 and estimated outlays in 1978-79 are shown in the following table: Assistance for the Aged {:#subdebate-69-59} #### Pensions and Allowances Age Pensions are payable, free of income test, to residentially qualified men and women aged 70 years or more and to persons of age pension age who are permanently blind. Age pensions are payable, subject to an income test, to residentially qualified women aged 60 to 69 years and to residentially qualified men aged 65 to 69 years. To be residentially qualified for age pension, a period of ten years continuous residence in Australia is usually necessary. As announced in the Budget Speech, the Government has decided to amend legislation to freeze at the present rate the pension payable to income-test-free pensioners aged 70 years or over. Such pensioners may qualify for a higher rate of pension from November 1978 subject to the normal pensions income test. Wife's pension is payable to an age pensioner's wife who does not qualify for an age, invalid or repatriation service pension in her own right. The pension is subject to an income test. Additional payments of $7.50 a week for each child are available to pensioners with dependent children. These payments are subject to an income test. Supplementary assistance of up to $5 a week is payable, subject to a special income test, to pensioners who pay rent or lodging charges. Generally the amount of supplementary assistance payable is not to exceed the actual amount paid for rent or lodgings. Upon the death of one of a married pensioner couple, the surviving member becomes entitled to receive, for up to six fortnightly instalments, the equivalent of the two pensions that would have been paid had the spouse not died. The basic levels of the relevant pensions and benefits are adjusted automatically for movements in the Consumer Price Index (CPI). Levels have been adjusted in November and May by the percentage increase in the CPI between the previous December and June quarters and between the June and December quarters respectively. The Government has decided to amend the Act so that pensions and benefits are automatically adjusted once a year in November rather than twice a year as at present. The pension increase in November 1979 will be based on the percentage increase in the CPI between the June quarter 1978 and the June quarter 1979. The existing maximum rates of pensions and additional payments and the rates to come into force as from November 1978 are set out below: The estimated cost of the proposed increase in the rates of age pensions is $58.0 million in 1978-79 and $88.0 million in a full year. At 30 June 1978 there were 1 293 000 age pensioners (including wives of age pensioners in receipt of a wife's pension) and during 1978-79 the number is estimated to increase by 47 000 to 1 340 000. The average amount of age pension (including additions for children and supplementary assistance) is estimated to rise from $44.40 a week in 1977-78 to $47.50 a week in 1978-79, an increase of 7.0 per cent. The main reasons for this are the increase in pension rates in line with the CPI and the full-year effects of increased rates of pension introduced during 1977-78. {:#subdebate-69-60} #### Aged Persons Accommodation Under the *Aged and Disabled Persons Homes Act* 1954, organisations are assisted to provide suitable homes in which aged people may live in conditions approaching ordinary domestic life. Grants on a $2 for $1 basis may be made to religious and charitable organisations and local government bodies to meet the cost of erection, extension or purchase of homes for the aged. The maximum subsidy limits under the Act are $11 130 for a single unit and $12 910 for a double unit, plus a maximum of $1920 a unit for land. Handicapped adults may also be accommodated in subsidised homes. Expenditure on the provision of homes is estimated at $26.1 million in 1978-79 compared with $22.2 million in 1977-78. The *Aged Persons Hostels Act* 1972 is designed to encourage the provision of hostel accommodation for the aged. Subject to certain conditions, the Commonwealth meets the cost of providing additional hostel accommodation by eligible organisations up to a maximum of $16 700 a person. The Commonwealth also pays an additional grant of up to $2400 a person for the purchase of land; a further $250 a person is available for furnishings. Accommodation provided under the Act must be allocated strictly on the basis of need and without any contribution from the prospective resident. Expenditure under the Act is estimated at $29.9 million in 1978-79 compared with $30.0 million in 1977-78. Under the *Aged or Disabled Persons Homes Act* 1954, the Commonwealth also pays a personal care subsidy of $15 a week to eligible organisations for persons aged 80 years or ov:r and other residents who require, and are receiving, approved personal care while living in hostel-type accommodation provided by those organisations. Expenditure on the personal care, subsidy is estimated to rise from $12.6 million in 1977-78 to $14.0 million in 1978-79 as a result of an expected increase in the number of persons who will qualify for the subsidy. Since 1969-70, the Commonwealth has provided grants to the States to assist with the provision of self-contained accommodation at reasonable rentals for certain categories of single aged and service pensioners who have little or no means of support apart from their pensions. The *Housing Assistance Act* 1978 provides for the continuation of this scheme for a period of three years from 1978-79, with wider eligibility and under conditions giving the States greater freedom in the way the funds may be applied. Persons eligible for assistance include those in receipt of an age or invalid pension, a supporting parent's" benefit, a special benefit, a sheltered employment allowance, a training allowance in certain circumstances and some classes of service pension. Married as well as single pensioners will be eligible for assistance. Grants totalling $14 million will be provided in 1978-79, an increase of $4 million over 1977-78. {:#subdebate-69-61} #### Home Care Services Under the *States Grants (Home Care) Act* 1969, and the *States Grants (Paramedical Services) Act* 1969, the Commonwealth provides funds, in association with the States, for the provision of a range of home care services, mainly for aged persons, and for the provision of senior citizens centres. Under the *States Grants (Home Care) Act* 1969, the Commonwealth shares on a $2 for $1 basis with the States the cost of approved housekeeping or other domestic assistance provided wholly or mainly for aged persons in their homes. The Commonwealth also shares, on a $2 for SI basis with the States, up to a maximum of two-thirds of the capital cost of approved senior citizens centres arid, again on a $2 for $1 basis, the cost of the salary of a welfare officer employed in conjunction with such a centre. As announced by the Treasurer at the time of the Premiers' Conference, the Government has decided to amend the Act to change the funding basis for approved housekeeping or other domestic assistance and for the salary of welfare officers employed in conjunction with a senior citizens centre to a $1 for $1 sharing basis with the States. Grants towards the cost of approved housekeeping and other domestic assistance for aged persons in their homes are estimated to rise from $9.1 million in 1977-78 to $10.4 million in 1978-79 because of the expansion of existing services. Grants towards the cost of the salary of a welfare officer employed in conjunction with a senior citizens centre are estimated to rise from $0.7 million in 1977-78 to $1.1 million in 1978-79 because of the full year cost of salary increases awarded in 1977-78 and higher utilisation of approved positions. Under a three-year funding program $4 million annually is being provided for senior citizens centres; 1978-79 will be the third year of the program. Under the *States Grants (Paramedical Services) Act* 1969, the Commonwealth shares on a $1 for $1 basis with the States, the cost of approved paramedical services provided wholly or mainly for aged persons in their homes. Grants in 1978-79 are estimated at $0.8 million. The *Delivered Meals Subsidy Act* 1970 is designed to assist the establishment, expansion, improvement or maintenance of approved meals-on-wheels services. The basic rate of subsidy is 25 cents a meal. An additional subsidy of 5 cents a meal is payable if the organisation undertakes to include with each meal approved kinds and quantities of fresh fruit or fruit juices. Expenditure under the Act in 1978-79 is estimated at $2.3 million, compared with $2.2 million in 1977-78, as a result of an expected rise in the number of meals supplied by existing services. {:#subdebate-69-62} #### Assistance to Veterans and Their Dependants {:#subdebate-69-63} #### Disability Pensions and Allowances Disability pensions and allowances (and certain other benefits including medical treatment) are available to certain veterans and their dependants. The term 'veteran' includes any man or woman eligible for consideration under the *Repatriation Act* 1920 or associated Acts by virtue of service in the Australian armed forces. The term 'service' includes service in the 1914-18 War, the 1939-45 War, the Korea-Malaya Operations, the Far East Strategic Reserve, special service in South-East Asia (including Vietnam), and service with the Defence Force on or after 7 December 1972. Basic eligibility varies according to the nature of service. Broadly, for those with 'active service' incapacity or death resulting from 'any occurrence' during service may be accepted. For those with 'home service', however, the criterion is narrower, in that incapacity or death must have arisen out of, or be attributable to, that service; incapacity or death arising from a condition existing prior to enlistment may be accepted if aggravated or contributed to by the conditions of service. {:#subdebate-69-64} #### Classes of Disability Pensions Pensions are paid to eligible veterans in three main categories: The Special Rate (known as the T & PI) Pension, payable to a veteran who, as a result of service, is blinded, or is totally and permanently incapacitated so that he is unable to earn more than a negligible percentage of a living wage; The Intermediate Rate, payable to a veteran who, because of the severity of his incapacity accepted as related to service, can work only part-time or intermittently, and in consequence is unable to earn a living wage; and The General Rate, payable to a veteran who has an incapacity accepted as related to service, but who is still able to work full-time although under difficulty. The amounts payable range from 10 per cent to 100 per cent of the maximum General Rate, according to the assessed degree of incapacity. Pensions are also paid to the wives of incapacitated veterans and to their children. Such pensions are paid at rates varying with the assessed degree of the particular veteran's incapacity. When the death of a veteran has been accepted as related to his service, his widow qualifies for the war widow's rate of pension and for associated benefits, while his children each receive pensions at 'orphan' rates and other benefits. If a veteran's death has not been accepted as related to service, but at the time of death he was receiving, or is later adjudged to have been eligible to receive, a pension at the Special Rate or as a double amputee, his dependants qualify for pensions as if his death had been accepted as related to service. Other dependants of deceased veterans may qualify for pensions in certain cases. {:#subdebate-69-65} #### Allowances Various allowances are provided to supplement disability pensions. These allowances vary according to the type of severity of disablement and the special needs of the pensioners. {:#subdebate-69-66} #### Rates of Pensions and Allowances The Special, Intermediate and General Rate disability pensions and the war and defence widow pensions have been automatically adjusted each Spring and Autumn in line with movements in the Consumer Price Index. The Government has decided that Repatriation legislation will be amended to provide for automatic adjustment of these pensions on an annual basis, i.e. in November of each year. The existing and proposed rates of the main disability pensions and allowances are set out below. The Repatriation legislation will also be amended in relation to the provision for the automatic acceptance of pulmonary tuberculosis as a basis for disability pension and the guaranteed minimum pension rate of 100 per cent payable in respect of it. It is proposed to review all pensioners in this category and to freeze at their present levels pensions which are found to be over-assessed. The Minister for Veterans' Affairs will be announcing details of this change. Sustenance Allowance is to be replaced by a Loss of Earnings Allowance which will be paid to veterans who have suffered a loss of earnings during the investigation of a claim or while receiving medical treatment for an accepted disability. The allowance will be paid at a rate not exceeding the Special Rate pension or the actual loss of earnings, whichever is lower. The proposed increases in the rates of disability pensions in November 1978 are estimated to cost $8.3 million in 1978-79 and $11.7 million in a full year. During 1977-78 the average number of veterans and their dependants in receipt of disability pensions was 473 000; in 1978-79 the number is estimated to be 458 000. The effect on expenditure of this estimated decline in numbers is more than offset by the full year effects of increased rates of benefits introduced in 1977-78 and the increases in benefit rates in line with movements in the CPI in November 1978. {:#subdebate-69-67} #### Service Pensions Service pensions may be payable to: a male veteran who served in a theatre of war and who has attained the age of 60 years or is permanently unemployable; a female veteran who served in a theatre of war or embarked for service abroad and has attained the age of 55 years or is permanently unemployable; ex-members of the Defence Forces of British Commonwealth countries who served in a theatre of war and have had at least ten years residence in Australia; and a veteran suffering from pulmonary tuberculosis irrespective of age or the area of service. As with disability pensions, legislation will also be introduced to remove pulmonary tuberculosis as a basis for the grant of service pension. Those veterans currently receiving Service Pension for this reason will, however, continue to do so. Service in a 'theatre of war' means, in respect of the 1914-18 War or 1939-45 War, service 'at sea, in the field or in the air in naval, military or aerial operations against the enemy in an area, or on an aircraft or ship of war, at a time when danger from hostile forces of the enemy was incurred in that area or on that aircraft or ship of war . . .' In respect of certain later service, 'service in an operational area', and 'special service' as defined are the qualifications equivalent to service in a 'theatre of war'. A service pension is the broad equivalent of an age or invalid pension. The advantages to the veteran are availability of the service pension five years earlier and, in certain circumstances, eligibility for a wide range of repatriation medical treatment services. Service pensioners are eligible for the same range of pensions and allowances as age pensioners and the rates of benefits are the same. Like age pensions, service pensions will be increased in November 1978 in line with movements in the Consumer Price Index. Service pensions are paid, free of income test, to eligible veterans aged 70 years and over. For eligible veterans under 70 years of age, 50 per cent of any disability pension received is disregarded as income for service pension income test purposes. With this exception service pensions are subject to the same income test arrangements as social security pensions. The Government has decided to amend the Repatriation legislation to freeze the service pension paid to eligible veterans aged 70 years and over at its present level and pay future increases in the form of an income tested supplement. This will be consistent with the treatment of comparable social security pensions but these veterans will be eligible to have any disability pension treated in the same way as veterans under 70 years of age for the purposes of the income test. During 1977-78 the average number of service pensioners (including wives) was 174 600; this number is estimated to rise to 201 000 in 1978-79. Increased expenditure in 1978-79 reflects this increase in numbers, the full-year effect of pension increases granted in 1977-78, and the increased rates to apply in 1978-79. The proposed increase in the rates of service pensions in November 1978 is estimated to cost $9.4 million in 1978-79 and $17.4 million in a full year. Assistance to the Handicapped {:#subdebate-69-68} #### Invalid Pensions and Allowances Invalid pensions are payable to persons not less than 16 years of age who are permanently incapacitated for work to the extent of at least 85 per cent or permanently blind. Pensions are subject to an income test except in the case of people who are permanently blind. If the incapacity or blindness occurred outside Australia, the residence qualification is the same as for an age pension. Invalid pensioners are eligible for the same additional payments as age pensioners and the rates of payment are the same. Similarly, wife's pension is payable, subject to income test, to the wife of an invalid pensioner if she is not eligible for an age, invalid or service pension in her own right. At 30 June 1978 there were 254 000 invalid pensioners (including wives of invalid pensioners in receipt of wife's pension) and during 1978-79 the number is estimated to increase by 16 000 to 270 000. The average amount of invalid pension (including additions for children and supplementary assistance) is estimated to rise from $45.80 a week in 1977-78 to $49.10 a week in 1978-79, an increase of 7.2 per cent. The main reasons for this are the proposed increase in pension rates in line with the Consumer Price Index in November 1978 and the full-year effects of increased rates of pension introduced during 1977-78. The estimated cost of the increase in rates of invalid pension in November 1978 is $14.0 million in 1978-79 and $22.0 million in a full year. {:#subdebate-69-69} #### Sheltered Employment Allowances Sheltered employment allowances are payable to disabled people engaged in approved sheltered employment who are qualified to receive an invalid pension or who would become so qualified if they ceased to be provided with sheltered employment. The allowance is subject to the same income test as applies to the invalid pension and the rates of payment are generally the same. An incentive allowance of $5 a week is paid (free of income test) to the recipients of sheltered employment allowance. Recipients of the sheltered employment allowance are not eligible for supplementary assistance. {:#subdebate-69-70} #### Handicapped Child's Allowance A handicapped child's allowance of $15 a week is payable to parents or guardians in respect of a child under the age of 16 years who is cared for at home and who, because of the severity of the handicap, is in need of constant care and attention. Subject to the discretion of the Director-General, a handicapped child's allowance is also payable, wholly or in part, where .a person has the custody, care and control of a substantially handicapped child and, as a consequence of continuing substantive expenditure associated with the child's disability, the person suffers financial hardship. The Government has decided to extend payment of handicapped child's allowance in respect of full-time student children aged 16 to 25 years except in cases where the child is in receipt of an invalid pension. The Government has also decided to amend the Social Services Act to pay handicapped child's allowance on a monthly basis rather than four-weekly as at present. The allowance will be paid at the rate of $65 a month. The number of recipients at 30 June 1978 was 21 000 and this number is expected to increase to 24 000 by 30 June 1979. Expenditure is estimated to rise from $16.3 million in 1977-78 to $17.0 million in 1978-79 as a result of the increased numbers expected to qualify for the allowance. The Commonwealth pays a handicapped children's benefit of $5.00 a day, for each child under 16 years of age, to charitable and religious organisations conducting approved homes providing accommodation and care for mentally and physically handicapped children. The benefit continues to be paid to an eligible organisation when a child is absent from the institution for a short period only such as a week-end home visit. Expenditure is estimated to increase from $1.7 million in 1977-78 to $2.1 million in 1978-79 due to an expected increase ia the number of organisations becoming eligible for subsidy. {:#subdebate-69-71} #### Handicapped Persons Facilities Under the *Handicapped Persons Assistance Act* 1974, the Commonwealth provides subsidies on a $4 for $1 basis to non-profit organisations and local governing bodies for the purchase, construction, extension, alteration, rental and maintenance of premises that cater for physically and mentally handicapped people. Buildings qualifying for subsidy comprise day training centres for handicapped children, activity therapy centres, training centres and sheltered workshops for handicapped adults and residential projects for people who attend these establishments. Residential projects for people who, because of a disability, need special accommodation to allow them to engage in normal outside employment also qualify for subsidy. Subsidies on a $4 for $1 basis are available also for the cost of furnishing and equipping the various types of centres, while assistance with operating costs may be provided by means of staff salary subsidies. The latter are usually on a $1 for $1 basis although a higher proportion, up to 100 per cent, may be paid for the first two years of operation of some new projects. A training fee of $500 is paid to eligible sheltered workshops for each former employee who, after completing more than six months sheltered employment, graduates to and retains employment for 12 months or more. Under a three-year program of assistance, $30 million was provided for handicapped persons facilities in 1976-77 and $37.9 million in 1977-78; $52 million will be provided in 1978-79. {:#subdebate-69-72} #### Rehabilitation Services The Commonwealth Rehabilitation Service attempts to restore disabled people to their fullest physical, mental, social and vocational usefulness. Treatment and training are provided free to persons if there is a reasonable prospect of their being able to undertake full-time, part-time or sheltered employment or household duties or of their becoming capable of leading an independent or semiindependent life at home. The following broad categories are accepted for rehabilitation: pensioners and claimants for pension who would be likely to derive substantial benefit from that treatment and training; beneficiaries and claimants for benefit who, without that treatment and training, would be likely to become unemployable; persons being paid allowances under section 9 of the Tuberculosis Act 1948 and who would be likely to derive substantial benefit from that treatment and training; persons of 14 or 15 years who, without treatment and training, would be likely to become qualified to receive invalid pension on attaining the age of 16 years; and any other persons between the age of 16 and 65 (men) or 16 and 60 (women) who would be likely to derive substantial benefit from that treatment and training. Persons who do not fall within these eligibility criteria may be accepted for rehabilitation on a paying basis. Expenditure is estimated to rise from $15.2 million in 1977-78 to $18.7 million in 1978-79 as a result of an expected increase in the numbers to be accepted for treatment and training, the full year effect of price and salary increases during 1977-78 and the extension of eligibility for treatment free of charge. The Commonwealth and Tasmanian Governments have agreed to share the costs of establishing and operating a joint rehabilitation centre for handicapped persons in Hobart. The Commonwealth meets up to half the capital cost of the Centre. Its contribution is estimated at $1.1 million in 1978-79 compared to $0.9 million in 1977-78. {:#subdebate-69-73} #### Assistance to Widows and Supporting Parents {:#subdebate-69-74} #### Widows' Pensions and Allowances Pensions are payable to widows subject to an income test. No period of residence is necessary if a woman and her husband were residing permanently in Australia when she became a widow. In other cases, there is a residence qualification of either 5 years immediately prior to claiming a pension or 10 years continuous residence in Australia at any time. There are three classes of widow's pension: Class A - A widow with one or more qualifying children in her care. Class B - A widow without qualifying children who is at least 50 years of age or at least 45 years of age if her Class A pension ceased after she reached that age because she no longer had a qualifying child in her care. Class' C - A widow without qualifying children who is in necessitous circumstances within 26 weeks of her husband's death. For all classes, the term 'widow' includes a woman who was the common-law wife of a man for at least three years immediately before his death. For Class A and B, it includes a wife who has been deserted for six months, a divorcee, a woman whose husband has been imprisoned for six months and a woman whose husband is in a mental hospital. Widow pensioners may be eligible for supplementary assistance, additional pension for dependent children and mother's allowance in lieu of guardian's allowance at the same rates as age and invalid pensioners. These payments are subject to an income test. At 30 June 1978 there were 150 000 widow pensioners and during 1978-79 the number is estimated to increase by 11 000 to 161 000. The average rate of pension (including additions for children and supplementary assistance) is estimated to rise from $57.40 a week in 1977-78 to $61.00 a week in 1978-79, an increase of 6.3 per cent. The estimated cost of the increase in the rates of widows' pensions in November 1978 is $9.0 million in 1977-78 and $14.0 million in a full year. {:#subdebate-69-75} #### Supporting Parents' Benefits and Allowances A supporting parent's benefit is paid to unmarried mothers and mothers who are separated wives or de facto wives and de facto wives of prisoners or of mental hospital patients. In the case of unmarried mothers, benefit becomes payable six months after the child's birth and, in other cases, from six months after the event which gives rise to eligibility (e.g. separation) provided a child is six months old. Supporting parent's benefit is paid immediately to a widowed father, an unmarried father, a father whose de facto wife dies or a divorced father, provided a child is six months old. It is payable to separated husbands and de facto husbands and to husbands and ex husbands of prisoners or mental hospital patients after six months from the date of the event which gives rise to eligibility provided a child is six months old. The benefit is payable at the same rate and subject to similar conditions as the Class A widow's pension. Supporting parents may also be eligible for supplementary assistance, additional benefit for dependent children and guardian's allowance. At 30 June 1978, there were 59 000 supporting parent beneficiaries and during 1978-79 the number is estimated to increase by 8000 to 67 000. The average rate of benefit (including additions for children and supplementary assistance) is estimated to rise for $66.50 a week in 1977-78 to $70.50 a week in 1978-79, an increase of 6 per cent. The estimated cost of the increase in the rates of supporting parent's benefit in November 1978 is $4 million in 1978-79 and $6 million in a full year. {:#subdebate-69-76} #### Other Under the *States Grants (Deserted Wives) Act* 1968, the Commonwealth shares, up to certain limits, on a $1 for $1 basis with the States the cost of helping mothers of families without a breadwinner where the mothers are ineligible for a Class A widow's pension or a supporting parent's benefit. Assistance is provided during the first six months after the date of the event which gives rise to eligibility (e.g., the birth of a child or separation). The main groups of mothers assisted are deserted wives, deserting wives, wives of prisoners and unmarried mothers. After the first six months, these groups of mothers may qualify for either a Class A widow's pension or a supporting parent's benefit. Expenditure is estimated to rise from $20.1 million in 1977-78 to $23.0 million in 1978-79 due to a small expected increase in numbers and the full year effect of rate increases during 1977-78. {:#subdebate-69-77} #### Assistance to Families {:#subdebate-69-78} #### Family Allowances Family allowances are payable to people with children under 16 years of age or 16 years but under 25 years of age and receiving full-time education at a school, college or university and not in employment. Allowances are usually paid to the mother. Special conditions apply if the person does not intend to reside permanently in Australia. The rates of family allowance are: The Government has decided to amend the Act so that family allowances will be paid from June 1979 on a monthly basis and the present weekly rates will be converted to a monthly equivalent (rounded upwards to the nearest five cents). The new rates of family allowance will be: The Government has also decided to amend the Act so that, from 1 January 1979, family allowance payments will be income tested for each child on the basis of that child's income. Parents will not be eligible for family allowance in respect of children receiving student allowances under the Tertiary Education Assistance Scheme and other related scholarship schemes but appropriate adjustment will be made to these allowances to ensure that all families of tertiary students will receive broadly the same base payments. Payment of family allowance will also be precluded in respect of a person receiving invalid pension. At 30 June 1978, there were 4 305 000 children (including student children and children in institutions) covered by the allowances and the number is estimated to increase to 4 307 000 by 30 June 1979. Outlays are estimated to decrease from $1038.1 million in 1977-78 to $948.2 million in 1978-79 due to the changes detailed above. As announced in the Budget Speech, the Government has decided that payment of family allowance, orphan's pension, handicapped child's allowance and additional pension/benefit for a child will no longer be made outside Australia except where the child is: temporarily abroad; living abroad pending migration to Australia (within 4 years); and living abroad with a person receiving an Australian pension or benefit - that person will be entitled to payment of additional pension/benefit for a child, but not family allowance. {:#subdebate-69-79} #### Maternity Allowance Maternity allowance is payable, as a lump sum, to mothers on the birth of children. There is no income test. The Government has decided to amend the Act to discontinue payment of maternity allowance for births occuring after 31 October 1978. Maternity allowances cost $7.2 million in 1977-78. Payments in 1978-79 in respect of eligible births are estimated at $2.9 million. {:#subdebate-69-80} #### Children's Services The Commonwealth provides capital and recurrent assistance for pre-school and child care projects including home care, vacation and after-school care projects. Assistance is provided through the State Governments and directly to organisations concerned with pre-school and child care activities. Since 1 January 1977, assistance to the States for the recurrent costs of preschool services has been provided in the form of a block grant, subject to certain broad requirements concerning priority of access. An amount of $39 million was provided to the States by way of block grants in 1977-78. The Government has decided that $32.75 million will be paid to the States by way of block grants in 1978-79 and that this will represent the total Commonwealth contribution to pre-schools in the States, for both capital and recurrent purposes. Total expenditure on children's services is estimated at $65.1 million in 1978-79, compared to $71.2 million in 1977-78. {:#subdebate-69-81} #### Other Grants are made to approved marriage guidance organisations (estimated at $2.2 million in 1978-79) and for the provision of family planning facilities and the training of medical personnel (estimated at $0.8 million in 1978-79). An orphan's pension of $11 a week is payable, free of income test, to the guardian of a child under 16 years of age or a full-time student over 16 but under 25 years of age. It is paid in respect of a child, both of whose parents are dead, or one of whose parents is dead and the whereabouts of the other is unknown, or in respect of a child whose sole surviving parent or adoptive parent is in prison or in a mental hospital. The Government has decided to amend the Act to pay orphan's pension on a monthly basis rather than four-weekly as at present. The weekly rate will therefore be converted to a monthly equivalent of $47.70. Orphans pension will no longer be paid in respect of a person who is receiving an invalid pension. Expenditure is estimated at $2.6 million in 1978-79, compared with $1.9 million in 1977-78; the increase reflects the expected rise in the numbers becoming eligible. Assistance to the Unemployed and Sick {:#subdebate-69-82} #### Unemployment and Sickness Benefits Unemployment and sickness benefits are respectively available, subject to an income test, to people who are unemployed or to people who are temporarily incapacitated for work and have thereby lost income. A special benefit may be paid to a person ineligible for a pension or for an unemployment or sickness benefit if he is unable to earn a sufficient livelihood for himself and his dependants. To be eligible for unemployment or sickness benefit, a person must be at least 16 years of age and under 60 (females) or under 65 years (males). The person must also have lived in Australia for at least a year immediately prior to claiming benefit or intend to remain here permanently. The basic rates of benefit are generally the same as for age and invalid pensions except for single people under 18 years of age. This group is eligible for a maximum payment of $36 a week and the benefit is not subject to the automatic indexation provisions for increases in the Consumer Price Index. Beneficiaries are also eligible for additional benefit for each dependent child. As announced in the Budget Speech, the Government has decided to amend the Act to remove the rates of benefit paid to unemployment beneficiaries without dependants from the automatic indexation provisions. It is not proposed to make any adjustment to these benefits in 1978-79. After receiving benefits for six consecutive weeks sickness beneficiaries become eligible, subject to a special income test, to receive supplementary allowance of up to $5.00 a week if they pay rent. This allowance is not payable to beneficiaries in hospital who have no dependants. The cost of the increase in the rate of unemployment, sickness and special benefits in November 1978 is estimated to be $10.0 million in 1978-79 and $15.0 million in a full year. Approximately half of the estimated gross savings of $100 million in 1978-79 stemming from the review of the Department of Social Security's systems and procedures (see earlier reference) are reflected in the unemployment benefits estimate. {:#subdebate-69-83} #### Unemployment Relief {:#subdebate-69-84} #### Community Youth Support Scheme The Community Youth Support Scheme (CYSS) was introduced in November 1976 to assist young unemployed persons who have registered with the Commonwealth Employment Service. The aim of CYSS is to improve the employability of the unemployed young and to maintain an orientation towards work. Under the Scheme financial assistance is provided to community groups, including recognised youth organisations and local government authorities, to meet the administrative and operating costs of the projects conducted by those bodies to assist the unemployed young. An allowance of up to $6 a week may be paid to participants to meet fares and incidental expenses, this allowance being additional to unemployment benefit received by participants. Expenditure under CYSS in 1977-78 amounted to $5.7 million; $9.0 million has been provided for 1978-79. {:#subdebate-69-85} #### Fraser Island Following its decision to cease granting export licences for minerals from sand mining on Fraser Island, the Commonwealth agreed to provide $10.0 million to Queensland for allocation by that State to create employment opportunities in the Maryborough region. Amounts of $1.0 million and $3.0 million were provided in 1976-77 and 1977-78, respectively, and it is intended to provide a further $3.0 million both in 1978-79 and 1979-80. {:#subdebate-69-86} #### Relocation Assistance Scheme In October 1976 the Government introduced the Relocation Assistance Scheme to help overcome the difficulties of unemployed persons who are unable to secure continuing employment in their present locality and are without prospects of doing so, even with re-training. Assistance is made available to enable eligible persons to move to another locality to take up either employment or training under NEAT leading to employment. Assistance is provided for fares and for other costs incurred by unemployed workers and their families changing their place of permanent residence, including removal expenses of $750 (maximum), re-establishment costs (related to family size), legal and agents' fees of $1000 (maximum) or rental allowances of $500 (maximum). The Scheme is estimated to provide assistance for about 1200 relocations at a cost of $1.2 million in 1978-79, an increase of $0.5 million on 1977-78. {:#subdebate-69-87} #### Other Welfare Programs {:#subdebate-69-88} #### Funeral Benefits A funeral benefit of up to $20 is payable to any person liable for the funeral costs of an age or invalid pensioner. A higher benefit of up to $40 is payable to an age, invalid or widow pensioner (including a person in receipt of supporting parent's benefit) liable for the funeral costs of a spouse, a child or another such pensioner. For these benefits 'pensioner' means a person who satisfies, or had satisfied, the Commonwealth Government pensioner 'fringe' benefits income test. Expenditure is expected to remain steady at $1.6 million in 1978-79. {:#subdebate-69-89} #### Telephone Rental Concessions A reduction of one-third in the basic annual rental for a telephone is available to pensioners and recipients of some other benefits who meet certain requirements including, in most cases, a special income test. Expenditure on concessions to social security and repatriation pensioners is expected to rise from $15.4 million in 1977-78 to $16.6 million in 1978-79 as a result of an expected increase in the number of persons applying for the concession. {:#subdebate-69-90} #### Assistance to Homeless Men and Women The *Homeless Persons Assistance Act* 1974 provides for the payment of capital grants to voluntary agencies and to local authorities for approved projects (such as night shelters, reception centres and hostels) in order to upgrade and replace inadequate existing accommodation and to build new facilities for homeless persons. It also provides payment of a salary subsidy of 50 per cent of the salary of approved staff, an accommodation subsidy of 75 cents a person a day and a meal subsidy of 25 cents a meal in respect of non-resident homeless persons. The Act was initially to be in force for a three-year period but was extended for one year to December 1978 to allow for a proper evaluation. The Government has decided to extend the Act for a further year to December 1979 to allow it to consider the evaluation and to make decisions on the future of the program. Expenditure in 1978-79 is estimated to be $4.8 million, compared with $2.7 million in 1977-78. {:#subdebate-69-91} #### Assistance for Migrants In line with the Government's endorsement of the recommendations of the *Review of Post Arrival Programs and Services for Migrants* presented in April 1978, additional funds are being provided in 1978-79 for improving services to migrants. Under this heading expenditure on translation and interpreting services is estimated to rise from $0.4 million in 1977-78 to $1.0 million in 1978-79 to allow for increased usage, for the extension of the Community Interpreter Service to Canberra/Queanbeyan and Hobart, and to assist the States to provide translation and interpreting services. Grants to community agencies involved in migrant integration activities will increase to $2.7 million in 1978-79, including assistance of $1.0 million to the Good Neighbour Council and increased provision for the operation of migrant information and resource centres in Sydney and Melbourne. The Northern Territory will assume responsibility for the provision of essential services to Aboriginal communities in the Territory in 1978-79; expenditure for this purpose was previously included under this heading. In 1978-79 expenditure under this heading is estimated at $39.6 million for programs carried out through the Department of Aboriginal Affairs. Programs include assistance to Aboriginals through grants-in-aid in the fields of employment, general welfare, enterprises and town planning. New programs are to be introduced in 1978-79 to provide training for Aboriginals in management and other skills to assist them to manage their own affairs. Expenditure associated with the National Aboriginal Conference is also included under this heading. This Expenditure comprises the general running and capital expenses of the Departments of Social Security, Veterans' Affairs (except those relating to repatriation institutions), Aboriginal Affairs and the Social Welfare Policy Secretariat. {: type="1" start="5"} 0. HOUSING The Commonwealth finances a range of programs to provide housing and to assist persons to attain home ownership. Assistance provided under some of these programs takes the form of 'recycled' funds and of interest subsidies and tax concessions, which are not reflected in Budget outlays. Identifiable outlays from the Budget are estimated at $363.3 million in 1978-79, a reduction of 28.3 per cent compared with 1977-78. Advances to the States for Housing An amount of up to $316 million is to be advanced to the States in 1978-79 for welfare housing purposes under the terms of new three-year housing Agreements to be executed under the authority of the *Housing Assistance Act* 1978. The advances, which are repayable at low rates of interest over a 53 year period, assist the States to provide through their housing authorities concessional rental accommodation for low income earners and to provide concessional loans to assist low income earners into home ownership. The arrangements for 1978-79 include cost sharing arrangements with the States for capital expenditure on housing. Of the $316 million provided in the Budget, the Commonwealth will make available to the States $186 million in the form of base advances while a further $130 million will be made available on a $1 for $1 matching basis with estimated State expenditures in 1978-79 on their housing programs. In addition to expenditures on welfare housing, other State expenditures for the provision of housing or assistance towards home ownership will qualify as matching funds. The allocations in 1978-79 between home ownership assistance and rental assistance have still to be determined. By the third year of the Agreements (1980- 81), however, at least 40 per cent of the total advances are to be allocated to home ownership programs. Home purchase assistance will be directed to those who are unable to obtain mortgage finance in the private market. The Agreements will not, however, impose specific means tests or prescribe how assistance is to be provided; each State will be able to determine for itself the conditions of eligibility for home purchase assistance and to apply its funds to schemes of its own choosing. Assistance will be provided on flexible terms so as to limit concessions, as far as practicable, to the period of real need. Purchasers of public housing also will have access to loans from the home purchase assistance program if they are unable to obtain finance in the private market. The remainder of the advances will be applied to the construction or acquisition of public housing for rental or sale. The States will have the responsibility for the design and conduct of their programs and will be free to determine eligibility criteria, provided that assistance is directed to those in need. The States have agreed to move rental ceilings towards market rents and to continue rebates so that those unable to meet the ceiling rent will pay a rent geared to their income and other family circumstances. The Agreements will not impose a limit on the number of dwellings that may be sold, but all sales by the housing authorities are to be at market value or replacement cost, and on the basis of cash transactions. Details of the State by State allocation of the $316 million are presented in the document *Payments to or for the States, the Northern Territory and Local Government Authorities, 1978-79* published concurrently with the Budget Speech. {:#subdebate-69-92} #### Grants to States for Housing The *States Grants (Housing) Act* 1971 provides for housing assistance to the States by way of basic grants of $2.75 million a year, payable for a period of 30 years, in respect of the States' housing operations in each of the years 1971-72 and 1972-73; $5.5 million will again be paid in 1978-79. The payments are in lieu of an interest concession on funds used by the States for welfare housing in those years. Further details of these arrangements are presented in the document *Payments to or for the States, the Northern Territory and Local Government Authorities, 1978-79.* {:#subdebate-69-93} #### Home Savings Grants Home Savings Grants are payable to eligible persons to assist with the purchase or construction of a first home contracted for on or after 1 January 1977, on the basis of $1 for each $3 of savings held in an acceptable form. Savings from 1 January 1976 are eligible. Grants of up to $667 are payable in respect of savings over at least one year, and of up to $1333 in respect of savings over two years. From 1 January 1979, the maximum grant will be increased to $2000 and will be payable in respect of savings held over a three-year period. An amount of $20 million has been provided for Home Savings Grants in 1978-79; it is expected that this will result in waiting periods of up to 9 months before grants are paid. {:#subdebate-69-94} #### Housing Loans to Savings Banks Under the *Banks (Housing Loans) Act* 1974 advances of $150 million were made to savings banks and certain other banks to give a short-term stimulus to activity and employment in the home building industry. Balances outstanding at 30 June 1978 amounted to $75.2 million of which $10.7 million is expected to be repaid in 1978-79. {:#subdebate-69-95} #### Defence Service Homes An "amount of $10 million will be provided by way of a capital advance to the Defence Service Homes Trust Account in 1978-79. An estimated $68.8 million, representing mainly repayments of principal by borrowers, will be retained in the Trust Account for re-lending. A total of $78.8 million will, therefore, be available for Defence Service Homes loans in 1978-79, compared with $90 million in 1977-78. In the Budget last year the Government announced its intention to introduce an application fee of $75 for an initial loan to acquire a home and $50 for any additional loan. The *Defence Service Homes Amendment Bill* 1978, which was introduced into Parliament in the Autumn Sittings 1978, makes provision for the introduction of these application fees. The Bill also provides authority for other measures, including: eligibility for a Defence Service Homes loan for persons who commenced full-time service in the Defence Forces after 16 August 1977 to be on the basis of the completion of a period of six years continuous full-time service, subject to a commitment to render further full-time service; recognition of de facto relationships; and more flexible arrangements for the Defence Service Homes Insurance Scheme. Defence Service Homes estate development and construction activities are being phased out and surplus land holdings are to be sold for private home building purposes. Completed building blocks will be offered to eligible persons at market value. Lots not sold by this process, together with other land holdings, will be disposed of by public auction as circumstances permit. Revenues estimated at $6 million are expected from the sale of this land in 1978-79 and capital repayments of an equivalent amount are to be made from the Defence Service Homes Trust Account to the Consolidated Revenue Fund. In 1978-79 an amount of $13.8 million has been provided for the Corporation's administrative expenses, including salaries but excluding rent and repairs and maintenance; comparable expenditure in 1977-78 was $13.4 million. The figures include an estimated interest subsidy element of $25.6 million in 1978-79 compared with $24.6 million in 1977-78. The interest subsidy reflects the extent to which interest charged to borrowers of Defence Service Homes loans falls short of the interest payable to the Commonwealth on the Corporation's capital. Interest receipts from the Corporation, estimated at $71.8 million in 1978-79, are recorded in estimates of receipts (see Statement No. 4). Repayments by the Corporation to Consolidated Revenue (other than from the proceeds of land sales) are estimated at a net $7.8 million in 1978-79. This total includes $2.6 million in administrative fees and recoveries; the balance of $5.2 million is the estimated amount of net excess payments to the Corporation by borrowers. {:#subdebate-69-96} #### Other General Housing Expenditure Expenditure under this heading is mainly for caretaking and repairs and maintenance of rental dwellings in the Australian Capital Territory. Housing in the Territories Outlays under this heading in 1977-78 were for the construction of new houses and flats and advances to individuals for the construction of dwellings in the Australian Capital Territory and the Northern Territory. Outlays in 1978-79 relate only to the Australian Capital Territory, responsibility for all housing matters in the Northern Territory having passed to the Northern Territory under self-government arrangements. The Budget provision for the construction of rental dwellings in the Australian Capital Territory has been reduced to $4.8 million in 1978-79, from $13.1 million in 1977-78. This reduction reflects the continuing slow down in the rate of growth of the National Capital and a consequential falling off in the demand for new housing. Other Advances for Housing in 1978-79 comprise allocations from the Budget and funds recycled through the ACT Housing Trust Account. A total amount of $13.7 million is expected to be available to the ACT Commissioner for Housing for first mortgage lending in 1978-79; this compares with $20.1 million in 1977-78. Of this amount, $8.9 million will be provided from the Budget ($9.5 million in 1977-78). The balance of $4.8 million is estimated to be available from funds recirculated through the ACT Housing Trust Account. The reduction of $6.4 million in the total available reflects the Government's decision to apply eligibility criteria for loans by the Commissioner that are consistent with the new Housing Agreements with the States. {:#subdebate-69-97} #### Housing for Aboriginals Special assistance for Aboriginal housing is estimated to increase by $5.2 million in 1978-79 to $40.3 million. The total includes grants to the States ($11.1 million) and to individual Aboriginal Housing Associations ($16.9 million) for the construction and purchase of homes for Aboriginal families. Provision also is made in the 1978-79 estimates for a payment of $5.4 million to the Aboriginal Housing and Personal Loans Fund of the Aboriginal Loans Commission from which Aboriginals, unable to obtain housing (and personal) loans from other financial institutions, are assisted. In 1977-78 the Commission approved 198 housing loans and a similar number is expected to be approved in 1978-79. An amount of $6.0 million is to be paid to Aboriginal Hostels Limited for the provision of hostel accommodation in 1978-79, an increase of $0.7 million over 1977-78. {:#subdebate-69-98} #### Other Recoveries and Repayments This item includes revenue from Government-owned rental dwellings in the Australian Capital Territory which is estimated to increase from $19.1 million in 1977-78 to $21.0 million, reflecting the full year effect of the rent increase in September 1977. {: type="1" start="6"} 0. URBAN AND REGIONAL DEVELOPMENT NEC AND THE {: .page-start } page 147 {:#debate-70} ### ENVIRONMENT Total outlays on the activities covered by this heading are estimated to decline by 29.5 per cent in 1978-79, to $108.1 million. Urban and Regional Development nec This- heading covers outlays related to urban and regional development which are not classified to other functions. Included is financial assistance for the AlburyWodonga growth centre, general decentralisation, urban rehabilitation, urban flood mitigation and expenditure on the physical development of urban centres in the Commonwealth territories. {:#subdebate-70-0} #### Growth Centres and Decentralisation Assistance Of the total of $35.5 million included for growth centres and decentralisation assistance, approximately $20 million represents capitalised interest on advances to the States for Albury-Wodonga in 1978-79 and earlier years and for the BathurstOrange, Macarthur and Monarto growth centres in earlier years. (These and other capitalised interest provisions represent, in effect, notional advances to the States which are offset by notional equivalent receipts from the States. The notional advances indicate the extent of the real concession which is afforded to the States by the deferment and capitalization of interest payments.) An amount of $5 million - the same as in 1977-78 - is to be provided for the Albury-Wodonga growth centre; an additional $0.3 million - recorded as part of the General Administrative Expenditure item - is also provided for the estimated one-third contribution by the Commonwealth to the administrative expenses "of the Albury-Wodonga Development Corporation. A total of $3 million was provided for the Bathurst/Orange and Macarthur growth centres in 1977-78 but there are no comparable provisions in the 1978-79 estimates. The balance of $10.5 million is to support general decentralisation initiatives under the Government's Decentralised Development Program. This Program was introduced last year to provide assistance of a capital nature to State, local government and community bodies and private firms pursuing manufacturing and tertiary activities in selected non-metropolitan centres. The Minister for National Development approves projects under the Program following consideration of recommendations made by the Decentralisation Advisory Board. An amount of $6.1 million was included in the 1977-78 Budget estimates for this Program but while some commitments were entered into, no expenditure occurred last year. The $10.5 million to be provided in 1978-79 will fund both commitments carried over from 1977-78 and new projects to be approved in 1978-79. {:#subdebate-70-1} #### Urban Rehabilitation In 1974-75 the Commonwealth acquired, at a cost of $17.5 million, 700 dwellings on 19 hectares of land at Glebe from the Anglican Church with the view to rehabilitating the Estate and preserving accommodation for low income families. Expenditure in 1977-78 on rehabilitation of the Estate amounted to $0.9 million and $0.8 million was spent on administration and maintenance; the 1978-79 estimates include $1.1 million for further rehabilitation work and $0.7 million for administration and maintenance costs. An amount of $1.2 million is also included to meet estimated expenditure in 1978-79 on further acquisition and site development of land in the Woolloomooloo Basin of Sydney. The site is being developed mainly for residential purposes. This continues the provision of assistance to New South Wales, under an agreement concluded with the State Government in 1974-75, to provide grants of up to $17 million for the acquisition of 3.2 hectares of land and for planning and site development. Total payments to the State amounted to $9.4 million at the end of 1977-78. In addition to the provision of the financial assistance, the Commonwealth agreed to transfer, at no cost to the State, land valued in excess of $11 million. Most of these transfers have been completed. Such transactions, by their nature, are not shown in the Commonwealth's expenditure estimates. The agreement also provides for the State to make payments to the Commonwealth in respect of each unit of public housing produced and payment of the receipts from any part of the property that is not retained for public housing. Payments amounted to $0.5 million by the end of 1977-78 and receipts of $0.6 million have been allowed for in 1978-79. {:#subdebate-70-2} #### Urban Flood Mitigation The Commonwealth is providing assistance to Queensland to meet 40 per cent of the cost of flood mitigation works on the Breakfast and Enoggera creeks in Brisbane. The $0.9 million included in the Budget for 1978-79 represents the Commonwealth's contribution for the completion of these works. {:#subdebate-70-3} #### Land Commissions/ Urban Land Councils Under a program commenced in 1973-74, but since terminated, assistance was provided for land acquisition, for servicing the land acquired (where these costs were not met from normal government subventions) and for urban renewal and redevelopment. Payments amounting to $14.1 million were made to the States in 1977-78 to meet the Commonwealth's remaining commitments to the States for the Land Commissions/Urban Land Councils program. An amount of $12.1 million was also included in the 1977-78 Budget representing the capitalisation of interest payments on loans provided to the States in 1977-78 and previous years. This program is now terminated and the figure of $14.6 million included in the estimates for 1978-79 represents estimated capitalised interest in respect of the loans made to the States in earlier years. Following the review of the Commonwealth's involvement in urban land development programs in 1976-77, the Commonwealth Government, with the co-operation of the States, established an independent national inquiry into housing costs to prepare a report on the means available to improve the efficiency, and to lower the cost, of the supply of housing and the provision of infrastructure services within existing national resources. The report is expected to be available shortly. {:#subdebate-70-4} #### Other Urban Development and Amenities Funds provided under this heading for 1978-79 are mainly for the acquisition and development of land in the ACT for residential, commercial and industrial purposes. Expenditure in the ACT in 1978-79 is estimated to decline by $18.2 million. Responsibility for land development and related activities in the Northern Territory were transferred under self-government arrangements from 1 July 1978. {:#subdebate-70-5} #### Development of Aboriginal Community Amenities The Northern Territory will . assume responsibility for the provision of essential services to Aboriginal communities in the Territory in 1978-79; expenditure for this purpose was previously included under this heading. Expenditure under this item in 1978-79 includes $0.6 million for the provision of services to, and purchase of land by, the Aboriginal Land Fund Commission and $0.7 million under States grants programs for the improvement of facilities in Aboriginal communities. Protection of the Environment An amount of $2.1 million will be provided for purposes related to the protection of the environment in 1978-79, compared "with $0.8 million in 1977- 78. The increase reflects mainly the establishment of the Supervising Scientist and the Alligator Rivers Region Research Institute ($1.2 million in total) for the purpose of protecting the environment in the Alligator Rivers Region of the Northern Territory, in the context of uranium mining operations. Provision also is made in 1978-79 for expenditure on air quality monitoring activities ($260 000), for marine quality assessment ($100 000), and for grants to conservation bodies ($350 000). {:#subdebate-70-6} #### Sewerage and Garbage The estimated net outlays of $7.4 million in 1978-79 relate mainly to sewerage, drainage and waste disposal works in the Australian Capital Territory. The reduction compared . with 1977-78 reflects the near completion of work on the Lower Molonglo Water Quality Control Centre and the transfer of responsibilities to the Northern Territory from 1 July 1978. The program of assistance to the States was terminated at the end of 1976-77. {:#subdebate-70-7} #### General Administrative Expenditure This heading includes the administrative expenditure of the Department of Environment, Housing and Community Development ($12.5 million) and the National Capital Development Commission ($8.0 million). It includes also consultancy fees payable by the NCDC for investigation, design and construction purposes ($9 million). As indicated earlier, also included here is $0.3 million for the Commonwealth's one-third contribution to the estimated running costs of the Albury-Wodonga Development Corporation. The reduction of $4.2 million in these expenditures in 1978-79 reflects mainly an estimated decrease of $2.8 million in fees payable by the NCDC, the disbandment of the Darwin Reconstruction Commission in 1977-78 and reductions in staff numbers and administrative expenses generally in this area. {: type="1" start="7"} 0. CULTURE AND RECREATION The Commonwealth provides support for a wide range of cultural and recreational activities. Outlays in 1978-79 are estimated at $284.2 million, an increase of 8.9 per cent over 1977-78. The radio and television programs of the National Broadcasting and Television Service are presented by the Australian Broadcasting Commission and are broadcast through transmitters provided and operated on behalf of the Commonwealth by the Australian Telecommunications Commission. The allocation of $171.0 million for 1978-79 enables substantially the same level of operations as in 1977-78 and also includes $3.7 million for the first year of a three-year program of extensions to the National Broadcasting and Television Service network of transmitters, including installations of television repeater and translator stations in remote communities. {:#subdebate-70-8} #### Planning of Broadcasting and Television Planning of broadcasting and television services generally, which is carried out by the Postal and Telecommunications Department, includes examination of technical matters relating to the adequacy and location of national, commercial and public stations. Outlays by the department on these functions are estimated at $2.1 million in 1978-79. {:#subdebate-70-9} #### Regulation of Broadcasting and Television An amount of $2.8 million is provided for the Australian Broadcasting Tribunal to enable that body to conduct public inquiries into the granting and renewal of commercial and public station licences, and to regulate the radio and television industry as required under the Broadcasting and Television Act. {:#subdebate-70-10} #### Ethnic Broadcasting Ethnic radio transmissions in Sydney and Melbourne have been continued by the new statutory authority, the Special Broadcasting Service, set up on 1 January 1978. An amount of $4.5 million is being provided for ethnic broadcasting in 1978-79. The increase of $3.1 million reflects the full year operating costs of the new body, the Government's intention to upgrade and extend this service and to finance ethnic radio programs transmitted by public broadcasters in a number of centres; and the provision of $1 million for the commencement of a pilot ethnic television service drawing on existing technical resources. Outlays under this heading are for the operation of the National Library of Australia and the Canberra Public Library Service. Total outlays are estimated to be $14.3 million in 1978-79, an increase of $0.7 million. {:#subdebate-70-11} #### Australian National Gallery and Collection The Australian National Gallery commenced operations as a separate statutory authority in 1976-77. An amount of $5 million is provided for the Gallery's operational requirements and development program in 1978-79, compared with $4.2 million in 1977-78. Acquisition of further items for the National Collection is expected to require $3 million :in 1978-79. Expenditure on the new National Gallery building in 1978-79 is estimated at $9 million; the building is scheduled to be completed in 1981. {:#subdebate-70-12} #### Film Industry Development The Australian Film Commission assists the industry with equity capital and loans for the production, promotion and distribution of Australian film, radio and television programs, and provides grants for creative development in those media. The 1978-79 allocation of $6.3 million will enable continuation of industry assistance at about the same level as in 1977-78. *Assistance to the Arts* The Commonwealth's program of assistance to the Arts is administered by the Australia Council, with the assistance of Boards responsible for theatre, music, literature, Aboriginal arts, crafts and visual arts. The total allocation for the Council in 1978-79 is almost $26 million and consists of the following components: > *Libraries* $ million {:#subdebate-70-13} #### Australian Opera {:#subdebate-70-14} #### Australian Ballet Foundation {:#subdebate-70-15} #### Australian Elizabethan Theatre Trust Orchestras Public Lending Right Scheme General Support for the Arts Administration 2.520 1.344 2.131 0.885 15.470 3.601 25.951 {:#subdebate-70-16} #### War Memorials An amount of $3.0 million is provided for running costs and capital works of the Australian War Memorial in 1978-79, compared with expenditure of $1.5 million in 1977-78; the increase provides for the construction and equipping of a new building at Mitchell (ACT), and greater emphasis on conservation activities. {:#subdebate-70-17} #### Archives The Budget provides $9.8 million in 1978-79 for the preservation and maintenance of archival resources that are of national significance or of general public interest; this total includes $4.9 million for the construction and equipping of new repositories. {:#subdebate-70-18} #### Youth, Sport and Recreation Outlays on these activities in 1978-79 are estimated at $7.4 million. This includes $1.3 million to finalise outstanding commitments for community amenities projects approved under the Capital Assistance for Leisure Facilities Program; grants under this program amounted to $3.4 million in 1977-78. An amount of $4.9 million, including $1.3 million for a program of support for national sporting bodies, has been provided for other youth, sport and recreation programs in 1978-79. A Sports Advisory Council was appointed earlier in 1978 to provide advice on sports development and assistance under this program. $2.5 million is included in the Budget as the first instalment of a $10 million grant to be made available to the Queensland Government for the 1982 Commonwealth Games, and $0.6 million for the 'Life be in it' campaign. {:#subdebate-70-19} #### Other Cultural Organisations Grants totalling $0.8 million have been allocated to other cultural and national organisations, including the Women's Advisory Council and the National Trusts. Provision also has been made for issues of the National Flag, Royal Portraits, and recordings of the Anthem and National Song; for the Historical Memorials Committee; for the control of Historic Shipwrecks; and for the display and storage of historic relics. {:#subdebate-70-20} #### Wildlife and National Parks An amount of $4.9 million is included in the estimates for wildlife and national parks, compared with expenditure of $3.1 million in 1977-78. Funds totalling $3 million for the Australian National Parks and Wildlife Service include provision for the development of two parks of national significance - Kakadu and Uluru - in the Northern Territory. Provision is also made for grants to the States to acquire land for nature conservation purposes ($0.6 million), for the Great Barrier Reef Marine Park Authority ($0.74 million), and for the operation of nature reserves in the Australian Capital Territory. {:#subdebate-70-21} #### National Estate The Commonwealth provides assistance to State and local government bodies and to the National Trusts for the protection of the National Estate. For 1978-79 an amount of $2.6 million is provided to finance programs of assistance for the restoration, preservation and improvement of buildings and areas of special significance. Expenditure in 1977-78 was $2.3 million. / {:#subdebate-70-22} #### Australian Heritage Commission The Australian Heritage Commission is responsible for the development of measures for the protection of the National Estate, including a National Register of the National Estate. The running costs of the Commission are estimated at $496 000 in 1978-79. *Cultural and Recreational Activities in the Territories nec* This item relates mainly to the maintenance of theatres, parks, gardens and sporting facilities in the ACT.- {: type="1" start="8"} 0. ECONOMIC SERVICES This heading brings together the various services and categories of assistance provided by the Commonwealth to industry and to the community generally. It embraces the provision of economic infrastructure, the regulation of private sector economic activity and more direct forms of Government participation in economic activity. {: type="A" start="A"} 0. TRANSPORT AND COMMUNICATION The Budget provides $769.3 million for transport and communication activities in 1978-79, 9.9 per cent less than in 1977-78. {:#subdebate-70-23} #### Communication {:#subdebate-70-24} #### Australian Postal Commission and Australian Telecommunications Commission These two Commissions provide postal and telecommunications services in Australia. Each Commission is required to operate on a commercial basis with the financial objective of generating, by way of charges for services, such amounts as are necessary to meet all operating costs and at least half of its capital expenditure. During 1978-79 the Australian Postal Commission will draw upon funds accumulated from past operating surpluses to repay an estimated $19 million of its capital indebtedness to the Commonwealth; in 1977-78 $28 million was repaid. Last year $65 million was provided to the Australian Telecommunications Commission (Telecom) as interest-bearing advances from the Budget; no such advance is proposed in 1978-79. The Government has agreed, however, that Telecom may retain in 1978-79 an amount of $122 million, representing a portion of its superannuation provision, to assist in financing its capital expenditure. The remainder of Telecom's capital requirements, after utilizing all available internal resources, are to be raised by borrowings, mainly longer term borrowings from the domestic capital market. {:#subdebate-70-25} #### Overseas Telecommunications Commission This Commission, which is required to operate on a commercial basis, provides telecommunications services between Australia and other countries. In 1978-79 the Commission *will* make a capital repayment of $8 million to the Commonwealth; there was no comparable repayment in 1977-78. *Radio frequency management* Administration of the Wireless Telegraphy Act includes regulation of the operations of the many radio communications stations (including 'Citizen Band' stations) operating in Australia. The increased provision of $7.6 million in 1978-79, compared with expenditure of $6.5 million in 1977-78, is due mainly to the growth in 'Citizen Band' stations. *Administrative expenditure* This heading covers the costs of the Postal and Telecommunications Department including expenditure on the Task Force investigations of the need for a satellite communications system in Australia. {:#subdebate-70-26} #### Air Transport {:#subdebate-70-27} #### Advances to Qantas Airways Ltd and Australian National Airlines Commission Past advances comprised mainly the proceeds of loans raised by the Commonwealth on behalf of the airlines to assist in the financing of aircraft purchases. Amounts repaid by the airlines to the Commonwealth in respect of past loans - estimated at $18.6 million in 1978-79 - are in turn repaid to the lenders. No provision has been made for further loans to the airlines in 1978-79. {:#subdebate-70-28} #### Civil Aviation Services The Department of Transport provides many services to the air transport industry, including the provision and operation of over 80 airports and a network of air navigation facilities. These activities account for the major portion of administrative and operational expenditures and for the outlays on buildings, works and equipment. Administrative and operational expenditure on air transport activities in 1978-79 is estimated at $174.3 million, an increase of $6.7 million. The increased provision will ensure that the existing high standards of services and safety are preserved. The 1978-79 estimated expenditure of $16.4 million on buildings, works and equipment includes $2.3 million for land acquisitions connected with Brisbane, Melbourne and Perth airports. Most of the allocation for buildings and works is for projects that were begun in 1977-78 and earlier years. Works planned for commencement in 1978-79 include a new operations centre (estimated cost $2.35 million) at Adelaide Airport. A total of $11.0 million is to be provided for purchases of navigational aids and other technical equipment, including a further payment of $0.7 million under a program to upgrade the fire fighting capabilities at major airports (total cost of about $5 million over 4 years). {:#subdebate-70-29} #### Air Service Subsidies An amount of $483 000 has been provided in 1978-79 for continuing assistance to Connair Pty Ltd. It is intended to maintain a subsidy to the Company on a reducing basis over the next three years. Subsidy payments also will be continued to other operators of essential air services in remote areas of Western Australia, Queensland and the Northern Territory; the total allocation in 1978-79 is $270 000. {:#subdebate-70-30} #### Other Expenditure This item includes an amount of $3.49 million (an increase of 89 per cent on 1977-78) to meet the Commonwealth's share of approved maintenance and development projects proposed by local government authorities under the Aerodrome Local Ownership Plan. Also included is an amount of $660 000 to enable continuation of the Department of Transport's InterScan program and other aviation research in 1978-79. {:#subdebate-70-31} #### Civil Aviation Services - Recoveries *Air Navigation Charges.* The forecast increase of $3.6 million reflects expected growth in air traffic as well as the Government's intention to increase air navigation charges for general aviation by 15 per cent from 1 December 1978. *Other Recoveries.* As announced in the Budget Speech, the Government intends to achieve full recovery in respect of the domestic trunk sector over the next two years. This decision is expected to yield additional revenue of approximately $7.7 million in 1978-79 and $15.9 million in 1979-80. Revenue from airport rentals is estimated to increase by $8.7 million to $16.7 million in 1978-79. While there has been no change to the Government's policy of charging full economic rentals at capital city airports, the 1978-79 revenue estimate includes rental receipts of some $5 million which relate to earlier years' operations, and which are currently held in trust. In the light of a recent decision of the N.S.W. Supreme Court, the International Air Transport Association has sought repayment of some of those receipts. This matter is yet to be decided. Revenue from business concessions at airports is estimated at $11 million in 1978-79, a small increase over 1977-78. An extra $1.3 million revenue is expected to be raised in 1978-79 from charges, previously announced, for a wide range of regulatory services, presently provided by the Department of Transport at little or no cost to the user. {:#subdebate-70-32} #### Road Transport {:#subdebate-70-33} #### Road Grants to States The Budget provides for $508 million - an increase of 7 per cent or $33 million over 1977-78 - to be made available to the States under the *States Grants (Roads) Act* 1977. That provision accords with the Government's intention to at least maintain the value of these grants in real terms over the 1977-78 to 1979-80 triennium. (Last year, in addition to the $475 million made available under the *States Grants (Roads) Act* 1977, $2.9 million was provided to the States to meet commitments outstanding in respect of earlier Roads Grants legislation). *Road Construction and Maintenance - in the Territories* The allocation of $35.5 million under this heading provides for an increase of S2.3 million for the construction, improvement and maintenance of urban, arterial and rural roads, highways and bridges in the ACT, including parking facilities and public transport interchange systems. The reduction under this heading reflects the transfer to the Northern Territory, from 1 July 1978, of responsibility for Northern Territory roads and associated works. {:#subdebate-70-34} #### Road Construction and Maintenance - Other The Commonwealth is financing investigation and design work, undertaken by the joint Second Hobart Bridge Committee for a second Derwent River crossing in Hobart. Outlays on the project totalled $1.2 million to June 1978; a further $80,000 is provided in 1978-79 to complete this work. Expenditures shown under this heading are net of repayments amounting to $0.6 million per year from Queensland in respect of advances provided some years ago for the construction of beef cattle roads. *Public Transport Equipment in the Territories* Outlays in 1977-78 on this item comprised $2.0 million in respect of the Australian Capital Territory and $1.8 million in respect of the Northern Territory. The estimates for 1978-79 relate to the purchase of equipment for the Australian Capital Territory, responsibility for equipment in the Northern Territory having been transferred on 1 July 1978 to the Northern Territory. The increase in estimated expenditure reflects delays in 1977-78 in the delivery of buses for the Australian Capital Territory. {:#subdebate-70-35} #### Road Research and Investigations The reduction in the provision for road research and investigations in 1978-79 reflects the transfer of responsibility for traffic administration in the Northern Territory to the Territory; the provision for 1978-79 is the direct Commonwealth contribution to the Australian Road Research Board ($259 000). {:#subdebate-70-36} #### Rail Transport *Australian National Railways (ANR)* The Government has allocated $60.0 million to meet operating losses expected in 1978-79 and $32.6 million for ANR's capital works program. The major element in the capital works program is the construction of a standard gauge railway between Tarcoola and Alice Springs, for which $27.2 million is provided in 1978-79. As mentioned in the Budget Speech, the Government is concerned about ANR's mounting losses and has asked the Commission to set in hand action directed towards identifying possible solutions. *Rail Projects in the States* The Government has announced its intention to provide, to the States which still operate their own railway systems, a total of $70 million over the 5 years commencing 1978-79 for projects designed to upgrade the national mainline railway network. An amount of $3 million is provided for the commencement of the program in 1978-79. Details of the method by which this financial assistance is to be made available to the States, the terms and conditions to apply, and the selection of specific projects to be assisted in 1978-79 have still to be finalised. Repayments of past advances from the Commonwealth for State rail projects (mainly standardisation) are estimated to amount to $4.5 million in 1978-79. Urban rail projects in the States, for which the Commonwealth provides financial assistance under the *States Grants (Urban Public Transport) Act* 1978, are recorded under the 'Urban Public Transport' heading (see below). {:#subdebate-70-37} #### Other Rail Transport The Government has agreed to contribute up to $500 000 to meet half of the establishment costs of the Australian Railway Research and Development Organisation (ARRDO), which has been set up by Commonwealth and State railway authorities. The full $500 000 has been provided for this purpose in 1978-79. The organisation will provide a national centre for research and studies into matters relating to Australian railways. {:#subdebate-70-38} #### Urban Public Transport A new program of assistance totalling $300 million is being provided for the five year period commencing 1978-79. The *States Grants (Urban Public Transport) Act* 1978 provides for payments at the rate of up to $60 million a year, of which $40 million is allocated to the States in fixed guaranteed amounts, with the remaining $20 million to be allocated on the basis of needs and priorities assessed in the light of proposals submitted by the States. Under the Act the Commonwealth will meet two thirds of the cost of approved urban public transport projects. The Government decided to limit payments in 1978-79 to the guaranteed amount and proposes to add the $20 million which will not be paid in 1978-79 to the amounts available in later years of the program. In addition to the $40 million to be made available for the new program, $2 million has been included in the Budget to meet part of the Commonwealth's remaining liabilities under the previous Urban Public Transport Agreement. {:#subdebate-70-39} #### Shipping and Harbours {:#subdebate-70-40} #### Australian Shipping Commission The Australian Shipping Commission (ANL) is currently financing its capital program from internally generated funds and from overseas borrowings (for major items of capital equipment). ANL made no call on the Budget in 1977-78 and no such provision has been included in the 1978-79 estimates. The major component of ANL's 1978-79 capital program is a container terminal at Botany Bay. ANL is expected to repay $21.2 million in 1978-79 in respect of earlier loans from the Budget. {:#subdebate-70-41} #### Shipping Subsidies - Tasmania An amount of $25.7 million is provided for Tasmanian freight equalisation in 1978-79 - $23 million for the northbound scheme and $2.7 million for the southbound scheme. The schemes aim to make the door-to-door freight costs of eligible cargoes shipped between Tasmania and the mainland approximate the door-to-door costs of moving similar goods by road or rail over comparable interstate routes on the mainland. The estimates allow for the revised rates of assistance introduced on 1 July 1978. The provision for shipping subsidies to Tasmania also includes $2.0 million for the Australian Shipping Commission to subsidise the operation of the Empress of Australia' passenger service between Tasmania and the mainland. *Shipping and Harbours - other* These outlays include $3.3 million in 1978-79 for capital expenditure on equipment and facilities for the Department of Transport, mainly in respect of marine navigational aids. {:#subdebate-70-42} #### Transport Planning and Research The Commonwealth is providing $6.4 million in 1978-79 under arrangements for assistance to the States for an approved program of land transport planning and research projects. The total program supported under these arrangements is estimated to be $12.8 million, an increase of 7 per cent over 1977-78. The reduction in Commonwealth payments results from revised cost-sharing arrangements with the States: in 1978-79 the States will match Commonwealth expenditure on a $ for $ basis whereas in previous years costs were shared on a $2 Commonwealth for each $1 of State funds. In addition, $3.0 million is provided to finance the Bureau of Transport Economics (BTE). The functions of the BTE cover research into the economics and operations of all modes of transport. {:#subdebate-70-43} #### Pipelines The interest-bearing advance of $25.9 million to the Pipeline Authority in 1978-79 is to enable the Authority to pay the final $0.7 million for the completion of the Moomba-Sydney pipeline; $1.4 million for the Authority's costs of litigation with certain construction contractors; and $23.8 million towards meeting capital and interest commitments to the Commonwealth in respect of the Authority's borrowings. Capital repayments by the Authority are estimated to total $11.1 million in 1978-79. In addition, allowance is made for a repayment of $1.9 million in respect of advances made to South Australia for a natural gas pipeline. {:#subdebate-70-44} #### General Administrative and Other Expenditure An amount of $38.4 million is provided in 1978-79 for the running expenses of the Department of Transport (other than expenses related to provision of air transport services and the functions of the Bureau of Transport Economics); of this $27.9 million represents wages and salaries. A major component of this item is recurrent expenditure on provision of marine navigational aids, which is fully recoverable (see below). {:#subdebate-70-45} #### Other Recoveries Light dues, which are charged on commercial shipping for the use of marine navigational aids provided by the Commonwealth, are the major source of recoveries under this heading ($19.7 million in 1978-79). The charge levied in 1978-79 remains at 41 cents per net registered ton per quarter. This charge is estimated to be sufficient to allow for full recovery of costs incurred by the Commonwealth in providing and maintaining marine navigational aids. {: type="A" start="B"} 0. WATER SUPPLY AND ELECTRICITY Outlays on urban water supply and electricity projects are estimated at $4.1 million for 1978-79, a decrease of $40.9 million compared with 1977-78. {:#subdebate-70-46} #### Urban Water Supply The Commonwealth is continuing to provide financial assistance to South Australia for water treatment works in Adelaide. The Budget includes an amount of $4.4 million for this purpose compared with $6 million in 1977-78. Also included is an amount of $7.9 million for water storage and reticulation projects in the Australian Capital Territory and for completion of Googong Dam and appurtenant works which will increase water storage capacity in the Canberra/ Queanbeyan area. {:#subdebate-70-47} #### Snowy Mountains Scheme Outlays on this scheme have been small over recent years reflecting its virtual completion. The proposed payment of $0.2 million to the Snowy Mountains Hydro-electric Authority in 1978-79 will enable the Authority to undertake certain capital works pending the outcome of the Government's continuing investigation of ways in which the New South Wales and Victoria Governments might share in financing assets required for the operation and maintenance of the Scheme. {:#subdebate-70-48} #### Gladstone Power Station The Commonwealth has provided loan finance to Queensland for the construction of a thermal power station at Gladstone since 1972-73. The final payment of $0.2 million was made in 1977-78 bringing total assistance for this purpose to $138.7 million. *Electricity Supply in the Territories* Outlays under this item in 1977-78 related to electricity supply in the Northern Territory and the Australian Capital Territory. No specific provision has been made for these purposes in the 1978-79 Budget for two reasons. First, under the self-government arrangements, expenditure on electricity supply in the Northern Territory will be met from the global allocation to the Northern Territory. Secondly, the Australian Capital Territory Electricity Authority is to finance its total capital requirements in 1978-79 from its own resources and from borrowings on its own account. {:#subdebate-70-49} #### Repayments The main items here are repayments of $5.3 million from the Snowy Mountains Hydro-electric Authority and $3.0 million in respect of hydro-electric schemes in Tasmania. {: type="A" start="C"} 0. INDUSTRY ASSISTANCE AND DEVELOPMENT The Commonwealth assists industry through a variety of measures, including direct financial assistance, taxation concessions, guaranteed domestic price arrangements, financial guarantees and the customs tariff. Direct industry assistance takes the form of bounties and subsidies, reconstruction, adjustment and emergency relief schemes, contributions to research and promotion programs, disease eradication schemes, price support and other payments to or for the benefit of industry. It includes some outlays by Government departments and instrumentalities (e.g., the Departments of Industry and Commerce, Primary Industry, Trade and Resources and the Australian Tourist Commission) which provide many services either free of charge or for charges which do not recover fully the costs incurred. Apart from these direct outlays from the Budget, substantial additional assistance has been provided through the Budget by way of special taxation concessions which, as they result in a reduction of Government revenues, are as much a call on the Budget as are direct outlays. The amount of revenue forgone in 1977-78 through the main taxation concessions for which data are available is estimated to have been in excess of $820 million. Further information relating to these taxation concessions is provided following the commentary on direct assistance to various industry categories. Outlays under some other functional headings also assist industry. Examples include the provision of airports and airways facilities for the aviation industry, assistance for the development of the film and television industry, some specific purpose payments to the States, expenditure to maintain or improve the defence capacity of industry, and some expenditure by the CSIRO. Net direct assistance from the Budget (i.e., after deducting amounts collected by way of industry levies and charges such as wool tax and livestock slaughter levy) is estimated at $536 million in 1978-79 compared with $326 million in 1977-78; this comparison is significantly affected, however, by larger repayments by the Australian Wool Corporation in 1977-78 (see below). Outlays on direct assistance to major industry categories are summarised in the following table: Detailed information on each of these industry categories is set out below. {:#subdebate-70-50} #### Softwood Forestry Development Under the Softwood Forestry Agreements Acts of 1967, 1972 and 1976 loans totalling $55.3 million have been advanced to the States to assist the establishment of softwood plantations. Assistance for new plantings ceased in 1976-77. New arrangements implemented in 1977-78 restrict Commonwealth involvement to loans for maintenance of existing Commonwealth-financed plantings for the five-year period which commenced 1 July 1977. The new Act limited assistance for 1977-78 to $4.2 million but provides that payments in the subsequent four years vary with State requirements for the maintenance program. Delays in finalising agreements with the States prevented payments being made in 1977-78 but it is expected that the States will receive their 1977-78 entitlements in 1978-79, as well as a further $5.0 million in respect of the 1978-79 program. {:#subdebate-70-51} #### Other Forestry The decrease of $1.8 million in 1978-79 reflects the transfer of responsibility for forestry in the Northern Territory under self-government, arrangements. The 1978-79 provision includes $0,136 million for assistance to Tasmania for establishment of some small plantations and silviculture projects involving native trees. Under a five year program to commence in 1978-79 the Commonwealth will provide loans on a dollar for dollar matching basis; the loans will be repayable over 40 years with repayments to commence 20 years after each advance is made. Deferred interest is to be capitalised over the first 20 years. The balance relates mainly to forestry activities in the Australian Capital Territory. {:#subdebate-70-52} #### Fisheries Research, Promotion and Development The main items under this heading in 1978-79 are Commonwealth grants provided to match industry contributions for fisheries research ($0.9 million); reimbursement of the States for costs incurred in administering Commonwealth fishing licences on behalf of the Commonwealth ($0.8 million); and Commonwealth expenditure of fisheries development ($0.4 million). In addition, $0.7 million has been provided to CSIRO to carry out research support in monitoring fisheries resources in the 200 nautical mile Australian Fishing Zone; this provision is recorded under the heading *General and Scientific* {:#subdebate-70-53} #### Wool Industry {:#subdebate-70-54} #### Wool Marketing Assistance The Government has authorised the Australian Wool Corporation to operate a minimum reserve price of 298 cents per kilo clean on a whole clip average basis for the 1978-79 wool selling season, compared with a minimum reserve price of 284 cents per kilo for the 1977-78 season. The Corporation will continue to regulate the flow of wool onto the auction market to improve the balance between quantities of wool supplied and demanded and will exercise a 'pot-holing' function to reduce losses due to random movements in prices when the market is above the floor. During 1977-78 the Corporation repaid the $100 million of borrowings outstanding under the Wool Marketing (Loan) Act; the Corporation is expected to clear its indebtedness to the Commonwealth in 1978-79 by repaying the $13 million advanced from the Australian Wool Corporation (Working Capital) Trust Fund. It is this reduction of $87 million in repayments to the Commonwealth which is responsible for the change in net outlays on direct assistance for wool marketing; if repayments of advances made to the Corporation in earlier years are excluded, there is no change in net outlays between the two years. The Wool Tax (8 per cent on the gross returns from wool sold) is estimated to yield $90.4 million in 1978-79. This tax includes a special levy of 5 per cent on the gross returns from wool sold to offset any losses which may arise from the operation of the reserve price scheme; it is estimated that the special levy will result in an amount of $56.5 million being collected and paid to the Corporation's Market Support Fund in 1978-79. {:#subdebate-70-55} #### Research, Promotion and Other Expenditures The Budget provides for Commonwealth contributions of $21.3 million for wool promotion and $3.1 million for payment to the Wool Research Trust Fund in 1978-79. An amount of $30.6 million is expected to be contributed by the industry for wool promotion and research from the proceeds of the Wool Tax, and $5 million is estimated to be available from the reserves of the Wool Research Trust Fund. In addition to those contributions, the Commonwealth, under arrangements introduced from 1 January 1977, is directly financing some 60 per cent of CSIRO and Bureau of Agricultural Economics (BAE) outlays on wool research, hitherto funded from the Wool Research Trust Fund. That direct financing (which is included in the appropriations for those organisations and hence not shown in the table above) is estimated to total $9.2 million in 1978-79 compared with $4.4 million in the previous year. Taking those contributions for CSIRO and BAE activities into account, total outlays on wool promotion and research are estimated at $69.2 million in 1978-79. {:#subdebate-70-56} #### Wheat Industry {:#subdebate-70-57} #### Wheat Industry Stabilization The sixth Wheat Industry Stabilization Scheme commenced with the marketing of the 1974-75 crop and covers the seasons 1974-75 to 1978-79. The stabilization arrangements provide for grower contributions to the Stabilization Fund when export returns are relatively high and payments to growers from the Fund when export returns are relatively low. If grower contributions held in the Fund are insufficient to make required stabilization payments, the Commonwealth contributes, under certain conditions, to the Fund to make up the shortfall. The Fund has an upper limit of $80 million and once this maximum is achieved any further grower contributions or interest earned by the Fund are paid to the Wheat Board for distribution to growers who earlier contributed to the Fund. The prescribed maximum of $80 million was reached in July 1976 and interest earnings amounting to $7.0 million were paid to the Board in 1977-78. Further grower contributions of $30 million in respect of the 1976-77 crop season and $30 million in respect of the 1977-78 crop season are expected to be paid into the Fund in 1978-79. An amount equal to those receipts, together with interest earned during the year, will be returned to growers. No stabilization contributions by the Commonwealth are required in 1978-79. The Government is currently considering possible wheat stabilization arrangements to apply after the 1978-79 crop season in the light of a recent Industries Assistance Commission report on the matter. {:#subdebate-70-58} #### Dairy Industry {:#subdebate-70-59} #### Dairy Adjustment Program This scheme was superseded by the establishment of the Rural Adjustment Scheme (see below) which, from 1 January 1977, provided expanded assistance to a broader range of primary producers. The amounts shown for 1977-78 and 1978-79 are for the discharge of outstanding commitments under the scheme. {:#subdebate-70-60} #### Dairy Industry Stabilization Under new marketing arrangements for dairy products, Stage I of which was introduced by the Government on 1 July 1977, an equalisation levy (equal to the difference between the domestic price and the assessed average export price) was imposed on the production of certain prescribed dairy products, and the proceeds redistributed among manufacturers with a view to protecting the domestic price structure and ensuring that manufacturers receive an equalised return from total domestic and export sales. With the introduction of Stage II of the new arrangements from 1 July 1978, limits have been imposed on the volume of production which will qualify for equalisation payments. Levy collections and payments to manufacturers are estimated at $63.6 million in 1978-79. {:#subdebate-70-61} #### Price Support for Dairy Products In addition to the new marketing arrangements, the Government has continued to underwrite the equalisation values of certain dairy products. A provision of $17.4 million is included in 1978-79 in respect of the Commonwealth liability for the 1977-78 and 1976-77 seasons. Under the Stage II marketing arrangements referred to above, underwriting for the 1978-79 season will be restricted for certain products to specified quantities, whereas in the 1977-78 season underwriting applied to total production of these products. {:#subdebate-70-62} #### Repayments In addition to the levy referred to under Dairy Industry Stabilization, this item includes repayments by the States in respect of dairy industry adjustment programs. {:#subdebate-70-63} #### Fruit Industry {:#subdebate-70-64} #### Apple and Pear Stabilization Under apple and pear stabilization arrangements for the 1978 season the maximum outlay which the Commonwealth could incur in 1978-79 is $5.12 million. However, on the basis of current assessments of export prospects, $1.0 million is the best estimate of likely requirements. An additional Commonwealth outlay on supplementary assistance for apples, which is matched on a $ for $ basis by the States, is estimated at $0.5 million. As already announced, legislation is proposed to extend the Apple and Pear Stabilization Scheme on a modified basis to cover 'at risk' exports of apples and pears in 1979 and 1980. Under the new arrangements the Commonwealth's maximum export price support commitments will be reduced from $4.0 million to $3.3 million per season in respect of apple exports, and from $1.1 million to $0.8 million per season in respect of pear exports. In addition, the Commonwealth has agreed to offer up to $0.75 million per year on a dollar for dollar matching basis with the States by way of supplementary assistance for apples in 1979 and 1980, and to offer up to $0.2 million on a similar basis for pears in 1979 and 1980. {:#subdebate-70-65} #### Dried Vine Fruits Stabilization Legislation is proposed for a new Dried Vine Fruits Stabilization Scheme, to cover the three seasons 1978 to 1980, incorporating a number of the principles of the Scheme which had applied to the 1971 to 1976 seasons. The new Scheme is intended to apply to sultanas only and to involve a maximum Commonwealth price support commitment of $1.5 million per season. On the basis of current assessments of export prospects, no Commonwealth contribution is expected in 1978-79. A statutory scheme also is to be introduced for the equalisation of returns from domestic and export sales of dried vine fruits. This scheme, to apply from the 1979 season, is intended to replace the industry's voluntary equalisation arrangements. Under the scheme, levies equivalent to the difference between assessed average domestic and export returns would be raised on production of each variety of fruit, but with exemptions for production which was exported. These levies, together with export returns in excess of the assessed average export return, would be paid into equalisation funds and disbursement would be made to packers to achieve the equalised return. No levy receipts or disbursements under this scheme are expected in 1978-79. {:#subdebate-70-66} #### Poultry Industry Outlays on stabilization and research for the poultry industry are financed mostly from industry levies which flow back to the industry through State research bodies and egg marketing authorities in accordance with the terms of the egg industry stabilization scheme. Receipts and expenditure for stabilization purposes in 1978-79 are estimated at the same levels as in 1977-78. {:#subdebate-70-67} #### Cattle, Sheep and Pigmeat Industry {:#subdebate-70-68} #### Beef Industry Assistance A scheme providing for incentive payments of $10 per head in respect of certain recognised animal health and husbandry procedures carried out in respect of beef cattle between 23 September 1977 and 22 September 1978 was introduced under the *Beef Industry (Incentives Payments) Act* 1977. The scheme, which is intended to help alleviate the serious cash flow position of beef producers and to maintain essential animal health practices, is restricted to producers who owned fifty or more cattle at 30 June 1977. There is an upper limit of $2000 per producer; recognised procedures include dipping and other treatments for external parasites, drenching and other treatments for internal parasites, tuberculin testing and blood sampling and vaccination for brucellosis and spaying of female cattle less than two years of age. Assistance up to 30 June 1978 totalled $85 million and it is expected that another $40 million will be paid out in 1978-79 in final payments under the scheme. The Commonwealth provided $250 000 in 1977-78 and it is expected that a further $2 million will be spent in 1978-79 in pursuance of the Commonwealth's commitment to provide up to $6 million towards the cost of implementing a beef cattle carcase classification system. {:#subdebate-70-69} #### Eradication of Diseases and Compensation *A* total of $25.5 million is estimated to be payable to the States for the bovine brucellosis and tuberculosis eradication campaign in 1978-79. That amount includes $19.1 million for eradication operations (of which $7.9 million will be offset by recoveries from producers in 1978-79) and $6.4 million in grants towards slaughter compensation payments; net payments for these purposes are therefore estimated at $17.6 million. An estimated $1 million for the campaign will in addition be met in 1978-79 from the global allocation to the Northern Territory. The Budget provides for payments in 1978-79 totalling $1.6 million, to the States and the Northern Territory, under the *States and Northern Territory Grants (Bluetongue Virus Control) Act* 1978. That Act provides for grants to cattle producers for certain husbandry procedures made necessary because of the implementation of bluetongue control measures and for expenditure on laboratory equipment, on a dollar for dollar basis with the States. The estimates under this heading do not provide for expenditure on laboratory equipment and assistance to producers for procedures undertaken before 1 July 1978 in the Northern Territory. Such expenditures will be met from the global allocation to the Northern Territory. {:#subdebate-70-70} #### Inspection Services Outlays in 1978-79 for meat export inspection and animal health services undertaken by the Bureau of Animal Health are estimated at $35.5 million, less estimated revenue of $3.2 million from charges to exporters for meat export inspection services outside prescribed hours. As announced in the Budget speech, the question of further recovery of these costs is to be considered during 1978-79. {:#subdebate-70-71} #### Outlays Not Allocated to Specific Agricultural and Pastoral Industries {:#subdebate-70-72} #### Primary Industry Bank of Australia The Primary Industry Bank of Australia has been established to increase the availability of longer term loans to primary producers (including fishermen). The Bank will operate as a re-finance institution - i.e., it will borrow funds for onlending to other financial institutions who will in turn lend the funds to individual primary producers. In 1978-79 the Commonwealth is subscribing $625 000 in equity capital to the Bank. To enable the Bank to lend at lower interest rates than would otherwise be possible, the Commonwealth has decided to assist the Bank by investing with it funds from the Income Equalization Deposits Trust Account. {:#subdebate-70-73} #### Rural Reconstruction/ Adjustment From 1 January 1977 a Rural Adjustment Scheme, established under the *States Grants (Rural Adjustment) Act* 1976, came into operation. Under this scheme (which replaced the Rural Reconstruction Scheme, the Dairy Adjustment Program and the joint Commonwealth/State scheme of carry-on finance for specialist beef producers) assistance is made available to the States for purposes of farm debt reconstruction, farm build-up, farm improvement and rehabilitation, carry-on finance and household support. Assistance for debt reconstruction, farm build-up, farm improvement and rehabilitation is made available by the Commonwealth on an overall 85 per cent loan/ 15 per cent grant basis, with the Commonwealth contributing a further amount to assist in defraying administrative expenses. For the household support component the Commonwealth finances all assistance and contributes towards administrative expenses; the States repay to the Commonwealth all principal and interest recouped by them. For carry-on finance, the States share equally with the Commonwealth both the financing of loans (and administrative costs) and all principal and interest payments received from producers. The Scheme was modified during 1977-78 to provide for more liberal conditions of carry-on finance for beef producers and household support, and to make wine-grape growers eligible for carry-on finance. Outlays under the Rural Adjustment Scheme are estimated at $48.7 million in 1978-79 compared with $43.2 million under the Rural Adjustment and Rural Reconstruction Schemes in 1977-78. {:#subdebate-70-74} #### Fertilizer Bounties Payments under the Phosphate Fertilizers Bounty Act are estimated at $40 million in 1978-79. The Budget also provides for the subsidy under the Nitrogenous Fertilizers Subsidy Act to be continued at the reduced rate of $40 per tonne from 1 January 1979. Subsidy payments in 1978-79 are estimated at $10 million. The question of the rate of subsidy from 1 January 1980 is to be considered during 1979. *Inspection Services nec* In addition to export meat inspection services, the Commonwealth provides for export inspections in respect of grains, fruits and other exports requiring quality certification. The net cost of these services are estimated at $5.2 million in 1978-79. The question of further recovery of these costs is to be considered during 1978-79. {:#subdebate-70-75} #### Agricultural Extension and Research The Budget provides $9.7 million in grants to the States for the development of their agricultural advisory services under arrangements dating from 1952-53. The Commonwealth proposes to spend a further $0.3 million directly on projects which are of common interest to several States. Also included is $0.3 million for lucerne aphid control and $0.2 million for minor agricultural research. {:#subdebate-70-76} #### Irrigation and Other Pastoral Water Projects Expenditure under this heading comprises Commonwealth assistance to the States for rural water conservation, irrigation and flood mitigation. Assistance is to be provided to the States for these purposes in 1978-79 under the National Water Resources Program (NWRP) announced in November 1977. This Program, which will extend over five years, provides for a Commonwealth contribution of $200 million as grants and/or loans for water related purposes in the States; in all a total of $21.1 million is to be provided in 1978-79, mostly for purposes recorded under the following headings (see *Payments to or for the States, the Northern Territory and Local Authorities 1978-79* for further details on this Program). {:#subdebate-70-77} #### Irrigation In 1978-79, grants totalling $2.7 million will be provided to the River Murray Commission for completion of Dartmouth Dam and for other River Murray works, and loan funds of $96 000 will be provided for minor works associated with the Ord Irrigation Scheme. The $6 million reduction here reflects the winding down of expenditure on Dartmouth Dam, completion of the Commonwealth's commitment to the Namoi River Weirs ($1 million in 1977-78) and the Gin Gin Channel at Bundaberg ($1.5 million in 1977-78). {:#subdebate-70-78} #### Investigations and Other Pastoral Water Projects Continuing assistance is provided in the Budget for water resources assessment in the States ($6.7 million) and water research ($0.39 million). Also included under this item is $5.8 million which is being provided under the National Water Resources Program but which had not been allocated to specific projects at the time of the Budget. {:#subdebate-70-79} #### Flood Mitigation *A* grant of $62 000 is to be made in 1978-79 for completion of a flood mitigation scheme at Proserpine in North Queensland. In 1977-78, $1 million was provided to New South Wales for flood mitigation works on coastal rivers. The Commonwealth has an in principle commitment to a new flood mitigation program in New South Wales and consideration will be given to funds for this purpose as allocations proceed under the NWRP. {:#subdebate-70-80} #### Repayments Estimated repayments of $2.5 million in 1978-79 include $2 million from New South Wales in respect of earlier advances for Blowering Reservoir. {:#subdebate-70-81} #### Land Development Projects {:#subdebate-70-82} #### Soil Conservation The Budget provides $105 000 for interim assistance to the States pending consideration by the Government of a comprehensive study of soil conservation problems. {:#subdebate-70-83} #### War Service Land Settlement Expenditure on the scheme in 1978-79 is estimated at $2.6 million, compared with $2.4 million in 1977-78. The total includes payments of $1.5 million to the agent States to make credit facilities available to eligible settlers and $0.9 million towards the operation and maintenance of the Loxton irrigation project in South Australia. {:#subdebate-70-84} #### Repayments Estimated repayments of $4.0 million include $2.9 million repayments by War Service Land Settlers. {:#subdebate-70-85} #### General Administrative and Other Expenditure The 1978-79 provision covers mainly the administrative expenses of the Department of Primary Industry ($13.3 million) and the Bureau of Agricultural Economics ($5.3 million), and contributions to the Australian Plague Locust Commission ($0.5 million). {:#subdebate-70-86} #### Mining Industry {:#subdebate-70-87} #### Uranium Exploration and Development Under the Memorandum of Understanding with Peko Mines Limited, and the Electrolytic Zinc Company of Australasia Limited, the Commonwealth, through the Australian Atomic Energy Commission as its agent, is to contribute 72i per cent of the capital costs incurred by the Ranger Joint Venture in developing the Ranger uranium deposits. The present estimated cost of this project is about $320 million. The Commonwealth's contribution is estimated to total $232 million and is to be financed primarily by borrowings by the Commission. Of the $44 million estimated to be required for the Ranger Project in 1978-79, the Commission will borrow $24 million; the Budget provision of $20 million is to cover commitments to be met in 1978-79 prior to implementation of borrowing arrangements. Outlays in 1977-78 include a $9 million loan to Mary Kathleen Uranium Ltd (MKU); $0.1 million in respect of Commonwealth guarantees in relation to MKU borrowings of uranium from the United Kingdom Atomic Energy Authority; and $0. 1 million to maintain the Australian Atomic Energy Commission's beneficial interest in the Ngalia Basin uranium exploration joint venture. During 1977-78 $2 million was also paid by the Commonwealth for the purchase of uranium from MKU to assist MKU's cash position during the temporary ban on uranium exports. That transaction was later offset by equivalent revenue from the resale of the uranium to MKU. In 1977-78 MKU also repaid a loan of $1.8 million made in 1976-77. {:#subdebate-70-88} #### Bureau of Mineral Resources The provision of $13.0 million for the ongoing activities of the Bureau in 1978-79 compares with expenditure in 1977-78 of $12.8 million. The activities of the Bureau involve the gathering, storage and dissemination of geological and geophysical information relevant to the exploration and development by industry of the nation's mineral resources; as such they are a significant form of assistance to the mining industry. *Other Mining (net)* Included under this heading is provision for the expenditure of $6.0 million in 1978-79 from the Coal Research Trust Account, which was established in 1977-78 to facilitate the administration of an industry-financed coal research program. (This Trust Account receives the proceeds of a 5c per tonne levy on coal production, together with payments on an equivalent basis by Victorian and South Australian government agencies in respect of production in those States. During 1977-78 the Trust Account built up a substantial cash balance). Other major provisions include $4 million for an act-of-grace payment to a mineral sands mining company affected by th; Government's decision in 1976 to prohibit export of mineral sands mined from certain areas on Fraser Island; $1.4 million to the Tasmanian Government to continue assistance for copper mining operations by the Mount Lyell Mining and Railway Company Limited until 30 September 1978, pending the outcome of negotiations as to a possible need for further assistance; $0.8 million for the Commonwealth's contribution towards the administrative costs of the Joint Coal Board; $0.7 million for Australia's contribution to various international commodity organisations; and $0.2 million towards the cost of a study of the feasibility of establishing a coal liquefaction plant in Australia. In 1977-78 expenditures under this heading included $4.6 million in relation to the Commonwealth interest in the Cooper Basin gas field in South Australia and $3.4 million for assistance to Tasmania for the Mount Lyell Company. {:#subdebate-70-89} #### Divestment of Petroleum and Minerals Authority Investments No provision is made for revenue under this heading in 1978-79. In 1977-78 revenue of $14 million arose from the disposal by the Commonwealth of its interest in the Cooper Basin gas field to the South Australian Oil and Gas Corporation (a company wholly owned by the S.A. Government). {:#subdebate-70-90} #### Manufacturing Industry {:#subdebate-70-91} #### Shipbuilding Assistance Assistance is payable in respect of the construction of vessels in Australia following a case-by-case examination by the Australian Shipbuilding Board. Assistance for new shipbuilding contracts is provided under the *Ship Construction Bounty Act* 1975 as a direct bounty to shipbuilders. The maximum level of assistance is currently 31 per cent but the Government's shipbuilding policy provides for a phased reduction in the level of assistance to an eventual long-term rate of 25 per cent by December 1980. Outlays under this scheme in 1978-79 are estimated at $8 million and represent subsidies towards the construction of 65 ships. Prior to the enactment of the bounty legislation in June 1975 a shipbuilding subsidy was provided by means of the Commonwealth buying ships and then selling them to ship owners at a lower price. It is expected that construction of the final 4 ships to be subsidised under those arrangements will be completed in 1978-79, at a net cost to the Budget of $2.9 million. An amount of $1.2 million is provided for the administrative expenses of the Shipbuilding Board. {:#subdebate-70-92} #### Industrial Research and Development The Government will introduce amendments to the *Industrial Research and Development Incentives Act* 1976 to expand assistance to encourage the expansion of research and development activities by industry. For both commencement grants (intended to encourage a build up of basic industry research and development capability) and specific project grants, it is proposed that the current maximum rates for grants payable to firms in respect of eligible expenditure be increased from 25 per cent to 50 per cent; the maximum annual grant payable to individual companies would be increased to $25 000 for commencement grants and $500 000 for project grants. It is also proposed that funds be provided for the support of major industrial research projects which are considered to be in the public interest. A total of $24 million has been provided for these various purposes in 1978-79, compared with expenditure of $1 3.7 million in 1978. {:#subdebate-70-93} #### Agricultural Tractor Bounty Under the *Agricultural Tractors Bounty Act* 1977 assistance is payable to eligible producers of agricultural wheeled tractors with a power rating up to 105 kw. The rates of bounty payments are indexed quarterly and currently range from $703 to $4757 per tractor, depending on the power of the tractor and sub'ject to local content provisions. Payments under the Act in 1977-78 amounted to $5.7 million. Following a review by the Industries Assistance Commission, the Government proposes to extend the bounty to include tractors rated over 105 kw. That arrangement would apply when the necessary amendments to existing legislation take effect. Payments under the existing Act and the proposed legislation are estimated at $5.5 million in 1978-79. {:#subdebate-70-94} #### Machine Tools Bounty The *Metal Working Machine Tools Bounty Act* 1972 and the *Bounty (Drilling Machines) Act* 1978, both of which expire on 30 June 1979, provide for payment of a bounty on the production of certain categories of machine tools. Payments are based on a bounty rate of 33i per cent of factory cost, subject to certain local content requirements; payments amounted to $4,025 million in 1977- 78. Following a review by the Industries Assistance Commission, it is proposed to continue assistance to the metal-working machine tools industry and to broaden the scope of bounty to cover a wider range of machine tools. In addition, a new bounty payable on local design content is to be introduced. The new arrangements will apply when the necessary legislation has been enacted. Payments under the existing Acts, and under the proposed legislation, are estimated at $8.05 million in 1978-79. {:#subdebate-70-95} #### Book Bounty Under the *Book Bounty Act* 1969 (which is due to expire on 31 December 1978) a bounty is paid, at the rate of 33i per cent of the cost of production, on eligible books manufactured in Australia. Pending a review by the Industries Assistance Commission, the Government has announced its intention to extend the bounty until 31 December 1979. Australian book production continued to increase in 1977-78, resulting in bounty payments of $9.5 million; $10 million has been provided for 1978-79. {:#subdebate-70-96} #### Heavy Commercial Vehicles Bounty The Government proposes to introduce a bounty payable to assemblers of certain general purpose vehicles, including buses, having a gross vehicle mass of 2.72 tonnes or more, on prescribed components used as original equipment in the production of those vehicles and purchased from suppliers not associated in business with the vehicle assembler. It is intended that bounty be payable at the rate of 20 per cent of the into-store value of those components. Payments in 1978- 79 are estimated at $4.4 million. {:#subdebate-70-97} #### Other Bounty Payments Under the *Automatic Data Processing Equipment Bounty Act* 1977 bounty is to be payable for a period of seven years on eligible equipment, with the bounty rate being phased down gradually over that period. $1.5 million has been provided for payments in 1978-79, compared with outlays of $0.6 million for 1977-78. The *Bed Sheeting Bounty Act* 1977 provides for a maximum payment of $0.6 million a year. Pending a review by the Industries Assistance Commission of conditions of eligibility for bounty payments, $0.5 million has been provided in the 1978-79 estimates. The *Bounty (Polyester-Cotton Yarn) Act* 1978 provides for the payment of bounty on the production of yarn, up to a maximum of $0.6 million per year until 30 September 1980; $0.5 million has been provided in 1978-79. The Government has announced its intention to introduce a bounty, involving an annual maximum outlay of $0.7 million, on the production of steel ball and roller bearings. Payments in 1978-79 are estimated at $0.6 million. {:#subdebate-70-98} #### Export Incentive Grants and Payroll Tax Rebates The .former Payroll Tax Rebate Scheme and Export Incentives Scheme, which were discontinuued in 1971 and 1974, respectively, have required ongoing payments since then in respect of outstanding claims ($1.3 million in 1977-78). As announced recently, a new system of export incentives grants is to be introduced to operate from 1 July 1977. Payments are to be based, in general, on increases in the value of exports of eligible goods and services in the grant year over the average value for the previous three years. It is estimated that claims arising from the first grant-year (1977-78) will amount to some $66 million for which an amount of $20 million is being provided in 1978-79. An additional $46 million will be committed for payments next financial year for claims arising from the 1977-78 grant-year. {:#subdebate-70-99} #### Export Market Development Grants Following an Industries Assistance Commission report on export incentives, the Government has announced improvements to the Export Market Development Grants scheme which aim to encourage exporters and prospective exporters to seek out and develop overseas markets. These changes would not require payments from the Budget until 1979-80; payments in 1978-79, estimated at $38 million, relate to the existing scheme. {:#subdebate-70-100} #### Other Assistance The Budget provides $2.2 million for the first year of a joint Commonwealth industry program .for the commercial development of the Australian-designed INTERSCAN Microwave Landing System. Provision for the program follows a decision, by the International Civil Aviation Organisation, to endorse the principles underlying INTERSCAN as the basis of future world airport landing-guidance systems. The program is designed to cover engineering development, manufacture and marketing. Commonwealth expenditure under the program will relate to a three-year engineering phase which is estimated to cost a total of about $8.2 million. The Australian Industry Development Corporation has formed a company (InterScan Australia Pty Ltd) to provide a vehicle for a consortium of Australian firms to undertake the production/development phase; it is intended that the production/development phase be funded entirely by industry. As announced in the Budget Speech an amount of $1.1 million is provided for a campaign, "Project Australia", aimed at heightening community awareness of Australian skills, achievements and potential and encouraging improvements in Australian industry in particular areas such as product quality design and marketing. An amount of $1.2 million is also being provided in 1978-79 for the implementation of joint Commonwealth-industry productivity improvement programs. Other industry support to be provided in 1978-79 includes grants for the Industrial Design Council of Australia ($385 000) and a grant to Pritchard Steam Power Pty Ltd ($40 000). {:#subdebate-70-101} #### General Administration This heading covers administrative costs of the Export Market Development Grants Board ($0.9 million) and the Department of Industry and Commerce ($6.3 million). The latter includes $120 000 for certain support services to small business, including publications, training programs, seminars and awards. {:#subdebate-70-102} #### Petroleum Products Subsidy Scheme A scheme has been introduced to subsidise the price of certain petroleum products in country areas throughout Australia. This scheme, established by amendment to the *States Grants (Petroleum Products) Act* 1965, provides for the payment of a subsidy, similar to that which operated under the Act from 1965-1974, on the cost of distributing motor spirit, power kerosene, aviation fuels and automotive distillate. The effect of this subsidy is that country consumers of these products pay a price which includes not more than 0.88 cents per litre (4 cents per gallon) of the freight differential costs. Following agreement by the States the Scheme was introduced progressively in the States and Northern Territory from May 1978 and was in nation-wide operation by 1 July 1978. Outlays in 1978-79 are estimated at $40 million. {:#subdebate-70-103} #### Energy Research A provision of $4 million is included in 1978-79 for energy research, development and demonstration. These funds will be disbursed by the Minister for National Development.in the light of advice from the recently established National Energy Research Development and Demonstration Council. Also included is a provision of $50 000 for a preliminary study of a national energy conservation publicity campaign. {:#subdebate-70-104} #### Australian Industry Development Corporation The Australian Industry Development Corporation seeks broadly to help finance the development and growth of Australian private enterprise in areas of activity concerned with, or incidental to, the manufacture, processing, treatment, transportation or distribution of goods, or the development or use of natural resources or of technology, and to secure Australian participation in the ownership and control of companies engaged in such activities. The Corporation's paid-up capital at 30 June 1978 was $62.5 million; no additional capital provision is expected to be required this year. The Corporation has no plans to request the Government to borrow funds on its behalf in 1978-79 under the *Loans (Australian Industry Development Corporation) Act.* {:#subdebate-70-105} #### Export and Trade Promotion Outlays on export and trade promotion in 1978-79 are estimated at $19.8 million. This total includes expenditure on the Trade Commissioner Service ($14.2 million), matching grants to primary product marketing boards ($1.0 million) and trade publicity fairs, displays and trade promotion visits ($4.6 million). A review of the Trade Commissioner Service in the light of changing patterns of world trade has led to plans to strengthen Australia's trade representation in the Middle East, the United States, Latin America, Asia and the Pacific. {:#subdebate-70-106} #### Export Finance and Insurance Corporation The Export Finance and Insurance Corporation (EFIC) provides export credit insurance and guarantee facilities, insurance cover for direct investment overseas against non-commercial risks and, where necessary, export finance for medium and long-term credit sales of capital goods. As already announced, legislation is to be introduced to expand EFIC's guarantee facilities by enabling it to offer tender and performance guarantees to further assist Australian exporters. EFIC's export finance facility is financed by trading bank loans at commercial rates of interest. The Corporation on-lends these funds to foreign buyers at concessional interest rates. The difference between the commercial rates at which EFIC borrows and the rates at which it on-lends is financed from the Budget by an interest rate subsidy payable to EFIC each year. The subsidy amounted to $454 000 in 1977-78 and $1.5 million has been provided in 1978-79 for this purpose. The 'subsidy commitment authority', the mechanism to control future commitments on the Budget, has been increased from $17.5 million to $30 million. At 30 June 1978, the Corporation had entered into loans in support of capital goods exports aggregating $112 million, requiring use of the subsidy commitment authority of about $14.2 million which is payable over the term of the loans. In addition, the Corporation had made advance commitments to enter into loans of $6.7 million, involving use of a further $0.7 million of subsidy commitment authority. The decision to increase the subsidy commitment authority to $30 million will enable EFIC to enter into new loan commitments aggregating to about $135 million. {:#subdebate-70-107} #### Other Assistance This item includes $375 000 for the promotion of Australian consultancy services in developing countries, and $1.0 million for the capital of the Australian Overseas Projects Corporation. A bill is currently before Parliament to establish the Corporation, which is designed to assist Australian industry to compete for large-scale development projects overseas. It is envisaged that the Corporation should operate as a small specialist organisation functioning on a commercial basis. Industry Assistance Through the Taxation System A considerable amount of assistance to industry has been provided in the past through special taxation concessions. Some of these concessions were withdrawn during 1972-73 while others were withdrawn or modified in 1973-74, 1974-75 and 1975-76. On the other hand, a new concession was introduced in 1974-75 - double depreciation - applicable to new plant and equipment first used or installed ready for use by taxpayers in the manufacturing and primary industry sectors on or after 1 July 1974 and before 1 July 1975. The double depreciation scheme was extended in both time and coverage in 1975 but when the income tax law was amended to provide a new investment allowance, provision was also made for the discontinuar.ee of the double depreciation scheme for plant first used or installed after 30 June 1976. The new investment allowance is applicable to new plant and equipment purchased, leased or constructed under a contract made on or after 1 January 1976. A 40 per cent rate applied for the period 1 January 1976 to 30 June 1978, and a 20 per cent rate applies for the period 1 July 1978 to 30 June 1985. Other provisions relating to accelerated deductions for certain capital expenditure by mining enterprises, and to a deduction for a trading stock valuation adjustment were enacted in 1976-77. Such concessions result in a reduction of, or a delay in the receipt of, Commonwealth revenue (and a corresponding increase in the funds available to the recipients). They are, in fact, as much a call on the Budget as equivalent direct outlays would be, and for this reason have sometimes been described as disguised expenditures. Assistance of this type through the taxation system has been provided mainly by way of income tax concessions which permit firms and individuals to make deductions from their assessable income additional to those authorised under the general provisions of the income tax law. The amount of revenue forgone in 1977-78 through the main taxation concessions is estimated to have been in excess of S820 million. Details are shown below. (Payroll tax rebates under the export incentive scheme in respect of exports in 1970-71 and prior years are included under the heading 'Manufacturing Industry'.) Most of the relevant concessions in the income tax field may be grouped in three broad categories, namely: A - those allowing the deduction of amounts that are not authorised under the general provisions of the law; B - those allowing certain taxpayers to deduct the cost of items of plant over shorter periods than is the case for the general run of taxpayers; and C - those exempting certain classes of income, now confined to exemption of income from gold mining. The estimated amounts of revenue forgone in 1977-78 under the main provisions in categories A and B are shown in the following table. A miscellany of other provisions is not included, in some cases because of lack of data on revenue forgone or questions about the extent to which they may properly be regarded as wholly 'Industry Assistance'. These provisions include the concession whereby primary producers are allowed to adopt artificially low values for natural increase in their livestock accounts for taxation purposes; drought bonds and income equalisation deposits; and the accelerated depreciation of expenditure on employees' amenities. The averaging provisions applied to primary producers are also not included. Taxpayers to whom these provisions apply are assessed on their taxable incomes for the current year at rates of tax corresponding to the lesser of the taxable income for the current year and the average of their incomes for the current year and the preceding four years. The purpose of the provisions is to ensure that *fluctuations* in income in conjunction with progression in rates of tax do not lead to those taxpayers bearing higher tax rates than other taxpayers having incomes which, over a period of years, are comparable but non-fluctuating. The effects go beyond that when there is an upward trend in incomes over a number of years and, even if there are fluctuations in income superimposed on that trend, the averaging provisions result in the taxpayers covered by them bearing lower tax rates than other taxpayers whose incomes over a period of years are comparable. Even in the absence of an upward trend in income, the effects can go beyond levelling out the treatments, because of the provisions introduced in 1977-78 which, in effect, permit averaging to be applied only in years when it benefits the taxpayer and tax at ordinary rates in other years. {: type="A" start="D"} 0. LABOUR AND EMPLOYMENT Outlays under this heading provide for various programs relating to occupation training schemes, the prevention and settlement of industrial disputes and the enforcement of industrial awards and agreements and immigration. Outlays are estimated at $344.3 million in 1978-79, an increase of 20.4 per cent over 1977-78. {:#subdebate-70-108} #### Conciliation and Arbitration Estimated expenditure in 1978-79 is $6.3 million. The increase of $0.7 million over 1977-78 reflects a higher level of activity and the full year effect of salary and allowance increases. {:#subdebate-70-109} #### Industrial Relations Bureau The Industrial Relations Bureau, established under the Conciliation and Arbitration Act to facilitate the general supervision and observance of federal industrial law, commenced operation on 1 March 1978. Provision of $3.2 million is made for administrative and operational expenses of the Bureau in 1978-79, the first full year of activity. {:#subdebate-70-110} #### Payment to Stevedoring Industry Under the *Stevedoring Industry Levy Act1977,a* levy is imposed on stevedoring employers to meet certain payments in respect of waterside workers, including contributions to the employees' retirement fund and to eliminate over a period of years the deficit in that fund which was incurred in previous years. Funds collected from the levy are paid to the Stevedoring Industry Finance Committee which has replaced the former Stevedoring Industry Authority. The reduction of $17.1 million in the 1978-79 estimate reflects the effect of the new legislative arrangements, effective from December 1977, under which the stevedoring industry itself has responsibility for funding some payments previously made by the Stevedoring Industry Authority from levy proceeds. {:#subdebate-70-111} #### Apprenticeship Training Assistance for apprenticeship training is provided by the Commonwealth under a number of schemes intended to promote apprenticeship opportunities, to improve the standard of apprenticeship training in industry, and to increase the future supply of skilled tradesmen. The Commonwealth Rebate for Apprentice Full-Time Training (CRAFT), introduced in January 1977 to replace the National Apprenticeship Assistance Scheme (NAAS), encourages employers to increase their apprentice intake by compensating them with tax-exempt rebates for the costs of releasing apprentices to attend (or to study for) basic trade courses provided by technical education institutions in any year of apprenticeship, or to attend full-time, off-the-job training courses in their first three years of apprenticeship. Rebates are set at $12 per day for apprentices attending stages 1 and 2 of a basic trade course, increasing to $16 per day for stages 3 and 4, if not completed in the first year. Full time off-the-job training rebates of $6.00 per day are payable to employers for a maximum of 260 working days. Both rebates are indexed to annual movements in wages, effective 1 January each year. Weekly living-away-from-home allowances of $19.80 for first year apprentices, and $7.60 for persons in the second year of their apprenticeship, may also be provided. These allowances are not tax exempt. The 1978-79 provision for CRAFT of $38 million compares with 1977-78 (first year) expenditure of $15.8 million and reflects the continuing build-up of eligible apprentices from successive intakes since the commencement of the scheme. In 1978-79, technical education rebate claims, the major expenditure component under CRAFT, are expected to be paid for about 63 000 apprentices. In 1977-78, technical education rebate claims were met for some 27 000 apprentices. An amount of $6.6 million is provided for the award costs of apprentices, surplus to normal requirements, who are undergoing the full term of their training in Commonwealth and State Government establishments. The number of apprentices training in Commonwealth Departments under the Group Partial Training Scheme is expected to increase from 220 in 1978 to 400 in 1979. Under this Scheme, apprentices sponsored by private employers are given full-time training in Commonwealth Government Departments for the whole of their first year. The costs (including wages) of this training are met in full by the Commonwealth. At the end of the first year the apprentices commence work with their employers. The cost of the scheme in 1978-79 is estimated at $1.6 million. {:#subdebate-70-112} #### Employment Training Schemes Expenditure on employment training schemes in 1977-78 of $87.4 million was 166 per cent higher than in the previous year. The large increase, which related almost entirely to expenditure on the National Employment and Training System (NEAT), reflected the Commonwealth's undertaking in 1977-78 to provide training for all who meet the necessary labour market criteria. A total provision of $126.8 million has been made for training schemes in 1978-79, a further increase of 45 per cent. The estimated expenditure in 1978-79 on the main schemes are shown below, together with the changes compared with 1977-78: Under NEAT assistance is provided to eligible trainees undertaking (and employers and training organisations providing) on-the-job, full-time or parttime training for skills in demand in the labour market. Employers providing on-the-job training receive subsidies equal to 37.5 per cent of the Male Adult Average Award Wage, as adjusted in January each year for trainees receiving adult rates of pay, and 27.5 per cent for trainees receiving junior rates of pay (other than those receiving training under SYETP - see below). Allowances paid to full-time trainees comprise a component equivalent to the unemployment benefit (income tested) and a training component equivalent to 20 per cent of the male adult average award wage (or 10 per cent if under 18 years). The training component is .paid only where the weekly income of the trainee and/or spouse is less than 1.5 times the average weekly earnings (male adult unit). Part-time trainees who are not in full-time employment receive an allowance equal to the training component of the full-time allowance. In addition, the cost of essential books and equipment (up to $150) and fees are reimbursed. As shown in the summary table, the growth in NEAT expenditure results mainly from the large increase in activity under SYETP. The number of persons in training at 30 June 1978 had risen to 33 000 compared with 7500 at 30 June 1977. SYETP provides employment training for the young unemployed who have been unemployed for four of the previous twelve months by subsidising the wage costs to employers providing on-the-job training. As announced in the Budget Speech, the period of training under SYETP is to be reduced from six to four months in 1978-79 and the rate of wage subsidy payable to employers will be reduced from $67 a week for training to $45 a week; this will bring SYETP allowances more closely into line with other NEAT training allowances and is intended to correct the present tendency for SYETP to favour unduly younger age groups to the detriment of older age groups. Of the estimated total throughput of about 110 000 trainees under NEAT in 1978-79 about 80 000 are expected to be trained under SYETP. Under the *Education program for Unemployed Youth* the Commonwealth provides funds to the States to conduct courses to improve the skills and motivation of the young unemployed, particularly those with low or inadequate educational qualifications. During 1977-78 eligibility was extended to the 21-24 years age group and a first course was provided in NSW for this age group. The Government has decided to provide $3.0 million to the States for this Scheme in 1978-79. A further $200 000 will be provided for the Australian Capital Territory and the Northern Territory. In addition to these expenditures a further $2.3 million will be provided by way of allowances to participants in the courses; these allowances, which are recorded under NEAT, are equivalent to unemployment benefits (plus an incidentals allowance of $6 per week in the States and NT and $4 per week in the ACT). Assistance for *training in industry and commerce* is provided under programs designed to" encourage the development of training in the private sector (particularly the employment of manpower training specialists), the training of instructors and training officers, the development of better training programs and the development of training in small firms. These programs are expected to cost $1.2 million in 1978-79, an increase of $0.3 million over 1977-78. {:#subdebate-70-113} #### General Administration Expenditure on administration and other costs related to employment and industrial relations (including the costs of the Department of Employment and Industrial Relations) is estimated to increase by $13.6 million to $91.7 million in 1978-79. This rise reflects increases in staff numbers and in wage, salary and other costs. {:#subdebate-70-114} #### Immigration Program Annual immigration targets have been replaced by a triennial program commencing in 1978-79; an average net gain of 70 000 per year is the objective in the first three year period. The expected gross intake of 90 000 in 1978-79 compares with arrivals of 75 700 in 1977-78. From 1 January 1979 eligibility will be based on a Numerical Multi-factor Assessment System which will give weight to such factors as family ties, occupational skills in demand, literacy in the mother tongue, and knowledge of English. Eligibility based upon refugee status remains unchanged. {:#subdebate-70-115} #### Assisted Migration Assisted passages will be available for some 24 000 people in 1978-79, compared with the 20 200 provided in 1977-78; the figure for 1978-79 includes up to 10 000 refugees. Expenditure on assisted migration is estimated at $17.1 million compared with expenditure of $14.1 million in 1977-78. The main components of the assisted migration program in 1978-79 are embarkation and passage costs ($8.6 million) and transitory accommodation ($7.6 million). {:#subdebate-70-116} #### Administration Administrative expenditure of the Department of Immigration and Ethnic Affairs in 1978-79 is estimated at $29.6 million, an increase of $4.5 million on 1977-78. This increase mainly reflects increases in salary and other costs. {:#subdebate-70-117} #### Recoveries Contributions by assisted migrants towards passage costs are estimated to be about the same as in 1977-78 ($1.1 million). {: type="A" start="E"} 0. OTHER ECONOMIC SERVICES This residual group covers economic services which are not readily categorised elsewhere. Outlays on these services in 1978-79 are estimated to be $99 million, an increase of 6 per cent over 1977-78. {:#subdebate-70-118} #### Economic and Trade Regulation The outlays under this heading relate very largely to the operations of the various regulatory authorities listed. The amounts provided for 1978-79 reflect a small decrease in overall staff numbers for these authorities offset by the full year effects of wage and other cost increases during 1977-78. {:#subdebate-70-119} #### Specialised Activities The main provision under this heading in 1978-79 is for Meteorological Services ($41.3 million). Increases in wages, salaries and other costs are responsible for the increase over 1977-78 expenditure. Recoveries are estimated at $14.4 million in 1978-79 and consist of receipts of the Bureau of Meteorology for services provided, particularly for civil aviation users and the defence forces. {:#subdebate-70-120} #### General Administrative and Other Expenditures These outlays are for the operating and capital costs of the Departments of Trade and Resources, National Development, Business and Consumer Affairs, Productivity and the Special Trade Representative. The first two of these departments, previously the Department of Overseas Trade and National Resources respectively, underwent substantial re-organisation in 1977-78. Expenditure in 1978-79 is estimated to increase by $5.5 million, reflecting increases in salary and other administrative costs, offset to some extent by lower staff numbers. {: type="1" start="9"} 0. GENERAL PUBLIC SERVICES This broad functional heading covers a range of general public services and activities concerned with the organisation and operation of the Commonwealth Government, including legislative services, administrative services, the maintenance of law and order and foreign affairs and overseas aid. {: type="A" start="A"} 0. LEGISLATIVE SERVICES As shown in the following table outlays on legislative services are estimated to decrease by 8.4 per cent in 1978-79: {:#subdebate-70-121} #### Parliamentary Expenditure - Other Provision is made under this heading for salaries, administrative costs and capital works associated with the functioning of Parliament and for the administrative costs of Electorate Offices of Senators and Members. Of the total increase of $2.4 million, $2.2 million relates to salaries and allowances. An amount of $0.5 million is included for minor capital works for Parliament House. {:#subdebate-70-122} #### Northern Territory - Legislative Assembly The Northern Territory became a self-governing territory on 1 July 1978 and funding of legislative activities is now the responsibility of the Northern Territory of Australia. {:#subdebate-70-123} #### Australian Electoral Office Net outlays by the Electoral Office on administrative costs of maintaining electoral rolls, conducting Commonwealth elections and referenda and industrial elections are estimated to be $15.3 million in 1978-79. This is $6.7 million less than outlays in 1977-78, which included costs relating to the December 1977 general elections. The estimates for 1978-79 include provision for an ACT Legislative Assembly election. Administrative costs of the Australian Electoral Office, other than those associated with Commonwealth elections and referenda, are estimated to increase by $1.7 million in 1978-79, reflecting the expected increase in industrial elections to be conducted by the Electoral Office and the need to review and improve the electoral system. {: type="A" start="B"} 0. LAW, ORDER AND PUBLIC SAFETY Commonwealth outlaws on law, order and public safety are estimated to total $172.5 million in 1978-79, an increase of 27.4 per cent over 1977-78. {:#subdebate-70-124} #### Courts and Legal Services {:#subdebate-70-125} #### Federal Court The Federal Court of Australia was created in December 1976 with powers to exercise original jurisdiction and to carry out appeal functions in the Federal area. An amount of $1.8 million is provided for the estimated operating costs of the Court in 1978-79. *High Court* Outlays on the construction of the new High Court building in the Australian Capital Territory are estimated at $12.5 million in 1978-79. An additional $1.7 million is provided to cover estimated running costs of the High Court in 1978-79. {:#subdebate-70-126} #### Commonwealth-State Law Courts This provision is for the Commonwealth's share (approximately 45 per cent) of final costs of constructing a court complex in Sydney built jointly with the State of New South Wales and occupied during 1977-78. *Courts and Registration Offices in the Territories* The reduced provision under this heading in 1978-79 reflects the handing over to the Northern Territory on 1 January 1978 of responsibility for lower court functions. {:#subdebate-70-127} #### Legal Aid The estimates provide for the continuation of legal aid in the Federal area in 1978-79. They allow for the first full-year's operation of the Commonwealth Legal Aid Commission, the Legal Aid Commission (ACT) and the Western Australia Legal Aid Commission (which is reimbursed by the Commonwealth for legal aid services rendered in the Federal area of responsibility). Other State Commissions are scheduled to come into operation during 1978-79 and will take over the activities of the Australian Legal Aid Office in the Federal law area. {:#subdebate-70-128} #### Family Law The *Family Law Act* 1975 established the Family Court of Australia, the Family Law Council and the Institute of Family Studies. The allocation of $11.5 million in 1978-79 provides for a 12 per cent increase in staff, payments to Western Australia for the operation of the Family Court in that State and higher reimbursements to the other States for services provided by their officers in maintenance administration. {:#subdebate-70-129} #### Police, Security and Detention {:#subdebate-70-130} #### Security Services and Organisations This estimate provides for expenditure by the Australian Security Intelligence Organisation (ASIO), $12.6 million, and the Australian Secret Intelligence Service (ASIS), $7.3 million. In the past expenditure on ASIS has been recorded under other functional headings. {:#subdebate-70-131} #### Police and Prison Services This provision is for police and prison services in the Australian Capital Territory ($12.8 million) and for the Commonwealth Police Force ($41.7 million). The increase in expenditure largely relates to the Commonwealth Police and reflects the full-year costs of expanded security operations that became effective during 1977-78. The Government has announced that the ACT Police and Commonwealth Police Forces will be merged in 1978-79. {:#subdebate-70-132} #### Other The increase in this provision reflects the first full year of operation of the Office of National Assessments (ONA). {:#subdebate-70-133} #### Attorney-General's Department The increase of $2.1 million comprises $0.9 million for salaries, $0.6 million for costs associated with the computerised Legal Information Retrieval and Reporting Systems and $0.6 million for other administrative expenses, including a contribution to the running costs of the joint Commonwealth-State Law Court Building in Sydney. {:#subdebate-70-134} #### Public Safety and Protection The Commonwealth is providing $800 000 in 1978-79 for road safety promotion and research and a grant to the States of $150 000 for promotion of road safety practices. Included under 'Other' are the operating expenses of the ACT Fire Brigade ($2.9 million) and fire protection services for Commonwealth property ($1.6 million). {: type="A" start="C"} 0. FOREIGN AFFAIRS AND OVERSEAS AID This heading covers most of the Government's expenditures under policies designed to promote relations with overseas countries and to assist in the economic and social development of developing countries. Total outlays on foreign affairs and overseas aid are estimated to increase by 7.4 per cent to $607.0 million in 1978-79. (About three quarters of this expenditure relates to various overseas economic aid programs to assist developing countries, including Papua New Guinea; a detailed statement of Australia's aid programs is given in Budget Paper No. 8 entitled *Australia's Official Development Assistance to Developing Countries 1978-79.)* {:#subdebate-70-135} #### Aid Payments An amount of $455 million is provided for expenditure on overseas aid in 1978-79, an increase of $35.9 million, or 8.6 per cent, over 1977-78. Taking into account 'Assistance Additional to Aid Payments' (see below) total assistance to developing countries in 1978-79 is estimated to amount to about $488.1 million. This figure does not, however, include significant amounts spent by the Commonwealth and State Governments on the education and training of several thousand students from developing countries who are attending various tertiary and other training institutions in Australia. The annual cost to the Australian taxpayer of providing assistance of this kind, not brought to account directly under the overseas aid program, is estimated at about $33 million. Australia also provides other indirect forms of economic aid through its contributions to the regular budgets of a number of international organisations (e.g. United Nations Organisation, the Food and Agriculture Organisation and the World Health Organisation) that assist in the financing of aid projects in developing countries, and through the activities of the Export Finance and Insurance Corporation (EFIC). The Government, in the national interest, has assumed large contingent liabilities in relation to developing countries through its support of EFIC activities in export and investment insurance. Since February 1975 EFIC has also operated a facility to finance exports of capital goods, with concessional terms provided, if necessary, especially to developing countries. {:#subdebate-70-136} #### Bilateral Aid {:#subdebate-70-137} #### Papua New Guinea An amount of $235.7 million is provided for expenditure on aid to or on behalf of the Papua New Guinea Government in 1978-79, an increase of $13.5 million over 1977-78. Under the terms of an aid agreement announced in March 1976, Australia is to provide to Papua New Guinea, in annual instalments, a minimum grant of $930 million as general budgetary assistance over a five year period commencing with 1976-77. In 1978-79 the amount to be provided, as agreed by the respective governments in negotiations in November 1977, is $215 million, an increase of $15 million over 1977-78. Outlays on the provision of assistance under the Australia-Papua New Guinea Education and Training Scheme are estimated at $1.2 million in 1978-79. Payments in respect of termination and retirement benefits payable to expatriate officers of former Papua New Guinea Administrations and the Australian Staffing Assistance Group are estimated at $18.9 million in 1978-79, slightly more than expenditure in 1977-78. These payments are expected to run down sharply over the next few years as the Government's obligations under the relevant legislation - the *Papua New Guinea (Staffing Assistance) Termination Act* 1976 - are discharged. {:#subdebate-70-138} #### Bilateral Projects Expenditures on bilateral projects are estimated to increase by 28 per cent in 1978-79 to $95.7 million. This reflects the implementation of substantially increased Australian aid commitments announced in recent years to South Pacific countries, Indonesia and other member countries of the Association of South-East Asian Nations (ASEAN). The expenditures cover a diversity of activities including projects, equipment and expert advice directed towards increasing agricultural productivity, providing general infrastructure and improving transport and communication facilities. These commitments reflect the Government's policy of concentrating its aid program in developing countries in Australia's immediate region. {:#subdebate-70-139} #### Training Expenditure on training programs (excluding training provided under the Australia-Papua New Guinea Education and Training Scheme) is estimated at $14.2 million, a decrease of $0.9 million on 1977-78. This decrease is due to a decline in the number of continuing and new student awards in Australia and to economies made in the cost of providing facilities and administrative services for students. {:#subdebate-70-140} #### Food Aid Expenditure on food aid is estimated to increase by $7.8 million to $36.0 million in 1978-79. Part of this increase reflects the higher prices expected to be paid for wheat and flour purchases in 1978-79 compared with 1977-78 but part also allows for a substantial increase in the quantity of food aid to be provided. **Major commitments** in 1978to79 include an increase to 275,000 tonnes in the total quantity of wheat (or wheat equivalent) to be supplied by Australia under the provisions of the Food Aid Convention of the International Wheat Agreement, provision of funds to cover freight costs on food aid provided under the Bilateral Reserve for Emergencies Scheme ($1 million), and provision of non-grain foods to developing countries ($2 million). Australia's food aid contribution to the World Food Program is included under the heading 'United Nations Programs'. {:#subdebate-70-141} #### Other Bilateral The main reason for the $5 million increase in spending under this heading is the provision of $5.2 million in 1978-79 towards the bilateral component of Australia's total contribution of $US18 million to the Conference on International Economic Co-operation's Special Action Program of $US 1 billion designed to assist individual low-income countries facing resource transfer difficulties. The bilateral component of Australia's contribution will be provided in the form of development import grants which allow receipient governments to import developmental goods and services from Australia. The grants will be made available to low-income Commonwealth countries in the region. Support for voluntary aid organisations is estimated at $1.7 million in 1978-79, $0.1 million more than in 1977-78. Expenditure under this heading includes grants for the Overseas Service Bureau and the Australian Council for Overseas Aid, and direct financial support for small-scale development assistance projects carried out by voluntary aid organisations in developing countries. An amount of $300 000 is also included for expenditure on disaster relief and $100 000 for expenditure on the preservation and development of South Pacific cultures. {:#subdebate-70-142} #### Multilateral Aid Under multilateral aid programs the Government supports a wide range of international organisations, including development finance institutions, United Nations agencies arid various regional organisations. Expenditure in 1978-79 is estimated at $66.1 million, a decrease of $10.8 million on 1977-78. {:#subdebate-70-143} #### United Nations Programs Payments by Australia to aid agencies and organisations established under the aegis of the United Nations are expected to increase to $22.9 million in 1978-79. Estimated expenditure under the World Food Program is estimated to increase by $4.9 million in 1978-79. This is due largely to Australia's commitment to progressively increase to 20 per cent the proportion of food grain aid channelled through the World Food Program and to an increased biennial pledge of cash and commodities (other than wheat). Payments in 1978-79 in respect of Australia's contributions to various UN organisations reflect the maintenance of those contributions at the same level in 1979 as in 1978. {:#subdebate-70-144} #### Regional and Other International Programs Total assistance to regional and other international programs is expected to increase by $3.4 million to $11.3 million in 1978-79 in line with the Government's policy of supporting major regional and international aid programs. **Major regional** organisations to receive support include the Economic and Social Commission for Asia and the Pacific, the South Pacific Commission, the South Pacific Bureau for Economic Co-operation and the Consultative Group for International Agricultural Research. Provision also is made for an initial payment of $2.7 million to the International Development Association in 1978-79 in respect of Australia's contribution of $US18 million to the Conference on International Economic Co-operation's Special Action Program and for a loan of $1 80 000 on concessional terms to the Pacific Forum Line, a shipping enterprise established by various South Pacific countries. {:#subdebate-70-145} #### International Development Finance Institutions Total payments by Australia to the Asian Development Bank, the World Bank Group, the International Monetary Fund and the International Fund for Agricultural Development arising out of its obligations as a member of these organisations are estimated at $31.9 million in 1978-79, compared with $50.6 million in 1977- 78. These expected payments include calls on Australia in accordance with previously announced commitments to the institutions concerned. The lower total figure in 1978-79 reflects a lower rate of cash disbursement in respect of Australia's contributions to the International Development Association and capital subscriptions to the Asian Development Bank, and lower maintenance of value payments to the Asian Development Bank. Provision is made for payments in 1978-79 in respect of capital subscriptions to the International Bank for Reconstruction and Development and the Asian Development Bank ($7.5 million) and of contributions to the International Development Association ($18.2 million), the Asian Development Fund ($4.0 million), the International Monetary Fund ($1.2 million), and the International Fund for Agricultural Development ($1.0 million). {:#subdebate-70-146} #### Assistance Additional to Aid Payments Although Australia's Defence Co-operation program ($24.6 million in 1978- 79) represents an extension of our own defence effort, it also supplements the Government's overseas economic aid programs to the extent that it releases for development purposes resources that recipient governments might otherwise have set aside for defence purposes. Australia's assistance in this respect is referred to in the section on Defence Co-operation under the Defence function. In addition, the administrative expenses of the Australian Development Assistance Bureau, estimated at $8.5 million in 1978-79 and recorded under General Administrative Expenditure, represent an integral part of total expenditure on Australia's aid effort. {:#subdebate-70-147} #### Cocos (Keeling), Christmas and Norfolk Islands This heading covers the costs involved in administering these three small external territories. The increased provision in 1978-79 includes $6.2 million for the acquisition of Cocos (Keeling) Islands from **Mr Clunies** Ross. Membership of International Organisations and Other Non-aid {:#subdebate-70-148} #### Expenditure These outlays arise mainly from Australia's membership of a large number of international and regional organisations. Active participation in these organisations, which is considered an important part of Australia's foreign policy, entails contributions to the administrative expenses and, in some cases, the functional activities of the organisations involved. Total expenditure for these purposes in 1978-79 is estimated at $22.7 million. The major expenditures include $5.5 million for the United Nations Organisation, $2.3 million for the World Health Organisation, $1.8 million for the United Nations Food and Agriculture Organisation, $1.4 million for the United Nations Educational, Scientific and Cultural Organisation, $1.2 million for the International Labour Organisation, $ 1 .4 million for the Organisation for Economic Co-operation and Development, $1.2 million towards the cost of the United Nations Emergency Force in the "Middle East, and $1.1 million towards the cost of the United Nations Interim Force in Lebanon. {:#subdebate-70-149} #### General Administrative Expenditure Outlays on administrative costs of the Department of Foreign Affairs, the Australian Development Assistance Bureau and the Overseas Operations Branch of the Department of Administrative Services are estimated to increase by $0.9 million in 1978-79, to $128.5 million. {:#subdebate-70-150} #### Recoveries and Repayments Recoveries and repayments are estimated at $12.5 million in 1978-79, an increase of $2.0 million over 1977-78. This item includes repayments in respect, of various loans provided to the Papua New Guinea and Fiji Governments on concessional terms under the overseas aid program, expected proceeds from the sale of overseas assets and recoveries relating to the administrative expenses of Christmas, Cocos (Keeling) and Norfolk Islands. {: type="A" start="D"} 0. GENERAL AND SCIENTIFIC RESEARCH NEC The Government provides funds for a range of scientific, industrial and general research purposes but much of this is recorded under the appropriate functional headings (e.g. Health, Education, Industry Assistance). General and Scientific Research (not elsewhere classified) covers the activities of the Commonwealth Scientific and Industrial Research Organization, the Australian Atomic Energy Commission and various programs of research undertaken by several Government departments and instrumentalities, including the Department of Science. Provision also is made here for assistance for research activities funded through the Australian Research Grants Committee, support for fellowship schemes and for the establishment of an Australian LANDSAT facility. Total expenditure for 1978-79 is estimated at $229.0 million, an increase of 15.7 per cent over 1977-78. {:#subdebate-70-151} #### Australian Atomic Energy Commission The Commission's functions include research and investigation into matters associated with uranium and atomic energy, and sale of radio-isotopes. The $1.2 million increase in outlays in 1978-79 reflects general cost increases, some expansion in the centrifuge enrichment research program and increased activity in the design-cost study for a replacement for the HIFAR reactor; these increases are partially offset by the effect of a reduction in the Commission's staff. Outlays relating to the Commission's contributions to the Ranger Joint Venture are included under 'Industry Assistance and Development'. {:#subdebate-70-152} #### Commonwealth Scientific and Industrial Research Organization The main role of CSIRO is to undertake scientific and technological research, in the physical and biological sciences, in support of Australian industry, community interests and other national objectives and obligations. Expenditures relate to research activities in such fields as agriculture, land resources, fisheries and oceanography, food and human nutrition, manufacturing, mining and energy, atmospheric science and astronomy. The total of $167.7 million in 1978-79 makes provision for increases resulting from salary and wage rises ($4.3 million), the full year effect of new financing arrangements for wool research ($4.4 million), the expansion of fishing research ($0.7 million) and increased expenditure on major buildings and works ($12.1 million), including the construction of the Australian National Animal Health Laboratory at Geelong. {:#subdebate-70-153} #### Antarctic Division The Antarctic Division of the Department of Science administers, organises and provides logistic support for the Australian National Antarctic Research Expeditions. These expeditions operate from three stations in the Antarctic region, and one station on Macquarie Island, and undertake scientific research programs in upper atmosphere physics, cosmic ray physics, glaciology, biology, medical science, geology and geophysics. The provision of $11.8 million for 1978-79 allows for upgrading of buildings and associated facilities at the stations and for the completion of a design study for an Australian-owned antarctic ship. {:#subdebate-70-154} #### Research Grants Assistance is provided through the Australian Research Grants Scheme, the Queen Elizabeth II Fellowship Scheme and the Queen's Fellowship Scheme for research projects by individuals in the physical, chemical, biological and earth sciences, in engineering and applied sciences and in the humanities and social sciences. Grants by the Australian Research Grants Committee make up some 96 per cent of the research assistance provided. The 1978-79 provision of $12.8 million represents an increase of $1.8 million and is intended to maintain broadly the same level of research activity as in 1977-78. {:#subdebate-70-155} #### Australian Institute of Marine Science The Australian Institute of Marine Science was established in 1972 to carry out research in marine science, both directly and in co-operation with other institutions. The provision of $2.9 million for the Institute in 1978-79 is $0.8 million less than was spent in 1977-78; the decrease reflects large non-recurrent payments made in 1977-78 for a 24 metre research ship ($1 million) and for the initial setting-up expenses for the permanent laboratory complex, offset in part by increases in the running costs of the Institute. {:#subdebate-70-156} #### Anglo-Australian Telescope Board This item provides for the Australian Government's contribution to the operational costs of the Anglo-Australian 3.9 metre telescope and its associated research facilities. The total cost of operations in 1978-79, which is to be shared equally with the UK Government, is estimated at $2.1 million. {:#subdebate-70-157} #### Australian Institute of Aboriginal Studies The Australian Institute of Aboriginal Studies was established in 1964 to promote, encourage and assist studies and research in relation to the Aboriginal people. The provision for the Institute in 1978-79 is $2.3 million; this includes funds for monitoring the social impact of uranium mining on Aboriginal communities. {:#subdebate-70-158} #### Other Research and Science Expenditure under this heading covers a range of activities associated with the support of scientific research and development in Australia. The increase of $4.1 million reflects a grant of $2.1 million to the Standards Association of Australia (in previous years this grant has been funded from CSIRO appropriations) and the provision of $1.8 million for the establishment of an Australian LANDSAT facility. Provision is also made within the total for support of the Australian Science and Technology Council ($266 000) and the Australian Biological Resources Study ($250 000), and for the support and development of major scientific facilities in Australia, such as the Nuclear Magnetic Resonance Spectrometer Centre ($434 000) and the Balloon Launching Station ($100 000). In addition, support is provided for the Learned Academies ($220 000), for activities under several agreements for scientific and technical co-operation with other countries, and for the Australian and New Zealand Association for the Advancement of Science. {: type="A" start="E"} 0. ADMINISTRATIVE SERVICES This heading covers general administrative services not allocated to specific functions, as well as a number of common services provided for the general operations of Government. Outlays for these purposes are estimated to total $849.3 million in 1978-79, an increase of 3.7 per cent. {:#subdebate-70-159} #### Financial Affairs and Fiscal Administration {:#subdebate-70-160} #### Customs and Excise Administration The increase of $5.6 million in these outlays relates largely to the provision for increased salaries and additional staff in the Narcotics Bureau ($2.7 million), increased air charter and other travel costs arising principally from antinarcotic smuggling activities ($1.0 million), and the upgrading of customs communications systems and other capital equipment to combat narcotics smuggling ($0.8 million). {:#subdebate-70-161} #### Taxation Administration The estimated increase of $10.2 million in 1978-79 relates principally to an expansion in enforcement activity by instalment inspectors and field auditors and the installation, Commonwealth-wide, of word processing equipment. {:#subdebate-70-162} #### Other Included under this heading are loan flotation expenses associated with the raising of overseas loans. In 1977-78 outlays on these flotation expenses were $23.8 million; the 1978-79 provision is $9.0 million. Partly offsetting this estimated reduction are increases in general administrative expenses of the Departments of the Treasury and Finance, which reflect full-year effects of cost rises, and additional costs associated with the proposed commencement of efficiency audits by the Auditor-General. {:#subdebate-70-163} #### Statistical Services Outlays under this heading are largely for the operations of the Australian Bureau of Statistics. There are estimated increases in 1978-79 of $1.2 million in costs of statistical surveys (resulting from the introduction of Monthly Labour Force Surveys early in 1978, together with a proposed Housing Survey in Sydney /Newcastle/Wollongong) and $1.4 million for the purchase of computer equipment. These increases are largely offset by reductions in salary and other payments associated with various surveys, the 1976 population census and a reduction in hiring of computers. General Administration of the Territories This item includes outlays in the Australian Capital Territory ($29.6 million) and by the Department of the Northern Territory ($1.5 million) on services which are of a general nature and cannot be readily classified to other functions (e.g. city works undertaken by the NCDC in Canberra and general salaries and administrative expenses of the Department of the Capital Territory and Northern Territory). Outlays in the ACT are expected to increase by $1.2 million in 1978-79. **Major components** of this increase are increased salary costs and charges for computer services. The provision of $1.5 million for the Northern Territory represents salaries and administrative costs for residual elements of the Department of the Northern Territory not transferred under the self-government arrangements. These elements are to be transferred to the Department of Home Affairs on 1 October 1978. Commonwealth assistance for the Northern Territory in 1978-79 is largely by way of a global allocation to the Territory (see Section 10A of this Statement). Other Administrative Services, nec Included here are the administrative expenses of the Department of the Prime Minister and Cabinet, the Central Office and the Australian Government Analytical Laboratories of the Department of Science, the Department of Administrative Services and the Department of Home Affairs. Expenditures related to the running costs of the Administrative Appeals Tribunal and the Office of the Commonwealth Ombudsman are also included. {:#subdebate-70-164} #### Common Services {:#subdebate-70-165} #### Construction Services (Net) Outlays under this heading are mainly for the running costs of the Department of Construction and include salaries, administrative expenses and consultants' fees. The decrease in expenditure reflects the transfer of functions from the Department of Construction to the Northern Territory under self-government arrangements. {:#subdebate-70-166} #### Commonwealth Offices This heading covers expenditures for the construction and maintenance of Commonwealth offices. Expenditures on new Commonwealth Offices in the ACT, which make up the bulk of this item, are estimated to decline by $1.9 million in 1978-79. Expenditures on repairs and maintenance of offices throughout Australia are estimated to increase by $1.5 million. {:#subdebate-70-167} #### Australian Government Publishing Service The estimated increase of $2.0 million in 1978-79 in the operational expenses of the Australian Government Publishing Service (including the Government Printing Office) reflects salary increases and delays in 1977-78 in the delivery of equipment. {:#subdebate-70-168} #### Property Management and Services This item includes the costs associated with the management of Commonwealth office accommodation and the property survey program for Commonwealth departments and authorities. **Major components** of the estimate are salaries ($18.9 million), contract cleaning ($7.4 million) and office services ($10.0 million). {:#subdebate-70-169} #### Government Purchasing The main component of the estimate for 1978-79 is salaries ($7.8 million) for staff of the Department of Administrative Services engaged in purchasing activities. {:#subdebate-70-170} #### Rent This item covers rental costs for office and other accommodation leased for civil departments. The full year cost of leases taken up in 1977-78, increased rentals on existing leases, and proposed expenditure of $2.5 million on new leases in 1978-79, account for the increase of $9.1 million. {:#subdebate-70-171} #### Publicity Services The 1978-79 estimates include provision for publicity programs undertaken by the Australian Information Service ($4.4 million), as well as support for Film Australia ($3.8 million). {:#subdebate-70-172} #### Transport and Storage Services Outlays under this heading provide for the operation of the Department of Administrative Services vehicle fleet, removal and storage costs associated with the transfer of Commonwealth civilian employees and the provision of bulk storage facilities for other than the Defence Department. **Major components** of the estimated increase in 1978to79 are SI. 6 million for a new transport and storage depot in the ACT, which was begun in 1977-78, and $3.7 million for increased vehicle purchases. Net Superannuation Payments, nec The increase of S3 1.0 million estimated for 1978-79 provides for growth of about 11 per cent in the number of pensioners and reflects the full year costs of new pensions granted in 1977-78 and the cost of automatic updating of pensions in July 1978. Also included is an increase of $5.6 million in payments to former railway workers in South Australia and Tasmania; the Commonwealth assumed these liabilities under the arrangements covering the takeover of the railways of those States. {:#subdebate-70-173} #### Recoveries This heading records various miscellaneous receipts including, administrative charges for work undertaken by the Department of Construction, rent from Commonwealth property, charges for the hire of computers, audit fees and other minor charges. The decrease reflects mainly an estimated reduction of $4.2 million in revenue from the Northern Territory which is only partly offset by recoveries from other sources. {: type="1" start="1"} 0. NOT ALLOCATED TO FUNCTION Outlays not allocated to specific functions comprise payments to the States, the Northern Territory and local government authorities not elsewhere classified, natural disaster relief, interest payments on the public debt, and allowances for increases in wages and salaries for Commonwealth Government employees and the defence forces and for unallocated administrative savings arising from further reductions in staff ceilings approved by the Government. {: type="A" start="A"} 0. PAYMENTS TO OR FOR THE STATES, THE NORTHERN TERRITORY AND LOCAL GOVERNMENT AUTHORITIES, NEC Outlays under this heading comprise general revenue funds for the States, State Government Loan Council programs, assistance related to State debt, financial assistance to the Northern Territory, financial assistance for local government and outlays for natural disaster relief. Details of the payments are set out below; additional information on these and other payments to the States, the Northern Territory and local government authorities classified under various functional headings is contained in Budget Paper No. 7 entitled *Payments to or for the States, the Northern Territory and Local Government Authorities, 1978-79.* {:#subdebate-70-174} #### General Revenue Funds General revenue funds are utilised for purposes determined by the States. Financial assistance grants, which constituted most of these funds up to and including 1975-76, were determined under a formula which took into account increases in States' populations and in average wages in the economy as a whole, and a further 'betterment' factor. Financial assistance grants were replaced by personal income tax sharing arrangements between the Commonwealth and State Governments in 1976-77. Under 'Stage 1' of these arrangements, the States became entitled to receive: in 1976- 77, 33.6 per cent of Commonwealth net personal income tax collections (excluding the revenue effects of any special surcharges or rebates applied by the Commonwealth) in that year; in 1977-78, a fixed amount of $4336.1 million; and in each subsequent year, 39.87 per cent of collections in the preceding year. The 'Stage 1' arrangements include a guarantee that the States' entitlements in any year will not be less than in the previous year and, in the four years 1976-77 to 1979-80, will not be less in a year than the amount which would have been yielded in that year by the financial assistance grants formula referred to above. (Over-payments of $19.6 million in the first year of the tax sharing arrangements were deducted from payments in the following year.) Under 'Stage 2', for which enabling legislation has been passed by the Parliament, each State can, if it so chooses, legislate to increase its revenue from personal income tax or to give a rebate on personal income tax to residents in the State. Each of the four less populous States is entitled to apply for special grants which are paid on the recommendation of the Commonwealth Grants Commission. Payments of special grants in 1976-77, 1977-78 and 1978-79 relate solely to Queensland, the only applicant State in recent years. Tasmania withdrew from claimancy in 1974-75 but has now applied for a special grant in respect of 1977-78; this claim will be examined and reported on by the Commonwealth Grants Commission. Repayments under the general revenue assistance heading relate to special repayable interest bearing advances made to New South Wales in 1971-72 and 1972-73. In total, net general revenue funds to be provided to the States in 1978-79 are estimated at $4788.7 million, an increase of $457.3 million, or 10.6 per cent, compared with 1977-78. {:#subdebate-70-175} #### State Government Loan Council Program At its June 1978 meeting the Loan Council approved a total State Government program of $1433.8 million for 1978-79, the same money amount as in 1977- 78. Of the total program $955.9 million will take the form of advances and $477.9 million will be by way of grants. {:#subdebate-70-176} #### Assistance Related to State Debt Under the Financial Agreement the Commonwealth pays $15.2 million each year to the States as a contribution towards interest payable on their debt and also contributes sinking fund payments; the sinking fund payments in {:#subdebate-70-177} #### Assistance for Local Government Under the tax sharing arrangements introduced in 1976-77 the Commonwealth provides funds to the States for general purpose assistance to local government authorities. The amount to be provided in 1978-79 is $179.4 million, which represents an increase of 8.5 per cent over the amount of $165.3 million paid to the States for local government in 1977-78. {:#subdebate-70-178} #### Natural Disaster Relief A net amount of $12.6 million is provided for expenditure on natural disaster relief payments to the States in 1978-79. This provision is to meet outstanding commitments in respect of past natural disasters, mostly drought; no allowance is made in the estimates for payments in respect of natural disasters which may occur in 1978-79. Changes have been made to the administrative and financial arrangements under which the Commonwealth assists the States when natural disasters occur. To simplify administration of the arrangements, the Commonwealth has agreed that following specified major disasters certain 'standard' measures may be implemented by the States without the need to obtain prior Commonwealth approval. At the same time the States will continue to be able to request Commonwealth support for any additional 'non-standard' measures which they may consider warranted following particular disasters. As announced in the Budget Speech, the basis on which natural disaster relief costs are shared between the Commonwealth and the States has also been changed In 1977-78 and earlier years the Commonwealth met all expenditures by a State in a year on agreed measures necessitated by major disasters in excess of a bas« amount for that State. The State base amounts were established in 1971 and have remained unchanged since then. Under new arrangements to apply from 1978-79, the States' base contributions have been doubled and expenditures in excess of those base amounts will in future be financed on a $3 Commonwealth: $1 State basis. Payments to the Northern Territory In 1977-78 a total of $52.5 million was provided to the Northern Territory Legislative Assembly for expenditure on functions for which executive control had passed to the Northern Territory (see the Appendix to the Budget Statements). Disbursement of this amount was determined in accordance with Funds Allocation Ordinances of the Northern Territory Legislative Assembly. In addition, the Northern Territory was provided with establishment grants of $264 000 and $267 000, respectively to cover the costs of special advisors to the Northern Territory Executive and of the setting-up of the Northern Territory Electricity Commission. On 1 July 1978, the Northern Territory became a self-governing Territory under the *Northern Territory (Self-Government) Act* 1978. Under the Act, the Assembly of the Northern Territory has power, with the assent of the Administrator or Governor-General, to make laws for the peace, order and good government of the Territory, and Ministers of the Territory have executive authority in respect of specified functions of a State-type nature. The two functions still to be transferred to the Territory are health (scheduled for 1 January 1979) and education (scheduled for 1 July 1979). **Major State-type** functions for which responsibility is not being transferred are the Supreme Court, the mining of uranium, and Aboriginal affairs other than the provision of services to Aboriginal communities. A summary of the financial arrangements governing SelfGovernment to the Northern Territory is provided in Chapter V of Budget Paper No. 7 *Payments to or for the States, the Northern Territory and Local Government Authorities 1978-79.* In 1978-79, which is the transitional year, the bulk of Commonwealth funds for the Territory will be provided as general purpose funds by means of a global budget allocation of $280 million. This allocation is intended to enable standards of services to be maintained at their present overall level and is based on acceptance by the Northern Territory of responsibility for raising a reasonable proportion of its total revenue and for setting its expenditure priorities within the total level of funds available from its own sources and the Commonwealth. The global allocation includes some amounts that are subject to agreed conditions, notably $23 million for a subsidy to the Northern Territory Electricity Commission. Provision has been made for estimated expenditure on health for six months after the transfer of this function from 1 January 1979. After allowing for a further establishment grant of $0.3 million, and a repayment by the Territory of $2.2 million in respect of its initial debt (created through the transfer of certain revenue producing assets), the estimated net Commonwealth payment to the Northern Territory in 1978-79 is $278.1 million. The Northern Territory is also to be the recipient of certain specific purpose payments, namely a matching grant under the *States and Northern Territory Grants (Bluetongue Virus Control) Act* 1978, a matching grant under proposed legislation to amend the *Health Insurance Act* 1973 to provide for a hospital cost-sharing agreement with the Territory, and a grant for expenditure by the Northern Territory Housing Commission on special Aboriginal housing in urban areas. These specific purpose allocations are classified to the relevant functions, and are not included under this specific heading. {: type="A" start="B"} 0. PUBLIC DEBT INTEREST This heading brings together interest payments made from the Budget sector to other sectors, including interest payments on Commonwealth securities, and under defence credit arrangements with other countries. Interest received by Government Trust Funds on Commonwealth Securities held as investments and cash balances is offset against gross interest payments. Total public debt interest payments are estimated to increase by 15.6 per cent in 1978-79 to $1905.9 million; this is equivalent to 6.6 per cent of total Budget outlays in 1978-79. *Gross Interest Paid on Commonwealth. Securities* Interest on all Commonwealth securities on issue, except for defence borrowings, are included under this heading. The total includes interest on Commonwealth Bonds and Inscribed Stock, Australian Savings Bonds, and Treasury Notes. Over half the securities on issue are on behalf of the States; reimbursement of interest payments by the States and Commonwealth Authorities are recorded as receipts under the heading Interest, Rent and Dividends (see the relevant section in Budget Statement No. 4 for further details). The further increase in interest payments in 1978-79 reflects mainly the financing, to the extent possible by borrowings from the public, of the large deficits of recent years. {:#subdebate-70-179} #### Loan Defence Act Interest The reduction in interest payments in 1978-79 on loans raised in the United States for defence equipment purchases reflects the declining level of that outstanding debt. {:#subdebate-70-180} #### Loan Consolidation and Investment Reserve Interest is received by the Loan Consolidation and Investment Reserve on investments in Commonwealth securities which were issued mainly in Special Loans to assist State works programs. These receipts represent interest paid by the Commonwealth to the Commonwealth (through one of its Trust Accounts) and are offset against total interest paid. {:#subdebate-70-181} #### Other Interest is also received on investments in Commonwealth securities and on cash balances by other Commonwealth Trust Funds, including the National Debt Sinking Fund. These receipts also are offset in arriving at net interest payments. {: type="A" start="C"} 0. ALLOWANCE FOR WAGE AND SALARY INCREASES A bulk allowance of $50 million is included in the 1978-79 Budget estimates to provide for prospective increases in wage and salary rates in the public service during the year; the comparable provision last year was $90 million. This amount is not appropriated as such at this stage but the provisions required in the light of actual increases in wages and salaries and other relevant developments will be reflected in additional appropriations later in the year. The calculation of the allowance is necessarily approximate. {: type="A" start="D"} 0. UNALLOCATED ADMINISTRATIVE SAVINGS As mentioned in the Budget Speech, staff ceilings have again been set for departments and certain authorities in 1978-79. These ceilings reflect decisions on staff levels which were taken too late in the Budget preparations to be allocated, in detail, across departments and functions in the Budget estimates. These further reductions are estimated to result in total savings of about $5 million on the detailed estimates for 1978-79. Over the past three years the number of public servants covered by staff ceilings has fallen by 10 650, after allowing for movements of functions into and out of ceiling coverage. The current ceilings imply a further reduction in staff of 2600, or 0.8 per cent, during 1978-79; this is after making provision for further anticipated movements into and out of ceiling coverage, and for significant increases in the staff of the Department of Social Security in line with recommendations made by the Review Team that examined that Department's operations in 1977-78. {: .page-start } page 208 {:#debate-71} ### STATEMENT No. 4- ESTIMATES OF RECEIPTS 1978-79 Total receipts in 1978-79 are estimated to be $26 057 million, an increase of 11 per cent over 1977-78. In the absence of the tax changes identified in the following table, estimated receipts in 1978-79 would have grown by only 4.5 per cent reflecting, *inter alia,* the cost to revenue of the first full year's operation of the new personal income tax scale which came into effect on 1 February 1978 and subdued growth in the bases of non-personal taxes, the latter stemming in part from the increased cost to revenue of the investment allowance. {: .page-start } page 208 {:#debate-72} ### THE MEASURES The following schedule lists the Budget taxation measures and shows the estimated effects on receipts in 1978-79 and in a full year. Minor measures outside the taxation field that will affect receipts are not shown. Full-year estimates are the ultimate changes in receipts from applying the new rates or other new arrangements for the current financial year to the estimated level of the tax base for the current financial year as though the measure had applied from 1 July 1978. Measures previously introduced also involve substantial costs to revenue in 1978-79. The most important of these are: ° introduction of the standard rate scale with effect from 1 February 1978, which reduced collections on 1977-78 levels of income by $1300 million on a full-year basis. The cost to revenue of this measure in 1977-78 was about $400 million; o the trading stock valuation adjustment, estimated to cost $307 million in 1978-79, compared with $316 million in 1977-78; and ° the investment allowance, estimated to cost $410 million in 1978-79, compared with $325 million in 1977-78 and $100 million in 1976-77. Companies account for most of the cost to revenue arising from the investment allowance and the trading stock valuation adjustment. Payments of company tax are normally in respect of incomes earned in the previous year so that the cost to revenue of these measures in 1978-79 largely reflects the availability of these allowances in determining liability to tax on incomes earned in 1977-78. {:#subdebate-72-0} #### Changes to Personal Income Tax System {:#subdebate-72-1} #### Indexation Arrangements On 1 July 1978, the PAYE instalment deductions were adjusted as part of the indexation arrangements for 1978-79, under which: o the 1977-78 dependants rebates were indexed by a factor of 1.076 to derive the 1978-79 rebates; and o the income brackets, including the zero rate step, in the standard rate scale introduced from 1 February 1978 were indexed by a factor of 1.038 (halfindexation) to derive the rate scale for 1978-79. {:#subdebate-72-2} #### Temporary Standard Rate Increase As a temporary measure for 1978-79 only, the standard rate of tax will be increased by H per cent to 33i per cent. The surcharges of 14 and 28 per cent on income above specified levels will remain unchanged, so that marginal rates on the income ranges subject to those surcharges will be 47i per cent and 61± per cent. The rates of *33i* per cent, 47± per cent and *6H* per cent will also apply to the 1978-79 incomes of trusts taxed under section 98, 99 or 99a of the Income Tax Assessment Act in place of the respective rates of 32 per cent, 46 per cent and 60 per cent that would otherwise have applied. (The rate of tax payable for 1978-79 by trustees of superannuation funds under section 121da of the Income Tax Assessment Act will correspondingly increase from 60 per cent to 6H per cent.) The change will be reflected in PAYE instalment deductions from 1 November 1978. From that date PAYE deductions will increase by an amount designed to make deductions received over 1978-79 broadly equivalent to the increased tax to be assessed on the income of 1978-79 as a whole. Allowing for a month's lag in PAYE collections (PAYE deductions made by an employer in one month are not received by the Taxation Office until the next month) this means, in effect, that the rise in PAYE deductions from 1 November 1978 to 30 June 1979 will be increased by the factor 12/7. (The month's excess deductions in 1978-79 will form part of refunds in 1979-80.) The temporary increase in the standard rate for 1978-79 will also be reflected in the calculation of provisional tax. In broad terms, the amount of basic provisional tax in respect of a year of income is calculated as the amount of tax payable for the preceding year of income on income of that year, except where the taxpayer elects to self-assess, that is, to provide an estimate of taxable income for the relevant year. Provisional tax based on the previous year's income is calculated by applying, unindexed, the previous year's rate scale. If, however, the taxpayer elects to self-assess, the current year's indexed rate scale is applied to the estimate of taxable income to derive the amount of provisional tax payable. In line with these procedures, basic provisional tax in respect of 1978-79 will be calculated on 1977-78 income at 1977-78 "composite scale" rates plus the additional11/2 per cent applied to taxable income in excess of $3402. Self-assessed provisional tax in respect of 1978-79 will be calculated by applying the 1978-79 rate scale, including a standard rate of 331/2 per cent, to estimated 1978-79 income. {:#subdebate-72-3} #### Personal Income Tax System - 1978-79 After the changes described above, the broad structure of the personal income tax system to be applied to 1978-79 incomes will be as follows. {: type="a" start="a"} 0. *Rate Scale* The scale of tax rates in 1978-79 is: The rebates allowable in respect of dependants who are not residents of Australia will cease from 1 November 1978. This will be effected by reducing appropriately the amounts claimable for such dependants. The maximum amount claimable for 1978-79 in respect of a dependent parent or parent-in-law residing overseas will thus be $180 and that for an invalid relative $90. Abolition will not affect the arrangements under which a rebate is allowable in respect of a dependent spouse temporarily overseas or overseas pending early migration to Australia. In such a case, a rebate of up to $597 will continue to be allowable. Where, for PAYE purposes, an employee has claimed rebates for dependants residing overseas, the claim will not be reflected in PAYE deductions made on or after 1 November 1978. *Zone rebates* are: Zone A: §216 plus 25 pet cent of rebates for dependants (including notional rebates for dependent children and students - S270 for first child and each student child, $203 for each other child); Zone B: $36 plus 4 per cent of rebates for dependants. *Concessional expenditure:* Rebates will continue to be allowed in 1978-79 for concessional expenditures in excess of $1590. Rebates will be at a rate of 33i per cent, i.e. a rate matching the standard tax rate of 33± per cent. The concessional rebate ceiling is not indexed. *Pay-as-you-earn Tax Instalment Deductions* Under the income tax PAYE system, an employer is called upon to deduct tax instalments at prescribed rates from amounts paid as salary or wages and remit the amounts deducted to the Taxation Office for crediting against the employees' income tax assessments. Although payments made under a contract which is wholly or substantially for the payee's labour are included in salary or wages, and thus made subject to tax instalment deductions, this is not the case where the payee has the right under the contract to arrange for the labour to be supplied by another person. There is also a question whether the definition of salary or wages from which tax instalment deductions should be made encompasses some payments made to musicians or entertainers. To make it clear that payments made to individuals providing labour or services are generally subject to tax at the source under the PAYE system, the expression 'salary or wages' is to be given an extended meaning for income tax purposes to include payments made on or after 1 November 1978 - {: type="a" start="a"} 0. under a contract wholly or substantially for labour that is in fact per formed by the person to whom the payments are made, and 1. for services or performances given by a musician, entertainer or other person of creative talent. *Self-assessment of Provisional Tax* The self-assessment provisions for provisional taxpayers will be amended to provide stronger safeguards against abuse. One of the existing safeguards provides that additional tax is payable if the self-assessment estimate of income is more than 20 per cent below the actual taxable incomes of *both* the relevant year and the previous year. The additional tax is 10 per cent of the amount by which the provisional tax payable on the basis of the self-assessment falls short of the lesser of tax on a taxable income equal to 80 per cent of the taxable income of the relevant year or of tax on a taxable income equal to 80 per cent of the taxable income of the previous year. This safeguarding provision will be amended for 1978-79 and subsequent years so as to impose additional tax where the estimated income for a year turns out to be more than 10 per cent below the actual income for that year. The amount of the additional tax will be 10 per cent of the full amount of the reduction in the provisional tax originally notified or of the full amount by which the reduced provisional tax falls short of the tax ultimately payable, whichever is the lesser. As under the present provisions, the Commissioner will have the power to remit the additional tax where the taxpayer's under-estimate arose from circumstances of which he or she was unaware when making the estimate. {:#subdebate-72-4} #### Home Loan Interest For the 1978-79 income year the income tax deduction for home loan interest will be restricted to interest paid by 30 June 1979, to the extent that the payment relatesto interest accrued to 31 October 1978. In other respects the deduction allowable in respect of the 1978-79 income year will be calculated according to the existing requirements of the law, including the income qualification. No deduction will be allowable in respect of home loan interest paid after 30 June 1979. Where, for PA YE purposes, home loan interest declaration forms have been lodged by employees, these will cease to be operative from 1 November 1978. {:#subdebate-72-5} #### Social Welfare Payments The 1976 decision to subject to tax a wide range of social welfare payments has been extended; the other such payments now to be subject to tax, as from 1 November 1978, are, broadly: ° Invalid pension for persons under age pension age Sheltered employment allowance o Repatriation service pension on account of unemployability or pulmonary tuberculosis for persons under age pension age o Tuberculosis allowance for persons under age pension age o Tuberculosis housekeeper allowance o Rehabilitation training allowance o Rehabilitation living-away-from-home allowance ° Incentive allowance (rehabilitation). *Post-graduate Awards* Commonwealth awards under the Post-graduate . Awards Scheme are to be made assessable income in the hands of the recipient, with effect from 1 November 1978. {:#subdebate-72-6} #### Unused Annual and Long Service Leave At present only 5 per cent of lump sums received on retirement or termination of employment for unused annual and long service leave is included in assessable income. Lump sums for such unused leave will be taxed on the following basis where the retirement or termination of employment occurs after 15 August 1978: © lump sums for unused *annual* leave will be included in full in assessable income and taxed on the normal basis; o so much of a lump sum for unused *long service* leave as is attributable to a period of qualifying service after 15 August 1978 will be fully taxable but at the standard rate of tax (331/2 per cent in 1978-79); o so much of a lump sum for *long service* leave as is attributable to a period of qualifying service up to 15 August 1978 will continue to be taxed on the present basis, whenever the lump sum is received; and where an employer is exempted from compliance with the requirements of a law, industrial award, etc., relating to long service leave benefits because there is a scheme in operation that provides alternative benefits, the basis proposed for taxing long service leave payments will apply to lump sums for leave paid under the scheme. Where an employee has some unused long service leave attributable to a period of qualifying service up to 15 August 1978 and uses some long service leave after 15 August 1978, the leave will be treated for income tax purposes as having been used first out of any entitlement that is attributable to a period of qualifying service accruing after 15 August 1978 and second out of entitlements attributable to a period of qualifying service up to 15 August 1978. This "last-in-first-out" basis has the effect that leave attributable to a period of qualifying service up to 15 August 1978, which under the phasing-in arrangements proposed will continue to have the present tax basis applied to it, will be preserved until leave attributable to post-Budget qualifying service is exhausted. The changes will not alter the existing rule that payments on the death of a person to a spouse or dependants or a legal personal representative in respect of accrued annual or long service leave are not subject to taxation. PAYE deductions from lump sums referred to above will be made from payments effected on or after 1 November 1978. *Averaging of Income from Primary Production* Adjustments are to be made to the income tax averaging system so as to confine its benefits more strictly to income derived from primary production. Where a primary producer derives only a limited amount of income from other activities, averaging benefits may still apply to a certain amount of that income also. Income to which averaging benefits are to apply consists of: that part of taxable income that is derived from primary production; where income from non-farm sources is $5000 or less, the amount of that income; and where the income from non-farm sources is greater than $5000, the amount (if any) that remains after deducting from $5000 the excess of that income over $5000 (the $5000 allowance for non-farm income will thus shade out completely when the non-farm income reaches $10 000). Where the taxpayer earns $10 000 or more from activities other than primary production, averaging is thus to apply only to his income from primary production activities. After determining the income to which averaging benefits apply, the system will work as follows: tax on *total* taxable income for the current year is first calculated at ordinary rates (i.e., those which would apply in the absence of averaging); e tax on *total* taxable income is then calculated under the present averaging arrangements; the *basic* benefit from averaging is the difference between those two figures; the taxpayer is allowed a proportion of that basic benefit, equal to the proportion of his total taxable income for the current year which, under the rules stated above, is subject to averaging; tax assessed is calculated by deducting from tax at ordinary rates the amount of averaging benefit to which he is entitled; as at present, any rebates to which the taxpayer is entitled will also be deducted. *Examples:* Assume a taxpayer has a taxable income of $18 000 in 1978-79 with an average income of $14 000. Assume that the non-primary production income is: Case (a) $4000, so that $18 000 is subject to averaging, Case (b) $7000, so that $14 000 is subject to averaging, Case (c) $15 000, so that $3000 is subject to averaging. The following example illustrates how the amount to which the averaging benefit will apply will be calculated in a case where the taxpayer has a loss from primary production activities, and other income exceeding $5000: Assume a taxpayer has net non-farm income of $8000 and a loss from primary production of $1000, giving a taxable income of $7000. In such circumstances the averaging benefit allowable would be determined by reference to an amount calculated as follows: A taxpayer with a taxable income of the same amount ($7000) and having a loss from primary production in excess of the allowance (if any) of non-farm income treated as primary production income would not derive any benefit from averaging in that year. These changes to the averaging system are to apply in assessments of 1978-79 income and will be reflected in self-assessed provisional tax for 1978-79. {:#subdebate-72-7} #### Health Insurance Levy As part of the new arrangements which come into operation for health financing on 1 November 1978 the health insurance levy will cease from that date. For people who have no entitlement to exemption from the levy the amount of health insurance levy that will be included in assessments for 1978-79 will be one-third of 2± per cent of the whole year's taxable income, or one-third of the relevant ceiling, whichever is the lesser. A person's entitlement to exemption will be determined by circumstances existing in the first 4 months of 1978-79, so that, for example, a person who has appropriate private insurance throughout that period of 4 months will be exempt from the levy in 1978-79. For levy payers PAYE deductions until 31 October 1978 will continue to include a component for the levy calculated to reflect the basic rate of *2i* per cent. The provisional tax payable for 1978-79 for levy payers will include a component for the levy and this will be one-third of what would have been the levy component for the full year. {:#subdebate-72-8} #### Customs and Excise Duties *Excise Duty on Crude Oil* The rate of duty on non-parity indigenous crude oil is to be raised from its present level of $18.90 per kilolitre (approximately $3 per barrel) to a rate that will bring the cost to refineries of such oil to import parity levels. In the case of such oil produced in Bass Strait the new rate of excise levy will be set at $64.53 per kilolitre from 16 August 1978 to 31 December 1978. The rate of levy for corresponding Barrow Island production will be $61.39 per kilolitre. The subsequent levels of the levy will depend on the import parity price of oil as determined by the Minister for National Development. The new rates of levy will not apply to that increasing proportion of 'old' indigenous crude oil production for which, under the arrangements announced in the 1977-78 Budget, producers are to receive import parity prices. The levy on that part of production will remain at $18.90 per kilolitre. The increased duty will not be applied to condensate marketed separately from a crude oil stream. LPG from currently producing fields will continue to attract duty at the rate of $12.60 per kilolitre. {:#subdebate-72-9} #### Other Excise Duties The excise duty on *beer* is being increased by $0,126 per litre to $0.52 per litre. The rate of duty on *potable spirits* will be a standard $18.75 per litre alcohol with the exception of spirits n.e.i. and liqueurs n.e.i. for which a differential rate has been maintained. Previously the rates of excise for brandy and whisky were $10.21 per litre alcohol, for gin and rum $10.29 per litre alcohol and for other spirits $10.25 per litre alcohol. The rate of excise duty for *cigarettes* is being raised by $5.39 per kilogram to $24.75 per kilogram. Correspondingly, the duty on cigars is being raised by $4.56 per kilogram to $21.12 per kilogram and that on manufactured tobacco'' by $2.70 per kilogram to $12.58 per kilogram. For each of these excise increases, commensurate increases in the relevant rates of *customs duty* are also being made. Rates of duty for the main items subject to excise, incorporating the changes announced in the Budget Speech, are as follows: {:#subdebate-72-10} #### Tariff Quotas and Import Licences An additional duty of 12i per cent, effective from 16 August 1978, is to be imposed on imports of certain finished goods on which an import ceiling is imposed through tariff quota arrangements or import licensing restrictions. {:#subdebate-72-11} #### Coal Export Duty The present rates of duty ($3.50 and $1.00 per tonne) will apply during 1978-79. The duty will be abolished from midnight on 30 June 1979. {:#subdebate-72-12} #### Other Measures {:#subdebate-72-13} #### Sales Tax Motor cars and station waggons subject to sales tax at *27 i* per cent will bear tax at 15 per cent after 15 August 1978. *Departure Tax on Overseas Travel* *A* general revenue tax of $10 per head on adults departing from Australia by sea or air will operate from 15 September 1978. It will apply to both Australian residents and overseas visitors leaving Australia. The tax will be administered by the Department of Immigration and Ethnic Affairs. It will be collected before presentation of the immigration passenger card at the sea terminal or airport when leaving Australia. {:#subdebate-72-14} #### Taxation Revenue After taking account of the measures described above, total taxation revenue in 1978-79 is estimated to increase by 11.4 per cent to $23 769 million. The main components are described below. {:#subdebate-72-15} #### Customs Duty - Imports Collections of customs duty on imports are expected to total $1,462 million in 1978-79, an increase of $330 million or 29.2 per cent, compared with a decrease of 1.8 per cent in 1977-78. The considerable rise expected in 1978-79 reflects: a pick-up in growth in dutiable imports; some re-emergence of the longer-run upward trend in the ratio of duty to dutiable imports; effects of the additional duty on imports under quota and licensing arrangements; and increases in customs duty rates corresponding to the increases in the various excise duties. {:#subdebate-72-16} #### Customs Duty - Coal Exports Collections from the coal export levy are expected to total $93 million, a decline of $7 million from 1977-78, reflecting in part the full-year effect of the reduction in the rates of duty announced in the 1977-78 Budget. {:#subdebate-72-17} #### Excise Duty As outlined earlier in this Statement the duties on beer, potable spirits, tobacco products and crude oil have been increased. In estimating the revenue from those items for which rates of duty have been increased, allowance has been made for effects of the resulting increases in prices on consumption of the goods in question. Allowance has also been made for the effects on usage of petroleum products of the price rises associated with the accelerated move to import parity in the prices of crude oil to refiners announced in the Budget. In total, collections of excise duty are estimated to rise by $1151 million or 42 per cent in 1978-79. In the absence of any changes to rates of duty, estimated collections would have risen by less than 5 per cent in 1978-79. The major components of the 1978-79 estimate, and comparable figures for 1977-78, are as follows: {:#subdebate-72-18} #### Sales Tax Sales tax revenue depends on both the price and volume of taxable goods sold. Prices are generally expected to rise more slowly in 1978-79 than in 1977-78 while volumes are expected to be higher. Volume effects in respect of sales of motor vehicles have been allowed for in arriving at the estimates. Total revenue from sales tax in 1978-79 is estimated to increase by $43 million or 2.5 per cent. In the absence of any Budget measures estimated collections would have risen by about 10 per cent. The increase in collections in 1977-78 was 6.5 per cent. Estimated collections by rate class for 1978-79 are shown in the following table. {:#subdebate-72-19} #### Income Tax - Individuals It is estimated that *net* collections of income tax from individuals in 1978-79 will increase by 6.7 per cent to $12 940 million. {: type="a" start="a"} 0. *PA YE Instalment Deductions* Gross PAYE receipts are estimated to increase by 7.1 per cent in 1978-79 compared with 7.8 per cent in 1977-78 and 17.3 per cent in 1976-77. For the purpose of calculating gross PAYE instalment deductions, average weekly earnings are assumed to increase by 7i per cent in 1978:79 and the average level of wage and salary earner employment by 0.5 per cent. In 1977-78 average weekly earnings are estimated to have increased by 9.8 per cent and employment to have been unchanged. The estimate incorporates effects of the temporary standard rate increase and the introduction of a number of more minor measures affecting PAYE deductions described earlier in this statement. In the absence of Budget measures it is estimated that gross PAYE collections would have increased by 3.5 per cent in 1978-79. After allowing for the effect of the abolition of the Health Insurance Levy on 1 November 1978, an amount of $156 million has been included in the estimates for collections of the levy in 1978-79 in respect of *all* individual taxpayers. {: type="a" start="b"} 0. *PAYE Refunds* The estimate of $990 million for PAYE refunds in 1978-79 is $50 million above the result of $940 million for 1977-78. The 1978-79 estimate assumes a refund rate similar to that applying in 1977-78. {: type="a" start="c"} 0. *Other Individuals* Collections on assessments of individuals are expected to increase by 4.4 per cent to $2599 million in 1978-79. These tax payments are based mainly on income received in 1977-78; in that year incomes of primary producers are estimated to have fallen markedly while other business and property incomes rose fairly strongly. The cost to revenue of the investment allowance and the trading stock valuation adjustment in respect of other individuals is expected to be a little higher in 1978-79 ($144 million) than in 1977-78 ($135 million). As noted above the temporary increase in the standard rate will affect collections in 1978-79 as will several of the other measures affecting individual income taxation. {:#subdebate-72-20} #### Income Tax - Companies Collections of income tax from companies in 1978-79 are estimated at $3222 million, 4.1 per cent more than in 1977-78. An estimated $15 million of the increase relates to payments from non-resident companies on account of the branch profits tax to apply to that part of the 1977-78 tax year after 4 November 1977. The relatively low increase in prospective collections reflects subdued growth in company incomes during 1977-78; in addition, the investment allowance is estimated to reduce revenue from companies by $300 million in 1978-79, compared with $225 million in 1977-78. The trading stock valuation adjustment for companies involves an estimated cost to revenue of $273 million in 1978-79 ($281 million in 1977-78). {:#subdebate-72-21} #### Withholding Tax Withholding tax collections in 1978-79 are estimated at $120 million, about $2 million more than was collected in 1977-78. {:#subdebate-72-22} #### Payroll Tax Payroll tax receipts in 1978-79 are estimated at $16 million. This takes account of the increase in the Commonwealth payroll tax general exemption from 1 July 1978 and the fact that Commonwealth payroll tax payable as from 1 July 1978 will relate only to employment in the Australian Capital Territory. {:#subdebate-72-23} #### Departure Tax This new tax *(see* above) is expected to yield $10 million in 1978-79. *Estate Duty* Revenue from estate duty is expected to decline by $26 million in 1978-79 to $70 million, reflecting measures earlier this year to exempt from duty estates passing to certain near relatives. {:#subdebate-72-24} #### Gift Duty The effect of measures enacted since the 1977 Budget is to reduce collections of gift duty in the 1978-79 financial year to $2 million, some $4.6 million less than the collections for 1977-78. {:#subdebate-72-25} #### Other Taxes, Fees and Fines Estimates for the major items of other taxes, fees and fines are shown in the following table: The increase of $4.1 million in revenues from broadcasting and television station licence fees reflects mainly the increase in gross earnings of stations in 1977-78 on which fees are payable in 1978-79. The increased revenue expected in respect of radio-communications licence fees results mainly from the full-year effect of the 1977 increase in licence fees (from $20 per year to $25 per year). About 240 000 civil stations and 160 000 Citizens Band operators are currently licensed and those numbers are expected to increase slightly during 1978-79. Unfunded employees retirement contributions are estimated at about the same level as in 1977-78. This item records contributions paid during the year by Parliamentarians and Service personnel to their superannuation schemes. Also included are net amounts retained by the Commonwealth in respect of retiring Commonwealth employees opting for the contributor financed pension in lieu of the refund of their accumulated contributions to the Superannuation Fund. The further decline in receipts from the stevedoring industry charge reflects the effect of the changed arrangements operative since December 1977. Under these arrangements the industry itself has assumed responsibility for certain payments made previously by the Stevedoring Industry Authority and subsequently recouped through the stevedoring industry charge. Total collections of miscellaneous taxes and charges in the territories are expected to remain at much the same level as in 1977-78. From 1 July 1978 the Northern Territory Government has been collecting directly a number of the taxes, fees and fines collected previously by the Commonwealth in the Northern Territory. Offsetting this reduction are increases totalling $4.1 million in receipts from A.C.T. rates and other levies. The main A.C.T. revenue items include general rates ($14.8 million), drivers' licence and motor vehicle registration fees ($8.1 million) and liquor licence fees ($2.5 million). Included in the 'other' category are revenues from passport fees ($7.6 million) and quarantine charges ($4.1 million). {:#subdebate-72-26} #### Interest, Rent and Dividends Details of estimated receipts of interest; rent and dividends in 1978-79 are set out below: All interest received by the Commonwealth Government from sources outside the Budget sector is included under this general heading, together with land rents collected in the A.C.T. and dividends received from Government-owned companies, other than financial enterprises. Total receipts from interest, rent and dividends are estimated at $1921.6 million in 1978-79, an increase of $108.4 million or 6.0 per cent on 1977-78. Interest received from the States, the bulk of which is in respect of advances for general purpose works and housing programs, is estimated to increase by $106.6 million to $1280.8 million. Other interest receipts are estimated to decline by $5.0 million. Interest receipts from the Australian Wool Corporation are estimated to be only $1.2 million in 1978-79 compared with $8.9 million in 1977-78; the Corporation has now repaid almost all advances previously made to it from the Budget. In recent years both the Australian Telecommunications Commission and the Australian Shipping Commission have raised loans on their own behalf and, as a consequence, reduced their drawings from the Budget. That factor has contributed to the overall decline in other interest receipts. Rent and dividends are estimated to increase by a net $6.7 million. Provision is made for a dividend of $6.4 million from Qantas in respect of 1977-78 operations; the previous dividend payment from Qantas was in 1975-76. The increase of $5 million in offshore petroleum royalties reflects an increase in the proportion of oil production attracting import parity prices. The estimated reduction in other' dividends mainly reflects the sale in 1977-78 of the Commonwealth's petroleum and minerals investments. *Net Receipts from Government Ente, prise Transactions* Estimates of these receipts, which include receipts (other than taxation receipts) from public financial enterprises and the net operating revenues of certain activities carried on as business-type enterprises, are shown in the following table: The payment of $216 million to the Commonwealth in 1977-78 from the profits of the Reserve Bank was made up of $126 million as the Commonwealth share of 1976-77 profits and an interim payment of $90 million from the Note Issue Department profits for 1977-78. This was the first such interim payment since 1971-72. The Budget provides for payment of $262.9 million in 1978-79 made up of $92.9 million as the balance of the Commonwealth share of 1977-78 profits and $170 million from expected profits of the Note Issue Department in 1978-79. Prior to 1967-68 the whole of the net profits of the Note Issue Department in each financial year were paid to the Commonwealth in that year. In succeeding years, drawings by the Reserve Bank on the operating profits of the Note Issue Department were made to assist in liquidating exchange losses, with the amount, if any, remaining available for payment to the Commonwealth being determined after the close of the profit year. Following a very marked increase in 1977-78 in the Reserve Bank's reserves, the likelihood of any significant call on the operating earnings of the Note Issue Department to meet contingencies is greatly diminished and it can therefore be expected that the full profits for 1978-79 will be payable to the Commonwealth. Provision is therefore being made for receipt by the Commonwealth this year of $170 million from expected 1978-79 Note Issue Department profits. The Commonwealth Banking Corporation is expected to pay $28.2 million to the Commonwealth in 1978-79, representing one half of the net profits for 1977-78 of the Commonwealth Trading Bank and the Commonwealth Savings Bank. Responsibility for the supply of electricity in the Northern Territory was transferred to the Northern Territory upon attainment of self-government on 1 July 1978. The 1978-79 revenues of $3.5 million are in respect of electricity operations prior to the transfer. In 1977-78 the figures reflect the loss on electricity operations in the Northern Territory, but in 1978-79 this is subsumed in the global allocation to the Territory (see Statement No. 3). The 'other' category includes an estimate of $2.6 million for Northern Territory water and sewerage revenues attributable to operations in previous years, to be collected by the Northern Territory and paid to the Commonwealth in 1978-79. {:#subdebate-72-27} #### Sale of Existing Assets Details are set out below: Provision is made for the receipt of $34 million in 1978-79, compared with $63.6 million in 1977-78, in respect of the disposition of the Commonwealth's uranium stockpile. The Commonwealth has entered into agreements to enable certain companies with previously approved contracts for sales of uranium to acquire uranium from the Commonwealth's stockpile. These agreements will allow the companies to make deliveries of uranium in accordance with approved contracts. The agreements provide for amounts approximating the net proceeds from the sale of the uranium to be paid to the Commonwealth pending the return of uranium to the Commonwealth. The estimated increase of $5.7 million from sale of leases in the A.C.T. reflects an expected increase in the number of blocks of land to be sold in 1978-79. The increase of $6.5 million in the 'other' category reflects estimated proceeds from sales of land and buildings that have been deemed surplus to the Commonwealth's requirements. {: .page-start } page 1 {:#debate-73} ### STATEMENT No. 5- BUDGET OUTCOME, 1977-78 Total outlays in 1977-78 exceeded the Budget estimate by $146 million (0.5 per cent) while total receipts fell short by $970 million (4.0 per cent). As a result the deficit of $3333 million exceeded the Budget estimate by $1117 million. As the summary table indicates, the increase in the deficit was attributable mainly to the shortfall in receipts. This in turn reflected shortfalls in several items but especially collections of income tax from other individuals (generally provisional taxpayers) and net collections from PAYE taxpayers (mainly because of higher than estimated refunds). The small over-run on outlays was more than accounted for by increased natural disaster relief payments ($44 million) and by post-Budget decisions, including the provision of assistance for beef producers ($85 million), for mining operations at Mary Kathleen and Mt Lyell ($11 million in total) and for sole fathers ($8 million). {: .page-start } page 1 {:#debate-74} ### OUTLAYS The outcome compared with the Budget estimate for each functional category of outlays is shown below: OUTLAYS- *continued* The more significant variations from the Budget estimates are commented upon below. {:#subdebate-74-0} #### Defence Defence manpower costs exceeded the Budget provision by $34 million, about the same amount as the total Defence over-run. This increase reflected mainly salary and wage increases awarded during the year. (Provision was made for these increases in the bulk allowance for wage and salary increases rather than in the Defence estimates - see footnote to above table). Other variations from the estimates were offsetting. General administrative expenditure exceeded the Budget estimate by $11 million, of which $5 million was accounted for by increased travelling and subsistence and reflected higher than expected discharges and consequential postings; cost increases and a higher than expected level of compensation claims also contributed to the over-run here. Outlays on defence facilities were $6 million less than estimated, mainly on account of a shortfall of $4 million in advances to the States for service housing. Recoveries were $6 million more than estimated and reflected greater recoveries from other Governments. {:#subdebate-74-1} #### Education There was a shortfall of $16 million in expenditure on education. Outlays on student assistance schemes were $20 million less than budgeted for, largely because the number of applicants under the Tertiary Education Assistance Scheme was lower than had been assumed while changes in administrative arrangements in relation to that scheme and some other allowances resulted in there being one less pay period in 1977-78 than had been allowed for. Outlays on education programs for migrants and refugees were $4 million more than estimated and reflected post-budget decisions in October 1977 and March 1978 to increase the level of activity under the adult migrant education program and to provide postarrival services for an increased refugee intake. {:#subdebate-74-2} #### Health Outlays on health fell short of the Budget estimate by $115 million. Medibank medical payments were $91 million less than estimated partly because usage of medical services was lower than estimated; this factor also contributed to a shortfall of $7 million in pharmaceutical services benefits. Assistance for community health facilities was $6 million less than estimated, reflecting lower claims by the States. Private health insurance funds did not seek their full entitlements under the hospitals insurance subsidy arrangements and this resulted in a further shortfall of $6 million. Outlays on health services in the Territories also fell short of the estimate by $6 million, reflecting relatively small variations over a large number of items. These shortfalls were partly offset by over-runs in a few areas. Payments for hospital benefits reinsurance were $9 million more than estimated, reflecting the drawing down of the balance of the Hospital Benefits Reinsurance Trust Fund accumulated in the previous year. Nursing home benefits were $4 million higher than estimated at Budget time because the number of eligible patients was higher. Nursing care and medical services for veterans exceeded the Budget estimate by a total of $6 million, reflecting a higher demand for services together with increased charges for nursing home accommodation (effective from 1 October 1977) and increased fees for various medical practitioners (effective from 1 January 1978). {:#subdebate-74-3} #### Social Security and Welfare Outlays on Social Security and Welfare exceeded the Budget estimate by $242 million. Payments of unemployment and sickness benefits were $155 million higher than estimated and payments of pensions and allowances for the aged, veterans and their dependants, invalids, the handicapped and widows were, in total, $96 million greater. In all these cases the numbers of benefit recipients were greater than had been estimated at Budget time. Supporting parents' benefits cost $8 million more than had been estimated, mainly because of the introduction of a sole fathers' benefit during the year. Partly offsetting these increases were shortfalls in respect of family allowances ($11 million less than estimated, primarily because of the introduction of a new system for reviewing family allowance entitlements for students over 16 years of age) and of homeless persons assistance ($4 million less, because of delays associated with some construction projects). {:#subdebate-74-4} #### Housing Outlays on housing exceeded the Budget estimate by $11 million, mainly on account of a decision taken after the Budget to provide additional funds for Home Savings Grants. *Urban and Regional Development nec and the Environment* Outlays for the purposes included under this heading were $14 million less than the Budget estimate. Because of establishment delays, the $6 million included in the estimates for the Government's new scheme of decentralization assistance was not spent, although certain commitments were incurred. Lower than estimated expenditure by the National Capital Development Commission on land development in the ACT was the main factor accounting for a shortfall of $4 million in outlays on other urban development and amenities. {:#subdebate-74-5} #### Transport and Communication Outlays for these purposes were $10 million more than the Budget estimate. Outlays on roads in the Territories exceeded the estimate by $5 million, with activities in the ACT accounting for $3 million of the excess and work on the Stuart and Barkly Highways for $2 million. Payments to the Australian National Railways Commission were a net $4 million more; a greater than estimated operating loss was, in part, offset by a shortfall in outlays for capital equipment. Civil aviation recoveries were $5 million less than estimated, the main shortfall being in airport rentals. On the other hand, advances to the Pipeline Authority were $6 million less than estimated as a result of deferment of some capital expenditure. {:#subdebate-74-6} #### Industry Assistance and Development The major variation in this area occurred as a result of the decision taken after the Budget to provide special assistance for beef producers. This new scheme added $85 million to outlays in 1977-78. Two other post-budget decisions also added to outlays here: the provision of a net $7 million for mining operations at Mary Kathleen, and $3 million to the Tasmanian Government to sustain mining operations at Mt Lyell. Outlays on fertilizer bounties, and on irrigation and pastoral water projects, each exceeded the Budget estimates by $3 million. Shortfalls occurred in several areas including rural reconstruction/adjustment payments (down $8 million because there were fewer applications for assistance than assumed) and net outlays on apple and pear stabilization (down $5 million due to improved export returns). In addition, delays in finalising the Softwood Forestry Agreement between the Commonwealth and States meant that the $4 million provided in the Budget for softwood forestry was not disbursed in 1977-78. {:#subdebate-74-7} #### Labour and Employment Outlays classified to this heading were $28 million more than estimated. This outcome mainly reflected the Government's Budget Speech undertaking to provide funds to all eligible applicants under employment training programs. In the event payments to employers under the NEAT scheme amounted to $41 million more than had been estimated at Budget time. This was partly offset by shortfalls in respect of NEAT trainees ($8 million) and apprenticeship training schemes ($10 million, reflecting fewer eligible applicants than had been expected). {:#subdebate-74-8} #### General Public Services Overall, expenditures within this group exceeded the Budget estimate by $12 million. *Legislative Services* required an extra $3 million, largely because of higher than estimated costs of elections. Expenditure on *Law, Order and Public Safety* was $1 million lower than expected. There was also a shortfall of $6 million in expenditure under the *Foreign Affairs and Overseas Aid* heading, with lower than expected calls on Australia's contributions to various international aid institutions being mainly responsible. *Adminstrative Services* required $13 million more than the Budget estimate. The Government's expanded overseas loan program cost $14 million more in loan flotation expenses than had been allowed for in the Budget. Net superannuation payments exceeded the Budget estimate by $7 million and reflected the payment of a greater number of new pensions during 1977-78 than had been assumed. On the other hand, recoveries were $12 million more than estimated; this increase resulted from relatively small changes in a large number of items. *Payments to or for the States, the Northern Territory and Local Government Authorities nec* The $47 million over-run on these items was attributable largely to the provision of additional funds for the relief of natural disasters that had not been foreseen at Budget time. Funds provided to the Northern Territory Legislative Assembly for functions under the executive control of that body also exceeded the Budget estimate by $3 million. {:#subdebate-74-9} #### Public Debt Interest These payments were $78 million less than estimated. Subscriptions to Treasury Notes during 1977-78 were lower than had been assumed and in the event there were fewer cash loans than had been allowed for in the Budget estimates. {: .page-start } page 229 {:#debate-75} ### RECEIPTS The differences between the Budget estimates and actual receipts in 1977-78 are set out in the table below; the accompanying notes comment briefly on the main variations. {:#subdebate-75-0} #### Customs Duty - Imports Collections were $183 million below the Budget estimate, principally reflecting a lower ratio of duty to dutiable imports than was expected at Budget time. {:#subdebate-75-1} #### Customs Duty - Coal Exports Revenue from the coal export levy exceeded the Budget estimate by $7 million, reflecting a higher than estimated volume of coal exports. {:#subdebate-75-2} #### Excise Duty Lower receipts from excise duty (down $59 million) reflected mainly a lower level of crude oil production than expected at Budget time. Sales of tobacco products and beer were also a little lower than had been forecast. {:#subdebate-75-3} #### Sales Tax The shortfall of $107 million in sales tax receipts resulted from lower than expected sales of cars, station wagons and other items in the *27 i* per cent rate class. *Income Tax on Individuals - Pay-as-you-earn* Net PAYE income tax collections were $356 million lower than the Budget estimate. Gross PAYE collections were very close to the estimate but refunds were $300 million greater than estimated. The reasons included a greater increase in part-time and part-year employment in 1976-77, and a greater element of taxpayer preference for over-deduction, than was surmised at the time of the Budget. These factors added to the difficulties in estimating the effects on refunds in 1977-78 of the first full year of operation of the rebate scheme introduced in the 1975-76 Budget. *Income Tax on Other Individuals* Collections on assessment of income tax on other individuals were down $399 million on the Budget estimate, the largest absolute difference on the receipts side. This result related primarily to collections from provisional taxpayers and reflected an unexpected change in the income distribution pattern of taxpayers, increased resort to variations of provisional tax by primary producers and unavoidable delays (through strikes and other factors) in issuing some assessments. The latter resulted in a higher than expected level of tax outstanding at the end of the 1977-78 financial year. Collections from non-provisional taxpayers were also down on the Budget estimate. {:#subdebate-75-4} #### Income Tax - Companies The actual outcome exceeded the Budget estimate by $97 million and reflected a greater increase than earlier estimated in company income for 1976- 77 on which tax was paid in 1977-78. {:#subdebate-75-5} #### Interest, Rent and Dividends These receipts were $1 million less than estimated at Budget time and reflected a number of offsetting, minor differences. {:#subdebate-75-6} #### Sale of Existing Assets Receipts from the sale of existing assets were$12 million more than estimated. Revenue from uranium sales was $30 million higher, mainly as a result of rescheduling of sales. On the other hand, lease sales in the Australian Capital Territory yielded $8 million less than had been estimated while proceeds from the sale of property and materials by the Department of Administrative Services were $7 million lower. {: .page-start } page 231 {:#debate-76} ### FINANCING TRANSACTIONS The manner in which the Budget deficit in 1977-78 was financed is summarised in Tables 1 and 2. Table 1 is the presentation of Budget financing transactions, as published monthly in the Statement of Commonwealth Government Financing Transactions, rearranged to indicate the concept of *Domestic Borrowings* and its composition; see Statement No. 5 attached to the 1977-78 Budget Speech. While this presentation is useful for purposes of describing aggregate financing transactions - and in particular the *securities* (financing instruments) involved in those transactions - it does not bring out the net changes in the holdings of government debt of the various sectors with which the Budget sector transacts. This further information is relevant to analysis of the monetary implications of the financing transactions. Portfolio movements, reflecting both net proceeds (subscriptions to new issues less redemptions) and subsequent market transactions in government securities, are shown in Table 2. The link between the tables is Domestic Borrowings. As defined here, Domestic Borrowings is that portion of the Budget deficit financed by the issue of Commonwealth securities to domestic non-budget sectors or by the use (running-down) of Commonwealth cash balances with the Reserve Bank (see footnote (c) to Table 2). Subject to minor qualifications set out in Statement No. 5 attached to the 1977-78 Budget Speech, Domestic Borrowings thus represents the increase in the indebtedness of the Commonwealth to domestic non-Budget sectors arising from Budget financing. Economic effects of financing transactions depend importantly on which of the non-Budget sectors hold the stock of government debt and the changes in those holdings. Private sector holdings of Commonwealth debt constitute the bulk of the liquidity base of the economy (see also footnote (b) to Table 2). Private sector take-up of Commonwealth debt instruments reflects a large number of influences on domestic liquidity conditions, including the size of Domestic Borrowings, interest rates, private sector external transactions and Reserve Bank transactions with the private sector. Other things being equal, take-up of government securities by the non-bank private sector provides an offset to the direct increase in banking sector liquidity and the volume of money that would otherwise accompany an increase in the domestic liquidity base. Table 2 therefore distinguishes between banks and non-banks and, within each category, the major institutional groups which it is useful, and possible with available data, to identify. *Changes* in debt by the main *forms* of security are also shown. This too is relevant information for the analysis of the economic impact of Budget financing transactions, although a full exposition would go beyond the fairly direct effects of those transactions reflected in Table 2. Other relevant effects include those on the maturity structure of the stock of government debt in private portfolios, the level and structure of interest rates and associated expectations. Brief comments on the main items in Table 1 are provided below. {:#subdebate-76-0} #### Net Overseas Borrowings In September 1977 a public bond issue was undertaken on the Eurodollar capital market. The proceeds amounted to $227 million. Also in September a Schuldscheindarlehen - a form of loan offered by German commercial banks - and a direct bank loan were undertaken in Germany; the proceeds amounted to $97 million and $194 million respectively. A DM1250 million borrowing package' was completed in October with two further operations in Germany: a $97 million private placement and a public issue of $98 million. In November, $199 million was raised through a public issue on the New York capital market. The Commonwealth's second public bond issue in Japan, which was undertaken in February 1978, produced $184 million. A further Eurodollar bond issue was undertaken in March and $306 million was raised. In April the Commonwealth raised $23 million (SF50 million) through a direct bank loan from the Swiss Bank Corporation. Part of the proceeds was used to refinance SF45 million of the Commonwealth's SF50 million bond issue raised in 1967 and due to mature in 1982. Two further borrowings were undertaken in May: $221 million was raised by way of a public issue in New York and $117 million through a syndicated bank loan in the Netherlands. Repayments during the year of previous drawings on behalf of Qantas and TAA amounted to $21 million and $3 million respectively. Repayments of $1 million were also made to Eximbank. Other securities to a value of $95 million were redeemed in the USA, UK, Canada, Switzerland, Germany and the Netherlands. In addition, repayments of $4 million were made on borrowings from the International Bank for Reconstruction and Development, with repayments amounting to $24 million also being made on borrowings previously undertaken for defence purchases in the USA. In summary, total gross overseas borrowings amounted to $1760 million*1'; total redemptions and repayments amounted to $148 million so that net overseas raisings yielded $1612 million. *Other Financing Transactions in Australia* The major components of this category were: net payments of $139 million by the Postal and Telecommunications Commissions, representing the Commissions' employer contributions to the Commonwealth superannuation scheme deposited with the Commonwealth; $23 million in net proceeds from coinage transactions; $25 million received from the Commonwealth Government Superannuation Fund in respect of the liability assumed by the Government for existing pensioners at 1 July 1976; and an amount of $15 million representing the increase in the value of benefit cheques drawn against the Health Insurance Fund during the year but not presented at 30 June. *Loan Raisings in Australia* *Australian Savings Bonds* raised $720 million gross in 1977-78; redemptions1 of these securities amounted to $209 million, and redemptions of the superseded Special Bonds to $110 million, resulting in net proceeds of $401 million. Gross proceeds from the issue of *Treasury Notes* amounted to $1767 million; redemptions amounted to $1773 million. As at 30 June 1978, total Treasury Notes on issue (including Reserve Bank holdings) amounted to $363 million, a decline of $7 million over the year. One Government public cash loan was held in 1977-78 (July), resulting in cash raisings of $611 million. Advance subscription proceeds and proceeds received in 1977-78 from instalment subscriptions to the May 1977 cash loan amounted to $23 million. Public conversion loans were held in July, October, February and May with conversions totalling $1628 million (face value). Total redemptions and repurchases amounted to $68 million. An amount of $42 million was received into Income Equalization Deposits (IED's) in 1977-78; redemptions of IED's amounted to $15 million and redemptions and conversions of the discontinued Drought Bonds amounted to $1 million, resulting in net proceeds of $27 million. States' domestic loan raisings were $58 million, bringing net proceeds of domestic loan raisings in 1977-78 (excluding Australian Savings Bonds and Treasury Notes but including IED's) to $651 million. {:#subdebate-76-1} #### Residual Financing To complete the financing of the deficit in 1977-78, the Government ran down its cash balances with the Reserve Bank by $103 million and borrowed $359 million from the Reserve Bank. Qf the latter amount, $200 million was covered by the issue of Treasury Bills and the remainder by the issue of other government securities to the Reserve Bank by way of a special cash loan for defence purposes on 20 January 1978. The February 1978 issue of the *Round-up of Economic Statistics* provided some details of the special loan. {: type="1" start="1"} 0. The amounts shown in the text as the proceeds of individual raisings are the $A equivalent of the principal amount (at face value, where applicable) calculated by applying the exchange rate used by the Reserve Bank at the time of receipt of proceeds. The total gross overseas borrowings figure represents cash proceeds and therefore includes an adjustment for the issue of any securities at a discount/premium from face value and is net of any commissions. {: type="a" start="a"} 0. Includes movements in holdings of Treasury Bonds, Australian Savings Bonds, Special Bonds, Income Equalization Deposits, Drought Bonds, etc., and associated Inscribed Stock. 1. Includes movements in the holdings of Commonwealth Government, State Governments, State Government and non-financial Commonwealth semi-government authorities (but excluding special loans, changes in holdings of internal Treasury Bills and cancellations of some securities). For given Domestic Borrowings, increases in such holdings reduce private sector and Reserve Bank portfolios of net government debt. If changes in Government sector holdings are subtracted from Domestic Borrowings, this gives a concept termed *Net Domestic Borrowing Requirement* by the Reserve Bank, data for which are published quarterly in the Bank's *Statistical Bulletin.* Subject to a few minor qualifications, this shows the change in indebtedness of the Budget sector to the private sector and the Reserve Bank. 2. Includes take-up of Treasury Bills, Treasury Notes and other government securities, as well as the Commonwealth Government's use of cash balances. (Such cash balances are an asset of the Commonwealth so that their use increases the net indebtedness of the Budget sector.) 3. Preliminary. Table 2 indicates that private sector holdings of government securities increased by $1237 million over 1977-78; Treasury Note holdings fell by $35 million while other securities (mainly Treasury Bonds and Australian Savings Bonds) rose by $1272 million. A brief descriptive account of factors affecting these portfolio movements is contained in the *Monetary Conditions* section of Statement No. 2; Table 7 of that Statement provides quarterly data in the format of Table 2. Total private non-bank take-up of $1255 million represented 53 per cent of the Budget contribution to private sector LGS assets. {: .page-start } page 234 {:#debate-77} ### RELATIONSHIP OF DEFICIT TO NET MOVEMENT IN SECURITIES ON {: .page-start } page 234 {:#debate-78} ### ISSUE As is evident from Table 1, most financing transactions involve the issue, repurchase, redemption or acquisition of Commonwealth Government securities, although some involve or are represented by changes in other assets or liabilities of the Commonwealth Government. A reconciliation of the deficit with the net movement in securities on issue can therefore be made. (Details of securities on issue are published in Budget Paper No. 6) . For this purpose, total financing can be disaggregated as: Net sales of Commonwealth Government securities (new issues, *less* redemptions, *less* net purchases from balances"' in the Trust Fund), *less* net purchases of other investments from Commonwealth Government balances in the Trust Fund, *plus* minor items of indebtedness (such as borrowing by Australian Capital Territory and Northern Territory housing trust accounts, and transactions associated with the issue of coin), *less* net additions to cash balances, borrowings from the Reserve Bank and funds provided for the International Monetary Fund. The relationship between the items which finance the deficit and the net movement in securities on issue for previous years is contained in Budget Paper No. 10 issued in August 1977. {: .page-start } page 236 {:#debate-79} ### STATEMENT No. 6- BUDGET TRANSACTIONS SINCE 1968-69 This Statement details Budget transactions since 1968-69 in terms of both the functional and national accounting classifications. It also provides some data on the Commonwealth non-budget sector and of the public sector as a whole. The *national accounts classification* categorises Budget transactions by economic type, within a classification framework which is broadly consistent with conventions recommended in the United Nations *System of National Accounts.* This classification provides a consistent framework for the aggregation of Commonwealth, State and local government transactions into consolidated figures for the public sector as a whole; it also clarifies the nature of transactions between the public sector and the rest of the economy and facilitates comparisons with other national accounts data. The *functional classification* categorises Budget outlays according to their primary objectives or purposes. It aims to facilitate consideration of the nature, extent and relative priorities of Government activities. The functional classification follows the same conventions for the determination of Budget totals as the national accounts classification. Additional information on the two classification systems is given in the Appendix to the Budget Statements. {:#subdebate-79-0} #### Budget Outlays - Summary The table below shows increases in Commonwealth Government Budget outlays in each year since 1968-69; the proportions of Gross Domestic Product (GDP) represented by those outlays are also shown: In terms of percentage increases, the experience in 1976-77 and 1977-78 represented a return to the more 'normal' rates of increase recorded in the late sixties-early seventies and was in marked contrast to the rapid acceleration in outlays over the period 1973-74 to 1975-76. The increase of 7.7 per cent projected for total outlays in 1978-79 is the lowest increase since 1968-69 (6.2 per cent). Expressed as a proportion of GDP it can be seen that total outlays remained very steady around 24-25 per cent until 1974-75 when the proportion jumped to over 29 per cent, and to over 30 per cent in 1975-76. Since then the proportion has edged back marginally, with sluggish growth in GDP in recent years contributing to the limited extent of the decline. On the basis of the projected increase in outlays of 7.7 per cent, however, a further reduction in the ratio can be expected in 1978-79. Budget Outlays by Function Budget transactions classified by function for the period 1968-69 to 1977-78 are shown in Tables 1 and 3 at the end of this Statement; Table 2 shows the proportions of total outlays represented by the major functional and subfunctional blocks over this period. Over the nine year period to 1977-78, total Budget outlays have grown at an average annual rate of 16.9 per cent. Outlays for 'Education', 'Health' and Social Security and Welfare' have grown much faster than this and have accounted for over half of the total increase over the period. The following table shows the rates of increase for the main outlay categories for the period as a whole: Comparisons of trends over the period covered in the tables are affected by a number of important factors, including the transfer of payroll tax to the States, 'offsets' to grants to the States, changes in the operation of certain retirement benefits schemes, changes in the arrangements for funding tertiary education, the introduction of family allowances, changes in health care funding arrangements, the transfer of the South Australian and Tasmanian railways to the Commonwealth, the granting of self-government to the Northern Territory and off-budget funding of the capital program of the Australian Telecommunications Commission. These and other factors, such as differential rates of price increase among functions, affect the relative rates of growth and should be borne in mind when comparing movements in different categories of expenditure. Average annual rates of increase over a period of years can, of course, mask significant changes within that period. The charts below give a broad indication of movements within each of the main functional blocks of outlays. Budget Outlays by Economic Type The national accounts provide a systematic summary of the transactions that take place within the economy, especially those relating to the production and use of goods and services, and to transfers of income or capital between sectors of the economy. By outlining these relationships the national accounts facilitate analysis of the processes by which production and expenditure are linked. Table 4 at the end of this Statement shows Budget outlays since 1968-69 classified according to broad national accounts categories. On this basis transfers between different parts of the accounts of the Commonwealth Budget sector are eliminated so that the figures shown relate to the transactions which occur between the Commonwealth Budget sector and the rest of the economy, including other levels of government and overseas. Budget sector transactions classified on this basis may be readily related to transactions elsewhere in the public sector (see Budget Paper No. 10: *National Accounting Estimates of Receipts and Outlays of Commonwealth Government Authorities)* and to developments in the economy as a whole as shown in Budget Paper No. 9: *National Income and Expenditure 1977-78.* The following table compares the average annual rates of growth of the main economic type components of outlays over the period since 1968-69 with the corresponding increase in Gross Domestic Product (GDP) : Significant movements in the proportion each component bears to total outlays have occurred over that period. These movements, reflected in the following charts, must also be viewed against the background of the important changes in Commonwealth financing arrangements which were referred to earlier. {: type="a" start="a"} 0. Comprises net current expenditure on goods and services, gross fixed capital expenditure and changes in stocks. 1. Includes pensions and allowances for the aged, the handicapped, veterans, etc; unemployment and sickness benefits, assistance to families, widows and other disadvantaged groups. Also includes unfunded employee retirement benefits. 2. Comprises grants and advances to the States and local government authorities for specific purposes and of a general purpose nature. Repayments of advances are deducted to arrive at net figures. Includes, for 1977-78, allocations of $52.5 million to the Northern Territory. 3. Comprises subsidies, interest payments, grants for private capital purposes, transfers overseas, purchases of existing assets, net advances to Commonwealth government authorities such as the Postal and Telecommunications Commissions, Qantas Airways Ltd, Australian National Airlines Commission, and net advances to other sectors apart from State and local authorities. {:#subdebate-79-1} #### Budget Receipts Details of Commonwealth Budget sector receipts for the period 1968-69 to 1977-78, together with the 1978-79 estimates, are shown in Table 5 at the end of this Statement. Total Budget receipts have increased at an average annual rate of 16.7 per cent in the period since 1968-69, compared with a rate of growth of 15.3 per cent in GDP over the same period. As the following table shows, the rate of increase in Budget receipts has slowed significantly in recent years, and specially in 1977-78. The projected increase of 11 per cent in 1978-79 reflects in large part the revenue measures announced in the Budget Speech. Details of the composition and rate of growth of Budget receipts over the period are shown in the following table: The charts below indicate the relative importance of the various categories of receipts in total Budget receipts over the past ten years: {: type="a" start="a"} 0. Interest, Rent and Dividends, Net Receipts from Government Enterprise Transactions and Sale of Existing Assets. Income tax on individuals remains by far the most important single category of Budget receipts. Expressed as a proportion of total receipts income tax collections from individuals have risen from 38.2 per cent of total receipts in 1968-69 to 51.7 per cent in 1977-78. This increase stems largely from the effects of 'the progressive rate scale in a period of strong growth in personal incomes, particularly wage and salary incomes. This growth occurred despite various adjustments to the rate scale and other elements of the personal income tax system that < were made over the period with a view to reducing rates of tax for most taxpayers. The figures for 1976-77 and 1977-78 reflect, inter alia, the net effects of the introduction of personal income tax indexation, the abolition of tax rebates for dependent children and students which accompanied the introduction of family allowances, and the imposition of the Health Insurance Levy. Movements in some other categories of receipts are also affected by certain special factors: 'Other General Taxation', for example, is affected by the transfer to the States in September 1971 of payroll tax and the decision to abolish broadcast listeners' and television viewers' licences from September 1974. {:#subdebate-79-2} #### The Deficit and Financing Transactions In each of the past ten years there has been an overall deficit in the Commonwealth's budgetary transactions. The following table shows the size of the total deficit in relation to GDP since 1968-69. Also shown are the estimated 'domestic' deficits (see below). These deficits increased sharply in 1974-75 and 1975-76 when the overall deficit was equivalent to over 5 per cent of GDP; expressed in these terms the deficit was significantly lower in 1976-77 and 1977-78 and, on the basis of present projections, a further significant reduction can be expected in 1978-79. There is no satisfactory single measure of the economic impact of Budget transactions. Although the Budget deficit (or surplus) is often taken as a shorthand or summary measure of Budget impact, its use for this purpose is subject to a number of important qualifications. The deficit really does little more than indicate the difference between aggregate outlays and aggregate receipts; it cannot adequately reflect the differing economic impacts of the various components of total outlays and receipts - or of changes in those components. Consequently, the 'mix' of Budget outlays and revenues, as well as their total size, is very relevant to the assessment of the Budget's overall impact on the economy. For analytical purposes it is important also to distinguish between domestic and overseas transactions: government payments made overseas do not add directly to domestic incomes and the demand for locally produced goods and services, while government receipts from overseas sources increase total receipts without withdrawing purchasing power from the domestic private sector. In the table above overseas transactions have been netted out to arrive at estimates of the domestic deficit/surplus in recent years. The transactions by which the overall Budget deficit is financed are also of considerable significance for monetary conditions and economic developments generally. Table 6 at the end of this Statement provides a summary of Commonwealth Government Budget Financing Transactions for each year since 1968-69. The main transactions undertaken to finance deficits in the Budget have been domestic and overseas loan raisings, the issue of Treasury Notes and borrowings from the Reserve Bank through the issue of Treasury Bills and other securities. Budget Statement No. 5 includes an outline of the significance for monetary conditions and monetary policy of Budget financing transactions. The Budget and the Public Sector as a Whole While Commonwealth budget transactions are of central importance in their own right, the Commonwealth budget sector forms only a part of the total public sector. For many purposes of economic analysis it is relevant to look at the transactions of the total public sector as well as its constituent parts. Commonwealth budget payments to other areas of the public sector do, of course, have an important influence on the transactions of those other areas. This section outlines those linkages in broad terms and indicates certain trends in the total public sector, and in its main components over the past decade. The following diagram presents a disaggregation of the public sector based on level of government (Commonwealth, State and local) and form of administration (budget and non-budget): >ALL PUBLIC AUTHORITIES > >COMMONWEALTH l_ AUTHORITIES > >STATE AND LOCAL AUTHORITIES > >STATE > >AUTHORITIES > >COMMONWEALTH > >BUDGET > >SUB-SECTOR > >COMMONWEALTH > >NON-BUDGET > >SUB-SECTOR > >STATE > >BUDGET > >SUB-SECTOR > >STATE > >NON-BUDGET SUB-SECTOR > >LOCAL > >AUTHORITIES The Commonwealth *budget* sector consists, for the most part, of those transactions which pass through the Commonwealth Public Account and are therefore subject to Parliamentary approval. The Commonwealth *non-budget* sector covers transactions of authorities - mainly trading enterprises - which are not subject to detailed Parliamentary appropriation procedures, e.g.: the Australian Telecommunications and Postal Commissions, TAA, Qantas, the Australian Wool Corporation, the Australian National Railway Commission and the Australian Shipping Commission.1 An analogous distinction can be made between State budget and non-budget sub-sectors. Chart 1 below shows trends in gross outlays of the five sub-sectors expressed as proportions of gross domestic product. *Source:* Budget Paper No. 10 (National Accounting Estimates of Receipts and Outlays of Commonwealth Government Authorities) and ABS: Public Authority Estimates (Catalogue No.5501.0); the Explanatory Notes in the latter describe the relationships between the various statistics. Commonwealth sub-sector figures from Budget Paper No. 10 have been adjusted for the major differences in treatment and classification between that source and Public Authority Estimates. State and local government figures for 1977-78 are the *estimates* published in ABS: Public Authority Estimates, 1977-78. {: type="a" start="a"} 0. Prior to 1977-78, the Commonwealth sector included the Northern Territory. With the move to selfgovernment, Commonwealth Budget figures for 1977-78 and later years will show payments to the Northern Territory as payments to another level of government. For the purposes of Charts 1 to 5 estimates of Northern Territory outlays in the various categories have been included in the relevant Commonwealth items. A comparison of *gross* outlay figures for the different sectors does not, however, provide a good measure of the relative contributions made by each part of the total because transfers between those parts are included in gross outlays of each.(2) {: type="1" start="1"} 0. Public financial enterprises (e.g. the Reserve Bank and the Commonwealth Banking Corporation) are excluded from the Commonwealth non-budget sector although their expenditure on fixed capital assets is included in the National Accounts presentation of public authorities' gross fixed capital expenditure. 1. The figures underlying Chart 1 are also affected to an extent by changes in payment arrangements, etc., which have the consequence of recording the same, or very similar transactions in different sectors from time to time. Chart 2 shows outlays of each part of the public sector, net of estimated transactions with other public sector sub-sectors, as proportions of total public sector outlays. Chart 3 shows for the total Commonwealth sector, the total State and local government sector, and the public sector as a whole, net expenditures on goods and services (i.e. the entries from the expenditure side of the National Production Account) as proportions of GDP. These expenditures represent the direct component of aggregate national expenditure accounted for by the public sector and are net both of transactions with other parts of the public sector and transfers and advances to the private sector. The main feature of these charts is the sharp increase in the size of the public sector in 1974-75. This jump occurred at all levels of government and was followed by a further - though less sharp - rise in 1975-76. The size of the total public sector has tended to stabilize since 1975-76, owing relatively more to the movement in the Commonwealth sector in that time. Looking behind the figures for the public sector as a whole, total outlays (which include transfer payments as well as direct expenditure on goods and services) of the Commonwealth sector in 1974-75 rose more sharply than total outlays of State and local government authorities (Chart 1), but the State and local government sector registered the more pronounced increase in net expenditure on goods and services (Chart 3). This reflects the lift in Commonwealth budget payments to State and local government authorities (see following table). As Chart 2 shows, the State budget sector has clearly experienced the strongest growth of all the sub-sectors of the public sector over the period covered by the chart. As noted above, payments from the Commonwealth budget constitute important sources of funds for other parts of the public sector. This is illustrated, for the Commonwealth non-budget sub-sector, in Chart 4. Chart 4 - Commonwealth Non-budget Sub-sector Deficits and Advances from the Commonwealth Budget. 1000 800- 600- 400- 200- [j:;Sj Deficit [ Advances from Commonwealth Budget 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 In most years up to 1975-76 the deficit (or, more broadly, the financing requirement) arising from the transactions of non-budget authorities closely approximated the level of advances from the Commonwealth Budget i.e. changes in outlays of the non-budget authorities were linked with changes in advances from the Budget. In both 1976-77 and 1977-78, however, the deficit of the nonbudget sector was considerably larger than Budget advances; this reflects the substantial borrowings undertaken by some of the larger authorities on their own account during those two years. Commonwealth budget payments to State and local government authorities represent a very sizeable element of Commonwealth budget outlays and of total sources of funds for the recipients. The following table provides relevant figures: Combined grants and advances from the Commonwealth accounted, on average, for just on one half of sources of funds during the period shown, with an upward trend until 1976-77. In addition, the larger authorities borrowing program, which is subject to Loan Council approval, accounted for about 7 per cent of total sources of funds, on average, over the period. At the same time, however, the States have considerable flexibility in their taxing, pricing and financing policies, including, prospectively, the flexibility offered by the Stage 2 Income Tax Sharing Arrangements outlined in Budget Paper No. 7. Details of State and local government sector outlays are available in the ABS publications: Public Authority Estimates (Catalogue No. 5501.0), and State and Local Authorities (Catalogue No. 5504.0). Consolidating the transactions of the Commonwealth budget sector, Commonwealth non-budget authorities and State and local government authorities into figures for the public sector as a whole removes much of the incomparability over time of figures for individual sectors consequent upon changes in transactions between them. (Details of the consolidations are given in Budget Paper No. 10 and ABS: Public Authority Estimates.) Even then comparability is not wholly ensured; for example, in Chart 1 the series for outlays of all public authorities is broken in 1976-77 because of the introduction of family allowances to replace the tax rebate for dependent children, which effectively transferred assistance of that kind from the receipts to the outlays side of the public account. Chart 5 shows trends in total public sector outlays by major economic type; transfers' are to other, non-government sectors. Chart 5- Public Sector Outlays as a Percentage of G.D.P. *(a)* 7. 20 15' 10- 5.- -Current Expenditure _______ Transfers {:#subdebate-79-3} #### Capital Expenditure 1968-69 1970-71 1972-73 1974-75 1976-77 *See* footnotes to Chart 1 . Final consumption expenditure has risen as a percentage of GDP (especially in 1974-75) as have transfer payments (especially in 1975-76 consequent upon the introduction of the Medibank arrangements); about two-thirds of transfer payments are cash benefits to persons. Public sector capital expenditure rose strongly in 1974-75 but has declined in relation to GDP since then. As might be expected from the foregoing, trends in receipts of the whole public sector mirror trends in Commonwealth budget receipts fairly closely. Chart 6 shows the major categories of public sector receipts as percentages of GDP. Two main features are noteworthy - the increased share of total taxation accounted for by income tax on persons, and the fact that total public sector receipts did not rise as fast as total outlays in 1974-75 (c.f. Chart 1), the public sector deficit rising considerably as a result. When considering the influence of public sector transactions on financial conditions in the economy it is also necessary to look beyond the Commonwealth Budget. The implications of the deficit in Commonwealth budget transactions for financial conditions are discussed in Statement No. 5. Deficits of other sub-sectors of the public sector must also be financed - whether by transfers from the Commonwealth budget or by their own borrowing. The implications of borrowings by these other sub-sectors will differ to an extent from those of Commonwealth borrowings because of the liquidity characteristics of Commonwealth securities, the Commonwealth's power to borrow from the Reserve Bank, and for other reasons. Nevertheless the size of the total public sector deficit, indicating the public sector's overall net demand for borrowed funds, is an important conditioning factor in its own right in domestic financial markets. Reflecting the trends in outlays and receipts outlined above, the deficit in the transactions of all public authorities rose sharply in 1974-75 and has subsequently increased further. Notes on Tables To the extent practical, historical data have been adjusted to eliminate major breaks in series but some important changes affecting comparability cannot readily be removed. At the Premier's Conference in June 1971 it was agreed that the Commonwealth Government would cease to levy payroll tax in the States as from 1 September 1971 and that the States would levy their own payroll taxes as from that date. This decision resulted in a reduction in Commonwealth payroll tax revenues estimated at $253 million in 1971-72. To offset most of this loss in revenue, financial assistance grants paid to the States in 1971-72 were reduced. The full-year effect of these transfer arrangements is reflected in the 1972-73 figures for outlays and receipts. The transfer arrangements had the effect of reducing the growth of Commonwealth Budget outlays and receipts below the rates that would otherwise have been recorded by approximately 3 percentage points in 1971-72 and by about 1 percentage point in 1972-73. The figures shown in the tables reflect these lower growth rates. Comparisons between 1972-73 and subsequent years are not affected by the transfer since no significant effects of the changeover continued beyond 1972-73. Increases in special purpose payments to the States are recorded under the appropriate functional headings, while 'offsetting adjustments' to General Revenue Assistance Grants to the States are taken into account under the heading 'Payments to or for the States, the Northern Territory and Local Government Authorities nec'. The assumption by the Commonwealth Government in 1973-74 of full financial responsibility for universities and colleges of advanced education contributed to an increase in outlays classified to 'Education' but also involved a compensating decrease in general purpose funds provided to the States. As a consequence, the rate of increase in Commonwealth Government resources devoted to education, as shown for the function 'Education' in 1973-74 is somewhat over-stated. A similar effect occurred in 1974-75, which was the first full financial year of the new tertiary education arrangements. Changes in the operation of the Defence Force Retirement and Death Benefits, Ministerial Retiring Allowances and Parliamentary Retiring Allowances Schemes affect outlays for 1973-74 and subsequent years under the relevant functions and receipts under the heading 'Other Taxes, Fees and Fines - Unfunded Retirement Benefits Contributions'. These changes involved a move from funded schemes to unfunded benefit schemes. The implementation of the new Commonwealth Superannuation scheme from 1 July 1976 gave rise to similar effects. The scheme of Family Allowances introduced in 1976-77 involved the abolition of taxation rebates for dependant children and students, offset by substantial increases in family allowances in place of child endowment. The effect of this measure was to increase significantly the level of outlays under the 'Social Security and Welfare' function in 1976-77, and to increase receipts from personal income taxation above what they would otherwise have been. On 1 July 1978 the Northern Territory of Australia became a self-governing territory. Functions transferred to the Ministers of the Territory from that date are mainly those of a State-type character; this is true also of the functions transferred to the Northern Territory on 1 January 1977. In terms of financial arrangements, 1977-78 and 1978-79 are transitional years pending development of a financial framework for the Northern Territory similar to that which operates for the States. During this transitional period, the Commonwealth is providing the bulk of its assistance to the Northern Territory through global (general purpose) allocations which are classified to the heading 'Payments to or for the States, the Northern Territory and Local Government Authorities nec'. Prior to 1977-78 outlays associated with the functions transferred to the Northern Territory have been classified as direct Commonwealth outlays under relevant functional headings. (Further details of these changes are set out in the Appendix to the Budget Statements and in Budget Paper No. 7 - *Payments to or for the States, the Northern Territory and Local Government Authorities 1978-79.)* Notes on Tables 1, 2 and 3: Budget Outlays Classified by Function To the extent possible, the definitions and concepts adopted for the historical series are the same as those used in Statement No. 3 (although Table 3 provides less detail than do the tables in Statement No. 3). **Major discontinuities** are indicated where appropriate. The 1956-66 Housing Agreement was not renewed on its expiry at the end of 1970-71. Instead, the Commonwealth and State Governments agreed on arrangements under which housing allocations were to be met by the States out of their approved Loan Council borrowing programs. Amounts totalling $160 million in 1971-72 and $166.9 million in 1972-73 were subsequently allocated by the States for housing projects similar in nature to those covered by the 1973 Housing Agreement. Tables 1, 2 and 3 show these amounts classified to 'Payments to or for the States, etc' instead of 'Housing'. However, for the purposes of the calculation of the trend rates of growth and the charts of proportions of total outlays, these amounts have been included under the function 'Housing'. Because of revisions in the classification of items to the various functional headings (see Appendix to the Budget Statements) the figures in Tables 1-3 are not entirely comparable with those given in the Budget documents in previous years. jj. *in* <./> r-J vo el era e vo -4 CO CO to vo -J 00 to W to In {: .page-start } page 268 {:#debate-80} ### APPENDIX TO THE BUDGET STATEMENTS - THE FUNCTIONAL CLASSIFICATION OF BUDGET OUTLAYS The functional classification brings together outlays serving like objectives or purposes. As such it facilitates meaningful presentations of information on the nature of government activities and on the resources devoted to particular objectives. Basis of the Functional Classification The functional classification is applied to aggregates derived using national accounting conventions and is therefore conceptually consistent with the economic (national accounts) classification. The conventions and principles adopted are broadly those set out in the 1968 United Nations publication *A System of National Accounts* which provides widely accepted international standards for the classification of public sector outlays. The major functional headings adopted for Budget purposes are conceptually consistent with those used by the Australian Statistician in his publications, but it should be noted that in the latter's publications Commonwealth Government outlays cover both Budget outlays (shown in the Budget Statements) *and* outlays by Commonwealth Government authorities which operate outside the Budget sector. Information on the transactions of authorities operating outside the Budget sector is shown in the document *National Accounting Estimates of Receipts and Outlays of Commonwealth Government Authorities* published with the Budget. Two further significant differences should be noted. First, outlays on primary industry assistance are shown in the Budget Statements 'net' of the relevant primary industry levies and charges but are shown on a gross basis by the Statistician. Secondly, for the years prior to 1974-75, part of the expenditure incurred by some Commonwealth Government departments and instrumentalities operating in Papua New Guinea is classified by the Statistician as foreign aid. In the Budget Statements these outlays are shown under the same, functional heading as similar outlays made within Australia. The Structure of the Functional Classification The contents of each function are described briefly in the final section of this Appendix. It will be evident from those descriptions that the functional classification is relatively aggregative in nature. Outlays under each functional heading have, however, been grouped together into identifiable and meaningful blocks which lend themselves to comment and analysis. These blocks do not, as a rule, purport to represent detailed purpose-oriented sub-functions or programs; on the whole it is not possible, for example, to dissect administrative outlays of departments and to allocate them to particular sub-functions. Given the need to monitor actual monthly outlays and receipts on a basis consistent with the annual estimates embodied in the Budget documents, it has been necessary to work largely from existing central acounting records. These records are built around the Appropriation Acts which are the legal authority for expenditure, rather than detailed costing documents. The figures in the functional classification, therefore, have been derived essentially by reclassifying appropriation data, supplemented by a limited amount of additional data on substantial appropriation items which cover more than one function or purpose. A reconciliation between total outlays shown in Statement No. 3 and in the appropriations of the Consolidated Revenue Fund is set out in Tables 1 and 2 of Budget Document No. 4 *Estimates of Receipts and Summary of Estimated Expenditure.* Functional categories do not necessarily correspond with appropriation or departmental structures. Furthermore, some outlay and receipt figures are netted in arriving at aggregates. Expenditure votes and revenue heads under the control of a particular department may, therefore, be classified under more than one functional heading and it is not always possible to identify individual appropriation items in the Statements. Although the basic aim of a functional classification scheme is to reveal the broad purposes for which government outlays are undertaken, it is acknowledged that such a classification cannot always be applied unambiguously. Particular outlays will often serve two or more distinct functions: military colleges, for example, may be said to serve both a defence and an education purpose. The application of a functional classification scheme, however, requires that an outlay be classified to the function which it is considered primarily to serve. In the example quoted, the primary function is considered to be defence; this is in line with United Nations recommendations. Any single classification system, cannot of course, focus at one and the same time on every outlay characteristic that may be of interest to the Government or the public. Supplementary information on particular aspects of outlays is therefore provided in other documents; details of wage and salary estimates, for example, are shown in the document *Estimates of Receipts and Summary of Estimated Expenditure* and a separate Budget Paper is provided on *Payments to or for the States, the Northern Territory and Local Government Authorities.* Other supplementary Budget Papers issued with the Budget Speech deal with the *Civil Works Program* and *Australia's Official Development Assistance to Developing Countries.* {:#subdebate-80-0} #### The Implications of Using National Accounting Conventions The principles underlying the national accounting presentation of Budget data are set out in the Appendix to the supplement to the Treasury Information Bulletin entitled *National Accounting Estimates of Receipts and Expenditure of Australian Government Authorities, September* 1974. The use of definitions of Budget outlays and receipts based on national accounting conventions places Budget data on a basis which, in the main, is conceptually consistent with national accounting information published by the Australian Bureau of Statistics and can he related to that information. The adoption of these conventions requires that the receipts and outlay figures shown in the Statements attached to the Budget Speech show the net transactions of the Budget Sector with the rest of the economy. Some important characteristics of the national accounting treatment shown in the Statements are: (a) The transactions of various Funds forming the Public Account (the Consolidated Revenue Fund, Trust Fund and Loan Fund) are consolidated and inter-fund transfers are eliminated. For example, payments to Trust Accounts are not shown as part of outlays; rather, the expenditure from Trust Accounts is included. The aim is essentially to record the transactions between the Budget sector and the rest of the economy. Allowance is made, however, for adjustments between functions arising from the transfer of existing assets where financial adjustments for these transfers are recorded; {: type="a" start="b"} 0. Receipts derived from activities which are essentially of a governmental nature, involving regulation and compulsory payment, are normally treated as revenue items. As mentioned earlier, however, various primary industry levies and charges which are collected by the Government and applied more or less directly for the purposes of commodity stabilisation, research and promotional activities are offset against the relevant outlays. Other recoveries and repayments are normally offset against the relevant outlays to arrive at net figures. For example, repayments of principal on advances are offset against the corresponding advances. Bringing together the relevant outlays and recoveries or repayments facilitates assessment of the extent to which resources are directed through the Budget to a particular activity. Other taxes, compulsory charges, licence fees and the like which are of a general revenue nature, are treated as receipts items under the heading 'Other Taxes, Fees and Fines'; 1. The operating revenues, net of operating expenses, of activities with the Budget Sector which are carried out as business-type enterprises are shown as receipts items, along with dividends and similar receipts from business enterprises operated outside the Budget Sector. The current operations of enterprises are therefore reflected in the Budget Statements to the extent that they contribute to general Budget revenues; and 2. Certain transactions which are netted in published totals of the receipts and payments of the Public Account are shown in gross form. The more important of these are interest on loans raised by the Commonwealth Government for State works programs and for the Australian National Airlines Commission and Qantas Airways Ltd. Interest paid on these loans is included under the outlay heading 'Public Debt Interest', while interest received on advances made to the relevant authorities is included as a receipts item. This has the effect of making the coverage of interest in the Statements the same as the coverage of the debt to which it relates. Changes in the Functional Classification From time to time, it is necessary to amend the functional classification to reflect changes in the organisation and coverage of government activities. The more significant changes made this year relate to the treatment of *Payments to the Northern Territory Government.* On 1 July 1978 the Northern Territory of Australia became a self-governing territory under the Northern Territory (Self-Government) Act 1978. Functions for which executive responsibility was transferred to Ministers of the Territory from that date are mainly those of a State-type character. (Executive responsibility for some functions previously administered by the Department of the Northern Territory and the Attorney-General's Department was transferred to the Northern Territory on 1 January 1977 and 1 January 1978 respectively. The current year is seen as a transitional year during which financial arrangements will be developed to bring the Northern Territory within a framework similar to that which operates for the States. During this transitional period, the Commonwealth will provide the bulk of its payments to the Territory Government, for functions already transferred or to be transferred during 1978-79, through a global allocation. In terms of the functional classification for 1978-79 this global allocation is included under the heading 'Not Allocated to Function - Payments to or for the States, the Northern Territory and Local Government Authorities nec'. (In Statement No. 3 attached to last year's Budget Speech similar bulk allocations to the Northern Territory were shown under 'Administrative Services'; the 1977-78 figures have been adjusted to include these funds in the 'Not Allocated to Function' category.) Two functions have yet to be transferred to the Northern Territory Government, namely health which is to be transferred on 1 January 1979 and education which is to be transferred on 1 July 1979: outlays by the Commonwealth in the Northern Territory for these purposes will continue to be classified to relevant functional headings until formal transfer takes place. The Commonwealth also will make a small number of specific purpose payments to the Territory during 1978-79. These payments have been classified to relevant functional headings in the same way as similar specific purpose payments to the States. The treatment of outlays in respect of the Northern Territory will need to be revised further as the transitional financial arrangements give way to arrangements similar to those now operating for the States. Historical data for the period 1968-69 to 1977-78 classified by function are presented in Statement No. 6. Because the functional classification is derived from the appropriation accounting system, adjustments to the historical series are constrained by the availability of data in that system. In particular, major changes to departmental administrative arrangements announced in December 1972, June 1974, June 1975, and December 1975, have made it difficult to produce a strictly consistent series of outlays for the periods covered in the Budget Statements. Wherever possible the more important discontinuities have been eliminated by sub-costing and regrouping appropriation data, but it has not been practicable to eliminate all inconsistencies. {:#subdebate-80-1} #### Description of Functions The following notes indicate briefly the nature and scope of the net outlays encompassed under each functional heading; they are not intended to provide a definitive listing of the contents of each category. {: type="1" start="1"} 0. *Defence* Outlays on military defence, including outlays to keep the armed services in a state of readiness. Includes outlays on central administration and on research in connection with activities carried out for defence purposes; outlays on military construction and equipment, inspection, transport and storage; all outlays on recruiting, training, equipping and housing the armed forces, and on medical care and other services for them; outlays on military colleges; expenditure for the provision of quarters for families of military personnel; outlays on pensions and other payments for military personnel under the Defence Forces Retirement and Death Benefits Scheme; outlays on civil defence; outlays on foreign military aid and contributions to international military organisations and alliances. {: type="1" start="2"} 0. *Education* Outlays on the provision, management and support of all levels of educational services, including schools, trade and technical courses, courses in music and fine arts and university and other higher education. Includes outlays relating to the provision of scholarships and allowances to students at all levels; special educational programs designed specifically for the benefit of Aboriginal students, for migrants and for handicapped children; expenditure on non-vocational adult education courses, school bus services and general administration, regulation and research activities related to education. {: type="1" start="3"} 0. *Health* Outlays on facilities or services for the prevention and treatment of human illness. Includes outlays related to the prevention of diseases, such as immunisation and vaccination programs; regulation of standards of sanitation, etc.; outlays concerned with the provision of hospital and clinical services, including treatment and care of those suffering from psychiatric disorders, infectious diseases, etc.; and expenditure on nursing schools associated with hospitals. Also includes the payment of hospital, nursing home, medical and pharmaceutical benefits which are designed to cover all or part of the costs of hospitalisation and medical treatment; health care of specific groups, such as Aboriginals, the aged, former members of the armed forces and their dependants; community health centres, drug treatment centres, and domiciliary care services; general administration, regulation and research related to health matters. {: type="1" start="4"} 0. *Social Security and Welfare* Provision of pensions and allowances and other benefits to persons who, because of age, physical or mental disability, domestic circumstances or other reasons, are unable or not expected to earn a sufficient livelihood for themselves and their dependants. Includes the provision of benefits such as unemployment benefits, age and veterans' pensions, accident and sickness benefits, other benefits to compensate for loss of income, and unemployment relief schemes. Provision of financial assistance towards the expenses associated with the bearing and raising of children, child care and pre-school facilities in the States, marriage guidance, other social security benefits, child welfare services and institutions, homes for and care of the aged and disabled, and welfare programs to meet specific needs of disadvantaged groups. {: type="1" start="5"} 0. *Housing* Outlays on the provision of dwellings for sale or rental, mortgage finance for purchase or construction of dwellings, and other financial assistance aimed at facilitating the purchase or construction of dwellings or home ownership. Also includes general administration, regulation and promotion of standards, and research in the field of housing. {: type="1" start="6"} 0. *Urban and Regional Development NEC and the Environment* Urban and Regional Development nec: Outlays on general promotion and assistance for urban and regional planning and development. Includes outlays on decentralisation assistance and the development of new cities or towns where it is not possible to distinguish expenditure as specifically for housing, roads, sewerage or other purposes, or it is not appropriate to classify the expenditure to other categories (e.g. in" the case of major outlays for urban sub-division or renewal, including the purchase of land for such purposes). Administrative costs of departments and agencies engaged in urban and regional planning and development activities, together with outlays for the provision of community amenities. Environment: Outlays on water quality control, air pollution and monitoring and other outlays related to pollution prevention and protection of the environment including identifiable outlays on research, planning and investigation. Sewerage and Sanitation: Outlays on the treatment and disposal of sewerage, refuse collection and disposal. {: type="1" start="7"} 0. *Culture and Recreation* Outlays related to the support of performing and creative arts; support of organisations concerned with sporting and other leisure-time activities, and provision of facilities serving purposes primarily related to these activities, such as swimming pools, community centres, athletic fields, etc.; contributions to youth and social organisations; outlays on the protection and preservation of historic sites and buildings, parks and wildlife reserves, and other elements of the national estate; outlays on the provision and operation of government radio and television broadcasting services. {: type="1" start="8"} 0. *Economic Services* This category covers regulation of, and assistance provided to, the private sector; direct government participation in economic activity and provision of economic infrastructure. {: type="A" start="A"} 0. *Transport and Communication.* Outlays concerned with postal services, and domestic and overseas telecommunications; outlays on construction, maintenance, promotion, administration and research relating to the various modes of land, sea and air transport, including urban transportation systems and pipelines for petroleum and gas transport. (Road traffic control services are shown under the category 'Law, Order and Public Safety'.) 1. *Water Supply and Electricity.* Outlays on construction and other assistance, regulation and research in connection with the production, transmission and distribution of electricity; and on the conservation, collection, purification and distribution of water primarily for domestic and industrial use. 2. *Industry Assistance and Development.* Direct assistance to primary, secondary or service enterprises in various forms including bounties, subsidies, export incentives, advances from the Budget and other transfers, including commodity price support arrangements; support of agricultural and other industrial research and development and of promotional activities, including export promotion; outlays on the management and development of timber and fishery resources; provision of veterinary, extension and other services to agriculture; land clearing, reclamation and settlement activities; outlays on programs of rural debt reconstruction and farm rehabilitation and adjustment; investigation, measurement, development and management of water resources for irrigation and pastoral purposes and rural flood mitigation; assistance and encouragement of mineral exploration; geological surveys; development of tourist facilities and tourist promotion; administration, promotion, regulation and research, directly associated with specific primary, secondary or service industries. 3. *Labour and Employment.* Outlays related to the regulation of working conditions, the prevention and settlement of industrial disputes and the enforcement of industrial awards and agreements; programs designed to facilitate changes of occupation by persons displaced by redundancy; occupational training schemes for adults, including assistance to enter or re-enter the work-force, provision of labour exchange facilities; outlays directly related to the assisted passage migration scheme; general administration, regulation and research in the field of labour and immigration affairs. 4. *Other Economic Services.* Outlays related to regulation of monopolies and restrictive trade practices, price control and justification, tariff regulation, other forms of business regulation; outlays on patents and trade marks administration, outlays on meteorological services and other technical services not allocable to specific kinds of industry; outlays on general administration in the area of economic and commercial affairs not allocable to other outlay categories within the 'Economic Services' function. {: type="1" start="9"} 0. *General Public Services* This category covers outlays on a number of general public services and activities concerned with the organisation and operation of government. {: type="A" start="A"} 0. *Legislative Activities.* Outlays of the legislative and executive bodies of government, including Parliamentary committees and the operation of the Governor-General's establishments; outlays related to the conduct of elections and maintenance of registers of voters. 1. *Law, Order and Public Safety.* Outlays on law courts (other than those concerned with industrial relations) and bodies concerned with the administration of the legal system and preparation and execution of law court action; provision of legal aid; registration of legal titles to property; outlays in respect of prisons and other places of detention and correction, and probation services; police services, including traffic control; fire protection and other public safety promotion or services; general administration and research related to these activities. 2. *Foreign Affairs and Overseas Aid.* Outlays of departments and agencies charged primarily with the handling of foreign relations; administration and other expenditure relating to external territories; outlays on overseas economic aid and contributions to international bodies other than military alliances and organisations. 3. *General and Scientific Research nec.* Contributions for the promotion of and outlays on basic and general research in the biological, physical and social sciences, which cannot readily be classified to other outlay categories or linked with the provision or promotion of a particular service or activity. 4. *Administrative Services.* Outlays on the collection of taxes, raising public loans, managing public debt, and controlling the disbursement and audit of public funds. Outlays on general services for the government as a whole, such as statistical services, the purchase and operation of government buildings and equipment (including the construction, repair and maintenance of general purpose buildings), rent, office cleaning, personnel and other administration. General administrative expenses of departments covering a variety of government activities (including in the A.C.T.) and which cannot be readily apportioned over relevant functions are also included under this heading. {: type="1" start="1"} 0. *Outlays Not Allocated to Function* 5. *Payments to or for the States, the Northern Territory and Local Government Authorities nec.* General purpose grants and advances to State and other local government authorities and the Northern Territory Government which may be spent at the recipient's discretion and are not therefore classifiable to specific functions. This category includes payments to assist the States to meet debt charges. Payments to States and direct assistance for the relief of victims of drought, flood, fire and other natural disasters, and for the restoration of community services and facilities; longer-term reconstruction activities of a specific nature are, to the extent possible, classified according to purpose. {: type="A" start="B"} 0. *Public Debt Interest.* Net interest payments made from the Budget Sector to other sectors, including interest payments on government securities, or under credit arrangements with other countries. Interest received from Government investments in Commonwealth Government securities is offset against gross interest payments. {: .page-start } page 276 {:#debate-81} ### APPROPRIATION BILL (No. 2) 1978-79 Message from the Governor-General recommending appropriation for proposed expenditure announced. Bill presented by **Mr Howard,** and read a first time. {:#subdebate-81-0} #### Second Reading {: #subdebate-81-0-s0 .speaker-ZD4} ##### Mr HOWARD:
Treasurer · Bennelong · LP The the Bill be now read a second time. This Bill seeks appropriations of the Consolidated Revenue Fund in 1978-79 for expenditure on the construction of public works and buildings, the acquisition of sites and buildings, advances and loans, plant and equipment, grants to the States under section 96 of the Constitution, and new policies not previously authorised by special legislation. Details of the amounts sought by each department totalling in all $1,593,902,000 are shown in Schedule 2 to the Bill. Of this amount $592,418,000 was authorised by Supply Act (No. 2) 1978-79, the balance of $1,001,484,000 being authorised by this Bill. An amount of $ 100m is included in the Bill for the Advance to the Minister for Finance. The main features of the proposed expenditure for 1978-79, of which this Bill will authorise part, were outlined in my Budget Speech. I commend the Bill to honourable members. Debate (on motion by **Mr Young)** adjourned. {: .page-start } page 276 {:#debate-82} ### BUDGET 1978-79 {: #debate-82-s0 .speaker-ZD4} ##### Mr HOWARD:
Treasurer · Bennelong · LP -I present the following papers for the information of honourable members in connection with the Budget for 1978-79: >Estimates of Receipts and Summary of Estimated Expenditure for the year ending 30 June 1979. > >Civil Works Program 1978-79. > >Government Securities on Issue at 30 June 1978. > >Payments to or for the States, the Northern Territory and Local Government Authorities 1978-79. > >Australia's Official Development Assistance to Developing Countries 1978-79. > >National Income and Expenditure 1977-78. > >National Accounting Estimates of Receipts and Outlays of Commonwealth Government Authorities. > >Income Tax Statistics. Ordered that the papers be printed. {: .page-start } page 276 {:#debate-83} ### POSTAL AND TELECOMMUNICATIONS COMMISSIONS {: #debate-83-s0 .speaker-GY5} ##### Mr STALEY:
Minister for Post and Telecommunications · Chisholm · LP -- I present the following papers for the information of honourable members: >Australian Postal Commission- Service and Business Outlook for year 1978-79. > >Australian Telecommunications Commission- Service and Business Outlook for year 1978-79. Ordered that the papers be printed. {: .page-start } page 276 {:#debate-84} ### HEALTH INSURANCE ARRANGEMENTS {:#subdebate-84-0} #### Ministerial Statement {: #subdebate-84-0-s0 .speaker-GH4} ##### Mr HUNT:
Minister for Health · Gwydir · NCP/NP -by leave- In his Budget Speech, the Treasurer **(Mr Howard)** advised that changes will be made to the health insurance arrangements from 1 November this year. Before outlining the proposals in more detail, it would be appropriate if I commented briefly on the recent history leading to these changes. Background to changes The House will recall that the Government in 1976 made certain modifications to Medibank and renegotiated the hospital cost-sharing agreements with the States. Although Medibank provided universal health insurance cover, it did so in a way which was open-ended and costly. Health costs were escalating at an alarming rate, and when the Government took office it was apparent that modifications to the scheme were necessary in order to reduce this rapid acceleration. As recently as May this year, I announced on behalf of the Government further modifications designed to reduce excessive use of medical services and to rationalise the use of hospital resources. The changes to Medibank which became effective on 1 October 1976 and the subsequent amendments have resulted in a significant decline in the rate of acceleration of health costs. This is confirmed by figures which were released earlier this year. The figures, announced in March, indicated that in relation to expenditure, including capital, on a financial year basis, the rise in health costs of 27.1 per cent in 1975-76 had been slowed to 19.7 per cent in 1976-77. The figures also showed that the rate of increase in health expenditure as a percentage of gross domestic product has been slowed. Further statistical information on these matters will be available in due course. Nevertheless, the rate of increase of health costs has continued to be unacceptably high. In addition, although the existing arrangements have been achieving their original purpose, they are none-the-less complex and involve the imposition of a high degree of compulsion on the individual. Indeed the cost of health insurance premiums has become uncomfortably high for many people. Because of these factors, the Government has continued its review of the health insurance system. In October last year, I asked the Hospitals and Health Services Commission to review the financing of health services in Australia. The Commission's report, 'A Discussion Paper on Paying for Health Care', was tabled in this House on 1 5 March this year. That report was one important component of the very comprehensive reconsideration of the health insurance system undertaken by the Government in recent months. Our review has pointed to an obvious fact: That to maintain a balance between the numbers of health insurance levy payers and those privately insured- an essential element in the existing scheme's strategy to contain costs- clearly the levy rate could not be held at its present level much longer. A further complexity has emerged because of the different health cost structures in different States, and the consequent variation in private insurance rates, which suggest a need to examine the imposition of different levy rates in different States. This, of course, could not be countenanced in a federal levy. Accordingly, we reached the conclusion that, rather than make any adjustments to the health insurance levy, it was more practical and desirable to introduce a new and better Medibank system by abandoning the levy and introducing a new Commonwealth medical benefit and other changes. Summary of changes Let me now summarise the major features of the changes: As announced by the Treasurer, the health insurance levy will be abolished. The Commonwealth will pay a new universal medical benefit from Consolidated Revenue. This new Commonwealth benefit, to cover 40 per cent of schedule medical fees with a maximum patient contribution of $20 for any one service where the schedule fee is charged, will be paid through private health insurance funds, including Medibank Private. This is not to say that where the doctor charges in excess of the schedule fee the patient will be denied the advantage of the universal Commonwealth medical benefit. Medical insurance premiums should fall considerably for comparable levels of cover. The present compulsion on every Australian to pay for one type of health insurance or another will be removed, although those people currently covered by Medibank Standard will need to consider whether they wish to insure for their present level of benefits. Private health funds, including Medibank Private, will offer medical benefits in addition to the new Commonwealth benefit, and will continue to provide hospital benefits. The funds will be given considerable freedom and flexibility to devise attractive benefit packages. Accommodation in standard wards of public hospitals, with treatment by doctors engaged by the hospital, will continue to be available free of charge to those who are not privately insured for hospital care. Bulk billing of Public Health Benefit pensioners and their dependants who are not privately insured for medical benefits will continue as at present. As previously announced* the new concept of bulk billing for socially disadvantaged patients will be introduced. Subsidies for hospital-only insurance will be discontinued. The subsidy of $ 1 6 per occupied bed day paid to private hospitals will remain. {:#subdebate-84-1} #### Further Details of Changes As honourable members will have noticed, a number of the best features of existing and previous schemes are being brought together in the modifications. For example, Medibank introduced the concept of universal medical benefits and standard hospital coverage for all Australians, regardless of means. This principle is being retained. Those people who are not covered by hospital insurance will continue to be eligible for accommodation in standard wards of public hospitals, with treatment by doctors engaged by the hospital, at no cost- although in Queensland, of course, all citizens will continue to be eligible for free standard ward care irrespective of their insurance status. The Commonwealth and the States will continue to share the approved net operating costs of recognised hospitals. Bulk or direct billing will continue to be available for pensioners with health benefit cards and their dependants, except for those who are privately insured for medical benefits and, as I announced recently will be introduced for socially disadvantaged people. The most important change, of course, is the abolition of the health insurance levy- a move which means that everyone in the community will be entitled to receive a basic level of protection against the costs of medical and hospital services without having to pay any direct contribution, either by way of levy to the Government or by premium payments to private insurance funds. The health funds- including Medibank Private- will continue to play an important role in the provision of insurance cover, but people will no longer be liable to pay the health insurance levy if they do not insure privately. Medical benefits As I stated earlier, the new universal Commonwealth medical benefits will be payable through the registered funds. This arrangement will apply both to those who elect to take Commonwealth benefits only and to those who take private medical insurance in addition. The latter group will receive their Commonwealth benefit as an integral part of any refund claimed for a medical service. No one, of course, will be obliged to take out medical insurance with a private fund if he or she is satisfied to receive the Commonwealth benefit only. It should be emphasised that those people who are now receiving standard Medibank benefits at 75 per cent of the scheduled fee for medical services with a maximum patient payment of $10, and who wish to retain the same benefit level, will need to insure privately to do so. In fact, as from 1 November, it will be a condition of registration of the private funds that they offer a basic medical benefits table. This table, together with the Commonwealth benefit, will cover 75 per cent of the scheduled fee, with a maximum patient payment of $ 10 for any one service where the schedule fee is charged. In other words, people insured for basic medical fund benefits will receive combined Commonwealth and fund benefits at the rate of 75 per cent of the schedule fees, with a maximum patient contribution of $10. That is, the fund will increase the level of benefit from the universal Commonwealth benefit of 40 per cent with a $20 gap, to 75 per cent with a $10 gap. In addition, funds will be free to offer a variety of other medical benefits packages up to a maximum of the schedule fee level, and other ancillary benefits. Under the scheme, therefore, the Commonwealth will meet all costs over and above $20 for any medical service, provided the doctor charges the schedule fee. It must be emphasised that those people currently paying the health insurance levy will be eligible to receive only 40 per cent of the schedule medical fee, with a maximum payment by the patient of $20 for any one service where the schedule fee is charged- unless they take the necessary steps to insure for additional benefits. Those who wish to retain their present 75 per cent/$10 gap benefit will need to insure by 1 November. As I said earlier, no one will be obliged to insure privately. Undoubtedly there will be many who will wish to carry a higher risk themselves and will decide to accept a 40 per cent benefit as payment in full, especially in the light of the knowledge that, where the schedule fee is charged, they will have to pay no more than $20 for any one medical service. I will be meeting with representatives of the health funds within the next few days to discuss the most practical and simple method for people to obtain their universal Commonwealth medical benefits. I will also be advising them that they will be required to submit a proposal to my Department by 29 September concerning their basic medical benefits table. Such proposals will be considered by the Registration Committee with a view to registration of the new tables by 1 November. Funds which do not offer this new basic medical benefits table will be unable to pay Commonwealth medical benefits. For the many people who are already enrolled with a fund for hospital and medical coversome 57 per cent of the population- the change will mean little apart from the fact that they should also have an opportunity to review the level of cover they require. They will also have the opportunity to make significant savings in the process. In turn, the funds will be in a position to offer a variety of innovative insurance tables, including 'deductibles' in some form. Apart from the basic table, the funds will be able to devise competitive and innovative benefit schemes, subject to guidelines. {:#subdebate-84-2} #### Hospital Insurance Turning to the hospital side, insurance and benefit arrangements will remain largely unchanged. People who are not privately insured will continue to be eligible for standard accommodation and treatment in public hospitals at no charge to them. Those who are covered by private insurance will be expected to contribute towards the cost of any hospitalisation in public hospitals, except in Queensland, as I have stated previously. The Commonwealth-State hospital costsharing arrangements will continue. The subsidy of $16 per occupied bed day paid to private hospitals will remain. The Commonwealth will continue to contribute the sum of $50m to the reinsurance pool. Hospital funds will continue to offer the basic standard table covering hospital accommodation at $40 a day and will also be obliged to continue to cover their contributors against nursing home charges in all tables. Apart from this, they will be able to devise competitive benefits packages, and to introduce deductibles if they choose, subject to guidelines. The Government and the industry are already in the process of developing acceptable guidelines for deductible schemes. Hospital-only insurance With the removal of the health insurance levy, the present system of subsidised hospital-only insurance will be discontinued. From 1 November, former levy-payers and those pensioners and others exempt from the levy who wish to continue coverage for shared ward accommodation with doctor of choice in hospital will need to take basic hospital insurance. However, the additional premium payable is not large. On present rates it should not exceed an extra 75c a week for family cover in New South Wales, South Australia and Western Australia, 35c in Victoria, 30c in Queensland and 25c in Tasmania. So that there will be no misunderstanding, I could add that those figures are the existing level of subsidy payable for hospitalonly insurers within the various States at present contribution rates. It is possible that the additional premium could be higher, depending on the varying experiences of funds with their hospital tables. {:#subdebate-84-3} #### Bulk Billing There has been considerable debate over recent years about the merits and demerits of bulk billing. The system has administrative advantages in meeting the needs of pensioners and socially disadvantaged people. The arrangements recently announced for assisting the socially disadvantaged through the use of bulk billing will be implemented. Doctors who do so will receive from the Government 75 per cent of the schedule fee as payment in full for the service rendered- provided the patient is not privately insured- and will not be permitted to recover a cash payment from such patients. Doctors will continue to be able to bulk bill the Commonwealth to the extent of 85 per cent of the scheduled fee for pensioners with pensioner health benefit entitlements, and their dependants, with a $5 gap. {:#subdebate-84-4} #### Commonwealth-State Hospital Cost-Sharing Arrangements As I said earlier, the Commonwealth-State hospital cost-sharing arrangements will continue. However, as previously mentioned, my announcement in May of this year emphasised the need to rationalise the use of hospital resources to improve efficiency and productivity and to reconstruct the hospital charging pattern. My Government recognises that an important key to the containment of health costs rests in the hospital area. It is therefore vigorously pursuing the rationalisation initiatives with the aim of producing real results. These matters have been under discussion with the States during recent weeks. The question of the level of hospital charges is directly related to these considerations, especially the varying levels of hospital operating costs in and between the various States. Therefore, my Government is not in a position to finalise its views on the levels of hospital charges until these negotiations and discussions are further advanced. Effect on Private Fund Contribution Rates I do not wish to forecast in any detail the effect the November changes might have on the current contribution rates for private insurance. However, it should be stressed that the new basic medical benefits table, which all funds will be obliged to offer, will meet from fund resources only 35 per cent of the schedule fee and no more than $ 10 for any medical service, compared with the present 75 per cent/$10 'gap' met entirely by the funds. The Commonwealth, of course, will meet the other 40 per cent. As I said earlier, the Commonwealth will be meeting all costs above $20 for any medical service, provided the doctor charges the schedule fee. The registration committee will be taking into account these new subsidised medical benefit arrangements in relation to the basic table before considering the new premiums for such insurance as from 1 November. I will await with interest the packages and contribution rates the funds will be offering for hospital insurance in due course, once they have had a chance to assess the freedom and flexibility the new scheme offers. Future Role of the Health Insurance Commission With the ending of the present Medibank Standard benefits system the Health Insurance Commission's activities after 1 November will be confined to the operation of Medibank Private. The Government has decided that the Department of Health will administer the new universal Commonwealth medical benefit. It would obviously be inappropriate for an organisation operating a private fund- that is, the Health Insurance Commission- to pay to other funds Commonwealth benefits for insured and uninsured persons; to be in a position where it had related information on the activities of the other funds; or to exercise supervisory or inspection functions. Similarly, in the new circumstances, bulk billing activities which represent the payment of medical benefits directly to doctors by the Commonwealth for pensioners and the disadvantaged, Commonwealth payments under the hospital cost-sharing agreements, per diem payments to private hospitals and health program grant payments are more appropriately placed within the Department of Health. At this stage I cannot be precise about the number of staff who will be required to handle Medibank Private or to deal with the additional functions within the Department of Health. It does seem, however, that some- indeed a considerable number- of the present employees of the Health Insurance Commission will be surplus to requirements. We will make every effort to redeploy any surplus staff to the Public Service, to other Commonwealth authorities, to the private health insurance funds or elsewhere. I will be raising employment possibilities with the private funds, and have asked that the Public Service Board and the Commonwealth Employment Service give particular attention to the placement needs of Commission staff. Meetings will be arranged by the Government as soon as possible with relevant staff organisations to discuss these important matters. Summary of Effects on Various Groups Let me now summarise briefly the effects of the 1 November changes on various groups in the community: For the 57 per cent of the population who are currently insured with private health funds for both medical and hospital benefits, there will be little change, although their medical insurance premiums should be lower from 1 November. Individuals can, of course, elect to take the new Commonwealth medical benefit and standard hospital care if they choose. For pensioners with pensioner health benefit cards, and their dependants, there will be no change in respect of present levels of medical and hospital coverage. Pensioners and others who currently have hospital-only insurance will be required to pay extra if they wish to continue coverage for shared ward accommodation with doctor of choice in hospital. For low income earners and others who are socially disadvantaged, doctors will be able to bulk bill their medical accounts, as recently announced. For health insurance levy payers, a clear-cut choice will need to be made- whether to accept the new universal Commonwealth benefits, or whether to take out private insurance in order to retain their existing level of medical benefits. It is a choice they should make by 1 November or soon after. {:#subdebate-84-5} #### Summary of Advantages In summary, the revised Medibank arrangements will provide a better and simpler system of universal health insurance for all Australians. Under the existing arrangements, people have faced complex decisions- whether to pay the health insurance levy only, whether to add hospital-only insurance to the levy, or whether to take out full private insurance. These complexities would have been increased by any future adjustments to the levy rate in line with rises in health insurance premiums. The new scheme removes these difficulties. In future an individual will have to decide only two major questions: Do I wish to take out private health insurance over and above my universal Commonwealth, medical benefit and standard hospital entitlement; and, if so, how much do I want? The whole income tax collection system will be simplified from 1 November. Paymasters will no longer have to concern themselves with levy collections. Self-employed people and others with unpredictable incomes will not have to cope with the uncertainties of deciding which options are most suitable to them. In spite of these simplifications, it is recognised that there are people who find any change unsettling, and who may feel immediate uncertainty about what they will be required to do. I assure those people that the Government will be undertaking an extensive information program between now and 1 November to ensure that everyone in the community will be fully aware of the choice to be made and the steps necessary to implement that choice. In conclusion, the very real advantages of the modified arrangements are: Everyone will continue to be automatically entitled to coverage for health care at a uniform level. The present element of compulsion by which people have to pay for one form of health insurance or another will disappear, and a substantial monetary saving should be available for most people. Those who wish to insure for a higher level of benefits may do so on a completely voluntary basis. Pensioners and the socially disadvantaged will be covered for medical benefits and standard ward hospital care. The complexities of income tax returns in relation to the health insurance levy will disappear. Acquisition of statistical data on medical services will be simplified because of the payment of a uniform Commonwealth benefit for every medical service. The principle of greater patient contribution by way of lower levels of universal medical benefits, introduced in the May modifications to encourage users and providers to use services responsibly, is carried forward in the new arrangements. Although considerable subsidy is being provided to people for medical benefits, the Government is introducing a form of voluntary deductible system by leaving it to contributors to decide whether they will insure for a larger or lesser percentage of benefits. There have been many representations from people wanting the opportunity to carry a higher proportion of risk in return for lower health insurance premiums. The November changes to Medibank will provide that oportunity. The modifications will, in effect, allow people to enter into their own voluntary deductible systems, knowing that they are largely covered for high-cost, catastrophic illness. Put in another way, the system will enable people to accept higher risks in return for lower insurance premiums. This will provide an incentive to people to use medical services responsibly. Whilst special arrangements have been made for pensioners and the socially disadvantaged, the Government will monitor the scheme carefully to ensure that it serves their needs satisfactorily. The Government is confident that these changes will not only ease some of the financial strain from individuals in paying for health care, but also simplify the health insurance system while at the same time maintaining a constraining effect on health costs. I commend the changes to honourable members. I present the following paper: >Health Insurance Arrangements- Ministerial Statement, IS August 1978. {: #subdebate-84-5-s0 .speaker-SH4} ##### Dr KLUGMAN:
Prospect -by leave-I would like to deal with a number of points raised in the ministerial statement by the Minister for Health **(Mr Hunt).** It is not easy to make an absolute judgment on these new proposals within about an hour of receiving notice of them, but I will try to do so. Undoubtedly, new aspects will be drawn to my attention and the attention of other honourable members during the next few days as we look at the ramifications of what is proposed, and I might well change my mind about the proposition. In some ways it is deplorable that this and other aspects of the Budget were leaked completely to the Press. I think this is wrong in principle. I do not think that the leaking of the Budget health proposals matters much; nobody could have gained a significant financial benefit from knowing of them before they were announced. But the leak applied not only to health aspects but also to other proposals from which there was a possibility of people making money. I therefore deplore the leaking of the Budget content. When the story of the new health care arrangements appeared yesterday in the *Sydney Morning Herald* and in the *Australian Financial Review* I did not believe it. I will explain why I did not believe it. I assumed that any new arrangements announced in the Budget or any alterations arising from it would come within the parameter of the Government's efforts to save money. I did not realise that the Government was trying to pump more money into the health care system. I will not criticise the Government for this. As the Minister for Health and the Treasurer **(Mr Howard)** have pointed out, in a full year the extra cost involved in the alterations to the system is estimated to be $62 lm- $305m in added Budget outlays and a reduction of $3 1 6m in receipts because of the abolition of the health insurance levy. That is a huge amount of money for a government which I notice is going in for taxing a number of benefits, such as the tuberculosis allowance, which will yield only $3m or $5m in a full year. That is why I did not accept that move as a likely change. The explanation for the change appears in the Budget Speech of the Treasurer. Dealing with health, in the second paragraph, he said: >We have therefore decided upon several major changes to existing arrangements which, while producing an immediately adverse Budgetary effect, are more consistent with our longer-term objectives in this area and remove much of the confusion and complexity from present arrangements. I knew that some members of the Government, especially the Prime Minister **(Mr Malcolm Fraser),** were very keen on ideology but I did not think that they would be prepared to pay $62 lm in any one year for an ideological proposition concerning universal health insurance. What in fact has been done? In some ways this situation is a return to what we of the Australian Labor Party had. I know that in some ways it is different. Under our scheme that was in operation until 1 October 1976 people did not have to pay a levy. They were entitled to free standard hospital care and 85 per cent of their medical costs, with the maximum expenditure being $5 per item. This Government then introduced a levy of 2.5 per cent, which encouraged over 50 per cent of the population to leave Medibank. What the Government has done now is to remove that levy which, by the time the change was introduced, had operated for only two years. But the patient will still get free standard hospital treatment. Instead of receiving 85 per cent of medical costs the patient will receive only 40 per cent, and the maximum patient contribution per service will be $20. It is difficult to criticise this proposition absolutely and to see no benefits in a proposal which, in effect, saves the taxpayer in the first instance in one way or another- or the people who take advantage of it- $62 1 m. It is not easy to just say that $62 lm will be paid and that it is all bad. I draw the attention of the House in a reasonable and rational approach to some of the difficulties that will arise. To my mind the first difficulty is that there will be no point in joining a medical or hospital fund unless the contributor is terribly keen on having a doctor of his own choice because it will now be much more expensive for him to do so. The subsidised hospital only insurance is being discontinued. Therefore whilst people were being encouraged to pay the levy and then to pay $ 1 35 a year extra for a family so as to get treatment by a doctor of their choice in a public hospital, they will now not be given that insurance in a subsidised form. It has been suggested that the extra cost will be 75c a week but as a calculation is not shown I cannot comment on it. However, it will certainly be more expensive. The contributor will get only that alleged doctor of choice benefit for which at present he pays $135 a year. My suggestion to most people would be not to insure themselves. It is difficult to tell that to people but if they think about it reasonably and rationally I think they will agree with me. It is certainly the sort of thing which I have done until now and which I have advised other people to do. Until now it has cost me the ceiling of the levy. Without contributing anything from now on the patient will get free hospitalisation in a standard ward and 40 per cent of medical fees. On top of that, if one is well off in the community one gets a 33 per cent tax rebate on one's medical and hospital expenses. I think it is an unfair aspect that the 10 per cent or so of the community who are able to exceed the automatic tax deduction of about $1,600 a year will be able to get from now on a *33Vi* per cent discount on whatever medical fees they are paying above the 40 per cent and that others will not be able to do so. This is not fair in equity, but in any case it is another encouragement for people not to join a private fund. It was not clear from the Minister's speech, because he kept on referring to people who at present pay the levy, whether people will be able to take advantage of that provision only if they pay the levy at present. I asked him earlier whether anybody can make that choice, and it appears from his speech that anybody will be able to make the choice, even people who at present belong to private funds. My own view would be that people ought to leave those private funds before or on 1 November and take advantage of what the Government is offering. I have some specific criticism to make which some people may consider to be nit picking, but I do not think that it really is. I refer to the question of the Health Insurance Commission and the abolition of the Health Insurance Commission as far as Medibank Standard is concerned. On 24 May the Minister announced the intention to abolish bulk billing, and early in June the Parliament passed legislation to that effect. **Mr Williams** in a letter to the Minister's staff said that the staff increase required by the Health Insurance Commission, which it would start recruiting, to handle the increased work load that this change would bring about, was approximately 390. That was due to the elimination of direct billing for all Medibank Standard nonpensioner patients. The Commission started to recruit that staff. Then the Minister about three weeks ago announced that in fact bulk billing will still continue for certain groups in the community, depending on doctors being prepared to accept 75 per cent of the schedule fee. So the Commission obviously did not need an extra 390 staff members; it may have needed an extra 100 or 200. Now the Health Insurance Commission is being abolished altogether so far as Medibank Standard is concerned. I notice that the Minister slipped in a few extra words to those contained in the copy of the speech which I have. At page 12 of the speech which was circulated this passage appears: >It does seem, however, that some of the present employees of the Health Insurance Commission will be surplus to requirements. In other words, they will lose their jobs. In his actual speech he said: lt does seem, however, that some- indeed a considerable number- of the present employees of the Health Insurance Commission will be surplus to requirements. So I suppose it is a muck-up. It is bungling, quite signifiant bungling, caused by political interference with the Health Insurance Commission. A couple of months ago the Government decided that the Commission needed more staff. Now the Government has decided that the Commission does not need any extra staff. I think that is rather poor. Complications will arise from people leaving the funds. Certainly young and healthy persons, especially males, would be quite silly to take out private health insurance because the likelihood of their having to pay a significant amount of money in any one year on hospital and medical fees is very low. So obviously they would be quite silly not to settle for standard ward treatment in hospitals for nothing and the greater of 40 per cent of schedule medical fees or the amount of schedule medical fees less $20. It would be quite silly to insure oneself in any one year to cover a $20 maximum payment on any one thing. Of course, the net result of that is what we have discussed previously. The Minister has realised and the papers submitted to the Minister reveal that the Government is destroying the average pool that exists as far as health insurance is concerned. If we pull out from the pool the people who collect relatively little in health insurance, the net result will be that the people who are left in the pool are the people who are more likely to collect money, the higher risk group in the community, and obviously the contribution rates will have to be increased by the funds. This is one of the difficulties. I think in the end one has the philosophical attitude- I certainly have it- that the whole community should contribute towards the health costs of those who have larger families and sicker families- some members of the family are chronically ill- and who therefore have to take out extra insurance. The Government is going against that philosophy, and I think it is even going against the advice of organisations such as the Australian Medical Association and the funds themselves. It distorts the pool and it removes the concept that the better off and the healthier in the community ought to be contributing towards the health and hospital costs of those who are sicker. As I see it another difficulty is the definition of a low income and socially disadvantaged person for whom the doctor can bulk bill. I assume such a person cannot be defined and that it will depend purely on whether doctors are prepared to accept 75 per cent bulk billing from persons instead of collecting 40 per cent from the Commonwealth and hoping that they will get the extra 60 per cent from the patient. My own advice would be that people should exert a lot of pressure on doctors to accept the 75 per cent bulk billing. It is possible to spread that bulk billing, provided there are some doctors prepared to bulk bill for the 75 per cent. More and more doctors are coming onto the market. I know it has been argued that the more doctors there are the more it actually costs in the long run. That argument may be partly true. In fact new doctors coming into areas, in order to establish themselves, will accept 75 per cent of the fee on a bulk billing basis, and hopefully other doctors will be forced to accept that. If that in fact happens the Government, of course, will be up for much more than the $62 lm that it has calculated. I do not know on what basis the Government has calculated or estimated the cost of bulk billing for low income and socially disadvantaged people. I would think that the Government has just grabbed a figure out of the air. Maybe the Minister for Finance **(Mr Eric Robinson),** who in the last couple of weeks has been occupied with other matters, has not noticed that departmental officers may have queried that figure. I predict that the Government will get itself into more and more financial strife by introducing these changes. The Government's proposals are unfair to some of the lower income groups in the community such as those families who will need to insure themselves because they require a lot of medical attention. It is the total of the services in their cases which makes it necessary for them to take out insurance. I am talking of large families, of which one or more members have some sort of chronic condition, who do not have access to doctors who bulk bill. These families will have to take out extra insurance. The cost to them will be greater than it has been when they have paid the levy. However, at the same time, the cost to the Government will increase. I predict that within a very short time the Government will try to introduce means tests in respect of hospitals. Hopefully it will get into trouble with the States, especially the State Treasurers, if it tries to do that. The Government will try to introduce means tests because the cost of hospitalisation will be so great without money coming back by way of the levy. I believe that there will be a steady reduction in respect of the 40 per cent Commonwealth refund on medical services so as to reduce the Commonwealth contribution. This in summary is my criticism, and hopefully a reasoned criticism, of the amendments that have been proposed. I conclude by saying that the Prime Minister said: 'We are not going to interfere with Medibank, we are not going to abolish Medibank'. The Prime Minister and the Minister for Health as recently as May this year said: Whatever we do we will keep a universal health scheme under which everybody has to take out some sort of insurance '. They have changed their minds on both those issues during the last few weeks when this decision was taken. It is just another episode which illustrates quite clearly that one cannot trust the members of the Fraser Ministry when they make what appear to be absolute statements as to long-term attitudes on services which are provided by government. I hope that the discussion on this issue will continue. I hope that we will get more details from the Minister for Health and more figures, as promised in his speech, so that we will be able to make an intelligent judgment as to whether the figures are true or are predictions that have just been pulled out of the air. {: .page-start } page 284 {:#debate-85} ### SALES TAX AMENDMENT BILLS (Nos l to 9) 1978 Bills presented by **Mr Eric** Robinson, and read a first time. {:#subdebate-85-0} #### Second Readings {: #subdebate-85-0-s0 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- I move: These Bills will give effect to the proposal announced in the Budget Speech to reduce the rate of sales tax on motor cars and station wagons from 27V4 per cent to 15 per cent. The nine amending Bills are necessary because sales tax is imposed by nine separate Acts in order to meet the constitutional requirement that an Act imposing taxation shall deal with only one subject of taxation. Vehicles affected by the reduction are listed in the Fifth Schedule to the Sales Tax (Exemptions and Classifications) Act. The ones more commonly used are sedans, station wagons and taxi cabs. In aggregate terms, this reduction in sales tax is expected to involve a revenue loss of $155m this year. It also will be significant for the individual car buyer as it should mean that the price of an average family car now costing around $7,000 will fall by some $530. The new rate is to be effective tomorrow, 16 August 1978. This accords with the normal practice under which changes in rates of sales tax take effect on the day following their introduction into Parliament. A memorandum explaining the provisions of the Bills in detail is being circulated for the information of honourable members. I commend the Bills to the House. Debate (on motion by **Dr Klugman)** adjourned. {: .page-start } page 284 {:#debate-86} ### TARIFF PROPOSALS {: #debate-86-s0 .speaker-CG4} ##### Mr FIFE:
Minister for Business and Consumer Affairs · Farrer · LP -- I move: Excise Tariffproposals No. 2 and Customs Tariff Proposals No. 20, which I have just tabled, introduce certain tariff changes foreshadowed by the Treasurer **(Mr Howard)** in his Budget Speech this evening. The proposals increase the duties of excise and customs on beer, spirits and manufactured tobacco products. The increases operate from 8 o'clock this evening. A summary of these alterations is being circulated to honourable members. I commend the proposals to the House. Debate (on motion by **Dr Klugman)** adjourned. {: .page-start } page 284 {:#debate-87} ### CUSTOMS TARIFF AMENDMENT BILL (No. 3) 1978 Bill presented by **Mr Fife,** and read a first time. {:#subdebate-87-0} #### Second Reading {: #subdebate-87-0-s0 .speaker-CG4} ##### Mr FIFE:
Minister for Business and Consumer Affairs · Farrer · LP -- I move: The Customs Tariff Amendment Bill (No. 3) 1978 now before the House proposes amendments to the Customs Tariff Act 1966. The Bill introduces tariff changes foreshadowed by the Treasurer **(Mr Howard)** in his Budget Speech this evening in relation to the imposition of a special additional duty of 12.5 per cent on imports of certain finished goods on which an important ceiling is imposed through tariff quota arrangements or import licensing restrictions. The additional duty does not apply to goods the produce or manufacture of New Zealand. A summary of the commodities to which this levy applies has been prepared and I seek leave to have the summary incorporated in *Hansard.* Leave granted. *The summary read as follows-* The Bill provides that the additional duty will apply from tomorrow. I commend the Bill to the House. Debate (on motion by **Dr Klugman)** adjourned. {: .page-start } page 3 {:#debate-88} ### TARIFF PROPOSALS {: #debate-88-s0 .speaker-CG4} ##### Mr FIFE:
Minister for Business and Consumer Affairs · Farrer · LP -- I move: Excise Tariff Proposals No. 3 (1978) which I have just tabled introduce the excise tariff alteration relating to indigenous crude oil foreshadowed by my colleague the Treasurer **(Mr Howard)** in his Budget Speech earlier this evening. The proposals, which will operate from tomorrow, 16 August, increase the excise duty on crude oil by $45.63 per kilolitre. This increase forms one part of the legislative arrangement designed to effect the Government's decision that all Australian-produced crude oil should be priced to refineries at import parity levels. The other part of this legislation arrangement is the Excise Amendment Bill (1978) which I will introduce immediately after these Excise Tariff Proposals. That Bill will amend the Excise Act 1 90 1 to provide for variable rebates of the excise duty rate for certain categories of crude oil. The conjoint effects of these proposals and of the Excise Bill will be to achieve the net rate of excise duty required to bring up to import parity prices all indigenous crude oil presently priced below import parity level. I commend the proposals. Debate (on motion by **Mr Scholes)** adjourned. {: .page-start } page 286 {:#debate-89} ### EXCISE AMENDMENT BILL 1978 Bill presented by **Mr Fife,** and read a first time. {:#subdebate-89-0} #### Second Reading {: #subdebate-89-0-s0 .speaker-CG4} ##### Mr FIFE:
Minister for Business and Consumer Affairs · Farrer · LP -- I move: The purpose of this Bill is to provide for the allowing of rebates of the excise duty payable on certain categories of indigenous crude oil. The Bill, in conjunction with Excise Tariffproposals No. 3 ( 1978), constitutes the legislation required to bring into effect the Government's decision, announced in the Budget Speech, that all indigenous crude oil is to be priced at import parity levels. As stated in the Budget Speech, this objective is to be achieved by increasing the present excise duty, that is the levy, on 'non-parity ' oil by an amount which will bring the price of that oil to import parity levels. The rate of excise duty required to raise the current price of Bass Strait 'non-parity' oil to import parity level is $64.53 per kilolitre- about $ 10.26 per barrel- and this is the basic proposed new excise duty rate for stabilised crude petroleum oil for the period ending 31 December 1978. However, Bass Strait oil currently priced at import parity, although liable to the higher rate of excise duty, will be allowed, in accordance with the provisions of this Bill, a rebate of duty of $45.63 per kilolitre to ensure that the net duty payable will remain at $18.90 per kilolitreabout $3 per barrel. Similarly, the quantity of Barrow Island oil which is currently priced at import parity and the total production of Moonie and other smaller fields- currently at import parity price- will be allowed the same rebate to provide an effective excise duty of $18.90 per kilolitre. The quantity of Barrow Island oil currently at 'non-parity' price will be liable to an effective duty rate of $61.39 per kilolitre-about $9.76 per barrel-to bring its price to import parity level. To achieve this the Bill provides for a rebate of $3.14 per kilolitre from the excise duty liability of $64.53 per kilolitre. The Bill requires that the Minister for National Development shall, from time to time, determine prices for crude oil to take account of changes in the import parity price and so enable appropriate rates of duties and rebates to be calculated in terms of the relevant provisions. It also allows for the making of regulations related to the administration of the scheme of rebates. I commend the Bill. Debate (on motion by **Mr Scholes)** adjourned. {: .page-start } page 286 {:#debate-90} ### ADJOURNMENT {:#subdebate-90-0} #### The Honourable E. G. Whitlam, A.C., Q.C.- Death of Lady Vera Deakin White, O.B.E Motion ( by **Mr Fife)** proposed: >That the House do now adjourn. {: #subdebate-90-0-s0 .speaker-KH4} ##### Mr BARRY JONES:
LALOR, VICTORIA · ALP **-Mr Speaker** announced this afternoon the resignation of the Hon. Edward Gough Whitlam after 26 years as a member of the House of Representatives. He was, by universal consent, the greatest member of the present Parliament- the largest in spirit, the loftiest in aspiration, the greatest orator and the member with the widest and deepest range of interests. Gough Whitlam sat here as the honourable member for Werriwa for a quarter of a century, was Deputy Leader of the Opposition for seven years, Leader of the Australian Labor Party for 10 years and Prime Minister for three years. Whilst he was passionate in his Australianism, he was also a man of universal interests who thought and tried to operate, to his political cost, in a larger time frame than the three years between Australian elections- or 18 months when the ALP is in office. The problem with democratic processes is that they often come up with the wrong result. In a free vote people will often vote for a Barabbas even where there are other choices. There is little doubt that Hitler and Mussolini would have won free elections at the height of their influence. The electors of Australia passed damning judgments on the prime ministership of E. G. Whitlam. This is not the time for a final judgment but I am confident that the verdict of history will be more generous. Conversely, the verdict of the electors in Australia was almost consistently generous to the recently deceased Prime Minister who had seven straight victories from 1949 to 1963. Yet the political world that was so triumphantly endorsed at the polls in that period now seems as remote as the Victorian era. Its values are largely obsolete and its vision of Australia as an outpost of Empire, tied to the United States alone in this region and resisting contact and cultural exchange with our neighbours in China, Japan or Indonesia, seems dangerously anachronistic. Yet it was enormously popular at the polls. As late as 1966 the electors voted overwhelmingly to endorse the Vietnam war and to reject the Australian Labor Party's position. Who would endorse that verdict today? Gough Whitlam was, I think, a man for all seasons, not especially for this one. He made many mistakes. He offended many rich and powerful groups. He was not always easy to work with and he liked to get his own way. The expression that he often used- 'crash through or crash'- is something we often have thought. His judgment was not infallible. Nevertheless, in a political Lilliput he was our Gulliver. I believe that all of us, of all political parties, are diminished by his withdrawal from the House. {: #subdebate-90-0-s1 .speaker-L1V} ##### Mr YATES:
Holt -- It would not be often that this House has placed on record words of praise for a wife of a former member of this House. But yesterday in the fading afternoon light within Christ Church, South Yarra, Melbourne, I stood with a congregation who remembered with thanks the life work of a very gallant and great Australian lady, the wife of the former honourable member for Balaclava, and the Minister for Air between 1949 and 195 1. Lady Vera Deakin White, O.B.E., was the daughter of Australia's founder, Federal statesman and Prime Minister, Alfred Deakin. She had lived a brilliant life having been born in 1891 and after her education at Melbourne Church of England Girl's Grammar School, Melbourne University, Berlin and Budapest, she became a talented musician in her own right. **Sir John** Nimmo in his eloquent tribute yesterday reminded us of her life service of over 60 years to t'.e Australian Red Cross Society in two world wars. It was of the highest order. Thousands of ex-servicemen and women, the disabled, the handicapped, and later the crippled children, knew and recognised her concern for them. It is perhaps fitting, therefore, that this House takes note of the passing of this wonderful Australian lady whose life was an example of Christian humility and simple affection towards all whom she met. She certainly requires no memorial. Immortality is hers as it is her distinguished statesman father who showed this nation the meaning of untarnished public service. I believe that this honourable House would wish to convey its respects to this distinguished family. Question resolved in the affirmative. House adjourned at 10.24 p.m. {: .page-start } page 288 {:#debate-91} ### ANSWERS TO QUESTIONS UPON NOTICE The following answers to questions upon notice were circulated: Purchase of VIP Aircraft {:#subdebate-91-0} #### Touchfones (Question No. 12) {: #subdebate-91-0-s0 .speaker-5J4} ##### Mr Scholes: asked the Minister for Post and Telecommunications, upon notice, on 22 February 1978: {: type="1" start="1"} 0. 1 ) Is the purchase price of push-button telephones lower than for standard units. 1. What is the price quoted for the supply of similar quantities of (a) standard and (b) push-button units. 2. Is the push-button unit fully transistorised without moving parts. 3. Are the anticipated maintenance costs for push-button units below those of standard units. 4. Are additional charges to be made for push-button units for financial reasons or to raise revenue from the public based on novelty or scarcity factors. {: #subdebate-91-0-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No. 1. Telephone instruments are purchased under public tendering conditions and it is not the practice to publicise prices quoted by suppliers. 2. No. 3. No. Compared with a standard instrument, touchfones are currently more expensive to maintain because on a per installation basis at current levels of penetration manhour requirements are greater in respect of both skill and time. Inventory and replacement costs are also higher. 4. Additional charges are made for push-button units because the current costed issue rate for the initial supply of Touchfones, which includes a component for administrative costs, is over 200 per cent higher than for a standard instrument. Under these circumstances the Commission has adopted a policy that subscribers who elect to have a standard instrument installed should not be required to meet any part of these additional costs. Therefore, subscribers who have touchfones installed make a once-only additional payment of $50 and are charged additional annual rental of $24. {:#subdebate-91-1} #### Advertising (Question No. 50) {: #subdebate-91-1-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Home Affairs, upon notice, on 22 February 1978: {: type="1" start="1"} 0. 1 ) What sum was spent by his Department on advertising and services during the period: {: type="a" start="a"} 0. 1 1 November 1975 to 13 December 1975; 1. 14December 1975 to 30 June 1976; 2. 1 July 1976 to 30 June 1977; and 3. 1 July 1977 to date. 1. ) What was the cost of each campaign undertaken. 2. Under which item of expenditure were funds allocated. 3. Which advertising agencies or consultants were used for each campaign. 4. What was the total sum paid to each agency or consultant for each campaign. 5. How was each agency or consultant selected. 6. What is the estimated cost of advertising and promotion of Government programs and services for 1 977-78. {: #subdebate-91-1-s1 .speaker-YF6} ##### Mr Ellicott:
LP -- The answer to the honourable member's question is as follows: >I am informed by my Department as follows: > >(a), (b) and (c) Nil. The Department of Home Affairs was established on 20 December 1 977. (d)$21,646from 1 July 1977 to date. > >and (3) Philatelic advertising, Christmas Is. Division 157-2-05-$4,027 > >Tax Incentives for the Arts- Division 336-3-01 -$12,825 > >Recruitment advertising, Office of Women's AffairsDivision 336-2-05-$4,139 > >Advertising for Conservator, Australian Archives Office-Division 136-2-06-$655 (4), (5) and (6) Arranged by the Australian Government Advertising Service. > >Philatelic advertising, Christmas Island- $10,000 > >Tax Incentives for Arts-$ 12,882 > >Recruitment advertising, Office of Womens' Affairs-$4,139 > >Advertising, Australian Archives- $655 {:#subdebate-91-2} #### Fraser Island (Question No. 177) {: #subdebate-91-2-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES am asked the Minister for Environment, Housing and Community Development, upon notice, on 22 February 1978: {: type="1" start="1"} 0. 1 ) Has the Government completed its consideration of the recommendations of the Fraser Island Environmental Inquiry. 1. Have all the decisions on the recommendations now been announced. {: #subdebate-91-2-s1 .speaker-QK5} ##### Mr Groom:
Minister Assisting the Minister for Employment and Industrial Relations · BRADDON, TASMANIA · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Yes, the Government has completed its consideration of the recommendations of the Fraser Island Environmental Inquiry. 1. All decisions which have been made on the recommendations have been announced. Any future decisions which may relate less directly to the Inquiry will be announced as appropriate. {:#subdebate-91-3} #### Immigration of Skilled Workers (Question No. 218) {: #subdebate-91-3-s0 .speaker-JNG} ##### Dr Cass:
MARIBYRNONG, VICTORIA asked the Minister for Immigration and Ethnic Affairs, upon notice, on 28 February 1978: {: type="1" start="1"} 0. Was any record kept of the skilled vacancies for which overseas skilled workers were recruited. 1. If so, is it known how many of these vacancies have been filled by migrants who came to Australia during 1977-78 and who entered under the approved occupation category. 2. How many skilled vacancies exist for which there are no available skilled workers in Australia. {: #subdebate-91-3-s1 .speaker-0I4} ##### Mr MacKellar:
Minister for Immigration and Ethnic Affairs · WARRINGAH, NEW SOUTH WALES · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Each quarter after consultation between my Department and the Department of Employment and Industrial Relations a list is drawn up of skilled occupations for which the supply of local labour is inadequate to fill demand. This list indicates whether the degree of unsatisfied demand is moderate or high, the position in each State and as between metropolitan and non-metropolitan areas. Nominations on behalf of, or applications from, migrants in occupations not on this list warranting special consideration are considered on a case-by-case basis by occupational review groups established in each State. {: type="1" start="2"} 0. A precise measure of this is not available. As skilled workers selected overseas are recruited only for occupations in which vacancies exist, the number of vacancies filled should be approximated by the number of skilled workers arriving. 1. ) There is no specific information on this. Vacancies may exist in an area where there is a shortage of labour, or to which available skilled labour is unable or unwilling to travel from localities where the availability of labour may exceed the number of job opportunities. Moreover, the situation changes frequently and it would not be productive to give precise numerical assessments of skilled labour shortfalls at a particular time. The approved occupations list for migration is based on ongoing qualitative assessments of the future labour demand for various occupations. {:#subdebate-91-4} #### Ministerial Travel Overseas (Question No. 248) {: #subdebate-91-4-s0 .speaker-HI4} ##### Mr Morris:
SHORTLAND, NEW SOUTH WALES asked the Minister representing the Minister for Administrative Services, upon notice, on 1 March 1978: {: type="1" start="1"} 0. 1 ) On what occasions and for what purposes has the Minister travelled overseas since 1 1 November 1975. 1. What was the name, classification and salary of each person who accompanied the Minister on each occasion. 2. What was the cost of (a) travel, (b) accommodation and (c) other expenditure, and what was the total cost incurred in respect of the Minister and each person who travelled with him on each journey overseas. 3. Which airlines and/or other means of transport were utilised during each journey overseas. {: #subdebate-91-4-s1 .speaker-KVM} ##### Mr Street:
LP -- The Minister for Administrative Services has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) New Zealand between 8 and 1 2 March 1 976 to consult with the New Zealand Government regarding matters affecting the Christmas Island Agreement Act of 1958, and Indonesia, Malaysia, Thailand and Singapore between 29 July and 5 August 1977 to look at aspects of my Department's operations. {: type="1" start="2"} 0. New Zealand: **Mrs Withers; Mr R.** Maher, Senior Private Secretary, $17,400 + $3,888 Ministerial Staff Allowance per annum; and **Mr P.** J. Lawler, O.B.E., Secretary, Department of Administrative Services, $35,000 + $2,000 Allowance per annum. South East Asia: **Mrs Withers; Mr P.** Hocking, Senior Private Secretary, $19,406 + $4,246 Ministerial Staff Allowance per annum and **Mr A.** Palmer, Deputy Secretary, Department of Administrative Services, $3 1 , 105 per annum. {: type="1" start="3"} 0. Based on accounts processed to date- New Zealand: {: type="1" start="4"} 0. New Zealand: Air New Zealand. South East Asia: Cathay Pacific, Singapore Airlines and Malaysian Airline System. {:#subdebate-91-5} #### Ministerial Travel Overseas (Question No. 262) {: #subdebate-91-5-s0 .speaker-HI4} ##### Mr Morris: asked the Minister for Immigration and Ethnic Affairs, upon notice, on 1 March 1978: {: type="1" start="1"} 0. 1 ) On what occasions and for what purposes has he travelled overseas since 1 1 November 1 975; 1. ) What was the name, classification and salary of each person who accompanied him on each occasion; 2. What was the cost of (a) travel, (b) accommodation and (c) other expenditure, and what was the total cost incurred in respect of himself and each person who travelled with him on each journey overseas; 3. Which airlines and/or other means of transport were utilised during each journey. {: #subdebate-91-5-s1 .speaker-0I4} ##### Mr MacKellar:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) to (4) I refer the honourable member to **Senator Withers'** reply to Senate Question No. 1116 which appeared in *Hansard,* 9 November 1 977, ( pages 2397-8 ). {:#subdebate-91-6} #### Telephone Services: Local Calls (Question No. 311) {: #subdebate-91-6-s0 .speaker-2E4} ##### Mr Lloyd:
MURRAY, VICTORIA asked the Minister for Post and Telecommunications, upon notice, on 1 March 1978: {: type="1" start="1"} 0. Is equipment presently installed in telephone exchanges in the major metropolitan cities capable of monitoring local calls of more than 6 minutes duration in those centres, in a manner similar to STD timed calls, so that those calls exceeding 6 minutes duration can be charged an additional fee; if not, when will suitable equipment be installed. 1. What additional revenue would be obtained if all calls exceeding 6 minutes were charged an additional local call fee for every 3 minutes beyond that period. {: #subdebate-91-6-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) The existing telephone network is not equipped to time local calls and Telecom Australia has not programmed the necessary equipment modifications to enable such calls to be timed. 1. Given that timing equipment is not installed it is difficult to provide an accurate estimate of additional revenue which could result from such a charging structure. However, based on information collected from manual sampling of telephone calls, additional earnings could be $38m per annum on current traffic levels. {:#subdebate-91-7} #### Australia Post: Purchase of Property (Question No. 326) {: #subdebate-91-7-s0 .speaker-ZE4} ##### Mr Lionel Bowen: asked the Minister for Post and Telecommunications, upon notice, on 1 March 1978: {: type="1" start="1"} 0. 1 ) Has Australia Post agreed to purchase by private sale real estate known as the 'Metiers factory', Alexandria, New South Wales; if so, what is the purchase price. 1. Is he able to say whether the premises were previously passed in at auction because the reserve price was not reached; if so, when did this take place and what was the reserve price. 2. Have the Directors of Australia Post any direct or indirect interest in the company or its affiiliates which is selling the real estate or have they at any time acted for or on behalf of that company or its affiiliates in any capacity. {: #subdebate-91-7-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No. However it is one of several properties which have been under consideration for a mail centre, in consultation with the Department of Administrative Services. {: type="1" start="2"} 0. I have been advised that the premises have not been recently offered for sale by public auction. 1. So far as is known the title of the property is in the name of Metters Ltd and the property is being sold by John McIlwraith Industries Limited. No Commissioner of the Australian Postal Commission has any direct or indirect interest in either of the companies concerned or their affiliates, nor have they at any time acted in any capacity for or on behalf of these companies or their affiliates. {:#subdebate-91-8} #### Telephone Services: Local Calls (Question No. 362) {: #subdebate-91-8-s0 .speaker-KKT} ##### Mr MacKenzie:
CALARE, NEW SOUTH WALES asked the Minister for Post and Telecommunications, upon notice, on 2 March 1978: >With reference to Question No. 311 of 1 March 1978, what would be the cost of installing suitable equipment to meter and charge calls in excess of 6 minutes duration in metropolitan areas of (a) Australia and (b) New South Wales. {: #subdebate-91-8-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: >Telecom Australia advises that on current estimates the cost would be (a) $45 million; (b) $ 16.2 million. {:#subdebate-91-9} #### Conservation of Energy (Question No. 382) {: #subdebate-91-9-s0 .speaker-KH4} ##### Mr BARRY JONES:
LALOR, VICTORIA · ALP asked the Minister for National Development, upon notice, on 7 March 1978: {: type="1" start="1"} 0. 1 ) Did he urge the adoption of a national energy conservation policy in May 1977, following his return from the United States of America. 1. If so, what action has been taken to develop this policy, and, specifically, what consultations have taken place with the States in order to secure their co-operation in conserving energy. {: #subdebate-91-9-s1 .speaker-JVV} ##### Mr Newman:
Minister for National Development · BASS, TASMANIA · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) The then Minister for National Resources, stated on a number of occasions that the conservation of energy was an important part of the Government's energy policy. 1. 2 ) See my answer to Question No. 749. Lockheed Corporation: Visit by Senators (Question No. 430) {: #subdebate-91-9-s2 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister representing the Attorney-General, upon notice, on 8 March 1978: >With reference to the statutory declaration of **Mr Geoffrey** Nicoll relating to Lockheed Corporation Sales in Australia, is the Minister able to say who were the Government senators who in 1 976 called on the senior Australasian Sales Manager for Lockheed, **Mr Peter** Mingrone of Sherman Oaks, Los Angeles, previously of Hopetoun Avenue, Vaucluse, New South Wales. {: #subdebate-91-9-s3 .speaker-EE6} ##### Mr Viner:
LP -- The Attorney-General has provided the following answer to the honourable member's question. I refer the honourable member to Question upon Notice No. 1533 asked by him and answered in the House of Representatives *Hansard* for 8 November 1977. {:#subdebate-91-10} #### Croatian Embassy' (Question No. 437) {: #subdebate-91-10-s0 .speaker-6U4} ##### Mr E G Whitlam: am asked the Minister for Post and Telecommunications, upon notice, on 8 March 1978: >What arrangements have been sought and made for the (a) delivery of mail and telegrams addressed to the selfstyled Croatian Embassy in Canberra, (b) registration of its publications for transmission as Category B newspapers and (c) rental of telephones in its name. {: #subdebate-91-10-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: {: type="a" start="a"} 0. All mail and telegrams addressed to the self-styled Croatian Embassy in Canberra are delivered in accordance with the physical address details shown. No arrangements have been sought specifically for the delivery of postal articles addressed to the 'Embassy'. 1. No publication of self-styled Croatian Embassy in Canberra is registered in either Category B or Category A, nor has an application for registration of any publication been received. 2. Acting on advice from the Department of Foreign Affairs, an applicant for telephone service in the name of the Croatian Embassy was advised by Telecom that the application was not acceptable because it was understood that he was not a member of a diplomatic mission of a sovereign government with which Australia has established diplomatic relations. A service was subsequently applied for and provided in the personal name of the applicant. {:#subdebate-91-11} #### Purchase of Newspapers and Periodicals (Question No. 494) {: #subdebate-91-11-s0 .speaker-JT9} ##### Mr Bungey:
CANNING, WESTERN AUSTRALIA asked the Minister for Home Affairs, upon notice, on 8 March 1978: {: type="1" start="1"} 0. 1 ) How many copies of (a) each daily newspaper and (b) each weekly publication are purchased by (i) the Head Office and (ii) other offices of his Department. 1. What was the cost of these purchases during 1976-77. {: #subdebate-91-11-s1 .speaker-YF6} ##### Mr Ellicott:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2)I refer the honourable member to the answer given by the Prime Minister to question no. 468 *(Hansard,* 4 April 1978, page 978). {:#subdebate-91-12} #### Purchase of Newspapers and Periodicals (Question No. 496) {: #subdebate-91-12-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Environment, Housing and Community Development, upon notice, on 8 March, 1987: {: type="1" start="1"} 0. 1 ) How many copies of (a) each daily newspaper and (b) each weekly publication are purchased by (i) the Head Office and (ii) other offices of his Department. 1. What was the cost of these purchases during 1 976-77. {: #subdebate-91-12-s1 .speaker-QK5} ##### Mr Groom:
LP -- I refer the honourable member to the answer to parliamentary Question No. 468 provided by the Prime Minister *(Hansard,* 4 April, 1978, page 978). Department of Health: Actions Against {:#subdebate-91-13} #### Mr W. F. Toomer (Question No. 536) {: #subdebate-91-13-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Health, upon notice, on 8 March 1978: >What has been the cost to his Department of the actions taken against **Mr W.** F. Toomer, formerly Quarantine Inspector, Western Australia. {: #subdebate-91-13-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: >The direct cost incurred by the Department of Health in actions taken against **Mr W.** F. Toomer in 1 974 and 1 977 is approximately $13,700. This figure includes counsel fees and costs of transcription of evidence in appeal hearings held during September/October 1974 and October 1977, fares and travelling allowance for Departmental representatives on the Appeal Boards and the costs associated with the transfers of **Mr Toomer** and his family. Departmental officers were involved in these actions as part of their normal duties but because records have not been maintained which would enable the time commitment of these officers to the case to be identified, an accurate costing of the proportion of salaries attributable to these actions cannot be provided. The Department continued to pay **Mr Toomer's** normal salary during the periods of his suspension from duty and the total salary paid to him during those periods was approximately $17,600. {:#subdebate-91-14} #### Staff Canteens (Question No. 565) {: #subdebate-91-14-s0 .speaker-JT9} ##### Mr Bungey: asked the Prime Minister, upon notice, on 8 March 1978: {: type="1" start="1"} 0. 1 ) What staff canteens are operated by his Department. 1. ) What is the pricing policy of each canteen. 2. Are charges for (a) cleaning, (b) electricity and power, (c) fuel, (d) rent or lease, (e) repairs and maintenance, (0 replacements of plant, furniture and fittings and (g) depreciation of plant, furniture and fittings included for determination of canteen prices; if not, what was the estimated cost of each of these items in each canteen during 1 976-77. 3. What staff is employed in each canteen, and what were the total wages and salaries paid to staff in each canteen in 1976-77. 4. Are all wages and salaries paid to canteen staff included for determination of canteen prices; if not, what percentage of total wages and salaries paid to canteen staff were included for determination of canteen prices for 1 976-77. 5. What decision has been made by his Department concerning subsidisation of each canteen and what was the estimated cost of such subsidisation to each canteen for 1976-77. 6. Are the public and relatives and friends of departmental staff permitted to use each canteen. 7. If there are restrictions on its use how are they implemented in each canteen. 8. What staff from other Commonwealth Departments and instrumentalities regularly use each canteen. 9. 10) Are there any arrangements made by his Department for any staff canteen to be operated by private enterprise; if so, which canteens and under what terms and conditions. {: #subdebate-91-14-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. None. 1. to (9) See answer to ( 1 ). 2. No. {:#subdebate-91-15} #### Staff Canteens (Question No. 579) {: #subdebate-91-15-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Health, upon notice, on 8 March 1978: {: type="1" start="1"} 0. 1 ) What staff canteens are operated by his Department. 1. What is the pricing policy of each canteen. 2. Are charges for (a) cleaning, (b) electricity and power, (c) fuel, (d) rent or lease, (e) repairs and maintenance, (f) replacements of plant, furniture and fittings and (g) depreciation of plant, furniture and fittings included for determination of canteen prices; if not, what was the estimated cost of each of these items in each canteen during 1976-77. 3. What staff is employed in each canteen, and what were the total wages and salaries paid to staff in each canteen in 1976-77. 4. Are all wages and salaries paid to canteen staff included for determination of canteen prices; if not, what percentage of total wages and salaries paid to canteen staff were included for determination of canteen prices for 1 976-77. 5. What decision has been made by his Department concerning subsidisation of each canteen and what was the estimated cost of such subsidisation to each canteen for 1976-77. 6. Are the public and relatives and friends of departmental staff permitted to use each canteen. 7. If there are restrictions on its use how are they implemented in each canteen. 8. What staff from other Commonwealth Departments and instrumentalities regularly use each canteen. 9. 10) Are there any arrangements made by his Department for any staff canteen to be operated by private enterprise; if so, which canteens and under what terms and conditions. {: #subdebate-91-15-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Nil. The Government decided early in 1977 that all Commonwealth employee food services would be operated by Commonwealth Hostels Limited. Handover of these services to the company was completed on 13 November 1977. However, in 1976-77 the only cafeteria operated by my Department was the Phillip Offices Department of Health Canteen, Woden, ACT. 1. Commonwealth employee food services are required to operate on a self-supporting financial basis, within the division of costs prescribed in Treasury (Finance) Directions, Section 8. {: type="1" start="5"} 0. Yes. 1. See answer to Question (2) above. 2. The cafeteria is provided for the use of Commonwealth employees only. However, it has always been seen as reasonable for persons visiting a Department on official business to be allowed to use the food service facilities on such occasions, at the Department's invitation. 3. The Cafeteria Manager implements the policy outlined in Part (7). 4. In general, Commonwealth food services are available for the use of any Commonwealth employee. Staff from all Commonwealth Departments and instrumentalities located in the Woden area regularly use the canteen. 5. No. See answer to Question ( 1 ) above. {:#subdebate-91-16} #### Staff Canteens (Question No. 581) {: #subdebate-91-16-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for the Northern Territory, upon notice, on 8 March 1978: {: type="1" start="1"} 0. 1 ) What staff canteens are operated by his Department. 1. What is the pricing policy of each canteen. 2. Are charges for (a) cleaning, (b) electricity and power, (c) fuel, (d) rent or lease, (e) repairs and maintenance, (0 replacements of plant, furniture and fittings and (g) depreciation of plant, furniture and fittings included for determination of canteen prices; if not, what was the estimated cost of each of these items in each canteen during 1 976-77. 3. What staff is employed in each canteen, and what were the total wages and salaries paid to staff in each canteen in 1976-77. 4. Are all wages and salaries paid to canteen staff included for determination of canteen prices; if not, what percentage of total wages and salaries paid to canteen staff were included for determination of canteen prices for 1976-77. 5. What decision has been made by his Department concerning subsidisation of each canteen and what was the estimated cost of such subsidisation to each canteen for 1976-77. 6. Are the public and relatives and friends of departmental staff permitted to use each canteen. 7. If there are restrictions on its use how are they implemented in each canteen. 8. What staff from other Commonwealth Departments and instrumentalities regularly use each canteen. 9. Are there any arrangements made by his Department for any staff canteen to be operated by private enterprise; if so, which canteens and under what terms and conditions. {: #subdebate-91-16-s1 .speaker-ID4} ##### Mr Adermann:
Minister Assisting the Minister for Primary Industry · FISHER, QUEENSLAND · NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) The Department of the Northern Territory does not operate a staff canteen. 1. to ( 10) Not applicable. Staff Canteens (Question No. 583) {: #subdebate-91-16-s2 .speaker-JT9} ##### Mr Bungey: asked the Minister for National Development, without notice, on 8 March 1978: {: type="1" start="1"} 0. 1 ) What staff canteens are operated by his Department. 1. What is the pricing policy of each canteen. 2. Are charges for (a) cleaning, (b) electricity and power, (c) fuel, (d) rent or lease, (e) repairs and maintenance, (f) replacements of plant, furniture and fittings and (g) depreciation of plant, furniture and fittings included for determination of canteen prices; if not, what was the estimated cost of each of these items in each canteen during 1 976-77 3. What staff is employed in each canteen, and what were the total wages and salaries paid to staff in each canteen in 1976-77 4. Are all wages and salaries paid to canteen staff included for determination of canteen prices; if not, what percentage of total wages and salaries paid to canteen staff were included for determination of canteen prices for 1 976-77. 5. What decision has been made by his Department concerning subsidisation of each canteen and what was the estimated cost of such subsidisation to each canteen for 1976-77. 6. Are the public and relatives and friends of departmental staff permitted to each canteen. 7. If there are restrictions on its use how are they implemented in each canteen. 8. What staff from other Commonwealth Departments and instrumentalities regularly use each canteen. 9. 10) Are there any arrangements made by his Department for any staff canteen to be operated by private enterprise; if so, which canteens and under what terms and conditions. {: #subdebate-91-16-s3 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable members question is as follows: {: type="1" start="1"} 0. None. 1. to (9) Not applicable. 2. No. {:#subdebate-91-17} #### Staff Canteens (Question No. 584) {: #subdebate-91-17-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister representing the Minister for Science, upon notice, on 8 March 1978: {: type="1" start="1"} 0. What staff canteens are operated by the Department ofScience. 1. What is the pricing policy of each canteen. 2. Are charges for (a) cleaning, (b) electricity and power, (c) fuel, (d) rent or lease, (e) repairs and maintenance, (f) replacements of plant, furniture and fittings and (g) depreciation of plant, furniture and fittings included for determination of canteen prices; if not what was the estimated cost of each of these items in each canteen during 1976-77. 3. What staff is employed in each canteen, and what were the total wages and salaries paid to staff in each canteen in 1976-77. 4. Are all wages and salaries paid to canteen staff included for determination of canteen prices; if not, what percentage of total wages and salaries paid to canteen staff were included for determination of canteen prices for 1 976-77. 5. What decision has been made by the Department of Science concerning subsidisation of each canteen and what was the estimated cost of such subsidisation to each canteen for 1976-77. 6. Are the public and relatives and friends of departmental staff permitted to use each canteen. 7. If there are restrictions on its use how are they implemented in each canteen. 8. What staff from other Commonwealth Departments and instrumentalities regularly use each canteen. 9. Are there any arrangements made by the Department ofScience for any staff canteen to be operated by private enterprise; if so, which canteens and under what terms and conditions. {: #subdebate-91-17-s1 .speaker-ID4} ##### Mr Adermann:
NCP/NP -- The Minister for Science has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) Nil- The only canteen facilities operating within the Department were controlled by the Bureau of Meteorology in Melbourne. The service was handed over to the Commonwealth Hostels Ltd on the 24 June 1 977. 1. Commonwealth employee food services are required to operate on a self-supporting financial basis within the division of cost prescribed in Treasury (Finance) Direction Section 8. 2. -- {: type="1" start="5"} 0. Yes. 1. See 2 and 3 above. 2. The canteen was provided for the use of Commonwealth employees only. However, it has always been seen as reasonable for persons visiting a Department on official business to be allowed to use the food service facilities on such occasions, at the Department 's invitation. 3. In view of location there is no display and restriction signs. 4. In general Commonwealth Food Services are available for the use of any Commonwealth employee. 5. No. {:#subdebate-91-18} #### Staff Canteens (Question No. 586) {: #subdebate-91-18-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister representing the Attorney-General, upon notice, on 8 March 1978: {: type="1" start="1"} 0. 1 ) What staff canteens are operated by the AttorneyGeneral 's Department. 1. What is the pricing policy of each canteen. 2. Are charges for (a) cleaning, (b) electricity and power, (c) fuel, (d) rent or lease, (e) repairs and maintenance, (f) replacements of plant, furniture and fittings and (g) depreciation of plant, furniture and fittings included for determination of canteen prices: if not, what was the estimated cost of each of these items in each canteen during 1 976-77. 3. What staff is employed in each canteen, and what were the total wages and salaries paid to staff in each canteen in 1976-77. 4. Are all wages and salaries paid to canteen staff included for determination of canteen prices; if not, what percentage of total wages and salaries paid to canteen staff were included for determination of canteen prices for 1976-77. 5. What decision has been made by the AttorneyGeneral's Department concerning subsidisation of each canteen and what was the estimated cost of such subsidisation to each canteen for 1976-77. 6. Are the public and relatives and friends of departmental staff permitted to use each canteen. 7. If there are restrictions on its use how are they implemented in each canteen. 8. What staff from other Commonwealth Departments and instrumentalities regularly use each canteen. 9. 10) Are there any arrangements made by the AttorneyGeneral's Department for any staff canteen to be operated by private enterprise; if so, which canteens and under what terms and conditions. {: #subdebate-91-18-s1 .speaker-EE6} ##### Mr Viner:
LP -- The Attorney-General has provided the following answer to the honourable member's question: >There are no staff canteens operated by the AttorneyGeneral's Department, nor are there any arrangements made by the Attorney-General's Department for any staff canteen to be operated by private enterprise. {:#subdebate-91-19} #### Staff Canteens (Question No. 589) {: #subdebate-91-19-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Veterans' Affairs, upon notice, on 8 March 1978: {: type="1" start="1"} 0. 1 ) What staff canteens are operated by his Department. 1. What is the pricing policy of each canteen. 2. Are charges for (a) cleaning, (b) electricity and power, (c) fuel, (d) rent or lease, (e) repairs and maintenance, (f) replacements of plant, furniture and fittings and (g) depreciation of plant, furniture and fittings included for determination of canteen prices; if not, what was the estimated cost of each of these items in each canteen during 1 976-77. 3. What staff is employed in each canteen, and what were the total wages and salaries paid to staff in each canteen in 1976-77. 4. Are all wages and salaries paid to canteen staff included for determinaton of canteen prices; if not, what percentage of total wages and salaries paid to canteen staff were included for determination of canteen prices for 1976-77. 5. What decision has been made by his Department concerning subsidisation of each canteen and what was the estimated cost of such subsidisation to each canteen for 1976-77. 6. Are the public and relatives and friends of departmental staff permitted to use each canteen. 7. If there are restrictions on its use how are they implemented in each canteen. 8. What staff from other Commonwealth Departments and instrumentalities regularly use each canteen. 9. 10) Are there any arrangements made by his Department for any staff canteen to be operated by private enterprise; if so, which canteens and under what terms and conditions. {: #subdebate-91-19-s1 .speaker-ID4} ##### Mr Adermann:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Nil. The Government decided early in 1977 that all Commonwealth employee food services would be operated by Commonwealth Hostels Limited. Handover of these services was completed on 13.11.77. However in 1976-77 the cafeterias listed in (4) were operated by the Department of Veterans' Affairs. 1. Commonwealth employee food services are required to operate on a self-supporting financial basis, within the division of costs prescribed in Treasury (Finance) Directions, Section 8. (3)- {: type="1" start="5"} 0. Yes. 1. See (2) and (3) above. 2. The cafeterias are provided for the use of Commonwealth employees only. However, it has always been seen as reasonable for persons visiting a Department on official business to be allowed to use the food service facilities on such occasions, at the Department's invitation. 3. Signs are displayed at the entrances to each cafeteria indicating that the dining rooms are for the use of Commonwealth employees only. 4. In general, Commonwealth food services are available for the use of any Commonwealth employee. 5. No. See answer to ( 1 ) above. {:#subdebate-91-20} #### Staff Canteens (Question No. 591) {: #subdebate-91-20-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Home Affairs, upon notice, on 8 March 1978: {: type="1" start="1"} 0. 1 ) What staff canteens are operated by his Department. 1. What is the pricing policy of each canteen. 2. Are charges for (a) cleaning, (b) electricity and power, (c) fuel, (d) rent or lease, (e) repairs and maintence, (f) placements of plant, furniture and fittings and (g) depreciation of plant, furniture and fittings included for determination of canteen prices; if not, what was the estimated cost of each of these items in each canteen during 1 976-77. 3. What staff is employed in each canteen, and what were the total wages and salaries paid to staff in each canteen in 1976-77. 4. Are all wages and salaries paid to canteen staff included for determination of canteen prices; if not, what percentage of total wages and salaries paid to canteen staff were included for determination of canteen prices for 1 976-77. 5. What decision has been made by his Department concerning subsidisation of each canteen and what was the estimated cost of such subsidisation to each canteen for 1976-77. 6. Are the public and relatives and friends of departmental staff permitted to use each canteen. 7. If there are restrictions on its use how are they implemented in each canteen. 8. What staff from other Commonwealth Departments and instrumentalities regularly use each canteen. 9. Are there any arrangements made by his Department for any staff canteen to be operated by private enterprise; if so which canteens and under what terms and conditions. {: #subdebate-91-20-s1 .speaker-YF6} ##### Mr Ellicott:
LP -- The answer to the honourable member's question is as follows: >There are no staff canteens operated by the Department nor are there any arrangements made by the Department for any staff canteen to be operated by private enterprise. {:#subdebate-91-21} #### National Trachoma Program (Question No. 611) {: #subdebate-91-21-s0 .speaker-KDP} ##### Dr Everingham:
CAPRICORNIA, QUEENSLAND asked the Minister for Health, upon notice, on 9 March 1978. {: type="1" start="1"} 0. 1 ) Will he disclose the substance of communications between himself or his officers and the Queensland authorities, the Royal Australian College of Ophthalmologists, Professor Hollows, his interpreters, and other organisations or spokespersons, concerning the suspension and resumption of the national trachoma program in Queensland. 1. What delay, curtailment and costs were caused by suspension, including (a) pay in lieu of notice, (b) travel costs, (c) unemployment benefits and (d) loss of earnings to (i) the Government, (ii) Professor Hollows and (iii) persons attending for examinations made impossible by the suspension. 2. If the Government had referred back the Queensland authorities' complaints for more justification, was greater disruption of the program envisaged. 3. What facilities were provided by Queensland to replace the suspended interpreters immediately, and why were these not accepted. {: #subdebate-91-21-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. On 8 November 1977 *(Hansard,* pages 3024 and 3026) in answer to two questions without notice I fully disclosed the substance of communications between the various parties which led to the temporary deferment of the screening program in Queensland. The honourable member will no doubt be aware that the teams moved back into Queensland during the latter pan of May 1978. {: type="1" start="2"} 0. The delays that have resulted from the temporary deferment of the screening program in Queensland are: approximately eleven days screening time deferred until later, resulting from the decision that the teams should move to New South Wales and continue their screening survey there. the consequential need to await the end of the wet season before resuming activities in Queensland. As against these delays, it should be noted that survey and screening activities continued in New South Wales and extensive surgical procedures have been carried out throughout Australia. The program has not been curtailed. Officials of the Royal Australian College of Ophthalmologists estimate that the following additional expenditure was incurred because of the temporary deferment: No direct costs have been incurred by the Commonwealth Government or are known to have been incurred by Professor Hollows or persons scheduled to attend for examination. In programs of this nature there are unexpected circumstances which arise from time to time which cause additional costs but which are necessary in the overall perspective of maintaining efficiency in the program. {: type="1" start="3"} 0. Yes- In the operation of this project it is essential that there be ongoing State co-operation and involvement to ensure that follow-up treatment is undertaken. Disruption was minimised when arrangements were made almost immediately for the field teams to work in New South Wales. 1. The need for replacement liaison officers did not eventuate because, as explained in (3) above, it was decided that the teams should continue their work in New South Wales. {:#subdebate-91-22} #### Defence Forces Retirement Benefits Act (Question No. 642) {: #subdebate-91-22-s0 .speaker-JUS} ##### Mr McVeigh:
DARLING DOWNS, QUEENSLAND asked the Prime Minister, upon notice, on 14 March 1978: >Has he received and had examined by the relevant Government departments the final report of the R. N. Bonnett Inquiry into the Defence Forces Retirement Benefits Act; if so, when is it expected that the Government will act on the recommendations of the report. {: #subdebate-91-22-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: >Yes. I have received **Mr Bonnett** 's final Report of his inquiry into the Defence Forces Retirement Benefits Scheme. > >The Report raises a series of inherently complex technical and policy issues arising from fundamental changes made to the actuarial basis of the scheme and to the contributions and benefits arrangements since its commencement in 1 948. > >The Report is under active consideration and an announcement of the Government's intentions will be made when the present inquiries are completed. Commonwealth land in Werriwa Division (Question No. 668) {: #subdebate-91-22-s2 .speaker-6U4} ##### Mr E G Whitlam: am asked the Minister representing the Minister for Administrative Services upon notice, on 15 March 1978. {: type="1" start="1"} 0. 1 ) Which Departments and Authorities occupy land and property in the Electoral Division of Werriwa. 1. What are the area and location and what were the date and price of acquisition in each case. {: #subdebate-91-22-s3 .speaker-KVM} ##### Mr Street:
LP -- The Minister for Administrative Services has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. The Department's records show that the following Departments and Authorities occupy Commonwealth owned and leased land and property in the Electoral Division of Werriwa: Department of Administrative Services (Electoral Office) Department of Employ ment and Industrial Relations Department ofScience Department of Social Security Department of Transport Australian Postal Commission Australian Telecommunications Commission Defence Service Homes Commission Health Insurance Commission. It should be noted that the Department does not hold all records of the land and property holdings of Commonwealth Statutory Authorities. {: type="1" start="2"} 0. I am not prepared at this time to direct staff resources away from important day to day tasks to assemble detailed information on each property in the honourable member's electorate, hut information on some specific properties could be supplied on request, subject, of course, to the confidentiality of the information asked for. However, I am able to advise that there are more than 120 properties both Commonwealth owned and leased within the Electorate. The range of properties includes a number transferred at Federation, pans of the Holsworthy Army Manoeuvre Area acquired in 1913, housing for Defence personnel, telephone exchanges (and extensions), post offices and an aerodrome. {:#subdebate-91-23} #### Coastal Surveillance (Question No. 675) {: #subdebate-91-23-s0 .speaker-6U4} ##### Mr E G Whitlam: am asked the Minister for Productivity, upon notice, on 15 March 1978: {: type="1" start="1"} 0. 1 ) Which departments and authorities are represented on the interdepartmental committee on coastal surveillance and which department provides the chairman *(Hansard,* 8 March 1978, page 505). 1. What are its terms of reference. 2. When was it established. 3. When is it expected or required to report. {: #subdebate-91-23-s1 .speaker-6I4} ##### Mr Macphee:
Minister for Productivity · BALACLAVA, VICTORIA · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. The following departments are represented on the Committee: Prime Minister and Cabinet (Chair) Business and Consumer Affairs Primary Industry Transport Defence. {: type="1" start="2"} 0. and (3) On 17 January 1978 the Government directed that the Permanent Heads of the designated departments report to Government on the general question of the present approach to coastal surveillance, including strategy, equipment and use of the RAN and RAAF. 1. The report by Permanent Heads has been submitted to the Government, and an announcement of the Government's decisions was made on 9 July 1 978. Expenditure on Urban and Regional Development and the Environment (Question No. 678) {: #subdebate-91-23-s2 .speaker-6U4} ##### Mr E G Whitlam: am asked the Minister for Environment, Housing and Community Development, upon notice, on 15 March 1978: >Why were Federal Government outlays on urban and regional development and the environment less than half as great in the 8 months to 28 February 1978 as in the 8 months to 28 February 1977. {: #subdebate-91-23-s3 .speaker-QK5} ##### Mr Groom:
LP -- The answer to the honourable member's question is as follows: >Specific items of expenditure are not to be read as a measure of total Government activity under any particular functional head. Both the States and Local Government have been provided with increased levels of general revenue funds and therefore an increased capacity to involve these levels of government in urban and regional development The following matters must also be considered: > >Winding down of the Darwin Reconstruction Commission. > >Reduced spending on sewerage in the Australian Capital Territory as the Lower Molonglo Water Quality Con trol Centre nears completion. > >Decreased level of land development in Canberra. > >Scaling down of expenditure on growth centres to reflect more realistic population targets. > >Lower administrative costs, reflecting reductions in staf numbers and expenses. {:#subdebate-91-24} #### Telephone Services, Cranbourne (Question No. 707) {: #subdebate-91-24-s0 .speaker-L1V} ##### Mr Yates: asked the Minister for Post and Telecommunications, upon notice, on 16 March 1978: {: type="1" start="1"} 0. 1 ) Why is the Cranbourne area (STD Zone 059) outside the Melbourne metropolitan zone. 1. When does he intend to take steps to see that machinery and equipment are installed to include the Cranbourne area in the Melbourne metropolitan telephone zone. {: #subdebate-91-24-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. The costs of providing facilities for the interconnection of telephone exchanges increase with distance. There is therefore a limit to the distance over which Telecom Australia can economically provide local call access. In the case of the Melbourne metropolitan zone, local calls have not been provided to exchanges more than about 40 km radially from the GPO. This limit is already in excess of that which normally applies and is made possible by the greater concentration of subscribers in the metropolitan area. It has not been possible, however, to extend the zone to include the Cranbourne exchange which is approximately 43.5 km from the GPO. 1. Telecom Australia does not at this stage intend to expand the Melbourne extended local service area to include other exchanges. Late last year, however, my predecessor, the Hon. E. L. Robinson, requested the Commission to review the whole question of local call access so as to correct any anomalies. The question of extending metropolitan zones to include the larger developments adjacent to the existing defined areas is part of this review. Tribunals associated with the Department of Environment, Housing and Community Development (Question No. 7.8) {: #subdebate-91-24-s2 .speaker-PD4} ##### Mr N A Brown:
DIAMOND VALLEY, VICTORIA · LP wn asked the Minister for Environment, Housing and Community Development, upon notice, on 4 April 1 978: {: type="1" start="1"} 0. 1 ) Was his Department requested by the Administrative Review Council to provide information of the type described in Appendix III of the First Annual Report of the Administrative Review Council relating to the operation of tribunals created under legislation administered by his Department and tribunals administered or serviced by his Department during 1976-77: if so, did his Department respond to that request. 1. Will he now provide the information referred to in part(l). {: #subdebate-91-24-s3 .speaker-QK5} ##### Mr Groom:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Yes, the Department was so requested and responded by letter dated 17 March 1977. 1. No. As the Council's request has already been answered, it is not proposed to duplicate that reply now. {:#subdebate-91-25} #### Croatian Embassy' (Question No. 775) {: #subdebate-91-25-s0 .speaker-6U4} ##### Mr E G Whitlam: am asked the Minister for Post and Telecommunications, upon notice, on 4 April 1978: {: type="1" start="1"} 0. 1 ) What arrangements have been sought and/or made for the (a) delivery of mail and telegrams addressed to the self-styled 'Croatian Embassy' in Canberra, (b) registration of its publications for transmission as Category B newspapers and (c) rental of telephones in its name. 1. When was the attention of the Australian Postal Commission and the Australian Telecommunications Commission drawn to the expressions of concern on 23 December 1 977 by the Minister for Foreign Affairs at the establishment of a self-styled 'Croatian Embassy'. 2. What steps have been or are being taken to avoid the recurrence of the situation which arose concerning the socalled ' Rhodesia Information Centre ' in 1 973. {: #subdebate-91-25-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) (a) All mail and telegrams addressed to the self-styled Croatian Embassy in Canberra are delivered in accordance with the physical address details shown. No arrangements have been sought specifically for the delivery of postal articles addressed to the 'Embassy'. {: type="a" start="1"} 0. b) No publication of the self-styled Croatian Embassy in Canberra is registered in either Category B or Category A, nor has an application for registration of any publication been received. 1. Acting on advice from the Department of Foreign Affairs, an applicant for telephone service in the name of the Croatian Embassy was advised by Telecom that the application was not acceptable because it was understood that he was not a member of a diplomatic mission of a sovereign government with which Australia has established diplomatic relations. A service was subsequently applied for and provided in the personal name of the applicant. 1. The attention of the two Commissions was not specifically drawn to the statement made by the Minister for Foreign Affairs. There is no doubt, however, that both Commissions are well aware of government policy in these matters and strictly adhere to it. 2. There is no intention on the part of the Government or either Commission to precipitate a situation similar to the one to which the honourable member refers. Postal and telecommunications services will continue to be provided on the basis outlined in 1 (a)- (c) above. {:#subdebate-91-26} #### Land Commissions (Question No. 789) {: #subdebate-91-26-s0 .speaker-00ATA} ##### Mr Hodges:
PETRIE, QUEENSLAND asked the Minister for Environment, Housing and Community Development, upon notice, on 5 April 1 978: {: type="1" start="1"} 0. 1 ) With reference to his predecessor's answer to question No. 1221 *(Hansard,* 18 November 1976, page 2930) on the matter of land commissions, has the Commonwealth Government encouraged any additional land commissions or have there been any approaches by other States to establish them since 1975. {: type="1" start="2"} 0. Has his Department or any other Commonwealth Government or State Government body conducted any surveys on the effectiveness of land commissions in reducing the land price spiral for serviced building blocks since 1976. 1. Has there been any additional expenditure on land acquisition by land councils for 1976-77. 2. What is the estimated expenditure for 1 977-78. 3. What proportion of land acquisition expenditures has been borne by the Commonwealth. {: #subdebate-91-26-s1 .speaker-QK5} ##### Mr Groom:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1) The Federal Government has not encouraged any additional Land Commissions. However, a proposal has been received from Queensland concerning the establishing of a scheme to fund urban land development. 1. My Department is carrying out continuous monitoring of prices for serviced housing blocks in major metropolitan areas. The Committee of Inquiry into Housing Costs has been established to examine land and housing issues in Australia. That Committee is expected to evaluate public policies relating to land development and to provide a framework against which an appropriate Commonwealth role can be developed. The States themselves of course are responsible for conducting ongoing evaluation as part of their own management procedures. {: type="1" start="3"} 0. Expenditure on land acquisition in 1976-77 by Land Commissions/Councils has been: These figures include a small proportion of grant funds for purchase of open space land and do not include capitalised interest. {:#subdebate-91-27} #### Refugees (Question No. 847) {: #subdebate-91-27-s0 .speaker-SH4} ##### Dr Klugman: asked the Minister for Immigration and Ethnic Affairs, upon notice, on5 April 1978: >What were the countries of origin of the 300,000 persons admitted into Australia as refugees or from refugee-type situations since 1945. {: #subdebate-91-27-s1 .speaker-0I4} ##### Mr MacKellar:
LP -- The answer to the honourable member's question is as follows: {:#subdebate-91-28} #### Skilled Labour (Question No. 851) {: #subdebate-91-28-s0 .speaker-KSF} ##### Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP asked the Minister for Employment and Industrial Relations, upon notice, on 5 April 1978: {: type="1" start="1"} 0. What industries are likely to be most affected by a future shortage of skilled labour. 1. To what extent are they likely to be affected. 2. What is the Government doing to offset this expected future shortage of skilled labour. 3. How effective have Government initiatives been to date. {: #subdebate-91-28-s1 .speaker-KVM} ##### Mr Street:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) to (4) The future structure of industry and any related shortages of skilled labour depend upon a large number of inter-related variables. Some of the main factors include the rate of growth of the economy, investment, labour market participation rates, consumer demand and overseas trade; the development and application of technology; the level and kind of assistance provided to particular industries; and increases in labour costs and labour-related costs. Both the Inquiry into Education and Training, chaired by Professor Williams, and the Study Group on Structural Adjustment, chaired by **Sir John** Crawford, are giving attention to future supply and demand for manpower. Their reports are expected later this year. The Department of Employment and Industrial Relations produces twice a year short-term forecasts for up to 3 years, of the demand for a range of occupational groups. These forecasts assist immigration selection officers and officers of my Department dealing with applications for vocational training assistance. It is hoped that the development of the IMPACT project will enable us to acquire a better understanding of the kinds of changes in industry and manpower requirements that are likely to emerge in the medium term. Regarding training for the skilled trades, the following measures have been taken: The Commonwealth Rebate for Apprentice Full-time Training (CRAFT) was introduced in January 1977. CRAFT provides rebates for employers who release apprentices during paid time for technical education and approved off-the-job training, and allowances to apprentices compelled to live away from home to follow their apprenticeship. In the year 1976-77, the national apprentice intake increased significantly over the previous year. In 1977-78, a further small increase over the 1976-77 figure has been recorded. However, it is apparent that this national improvement embraces wide variations between States and the Territories and my Departure will be studying this aspect further in the near future. The Group One- Year Scheme provides for apprentices taken on by private employers to receive their first year of training in a Commonwealth establishment before returning to their employers to complete the term of apprenticeship. The Commonwealth pays the wages and all related training costs during the year, the employers remaining responsible only for Workers Compensation premiums. The Scheme was introduced in 1975 on a pilot basis and has since been expanded. Currently, some 220 apprentices are being trained in this way. Additionally, in 1978, the scheme has been extended on a pilot basis to certain State Government establishments in South Australia and Queensland, the Commonwealth refunding costs on the same basis. This extension is still under development, but currently some 54 apprentices have been placed for training. The Special Assistance Program for Apprentices under NEAT provides assistance to employers in order to sustain apprentices in training whose employment is jeopardised by work shortage or temporary financial problems encountered by their employers. At the end of June 1978, employers of 871 apprentices were being assisted in this way. At my request, the National Training Council has for some months been studying the possibility of supplementing the output to the skilled labour force from apprenticeship. The operative word here is "supplementing'. It is not the intention that any such proposal should replace apprenticeship. I expect to receive proposals from the Council in the very near future for consideration and discussion with all parties concerned. {:#subdebate-91-29} #### Community Youth Support Schemes (Question No. 865) {: #subdebate-91-29-s0 .speaker-CV4} ##### Mr Jacobi:
HAWKER, SOUTH AUSTRALIA asked the Minister for Employment and Industrial Relations, upon notice, on 2 May 1978: {: type="1" start="1"} 0. 1) Is it a fact that Community Youth Support Schemes (CYSS) groups in South Australia are purchasing material and equipment for their programs through local government bodies to avoid paying sales tax, hence ensuring that their financial resources are used to maximum efficiency. 1. Is it also a fact that in doing so the material and equipment purchased by these groups must remain the property of the respective local government body. 2. If so, is the effectiveness of CYSS being negated. 3. Can he give an assurance that the situation will be investigated at the earliest opportunity. 4. If so, will he consider altering the Act to make provision for the purchasing activities of the CYSS groups and to allow them to retain ownership of material and equipment purchased. 5. Alternatively, will he investigate the possibility of altering the appropriate legislation to allow CYSS groups to undertake their own purchasing of materials and equipment free of sales tax. {: #subdebate-91-29-s1 .speaker-KVM} ##### Mr Street:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Investigation of all projects in South Australia has revealed that only those projects directly sponsored by local government bodies have purchased materials and equipment free of sales tax. To date, only 4 projects have been involved. 1. No. Grants made under CYSS are made upon the condition that items of equipment valued at more than $ 100 are to be given to the Commonwealth at the completion of the project. 2. Not applicable. 3. , (5) and (6) My Department is currently investigating the desirability and feasibility of exempting from sales tax, the material and equipment purchases of all CYSS projects. As a part of this investigation the advice of the Commissioner for Taxation is being sought. {:#subdebate-91-30} #### Mr Alexander Emil Vrisakis (Question No. 874) {: #subdebate-91-30-s0 .speaker-SH4} ##### Dr Klugman: asked the Minister representing the Attorney-General in the House of Representatives, upon notice, on 6 April 1 978: {: type="1" start="1"} 0. 1 ) Is Alexander Emil Vrisakis registered as a solicitor in the Australian Capital Territory and New South Wales. 1. Has the Attorney-General's attention been drawn to a statement by **Mr Justice** Holland in the Supreme Court of New South Wales on 17 March 1978 that there was a prima facie case of a breach of fiduciary duty by **Mr Vrisakis** both as a partner and as a legal adviser and further by a failure to disclose or draw attention to the fact that he was receiving preferential treatment in a deed of guarantee. 2. Can the Attorney-General say whether over 400 members of the public lost $3,500 each as the result of **Mr Vrisakis** 'action. 3. Can the Attorney-General also say whether **Mr Vrisakis** was a prominent opponent of the Corporations and Securities Industry Bill 1975 introduced by the Whitlam Government, but not passed by the Senate. {: #subdebate-91-30-s1 .speaker-EE6} ##### Mr Viner:
LP -- The Attorney-General has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) I am informed that the name Alexander Emil Vrisakis is not on the Roll of Barristers and Solicitors of the Supreme Court of the Australian Capital Territory. I understand that he is enrolled as a solicitor in New South Wales. 1. I am aware of a Press report in the Australian Financial Review of 20 March 1978 of statements, of the kind referred to, attributed to **Mr Justice** Holland in the Supreme Court of New South Wales on 17 March 1978. (3)I have no knowledge of this matter other than a reference to it in the Press report mentioned in ( 2 ), above. 2. I am not aware whether or not **Mr Vrisakis** was a prominent opponent of the Corporations and Securities Industry Bill 1 975.I am not concerned to discover also whether or not he was. 3. I am not responsible for conduct of New South Wales solicitors. {:#subdebate-91-31} #### Violent Incidents Involving Explosives (Question No. 900) {: #subdebate-91-31-s0 .speaker-VE4} ##### Dr Blewett:
BONYTHON, SOUTH AUSTRALIA asked the Prime Minister, upon notice, on 10 April 1978: {: type="1" start="1"} 0. 1 ) What was the time and location of each of the 40 or more violent incidents involving the use of explosives that occurred in Australia during the last 15 years and which were mentioned by him in his **Sir Robert** Menzies lecture. 1. In these incidents how many persons (i) were killed and (ii) were injured and what was the extent of property damage. 2. 3 ) In how many of these incidents have there been arrests and convictions. 3. How many persons were convicted in relation to these incidents. {: #subdebate-91-31-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) to (4) The reference to the 40 or more violent incidents involving the use of explosives referred to in my 1978 **Sir Robert** Menzies lecture was extracted from a confidential Commonwealth Police Force publication entitled ' Politically Motivated Violence and Vandalism in Australia 1963-1978' which was prepared by the Australia Crime Intelligence Centre in March 1978. Some of these incidents would stand out vividly in the minds of all honourable members. The reference was included to demonstrate that quite apart from the tragic event which occurred outside the Sydney Hilton Hotel earlier this year, our recent history has not been free of violent acts. As indicated in the lecture terrorism is unfortunately a fact of life both here in Australia and overseas and it may come to pose ever more serious threats to our open society, our values and way of life. Questions on Notice (Question No. 904) {: #subdebate-91-31-s2 .speaker-6U4} ##### Mr E G Whitlam: am asked the Prime Minister, upon notice, on 10 April 1978: {: type="1" start="1"} 0. 1 ) Has Cabinet decided that questions on notice should, except in special cases, be answered within a month *(Hansard,* 7 September 1977, page 80 1 ). 1. Why has he not answered my question which first appeared on the notice paper on 7 September 1977 as No. 1390 and since on 22 February 1978 as No. 78. {: #subdebate-91-31-s3 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) As the honourable member would know, it is not the Government's practice to comment on what has, or has not, been the subject of Cabinet discussions. (2)I refer the honourable member to the answer to question number 78, which appeared in *Hansard,* 1 1 April 1978, page 1408. {:#subdebate-91-32} #### Coal Exploration, Queensland (Question No. 933) {: #subdebate-91-32-s0 .speaker-6U4} ##### Mr E G Whitlam: am asked the Minister for Trade and Resources, upon notice, on 13 April 1978: {: type="1" start="1"} 0. 1 ) Has he noted that on 3 1 March 1977 *(Hansard,* page 790) the then Treasurer told me that the Queensland Government and the Deputy Prime Minister in his capacity as Minister for National Resources had had discussions on the exploration rights over the Oakey Creek coal area in the Bowen Basin which had been granted to Houston Oil and Minerals of Australia Ltd without tender. 1. Has he also noted that on 6 and 1 1 April 1978 a letter and statutory declaration were tabled in the Queensland Parliament from **Mr G.** J. Werner, a former coal exploration supervisor for the company, alleging that the Premier brought pressure to bear on the company that, in the event of it getting exploration rights in Queensland, it should use a drilling rig owned by the Premier's private company. 2. On what dates, at what places and with which Queensland State Ministers did he have the discussions. {: #subdebate-91-32-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. Yes. 2. I have had no discussions with Queensland State Ministers on these matters, but my department contacted the Queensland Mines Department on 29 March 1977 seeking information about reports published that day concerning the granting of exploration rights over the Oakey Creek area in the Bowen Basin in Queensland. Apparently due to a misunderstanding, the then Treasurer indicated in Parliament on 31 March 1977 that he understood I had discussed the matter with the Queensland Government. {:#subdebate-91-33} #### Potato Industry: Use of Machinery (Question No. 950) {: #subdebate-91-33-s0 .speaker-L1V} ##### Mr Yates: asked the Minister for Industry and Commerce, upon notice, on 4 May, 1 978: {: type="1" start="1"} 0. How many (a) potato harvesting machines and (b) planting and lifting machines made in Australia are sold in any one year. 1. How many planting and lifting machines are imported. 2. Has the Government considered imposing a quota for imported machines so that Australian production of these machines remains economically viable and protects the jobs of those in the Australian potato planting and lifting machinery industry. {: #subdebate-91-33-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. The Australian Bureau of Statistics has advised that available statistics do not show the number of potato harvesting, planting and lifting machines made and sold in Australia. 1. The Australian Bureau of Statistics has advised that statistics on imports of agricultural planting and lifting machines are not available. 2. No. The industry has not lodged an application for additional assistance supported by the necessary information. {:#subdebate-91-34} #### Australian Littoral Society: Funding for Research (Question No. 965) {: #subdebate-91-34-s0 .speaker-00ATA} ##### Mr Hodges: asked the Minister for Environment, Housing and Community Development, upon notice on 2 May 1 978: {: type="1" start="1"} 0. 1 ) Is the Queensland Littoral Society receiving any Commonwealth funds for research projects during 1 977-78; if so, what are those projects, 1. Has there been any correspondence between the Director of the Queensland Littoral Society and the Commonwealth Government concerning the refusal of the Queensland Government to pass on Federal funds to the Queensland Littoral Society for research work; if so, what is the nature of this correspondence. {: #subdebate-91-34-s1 .speaker-QK5} ##### Mr Groom:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) The Australian Littoral Society did not receive funds in 1977-78 from any program administered by my Department. 1. The Director of the Australian Heritage Commission did receive a letter from the Director of the Australian Littoral Society in February on a research project, after the Society had learned that the Co-ordinator General's Department had proposed that the project be carried out by the Queensland Fisheries Service. The letter requested that the funds be allocated to the Society for the project, rather than to the Fisheries Service. {:#subdebate-91-35} #### Citizenship (Question No. 1009) {: #subdebate-91-35-s0 .speaker-KH4} ##### Mr BARRY JONES:
LALOR, VICTORIA · ALP asked the Minister for Immigration and Ethnic Affairs, upon notice, on 3 May 1978: {: type="1" start="1"} 0. Is it a fact that total absences from Australia for periods in excess of 3 months in the 12 months period immediately preceding the grant of an Australian Citizenship Certificate, are regarded as breaking continuity of residence unless the applicant can establish that special circumstances were associated with the case. 1. If so, how many applications have been rejected on the grounds of absences which exceeded 3 months in each year since 1969. 2. What special circumstances would be regarded as relevant to set aside the general rule and how are these special circumstances evaluated. {: #subdebate-91-35-s1 .speaker-0I4} ##### Mr MacKellar:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Yes. Section 14(l)(c)ofthe Citizenship Act requires an applicant for a Certificate of Australian Citizenship to have been resident in Australia continuously throughout the period of one year immediately preceding the date of the grant of the certificate. Absences from Australia of up to three months are not generally considered sufficient to break the required period of continuous residence. 1. Statistics are not available. 2. Factors taken into account when considering cases involving periods of absences in excess of three months relate to the total length of the applicants residence in Australia, any other periods of absence, the reasons for the absence during the immediately preceding twelve months and the interests retained in Australia by way of family, home and business while away. {:#subdebate-91-36} #### Mining, Western Australia (Question No. 1026) {: #subdebate-91-36-s0 .speaker-9E4} ##### Mr Dawkins:
FREMANTLE, WESTERN AUSTRALIA asked the Minister for Trade and Resources, upon notice, on 5 May 1 978: >In relation to each of the following Western Australian mining projects, (a) Agnew Mining (Teutonic Bore coppernickel mine), (b) Alcoa (Wagerup alumina refinery), (c) Alumax (Mitchell Plateau bauxite mining and alumina refinery, (d) Alwest (Worsley alumina refinery), (e) Amax and Partners (Forrestania nickel project), (f) Anglo American (Sally Malay copper-nickel prospect), (g) Aquitaine (Sorby Hills zinc prospect), (h) BHP (Deepdale iron ore), (i) EZ Industries (Golden Grove copper prospect), (j) Goldsworthy Mining (Area C iron ore), (k) Kimberley Ventures (Koongie Park copper deposits), (1) Hamersley Iron (Expansion program), (m) Mt Newman Mining (Expansion program), (n) NW Shelf Developments (Natural gas), (o) Robe River (Expansion program ), ( p) Texasgulf-Hanwright (Marandoo iron ore), (q) Western Titanium (GabbinKoorda (kaolin deposits and Capel ilmenite), (r) Western Mining (Yeelirrie uranium), (s) Minefields Exploration (Mt Mulgine wolfram prospect) and (t) Agnew-Clough (Coates Siding vanadium deposits), (i) when is development expected to commence, (ii) what is the estimated investment involved, (iii) what will be the size of the construction workforce and (iv) what will be the size of the permanent operational workforce. {: #subdebate-91-36-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="a" start="i"} 0. The iron ore expansion programs included in the honourable member's list have already commenced; namely, the expansions by Hamersley Iron, Mt Newman and Robe River. Plans for the development of two bauxite/alumina projects listed- Alcoa (Wagerup) and Alwest (Worsley)- are advanced although firm dates for the commencement of development have not been announced. The development of the North West Shelf gas fields is presently the subject of an extensive feasibility study. Should a decision to proceed be taken, after completion of the study, development is likely to commence in the 1979 to 1980 period. With regard to Yeelirrie, subject to the necessary Government approvals, Western Mining Corporation contemplate construction commencing about 1981. For other projects listed, many of which are still the subject of exploration, no firm information is available as to an estimated date of development. The timing of the development of these projects will depend on, among other things, recovery in world markets. {: type="i" start="ii"} 0. Estimates of the investment involved in the projects that have commenced are as follows: Note: The estimates of investment in mining projects come from various public sources- some estimates may include provision for future inflation while other estimates may be expressed in terms of present-day dollars. {: type="i" start="iii"} 0. and (iv) Details of the sizes of the construction and operational workforces involved in the listed projects, where this is known, is set out below: {:#subdebate-91-37} #### Motor Vehicle Manufacturing: Local Content (Question No. 1031) {: #subdebate-91-37-s0 .speaker-5J4} ##### Mr Scholes: asked the Minister for Industry and Commerce, upon notice, on 4 May 1978: >Has the Government received representations from any of the participants in the motor vehicle manufacturers plan for consideration of an alteration which would permit withdrawal from the plan and re-entry as a new entrant at lower rates of local content. {: #subdebate-91-37-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: > Some passenger motor vehicle manufacturers have put submissions to the Government dealing with various problems they are encountering in operating under the Plan and certain possible options they see as available to them in relation to their future operations. These submissions are presently under close study by the Government and decisions on them will be made at the earliest possible time. {:#subdebate-91-38} #### Department of Immigration and Ethnic Affairs (Question No. 1041) {: #subdebate-91-38-s0 .speaker-JNG} ##### Dr Cass: asked the Minister for Immigration and Ethnic Affairs, upon notice, on 5 May 1978: {: type="1" start="1"} 0. How many officers in his Department at (a) second division level, (b) class 1 1 level, and (c) class 6 level are first generation migrants. 1. How many of these officers, at each of these levels, come from non-English speaking migrant backgrounds. 2. How many women were there at the (a) second division level, (b) class 1 1 level, (c) class 6 level, and (d) fourth division level, in his Department as at 1 January 1978. 3. What are the ethnic backgrounds and qualifications of the 3 most senior officers in the Ethnic Affairs Branch of his Department. {: #subdebate-91-38-s1 .speaker-0I4} ##### Mr MacKellar:
LP -- In my answer to the honourable member's question I advised in respect to question 3 that all of the information was not readily available in the form sought and that I would provide the information when it was obtained. The information is now available and the answer to question 3 of the honourable member's question is: >As at 1 January 1 978 there were no women employed at the second division level and the class 1 1 level. There were 2 1 women employed at the class 6 level and 283 women employed in the 4th division. {:#subdebate-91-39} #### Commonwealth Property, Broadmeadows (Question No. 1051) {: #subdebate-91-39-s0 .speaker-K9J} ##### Mr Keith Johnson:
BURKE, VICTORIA · ALP asked the Minister representing the Minister for Administrative Services, upon notice, on 5 May 1978: {: type="1" start="1"} 0. With reference to the Minister's answer to question No. 1516 *(Hansard,* 1 October 1977, page 2199), is the Minister able to say whether on 3 March 1 978 the Victorian Minister for Health advised the Broadmeadows City Council that the Hospital and Charities Commission has a firm commitment with the Department of Administrative Services for the eastern end of the former Serum Laboratory land in Camp Road as the site for a future hospital in the Broadmeadows area. 1. Did the Chief Property Officer of the Department of Administrative Services write to the Hospital and Charities Commission saying that he would be in contact again when he received the Commonwealth 's valuation. 2. Is part of the land formerly occupied by the Serum Laboratories to be disposed of to the Hospital and Charities Commission; if so, (a) when was the decision made, (b) when were negotiations commenced, (c) at what stage are negotiations now, (d) when will negotiations be concluded and (e) what is the area and value of the land to be transferred. {: #subdebate-91-39-s1 .speaker-KVM} ##### Mr Street:
LP -- The Minister for Administrative Services has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) I am not aware of the terms of any communication between the Victorian Minister for Health and the Broadmeadows City Council relating to the former Commonwealth Serum Laboratory land at Broadmeadows. 1. Yes. 2. (a) and (b) No decision to dispose of part of the former CSL land has yet been made. Correspondence with the Hospitals and Charities Commission commenced on 6 September 1977. {: type="a" start="c"} 0. and (d) The Department of Administrative Services has advised the Commission that it is prepared to recommend disposal at valuation. Negotiations will conclude if and when agreement on price is reached. 1. The area being considered for disposal is 27.17 hectares. The value of the land is a matter for negotiation between the parties. National Disasters: Provision of Stores and Equipment by Defence Forces (Question No. 1063) {: #subdebate-91-39-s2 .speaker-JVS} ##### Mr Neil:
ST GEORGE, NEW SOUTH WALES asked the Minister for Defence, upon notice, on 5 May 1978: {: type="1" start="1"} 0. 1 ) What stores or equipment have been given by the defence forces to individuals, civilian groups, State Governments or other Commonwealth Departments during national disasters since March 1976. 1. What is the value of these items and which costs have been recovered. {: #subdebate-91-39-s3 .speaker-4U4} ##### Mr Killen:
Minister for Defence · MORETON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) and (2) I refer the honourable member to the following table. {:#subdebate-91-40} #### Housing (Question No. 1068) {: #subdebate-91-40-s0 .speaker-JVS} ##### Mr Neil: asked the Minister for Environment, Housing and Community Development, upon notice: >How many persons are estimated to be currently repaying housing loans. {: #subdebate-91-40-s1 .speaker-QK5} ##### Mr Groom:
LP -- The answer to the honourable member's question is as follows: >No comprehensive information is collected on the number of persons or households repaying housing loans. > >Estimates for the six State capital cities can be obtained from the Household Expenditure Survey of 1974-75 conducted by the Australian Bureau of Statistics. On the basis of that survey it was estimated that in 1974-75 in the six State capital cities, 1,073,000 households (41 percent of all households in those cities) were repaying housing loans. A further 75 1,700 households in the State capital cities (29 per cent of all households in these cities) own their dwellings outright. > >Information is also available on the value of outstanding housing loans from savings banks and permanent building societies. As at 3 1 December 1977, there was $ 1 3,244m outstanding in housing loans from these institutions. Information on the value of outstanding housing loans from trading banks and other institutions providing housing finance is not available. {:#subdebate-91-41} #### Unemployment Statistics (Question No. 1071) {: #subdebate-91-41-s0 .speaker-EH4} ##### Mr Howe:
BATMAN, VICTORIA asked the Minister for Employment and Industrial Relations, upon notice, on 8 May 1978: {: type="1" start="1"} 0. 1 ) Does the Government intend to discontinue the publication of the numbers of persons registered as unemployed with the Commonwealth Employment Service offices on a monthly basis; if so, what are the Government's plans in terms of replacing existing CES regional unemployment statistics. 1. If monthly figures are to be continued, what plans are currently in progress to improve their detail and accuracy. {: #subdebate-91-41-s1 .speaker-KVM} ##### Mr Street:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) At the present time the Government intends that Commonwealth Employment Service unemployment statistics by employment office area continue to be collected and published, 1. The Department is currently in the process of introducing a computerised system for the collection of statistics, which will improve their detail and accuracy. The system recently received the support of the Interdepartmental Committee on Automatic Data Processing and implementation is planned to commence initially in Queensland in April 1979. {:#subdebate-91-42} #### Importation of Game Eggs (Question No. 1093) {: #subdebate-91-42-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Health, upon notice, on 9 May 1978: >How were the game eggs referred to in his press release of 23 March 1978 illegally imported into Australia and why were they not discovered by quarantine officials on their entry into Australia. {: #subdebate-91-42-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: >I have been informed that the game eggs were brought into Australia in hand luggage in a wicker-type basket with shaving gear. The eggs were not declared by the traveller concerned on his Customs declaration form. The hand luggage concerned was not included in baggage inspected at the Customs barrier at Brisbane airport. It is not practicable to inspect the baggage of all travellers entering Australia. {:#subdebate-91-43} #### Public Servants: Payment of Telephone Charges (Question No. 1099) {: #subdebate-91-43-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister representing the Minister for Administrative Services, upon notice, on 9 May 1978: {: type="1" start="1"} 0. 1 ) How many officers and employees of the Department of Administrative Services have their home telephone rentals or charges fully or partially paid by the Department. 1. What was the cost to the Department of this expenditure in 1976-77. {: #subdebate-91-43-s1 .speaker-KVM} ##### Mr Street:
LP -- The Minister for Administrative Services has provided the following answer to the honourable member's question. {: type="1" start="1"} 0. 1 ) 238 officers and employees of the Department of Administrative Services at present have their home telephone rentals or charges fully or partially paid by the Department. 1. The cost to the Department of Administrative Services for telephone services installed in the residences of officers and employees in 1976-77 was $36,691. This amount includes $2,260 in respect of services in residence of officers whose functions were transferred to the Department of Home Affairs when it was created on 20 December 1977. {:#subdebate-91-44} #### Public Servants: Payment of Telephone Charges (Question No. 1109) {: #subdebate-91-44-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Health, upon notice, on 9 May 1 978: {: type="1" start="1"} 0. 1 ) How many officers and employees of his Department have their home telephone rentals or charges fully or partially paid by the Department. 1. What was the cost to the Department of this expenditure in 1976-77. {: #subdebate-91-44-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 498 officers and employees of the Department of Health have their home telephone rentals or charges fully or partially paid by the Department. These are staff who must be able to be contacted by telephone outside of normal hours of duty in relation to special services provided by the Department, and for emergencies. These include: medical and para-medical services at hospitals and medical centres in the Northern Territory; quarantine clearances of aircraft and ships; diagnostic pathology services to hospitals and medical practitioners at 1 5 country centres throughout Australia. 1. $78,900. {:#subdebate-91-45} #### Public Servants: Payment of Telephone Charges (Question No. 1115) {: #subdebate-91-45-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Post and Telecommunications, upon notice, on 9 May 1978: {: type="1" start="1"} 0. 1 ) How many officers and employees of his Department have their home telephone rentals or charges fully or partially paid by the Department. 1. What was the cost to the Department of this expenditure in 1976-77. {: #subdebate-91-45-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) sixty-six. 1. $8,500. {:#subdebate-91-46} #### Public Servants: Payment of Telephone Charges (Question No. 1117) {: #subdebate-91-46-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Productivity, upon notice, on 9 May 1978: {: type="1" start="1"} 0. 1 ) How many officers and employees of his Department have their home telephone rentals or charges fully or partially paid by the Department. 1. What was the cost to the Department of this expenditure in 1976-77. {: #subdebate-91-46-s1 .speaker-6I4} ##### Mr Macphee:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) seventy-three. 1. $10,806.62. Commonwealth Land in Lalor Division (Question No. 644) {: #subdebate-91-46-s2 .speaker-KH4} ##### Mr BARRY JONES:
LALOR, VICTORIA · ALP asked the Minister representing the Minister for Administrative Services, upon notice, on 14 March 1978: >What is the total area of land in the Electoral Division of Lalor owned by Commonwealth departments or instrumentalities, including: > >the area and location of each piece of land; > >the controlling authority in each case; > >the purpose for which the land- > >was intended to be used; > >is actually used at present and, > >is intended to be used and; > >the details of rates in respect of each piece of land paid to the relevant local government authority or the Melbourne and Metropolitan Board of Works. {: #subdebate-91-46-s3 .speaker-KVM} ##### Mr Street:
LP -- The Minister for Administrative Services has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) The total area of land in the Electoral Division of Lalor owned by the Commonwealth or Commonwealth Statutory Authorities is 2022.758 hectares. 1. The attached schedule of properties shows in respect of each property: name location user department or authority area of property purpose of acquisition current use proposed long term use rates paid Property: St Albans Post Office. Location: Main Road, West St Albans 302 1 . Department or Instrumentality: Postal Commission. Total area: 0. 1 1 5 1 hectares. Purpose of acquisition: Post Office. Current Commonwealth use: Post Office Official, Vacant Urban Land. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $120.01, Council: Nil, Other: Nil. Property: St Albans Telephone Exchange. Location: 1 Victoria Crescent, St Albans 302 1 . Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.1831 hectares. Purpose of acquisition: Automatic Exchange. Current Commonwealth use: Automatic Exchange. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other: Nil. Property: Altona Telephone Exchange. Location: 53a Blyth Street, Altona 30 1 8. Department or Instrumentality: Australia., telecommunications Commission. Total area: 0. 1 100 hectares. Purpose of acquisition: Exchange (Telephone). Current Commonwealth use: Telephone Exchange **(Major).** Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $85.00, Council: Nil, Other: Nil. Property: Altona Post Office. Location: 1 1 5a Queen Street, Altona 30 1 8. Department or Instrumentality: Postal Commission. Total area: 0.0898 hectares. Purpose of acquisition: Post Office. Current Commonwealth use: Post Office Official. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $176.71, Council: Nil, Other: Nil. Property: Braybrook-House. Location: 229 Ballarat Road, Braybrook 30 1 9. Department or Instrumentality: Administrative Services. Total area: 0.0468 hectares. Purpose of acquisition: Storage Non-Defence. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $33.30, Council: $89.52, Other: Nil. Property: Deer Park Community Health Centre. Location: Station Street, Deer Park 3023. Department or Instrumentality: Health. Total area: 1.2899 hectares. Purpose of acquisition: Munitions. Current Commonwealth use: Health Centre. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other: Tenant pays rates. Property: Deer Park Explosives Factory. Location: Ballarat Road, Deer Park 3023. Department or Instrumentality: Productivity. Total area: 499.3640 hectares. Purpose of acquisition: Munitions. Current Commonwealth use: Munition Manufacture. Proposed short term use: As above. Proposed long term use: Munition Manufacture, not known. Rates paid: MMBW: $975.00, Council: Nil, Other: Nil. Property: Deer Park Weapons Research Est. Location: Robinsons Road, Deer Park, 3023. Department or Instrumentality: Defence- Army. Total area: 262.1880 hectares. Purpose of acquisition: Munitions. Current Commonwealth use: Weapons Research. Proposed short term use: As above. Proposed long term use: Not known. Rates paid: MMBW: Nil, Council: Nil, Other: Nil. Property: Braybrook- Flats. Location: 16-18 Lawn Crescent, Braybrook, 3019 Department or Instrumentality. Employment and Industrial Relations. Total Area: 0.2491 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Migrant Flats. Proposed short term use: Migrant Flats, Vacant Urban Land, Residential, Car Park. Proposed long term use: As above. Rates Paid: MMBW: $2,056.28, Council: $1,596.00, Other: Nil. Property: Braybrook- House. Location: 227 Ballarat Road, Braybrook 3019. Department or Instrumentality: Administrative Services. Total Area: 0.0468 hectares. Purpose of acquisition: Storage Non-Defence. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $33.30, Council: $89.52, Other Nil. Property: Deer Park Telephone Exchange. Location: Station Road, Deer Park, 3023. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0. 1 844 hectares. Purpose of acquisition: Exchange (Telephone) Current Commonwealth use: Telephone Exchange **(Major).** Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $280.66, Council: Nil, Other Nil. Property: Sunshine Line Depot. Location: 70 Sydney Street, Sunshine, 3020. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0. 1 874 hectares. Purpose of acquisition: Line Depot. Current Commonwealth use: Line Depot. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $269.93, Council: Nil, Other Nil. Property: Derrimut Magazine Area. Location: Palmer's Road, Derrimut 3023 Department or Instrumentality: Productivity. Total area: 262.5373 hectares. Purpose of acquisition: Testing Facilities, NonDefence. Current Commonwealth use: Houses, Munitions- Storage. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $103.50 (On Houses), Council: $146.00 (On Houses), Other: Tenant pays on 262 hectares of grazing land. Property: Derrimut Sewerage Pumping Station. Location: Fitzgeralds Road, Derrimut, 3022. Department or Instrumentality: Productivity. Total area: 0.9844 hectares. Purpose of acquisition: Sewerage. Current Commonwealth use: Sewerage, other. Proposed short term use: Not known. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other Nil. Property: Derrimut Telephone Exchange. Location: Palmer Road, Derrimut, 30 12. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.0462 hectares. Purpose of acquisition: Munitions. Current Commonwealth use: Automatic Exchange, Vacant Urban Land. Proposed short term use: Automatic Exchange **(Major), Vacant Urban Land.** Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other: Nil. Property: Laverton- House. Location: 2 Woods Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0647 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $118.50, Other Nil. Property: Laverton- House. Location: 4 Woods Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.063 1 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other. Nil. Property: Laverton- House. Location: 6 Woods Street, Laverton, 3028. Department or Instrumentality: Defence- Air. Total area: 0.0646 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other Nil. Property: Laverton- House. Location: 8 Woods Street, Laverton, 3028 Department or Instrumentality: Defence- Air. Total area: 0.0645 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other: Nil. Property: Laverton- House. Location: 10 Woods Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0645 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $86.58, Council: $110.00, Other. Nil. Property: Laverton- House. Location: 12 Woods Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0642 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $113.80, Other: Nil. Property: Laverton- House. Location: 25 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0607 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $86.58, Council: $110.00, Other: Nil. Property: Laverton- Houses. Location: 27 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0607 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates. paid: MMBW: $94.34, Council: $113.80, Other Nil. Property: Laverton- House. Location: 29 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0526 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $113.80, Other: Nil. Property: Laverton- House. Location: 13 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0640 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $113.80, Other: Nil. Property: Laverton- House. Location: 1 5 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0640 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $86.58, Council: $110.00, Other Nil. Property: Laverton- House. Location: 1 7 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0640 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $113.80, Other Nil. Property: Laverton- House. Location: 1 9 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0556 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other Nil. *Property:* Laverton- House. Location: 23 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0607 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $113.80, Other: Nil. Property: Laverton- House. Location: 2 1 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0526 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $109.88, Council: $135.90, Other: Nil. Property: Laverton- House. Location: 1 1 Charlesworth Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0556 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $104.34, Council: $132.00, Other Nil. Property: Laverton- House. Location: 1 Armstrong Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0556 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $86.58, Council: $110.00, Other: Nil. Property: Laverton- House. Location: 5 Armstrong Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.08 14 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other: Nil. Property: Laverton- House. Location: 3 Armstrong Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0599 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $106.56, Council: $129.40, Other: Nil. Property: Laverton- House. Location: 1 Wright Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0685 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $86.58, Council: $110.00, Other: Nil. Property: Laverton- House. Location: 3 Wright Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0680 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $95.23, Council: $112.50, Other: Nil. Property: Laverton- House. Location: 5 Wright Street, Laverton 3028. Department or Instrumentality: Defence-Air. Total area: 0.0675 hectares. Purpose of acquisition: Single House. Current Commonwealth use: As above. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other: Nil. Property: Laverton- House. Location: 2 Wright Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0602 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other Nil. Property: Laverton- House. Location: 4 Wright Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0602 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $86.58, Council: $110.00, Other Nil. Property: Laverton- House. Location: 6 Wright Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0615 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other Nil. Property: Laverton- House. Location: 8 Wright Street, Laverton 3028. Department or Instrumentality: Defence- Air Total area: 0.0632 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other Nil. Property: Laverton- House. Location: 9 Wright Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0678 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $94.34, Council: $112.50, Other Nil. Property: Laverton- House. Location: 7 Wright Street, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 0.0675 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Single House. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $105.56, Council: $128.75, Other Nil. Property: Tarneit Telephone Exchange. Location: Derrimut Road, Tarneit 3030. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.4858 hectares. Purpose of acquisition: Exchange (Telephone). Current Commonwealth use: Telephone Exchange **(Major).** Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other Nil. Property: Point Cook, RAAF Station. Location: Point Cook 3029. Department or Instrumentality: Defence- Air. Total area: 343.5326 hectares. Purpose of acquisition: Base- Air. Current Commonwealth use: Housing Complex, Air Base, Vacant Urban Land. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $3,712, Council: $3,688, Other. Nil. Property: Laverton, RAAF Base. Location: Laverton 3027. Department or Instrumentality: Defence- Air. Total area: 87.2803 hectares. Purpose of acquisition: Base- Air. Current Commonwealth use: Housing Complex, Air Base, Vacant Urban Land. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $8,591, Council: $5,851, Other Nil. Property: Laverton Transmitter Station Location: Dunnings Road, Laverton 3028. Department or Instrumentality: Defence- Air. Total area: 44.8 139 hectares. Purpose of acquisition: Communications. Current Commonwealth use: Air Communications, Vacant Urban Land. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other Tenants pay on 44.6326 hectares under lease. Property: Werribee Gunnery Range. Location: Werribee 3030. Department or Instrumentality: Defence- Air. Total area: 242.4978 hectares. Purpose of acquisition: Firing, Gunnery Range. Current Commonwealth use: Firing Range. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other: Tenants pay on 242.4 hectares under lease. Property: Laverton Transmitter Station. Location: Aviation Road, Laverton 3027. Department or Instrumentality: Defence- Air. Total area: 32.4995 hectares. Purpose of acquisition: Communications. Current Commonwealth use: Single House, Air Communication, Car Park. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other Tenant pays on 3 1 hectares underlease. Property: Werribee Remote Receiving Station. Location: Ballan Road, Werribee 3030. Department or Instrumentality: Defence- Air. Total area: 193.2121 hectares. Purpose of acquisition: Communications. Current Commonwealth use: Single House, Air communications. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other Tenant pays on 193 hectares under lease. Property: Werribee Research Station. Location: Railway Avenue, Werribee 3030. Department or Instrumentality: CSIRO. Total area: 47.2883 hectares. Purpose of acquisition: Research. Current Commonwealth use: Single House, Office, Grassland, Scientific Research, Animals. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other Nil- Property: Mount Cornell Telephone Exchange. Location: Boundary Road, Mount Cottrell 3030. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.0258 hectares. Purpose of acquisition: Automatic Exchange. Current Commonwealth use: Automatic Exchange. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other. Nil. Property: Laverton Telephone Exchange. Location: Cherry Lane, Laverton 3028. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.1672 hectares. Purpose of acquisition: Automatic Exchange. Current Commonwealth use: Automatic Exchange. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $136.75, Council: Nil, Other: Nil. Property: Laverton Repeater Station. Location: Geelong Road, Laverton 3028. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.1602 hectares. Purpose of acquisition: Communications. Current Commonwealth use: Longline Equipment, Coax Cable. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $25, Council: Nil, Other Nil. Property: Werribee South Telephone Exchange. Location: Duncans Road, Werribee South 3030. Department or Instrumentality: Australian Telecom- . munications Commission. Total area: 0.1249 hectares. Purpose of acquisition: Exchange (Telephone). Current Commonwealth use: Telephone Exchange **(Major), Vacant Urban Land.** Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other Water $95 Property: Werribee Telephone Exchange. Location: Market Road, Werribee 3030. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.2089 hectares. Purpose of acquisition: Exchange (Telephone). Current Commonwealth use: Telephone Exchange **(Major).** Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $683.20, Council: Nil, Other: Nil. Property: Werribee Line Depot. Location: King Street, Werribee 3030. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0. 1 424 hectares. Purpose of acquisition: Residential. Current Commonwealth use: Line Depot, Car Park, Car Garage. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $85, Council: Nil, Other. Nil. Property: Werribee Repeater Station. Location: Geelong Road, Werribee 3030. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.0837 hectares. Purpose of acquisition: Communications. Current Commonwealth use: Telephone Relay. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $25, Council: Nil, Other Nil. Property: Werribee Post Office. Location: Watton& Hedge Roads, Werribee 3030. Department or Instrumentality: Postal Commission. Total area: 0.0997 hectares. Purpose of acquisition: Post Office. Current Commonwealth use: Post Office, Indoor Sporting Facility. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $483.84, Council: Nil, Other: Nil. Property: Point Cook- Vacant Land. Location: Aviation Road, Point Cook 3029. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.2787 hectares. Purpose of acquisition: Exchange (Telephone). Current Commonwealth use: Vacant Urban LandResidential. Proposed short term use: Broadcasting Station. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other: Nil. Property: Laverton Post Office. Location: Woods Street, Laverton 3028. Department or Instrumentality: Postal Commission. Total area: 0.0486 hectares. Purpose of acquisition: Post Office. Current Commonwealth use: Post Office Official. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: $406.35, Council: Nil, Other: Nil. Property: Tarneit Telephone Exchange- Location: Derrimut Road, Tarneit 3030. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.0556 hectares. Purpose of acquisition: Automatic Exchange. Current Commonwealth use: Automatic Exchange. Proposed short term use: As above. Proposed long term use: As above. Rates paid: MMBW: Nil, Council: Nil, Other: Nil. Property: Laverton Telephone Exchange. Location: Aviation Road, Laverton 3028. Department or Instrumentality: Australian Telecommunications Commission. Total area: 0.1674 hectares. Purpose of acquisition: Exchange (Telephone). Current Commonwealth use: Telephone Exchange **(Major), Car Park.** Proposed short term use: Line Depot, Telephone Exchange **(Major), Car Park.** Proposed long term use: As above. Rates paid: MMBW: $25, Council: Nil, Other Nil. {:#subdebate-91-47} #### Broadcasting and Televising of Election Speeches and Advertisements (Question No. 163) {: #subdebate-91-47-s0 .speaker-6U4} ##### Mr E G Whitlam: am asked the Minister for Post and Telecommunications, upon notice, on 22 February 1978: {: type="1" start="1"} 0. 1 ) How much time was made available to broadcast election speeches of political advertisements in respect of each political party on each radio broadcasting station and television station in connection with the Federal elections on 10 December 1977. 1. What was the percentage distribution of time purchased by parties and candidates on those broadcasting and television stations. 2. What were the costs charged for this time and what was the percentage distribution of these costs between parties and candidates. 3. How much time and money were spent on broadcasting the television programs sponsored by **Sir Henry** Bolte. {: #subdebate-91-47-s1 .speaker-GY5} ##### Mr Staley:
LP -- The information which has been collated for the honourable member is too lengthy and complex to be published in *Hansard.* Copies are available at the Table Office of the House of Representatives. {:#subdebate-91-48} #### Alcohol and Drug Abuse, Northern Territory: Aborigines (Question No. 1126) {: #subdebate-91-48-s0 .speaker-KDP} ##### Dr Everingham: asked the Minister for Health, upon notice, on 9 May 1978: {: type="1" start="1"} 0. 1 ) Is it a fact that Northern Territory hospitals have more than 1 bed in 5 occupied by victims of accidents, poisonings, violence or mental disorders. 1. If so, are most of these, and some other diseases requiring hospitalisation, related to alcohol or drug misuse. 2. Is the average intake of alcohol by adult male drinkers in the Northern Territory beyond the safe limit. 3. Do some Aboriginal communities (a) spend most of their income on liquor, (b) have an incidence of alcoholism equal to half their adult populations and (c) suffer from a wide range of social and other problems directly contributed to by drinking problems. 4. Do most Aboriginal communities have no legal or de facto control over the commercial use of alcohol in their respective regions. 5. Has the setting up of mining and other whitecontrolled settlements with liquor sales outlets aggravated these problems. 6. Will he negotiate with other Ministers concerned with mineral development and Aboriginal affairs and spokesmen of relevant Aboriginal communities, the acquisition of liquor distribution and sale by local public authorities on terms which would prevent leasing of these functions to anyone who would stand to increase profits with any increase of liquor sales in planned new townships which would make liquor more accessible to Aboriginal communities. {: #subdebate-91-48-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Hospital admissions in the Northern Territory are not statistically categorised in a way that could confirm the honourable member's statement. However, statistics from the Northern Territory hospitals in 1976 indicate that 19.65 per cent of total hospital separations related to the conditions mentioned by the honourable member. 1. It is believed that many of the admissions to hospital are associated with alcohol or drug misuse but detailed information is not available. 2. The safe limit of alcohol use is generally accepted as 40 grams per day with 80 grams per day seen as a hazardous level. Adult male average consumption in the Northern Territory is 48.9 grams per day which would indicate that many may be drinking at a dangerous level. 3. (a) The percentage of Aboriginal income spent on alcohol varies from community to community. The few figures available for the Northern Territory vary from 5 per cent on Maningrida outstations to 27 per cent at Bamyili and 50 per cent at Oenpelli. {: type="a" start="b"} 0. While statistics are not available it is considered that the level of clinical alcoholism would be well below this rate. Problem 'binge' or episodic drinkers would be likely to reach the level stated in many communities. Unless this group can modify its drinking behaviour there is a danger of a higher level of clinical alcoholism developing. 1. Yes. However it would appear that alcohol abuse is mainly a means of escape from a depressed physical, social and economic environment. It is obvious that this form of escape mechanism adds to the severity of the problem being faced. 4. No. Some element of control over the provision of alcohol in Aboriginal communities exists in the permit system where permits are only issued with the approval of the local Aboriginal council. Other Aboriginal communities have decided either that they wish to be dry or that limits are to be placed on the type and quantity of alcohol on sale. Some communities, using legal means, have caused storekeepers to lose liquor licences. In some instances Aboriginal communities have made arrangements with local liquor sales outlets for restrictions on the type and quantity of alcohol sales. Following a number of recent reports on alcohol problems faced by Aboriginals, the Northern Territory Legislative Council has sought Aboriginal viewpoints on the development of new liquor legislation. 5. 6 ) The development of liquor outlets in the wake of both mining development and the expansion of tourist areas has meant that many Aboriginals have easier access to alcohol supplies; this has led in some instances to increases in alcohol abuse. While this is unfortunate, prohibition either by direct legal measures or by the restriction of sales outlets is not a long-term solution to the problem. People must develop attitudes and behavioural patterns that allow them to cope with such social dangers as the availability of alcohol and this is essential for all Australians not merely Aboriginals. 6. I am willing to negotiate on any matter relating to the health of Aboriginals. Arrangements have been made for me to discuss with other Ministers the final report on alcohol problems of Aboriginals prepared by the House of Representatives Standing Committee on Aboriginal Affairs. My Department has also been involved in discussions on the control of alcohol and the protection of Aboriginal interests in the new liquor legislation now being prepared in the Northern Territory. {:#subdebate-91-49} #### Advisor}' and Consultative Committees: Inclusion of Members of Parliament (Question No. 1 135) {: #subdebate-91-49-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister representing the Minister for Administrative Services, upon notice, on 10 May 1978: {: type="1" start="1"} 0. What advisory or consultative committees has the Minister established or continued which include members of parliament. 1. Which members and senators are included on these committees. {: #subdebate-91-49-s1 .speaker-KVM} ##### Mr Street:
LP -- The Minister for Administrative Services has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) and (2)I have not established or continued any advisory or consultative committees which include members of parliament. {:#subdebate-91-50} #### Advisory and Consultative Committees: Inclusion of Members of Parliament (Question No. 1147) {: #subdebate-91-50-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for the Northern Territory, upon notice, on 10 May 1978: >What advisory or consultative committees has he established or continued which include members of parliament. > >Which members and senators are included on these committees. {: #subdebate-91-50-s1 .speaker-ID4} ##### Mr Adermann:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. ) and (2)I have not established or continued any advisory or consultative committees which include members of parliament. {:#subdebate-91-51} #### Advisory and Consultative Committees: Inclusion of Members of Parliament (Question No. 1150) {: #subdebate-91-51-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister representing the Minister for Science the following question, upon notice, on 10 May 1978: {: type="1" start="1"} 0. What advisory or consultative committees has the Minister established or continued which include members of parliament. 1. Which members and senators are included on these committees. {: #subdebate-91-51-s1 .speaker-ID4} ##### Mr Adermann:
NCP/NP -- The Minister for Science has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) and (2) I have not established or continued any advisory or consultative committees which include members of parliament. {:#subdebate-91-52} #### Advisory and Consultative Committees: Inclusion of Members of Parliament (Question No. 1156) {: #subdebate-91-52-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Veterans' Affairs, upon notice, on 10 May 1978: {: type="1" start="1"} 0. 1 ) What advisory or consultative committees has he established or continued which include members of parliament. 1. Which members and senators are included on these committees. {: #subdebate-91-52-s1 .speaker-ID4} ##### Mr Adermann:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) and (2)I have not established or continued any advisory or consultative committees which include members of parliament. {:#subdebate-91-53} #### Advisory and Consultative Committees: Inclusion of Members of Parliament (Question No. 1158) {: #subdebate-91-53-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for the Capital Territory, upon notice, on 10 May 1 978: {: type="1" start="1"} 0. 1 ) What advisory or consultative committees has he established or continued which include members of parliament. 1. Which members and senators are included on these committees. {: #subdebate-91-53-s1 .speaker-YF6} ##### Mr Ellicott:
LP -- The answer to the honourable member's question is as follows: >I am informed by my Department as follows: > >The National Memorials Ordinance 1928 establishes the Canberra National Memorials Committee. This Committee is continuing. > >Membership of the Committee includes: The Prime Minister, the Leader of the Government in the Senate, the Minister for the Capital Territory, the Leader of the Opposition in the Senate, and the Leader of the Opposition in the House of Representatives. VIP Aircraft (Question No. 1168) {: #subdebate-91-53-s2 .speaker-5J4} ##### Mr Scholes: asked the Minister for Defence, upon notice, on 1 1 May 1978: {: type="1" start="1"} 0. 1 ) What conditions apply to the use of aircraft from No. 34 Squadron. 1. What are the financial arrangements for charging the cost of travel under these arrangements. 2. Under what circumstances are members or shadow ministers entitled to travel on VIP aircraft. 3. Are arrangements for the use of No. 34 Squadron aircraft during election periods solely at his discretion. 4. 5 ) Can senators be transported within their State. {: #subdebate-91-53-s3 .speaker-4U4} ##### Mr Killen:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) The rules for the use of the special aircraft of No. 34 Squadron are those which were tabled in the House of Representatives on 6 March 1973 by the then Minister for Defence, the Honourable Lance Barnard, M.P. In all cases where a request for travel does not meet the general criteria laid down in the rules, the matter is for decision by the Prime Minister. 1. The Department of Defence raises quarterly accounts on the Department of the Prime Minister and Cabinet in respect of hours flown and other costs incurred by No. 34 Squadron aircraft in transporting entitled persons. Costs which are additional to normal RAAF operations are recovered, and for this purpose hourly rates, which comprise fuel, civil contractor servicing and spares costs are established for each of the three types of aircraft operated by the Squadron. Other charges recovered include the actual costs of rations consumed, aircraft handling and landing fees, cleaning costs, and any other marginal or extra costs associated with the carriage of entitled persons which are not normally the responsibility of the Department of Defence. 2. The rules provide that 'where a Minister or the Leader of the Opposition is using an aircraft of No. 34 Squadron to visit a particular area it is in order for him to be accompanied by the Local Federal Member for that area'. Shadow ministers are not specifically provided for in the rules. 3. No special provision is made in the rules for the use of aircraft of No. 34 Squadron during election periods. It has been the practice for the Prime Minister to make available an aircraft to the Leader of the Opposition for the election period. An aircraft has also been made available where possible to another nominated senior representative of the Opposition. Apart from the Prime Minister, the Deputy Prime Minister and (when in Government) the Deputy Leader of the Liberal Party, Ministers are normally only granted the use of an aircraft where there is a clear requirement directly related to their portfolio responsibilities. {: type="1" start="5"} 0. There is no provision in the rules for the use of No. 34 Squadron aircraft by individual senators, other than Ministers. It should be noted that in the broad context of the rules, senators and members, other than Ministers, are on occasions permitted to travel under emergency or special circumstances where the approving authority considers that this mode of travel is justified and the Prime Minister has agreed. {:#subdebate-91-54} #### Grants to Authors (Question No. 1173) {: #subdebate-91-54-s0 .speaker-LE4} ##### Mr Baume: asked the Minister for Home Affairs, upon notice, on 1 1 May 1978: >Who were the 10 major recipients of Commonwealth Government grants for literature through the Commonwealth Literary Fund and its successor, the Literature Board of the Australia Council, and what were the total grants made to each of these authors. {: #subdebate-91-54-s1 .speaker-YF6} ##### Mr Ellicott:
LP -- The answer to the honourable member's question is as follows: >The Australia Council has advised me that its Literature Board holds a list of authors who were assisted by the former Commonwealth Literary Fund between 1939 and 1973. It does not hold records of payments made in relation to these grants. I am further advised that a full list of payments made by the Commonwealth Literary Fund would require an extensive search of archival records of several departments. In the circumstances I am not prepared to release scarce staff resources for this task. Records are readily available of payments made from the Literature Board from 1 July 1973, when it was established. The 10 major recipients of grants from the Board are set out below: {:#subdebate-91-55} #### Conservation of Art Collections (Question No. 1178) {: #subdebate-91-55-s0 .speaker-KH4} ##### Mr BARRY JONES:
LALOR, VICTORIA · ALP asked the Minister for Home Affairs, upon notice, on 23 May 1 978: {: type="1" start="1"} 0. 1 ) Has his attention been drawn to a statement by Professor Peter Karmel, the retiring Chairman of the Australia Council, in the last annual report of the Australia Council that many of the nation's artistic treasures are definitely deteriorating and that if the facades of many Government buildings were allowed to deteriorate to the degree that many of the nation 's works of an have deteriorated, there would be a national outcry. 1. If so, what is the extent of the problem and will he provide examples of works in urgent need for restoration. 2. What action has the Government taken to provide training for expert conservators. 3. What action will the Government take to secure the appointment of expert conservators as a matter of urgency. {: #subdebate-91-55-s1 .speaker-YF6} ##### Mr Ellicott:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. The Report of the Committee of Inquiry on Museums and National Collections spelled out in detail the extent of deterioration of art collections in Australia. Storage and the lack of qualified conservators are the major problems and action is being taken by the Government to overcome them. I am informed that the Visual Arts Board of the Australia Council has in the past, assisted several regional galleries in Victoria in conserving their collections. The Board has also provided salary assistance for conservators at the Tasmanian Museum and Art Gallery and the Queen Victoria Museum and Art Gallery, Launceston. In the latter instance, no appointment has yet been made. {: type="1" start="3"} 0. The Canberra College of Advanced Education introduced courses in materials conservation in 1978. These courses which are at post graduate and undergraduate level are funded by the Commonwealth under normal Advanced Education arrangements. 1. I am informed that the Public Service Board has undertaken a review of the structure and pay rates of conservator staff. After comparison with overseas organisations and State instrumentalities, as well as extensive consultations with interested agencies, the Board has near completion a proposal to revise structures and pay rates for conservators. A decision is expected shortly. With the availability of this structure, it is anticipated that prospects for recruiting conservator staff will be enhanced. {:#subdebate-91-56} #### Uranium: Safeguards (Question No. 1184) {: #subdebate-91-56-s0 .speaker-CV4} ##### Mr Jacobi: asked the Minister for Trade and Resources, upon notice, on 23 May 1 978: {: type="1" start="1"} 0. 1 ) What International Atomic Energy Agency safeguards will apply to future shipments of Australian yellowcake to the Philippines. 1. What IAEA safeguards will apply to (a) uranium hexafluoride, (b) enriched uranium and (c) plutonium and uranium obtained from reprocessing. {: #subdebate-91-56-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: >No arrangements have been concluded for the supply of Australian uranium to the Philippines. {:#subdebate-91-57} #### Uranium: Safeguards (Question No. 1185) {: #subdebate-91-57-s0 .speaker-CV4} ##### Mr Jacobi: asked the Minister for Trade and Resources, upon notice, on 23 May 1978: >In respect of any future shipments of Australian uranium to the Philippines, which country will (a) carry out the conversion of Australian yellowcake to uranium hexafluoride, (b) enrich the uranium hexafluoride, (c) carry out fuel fabrication, (d) accept the spent fuel rods for reprocessing, (e) accept the recycled plutonium and uranium and (f) accept the nuclear waste. {: #subdebate-91-57-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: >No arrangements have been concluded for supply of Australian uranium to the Philippines. {:#subdebate-91-58} #### Public Service: Maternity and Paternity Leave (Question No. 1206) {: #subdebate-91-58-s0 .speaker-9W4} ##### Mr Hyde:
MOORE, WESTERN AUSTRALIA asked the Minister Assisting the Prime Minister, upon notice, on 23 May 1 978: {: type="1" start="1"} 0. 1 ) What is the annual cost of ( a) paternity and ( b) maternity leave of public servants. 1. How many public servants have left the public service within one month of the expiration of their maternity leave (a) to date and (b) in the most recent 12 months period for which information is available. 2. How many public servants have left the public service within 12 months of the expiration of maternity or paternity leave (a) to date and (b) during the period referred to in part 2(b). 3. How many persons have sought maternity leave within (a) 12 months and (b) 6 months of joining the public service. {: #subdebate-91-58-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) The estimated costs for Public Service Act employees are as follows: {: type="1" start="2"} 0. (a) and (b). Information from survey data indicates that some 50 per cent of women return to the Service after the expiration of their period of maternity leave, and remain in the Service for more than one month after their return. Indications are that this figure has remained fairly constant overtime. 1. (a) and (b) The information sought is not available. 2. (a) Information available indicates that during 1975-76 393 women commenced maternity leave in their first twelve months of service. The figure for 1976-77 was 233. {: type="a" start="b"} 0. Information available indicates that during 1975-76 125 women commenced maternity leave in their first 6 months of service. The figure for 1976-77 was 78. {:#subdebate-91-59} #### Kaolin Deposits (Question No. 1216) {: #subdebate-91-59-s0 .speaker-CV4} ##### Mr Jacobi: asked the Minister for Trade and Resources, upon notice, on 24 May 1 977: {: type="1" start="1"} 0. 1 ) Has Englehard Minerals and Chemicals Corporation of the United States of America obtained an interest in a large West Australian kaolin deposit. 1. Is kaolin regarded as a potential source of aluminium; if so, how much aluminium is contained in the deposit. 2. Does the United States have access to technology for extracting aluminium from kaolin. 3. Is it a fact that the process by which aluminium is extracted from kaolin also produces titanium as a valuable by-product. 4. Will he (a) urgently investigate whether the interest in the kaolin deposits referred to in part ( 1 ) is to utilise these deposits ultimately as a substitute for bauxite and (b) take all steps to protect Australia's interest in these valuable deposits. {: #subdebate-91-59-s1 .speaker-009OD} ##### Mr Nixon:
LP -- the answer to the honourable member's question is as follows: {: type="1" start="1"} 0. I have seen reports in the media to the effect that Englehard Minerals and Chemicals Corp. of the United States has negotiated an agreement with West Australian Kaolin Pty Ltd to undertake the development of a Kaolin deposit at Gabbin in Western Australia. 1. to (4) I have been advised by the Bureau of Mineral Resources as follows: Clays are a potential source of aluminium although their use in aluminium production is currently uneconomic and not competitive with the Bayer process for the extraction of alumina from bauxite. From an average of chemical analyses carried out by CSIRO, the alumina content of the Gabbin coating clay is 38 percent, or about 20 percent aluminium. Gross reserves reported by West Australian Kaolin Co. Pty Ltd (in terms of clay content) are- Coating clay 10,700,000 tonnes Filler clay 6, 1 50,000 tonnes No analysis of the filler clay is available, but it is a less pure variety than the coating clay, and the alumina content is probably lower. It would seem from reports that the Gabbin clay owes its economic importance mainly to its suitability as a paper coating clay because of its very high grade. There are several large deposits of clays in Western Australia better situated in respect of transport and ports, which would be equally as suitable as sources of alumina should there ever be a demand for clay for this purpose. The United States Bureau of Mines has been involved for more than 50 years in research on methods of extracting alumina from its vast domestic resources of nonbauxitic materials. Studies of a variety of process technologies developed within the outside USBM have shown that to date none of the alternative processes is competitive with the Bayer process using bauxite. The USBM reported in 1976 that it was not possible to predict which alternative process might eventually prove to be commercially feasible. A pilot plant based on the most promising mini-plant technology would need to be built and operated to provide data for scaling up the selected process to commercial size and enable cost estimates to be made. The main advantage of the research to date is that it has demonstrated that the US could, in national emergency and if necessary, satisfy its need for alumina from its own resources. However, because of the uneconomic nature of the alternative processes any such project to produce alumina would need to be a government venture and could not be undertaken economically by a private company. The importance of titanium as a by-product of any process for the extraction of alumina from clay would depend on the concentration of titania in the clay, the form in which it occurs, and the feasibility of extracting it from the residue resulting from the alumina production process. It is important to realise in this context that Australian bauxites contain titanium (usually in higher proportion than that in the Gabbin kaolin yet the titanium is not in a usable form in the red mud residues, and so far extraction has not been feasible. An average of analyses carried out by CSIRO on the Gabbin clay showed it to have a ti02 content of 0.41 percent. {: type="1" start="5"} 0. (a) In view of the above technical advice, it would seem highly unlikely that development of a kaolin deposit in Western Australia would be based on its potential as an alternative to bauxite in aluminium production. (b) Any proposal by Englehard to jointly develop these Kaolin deposits would need to be submitted to the Foreign Investment Review Board for examination under the Foreign Investment Guidelines and would be considered by the Government in the light of the Board 's report. It has not been, however, the practice of this Government, nor that of its predecessor, to provide information on whether or not a proposal has been submitted to the Foreign Investment Review Board. {:#subdebate-91-60} #### Nuclear Waste Disposal (Question No. 1218) {: #subdebate-91-60-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Prime Minister, upon notice, on 24 May 1 978: {: type="1" start="1"} 0. 1 ) Has his attention been drawn to the United States report on Nuclear Power Costs prepared by the Environment, Energy and Natural Resources Sub-committee of the United States Congress House Government Operations Committee which stated that radioactive waste is a significant and growing problem, that at least 3,000 metric tonnes of spent nuclear fuel are now being stored at commercial reactor sites with an additional 1 7,000 metric tonnes expected to accumulate in the next decade and yet there is still no demonstrated technology for permanently and safely disposing of this waste. 1. If so, what is the reason for the Government's assertion that the problems of nuclear waste disposal have been solved. 2. Will the Government indicate in detail the method of safe long term disposal of nuclear waste upon which it purports to rely. {: #subdebate-91-60-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. The Government was persuaded by the weight of scientific evidence placed before it, that the technology exists for the safe management and ultimate disposal of highly radioactive waste. This view is also held by the International Atomic Energy Agency which states that 'the technology for handling them (i.e. high level wastes) is developed, the difficulty is in deciding which of several methods should be used, on a commercial basis '. I suggest that if the honourable member wishes to discuss scientific evidence in detail he communicate directly with the Atomic Energy Commission. 2. Details of the status of technology and management of high level waste arising from the spent nuclear fuel are contained in *Atomic Energy in Australia,* Vol. 20, No. 3, pp 8- 13, July 1977. {:#subdebate-91-61} #### Tourist Visas (Question No. 1220) {: #subdebate-91-61-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Immigration and Ethnic Affairs, upon notice, on 24 May 1978: >What percentage of the number of applications received for tourist visa entry to Australia have been refused from the following countries: > >Italy, (b) Greece, (c) Malta, (d) Turkey, (e) Great Britain, (f) Ireland, (g) Cyprus, (h) Philippines, (i) Malaysia, (j) Chile, (k) India, (1) Bangladesh, (m) Argentina, (n) Israel and (o) the United States of America during (i) 1975,(ii) 1976,(iii) 1977 and(iv) 1978 to date. {: #subdebate-91-61-s1 .speaker-0I4} ##### Mr MacKellar:
LP -- The answer to the honourable member's question is as follows: {:#subdebate-91-62} #### Cheese (Question No. 1231) {: #subdebate-91-62-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Trade and Resources, upon notice, on 24 May 1978: {: type="1" start="1"} 0. What tonnage of cheese (a) by type and (b) by country of export entered Australia in (i) 1975-76 (ii) 1976-77 and (iii) 1977-78 to date. 1. What percentage of total Australian consumption of each of these cheese varieties was provided by imports for the same period. 2. What tariffs, quotas or other restrictions are placed on Australian cheese exports to the countries from which cheese was imported. {: #subdebate-91-62-s1 .speaker-009OD} ##### Mr Nixon:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Details of Australian imports of major cheese varieties from the principal overseas supplying countries are set out below: {: type="1" start="2"} 0. Detailed figures showing Australian consumption of individual varieties of domestic and imported cheeses are not available. However, the following figures relating to apparent consumption of all cheese in Australia are provided: {: type="1" start="3"} 0. Tariffs, quotas and other restrictions affecting Australia 's cheese exports to other countries. EEC Within the framework of the Common Agricultural Policy, the EEC operates a variable levy system on imports of cheese. The levy is calculated as the difference between the prevailing world market for each of the various cheese types and the threshold price established by the Community. The level of the threshold price and the magnitude of the levies on cheese imports are such that imports of cheese on a regular basis from efficient producers such as Australia are for all practical purposes excluded. The threshold price is currently approximately $2,850 per tonne and the levy $2,150 per tonne for bulk cheddar cheese. In addition, the EEC operates a system of export restitutions whereby prices for EEC cheese exports are heavily subsidised in order to compete in world export markets. NEW ZEALAND Duty free access provided for Australian cheese under NAFTA provisions. ROMANIA All imports subject to permit granted by Minister of Foreign Trade. 40 per cent ad val duty applies to cheese imports. BULGARIA All imports subject to permit by Ministry of Foreign Tade 20 per cent duty applies to cheese imports. FINLAND A variable levy is applied to imports of dairy products and is adjusted according to the difference between world and domestic market prices. NORWAY Imports of cheese are subject to licensing and global quotas (up to 600 tonnes in 1977). Tariff applicable on cheese: 1.20 kroner/kg. SWEDEN Variable levies apply to imports of dairy products; rates for cheese range from approximately 50-350 kroner/ 100 kg. SWITZERLAND Imports of cheese are subject to licensing and a prices supplement system. In addition, supplementary duties are applied on imports of certain cheese at rates ranging from 25-80 Swiss francs/ 100 kg. HUNGARY All cheese imports require licences. A tariff of 25 per cent is applicable to most cheese types. GREECE Imports are controlled by a system of credit approvals. Duties on cheese range from 18.6 per cent to 68.3 per cent. AUSTRIA A levy system is operated, based on the difference between border (world market) prices and domestic prices. A duty of 23 per cent applies to fine table cheese and cheese in boxes. Duties ranging from 200-500 schillings/ 100 kg apply to imports of hard and special cheeses. ARGENTINA All cheese types are subject to 15 per cent ad val import duty. CZECHOSLOVAKIA All imports are subject to control by the Ministry of Foreign Trade which grants specific import allocations to the foreign trade organisations. Within these allocations, the foreign trade organisations can source their imports from any country. Duty of 110 crowns per 100 kg applies to imports of cheese. USA USA operates a system of highly restrictive import quotas on dairy products. Australia's current overall annual entitlement for cheese is approximately 1 , 600 tonnes. Import duties ranging from 6-25 per cent ad val apply to various cheese types. {:#subdebate-91-63} #### Re-enactment of Captain Cook's Voyage (Question No. 1241) {: #subdebate-91-63-s0 .speaker-HI4} ##### Mr Morris: asked the Minister for Home Affairs, upon notice, on 25 May 1978: {: type="1" start="1"} 0. Has his attention been drawn to activities being organised in eastern Australia, in association with the 250th anniversary of the birth of Captain James Cook, and the reenactment of his voyage along Australia 's east coast. 1. What financial contribution is the Government making towards these activities. 2. Is he able to say what international activities are being arranged in association with the 250th anniversary of Captain James Cook's birth. 3. Has practical assistance been sought from the Australian Government by the organisers of the 250th anniversary celebration; if so, what has been the Government's response. 4. Will he arrange for a statement to be prepared and distributed about the celebrations. 5. Has his attention also been drawn to the active role being played by members of Redhead Surf Life Saving Club in the re-enactment of the voyage of Captain James Cook in 1 770, northward along Australia 's east coast. {: #subdebate-91-63-s1 .speaker-YF6} ##### Mr Ellicott:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) My attention was drawn to the re-enactment of Captain Cook 's voyage along the east coast of Australia. Iam not aware of any other activities being organized in eastern Australia to mark this anniversary. 1. The Government did not make a financial contribution to the re-enactment voyage. 2. The only activity I am aware of, which might be described as international, is the formation of a Captain Cook Trust in Britain which has launched an international appeal to set up a Captain Cook Birthplace Museum. 3. In regard to the activities in Britain I understand that the Australian Government has been asked to provide some practical assistance to the Captain Cook Trust. The organisers of the re-enactment voyage along the eastern Australian coast sought some practical assistance from the Government. This request was not agreed to. I have asked my Department to consult with other interested Departments and Authorities with a view to submitting recommendations on proposals for celebrating these anniversaries in Australia and Britain. It should be noted, however, that this anniversary falls soon after the 1970 Bicentenary when a major contribution was made by the Commonwealth to the celebrations which then took place. {: type="1" start="5"} 0. I will give consideration to making a statement at a time closer to the anniversary. 1. Yes. {:#subdebate-91-64} #### Ministerial Travel Overseas (Question No. 1244) {: #subdebate-91-64-s0 .speaker-HI4} ##### Mr Morris: asked the Minister for Defence, upon notice, on 25 May 1978: >Further to his answer to question No. 1018 *(Hansard,* 23 May 1978, page 2356) when has he travelled outside Australia since 1 1 November 1975 by (a) aeroplane and (b) ship. {: #subdebate-91-64-s1 .speaker-4U4} ##### Mr Killen:
LP -- The answer to the honourable member's question is as follows: {: type="a" start="a"} 0. Aeroplane- {: type="i" start="i"} 0. June 1976-USA/Canada 1. April 1978- Malaysia/Singapore 2. Ship- Nil. Petroleum Products: Use in Primary Industry (Question No. 1245) {: #subdebate-91-64-s2 .speaker-RK4} ##### Mr Hayden: asked the Minister for Primary Industry, upon notice on 25 May 1978: {: type="1" start="1"} 0. 1 ) What was the approximate average quantity per farm of petroleum products used during the last three years by (a) sugar farms in Queensland, (b) wheat farms in (i) Western Australia, (ii) New South Wales, (iii) South Australia, (iv) Victoria and (v) Queensland and (c) wheat-sheep farms in (i) Western Australia, (ii) New South Wales, (iii) South Australia, (iv) Victoria and (v) Queensland. 1. What approximate proportion of total farm costs were accounted for by petroleum products for the last 3 years by the categories of farms referred to in part (i). 2. By how much in both dollar and percentage terms will the fuel price increase announced at the time of the last budget increase production cost for the categories referred to in part (i). {: #subdebate-91-64-s3 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The Bureau of Agricultural Economics has provided the following information in answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) Detailed information on the quantities of petroleum products used by the categories of farms listed is not available. The information in part (2) below gives some indication of the relative importance of petroleum products in total farm inputs. Petroleum products used directly by the rural sector totalled 2.7m kilolitres in 1976 or some 7 per cent of all petroleum products used in Australia. Recent information collected by the Queensland Cane Growers ' Council indicated that the average sugar cane farm in Queensland used 1 1 , 600 litres of distillate and 6,200 litres of petrol. {: type="1" start="2"} 0. Information collected by the Queensland Cane Growers' Council indicates that in recent years expenditure on fuels (including lubricants and fuel in harvester operation) as a percentage of cash expenditure on crop production has been between 4 per cent and 8 per cent depending mainly on power source for irrigation, cane haulage distance and location of farm. Data based on BAE farm surveys for wheat and wheatsheep farms in the mainland states are as follows: {: type="1" start="3"} 0. The Queensland Cane Growers' Council estimates that in a full season the direct effect on farm costs of the petroleum price increases resulting from the last budget would be to increase farm costs by $360 per sugar farm or between 0.5 and 1 . 0 per cent of direct farm operating costs. The BAE has estimated the effect on costs of wheat and wheat-sheep farms as follows: {:#subdebate-91-65} #### Weather Forecasts: Wind Chill Factor (Question No. 1260) {: #subdebate-91-65-s0 .speaker-CJ4} ##### Mr Shipton: asked the Minister representing the Minister for Science the following question, upon notice, on 25 May 1978: >Is it feasible during winter months to add to Bureau of Meteorology weather forecasts a chill factor to indicate the degree of wind coldness that might be anticipated in the forecast period; if so, in what cities, towns or states would such a chill factor forecast be appropriate? {: #subdebate-91-65-s1 .speaker-ID4} ##### Mr Adermann:
NCP/NP -- The Minister for Science has provided the following answer to the honourable members 's question: >In Australia, although it is feasible to add a wind chill factor to weather forecasts, the climate of the populated areas, even in the southern states in winter is not sufficiently cold for such a service to be warranted. The Bureau of Meteorology issues sheep weather alerts when a critical combination of wind, rain and low temperature would lead to chilling (hypothermia) in sheep. These alerts may be issued in any state or season, but are more applicable to southern Australia in winter. {:#subdebate-91-66} #### Northern Territory Health Services: Payments to Aircraft Operators (Question No. 1294) {: #subdebate-91-66-s0 .speaker-HI4} ##### Mr Morris: asked the Minister for Health upon notice on 26 May 1978: >What was the total sum paid to individual aircraft operators for matters related to the provision of health services in the Northern Territory during each year since 1 962. {: #subdebate-91-66-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: >Because detailed accounting records are no longer available for the years 1962 to 1972 it is not possible to provide the details requested for this period. > >Details of the claims for payments made by individual aircraft operators for matters related to the provision of health services in the Northern Territory during each financial year since 1972-73 are as follows: {:#subdebate-91-67} #### Repatriation General Hospital, Greenslopes (Question No. 1309) {: #subdebate-91-67-s0 .speaker-FH4} ##### Mr Humphreys:
GRIFFITH, QUEENSLAND asked the Minister for Veterans