31st Parliament · 1st Session
Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 2. 1 5 p.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled:
The humble Petition of we the undersigned citizens of Australia respectfully showeth-
That because this budget will further increase the number of persons unemployed, because it reduces the average worker’s spending power by $ 10 per week, because it will reduce the income of pensions, because it is unfair in placing a greater burden on the poor rather than the rich, and because it is driving this country into a depression.
Your petitioners therefore humbly pray that
The Federal Government withdraws this budget and provides Australia, within this session of Parliament, with a revised budget that increases the level of economic activity in Australia, lowers unemployment, removes the burdens placed on the disadvantaged, and revives business and consumer confidence in the future of this potentially great country.
And your petitioners, as in duty bound, will ever pray. by Mr Armitage, Mr Lionel Bowen, Mr Fry, Mr Kerin, Mr Morris and Mr West.
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 the provision of payments for abortion through items of the Medical Benefits Schedule is an unacceptable endorsement of abortion which has now reached the levels of a national tragedy with at least 60,000 unborn babies being killed in 1977.
Your petitioners therefore humbly pray that the Government will so amend the Medical benefits Schedule as to preclude the payment of any benefit for abortion.
And your petitioners as in duty bound will ever pray. by Mr Bourchier, Mr N. A. Brown, Mr Burns, Mr Scholes, Mr Short and Mr Yates.
To 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 the undersigned, having great concern at the way in which children are now being used in the production of pornography call upon the Government to introduce immediate legislation:
Your petitioners therefore humbly pray that your honourable House will protect all children and immediately prohibit pornographic child-abuse materials, publications or films.
And your petitioners as in duty bound, will ever pray. by Mr Connolly, Mr Howard, Mr Neil and Mr Shack.
To the honourable the speaker and members of the House of Representatives assembled. The humble petition of the undersigned citizens respectfully sheweth: That while Kogarah has an urgent need for a women’s rest centre and a place to expand the community aid activities of its citizens, the former post office building in Railway Parade has been left standing idle for the past four years.
Your petitioners therefore humbly pray that this building be immediately given to the people of Kogarah for the above mentioned purposes.
And your petitioners as in duty bound will every pray. byMrBradfield.
To the honourable speaker and members of the House of Representatives in Parliament assembled.
This petition of the undersigned citizens of Australia respectfully showeth that:
It is necessary that-
All pensions should be indexed in the same fashion as wages are indexed. Why should there be a distinction between one member of the community and another?
In our opinion this is discrimination and an injustice to individual citizens, and your petitioners as in duty bound will every pray. byMrEllicott.
To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
And your petitioners as in duty bound will ever pray. byMrEllicott.
To the Honourable the Speaker and Members of the House of Representatives assembled, the petition of the undersigned citizens of Australia respectfully showeth:
That as parents of children in government schools we maintain that it is the responsibility of governments to provide and maintain a public system of education of the highest standard open to all.
Your petitioners most humbly pray that the members of this house assembled ensure that the Commonwealth Government maintain a broadly representative Australian Schools Commission to determine; - National priorities in education - strategies and allocation of funds to ensure equality of educational opportunity for all children - allocation of funds for the continued improvement of public systems of education through General Recurrent and Capital Grants to Government school systems and Special Purpose Programs.
And your petitioners as in duty bound will ever pray. byMrEllicott.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectively showeth:
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. ‘
A specially commissioned March called ‘The Forgotten Heroes’ was played for the first time by the Band of the New South Wales Police Force.
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 poeple of Australia to honour 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. byMrEllicott.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.
The humble petition of the undersigned citizens of Australia respectfully showeth:
Your petitioners therefore humbly pray that the House will request the Fraser Government to abandon its present restrictive economic policies in favour of the expansionary alternative Budget outlined to the House of Representatives by Opposition Leader Bill Hayden on August 22, as this alternative Budget would reduce the cost of living, boost employment and generate strong economic growth.
Your petitioners, as in duty bound, will ever pray. by Dr Everingham.
To the Honourable the Speaker and Honourable Members of the House of Representatives.
This petition of citizens of Australia respectfully sheweth that:
Your petitioners therefore humbly pray that your honourable House will take urgent steps to concur with the wishes of a majority of electors at every polling booth in Australia at the 1967 referendum by resumption from the States of the major traditional Aboriginal land areas and reserves and former reserves as at 31.3.78, to become federal Crown land pending prompt determination of freehold title for Land Trusts and eventually for defined community co-operatives.
And your petitioners, as in duty bound, will every pray. by Dr Everingham.
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 NSW.
And your petitioners as in duty bound will ever pray. by Mr Les Johnson.
To the Honourable, the Speaker, and Members of the House of Representatives in Parliament assembled.
Your petitioners most humbly pray that the House of Representatives in Parliament assembled will-
And your petitioners, as in duty bound, will ever pray. by Mr Les Johnson.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of undersigned citizens of Australia respectfully showeth-
That we believe the Federal Government changes to the health insurance system are unjustified, costly and artificially bureaucratic.
The planned abolition of bulk billing will place an unnecessary burden on the poor and the disadvantaged in our community. The decision to reduce the rebate paid from 85 per cent to 75 per cent of the scheduled fee is an attack on real wages.
Your Petitioners therefore humbly pray that the Government should reverse its decisions on these matters and develop proper consultation with the trade unions and the community.
And your Petitioners as in duty bound will ever pray. by Mr Morris.
To The Honourable The Speaker and Members of the House of Representatives in Parliament assembled:
The humble petition of the undersigned citizens of Australia respectfully showeth-
That citizens in rural areas are strongly opposed to the automation of manually operated telephone exchanges which is resulting in loss of employment for telephone operators in difficult economic times and the unnecessary loss of an efficient, personalised telephone service which has proven to be eminently suited to the needs of rural telephone subscribers.
We the undersigned believe that Telecom Australia should be instructed to seek the views of country telephone subscribers before proceeding further with the automation program which is causing unemployment, confusion, discontent and unnecessary expense to country subscribers.
Your Petitioners therefore humbly pray that your Honourable House will call on the Government to halt the program pending a full and open Parliamentary inquiry into the needs and desires of affected subscribers and the full economic and social effects of the automation program on country towns, rural telephone subscribers and Telecom Australia employees.
And your Petitioners, as in duty bound, will ever pray. by Mr Ian Robinson.
-I refer the Minister for Aboriginal Affairs to his reply to a question without notice from the honourable member for Lalor last Wednesday in which he stated that a meeting between himself and the managing director of Stawell Timber Industries had been arranged directly by the company. I also refer the Minister to an answer given the following day by the Prime Minister in which the Prime Minister stated that he had approached the Minister in relation to helping Stawell Timber Industries. Will the Minister now answer the question he neglected to answer last week? Did the Prime Minister discuss the financial difficulties of Stawell Timber Industries with the Minister prior to that meeting?
-No, the Prime Minister did not discuss those matters with me.
– My question is addressed to the Prime Minister. Is he aware that he answered a question on 4 March 1976 in this House about the motor car that he uses in Canberra? Are the reports correct that shortly he will be replacing the car which he now uses in Canberra with an Australian made vehicle? If so, will a similar principle be applied to vehicles owned by statutory authorities and commercial undertakings under Commonwealth control and, above all, to the Australian Diplomatic Service?
– The reports in today’s Press are substantially correct. I believe it is time that an Australian Prime Minister drove a principally Australian designed and built car. Some time ago I think it might have been possible to make some criticism of Australian cars because their driveability, evasive qualities and primary safety would not have been up to world standards. In recent years there has been a very marked improvement in Australian designed and constructed cars. Some Australian designed and built models now hold their own with the best cars from overseas. Some at least are certainly as good and one or two are very much better than most cars that can be imported. I believe that in these matters the Australian Government and the Australian Prime Minister have a responsibility to parade the products of Australia’s factories. There is a ‘buy Australian’ policy throughout the operations of government, and I cannot see why that should not apply to the car that the Prime Minister happens to use.
– I take a point of order, Mr Speaker. I ask you to rule that the Prime Minister is misleading the House in seeking to convey the impression that the Government is purchasing only Australian cars when it is purchasing two $60,000 imported limousines.
-There is no point of order. The honourable gentleman will resume his seat.
-The car that is being purchased is a Holden Caprice. I have already tried it and clearly it is very well designed and well sprung and is a thoroughly safe car.
– Will there be enough leg room?
-Yes, there will be enough leg room, I am sure. I believe that it would be good if, to the maximum extent possible, statutory authorities and business undertakings that are conducted by government followed the same principle. I know that the Department of Foreign Affairs, to the maximum extent possible, seeks to buy Australian where there is an availability of Australian cars. In this instance it is worth noting that at least one major manufacturer is rebuilding its export organisation so its products will naturally spread to a greater number of countries. In addition, the Minister for
Administrative Services, who has an interest in these matters, is approaching major Australian manufacturers to see what kind of service guarantee they might be able to give in countries where Australian cars are not normally sold. That might make it possible to extend the general policy a little further. As a result, the Mercedes-Benz which carries the number plate CI and which was bought by Mr Whitlam some time ago will very shortly be sold and the CI number plate will be put on a Holden Caprice.
– My question is directed to the Minister for Aboriginal Affairs. Will the Minister and/or the Chief Minister of the Northern Territory be present at a proposed Northern Land Council meeting tomorrow on Croker Island to formalise an agreement to mine at Nabarlek? Are the Northern Land Council and the Government satisfied that all the traditional owners have been identified and that they understand the agreement? Has the draft agreement, or a simplified version of it, been translated into the language of traditional owners and will the Oenpelli community be allowed to discuss the terms of the agreement without outsiders being present or presiding over or directing their deliberations?
-Might I inform the honourable gentleman that the Government has absolutely nothing to do with negotiations that are going on between the Northern Land Council and Queensland Mines with respect to the Nabarlek deposits. The Northern Land Council, as I have informed the honourable gentlemen before, is a statutory body having statutory responsibilities. As I understand it, the meeting to be held at Croker Island has been arranged between the two communities concerned- that is, the Croker Island community and the Oenpelli community- and the Northern Land Council is involved because it is the authority which must enter into an agreement with Queensland Mines concerning the terms and conditions for rnining at Nabarlek. I repeat that the Government has absolutely nothing to do with it. It is a matter exclusively for the Northern Land Council in discharge of its statutory responsibilities.
– My question is directed to the Minister for Primary Industry. Further to the Minister’s most successful visit last month to Washington to argue the case of Australian beef producers with the United States Administration in relation to the Poage Bill, which was passed by Congress to restrict beef imports, will the Minister advise the House of the current situation in this matter now that President Carter has vetoed the Bill, in line with the Minister’s own strong and obviously effective representations?
– In spite of some of the assertions which I noticed came from the Opposition at the time of my departure for the United States, I know that following representations by the Prime Minister, the Deputy Prime Minister and the Minister for Special Trade Representations, the timing of my visit to Washington proved ideal in relation to the consideration by the American Administration of the Poage Bill received from the United States Congress. At the same time, I do not think that any one of us can be complacent about the manner and form of some of the statements that have been made about possible new legislation coming from the new Congress when it meets in the New Year. Quite obviously, it is very much in Australia’s interests to maintain, to the maximum, access to this, its principal beef market.
In terms of the balance of trade between Australia and the United States, I think it is also worth setting on record the fact that we export approximately $ 1,000m worth of goods to the United States each year. About one-third of those exports are represented by beef. We import from the United States about $2,500m worth of goods. Taking into account the net invisibles, our general balance of payments deficit with the United States is of the order of $2,500m. In other words, the principal component of our visible trade with the United States is beef, and any steps taken by the United States Administration which would prejudice our ability to maintain that trade must be regarded very seriously indeed by the Australian Government and, of course, by Australian beef producers. I hope that those facts are borne in mind by the United States Administration in any prospective legislation. Certainly we hope that there will be a continuation of the flexibility provided under the present system, which enables the President to lift import quotas when he believes domestic circumstances in the United States require it. We also believe that if there is to be any countercyclical legislation the base should be significantly higher than that proposed within the Poage Bill. At a Government level and at a diplomatic level we certainly will maintain every possible pressure on the United States to ensure that any new legislation takes account of Australia’s point of view. The Australian cattle industry can be confident that while it has a
Liberal-National Country Party Government in Canberra that effort and attitude will continue.
-I direct my question to the Minister for Aboriginal Affairs and refer the Minister to his previous answers in this House concerning Stawell Timber Industries, and specifically to a statement that he was aware that the Department of Construction had had cause to reprimand the company for the poor quality of its work. I ask the Minister whether his attention has been drawn to a letter from the company to every Aboriginal housing authority on a list the Minister supplied to the company, which states:
This letter is the result of a meeting, in Canberra, between our Managing Director and the Minister for Aboriginal Affairs, Mr Viner, who agreed, because of our performance throughout Australia in the field of Aboriginal Housing, to supply our firm with a list of Aboriginal Housing Societies with housing requirements this year.
When did the Minister first learn of the contents of this letter and what action did he take to correct its implication? Why did Stawell Timber Industries get such preferred ministerial treatment, particularly as there had been serious questioning of the quality of its work?
– I do not believe that I have ever seen the letter. I do not believe that I had any knowledge of its contents until the honourable gentleman read them to me. As has been said, the list was supplied to this company on request because it had supplied industrial houses to certain Aboriginal housing associations and it was interested in approaching other housing associations to seek to sell its product. We all know that various things are said by way of sales pitch. It may well be that this is what the company was indulging in. As I explained to the House previously, the fact of the matter is that the Department of Construction, being the technical consultant to my Department, had cause in a number of instances to examine the quality of the work of this company and in so doing it decided that the company needed to improve the quality of its work in certain respects. That advice was given to my Department and to the company. So far as I am aware, the company has improved the quality of its performance.
– My question is directed to the Minister for Employment and Industrial Relations. What is his reaction to last week’s call by the Chairman of David Jones Ltd, Mr Charles Lloyd Jones, for a review of penalty rates for weekend work in service industries? Is there any way in which the Government could assist in changing a situation that deprives willing workers of jobs and willing customers of the opportunity to purchase goods and services over weekends?
– I thank the honourable member for his question. The subject of penalty rates generally is causing increasing concern in the community, not least among those who are seeking jobs. As the House would know, penalty rates usually result from an award or determination by one of the various industrial tribunals. It is a fact that an examination of these awards will show that a great many of them are the result of consent agreements between the employers and the union or unions involved. I must say that to date the union movement has shown no great inclination to favour changing the present system. It should be stressed that, as the honourable member has said, penalty rates are having an inhibiting effect on the creation of new jobs because of the extra costs involved. I suspect that this is particularly so in the area of part time employment.
If the adverse effects on the creation of new jobs are to be overcome, the unions in particular and the employers will need to adopt a more flexible approach to dealing with this problem than they have in the past. This is particularly the case if the creation of new jobs is to be put ahead of increases in wages for those who are already employed. If the unions are genuinely concerned about the unemployment problem, they can show their concern. One of the ways in which they can show it is by changing their attitude to penalty rates. If employers also evidence some willingness to take another look at this matter the Government, for its part, certainly would be prepared to consider whatever help it might be able to give to them before the relevant industrial tribunal, provided, of course, that the award concerned was within federal jurisdiction.
– My question, which is directed to the Prime Minister, relates to the statement in his address to the nation on Sunday that the inflation rate is down and is falling. Was the annual rate of growth in the consumer price index in the September quarter, namely 7.9 per cent, the same as in the June quarter? Did the price index of home produced materials used in manufacturing industry increase by a staggering 21.1 per cent in the year to August, partly as a result of the crude oil levy? Is it possible that this crude oil levy, which affects prices in isolated centres throughout Australia- in particular, cities like Canberra which are heavily reliant on road transport- and other increases in indirect taxes and charges will result in either continued stagnation or a more rapid growth in the rate of inflation?
– In the honourable gentleman’s question no weight was given to the fact that a number of the Budget decisions would result in a reduction of the consumer price index. In coming to the overall impact of the Budget, one has to balance out those matters that would add to the CPI and those that would lead to a reduction in it- for example, the reduced sales tax on motor vehicles which already would appear to have had a significant impact. I am advised that the official forecast of inflation of around 5 per cent by the middle of next year is still adhered to by the Treasury. That is not our forecast; it is the technical advice that appears, I think, in Budget Paper No. 2. It is based on the Treasury’s own formulations. It was on that basis that I made the statement that inflation had come down very significantly and that it would fall further. With the policies the Government has in place, I believe that that statement is soundly based. I see no reason for the pessimism and gloom that are inherent in the honourable gentleman’s question.
Mr Baillieu proceeding to address a question to the Prime Minister-
– Order ! The honourable gentleman is asking a hypothetical question. I suggest to him that he put his question in order.
– My question is directed to the Prime Minister. I refer him to the heavy emphasis in his broadcast at the weekend on the new program of overseas borrowings by the States. Is it a fact that in borrowing overseas- assuming the States are not deterred by overseas interest rates- the States could be exposed to risks of loss through exchange rate adjustments? Will the Commonwealth Government underwrite the States against these risks? Is it a fact that, to the extent to which the States use this borrowed money to harness domestically produced resources, the effect will be to add to reserves, relieving the Commonwealth Government of the need to borrow so much for that purpose? Does this mean effectively that the Commonwealth Government gets its desired effect of bolstering reserves while it transfers the risks of borrowing to the State governments?
– I think the honourable gentleman misses the main thrust of the decisions that were taken at the Loan Council meeting. Perhaps I ought to recount for the House how the matter arose and how it developed. At earlier Premiers Conferences the Western Australian Premier had pointed out that major resource development would require a greater input by government for the future; that the world was more competitive and the marketing situation was tougher than in the past; and that there were a number of projects that would be difficult to get off the ground unless the Government was prepared to support the basic infrastructure in a number of instances. This concept was put to examination by all the State treasuries and the Commonwealth. Guidelines were devised and were approved last June. There was, I believe, unanimous agreement that the guidelines, as devised, should be given a trial for not less than three years.
Following that there was again lengthy and detailed discussion between the Commonwealth and State Treasury officers in preparing for the Premiers, the Treasurer and me a report to be examined and on which decisions were to be made at the last Loan Council meeting. It is worth noting, I think, as I indicated last Sunday, that there was a rare unanimity between all governments in Australia’s cause to enable these projects to go ahead. I refer to the great power development projects in the eastern States; the pipeline project in Western Australia, together with other projects such as the Redcliff petrochemical project which hopefully should be able to proceed in South Australia as a result of the decisions taken; hydro-electric and other water supply projects in Tasmania, as well as power and world trade centre projects in Victoria.
All Premiers and the Commonwealth supported these projects as being sensible and constructive and as being projects which will help us to move forward to the 1980s with a very real degree of confidence. It is worth noting that the Premiers have not sought and do not want a guarantee in relation to these loans, because one of the main purposes of the original examination and of the original request was to ensure that the States could do things of their own right, as governments with powers of their own, and not in every circumstance have to get approval for every detail from Canberra and guarantees from Canberra for every aspect of a proposal that they wanted to carry out. They know also that if there were to be a Commonwealth guarantee, quite clearly the Commonwealth would have to be much more intimately involved in the projects that would be supported. The States wanted to be able to make their own decisions about the projects that should be supported, subject to agreement with the Loan Council and the specific terms of a loan. So the matter which was put forward by the honourable gentleman was not requested by the States. I believe that it would, to a significant extent, undermine the nature and purpose of the proposal.
The Loan Council meeting was an historic meeting. It indicates a new period of cooperation between all the States and the Commonwealth, again in Australia’s cause. The Loan Council meeting was certainly held with bipartisan support and a bipartisan approach. I hope that that support from the Labor Party, the Liberal Party and the National Country Party for a great national purpose on a bipartisan basis can flow over from the Loan Council into this Parliament. I think it would do the Parliament good if we could find that kind of consensus.
– Is the Minister for Environment, Housing and Community Development in receipt of official reports on the quality of rehabilitation measures implemented by D.M. Minerals in respect of its sand mining operations on Fraser Island? Further, do such reports indicate at this stage that the Fraser Island Committee of Inquiry’s conclusion that rehabilitation could not be achieved is not necessarily correct?
-I thank the honourable member for his question and I acknowledge the very keen interest he has shown- some might say that he has shown too keen and too active an interest- in this issue over some time. As the House would be aware, following the decision made by the Government on sand mining on Fraser Island, we offered ex gratia payments to two of the companies involved- DM Minerals and Queensland Titanium Mines Ltd. The amounts involved were $4m and $500,000 respectively. One of the conditions of payment of those sums was that certain rehabilitation work should be carried out in the areas mined. It is true that my Department has been involved in assessing the rehabilitation work that has been done so far. Inspections have been carried out in the area. One was carried out in June of last year and there have been three inspections this year- in January, May and September. I am pleased to advise the House that the rehabilitation work has been very well done so far and is progressing very satisfactorily. The areas concerned are now quite stable and there is no present cause for concern that any area may become unstable or susceptible to wind or water erosion. Despite adverse weather conditions in the area, the growth of trees and shrubs is very encouraging. We intend to continue to assess the work that is being done, and I will keep the honourable member advised of progress.
-My question is directed to the Minister for Productivity. By way of preface, I state that when I was Minister for Labor I set in train an inquiry into bringing about a uniform code of safety which could be binding on all government departments so that there would at least be some uniform code to prevent unnecessary accidents. That was more than three years ago. Will the Minister tell the House whether anything has been done since then to give effect to that committee’s recommendations?
-Yes, I can report to the House that we have received the co-operation of all State governments in furthering the work begun by the honourable member for Hindmarsh. Again this is rather typical of what the Prime Minister was referring to when he was saying that the seven governments are able to work together. When the honourable member for Hindmarsh was Minister for Labor he began work aimed at reducing the cost to Australia of occupational ill health and industrial accidents. We have reached agreement with all areas of public sector employment to set standards in respect of each classification in the public sector and in respect of all modes of carrying out work so that -
– In the States as well?
-Yes. The agreement covers all aspects of the public sector. It has been endorsed by the State governments. Codes to apply to all occupations in the public sector have been published or are in the course of preparation. It is the Government’s hope that the private sector legislation, which is, of course, State legislation, will adopt similar standards as set for the public sector as a result of work begun by the honourable member. I suspect that this process will be a little slower. Legislation covering factories and shops has been introduced and updated at different times. We are now working on a model Act for adoption by the States in respect of the private sector. In respect of the public sector, we have made great strides in reaching agreement on a general code of principles and in the adoption of that code in a number of specific areas.
Perhaps I should add also that in the Budget we have allocated money for promotion of a national campaign for an awareness of the cost to the nation of bad occupational health and safety practices. I expect that the Prime Minister will soon be writing to the Premiers to ask them for their co-operation in that matter, which is very much allied to that raised by the honourable member.
– My question, which is directed to the Treasurer, refers particularly to motor vehicles. Will the Treasurer reaffirm his undertaking that the additional 12½ per cent tariff impost on goods which gain entry under import quotas will not appreciably increase protection? If changes in the relative value of the Australian dollar or any other factors should mean that the level of protection comes to be set by the tariff rather than by the quota, will the Government then reduce the relevant tariff so that the 12½ per cent impost will not increase protection? Will the Government keep the matter under continuing review.
– The honourable gentleman’s question, of course, refers to the Budget revenue raising decision to impose a 12½ per cent additional duty on quotas. The honourable gentleman asked whether the Government will keep under review the impact of currency fluctuations on the levels of protection. The Government most certainly will do that. In the Budget Speech I indicated that the purpose of this measure was not to give additional protection. I think that most honourable members would agree that there is what is commonly called a large amount of economic rent in most of the quotas that are issued to importers in Australia.
I believe that in general terms it is thoroughly defensible of the Government to categorise this as a measure to raise revenue and not as a measure to give additional protection. I regret to say to the honourable gentleman that I cannot give an unequivocal guarantee that the effect of the decision, in some cases, will not result in additional protection. Naturally the matter will be kept under review. I do not think that the evidence that is available so far- it is early days yet- gives any indication that the measure is offering additional protection.
Dr Klugman proceeding to address a question to the Prime Minister-
– Order! The honourable gentleman will resume his seat. Yesterday the
Leader of the Opposition moved a substantive motion that related to the Prime Minister’s failure to suspend the Leader of the House. The House voted on the matter. Therefore I feel that it is not correct to pursue questions of that kind.
– I take a point of order. My question has nothing to do with the events of yesterday. I will rephrase the actual question. I will not repeat the part of the question which apparently offended you, Mr Speaker.
– It is not a case of offending me; it is a case of upholding the Standing Orders.
Dr Klugman continuing to address a question to the Prime Minister-
– I think that the second part of the question raises an innuendo against a member of this House and can be proceeded with only by way of a substantive motion.
– I raise a point of order. The honourable member for Prospect is seeking to find out the level of propriety at which this Prime Minister acts. Why would he act against three other Ministers, they being in the Liberal Party, but not against a member of the National Country Party?
-The honourable gentleman is arguing the issue. There is no point of order.
– Well, the Parliament should be entitled to know the answer to that question.
-There is no point of order. The question is out of order.
– On 25 October, in a somewhat similar situation, when I raised an analogous question on this matter in the Parliament and a point of order was taken by a Government member as to the responsibility of the Prime Minister to answer questions on this matter and my right to raise questions on it, you, Mr Speaker, ruled this way:
I think that if the time ever arose when the private conduct of a Minister was not a concern of the Prime Minister, then the Parliament would indeed be in a curious position.
Mr Speaker, I would endorse that statement. You then allowed me to continue with the question and the Prime Minister responded to it. The conduct of the Prime Minister in relation to the appointment and the standing down of Ministers -
– Liberal Ministers.
– . . . Liberal Ministers where circumstances raise concern in the Parliament is legitimately a matter of concern generally for the whole of the Parliament and the community and ought to be raised in this Parliament.
Furthermore, the Prime Minister has enunciated here and outside the Parliament that the standards that are required of members of the Ministry are far stricter and harsher than those applied generally in the community.
-The honourable gentleman is now arguing a matter beyond the point of order.
– On the contrary, Mr Speaker, we are seeking to establish the standards so that we can follow them with some anticipation of consistency being applied and so that we can consistently understand them.
-The ruling which I gave and to which the Leader of the Opposition referred was correct, of course, just as my ruling today is correct. I reiterate the point that I made in relation to the first half of the question. I will not permit questions on matters upon which the House has already decided. My recollection- I am sure that it is the recollection of the House- is that the Minister for Special Trade Representations stood down. The matter was then proceeded with. After a period the Minister was re-appointed. I think that any resurrection of these matters is an innuendo against him which can be proceeded with only by way of a substantive motion.
– I again take a point of order. The matter raised -
-I say to the Leader of the Opposition that I have already ruled -
– But I want to raise another point of order which follows from your just completed comment.
-I will hear the honourable gentleman on a different point of order.
– The matter which the honourable member for Prospect raised today is quite separate and different from the matter which was raised as a censure motion in this Parliament yesterday and voted on. The matter yesterday was a censure of the Prime Minister for failing to suspend the Minister.
-I interrupt the honourable gentleman to say that I have ruled on the first half of that matter and I have ruled on the second half of it. If the honourable gentleman wishes to raise a new point of order I will hear him, but I will not hear him arguing the issue.
-Mr Speaker, I raise a point of order. My point of order is that it is an important function of the House to deal with questions relating to the conduct of Ministers.
-I hope that the honourable gentleman understands that I am not ruling that questions cannot be asked about the conduct of Ministers. I am ruling in relation to a particular question. It is out of order. The matter has been canvassed by the raising of several points of order. I will hear no more points of order on it.
-Mr Speaker, the point that I wish to make -
-I call the honourable member for Dawson.
– Are you not prepared to let me take a point of order?
-The question of the honourable member for Prospect is out of order. I call the honourable member for Dawson.
– My question is addressed to the Treasurer. The Treasurer would be aware that the growing incidence of tax avoidance and the closing of some tax avoidance practices have led to the expansion of the Income Tax Assessment Act to such an extent that it is now almost incomprehensible. The Treasurer also would be aware that the current income tax system lacks equity between taxpayers and acts against the work ethic of Australians. Will the Government, as part of its tax reform program, review the whole principle of the taxation of income with a view to simplifying the Act, discouraging avoidance, granting equity and providing incentives for the earning of income?
-The honourable member’s question raises a fundamental matter, that is, the Government’s approach to the tax system and, as a result, the structure of the Income Tax Assessment Act. It is true that as a result of individual announcements made this year by the Government the size of the Act has been greatly expanded. I know that that is a matter of concern to some people but, frankly, if one is to keep to a tolerable minimum the level of discretions which are available to the Commissioner of Taxation under the legislation it is very difficult to restrain the size or the rate of growth, if I may put it that way, of the Act when one is legislating against individual practices. In that connection, as the honourable member knows, the Government is studying the possibility of rewriting section 260 of the Act. Quite clearly we do have a complicated taxation Act in this country. We have it because we have a complicated taxation system. I think it is relevant for me to say here that before the Government can seriously address itself to the question of simplifying the taxation system in
Australia we have to make some decisions as to the relative reliance that government is to place on personal income tax as opposed to other forms of taxation.
Australia is a country that relies very heavily on personal income tax and comparatively lightly on forms of indirect tax. One of the purposes of the inquiry that is now being carried out into the practicalities of a broad-based indirect tax is to decide whether we ought to effect a change in the mix of taxation in the community and not necessarily to achieve an increase in the overall taxation burden. What I think ought to be said in that connection is that if we are to have a sensible debate about the taxation system in Australia and if we are to decide whether we should have a different mix, we ought to have an intelligent and objective debate. We ought not to have people like some of the retailers and, frankly, the Premier of New South Wales, making emotional and uninformed contributions to the discussion which is going on at the present time about our taxation system.
The Government has made no decision to introduce a broad-based indirect tax. It has demonstrably not set out, as the New South Wales Premier implied in his speech to the New South Wales Labor Party Conference, to increase in a substantial way the overall taxation burden in our community. He makes no contribution to the debate by raising simplistic criticisms of an indirect tax system; nor do some of the retailers make any contribution by circulating in the community misleading and simplistic letters in the hope that this Government will be deterred from making a sensible examination of our taxation system.
If we are to have a more equitable and simpler taxation system in our society, we must first of all make one fundamental decision, and that is whether we continue to rely on personal tax as the principal method of raising revenue with all the implications for incentive that it has, or alternatively, whether we should bring about a different mix. I hope that we can have a sensible debate on this matter. For my part, I have an open mind on the subject and so has the Government. I believe that everybody in the community who wants a sensible examination of our taxation system will welcome sensible and objective comments and npt emotional destructive criticism.
-I refer the Prime Minister to the current industrial dispute in the oil industry resulting from action being taken under section 45D of the Trade Practices Act against the Transport Workers Union of Australia and the fact that there are bright prospects for settlement on the basis that the writs issued thereunder will be withdrawn. I ask the Prime Minister. Is it a fact that in a number of major disputes, including the air traffic controllers strike of May 1977, the Redfern Mail Exchange dispute of August 1977, the Victorian power dispute of September 1977, the Telecom dispute of August 1978, the Victorian tramways dispute of 1978 and now the oil industry dispute, his threats and the threat of his industrial legislation exacerbated rather than resolved those disputes? Does he acknowledge that in each case the dispute was resolved by arbitration and/or conciliation, not by punitive action? Will the Prime Minister now turn away from the politics of confrontation and withdraw offending legislation such as section 45d of the Trade Practices Act, and the Commonwealth Employees (Employment Provisions) Act along with the 1977 amendments to the Conciliation and Arbitration Act?
– That is an odd question coming from somebody who was a Minister in a government under which there was record industrial disorder in this country of a kind that has never been seen before and will not be seen again so long as the Labor Party stays where it is. The heart of this Government’s industrial relations policy has been one of reason and one of conciliation. It was the Australian Labor Party that abolished the normal and standing consultative procedures between management, labour and government. It was this Government that re-established those procedures. It has done that on a statutory basis so that the procedures cannot be arbitrarily ended on some future occasion. The National Labour Consultative Council has already done a great deal of good work on a wide range of matters of importance to good industrial relations. But it was that kind of environment in which the Labor Party was not interested and which it could not achieve.
We all know that quite apart from reason and consultation, the processes of conciliation have to be backed on occasions by the force of law to protect the rights of individual working men and women of Australia and to protect the rights of all citizens in this country against the predatory actions of some union leaders in some circumstances. I think we know, for example, that over 1 50 certificates have been issued in respect of the conscientious objection provisions. They have been accepted by management and labour and the provisions are working well. I believe that is a measure that significantly protects the rights of certain Australian individuals.
The recent use of section 45d was a classic example of the way in which that provision is used by an employer to protect the rights of his own employees. That ought to be understood because the particular employer was seeking to use his own employees who are members of the same union, the Transport Workers Union of Australia, to drive his own petrol trucks and to collect his own petrol. But other members of the TWU said, ‘No, other members of the TWU should have that right and that privilege’, no matter what it was going to do to members of the TWU living in country areas of Victoria. Therefore the action under section 45d was encompassed to protect the rights of a number of Aus.tralian working people.
Bans were imposed and, as a result, action under section 45d led, through the processes of consultation yesterday, to the lifting of the bans and consequently the lifting of the 45D action. If the honourable gentleman is suggesting that in industrial relations there should be no law whatsoever and if he is suggesting that the Aus.tralian people should be left to the mercy and the sometimes utterly irresponsible actions of people in the oil industry in New South Wales, for example, and in other areas, that is a course which he can take some day but which this Government will never take. The people of Australia need and deserve protection, and the processes of conciliation and consultation need reinforcement. That path has led to a much greater measure of industrial peace in Australia than Labor was ever able to provide.
– I direct my question to the Prime Minister. I refer to the fact that next year Western Australia celebrates its sesquicentenary, 1979 of course being the one hundred and fiftieth anniversary of the founding of the Swan River colony in 1829. I ask the Prime Minister whether he can inform the House in what way the Commonwealth intends to acknowledge this significant event. More directly, will the Commonwealth give Western Australia a one hundred and fiftieth birthday present and, if so, what will it be?
– I have been in consultation with the Premier of Western Australia. The Commonwealth Government has decided that there should be a gift from the Commonwealth to Western Australia and the people of that State to mark the sesquicentenary. This will be an important occasion. It will be a very important year for Western Australia, and clearly the Commonwealth would want to participate in it; and that we intend to do. As a result, the Government has determined to make a gift of the major part of a financial responsibility for a hockey stadium of international standard for Western Australia. It will have an all-weather playing surface and will be a stadium of world standard.
Originally the Western Australian Government had proposed that the stadium be financed by the Western Australian Government, the hockey association and the Commonwealth. As a result of our deliberations, we believe that the Western Australian Government should not be asked to put some funds towards the gift to the people of Western Australia, so the Commonwealth not only will be putting in what might have been its share but also will be taking over the financial obligation from the Western Australian Government. The association will still be putting its funds into the project. This will mean that there will be a Commonwealth responsibility above the order of $750,000.
Hockey is a major amateur sport, as we know, particularly in Western Australia. Australia has won Olympic medals in hockey and I hope that with this assistance it will win many more. Indeed, at least one Minister in this House is a noted and frequent hockey player, and he has obviously pushed this proposal with his customary vigour and enthusiasm. The stadium will be used for the world hockey tournament in 1979, which will be a highlight of the sesquicentenary celebrations. At a later time a name will be selected that will be distinctive -
Opposition members interjecting-
-The House will come to order. There is far too much interjection on my left. I ask honourable gentlemen to remain silent. A gift to Western Australia is most important.
-At a later time a name for the stadium will be chosen which will have a distinctive Commonwealth flavour indicating the Commonwealth’s gift to Western Australia and its people for a year which will be most exciting for the ‘State of Excitement’.
– I direct my question to the Minister for Transport and remind him that it is now over two years since he requested a report from the
Bureau of Transport Economics on the realignment and reconstruction of the Federal Highway from Goulburn to Canberra. I understand that the report was completed two months ago. Will the Minister tell the House when he intends to table the report? In view of the deterioration of the Highway since his Government came to power, will he recommend to the Government the restructuring of the Federal Highway as a means of stimulating some activity in the private sector and matching the efforts of the State Government in this respect?
– The Federal Highway is what is called a national highway and, from the Commonwealth’s point of view, is eligible for funds from national roads grants. So far as priorities are concerned, that part of the Highway which is in New South Wales has to be eligible for funds according to the priorities set by the New South Wales Government. If the New South Wales Government does not determine that the Highway is eligible for funds, then funds are not made available to it. As for the Canberra side of the Highway, the National Capital Development Commission has responsibility for allotting priorities in respect of road development within the Territory. If the NCDC does not feel like allotting funds to the Federal Highway, no funds are allotted. I will have a look at the rest of the question asked by the honourable member and give him a further reply.
-For the information of honourable members I present the report of the Foreign Investment Review Board for 1978.
-The Government Whip has advised that Sir William McMahon has been discharged from the Legislation Committee considering the Trade Practices Amendment Bill and that Mr Simon has been nominated in his place. The Opposition Whip has advised that Mr John Brown has been discharged from that Committee and that Mr Humphreys has been nominated in his place. The Government Whip has advised that Mr Simon has been discharged from the Legislation Committee considering the Audit Amendment Bill and that Sir William McMahon has been nominated in his place. The Opposition Whip has advised that Mr Hurford has been discharged from that Committee and Mr Stewart nominated in his place.
-I have received letters from the honourable members for Port Adelaide (Mr Young), Indi (Mr Ewen Cameron) and Denison (Mr Hodgman), proposing that definite matters of public importance be submitted to the House for discussion today. As required by Standing Order 107, I have selected one matter, that is, that proposed by the honourable member for Port Adelaide, namely:
The Government’s failure, as reflected in the Prime Minister’s speech to the nation to recognise the massive problems facing the Australian work force.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the Standing Orders having risen in their places-
Mi YOUNG (Port Adelaide) (3.14)-This Government’s withdrawal from the full employment commitment poses a threat to the job security of every working Australian. Despite the promises of the Prime Minister (Mr Malcolm Fraser) that the 1980s will be years of growth, prosperity and excitement- I sometimes wonder just how twisted the Prime Minister has become- there is no doubt that Australia faces a social and economic disaster of unprecedented proportions.
The Minister for Employment and Industrial Relations (Mr Street) was given quite lavish praise when on 14 September last he finally broke away from the Government’s three-year line of deception. His views reflected the advice the Government has been getting from its professional advisers for at least the past year, advice which it has been ignoring in favour of the more politically expedient fantasies it has been feeding to the voters.
Quite clearly, the Prime Minister has not accepted, and does not accept, the propositions put forward by bis employment Minister.
Once again the Prime Minister is attempting to deceive the Australian people. The employment prospects confronting our school leavers, our manual and clerical work force, and our university graduates give the lie to the Prime Minister’s fantasies.
The Minister’s own Department has already told the Government that 10 per cent of the work force will be permanently unemployed because of the effects of structural change, especially through the introduction of new technology, unless the Government creates necessary job opportunities. Since the election of the Fraser
Government, the contraction of employment opportunities has been greatest in the private sector. Between August 1976 and August 1978, 67,600 jobs were lost in manufacturing. The construction industry also shed 17,700 jobs during this period, while the wholesale and retail trade and transport and storage lost 8,100 jobs and 3,500 jobs respectively. In total, these sectors shed 96,900 jobs over this two-year period.
I wonder whether the employees in these industries share the Prime Minister’s optimism. According to the Department of Employment and Industrial Relations, ‘it is unlikely that more than 10 per cent of additional jobs will in the future come in manufacturing industry’. In fact, the Department argues that the bulk of the new jobs in the future will be required to come from the services sector. However, employees in the services sector are now faced with a dual threat to. their job security. On the one hand, savage cuts in public expenditure imposed by the Fraser Government threaten the livelihood of those employed in community services and public administration. On the other, the effects of the micro-processor revolution threaten the job security of employees in banking, insurance and other clerical areas.
A study carried out by the Siemens company of Germany suggests that by 1 990, 40 per cent of the office work will be carried out by computerised word-processing machines linked to data transmission systems. Australia’s tertiary industries provide 70 per cent of the employment in Australia, yet the Fraser Government totally refuses to acknowledge the threat to job security caused by the introduction of new technology. The expectation that the growth of employment opportunities necessary to cater for 250,000 school leavers each year until 1981, let alone for those already unemployed, will occur in the services sector is just one more example of the Prime Minister’s wishful thinking.
It is little wonder that the Prime Minister refuses to recognise the significance of job displacement caused through technological change when he will not even acknowledge the disastrous employment effects of current economic policies. The most spectacular record of which this Government can boast is a real unemployment level of some 700,000 people. Given present Government policies and the introduction of new technology, unemployment will rise to 1,000,000 people by 1981. In October this year, in seasonally adjusted terms, 422,000 people were officially unemployed. It is common knowledge in the community that the situation is far worse than this. Official unemployment statistics are now virtually meaningless. At the very least, they represent an absolute minimum level of unemployment. A far better guide to employment and unemployment in this country is the number of people recorded in labour force surveys as ‘not in the labour force’. The Australian Bureau of Statistics definition of this group is as follows:
Persons without a job, business, or farm who were not actively looking for work and who during survey week, were either keeping house, attending an educational institution, retired or voluntarily inactive, permanently unable to work, or inmates of institutions.
Many thousands of young people, married women and men and people approaching retiring age have simply dropped out of the labour force- a stark acknowledgement of the hopeless task of finding employment. These people are not recorded as officially unemployed.
Between February 1977 and September 1978 an additional 305,300 people became forgotten statistics. In 18 months, an additional 305,300 people were recorded as ‘not in the labour force ‘. Would the Government have us believe that in 18 months 305,300 people suddenly became incapacitated or would it have us believe there was a sudden baby boom confining large numbers of females to the home? Would honourable members opposite have us believe that suddenly a large percentage of the work force has lost the work ethic?
These people certainly did not disappear into our tertiary institutions, technical colleges or high schools. In 1977, the full time students in universities and colleges of advanced education numbered 102,901 and 84,894 respectively. The comparable figures for 1978 were 101,235 and 84,230. Full time enrolments in upper secondary schools and technical colleges did increase slightly during this period. The number of students over the age of 15 years attending high schools increased from 479,407 in 1977 to 493,700 in 1978 with enrolments in technical colleges increasing from 39,515 to 42,000 during the period. The increase in the number of people not in the labour force represents hidden unemployment, people simply withdrawn from the labour force because there are not enough jobs to go around. At least 250,000 people have withdrawn from the labour force for this reason alone since February 1977. The real level of unemployment in Australia at this moment is therefore 672,000 people. Why did the Prime Minister not reveal this to the nation on Sunday night?
Those most vulnerable to social and economic disruption- our young people, the poor, the unskilled and semi-skilled, migrants and our Aboriginal population- are suffering tremendous hardship as a result of the Fraser Government’s unemployment blitzkreig
Let me give a few examples. In September 1978 there were 75,725 unskilled adult manual labourers out of work and there were 846 vacancies, giving an unemployment-vacancy ratio of 90 to 1 for this group. The ratio for juniors in this group is more like 130 to 1. For Australia as a whole, nearly 40 per cent of the total unemployed are people under the age of 2 1 years. With the addition of 250,000 school leavers each year, unemployment in this age bracket will continue to grow. In September 1978 there were 24 juniors registered with the Commonwealth Employment Service for each available job vacancy. I can only imagine how excited those juniors became upon hearing the Prime Minister’s prediction. The Prime Minister offers no solutions- he will not even acknowledge the problem. These people could rot for all he cares.
Let us look at some of the information that has been published about computers in the last few months. The last five years have seen an acceleration in the growth of computerisation and automation. In 1958 there were 11 computers in Australia. There were 608 by 1967 and 1,020 by 1970. In 1972 it was estimated that there would be 3,000 computers in Australia in 1975. This information was published in the Australian of 8 August 1972. But that was before the miniaturisation of the computer. A $20 microprocessor today has much the same computing ability as a $lm computer in 1950, using one onehundredthousandth of the power, and taking up one onehundredandfiftythousandth of the space. There is a lack of reliable statistics related to the computer industry and to the influence of computers on jobs. The area is wide open for research. It should be looked at seriously and urgently by this Government. However, each day fresh evidence comes to light in the Press. From this evidence trends can be seen. A headline in the June 1978 issue of Rydge ‘s business journal reads ‘National Mutual’s System Cut Costs, Lifted Quality’. The story is as follows:
Since the Group Head Office and Victoria Branch of National Mutual Life, an insurance firm, installed wordprocessing centres two years ago, support staff numbers have been reduced 29 per cent. The number of clerk-typists in the two offices has been reduced from 169 to 120. Forty-nine fewer staff are needed for a growing business.
But now there are 49 fewer people employed. This is an example of word-processing in its early stages. Further cuts to staff will be possible as the full efficiency of the system becomes evident. Word-processors are office systems based on a small computer which can perform almost any business function faster than human beings. Industry figures claim up to sixfold increases in throughput. Put another way, an office with six staff members can possibly get rid of five of them.
Another firm’s advertisement invites businessmen to ‘meet your new accounting department, the word-processor, which you can buy or lease for less than the cost of an office junior per week ‘. That advertisement was printed in the National Times of 1 July 1978. The present accounting department staff are no longer necessary. A third firm advertises that there are already well over 2,000 of its machines in Australia. This was stated in the Australian Financial Review of 2 August 1978. At a saving of an average of four office staff at a time, according to this firm, its sales alone mean 8,000 fewer jobs in Australia. Computer systems in wholesaling and retailing allow for ordering, stocktaking, accounting and point-of-sale operations to be carried out with fewer staff and the changeover allows for selfservice techniques which require fewer sales staff. The G. J. Coles-K-Mart chain currently is publicised as an example in the retail sector.
Computerisation in banking, insurance, commerce, airlines, hotels and restaurants allows for reductions in staff. This has occurred already in most large organisations. In 1969, McLean’s book detailed the changes already taking place in banking in Australia as a result of computerisation: The Commonwealth Bank had introduced a machine which could do the work of 1,000 clerks. The Bank of New South Wales was becoming full automated. The National Bank would employ 130 computer people but the low skilled clerk would be redundant. The new micro processors and word processing systems would allow the smallest firms to become computerised. In the United Kingdom this year a scheme was started to link banks with supermarkets and other shops by computer. This has been foreshadowed for some years. The computer terminals at the shops will debit the bank accounts of the customers at the time they make the purchase. This will cut out all the paper work hitherto related to purchasing and payment, and all the employees who worked on the paper. If this scheme works, the insurance firms, hotels, restaurants, airlines, and so on, could all set up computer links, as printed in the Daily Mirror on 2 February this year.
Manufacturing industry is switching to automation, where people are phased out and the computers run the machines, with a small number of technicians. The Fiat company’s new plant near Turin in Italy uses robot-style machines for all the automobile processing work at present being done by about 50,000 workers in Australia today, as stated by the Australian of 29 July 1975. The printing trades and those in the print media, including journalists, have been active in the past year because of perceived threats to jobs from computerised-automated techniques. The Sydney Morning Herald dispute of 1977 was related to this. The company now employs about 1,100 members of the Printing and Kindred Industries Union. As a result of the new processes the numbers are expected to be reduced to about 670 in the first half of 1980. About 500 jobs in one very small plant will go down the drain as a result of computerisation.
These are the things that the Prime Minister (Mr Malcolm Fraser) did not mention in his speech to the nation on Sunday night. He did not tell us that the Minister for Employment and Industrial Relations (Mr Street) on 14 September said that in the 1980s we would have an Australia of people in their early twenties who had never been to work. What hope or prosperity is there for people of that age as we go into the 1980s? Unless we have manpower policies there can be no prosperity in this country. Greater capital advances for large companies operating in Australia do not mean a thing for the welfare of the people of Australia unless we have humane manpower policies running parallel with the sort of assistance that is being given to industry. In today’s Melbourne Age there is a full page advertisement by the bank officials. They accept technology but not at the expense of having all their members sacked. Technology must be introduced when people on the job have some say as to how it is to be introduced. These sorts of things, which are the most important questions in Australia- employment and unemployment, manpower policies- were not even mentioned by the Prime Minister on Sunday night. People are going to vote on those questions in the 1980s and that is the reason why this Government will not be returned.
– A number of important matters were raised by the honourable member for Port Adelaide (Mr Young). It seemed to me that there were three main themes running through what he was saying. He was referring to the short term and the long term in the economic sense and also, towards the end of his speech, to a number of other areas which the Prime Minister (Mr Malcolm Fraser) has covered on other occasions. Recently the Prime Minister addressed the Academy of Technological Sciences and gave a great deal of attention to the role of technology in the 1980s. On other occasions the Prime Minister and I have spoken about employee participation programs and consultation with employees about the introduction of new technology. I have had discussions with officers of the Australian Bank Officials Association, amongst others, about the way in which it might be introduced and about the way in which consultation ought to take place. A considerable amount is being done by the Government on those last matters raised. It was not possible to refer to that in the Prime Minister’s relatively short speech on Sunday night.
As this matter of public importance relates to that speech, let me remind the House of what the Prime Minister endeavoured to say on Sunday night. He endeavoured to address himself to the changes in the longer term economy of this country. He endeavoured to paint the short term strategies in the context of longer term recovery and prosperity and job creation. This, I believe, he did most effectively. It is interesting that the honourable member for Port Adelaide did not quote from the Prime Minister’s speech. Let me remind the House briefly of some of the matters raised by the Prime Minister, First of all, he referred to the agreement reached with the States at the Loan Council meeting regarding infrastructure finance. He said that he believed that this was important and that it had been possible only because of the strategy adopted over the last three years in cutting back inflation and interest rates and reducing costs generally. He said that he believed that, with interest rates and inflation falling, employment prospects were improving. He said, in fact, in respect of unemployment:
Unfortunately unemployment is still far too high. That is of great concern to me, and I know it is of concern to all of you. It is because the Government is so concerned that we are prepared to take the hard, unpopular decisions that we know are right for Australia. We are. not prepared to take those decisions that might appear to help, but which we know will not.
Actions that we have already taken are enabling Australian manufacturing industry to get back into export markets.
The Prime Minister went on to give examples of how we are getting back into export markets. The export awards will be presented in the next 10 days or so. They are always inspiring examples of ‘coal to Newcastle’ stories, and the stories this year are even better than before. I know, in some of the labour intensive industries in which my Department has been working with the trade union movement and with the employers directly, of a number of cases where the situation is turning around. The firm of Julius Marlow, which has always been a leading company in the shoe industry, is now employing 200 more people than it employed at this time last year. It is now selling high quality shoes of a fashion and design that Australian consumers want. It is considerably undercutting the price of imported shoes and will be able to look to quality exports.
It seemed to me that the honourable member for Port Adelaide raised a number of very important matters; but, in talking in both the short and long term as he did, he left behind a picture which was distinctly different from that referred to by the Prime Minister. No one in this House has denied the difficulties in the short term regarding employment. No one has denied the social impact for those who are affected. What we have said in Government is that we do not possess a magic wand. If we did, we would use it. That is one of the important facts which has to be faced. The honourable member for Port Adelaide did not say that we should not introduce new technology, but he did identify what we identify as problems, namely, the rate of change of its introduction, the manner of its introduction and the way in which it is designed. We have tried to address ourselves to that. Let me refer once again to the Prime Minister’s address. He said:
All this is possible only because inflation is down, because costs have stabilised, and Australian manufacturing industry is more competitive in our own market and in export markets.
The Prime Minister then went on to talk of the position in the mining industry as the result of some of the policies of the Government. In respect of oil he said:
That means more oil reserves. It means more jobs for Australians.
It has to be acknowledged that the jobs to which the Prime Minister is referring there are not in high labour intensive industries. It has to be acknowledged that the manufacturing sector will not itself return to high labour intensive areas of employment unless we can find more export markets. We are going through extremely difficult times, but we as a Government are endeavouring to co-operate with the States in order to overcome those difficulties as rapidly as we can.
The importance of the Prime Minister’s address was that it focused attention on what the seven governments in Australia have been able to negotiate at the Loan Council meeting. His speech was devoted to that. The Prime Minister gave details of the infrastructure projects which the Premiers put forward and which had been accepted by the Loan Council. Most of those do have long lead times involved, but the construction phase will begin soon and each of those projects will contribute greatly to the prosperity of Australia. At the same time they will free precious capital held by the States for investment in other projects such as roads, schools, hospitals, bridges and so on, which will employ people in the construction phase. So let us have a look at some of those projects and at some of the vision that was in the minds of the seven leaders of government when they met at the Loan Council. I shall read again from the Prime Minister’s address to the nation:
Your Federal Government has always been committed to working in co-operation with the States, and last week we took that commitment to federalism a significant stage further. After two years of negotiations, at a special Loan Council meeting, the States were given authority to borrow overseas to assist major developing projects. Earlier in the year, in June, there was agreement about the guidelines. Now all seven governments, the States and the Commonwealth, acting together have taken decisions that will enable major development works to proceed.
In New South Wales and Queensland, coal export facilities will be vastly improved. In all the eastern States there will be a great expansion of power generation, as well as in the Pilbara of Western Australia. Hydro-electric and water supplies in Tasmania will be greatly improved. For Western Australia we have taken decisions that will encourage the great North West Shelf development to go ahead, and also an alumina project.
In South Australia, where there was some concern about the future of industrial development, we have taken decisions that will enable the State Government to construct power supplies and pipelines that will encourage a great petrochemical plant at Redcliff.
Again, in Melbourne, a great world trade centre will be built that will encourage trade, to and from Australia, around the world.
It was a rare show of unity between governments- acting together to advance Australia’s cause. All seven governments have worked and planned together to encourage Australia’s development. It was an historic meeting.
It is against that background that this matter of public importance is raised today. Let me refer to some of the remarks made by the honourable member for Port Adelaide. First of all, he spoke of job displacement through technological change. I say to him that what he presented was false in the sense that it assumed that too many elements were fixed. He presented pessimism galore because he did not look at the chain reaction of the effect of reducing unit costs by the introduction of new technology. We must strive in Australia to introduce technology of a kind suitable for the market, for the people who will work with the technology, and for our potential customers domestically and internationally. We must design our technology so that it does cater for all of those requirements. By doing those things we will so rejuvenate our existing industries that we will sustain a high level of employment in them. We will not extend employment in them but, by extending demand for the goods and services, a chain reaction can be achieved in which other employment opportunities are created.
-But not in manufacturing.
-Not necessarily in the existing manufacturing sectors. However, I shall deal with that matter first. Concurrent with our thrust to improve our technology in existing manufacturing is our thrust to create new manufacturing enterprises. So not only will we inevitably adopt micro-processing but also we ought to do all that we can to manufacture the technology involved in the micro-processes. For example, in respect of InterScan which has been hailed as an important initiative, we are determined to manufacture as much of the components as we possibly can for the world market. A piece of legislation which I will be introducing later this afternoon and which will greatly increase the industrial research and development grants is aimed not just at improving the technology to be adopted in existing industry, not just at enabling people to use the investment allowance more effectively by adopting the right kind of innovative technology for themselves, but also at creating new industry such as InterScan. We as a government are prepared to fund, if we have to, 100 per cent further research into and development of Australian innovations to a point where it is commercially feasible for risk capital to be injected for the creation of new industries, some of which will be manufacturing industries. I know the views of the honourable member for Lalor (Mr Barry Jones) on this matter. As I have heard him speak on it before, I would have thought that we were talking the same language.
– They will not be labour intensive.
– Very few of them will be labour intensive. It is very difficult to see labour intensive industries being created.
– Where will our people be employed?
– If we are really export oriented and if we really do those things we can do well enough to compete with other countries in quality and in delivery, we will find that people will pay for quality. It is the volume of goods and a reduction in unit costs which have to come together. It seems to me that there are four elements that have to come together for us in the 1980s if we are to return to high levels of employment and prosperity. Those four elements are a return to economic growth to which the strategies of this Government have been aimed -
– That’s a pipe dream.
– It is not at all a pipe dream. If a person living in our country with its human and material resources thinks that that is a pipe dream, it is a sad commentary on our innovative capacity. One can see so many other countries with very little in the way of resources coping far better than we have been coping with the international downturn and with the rate of change which is facing us, both economically and socially. Let me complete the picture. Four elements are important. One is a rejuvenation of our existing industries so that, whilst they may not be as labour intensive as they were before, we will retain as much skilled, satisfying employment in those industries as is possible. It involves a combination of ingenuity in a number of areas, including the introduction of technology, but that is not the only area for creativity and cooperation.
We need also the creation of enough new industries, which will largely be capital intensive but enough of them being of a creative, innovative kind, to develop export potential for this country. One which has been spoken of recently- it is another Commonwealth Scientific and Industrial Research Organisation innovation- is Sirotherm, which is a process for the desalination of brackish water. Another is Sirofloc, a process for the removal of other impurities from water. These innovations will be of benefit all around the world. When we have developed those processes to a stage where they are commercially marketable we will have a manufacturing industry for the components for sale all around the world. There are a great many other innovations in the area of medical research which we can market. I believe that these will be developed further by my Department in the next few months. Economic growth and a willingness to look at changes in our patterns of working hours are two other important elements. I have spoken on other occasions of a willingness to look at a 14 day fortnight in which we all work the same number of days but not on the same days.
– Without loss of income?
-As far as possible, with no lost income. Certainly, people should be working pro rata if they opt to work permanently on a part-time basis, but as far as possible our goal must be to give full-time employment to those who want it. We should give those who opt for early semi-retirement or who opt for part-time employment the opportunity to have that work on pro rata conditions. A variety of factors must come together to create the longer term objective. There is no magic wand which can be used to achieve our shorter term objective. Certainly we do not want a slavish adoption of other nation’s policies and technology. We want to return to specialisation, efficiency, equality of working life and development of a leisure ethic. All of those things and all the other factors that I have mentioned have to come together. It is a complex world of change. I believe we have a coherent strategy. We have a clear philosophy. It is based on a vision for Australia which is aimed at high levels of employment and sound standards of living. These things will not be achieved easily and in the short term but I do not believe that the Opposition can reasonably suggest that the policies which we have adopted in the short term can do other than bring on as quickly as possible the long term prospects of which the Prime Minister spoke. I believe that the 1980s are years of optimism for us. It is about time that we started talking positively.
Mr DEPUTY SPEAKER (Mr MillarOrder! The Minister’s time has expired.
-I take the unusual course of congratulating the Minister for Productivity (Mr Macphee) on the rational way in which he presented his case to the House today. It is regrettable that it had no substance but he did present it in a rational way. It was rather remarkable to find that his attitude towards this very complex subject is very different from that of his Prime Minister (Mr Malcolm Fraser) and, indeed, very different from that of most of his ministerial colleagues and vastly different from that of a lot of those members who sit on the back bench on the Government side of the House. In fact, if the Prime Minister were as rational and as reasonable on this whole matter as the Minister for Productivity who is sitting at the table perhaps many of the difficulties that have arisen in this country over the last three years would not have arisen. But we are not confronted with dealing with the Minister for Productivity. When the nation is confronted with this problem we must face up to the fact that the person who will dominate the scene in that area is the Prime Minister. He will inflict on other Ministers his will to beat the work force of this country.
I was pleased that the Minister had enough common sense not to mention the work force pricing itself out of the labour market through constant increases in wages. The Minister is intelligent enough to know that, were there no increases in wages, there would still have been the development of miniaturisation, computerisation, mechanisation, advances in technology or whichever term we care to use. I place on record that I am not a Luddite. I do not advocate that we should smash the machines. They should be used to the advantage of mankind, but unfortunately in the situation which is arising they will be used only for the benefit of those who claim ownership of them. That point has been made quite clearly. In fact, it is almost as obvious as Peter Nixon at a diplomats’ ball that what is happening in Australia at the moment is that large numbers of people are being made surplus to the work force because of the introduction of new, modern, less labour intensive machinery aided and abetted by the present Government.
We have been told that there will be this curious thing known as an investment allowance which will encourage employers to replace the machinery in their factories, machinery which at the moment is underemployed and underused, with new machinery. Of course, new machinery is far more advanced than the machinery it replaces, and the whole trend of machinery is to dispose of labour. So the new machines are less labour intensive than those that went before them. We see this vicious cycle of people being encouraged to put in machines to do the work that previously people used to do. The Prime Minister made what I thought was a rather laborious point about job creation as a result of new oil discoveries. It is a bit of a throwaway line; it does not mean anything. Actually very few jobs are involved in the discovery of new oil deposits. The Minister went on to say that the States being given permission to borrow would allow them to free capital for more capital works. That confused me a little because I could not see why it is so damned important that the States do that. I should have thought that the Federal Government would have more responsibility than the States in that area.
– Have you not heard of federalism?
-Federalism is exactly what I am talking about. The Minister is talking about the destruction of federalism. I do not know why he keeps calling it ‘new federalism’. Why does he not call it ‘destruction of federalism’.
– New feudalism.
– That is a much better way to describe it. If we talk about the infrastructure we are still not talking about labour intensive work. The honourable member for Port Adelaide (Mr Young) pointed out quite clearly that the highest number of people who have been replaced and made redundant in Australia are those in the manufacturing sector, not those in the construction sector. I suggest that those in the construction sector are there through downturn of capital investment rather than for any other reason. Construction work on roads and bridges and the like, in common with work in factories and offices, is becoming highly mechanised work. In one sense it is just as well that it is because a lot of us would be living adjacent to unmade roads if we had to wait for proper roads to be constructed by men with picks and shovels and wheelbarrows.
-That is the dilemma, isn’t it?
-It is not a dilemma at all. The situation is quite clear. My whole philosophy has always been that man was not born to work; rather was he born to have the work done. That is why he has intelligence and walks on his hind legs and not on four legs. This Government takes an extraordinarily callous attitude to the post-industrial revolution and is sitting on its butt doing nothing about the people who are being replaced by machines. The Minister mouths platitudes about this sort of study going on and that sort of study going on, but we never see any concrete results. All that we know is that the dole queues are getting longer. All that we know for sure is that there are people leaving school now who, for a period of three of four years or even longer, will not be able to find employment. If the Minister lived in an area such as the one in which I live rather than the comfortable area in which he lives- although I am sure that the problems exist there- he would know that even now there are people who have been conditioned to accept their dole cheque each week and regard it almost as a pay envelope. The pride that they had at one time has been stripped from them by the actions of this Government in ensuring that that situation continues. The Prime Minister, in his nice, mealy-mouthed way says: Unfortunately, unemployment is still far too high’. Goodness gracious me, I bet that all the dear old mothers around Australia wept their eyes out when they read that. But I bet that the 3,000 or 4,000 kids in my electorate who have left school and who have not been employed for two years did not weep their eyes out. It has been a conscious policy of the Government to bring about that pool of unemployment.
There is no way that the Government can sit back and blithely say that this post-industrial revolution, this onset of advancing technology, can be likened to the industrial revolution when initially the crofters smashed the machines which slowly created more employment for them. There are a few differences and if I may I will hastily elaborate on them. We have to understand that the industrial revolution was marked by an enormous population increase. In 1801 the population of the United Kingdom was 12 million and in 1850 it was 22 million. In 50 years the population had almost doubled. One cannot see that happening in Australia, even in cities, where the population has a longer life expectancy and where there are more live births. There was an enormous increase in the use of energy resources, such as coal, iron and water. I cannot really see a similar increase being condoned by our present society. There was development of new industries, such as railways, which employed huge resources and manpower. Of course, any innovation that takes place from now on is the child of technology, which just does not use up huge resources of manpower. I am told that it took 20 men to bring the railway from Tarcoola to Alice Springs. Hordes of Chinese coolies were used at one time to lay railway tracks.
– Would you like to bring back the Chinese coolies?
-I am not suggesting that. I have made that quite clear already. If the Minister took the wax out of his ears and listened to what was being said he would probably learn something. There was also an exploitation of cheap raw materials, for example from India and Africa. We will not see that again. There were major developments in the provision of utilities such as electricity, gas, water, sewerage, and in urban housing, transport, schools and hospitals with a resultant scarcity economy with supply falling behind demand. There was job creation through mechanisation. The machines needed operators.
– What about computers?
-If the Minister can contain himself I will turn now to the postindustrial revolution. I know that he is excited about all of this. In economically advanced countries there are now small population increases with life expectancy stable or, as in the United States and Australia, falling slightly. There is a growing anxiety about the rate of resource depletion, as illustrated by the Club of Rome’s report entitled ‘Limits to Growth’, which points out that the United States with 6 per cent of the world’s population consumes 40 per cent of the world’s annual output of raw materials. There has been a development of sophisticated industries which are based increasingly on the concept of miniaturisation. That is, quantum leaps in complexity and efficiency are accompanied by quantum dives in size, energy use and cost. Logically one cannot maximise two functions at the same time, but the achievement of miniaturisation has done precisely that. It has been estimated that since 1948 the size of computers has diminished by a factor of 1,000, that their reliability and capacity has increased by a factor of 1,000 and that their cost has dropped by a factor of 100. There has been an end to the era of cheap raw materials from the Third World, and major developments, such as utilities, schools and hospitals in a post-scarcity economy places more emphasis on the consumption of services than on goods.
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired. Before calling the honourable member for Mackellar I draw the attention of the Hansard reporters to the possibility that they may have intercepted an interjection from the honourable member for Port Adelaide made from the Public Gallery. Of course, under those circumstances that interjection is not admissible. Having said that, I must chastise the honourable member for Port Adelaide.
– I did not say that.
-It is the observation of the Chair that the honourable member involuntarily made an interjection, as he has just demonstrated his capacity for so doing.
-i take a point of order. I realise that interjections are out of order but I do not think it is stipulated that a member has to be in his seat to make an interjection.
-The honourable member for Port Adelaide, for all practical purposes as far as debate is concerned, was not present in the House when the interjection was made.
– The honourable member for Burke (Mr Keith Johnson) was surprised that the Minister for Productivity (Mr Macphee) was reasonable. The honourable member for Burke attempted, as have so many speakers on the other side of the House since I entered this Parliament earlier this year, to draw a distinction between the policies and character of the Prime Minister (Mr Malcolm Fraser) and those of his Ministers. Honourable members have tried to draw a distinction between this Minister and his ministerial colleagues and this Minister and back benchers. I have been a bit confused by all this because the demonology does not seem to ring true. The Minister for Productivity was appointed by the Prime Minister. A new department was set up by the Prime Minister to assist industry with the specific intention of working in the area of technological change. That department has been one of the great successes of the Fraser ministry. I think therefore that it is unreal for members of the Opposition to continue trying to draw a distinction between the Prime Minister and other Ministers.
Similarly, the honourable member for Port Adelaide (Mr Young) tried to draw a distinction between the Prime Minister’s approach to employment and unemployment and the approach of the Minister for Employment and Industrial Relations (Mr Street). That too is an absolute nonsense. The Minister for Employment and Industrial Relations was appointed by the Prime Minister. He has the full confidence of the Prime Minister. The statement that he made in the House was made with the agreement and approval of the Prime Minister. In fact the Prime Minister has made a number of statements along the same lines.
Let me get on to the question of the way the back benchers feel about these things and the attempt to make some distinction between the approach taken by the Minister for Productivity and the various members of the Liberal Party back bench. I have sat in this Parliament week in and week out this year and heard from members on the Opposition side what beasts the Liberal Party and National Country Party back benchers are for having absolutely no concern about the problem of unemployment. I have been told day in and day out that back benchers on this side of the House classify the unemployed as dole bludgers. It would be remarkable indeed if this were the fact and I had not heard the term mentioned even once in the joint parties party room or bandied about in general conversation amongst coalition back benchers. It has been my experience since being in the Parliament that the term ‘dole bludgers’ has been reserved for use in debate by members of the Opposition. It has been duly reported in the Press. A great mythology has built up about the views of members on this side of the House on the problems of the unemployed. Having paid close attention to the debates in this House since I have been a member and to what was reported in the Press before I entered Parliament, I have not found this view amongst Government Ministers and back benchers. In fact I have found a very grave concern amongst all of them about the very real human problems of unemployment. Not only that; I have found a more practical concern.
The honourable member for Port Adelaide, who has been most voluble on this subject in the House, seems to have discovered word processing. He is one of the most efficient word processors in the House. If the intention of word processing is to save labour costs, it certainly seems to save him the cost of the labour of looking at the question in a comprehensive fashion. He talked about the unemployment blitzkrieg of the Fraser ministry. I point out more in sorrow than in anger that if there were any blitzkrieg on employment by any government it was what I would refer to as the eight panzer divisions thrust into manufacturing industry during the period the Labor Government was in office. I am not saying this by way of combat in debate. I think the debate has been conducted reasonably. I have to refer to the eight major policies pursued by the Labor Party when it was in government as a direct result of which over 58,000 jobs per annum have been lost in manufacturing industry since 1974. That is a very severe blitzkrieg against employment in one area of industry. I am certainly not claiming, because I know far too much about manufacturing industry, that all was well in manufacturing industry at the end of 1972. The industry was facing great problems of adjustment. Certainly, down the line a bit, a number of external factors had to be worried about post- 1974, which would have occurred under any government. But these eight things did not have to occur. I list them as follows:
These were the eight major acts of policy which were felt most in the industries which were least competitive against imports. It is very hard to find anybody in the clothing, textile and footwear industries who is not grateful for a new government coming in in 1975 and taking some ameliorative steps in those industries. The people in the motor industry who prior to that time were being successful with exports know that as a result of those actions by the Labor Government they became uncompetitive. We are being told that there are now signs that export markets are returning for some of our manufacturing industries, particularly the motor trade.
I think that the policies taken to reverse a number of the policies of the Labor Government, together with a number of new policies, have been an expression of practical and genuine concern about employment in this country. I think we would find a lot in common between the approaches of the Government and the Opposition if we could only get to talk about them. I agree from what the honourable member for Burke said and from the interjection of the honourable member for Lalor (Mr Barry Jones) that we could pursue some common ground.
One area of common ground is the increase in wages to which the honourable member for Burke referred. I am not concerned about the absolute level of wages now that we are getting better relativity to overseas labour costs, those against which we are competing. In other words, if we conduct our industry in a certain way and use modern technology we can afford to pay high wage levels. But there are problems about relativities within that general level.
Members of the Opposition could assist in this area by trying to get more sensible awards for the young, the unskilled in relation to the skilled and for weekend workers. Some of the awards are quite absurd and have forced people out of work. For example, in the hotel and retail liquor trades industry, an industry which has squeezed out enormous numbers of people over the last few years, any ordinary time worked from midnight Friday to midnight Saturday is paid at time and a half, Saturday to Sunday at time and threequarters and in front of house at double time. The introduction of savage penalties like that has forced literally thousands of people out of employment in that industry. If we are to have any combined attack on these problems I ask members of the Opposition to assist by talking some sense into employees and unions about these awards.
-The discussion is concluded.
Assent to the following Bills reported:
Dairying Industry Research and Promotion Levy Amendment Bill 1978.
Dairying Industry Research and Promotion Levy Collection Bill 1978.
Motion (by Mr Sinclair) agreed to:
That Legislation Committees have power to meet during the sitting of the House on Wednesday, 1 5 November 1978.
Bill presented by Mr Anthony, and read a first time.
– I move:
That the Bill be now read a second time.
In a comprehensive statement to the House on 13 April, I announced that the Government had decided to take a number of export development initiatives to encourage Australian firms more actively to seek out and pursue export opportunities and to increase their export sales. One of these initiatives was the re-introduction of a twopronged system of export incentives. The Export Expansion Grants Act will provide export incentives grants based on increased export performance. I am now introducing this Bill to bring into effect certain measures aimed at improving the effectiveness of the export market development grants scheme and to extend the coverage of the scheme to encourage the development of certain services. These services include value-added services performed in Australia on foreign-owned items and certain travel and tourist services that are concerned with the encouragement of tourism to Australia.
The export market development grants scheme was introduced in 1974 and is based on the same principles as the export market development allowance scheme which had been operating since 1961. The scheme aims to encourage Australian exporters to seek out and develop overseas markets for products, services, industrial property rights and know-how which are substantially of Australian origin. It provides financial incentives for eligible expenditure incurred on overseas market research and development, such as advertising, the costs of participating in overseas fairs and exhibitions, the costs incurred in travel overseas and the costs of bringing agents or buyers to Australia. The amendments to the Act contained in this Bill have been framed following consultations with the Trade Development Council, the Australian Manufacturing Council and other industry organisations and inputs from individuals and companies. The Government has also decided to accept recommendations of the Industries Assistance Commission whose report on export incentives was received earlier this year. The amended Act will be effective from 1 July 1978 and will remain in force until 30 June 1982. I will now draw the attention of honourable members to the main changes that are being introduced. A single rate of grant of 70 per cent of eligible expenditure for all claimants and all classes of expenditure will be adopted in place of the present dual rates of 85 per cent and 60 per cent. This will simplify administration of the scheme and will have the net effect of increasing the benefits to claimants by an estimated amount of $500,000 a year. With the adoption of this single grant rate, the concept of ‘new markets’ will lapse. The ceiling on grants payable to a group of wholly-owned subsidiaries and their parent corporation will be removed, thereby allowing each separately incorporated subsidiary to receive a grant up to the absolute grant ceiling. The effects of this particular decision are estimated to result in an extra $2m flowing to exporters.
In addition, the ‘ 10 per cent of eligible export earnings’ requirement will be removed. This will result in the ‘new claimant’ status lapsing. An export earnings test will, however, be applied. After receiving grants for three years a claimant will be able to continue receiving grants only if he receives, or is entitled to receive, export earnings in excess of $25,000 in the particular grant year. In the case of earnings derived from eligible industrial property rights or know-how, a lesser amount of $10,000 has been determined. In the case of certain organisations which provide unbrella publicity for certain products but do not export in their own right, such as national commodity marketing boards, a dispensation from the export earnings requirement will be afforded.
Under the present provisions of the Act, persons supplying certain services overseas, such as consultancy services to overseas projects, are eligible to claim grants. To clarify which services should be included initially under the amended
Act, it has been decided to list those particular services by way of regulation. Essentially, they are services which involve consulting and construction and would include the following: Architectural; engineering; agricultural and forestry; economic evaluation; geological and geophysical; surveying; construction; urban and regional planning, and international transport services.
Other amendments are provided in the Bill to remove anomalies and improve the administration of the scheme. For example, the Export Development Grants Board will be given a discretionary power to decide on the eligibility of permanent overseas sales representation by company directors. The Board will be increased by two members, meaning that it will consist of a chairman and four industry members. A system of appeal will be introduced to allow appeals to go to the Administrative Appeals Tribunal. This provision will operate at a date to be proclaimed. The date of 28 February 1979 will be inserted in the Act as the closing date for receipt of claims under the existing provisions of the Act. The Bill provides for the scheme to be extended to cover value-added services performed on foreignowned goods imported and subsequently reexported. Examples of these kinds of services are repairs on foreign-owned ships or aircraft. It is estimated that the inclusion of these internal value-added services will provide benefits estimated at $ 1 m a year.
In recognition of the importance of the travel and tourist industry as an earner of foreign exchange and its potential to increase employment opportunities, the Government has decided to extend the scheme to cover that industry. This is in line with the announcement I made on 13 April and follows consideration by the Government of a report prepared by relevant departments which examined the legislative and administrative issues involved. The measures contained in the Bill are along the lines suggested in discussions with representatives of the travel and tourist industry. These discussions covered a number of options aimed at providing incentives to as large an area of the industry as practicable but which, at the same time, would minimise the administrative burden that could be associated with a large number of potential claimants in this industry. For the purposes of the scheme, the travel and tourist industry providing services for overseas visitors to Australia would be defined under the following categories: Accommodation; passenger transport; tourist attractions; interpreter services; convention centres; tour guide services, and package tour operators.
In order to contain the number of potential claimants to a manageable level, a minimum amount of $5,000 eligible expenditure, other than fares but including expenditure on government-sponsored tourist promotions, is to be incurred to establish eligibility under the scheme. However, expenditure incurred by claimants on government-sponsored promotions will be eligible without any minimum limit being imposed. Regional tourist associations carrying out promotional activities in governmentsponsored promotions would also be eligible for grants. There will be a review of the operation of these provisions of the scheme before the end of 1980 so that a decision can be made by the Government on the desirability and feasibility of introducing a suitable export performance test.
The extension of the scheme to the travel and tourist industry is to operate as from 1 July 1978 with the first grants being payable in 1979-80. Consistent with the other export incentives, the new arrangements will run to 30 June 1982. This will provide the travel and tourist industry with a firm basis for forward planning. It is estimated that the extension of the scheme to the travel and tourist industry will benefit that industry by about $3.25m in relation to the first grant year. The total effects of all of the changes and additions to the scheme, as outlined in this speech, are expected to provide additional benefits amounting to some $7.25m in relation to the first grant year of operation.
This Bill expands the degree and scope of the assistance now available to exporters under the export market development grants scheme while, at the same time, streamlining a good deal of the administrative procedures from both the claimant’s point of view and that of the Export Development Grants Board. The Bill is an important element of the series of measures and actions taken by the Government in stimulating more effort in opening up and securing market opportunities overseas. I commend the Bill to honourable members.
Debate (on motion by Mr Uren) adjourned.
Bill presented by Mr Sinclair, and read a first time.
– I move:
The Bill provides for the establishment of an Australian Dried Fruits Corporation to replace the Australian Dried Fruits Control Board which has been in existence since 1925. It is intended that the Corporation be in operation on 1 January 1979. When early in 1977 I announced the membership of the Board for its ensuing three-year term I foreshadowed a review of the Board’s constitution and functions, to be undertaken in consultation with the national industry organisation, the Australian Dried Fruits Association. I intimated at the time that I would be looking to the Association to bring forward proposals which reflect changed conditions in the industry. The proposals in the Bill are put forward as a consequence of that review and the Association’s recommendations.
In respect of its constitution, the Corporation is to have fewer members than the Board it replaces, namely, eight as against 11. Four members will represent growers. These will be selected for appointment by the Minister from a panel of nominees submitted by the Association. Two members, also ministerial appointments, will be persons specially qualified by reason of experience in marketing or promotion of dried fruit or other products or experience in commerce, finance, economics, science or industrial matters. In making these appointments the Minister will consult with the Association and with any other bodies that he considers appropriate. The two remaining members will be a member to represent the Commonwealth and a chairman. These also will be appointed by the Minister. All the members will be appointed as part-time members and the term of office will be three years.
The Corporation will continue the control and promotion of exports presently carried out by the Board and will also have the additional function of administering the statutory equalisation scheme which is dealt with in a separate bill. The Corporation will also have a power to engage in trade subject to ministerial approval, and subject to any conditions specified in that approval. Such conditions would lay down the manner in which proceeds from any Corporation trading would be brought within the compass of the equalisation scheme. The Corporation is empowered to borrow, with the approval of the Treasurer, for promotion and for the exercising of its power to engage in trade. If appropriate, the Treasurer may, on behalf of the Commonwealth, guarantee such borrowings. The Corporation will be financed, as was the Board, by the charge on exports of dried vine fruit.
In summary, the revision provides for a smaller and more compact body, with a wider range of skills and expertise available to it, and widened powers and functions. As part of the restructuring, the administrative provisions of the legislation reflect the up-to-date lines adopted for other recently restructured marketing authorities. I commend the Bill to honourable members.
Debate (on motion by Mr Uren) adjourned.
Bill presented by Mr Sinclair, and read a first time.
– I move:
The purpose of the Bill is to impose a levy under certain conditions on dried vine fruits produced in Australia on or after 1 January 1979 to meet the objectives of the dried vine fruits equalisation scheme. The rate of levy for a variety is to be fixed each season by regulation after consideration of a recommendation from the Australian Dried Fruits Corporation. I commend the Bill to honourable members.
Debate (on motion by Mr Uren) adjourned.
Bill presented by Mr Sinclair, and read a first time.
– I move:
This Bill and the associated Dried Vine Fruits Equalization Levy Bill provide for a statutory scheme for equalising the market returns received for dried currants, dried sultanas and dried raisins sold on the domestic and the export markets. The scheme will commence with the 1979 season. I should first like to deal briefly with the reasons for this measure. The production of dried currants, dried sultanas and dried raisins is a significant horticultural industry and an important component in the social and economic structures of the irrigation areas along the Murray River of which you, Mr Deputy Speaker, know so much. Annual production is about 60,000 tonnes, one-third of which is marketed in Australia. In ordinary circumstances, the return from Australian marketing has been much more attractive than the return from export marketing. For the main variety, sultanas, for example, this difference in return has in the past decade or so averaged about $200 per tonne. Recognising the problems for orderly marketing created by this, the industry itself through its national body, the Australian Dried Fruits Association, has for over 50 years operated a voluntary system of equalising the returns from domestic and export outlets. All dried fruit packing houses but one participate in this voluntary system.
Without an industry commitment to equalisation, the industry’s marketing circumstances carry the inherent risk of substantial diversions of fruit from export to the more attractive but limited Australian market, beyond the capacity of that market to absorb and still maintain a reasonable level of return to growers. Should that happen, the likely end result would be a significant fall in overall return to the industry and a corresponding fall in grower incomes.
The Association has become increasingly concerned that the voluntary commitment to equalisation will not withstand a developing climate of competition between dried vine fruit packers in South Australia, where the one packing house not participating in voluntary equalisation is located. The Association has therefore asked that the Government secure equalisation by placing it on a statutory footing. Having regard to the possible adverse consequences for grapegrowers, including growers in the related wine grape producing industry, and for important regional communities if overall industry income were diminished because of the abandonment of equalisation, the Government has acceded to that request. I might say that the representations of the honourable member for Mallee (Mr Fisher) and others on this side of the House contributed to that view. The administration of the statutory equalisation scheme will rest with the restructured statutory authority for this industry, the new Australian Dried Fruits Corporation, The Corporation is the subject of a separate Bill.
In outline, the statutory scheme will operate as follows: The equalising process will be applied separately to each variety in each season. An equalisation levy is imposed on the production of each variety in a season. Fruit that is exported will be relieved from the levy as will also fruit which for some reason does not pass into commercial channels as packed fruit for human consumption. The moneys thus collected on fruit of a season destined for the Australian market, which will become due for payment after the fruit has been sold, will be held in varietal accounts in an equalisation fund maintained by the Corporation. Levy is payable by the producer, but a liability to make the payment rests on the packer since the normal industry arrangement is that proceeds of sales come back to the producer through the packer’s hands.
The rate of levy to apply to a variety in a season will be prescribed after taking account of a recommendation from the Corporation. The intent of the scheme is that the Corporation will assess early in the season the expected average return at the packing house level from export sales of the variety and the rate of levy will be the amount by which the anticipated average return from the domestic market for the variety exceeds that assessed average export return. The effect of the levy is thus that a season’s fruit of a variety will achieve on the Australian market an initial return at the packing house level comparable to the anticipated average level of return from the season’s exports of that variety.
The moneys in the separate varietal accounts of the equalisation fund will be distributed by the Corporation in two ways. First, since returns from the several different export markets vary, some part of these moneys may need to be earmarked to ensure that all exports receive in fact the assessed average export return for the variety. At the close of a season’s export sales each exporter will submit details of his sales of a variety for calculation of his average return from exports of the variety. Where the exporter’s average is above the assessed average export return he will be required to contribute the excess to the varietal account of the fund. Where his average is below the assessed average export return he will receive a supplementary payment from the varietal account of the fund.
The main distribution of fund moneys, however, will be in the form of an equalisation payment on the season’s production of a variety, whether that production is for the export markets or for the domestic market. Advances against an equalisation payment will be made regularly throughout the season as levy moneys build up appropriately in the fund’s varietal accounts. The equalisation payment is payable to the producer of the fruit, that is, the dried vine fruit grower, but packers will have a right, subject to appropriate authorisation by the producer, to apply such moneys in their hands to discharge producer indebtedness to them, including indebtedness arising from costs and charges associated with the packing of a producer’s fruit.
An important feature of the scheme is provision for the exemption of fruit from levy. One class of fruit which will be exempted from levy by regulation in due course is dried vine fruit produced at certain packing establishments from fresh grapes by a relatively costly process of dehydration in tunnels. Small quantities of such fruit are produced to meet the requirements of specialty markets and because of the cost of the process it is not appropriate that the return for it should be equalised with dried vine fruit produced in the traditional manner. Fruit exempted in this way is not entitled to an equalisation payment and exports, if any, would not participate in the export accounting arrangement. In particular circumstances a variety may be completely exempted from levy in a season. Where this occurs the equalisation mechanism is in effect put into abeyance for the variety for that season, as no equalisation payment would be payable, and the system of transfers between the fund and exporters would not operate.
There are three sets of such particular circumstances: Where production of a variety falls to a level close to Australian market requirements; where the differential between domestic return and assessed average export return becomes marginal, that is, less than $20 per tonne; where the assessed average export return exceeds the domestic return. It is fortuitous that the first season of statutory equalisation, 1979, could produce circumstances where the export return exceeds the domestic return. This has come about through the substantial failure of the 1978 Californian crop with every likelihood that export prices in 1979 will be at an extremely high level. It has been represented to me from some quarters that this is a good reason to defer the introduction of statutory equalisation.
However, whether marketing circumstances in 1979 will necessitate the application of the equalisation mechanism to that season is a matter for formal recommendation by the Corporation in due course. The possibility that, through chance factors, very high export prices may be obtained in a particular season does not really remove the essential problem that statutory equalisation is designed to meet. The measures have, through the Association, substantial support within the industry. I commend the Bill to honourable members.
Debate (on motion by Mr Uren) adjourned.
Bill presented by Mr Sinclair, and read a first time.
– I move:
The Bill introduces amendments to the Dried Fruits Export Charges Act 1924 that are consequential to the Australian Dried Fruits Corporation Bill 1978. I commend the Bill to honourable members.
Debate (on motion by Mr Uren) adjourned.
Bill presented by Mr Street, and read a first time.
– I move:
These amendments are simple machinery matters so I intend to be brief. The first amendment will enable a member of the Conciliation and Arbitration Commission, appointed to office under the Trade Union Training Authority Act 1975, to receive remuneration and allowances in the performance of the duties of that position with the Authority and at the same time retain office as a member of the Conciliation and Arbitration Commission. This type of provision is by no means unusual and has been inserted in other relevant legislation in the past. Honourable members will know that Mr Commissioner M. E. Heagney, a man with long trade union experience, who has contributed much to the work of the Conciliation and Arbitration Commission over the past six years, was appointed National Director from 1 August this year. I am sure that members on both sides of the House would congratulate Commissioner Heagney on his appointment as National Director. With his sound leadership TUTA will continue to gain increasing support from the trade union movement and industry generally.
The second amendment concerns the question of remuneration for chairmen of the councils for union training established in each State. The Government sees these State councils providing valuable advice in respect of trade union training in each State. The chairmen of these councils will be required to contribute a significant amount of time to their tasks and consequently appropriate remuneration is warranted. Under the current terms of the Act, the chairmen are precluded from receiving remuneration.
The purpose of the third and final amendment is to protect the position of a member of or candidate for election to State or Federal Parliament who accepts an office on a council or the Executive Board of TUTA. I am sure that all members will agree that those members of parliament who are prepared to contribute their skills and valuable time to statutory authorities such as TUTA should not be discouraged from doing so. I commend the Bill to the House.
Debate (on motion by Mr Uren) adjourned.
Bill presented by Mr Howard, and read a first time.
That the Bill be now read a second time.
The main purpose of this Bill is to authorise the payment to Queensland of $21.7m in 1978-79 as a special grant. The payment of this amount is in accordance with the recommendations of the Commonwealth Grants Commission contained in its forty-fifth report on special assistance for the States which was tabled recently. In accordance with normal practice, the Bill also seeks authority for payment of advances to Queensland in the early months of 1979-80, pending receipt of the Commission’s recommendations for that year and enactment of necessary legislation to provide for any special grant that may be payable to the State in that year. The Commonwealth Government from time to time on the recommendation of the Commonwealth Grants Commission, and following applications by States, makes special grants to the less populous States to compensate them for such factors as lower capacity to raise revenue from their own sources and higher costs of providing government services of a standard comparable to that provided by the financially stronger States.
When such special grants were first paid they constituted the only regular form of general revenue assistance to the financially weaker States for this purpose. However, for many years now, the main way in which special compensatory assistance has been provided to these States has been through the payment of higher per capita amounts of other general revenue funds. This situation is reflected today in the fact that personal income tax sharing entitlements paid to Queensland, South Australia, Western Australia and Tasmania are higher, in per capita terms, than the entitlements paid to New South Wales and Victoria. Under the personal income tax sharing arrangements, the less populous States continue to be free to apply for special financial assistance on the recommendation of the Commonwealth Grants Commission. This is one of the explicit understandings between the Commonwealth and State governments in relation to the tax sharing arrangements. Such special grants supplement a State’s entitlement under the tax sharing arrangements in the same way as they formerly supplemented the financial assistance grants.
Queensland has been the only claimant State in recent years. However, Tasmania, which did not claim in 1974-75, applied on 30 June 1978 for special assistance in respect of 1977-78 and the matter has been referred to the Commission. Queensland’s estimated entitlement in respect of 1978-79 under the personal income tax sharing arrangements is $844.9m, representing $387 per head of population compared with an estimated average of $287 per head for New South Wales and Victoria. Accordingly, the assistance provided by way of the special grant should be seen as supplementing the special compensatory assistance of $100 per head, or some $220m, provided to Queensland by way of the tax sharing entitlement.
The Commonwealth Grants Commission, in arriving at its recommendations in relation to claims for special assistance, makes an assessment of the ‘financial needs’ of a claimant State. In making such assessments, the Commission compares in detail the finances of the claimant State with those of New South Wales and Victoria, taking into account differences in revenueraising capacity and differences in the cost of providing comparable services. Normally special grants recommended by the Commission consist of two parts. One part is based on a preliminary estimate of the claimant State’s financial need in the current financial year, and is treated as an advance payment subject to adjustment two years later when the Commission has compared in detail the finances of the claimant and standard States for that year. The other part represents the final adjustment to the advance payment made two years earlier and is known as the completion payment. This adjustment may be positive or negative and therefore may result in the final grant in respect of the year being higher or lower than the advance payment for that year.
The payment to Queensland in 1978-79 of $2 1.7m provided for by this Bill comprises, firstly, an advance payment of $ 16m in respect of 1978-79; and secondly, a completion payment of $5. 7m in respect of 1976-77. The completion payment in respect of 1976-77, when added to the $18m advance grant paid to Queensland in that year, brings the final grant in respect of 1976-77 to $23.7m, which is $12.1m below the corresponding figure for 1975-76. The advance grant for 1978-79 will, in accordance with normal practice, be subject to adjustment in two years’ time. The Commission’s recommendations in relation to the special grants arrangements have been adopted by the Parliament each year since the Commission’s inception and the Government considers that they should be accepted on this occasion. I commend the Bill to the House.
Debate (on motion by Mr Uren) adjourned.
Bill presented by Mr Staley, and read a first time.
– I move:
That the Bill be now read a second time.
Honourable members will recall the substantial changes made to the administrative structure of broadcasting in the amendments of 1977 to the Broadcasting and Television Act 1942. The amendments effected those recommendations of the report of the inquiry into the Australian broadcasting system- the Green Reportdecided upon by the Government One of the principal changes was the transfer of the power to grant and renew licences for broadcasting and television stations from the Minister to the Australian Broadcasting Tribunal. In addition, the new legislation specified for the first time periods or time for the lodgment of applications for licence grants and renewals and subsequent documents relating to licence grants and renewals. As a result of the calling of applications for the grant of the first series of public broadcasting licences, it became evident that greater flexibility of procedural arrangements for the lodging of licence grant applications and other related documents with the Tribunal would be desirable. Obviously, the same flexibility should apply in the procedures for the renewal of licences.
This Bill seeks to provide that flexibility. Specifically, the Bill seeks to amend section 82 of the Broadcasting and Television Act 1942 to allow the Australian Broadcasting Tribunal, where it is satisfied circumstances warrant it, to grant time extensions for the lodging of applications for, and submissions and replies in relation to, the grant of a licence. It is expected that in exercising this discretion, the Tribunal will ensure that there is substantial compliance with the Act. In addition, this Bill seeks to validate those applications and associated documents lodged in pursuance of invitations for the grant of public broadcasting licences published in issues of the Gazette of 74 April, 15 May and 13 June 1978, and those public broadcasting licences granted to persons applying for the grant of the licences not later than 5 July 1 978, where the requirements of sections 82, 83 and 84 of the Broadcasting and Television Act were not observed. It is also proposed through this Bill to amend section 86 of the Broadcasting and Television Act 1942 to direct applications for the renewal of licences to the Australian Broadcasting Tribunal rather than to the Minister, as is now the case. A similar amendment is incorporated to make consequential changes to section 33 of the Broadcasting and Television Amendment Act 1977, which contains the transitional provisions for licence renewals.
At the time of the major amendments to the licensing provisions of the Broadcasting and Television Act during last year, it was felt that the Minister should continue to receive licence renewal applications as he had in the past. It was felt that this procedure would enable the Minister to make an input into the renewal process from the viewpoint of his planning responsibilities. However, it has now become clear that it is more desirable that applications for renewal be lodged with the Tribunal. The Minister will be able under section 106B of the Broadcasting and Television Act 1942 to seek information from the Tribunal concerning renewal applications where necessary for planning purposes. The Tribunal will also have the power to grant extensions, of time to applicants and other interested persons making applications or submissions concerning licence renewals. Further, it is felt that licensees should have an avenue of appeal where the Tribunal refuses to grant extensions of time for the lodging of licence renewal applications, or of licensees’ replies to submissions made in relation to renewals. An amendment is therefore proposed to section 1 19A of the principal Act to provide that licensees in this position may apply to the Administrative Appeals Tribunal for a review of the Australian Broadcasting Tribunal’s decision. A consequential amendment to the Broadcasting and Television Amendment Act 1977 is also proposed in this regard.
These amendments will provide consistency between licence grant and renewal procedures, and will add to the ‘depoliticising’ of the administrative structure of broadcasting in Australia as effected in the major amendments to the Broadcasting and Television Act in 1977. I commend this BUI to the House.
Debate (on motion by Dr Cass) adjourned.
Bill presented by Mr Staley, and read a first time.
– I move:
This Bill is part of the Government’s program for the future well-being of the inhabitants of the Cocos (Keeling) Islands. The Bill will allow the Cocos (Keeling) Islands to establish its own postal and philatelic services similar to those conducted by Norfolk Island and Christmas Island. The Cocos (Keeling) Islands will obtain revenue from these operations, primarily from philatelic sales, and the revenue so derived will be retained on the Islands for the welfare of the inhabitants. It is proposed that this Act should take effect on a date to be fixed by proclamation which will be the date when the ordinance establishing the postal service takes effect. I commend the Bill to the House.
Debate (on motion by Dr Cass) adjourned.
Bill presented by Mr Staley, and read a first time.
– I move:
The purpose of the Bill is to provide financial assistance to the States for universities, colleges of advanced education, and technical and further education. It will be recalled that the guidelines for assistance to tertiary education in the 1 979-8 1 triennium provided for the introduction of fixed recurrent funding for the triennium. This Bill provides grants for the three sectors for 1979 and recurrent grants for the university sector for 1 980 and 1981. Recurrent grants for 1980 and 1981 for advanced education and technical and further education will be provided by legislative amendment in the 1979 autumn sittings after the Government has considered supplementary advice from the Tertiary Education Commission, in relation to advanced education, and the report of the Williams Committee of Inquiry into Education and Training in relation to Technical and Further Education.
The amounts provided for each of the three tertiary education sectors for 1979 are as follows:
Recurrent grants totalling $59 lm have also been provided for universities in respect of 1980 and 1981. Recurrent grants to each State for advanced education in respect of those years were set out in the statement of the Minister for Education (Senator Carrick) to the Senate on 19 October 1978. The amounts provided are based upon the programs of the Tertiary Education Commission for the 1979-81 triennium which the Minister for Education announced to the Senate on 19 October 1978. The amount provided for technical and further education includes the first component of the additional $50m for capital works in that sector which was announced in the Government’s ‘Guidelines for the Education Commissions, 1979-81 Triennium’. The announced programs were in December 1977 cost levels. They have been adjusted for cost movements to June 1978. The Bill provides amounts for institutions in lieu of assistance previously provided by the Commonwealth through fees assistance and other grants. These amounts, which are in addition to the guideline programs, are payable to the National Institute of Dramatic Art and to a number of universities in respect of professionally oriented law courses. It does not include approved grants for institutions which are funded from within the tertiary programs through the annual Appropriation Acts.
As announced in the Senate on 19 October 1978 a shortfall in expenditure of the 1978 capital program will enable additional university and college of advanced education capital projects to commence in the second half of 1979. These projects will be added to the legislation in the 1979 autumn sittings when the savings have been realised. The grants will be adjusted in subsequent legislation for cost movements in accordance with the Government’s guidelines for the 1979-81 triennium. The Bill also modifies certain conditions relating to grants to provide additional flexibility in the expenditure of these grants. These changes are designed to assist the institutions to utilise the grants as effectively as possible. The modifications do not reduce the States ‘ responsibilities to account for their expenditure of the grants.
In addition to appropriating grants for the 1979-81 triennium, the Bill amends the States Grants (Tertiary Education Assistance) Act 1 977 to supplement approved 1978 grants for cost increases between December 1977 and June 1978. The additional funds provided for cost supplementation are $6.8m for universities, $3. 4m for colleges, and $lm for technical and further education. It also amends the States Grants (Advanced Education Assistance) Act 1976 to allow for the transfer of $782,000 between capital and recurrent programs for Queensland in 1977 to enable colleges of advanced education in that State to meet unavoidable increases in superannuation contributions. I commend this Bill to the House.
Debate (on motion by Dr Cass) adjourned.
Bill presented by Mr Macphee, and read a first time.
– I move:
This Bill, to amend the Industrial Research and Development Incentives Act 1976, was foreshadowed by my colleague the Minister for Industry and Commerce (Mr Lynch), and me in a joint statement on 1 6 August 1978 when we announced that the $24m allocated for industrial research and development grants in the 1978-79 Budget was intended to fund a new policy for Commonwealth financial incentives provided under the Industrial Research and Development Incentives Act 1976. The purpose of the proposed Bill is to introduce a number of changes to the existing grant schemes to enable the full implementation of important elements of the new policy for the 1978-79 and later grant years. A number of administrative actions have already been taken under the existing terms of the Act to give effect to other aspects of the new policy.
A strong private sector research and development capability is of vital importance for Australian industry to develop the new and improved products and processes necessary to better meet competition from imports and to create new growth opportunities based on exports. For this reason Commonwealth financial incentives for industrial research and development- IR and D- have been provided to Australian manufacturing and mining companies since 1967 through the medium of various types of grants made available under legislation. The current Act, introduced in 1976, provides for the payment of two types of grants and there is also provision under section 39 for the undertaking of projects of industrial research considered to be in the public interest. However, there is strong evidence of a substantial rundown in corporate research and development activity over the past three years. This rundown has been a matter of serious concern to the Government. The extent of this concern is indicated by the decision, despite a difficult budgetary situation, to provide $24m to fund the new policy- an increase of over 70 per cent on the $ 14m allocated in the previous financial year.
The immediate objectives of the new policy are to prevent further wastage of Australian and research and development resources and to contribute advances in productivity, innovation and sound industry development. It is intended that these will be achieved by a balanced and costeffective strengthening of the existing grant schemes, together with a simplification of the procedures required of companies in making application for grants to allow for reduced administrative effort both on the part of the companies and the administering authority- the Australian Industrial Research and Development Incentives Board.
I will now relate the provisions of the Bill to the three main elements of the new policy. Firstly, the Bill makes provision for an increase in the level of the project grants provided under Division 2 of Part III of the Act from the existing 25 per cent of company expenditure, subject to an overall annual limit on grant payments to any company’ of $250,000, to 50 per cent, subject to a new annual limit of $500,000. The new grant levels will allow the Board greater scope to encourage company research and development projects assessed to have high technical and commercial merit. The existing levels have been found to be insufficient for this purpose and extensive discussions with industry have indicated that support up to the new levels would be required for many potentially important projects to be undertaken.
In this respect, I also intend to give careful consideration to recommendations from the Board concerning my authority under the Act to approve a higher annual limit on project grant payments to a company, or a group of related companies, than the proposed new limit of $500,000. Companies considering undertaking research and development projects which may place them above the new limit should approach the Board in relation to their proposed research and development program for 1978-79. The Board could then assess the technical and commercial merits of the program with a view to making an appropriate recommendation.
Other provisions of the Bill designed to improve the effectiveness of the project grant scheme include the introduction of eligibility of project expenditure from the date of a company’s application and changes which would allow the Board to enter into a single project grant agreement with a company which is acting on behalf of a number of companies engaged in a collaborative research and development project. Eligibility of project expenditure from the date of application will allow the Board and the company more time to negotiate an acceptable agreement and a single agreement for collaborative research and development projects will act to encourage technological co-operation between firms which, in many cases, provides a means of making the most effective use of limited Australian research and development resources.
The project grant scheme is intended to provide the main avenue for Commonwealth encouragement of company research and development, and I would like to take this opportunity to clarify several points which have been the subject of some widespread misunderstanding. In this respect, one of the features of the new policy which is worthy of further emphasis is the reduced administrative effort that will be required of companies in making applications for grants. New procedures are to be introduced to overcome the delays in finalising agreements and in settling grant payments which have to date inhibited company participation.
Other aspects of the scheme which require clarification relate to supposed mandatory requirements for the payment of royalties to the Commonwealth, and for the acquisition of the rights to grant-assisted research and development when a company decides to terminate a project. The Act does not contain any provisions in respect of royalty payments or for the acquisition of the results of grant-assisted research and development. The Government regrets the concern amongst industry in both these respects, and I have recently issued a direction to the Board which should ensure that no further confusion arises over these matters.
Concern has also been expressed by companies in relation to the eligibility of projects directed towards improved process technology. I regard the development of improved industrial processes as essential to realising major advances in industry productivity and such developments will be accorded a high priority. The project grant scheme has always been intended to provide support for advances in process technology as well as for the development of new and improved products.
The new policy provides for a strengthening of the commencement grants made available under Division 1 of Part III of the Act. The commencement grant scheme is intended to encourage small and medium-sized companies to gain an appreciation of the benefits of research and development, and regulations have already been made increasing the level of the grant, for the 1978-79 grant year, from the previous level of 25 per cent of ‘eligible’ company expenditure- up to an annual limit of $15,000- to 50 per cent- up to a new annual limit of $25,000. In conjunction with the increased grant level it is proposed to introduce the progressive settlement of the commencement grants which have previously been paid retrospectively, usually in the subsequent financial year. This particular change has been made in recognition of the current importance of company cash flows and should make a significant contribution towards improving the effectiveness of the grants as an incentive to companies to commence an involvement in research and development.
The Bill also makes provision for several other changes to the commencement grant scheme, and the most significant of these is a simplification in the eligibility criteria required of companies. Under the existing provisions of the Act a company must have had an employee engaged in ‘professional or technical research and development’ for a ‘continuous’ period of at least 4 weeks, whereas the Bill will allow for company eligibility on the basis of at least one employee engaged in R&D for a cumulative period of not less than 4 weeks, or alternatively on the basis of ‘eligible contract expenditure’ in excess of $1,500. The requirement for a ‘continuous’ period has, in practice, caused severe administrative difficulties and has been a continuing source of concern amongst industry.
Other changes provided for in the Bill in respect of commencement grants include a simplification of the definition of ‘eligible contract expenditure’, and a new requirement that regulations setting the amount of the commencement grant shall not be made later than 31 March in the grant year preceding the one to which they relate. The simplified definition will provide for reduced administrative effort on the part of the Board, and the new deadline of 3 1 March will allow for more certainty in company R&D planning.
The new policy also provides for support to be made available to enable the undertaking of projects of industrial research considered to be in the public interest. Under section 39 of the Act industrial research contracts will be placed in industry to encourage the commercial development of important Australian innovations, including the development of the process technologies required to increase the competitiveness of particular industry sectors. It is intended that this particular element of the new policy will be developed progressively. However, the Bill does allow for a clarification of the role of the Australian Industrial Research and Development Incentives Advisory Committee in providing me with advice on all aspects of the operation of the Act In particular, it is my intention that an appropriately constituted Advisory Committee should provide me with advice in relation to the use of section 39. An initial task which I will set the Committee is the development of a set of guidelines on what constitutes a ‘public interest’ project.
The opportunity provided by the present Bill has also been used to introduce a number of minor clarifications to particular aspects of the Act which have been the subject of some discussion. The clarifications, which relate to the definition of ‘eligible plant expenditure’, the meaning of the term ‘payable’ and my right to give notices under section 31 to an acting chairman, are all consistent with the way in which the Act has been interpreted since it came into operation.
Finally, it is my view that the new policy for Commonwealth industrial research and development incentives, provided for in part by the BUI, represents a positive expression of the Government’s confidence in the ability of Australian industry to develop the new products and processes required to resist competition from imports and to create new growth opportunities based on exports. The Government now looks to private enterprise for strong co-operation in stimulating major new R&D activity to secure the technological advancement of Australian industry- an advancement based on the proven ability of Australian scientists and technologists. I commend the BUI to honourable members.
Debate (on motion by Dr Cass) adjourned.
BUI presented by Mr Fife, and read a first time.
– I move:
The purpose of the BUI now before the House is to give effect to the Government’s decision to provide assistance to the assembly in Australia of general purpose commercial motor vehicles, including buses, having a gross vehicle mass of 2.72 tonnes or more. Following advice from the Industries Assistance Commission in its report No. 169 of 15 May 1978 on light commercial and four-wheel drive vehicles and heavier commercial vehicles and components, it has been decided to accord assistance by way of a bounty scheme providing for payment to eligible Australian assemblers of a bounty at the rate of 20 per cent of the into-store value of axles, gear boxes, propeller shafts, air brake equipment and suspension systems, having an Australian content of not less than 65 per cent, which are purchased from suppliers not associated in business with the vehicle assembler for use as original equipment in the assembly of general purpose commercial motor vehicles, including buses, having a gross vehicle mass of 2.72 tonnes or more, during the period to which the Act applies.
The scheme, which will operate from 17 August 1978 and cease on 31 December 1984, is part of a total package of measures designed to encourage the assembly in Australia of commercial motor vehicles; to generally maintain employment in the industry; and at the same time to provide opportunities to reduce the impact of the prices of commercial vehicles on transport costs in Australia. The other elements of the package, which were implemented on 17 August 1978, involved the setting of the rate of customs duty on imported completely built up vehicles at 22.5 per cent and the admission duty free under by-law of imported original equipment components and assemblies which do not form part of unassembled vehicles at the time of importation into Australia. Clause 22 of the Bill continues the Government’s policy of expanding, wherever possible, the jurisdiction of the Administrative Appeals Tribunal in relation to administrative decisions which affect the rights or entitlements of persons under Commonwealth legislation. I commend the Bill to honourable members.
Debate (on motion by Dr Cass) adjourned.
Bill presented by Mr Fife, and read a first time.
Mr FIFE (Farrer- Minister for Business and
Consumer Affairs) ( 5.5 )- I move:
The purpose of this Bill is to amend the valuation provisions of the Customs Act 1 90 1 , to clarify the rules under which the value of outside packaging is included within the dutiable value of imported goods. On 1 July 1976 the Government adopted a revised customs valuation system based on The Convention on the Valuation of Goods for Customs Purposes’, commonly known as the Brussels Definition of Value’. A feature of this system is that the cost of containers and of any packing, other than containers or pallets covered by certain international conventions, is included in the value of imported goods for the purposes of levying ad valorem duties of customs. The Government, when adopting the ‘Brussels Definition of Value’ as from 1 July 1976, stated that the cost of containers and of packing would be included in the value of imported goods for customs valuation purposes. Doubt has now been expressed as to the clarity of the law giving effect to this rule. Accordingly, the Government has decided to amend the legislation and thereby place the matter beyond doubt.
The amending Act will apply from 10 July 1978, the date upon which the Government announced its intention to place this matter beyond doubt. Insofar as importations prior to that date are concerned, the Bill makes provision to preserve the rights which importers may have had as at that date to seek in the courts or the Administrative Appeals Tribunal recovery of duty ‘paid under protest’ pursuant to section 167 of the principal Act or to seek a refund of duty pursuant to regulations made for the purposes of section 163 of the Act. This preservation of rights is contained in clause 4 of the Bill. That clause effectively provides that the period between 10 July 1978 and a date 14 days from the date upon which the present amendments come into force is to be disregarded in determining the time limits for commencement of procedures for the recovery of duty alleged to be overpaid. I commend the Bill to honourable members.
Debate (on motion by Dr Cass) adjourned.
Bill presented by Mr Fife, and read a first time.
– I move:
The purpose of the Excise Tariff Amendment Bill (No. 2) 1978 is to enact the excise tariff alterations introduced into this House as Excise Tariff Proposals Nos 2 and 3 on 15 August 1978 following the Budget Speech of the Treasurer (Mr Howard). Clause 3 of the Bill, in conjunction with clause 2 and the Schedule, proposes enactment of the alterations in the duties of excise on beer, spirits and manufactured tobacco products as set out in Excise Tariff Proposals No. 2.
The Government has received representations on behalf of the Australian brandy manufacturing industry in relation to the effect of this measure on the industry. We are concerned with the position of Australian brandy producers. Indeed although the Budget applied increases equally to all excisable spirits, it provided no new impost on Australian wine. Demonstrably this action has already stimulated domestic demand. There is an Industries Assistance Commission report on potable spirits outstanding and the appropriate time to consider further the position of the brandy industry is in the context of the report. The representations will be carefully considered by the Government at that time.
Clause 4 of the Bill proposes enactment of the alteration in excise duty on crude oil as set out in Excise Tariff Proposals No. 3. This clause, which increases the excise duty on crude oil by $45.63 per kilolitre, 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 was assented to on 2 1 September. That Bill provided for variable rebates on the excise duty rate for certain categories of crude oil. The conjoint effect of clause 4 and of Excise Amendment Bill 1978 will be to achieve, from 16 August 1978, the net rate of excise duty required to bring up to import parity prices all indigenous crude oil presently priced below import parity levels. Details of all the alterations are set out in the notes on clauses which have been circulated. I commend the Bill.
Debate (on motion by Dr Cass) adjourned.
Debate resumed from 9 November, on motion by Mr Howard:
That the Bill be now read a second time.
-The Loans (Taxation Exemption) Bill 1978 is a relatively simple amendment to the Loans Securities Act to provide for the exclusion of interest and loan repayments on overseas borrowings from Australian taxation. An overseas borrowing which takes the form of an issue of stock or securities is already exempt from Australian taxation, but overseas borrowings in the form of bank loans or made under other arrangements which do not involve the issue of stock or securities are not covered by the existing provisions of the Loans Securities Act. This amendment therefore brings up to date the provisions of that Act by including the newer forms of borrowing arrangements. The Opposition does not oppose this technical amendment. However, I move the following amendment to the motion that the Bill be now read a second time:
That all words after ‘That’ be omitted with a view to substituting the following words: whilst not opposing the Bill the House is of the opinion that the foreign loan program which will be facilitated by this Bill is seriously extending Australia ‘s foreign debt burden and should only be continued if the Government can assure the House that the program will be of limited duration’.
The purpose of moving that amendment is to draw attention to the fact that this Bill is inexorably connected with the Government’s overseas borrowing program. What the Opposition is concerned about is that this overseas borrowing program is proceeding with no clear explanation as to the extent of that borrowing or of the time frame over which it will be continued. This Bill draws attention to the fact that since June 1976 this Government has borrowed from overseas the equivalent of over $3.5 billion. I think it is important to see that not only as a massive debt in itself but also in the context of Australia’s external position as a whole. The reason why it is important to see the Government’s borrowing program as part of Australia’s external position is that this Government’s policy in relation to economic recovery is predicated on the view which overseas decision makers have of the Australian economy; that is, it is very important to the Government to ensure that decision makers overseas have a favourable view of the shape of the Australian economy, its strength and the strength of the Australian dollar.
The reason for that is that if the policy of this Government is to work- I think that must be very much under a cloud- the Government will need a substantial infusion of overseas investment in this country and it will also require that there be no assault on the current exchange rate. Therefore it is important that the Government take action to ensure that the exchange rate is more or less maintained and also that the climate in Australia as perceived by overseas decision makers is favourable for them. I think it is important for everyone in this country to be aware of the fact that this Government is making decisions which are primarily in the interests of overseas observers, overseas decision-makers, rather than in the interests of Australians. We have a Prime Minister who is pursuing his own ideological obsessions against the interests of the Australian people. This will become increasingly serious as I suspect that early next year the Government will have to face up to a number of very difficult decisions. One of those decisions will be whether to devalue the currency or to allow interest rates in this country to increase. If the Government is in any way consistent it is likely to make the decision that is most favourable to overseas interests, overseas decisionmakers, and not necessarily in the interests of Australians. It is more likely to allow interest rates to drift up than to devalue the currency. Therefore, I think we must see what is in a sense a fairly minor amendment in the context of the Government’s overall economic policy, the failure of that economic policy and the implications of that failure for Australians.
The Government’s borrowing program is so crucial because of the deteriorating position on a number of fronts. The first is that the position on current account is weak and continuing to weaken. Over the last four months we have seen a continuing deterioration of the balance on current account. If we translate the monthly deficit into an annual deficit we see that the annual deficit is running at something like $4 billion, which is 25 per cent above the Budget estimate of $3 billion. It is likely that some time between now and the end of the financial year the export of primary products will help to bring down that deficit to some extent, but a number of observers doubt whether the expectation of $3 billion will in fact be realised. What is necessary under these circumstances is for the Government to take much more action to expand our exports. In this context it is particularly important that the Government place far more importance on Asian markets than on European markets; yet time and time again we see the Government involved in pursuing markets in Europe and attacking the Europeans for not accepting our products. What seems to me to be much more in the long term interests of this country is for the Government to pursue markets for our products in the rapidly expanding Asian markets.
Even in the export of minerals, on which we have relied so much in the past, the current depressed state of the Japanese steel industry is likely to adversely affect the exports of iron ore and coal from Australia, both in price and quantity, at least into the early 1980s. The safety valve on our external position, that is, the export of minerals, is not likely to come to the Government’s rescue in the short term. It seems to me that rather than pursuing what I think are outmoded, old fashioned views of where our exports ought to go, the Government ought to be placing much more emphasis on opening up markets in our own region.
The reason the deficit on the current account is so important is that, if it continues to decline at its current rate, it will have even more disastrous consequences for our overseas reserves and, as a result, the Government will have to borrow even more heavily to bolster those reserves. One way in which the Government has attempted to bolster our reserves in recent times has been by the practice, which is probably a debatable practice, of valuing our holdings of gold on the basis of current prices. Since the Government adopted this practice in 1976 the value of our holdings of gold has increased on paper by in excess of $1 billion. That has substantially improved the position of overseas reserves because, if it were not for that substantial increase in the dollar value of our gold, our reserves would be $1 billion less than they are, and they are already at historically fairly low levels. Until the Government changed the method of valuing gold, the holdings of gold represented a fairly small proportion of our total overseas reserves, between 10 per cent and 20 per cent. However, gold now represents over 40 per cent of the value of our overseas reserves. I suppose that that is fair enough as long as the price of gold continues to increase, but should the price of gold decline the beneficial effects which the Government’s decision has had on the level of our overseas reserves will be immediately reversed.
Another aspect needs to be taken into account when considering the Government’s overseas borrowing program, and that is the size of the debt it represents to each and every Australian. Australians are concerned about the issues to which the Prime Minister adverted in November 1976, when he said:
Is there a man here who would say that he would sooner put Australia into hock to the tune of $ 1,000m rather than devalue?
At that time the Prime Minister was expressing a concern about the degree to which the Australian people are prepared to accept the Government’s putting the country into hock. Of course, almost immediately he said that he embarked on a borrowing program which, as I said, has lifted the level of borrowings by the Australian Government to 3Vi times the amount the Prime Minister mentioned in 1976. At the time this Government came to office the size of the official overseas debt was about $95 per head of population in this country. Now it has risen to a level of $280 per person. It has trebled in the period during which this Government has been in office. The Australian people are entitled to be somewhat concerned about the trebling of the official debt of this country. The people deserve a much more adequate explanation than the Government has been prepared to provide in terms of the extent to which it is prepared to allow these borrowings to grow and also in terms of the time period it is prepared to allow this borrowing program to extend.
The reasons why we are entitled to be concerned are revealed by an answer which the Treasurer (Mr Howard) gave to a question from the honourable member for Gellibrand (Mr Willis) on 9 November. The honourable member for Gellibrand asked the Treasurer to provide information concerning the servicing of the overseas borrowing program and the repayment of those loans. In that answer the Treasurer revealed that in to the early 1980s we will be confronted with having to find something like $850m to service and repay the loans which Australia has now negotiated.
In the current year interest payments will be about $300m. In 1981-82 interest payments will still be running at about that level but we will also have to find repayments in the order of $560m. It seems to me that we have to be concerned about the consequences of this obligation on the size and shape of Budgets in years to come. Of course, it would be possible to roll over those loans and re-negotiate them, or negotiate further loans in order to service and repay them, but that is not a costless exercise and would in any event it would be a charge on the Budget of the time. In a very real sense the Government at the moment is chalking up future debts and problems for forthcoming Treasurers.
An aspect which is of crucial importance in the repayment of these debts is the way in which the Australian dollar moves against the currencies of the countries where the loans are raised. In recent times the Australian dollar has weakened markedly against the yen, yet the Government recently has been raising its loans in yen. I think these problems deserve very much more explanation than the Government has been prepared to provide to the Parliament and the people of Australia. Despite the fact that the Treasurer was given an opportunity to answer important questions on 11 October he substantially avoided doing so. It therefore seems to the Opposition that, before we are prepared to embrace the notion of expanding and extending the Government’s loan borrowing program we ought to be provided with assurances that the program will be of a limited duration. We do not seek this assurance because we have any ideological objection to borrowing overseas; in fact we favour it. But we favour it for the purpose of providing investment capital in this country which would expand economic activity and job opportunities. That is not what the Government’s borrowing program is all about. The Government’s borrowing program has been undertaken to shore up the external position of Australia against a deficit on current account which is reaching record proportions and where the position of the Australian dollar is perceived by many observers to be weakening.
I cannot emphasise enough that the Opposition, if in government, would attempt to borrow money overseas for some of the purposes for which approval has been given for the States to borrow, although we do not entirely approve of the way in which this has been done. I suspect that Western Australia will use its borrowing program to provide disguised subsidies for particular industries and will not be necessarily in the interests of the people of Western Australia as a whole. If we were responsible for raising money overseas it would be with a view to expanding the level of economic activity in this country and thereby providing jobs.
I conclude by restating that the Opposition, in moving the amendment, is not attempting in any way to block the passage of this relatively technical and minor amending Bill. However, we insist that the Government come forward with a much clearer explanation of its borrowing program and with some guarantees concerning the level to which it will permit borrowing to grow. It should explain over what period it will allow the program to extend. This is mainly because of the consequences for future Australians and future governments in terms of servicing and repaying these loans. We are entitled to know the extent to which the Government is putting this country in hock and the implications of the Government’s decision for Australia ‘s future.
-Is the amendment seconded?
– I second the amendment.
-Before answering the comments made by the honourable member for Fremantle (Mr Dawkins) I want to refer precisely to the contents of this Bill. The purposes of the Bill is to enable the Commonwealth to give undertakings to foreign lenders that in the case of borrowings which do not involve the issue of stock or securities within the meaning of the Loans Securities Act 1919, the documents will be exempt from all Australian taxes and duties and all payments to be made by the Commonwealth will be free from all Australian taxes except in the case of payments to Australian residents. The old Act of 1919 will be supplemented by the provisions of this Bill. The old Act gave effect to similar undertakings where stocks and securities were issued. In modern loan programs the necessity for stocks and securities has not been so evident; but instead there have been loan agreements. The necessity for this Bill is, as the honourable member for Fremantle pointed out, a technical one to which the Opposition does not disagree. However, they have proposed an amendment concerning the foreign debt burden.
I want to refer to the Budget, which clearly sets out the Government’s intention in relation to this matter, before dealing with some of the points the honourable member raised. I think it is important that we get an overall perception of what the Government is doing. I then intend to deal in detail with some of the points which I think are quite invalid in the current economic situation. The Treasurer (Mr Howard), in introducing the Budget, said:
Externally, our export growth will be constrained by the continuing moderate growth of the world economy in 1978-79.
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.
The Treasurer made quite clear the Government’s intention. I refer now to page 46 of Budget Paper No. 1 for this financial year. It gives more details. If the honourable member for Fremantle read it he might understand the situation. The Budget Paper states:
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.
I shall deal with that in a moment. The Budget Paper continues:
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, nonrural 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.
I pause to comment that it would seem that those predictions are starting to be fulfilled. It is clear that following the visit to the United States by the Minister for Primary Industry (Mr Sinclair) our position in relation to meat exports has been saved and our exports to the United States will continue. There are distinct prospects for increases in meat exports to Japan. Similarly, the predictions in relation to wheat have so far proved to be correct. The season appears to be a relatively good one. Certainly the wheat growers in my electorate are looking forward to much better returns this year than they have had for quite a number of years. The Budget Paper continues:
Import values are forecast to rise more strongly than exports for 1978-79 as a whole.
If the honourable member for Fremantle had read that statement he might understand the situation. The Budget Paper continues:
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.
I suggest that that is exactly what is happening. The Budget Paper continues:
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.
I want to look at what has happened in the first quarter of 1978-79. There was an overall balance of payments deficit of $307m for the July to October period of 1978-79 compared with an overall deficit of $663m for the corresponding period last year. This improvement also has been reflected in a much lower outflow in respect of private sector foreign exchange transactions entirely because of a turnaround in net apparent private capital movements- from outflows of $346m in the July to October period of 1977-78 to inflows of $437m in the same period of this year. Inflows in respect of government capital transactions were the same in both periods, that is, an amount of $607m. The current account deficit in the July to October period of 1 978-79 of $1,35 lm was larger than the deficit of $926m for the corresponding period last year. This was attributable largely to a weaker trade balance due in turn to a slow growth in exports reflecting relatively sluggish world trade conditions and a recovery in imports in 1978 following the decline during the latter part of 1977 associated with the November 1976 devaluation and a decline in stocks. Industrial disputes, including waterfront stoppages, also probably adversely affected Australia’s trade position in the recent July to October period.
Official reserve assets at the end of October stood at about $3,328m, which is over $100m higher than at the beginning of 1978-79 and about $330m higher than at the end of October last year. Overall external account developments in 1978-79 are proceeding broadly as expected at the beginning of the financial year. The Government has made it clear that, against the background of declining domestic inflation and an anticipation of a gradual restoration of a sound private sector external account position, it will not hesitate to make overseas borrowings on its own account, as necessary, to maintain official reserves.
I believe that that answers the thrust of the suggestions made by the honourable member for Fremantle. The honourable member went on to talk about the debt per capita. I suggest to the House that the debt per capita is not a relevant yardstick. The volume of the Commonwealth’s overseas debt in relation to both the gross domestic product and the export income is still relatively low. Surely the real question relates to our ability to meet interest payments and capital repayments rather than the debt per capita. Following the recent package of yen borrowings, the Commonwealth’s external debt will amount to abour 5 per cent of the GDP. This compares with 6.5 per cent a decade ago. The relevant percentage for export income would be 38.3 per cent at 1977-78 levels compared with 53.2 per cent a decade ago. The honourable member for Fremantle conveniently forgets those figures.
– Who is going to pay the interest altogether- the taxpayers?
– Let us look at what has happened in Australia. The Opposition suddenly has become interested in some new economic theory but it has not come up with any alternative to the Government’s policies. The Opposition just does not like our program.
– Fremantle socialism.
– It may well be that but the honourable member for Fremantle has not told us what the Opposition wants. He has merely criticised the Government’s policy. It would be helpful if he were to give us some suggestions. Maybe we would see some bright new ideas. But certainly they have not yet been forthcoming. The Australian Government’s borrowings overseas as a total amount on issue at the end of 1955 as a percentage of the GDP represented 12.7 per cent. Let me give the percentages in five-year leaps. As a percentage of the GDP, overseas borrowings in 1960 represented 10.1 per cent. In 1965 the borrowings represented 7.8 per cent of the GDP; in 1970 they represented 5.3 per cent; and in 1975 they represented 1.9 per cent. That was the lowest percentage for about 25 years. That percentage remained at the same for the borrowings in 1976. The percentage of overseas borrowings is now up to about 4 per cent of the GDP, compared with 12 percent 20 years ago.
I ask the honourable member for Fremantle this question: What is the crucial point we are talking about? Is it the per capita borrowing or our ability to repay? The honourable member suggested that the make-up of the overseas borrowings was disadvantageous to the Australian population. In arranging the borrowings careful attention has been given to ensuring a manageable spread of maturities in future years. Although a concentration of repayments occurs in the years 1981-82 through to 1985-86 there should be no difficulty in meeting these obligations either through full repayment at maturity or, if appropriate, through refinancing operations. There is a relatively smooth pattern of maturities year by year. The figures a short time ago showed that for 1979-80 the maturity was for $259m; for 1980-81, $253m; for 1981-82, $539m; for 1982-83, $488m; for 1983-84, $483m; and for 1984-85, $465m. For the year 1988-89 there will be a maturity of $194m. There has been a careful spread by the Government in its borrowing program. I have set out why the Government considers the borrowing program is necessary. It has said so quite clearly in its Budget and it has undertaken, I believe, a responsible program.
Let us have a look at the purpose of the program. We have heard honourable members opposite say plenty of times, and the honourable member for Fremantle repeated it, that the Opposition is in favour of an increased public works program, but they never say whence they will get the money. They have been talking about wealth taxes. Maybe they want a high deficit; maybe they want to increase our loans, they never tell us that. They just want increased public works programs to the disadvantage of the private sector. I am sure the honourable member for Fremantle would know, and if he does not he ought to know, that the Commonwealth Government goes to the Loan Council and states the purpose of a loan before that loan is obtained.
Perhaps the honourable member for Fremantle would like to know the details of some of the loans. I will pick just a couple of them. On 24 May 1978 a public issue loan was made in the United States of America. The lead manager for the loan was Morgan Stanley- a bit different from the Iraqis- the amount borrowed was $A 154.4m and the rate was less than 8V4 per cent for five years. The purpose of the loan was for grants to the States for education. Does not the honourable member for Fremantle think that is a good idea? Perhaps he does not. If he does not I think the people of Perth would like to know. Let me take another example; any one will do. On 27 July a syndicated bank loan was made in Switzerland. The lead manager was Credit Suisse. The loan was for $A195m at 4 per cent coupon rate. The final maturity is 1986. The purpose of the loan as provided to the Loan Council is grant to the States funds for housing assistance and capital works’. I ask the honourable member for Fremantle to tell us where he stands. He almost repeated today what he said in a speech he made on 1 1 October 1978.
– Word for word.
– Nearly. At page 1716 of Hansard he is reported as saying:
The solutions to these problems, I admit, are not simple.
We know the solutions are not simple. We found that the Budget was a difficult one to bring down. It was a responsible Budget. Clearly it was aimed at restoring economic growth to Australia. It was a hard Budget, and we admit that. We would have liked not to have had to do the things we did, but the Budget was clearly consistent with the idea of overseas countries of what is responsible. The Organisation for Economic Cooperation and Development and members of the General Agreement on Tariffs and Trade have supported the Budget policy. There was a need to reduce our domestic cost structure so that we can become competitive on the overseas market.
The honourable member for Fremantle talked about Australia competing in South East Asia. I agree that we ought to be spending more money to try to increase our exports to Asia, and that is exactly what we are doing. Before the honourable member flees the chamber I remind him that he asked what are we doing and why we are not doing more. I think he ought to read the Notice Paper. Perhaps he was in the House only about five minutes before he commenced his speech. If he had been here he would know that only today the Government introduced the Export Market Development Grants Amendment Bill. What is the purpose of that legislation if it is not to assist this country to get back on the road to economic prosperity and to increase our exports to overcome just the sort of problems that the honourable member tried to highlight? The Government is doing just what he suggested.
The Minister for Productivity (Mr Macphee) also introduced today the Industrial Research and Development Incentives Amendment Bill which again aims to create a situation in which our manufacturing sector is more competitive so that it can compete against the Western developed countries, especially in the Asian markets to which the honourable member referred. I believe that the loan program as set out in the Budget is a responsible move by this Government. The program has resulted from a Budget which is aimed at bringing down inflation, bringing down interest rates and making our Australian economy more competitive. I strongly support the Bill and reject the amendment.
Original question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Staley) read a third time.
Debate resumed from 14 September, on motion by Mr Sinclair:
That the Bill be now read a second time.
- Mr Deputy Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation? Before the debate is resumed on this Bill I would suggest that it may suit the convenience of the House to have a general debate covering this Bill, the Live-stock Export Charge Amendment Bill and the Livestock Diseases Bill as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest, therefore, Mr Deputy Speaker, that you permit the subject matter of the three Bills to be discussed in this debate.
-Is it the wish of the House to have a general debate covering the three measures? There being no objection, I will allow that course to be followed.
-As the Minister for Post and Telecommunications (Mr Staley) has just pointed out, we are debating these three Bills cognately. The first of the Bills with which I would like to deal is the Livestock Diseases Bill 1978 which, of course, the Opposition supports. The Bill provides for the same disease controls in the Northern Territory and the Australian Capital Territory as now apply in the States. Since 196 1 arrangements have existed between the Commonwealth and the States for the control and eradication of foot and mouth disease outbreaks in Australia should they occur, involving agreements between the Prime Minister and the State Premiers for joint action. Regardless of where in Australia an outbreak occurred the Commonwealth was to contribute half the eradication costs and the States the balance. In addition to the agreed arrangements, each State enacted legislation to provide for the measures expected to be required should an outbreak occur in that State.
Similarly, the Commonwealth Foot and Mouth Disease Act 1961 covered potential outbreaks in the Northern Territory and the Australian Capital Territory. This Act established the Foot and Mouth Disease Eradication Trust Account, known for lots of good reasons as FMDETA- and even that is a long enough term- to finance any expenses incurred and compensation payments made by any eradication campaigns in the Northern Territory and Australian Capital Territory. In 1965 the arrangements were extended and the Act was amended to include two extra diseases, namely vesicular stomatitis and vesicular exanthema. These arrangements were reviewed in January 1978 by the Australian Agricultural Council which consists of Commonwealth and State Ministers for Primary Industry. This review resulted in an extension of the arrangements to cover a full list of exotic diseases instead of the present three. It now includes rinderpest, swine fever, African swine fever, rabies, Newcastle disease, fowl plague, bluetongue and swine vesicular diseasealmost everything except dandruff and flat feet, one might say.
The arrangements now also provide for control measures in circumstances where eradication is considered impractical as well as eradication measures. Control, of course, usually means vaccination and quarantine or destruction of diseased animals. I am a bit vague on the question of whether the Department of Primary Industry or the Department of Health would be responsible in the case, say, of a major outbreak of bluetongue. Neither this Bill nor the second reading speech of the Minister for Primary Industry (Mr Sinclair), whilst they detail all the arrangements regarding the financing of control measures, indicates what contingency plans are in existence to cope with such an outbreak. The Opposition would welcome a statement from the Minister detailing all of the arrangements necessary to see that any exotic disease can be quickly and effectively contained.
The legislation in principle allows that when any animals are destroyed under such a control measure, compensation is paid in accordance with Federal-State agreed policy. I will quote one example that will demonstrate that these arrangements need to be simplified and streamlined to enable prompt action to be taken by the authorities concerned without a lot of red tape to be overcome to ensure that the somewhat vague guidelines are complied with. The example that I wish to give is one that was quoted by Dr Rushford, the Deputy Chief of the Animal Health Division of the Victorian Department of Agriculture, at the Federal Council of Poultry Farmers Associations of Australia on 5 April 1976. Briefly, the incident was that on Sunday, 19 January 1976, fowl plague was discovered in Victoria, leading to the eventual slaughter of about 60,000 birds. The dilemma involved the decision of the State Department of Agriculture to order the slaughter of the infected birds.
A reluctance to make this order was prompted by the lack of firm guidelines. The decision eventually was delayed until a firm assurance was obtained from the Australian Agricultural Council that compensation would be paid. This led to no action being authorised until 6 a.m. on the following Wednesday, 22 January. The slaughter was eventually completed on 26 February 1976. Dr Rushford has said of this incident that the 60-hour delay in reaching a firm decision would have been disastrous if this outbreak had been Newcastle disease, for instance, instead of fowl plague. The Opposition supports the Bill and applauds the co-operation between the States and the Commonwealth to ensure that exotic diseases of all kinds are kept under control in Australia, thus maintaining our animal industries in the very healthy, traditional state; in fact it is a state envied by most of the rest of the world. While doing so, we in the Opposition call upon the Minister for a full and definitive statement setting out simple and streamlined guidelines to ensure the efficient implementation of the worthy aims of this Bill.
I turn to the other two Bills that are being considered. The Live-stock Slaughter Levy Amendment Bill 1978 is being considered concurrently with the Live-stock Export Charge Amendment Bill 1978. The first Bill increases the maximum rate leviable on cattle, buffaloes, sheep, lambs and goats slaughtered for human consumption. These levies along with the complementary charges on livestock exports, are used to finance the operations of the Australian Meat and Livestock Corporation. Payments to the research account operated by the Australian Meat Research Committee are also financed from this levy as well as some research carried out by the
Commonwealth Scientific and Industrial Research Organisation and the National Cattle Disease Eradication Trust Account. But this levy and the charges made under the Live-stock Export Charge Act 1977, which is concurrently being amended, are broken into a number of components according to the purpose for which the money is raised.
The components dealt with in this series of amendments are for meat research, meat processing research and the administration of the AMLC. The Bill specifies maximum rates for only the first two of a total of three components; therefore the third component is left as a residual possible maximum rate. Payments to the National Cattle Disease Eradication Trust Account are levied or charged only on cattle and buffaloes. Neither of these Bills alters payment on this component.
Operative rates for the meat processing research components are currently set at the maximum permissible under the Act. Increases in these rates have been recommended to the Government by the AMLC. These Bills of course will implement them. Other maximum components, although currently still above the operative rates, are being increased at this time. The Government matches research funds expended from moneys raised from producers through two research components on a dollar-for-dollar basis. The proposed increases in the maximum rates for cattle and buffalo for the levy components that are provided for by the Bill are: Meat research, from 25c to 50c; meat processing research, from lc to 4c; and the total for the above two components plus administration of the AMLC, from 75c to $1.50.
I think those charges are worthy of examination. Presently meat research levy is 25c and we want to increase it to 50c; the meat processing research levy is lc and we want to increase it to 4c; the levy for administration of the AMLC is 30c and it will remain at 30c. The possible maximum rate that the present Act allows at this stage is 75c. The new amendment will alter the possible maximum rate to 84c. At the present maximum . rate of 75c in fact the levy being paid is only 56c. This new amendment proposes to double that possible maximum rate from 75c to $ 1.50 but of that $1.50, only 84c is presently being levied. So it would appear to me that plenty of scope is left for the charge to be increased.
Sitting suspended from 6 to 8 p.m.
-When the suspension of the sitting for dinner cut me off in full flight I was speaking about the maximums that are available under the present legislation with regard to slaughter levies. I pointed out that the present possible maximum is 75c and that the levy being charged is 56c. The new legislation will allow for a maximum of $1.50 and only 84c is to be levied for the time being. I have no doubt that the slack will be taken up in due course. I might add in passing that this evening I endeavoured to help the beef producers by having a lovely steak in the dining room. The levy to finance the Australian Meat and Livestock Corporation has not been increased. However, the Government has forecast its intention to do so in the near future. Given that fact and the fact that the sheep levy is now only about half the existing maximum allowable, one wonders why the sheep maximum levy is being doubled. The changes have been recommended to the Government by the AMLC. There has been no audible protest from the producers, and there is a good reason for that. The implementation of the 1977 amendments to the Live-stock Slaughter Levy Collection Amendment Act meant that slaughterers were no longer able to pass back the slaughter levy to the livestock producers in the traditional way that they had done for many years, provided that the cattle were killed within 30 days of purchase. This imposed on the owner a responsibility at the time of slaughter for the payment of the full slaughter levy, a total of $1.56 per head. It is no wonder, therefore, that producers have exhibited no resistence to these new measures, which have increased an already heavy impost on the slaughterer. The theory propounded at the time of the 1977 change was that the purchaser of livestock would be able to discount this expanded levy by reducing the price paid to the producer. I rather believe that at this time of heightened cattle prices the levy tends to be absorbed further down the production line, almost at the marketing end. I suggest that the consumer is now paying a large share of that levy.
As a person who is closely identified with the meat industry, I am not quibbling about increased cattle prices because they are very necessary. I do not think that anybody concerned with the industry or with Australia’s future, taking into consideration our great dependence on primary industry, would quibble about farmers getting increased prices for their cattle. The rates they have been getting over the last two years have been depressingly low. The reasons for these depressed prices are many and varied, not the least being the producers own over-production in Australia without a large export market. We have not had such a market for the last couple of years, or at least not one able to sustain profitably a cattle population which I estimate to be about 40 million head.
Getting back to the Bill, the legislation now allows a maximum of $1.50 and the charge to be levied is only 84c There is plenty of scope remaining for the charge to be increased. In fact, as I pointed out, the charge paid by the butcher at the point of slaughter is $1.56 because, as well as the three components of the levy that are involved in these amendments- meat research, meat process research, and the administration costs of the AMLC- the butcher also pays $1 towards disease eradication. So under the old legislation his total impost was $1.56; under these new amendments it will be $1.84. However, it is possible under the new legislation for the Minister to increase that amount to $2.50 at whim, and recent history would indicate that that is more than likely to occur. I suggest that the Minister will not delay too long in increasing the component of the levy which pays for the AMLC.
I feel that it would be proper at this stage of my remarks to refer to the failure of the Minister for Primary Industry to implement his mid- 1977 promise to set up an elected producers consultative group. Such a body was to be established under the provisions of the Australian Meat and Livestock Corporation Act 1977 and, according to the promise, was to be operating by March 1 978. An interim consultative group was set up at that time to facilitate the commencement of operations of the AMLC, but the people involved were nominated by the various producer groups. A firm commitment was given at that time to have an elected body to advise the AMLC.
Many excuses have been advanced since that date for the body not having been elected, including the extreme workload of the Australian Electoral Office. Given the penchant of the present Government to have elections every 12 or 18 months, I would not deny that it has had a heavy workload. I doubt whether the Government is prepared at this time to give it an extra workload, for various reasons that I will not canvass now. Secondly, the cost of $250,000 to hold the election has been suggested as a reason why it has not been held. Surely when the Minister made the promise he realised that the cost would have been as high as that anyhow, and I dismiss that as a reason. There is a third argument- that not all producer groups support the idea. That is a possibility. I would not deny it. The last reason given is that the stage one report on the amalgamation of producer groups called for the establishment of a federal cattle council to provide the membership of the producer consultative group. That too is probably a reasonable excuse, but I still think that the Minister should act, under the existing situation, to see that the producers’ consultative group is elected to advise the AMLC in its operations.
One of the producer groups that was to be represented on the consultative group was the Australian Cattlemen’s Union. I think it is pertinent in the terms of this debate to mention that group, particularly its spokesman, Mr Barry Cassell. Anyone who read the Sydney newspapers last Sunday would have been astounded at the inflammatory and colourful statements reported as having been made by Mr Cassell. He talked of a cattle Mafia operating in the north-west of New South Wales in the cattle markets of Tamworth, Gunnedah, Moree, Narrabri and Manilla.
– He has made some exaggerated statements.
-The honourable member on my left, who is from the National Country Party, says that he was quoted correctly.
– No, I said that he has made some exaggerated statements.
-I am pleased to hear that the honourable member thinks Mr Cassell has made some exaggerated statements. I am sure that all the producers who are selling cattle in the other markets in New South Wales would be delighted to have that Mafia operating in their areas. There is no doubt in the world that the dearest cattle in New South Wales are in the north-west area where Mr Cassell alleges that this Mafia is operating. He talked of a buyer operating for a lot of butchers, and that too is correct. There are a lot of small operators in that area who cannot afford to put in an individual buyer. There are commission buyers there who might be buying cattle of different grades and types for four or five different operators. Mr Cassell talked of lot splitting. That may have been relevant 20 years ago, but nowadays, with live weight selling, cattle are sold in lots of 14 or 15, and I doubt whether anybody would seriously consider that as a threat. In any case, if Mr Cassell has some concrete evidence to indicate that that is happening, why does he not come forward with it? We all know that it is illegal. I certainly have not heard any complaints from stock and station agents about it happening and I am sure that Mr Cassell does not really have any concrete information of any relevance to produce.
If Mr Cassell has the best interests of the industry at heart, I think he would be well advised to be very careful in his statements. I wonder whether he does have the best interests of the industry at heart. I cannot think of one concrete advantage that has come about for the cattle industry- for producers or anyone else- since the advent of the Cattlemen’s Union. Most cattle these days are sold on a live weight basis. It is a matter of fact that at the time of the implementation of live weight selling there was a great deal of co-operation between various sections of the industry. It was promoted by a group called the Livestock Buyers Association. In conjunction with producers, stock and station agents and the Department of Agriculture, it set up the ground rules for live weight stock selling and they are still being observed. I believe that since Mr Cas sells advent on the scene a great deal of that cooperation has been lost. He is now promoting the sort of divisiveness that unfortunately is always identified with this industry. The producers think of the butchers or the processors as their hated enemies, sworn to rob them. I would have felt that, with maturity and sophistication in the industry, it largely was being removed and that all sections of the industry realise that they are all depending on that industry for their living and are all prepared to make an honest endeavour to see that it works and works correctly. What Mr Cassell is doing is destroying that good cooperation, that spirit of mutual existence.
– He is a rabble rouser.
– He is a rabble rouser, as the honourable member says. That is true. When Mr Cassell starts making these accusations, I would like him to realise that he is accusing some of the most honourable business firms in Australia, firms with a tradition of honourable trading. I refer to such firms as Anderson Meat Packing Co. Pty Ltd, F. J. Walker Ltd, Riverstone Meat Co. Pty Ltd, Tancred Bros Pty Ltd- I am sorry that the honourable member for Macarthur (Mr Baume), who is to be the next speaker, is not in the House, as he surely would back me up on Tancred Bros Pty Ltd- Thomas Borthwick and Sons, Presto Meat Service Pty Ltd and A. J. Bush and Sons Pty Ltd. These are some of the most honourable names in any business in Australia, not just in the livestock business. These are the people he is accusing of cheap charlatan tricks to depress the price of cattle. These things cannot be substantiated. I would like to think that, when this Producers Consultative Group is eventually formed and the members are elected, the Minister for Primary Industry will think very hard about giving the Cattlemen’s Union a place on the Group and whether Mr Cassell’s actions are in any way representative of the mass feeling of the people in that group.
– You are using a lot of emotive words.
-It is a very emotive matter. Just getting away from Mr Cassell for a moment- I think I can find more pleasant things to talk about- I would like to talk about the increasing cost of producing meat. I think that even members of the National Country Party would believe that livestock selling is the start of the operation and that livestock has to be transferred eventually into meat before it is turned into cash. The wholesale butcher, the retailer and the processor are charged with the responsibility of getting money back to the farmer. He obviously cannot go to the bank with 50 bullocks and bank them, because the bank manager will not accept them- even though they are likely to leave a bonus. He wants cash.
At the other end of the industry are the people who are charged with the responsibility of turning those cattle into cash. In the last few days I have gone to the trouble of getting some figures on the cost of producing meat from cattle from the gentleman who succeeded me as the Chairman of the New South Wales Wholesale Meat Traders Association. Funnily enough, his name is Don Sinclair. I doubt that he is any relation to the Minister, but it is a good solid name. I would like to quote some of the figures he has been able to give me. The figures relate to cattle bought at Tamworth- in the Mafia area. We have shifted the Mafia area north, apparently. I had a feeling that it was in the south-west of New South Wales. In any case, it has now shifted to Tamworth, according to Mr Cassell. The costs I am going to quote cover cattle bought in Tamworth, slaughtered at Gunnedah and forwarded by refrigerated rail to the Homebush meat markets and then to retail shops. The litany of charges reads thus: Commission buyer, $1 a head; transport to works, $3 a head; kill charge, $16.65 a head -
– That is the second lowest kill charge for cattle in New South Wales.
-That would be absolutely correct. Gunnedah would have the second lowest rate in New South Wales. Casino would have the lowest.
– What about Broken Hill?
– They do not kill cattle there. Let me continue with the charges: Hide handling, 52c; cattle compensation, 10c; livestock levy- the figure of which I spoke earlier- $1.56; inspection fees, $1.50- that is for the State inspection service, part of the dual inspection service which has been robbing the meat industry for many years- freight and loan out from Gunnedah, $6; Meat Board charges at Homebush to unload and load into the meat depot, $6.32; and the cartage to a butcher shop, $5.70 a carcass. That is a total of $42.35 a carcass. Of course, there are some refunds because the cattle hides at the present time are worth $20 and the offal is worth about $1.50. So, in fact, the impost per carcass is about $2 1. It is no wonder, therefore, that butchers are worrying very much about an increase under this legislation. I think they are prepared to accept it if, in the terms of the legislation, that money is put to good use. I will speak about that a little later.
The industry generally and the Minister for Primary Industry should have a look at the enormous increase in the cost of handling meat over the last few years. Unfortunately, in the last two years I have seen many very respected people in the meat industry in New South Wales have to close their doors by virtue of increasing costs. Within the last month, two firms that members of the National Country Party, particularly those who are in the cattle industry, would recognise- E. J. Ashcroft and Sons Ltd and Bawn Pty Ltd, both of which have been operating in New South Wales and, perhaps, throughout Australia for the last 50 years- have seen fit to cease business because of the prevailing high cost of production. It was just not a feasible operation to keep going. They have had to close their doors. I feel that it is a matter of some regret that that has happened. Those firms, like the larger firms I mentioned earlier, were firms that traded in the highest possible fashion, firms that had the highest reputation for business integrity and decency. It is a pity to see them go to the wall. All of these things being considered, including the fact that we have enormous problems in the meat industry in New South Wales and in Australia at the present time, it does not stop me as a butcher and us as an Opposition supporting the Bill.
The objects of the increase in levy are to be commended. The levy is for three areas of positive improvement. Part of the levy goes to the Meat Research Laboratory at Cannon Hill, Queensland. The meat industry generally will applaud any moves to see that that sort of research leads to a more healthy industry. There is also a component that allows for meat processing research. It is not a very big one, unfortunately. I think that is an area at which we probably could look even further. It does offer some sort of help in research of a scientific nature into the processing of meat. I think I have mentioned in the House before that there is no doubt in the world that the meat eaten by Australian consumers is the best meat in the world. There is no question about that. Even the meat produced by Tancred Bros Pty Ltd- this makes the honourable member for Macarthur nod his head- is of the highest quality in the world. I suggest to all producers who are critical of the butchering end of the industry that they go to Sydney and have a look at the butcher shops that are run, for instance, by A. J. Bush and Sons Pty Ltd, and then travel the world and see whether they can find the product of the farmer being presented in a more hygienic, more attractive fashion that it is presented in the butcher shops of the A. J. Bush company. It even has a shop at St Ives. Most things at St Ives- except the local member- are of high quality. I really believe that the meat industry is pulling its weight so far as the total entity of the cattle trade is concerned.
Although this Bill increases the impost that the butchers have to pay, I as a butcher and we as an Opposition support it because we believe in the benefits which can come from this increased levy, if it is used responsibly and also if the Australian Meat and Livestock Corporation, which is being funded from this slaughter levy, can do the job that is set out for it and find new markets for our exports- I know that it is endeavouring to do so in the Middle East at the moment, although belatedly- and no doubt bring a greater source of information and advice to the industry than the old fashioned Australian Meat Board. In that event we are not concerned about this increase in the levy. We feel that it is well intentioned and we are sure that in the long run it is going to be of great advantage to the industry.
Before concluding, having spelt out quite clearly that we do support the principle of this Bill, I wonder whether the Minister, given my argument that the butchering end, the processing end, the retailing end of the industry is a very important component of the cattle industry, would give serious consideration to increasing the representation of that end of the industry on the AMLC. Unfortunately I have to criticise the New South Wales State Government in this regard, as it is forming a meat authority with 13 people on it, including only one person from the meat end of the industry. I have no doubt that the Minister is well intentioned, but I hope that he sees the error of his ways. I suggest to the Minister for Primary Industry that when he is looking at the AMLC- I hope that it can have a greater say in making this a national industry and perhaps in removing the iniquitous impost on the industry of the dual inspection service- he look at it in those lights. In conclusion I say that we on this side of the House support the Bill.
-I support the Live-stock Slaughter Levy Amendment Bill 1978, the Live-stock Export Charge Amendment Bill 1978 and the Live-stock Diseases Bill 1978, which are being debated cognately. I congratulate the honourable member for Parramatta (Mr John Brown) for the contribution that he has made to the debate. It is quite evident that he has a first-class knowledge of the industry, the problems associated with it and the costs involved. He has given us some very interesting information tonight.
The first of these measures I wish to deal with is the Live-stock Slaughter Levy Amendment Bill 1 978. The purpose of this Bill is to amend the Live-stock Slaughter Levy Act 1964 to increase the maximum rates leviable on cattle, buffaloes, sheep, lambs and goats slaughtered for human consumption. The introduction of this Bill was requested by the Australian Meat and Livestock Corporation. The Bill sets out clearly the increased charges which are to apply. Funds so collected will go to meat research, meat processing research and the administration of the Aus.tralian Meat and Livestock Corporation. Much of the funds collected from the slaughter levies and export charges is expended on promoting an increase in the demand for Australian meat and livestock. We have to increase the volume of our exports of meat. We have to find new markets. If we were to lose the American market we would be placed in a very serious position indeed because America takes 300,000 tonnes of our beef and that really sets the price of beef on the Australian market.
We have to look at the situation in the countries that are members of the Association of South East Asian Nations and make every effort to increase our exports of meat to those countries. When we lost the European Economic Community market we lost an export market which took 80,000 tonnes of our beef year in and year out. That was a blow to our great cattle industry. Of course, we know of the problems with which primary producers were faced because they had increased the cattle population from 6 million head in 1972 to 32 million head by 1975. This presented a great problem. We were overstocked and, naturally, the prices obtained by primary producers came down. Many of them went to the wall and others faced very serious difficulties indeed. We must increase the volume of our exports to the Middle East. Selling campaigns are necessary if we are to achieve results. We need promotion in this area. If we were to get under way a good promotional campaign we could stimulate our sales.
The Live-stock Slaughter Levy Act provides for the proposed changes to operative rates of levy to be implemented by regulation. Recommendations for amendments to the operative levy rates are made to the Minister by the Australian Meat and Livestock Corporation after consultation with the Producer Consultative Group, the Exporter and Abattoir Consultative Group and, where appropriate, the Australian Meat Research Committee. The honourable member for Parramatta set out very clearly in his speech the increased levy rates which are to apply, so there is no need for me to cover that ground again.
The second Bill which we are debating cognately is the Live-Stock Export Charge Amendment Bill 1978. This is a BUI to amend the Livestock Export Charge Act 1977 to increase the maximum rates which may be charged on live exports of cattle, buffaloes, sheep, lambs and goats. The moneys collected from these charges are used for meat research, for financing the Aus.tralian Meat and Livestock Coporation and, in connection with buffaloes and cattle, for financing the national cattle disease eradication scheme. It is extremely important that we make every effort to carry out every possible investigation into ways and means of eradicating disease in our cattle industry. The increases in the maximum rates of charge provided for in the Bill parallel those in the Live-stock Slaughter Levy Amendment Bill 1978. Clauses 2 to 7 of the Bill refer to these matters. They set out the amended charges which are to apply.
The purpose of the third Bill which we are debating cognately- the Livestock Diseases Bill 1978- is to make provision for and in relation to the control and eradication of exotic diseases affecting livestock. The Foot and Mouth Disease Act 1961 and the Foot and Mouth Disease Act 1965 are being repealed by this Bill. It is very important that Australia use every means at its command to ensure that foot and mouth disease never enters this country. Some ten or eleven years ago that disease entered Great Britain and a large number of the livestock there had to be killed. We do not want it to enter this country because if it does we will find that we, acting in a responsible manner, will have to slaughter the stock which is affected by it.
I am very pleased indeed to see that this Government is taking care in this field to ensure that foot and mouth disease does not reach our shores. For many years we have had a well coordinated system of committees under the Australian Agricultural Council and the Standing Committee on Agriculture. Through these forums full consideration is continually given to finding ways and means of eradicating serious exotic diseases should they ever gain entry to Australia. It is most important that we keep such diseases out of Australia. There is complete agreement between the Prime Minister (Mr Malcolm Fraser) and the Premiers of all States about the need for joint action to be taken.
The diseases which will be covered by this Bill are quite numerous but I think it is well to enumerate them. They are foot and mouth disease, rinderpest, swine fever, African swine fever, rabies, Newcastle disease, fowl plague, bluetongue, and swine vesicular disease. The Bill covers the rules and regulations which would apply should an outbreak occur. It covers also compensation payable to the owners of stock destroyed. Clauses 12 to 17 of the Bill deal with the details of compensaton in a comprehensive manner. Clause 18 provides for a $200 penalty for making false or misleading statements.
It has been my pleasure to be a co-founder of possibly the most successful abattoir in the State of New South Wales. I refer to the Gunnedah Municipal Abattoir, which the honourable member for Parramatta mentioned.
– It is a good abattoir.
-Yes, it is a good abattoir. The honourable member for Parramatta mentioned the dual inspection of meat. This costs a great deal of money to the meat industry, to the housewife and to everybody connected with the industry. Meat for consumption within New South Wales is inspected by State meat inspectors. If it is to be exported, it is inspected by the Department of Primary Industry’s meat inspectors. At our meatworks- the same situation would apply at any meatworks- there are 30, 40 or even 50 meat inspectors. They all go through the same technical college course and they all gain the same qualifications. Yet we find that we have these double inspections. Surely the Commonwealth and the States can get together and agree to having one meat inspection and thereby reduce costs considerably. The honourable member for Parramatta mentioned the director of the Cattlemen’s Union of Australia. It is true that only last week in the city of Tamworth he said that there was a Mafia-type setup operating in regard to the marketing of cattle in the north. I know most of the buyers and most of the firms operating in the north and most of the primary producers who supply the markets, and they have all been very happy with the operation. If they had not been happy surely we would have heard considerable rumbles, particularly from the keen primary producers and some of the smaller butchers who operate in that market.
– Members of the Mafia do not leave their names and addresses.
– An honourable member interjects that members of the Mafia do not leave their names and addresses. I do not think that these people are connected with the Mafia. I think that this is just a term that Mr Cassell has conveniently used. I, along with other members, would like him to nominate the individuals involved in this Mafia-type operation. He has promised to do so by Friday of this week, that is, in a few days rime. Last year the housewives of Australia purchased 60,000 tonnes of Australian beef. This indicates that Australian beef is not overpriced. It is a commodity which will compare quite favourably with any other type of protein. Let us hope that through butchers like the honourable member for Parramatta and others this valuable trade to the industry will continue. It is a trade which far exceeds exports, say, to Japan and to other countries to which we export meat.
It is a great pleasure to support the measures because they provide great protection to the meat industry, the exports of which are worth well over $1 billion to this country. As I have said, 60,000 tonnes were sold on the local market so it is necessary that we carrry out research to eradicate disease and do everything we possibly can to help this great industry which at the present time is second only to the wool and coal industries. It is a pleasure to support the three Bills and I have no doubt that they will be passed without any problems.
Mr FitzPATRICK (Riverina) (8.33)-The honourable member for Paterson (Mr O’Keefe) told us about the first-class abattoir in Gunnedah. He said also that he had had something to do with the setting up of that abattoir. I want to draw his attention to the abattoir at Condobolin and also to inform him that I had something to do with the setting up of that abattoir. The Opposition does not intend to hold up the passage of these Bills but I want to point out to the House that I feel some responsibility to express the concern of meat producers and other primary producers in my electorate at some of the problems connected with the marketing of beef and other meat products and also at the steep levy increase contained in the amendments to the three Bills we are debating in this House tonight. I refer to the Live-stock Slaughter Levy Amendment BUI, the Live-stock Export Charge Amendment Bill and the Livestock Diseases BUI. It has been noted by beef producers and other primary producers that the maximum rates levyable per head under the Live-stock Slaughter Levy Amendment BUI will be doubled for the meat research component, quadrupled for the meat processing research component and doubled for the component dealing with the administration of the Australian Meat and Livestock Corporation.
Primary producers in my electorate say that they are sick and tired of the present Government’s claim that it is making their farms more profitable by reducing inflation while at the same time it is adding to farming costs in all directions. It seems to me that every service provided by the Government, whether it is of a direct or indirect nature, is costing the farmer double or quadruple the amount it cost previously. At the same time he has to accept the extra charges, such as the huge cost of the fuel price hike imposed in the Government’s attempt to reduce the deficit. I was surprised to hear the Minister for Primary Industry (Mr Sinclair) say in his second reading speech that the increases in the meat processing rates have been recommended by the Australian Meat and Livestock Corporation after consultation with and with the support of the Producer Consultative Group, the Exporter and Abattoir Consultative Group and the Australian Meat Research Committee. One wonders to whom the Australian Meat and Livestock Corporation and the other consultative groups spoke before agreeing to the increases. Primary producers in my electorate have informed me repeatedly that at long last there is some chance of their becoming viable provided no extra costs or charges are imposed on them.
They point out that if extra costs and charges are imposed they wil never get out of the economic bog they are in. Of course, they have the right vigorously to oppose additional costs and charges because even though the Prime Minister (Mr Malcolm Fraser) has promised good times ahead, many of them have not yet been able to get their hands on an extra dollar. It goes straight to their creditors. It appears from discussions I have had with these people that the so-called national Rural Bank will do very little to alter this situation. We must remember that it was the last straw that broke the camel’s back.
Just as the primary producers have been bracing themselves to bear the extra charges brought about by the fuel price hike, they should at least be able to see definite evidence that they will be able to climb out of this credit bog before further financial burdens are added to farm costs. This BUI provides for an increase in the maximum rate levyable for cattle, sheep, lamb and goats slaughtered for human consumption. The Minister has informed us that the consultative groups are in favour of these increases but if one reads what the Cattlemen’s Union has to say about the Australian Meat and Livestock Corporation, one will find it hard to understand how it would agree to doubling its contribution to that organisation. I know that many uncomplimentary remarks have been made about the Cattlemen’s Union of Australia tonight. I do not want to argue the point about that, but the fact is that the Union represents a large proportion of Australian beef producers and its membership is increasing rapidly. Therefore it is entitled to have some airing of its views in this House and some answers to the statements it has made.
It is a well known fact that the Cattlemen’s Union has sought a federal inquiry into the Australian Meat and Livestock Corporation’s administration of the beef export entitlement scheme. If we are to accept the Minister’s statement in his second reading speech that all the producers are in favour of these extra levies, surely some Government members or the Minister himself should give answers to the claims and statements made by the Executive of the Cattlemen’s Union, particularly the Press releases by Mr Barry Cassell and the letter from Graham McCamley, the national president, to the Prime Minister on 10 May. A letter circulated to members and senators on 1 1 May 1978 states:
Please find attached correspondence to the Prime Minister on an iniquitous system that has been imposed on Australia ‘s cattle and beef industries. This system is one major contributor to the failure in a recovery of Australia’s four-year-old cattle depression.
The Cattlemen’s Union seeks a full, open public inquiry into how the $2S0m false market has been allowed to continue. We seek an investigation into what beef export companies are benefiting at the expense of cattlemen and what individuals have stood to gain.
Your assistance and advice would be deeply appreciated by every Australian cattle producer.
I do not say that this is right or wrong, but surely when someone makes an accusation that $250m has been lost and seeks an open investigation the Parliament should take some notice. Honourable members cannot push that fact aside. The letter to the Prime Minister claims that the producers have been manipulated out of $ 125m by the beef industry export entitlement scheme. The Cattlemen’s Union asks for Federal intervention to effect the incorporation of the following basic principles in any new export entitlement schemes:
– Who wrote that?
– The article I am reading was produced by the Cattlemen’s Union. I think that it has been put out by Barry Cassell or Mr McCamley. It is the voice of the cattlemen’s Union. The fifth principle reads:
Japan removed from the entitlement scheme, and replaced by a price scheme for beef to Japan.
Surely, as these claims are made openly they deserve some answer. I am not saying that they are right. When a body the size of the Cattlemen’s Union has the courage to come out in the open and make these statements they should not be wiped off by someone saying he does not like Barry Cassell.
This is an important issue with primary producers. To indicate that I am referring to the same matters as the second reading speech of the Minister for Primary Industry and not introducing something that has nothing to do with the Bills I would like to read what the Minister had to say in that speech:
Moneys raised through the components designated for administration of the Australian Meat and Livestock Corporation are used to finance all aspects of the operation of the Corporation. The Corporation is essentially responsible for the control and regulation of external marketing of Australian meat, meat products, edible offal and livestock. The Corporation also encourages and provides assistance for promotion of meat and meat products both in Australia and overseas. The Government does not supplement funds raised from producers for this purpose.
All the money provided by the primary producers goes to financing the Corporation, whose responsibility it is to look after these entitlement schemes. These Bills deal with increases in the amounts of levies. Surely someone has to answer the Cattlemen’s Union. People are entitled to say that they do not like Barry Cassell but they also have to give an answer to the claims he is making.
I am in no way trying to prove that the claims made by the Cattlemen’s Union are 100 per cent correct, but the House should at least debate the claims made by the Cattlemen’s Union. It seems to me that statements on the subject are made frequently and publicly. Many primary producers are of the opinion that the statements contain a large degree of truth. In the Cattleman of 21 September we read such statements as the following:
Of the $2,250m spent this year on beef stabilisation, only $700m went to producers. The rest was paid to an inefficient’ secondary and marketing sector. In a recent tour of Hunter Valley towns Mr Cassell and Mr Armstrong have been promoting membership of the Australian Cattlemen’s Union.
In the same speech Mr Cassell attacked the AMLC, asserting that it ‘treats its producers with contempt*. The only means of changing the Corporation was through political pressure on the Federal Government. That pressure could be applied by the CUA
That may be why there is so much opposition to the Cattlemen’s Union. It is putting pressure on the Government. In my opinion the Government is under an obligation to answer the charges made by the Cattlemen’s Union. It is a fact that there is a general feeling throughout the meat industry that something is going on with the cattle entitlements. I believe it is up to the Government and the Minister to give some answers. I believe that grounds exist for a full Federal Government inquiry into the Australian meat entitlement scheme. I ask the Government to consider these things and to give an answer to the Cattlemen’s Union. We should let these people get out of the financial bog they are in before we load them down with any extra charges.
-I start my speech by advising the House something of which it is already fully aware. Being a director of a meat export company and holding the minumum number of shares required of a director I have an interest in this matter. I represent my wife’s family interest on the company not my own. Having said that, I suggest that the reply to the major argument of the honourable member for Riverina (Mr Fitzpatrick) was capably handled before he spoke by the honourable member for Parramatta (Mr John Brown). I am quite certain that the honourable member for Riverina did not have his heart in the points he made. If he did, no doubt the meat workers at the Bourke meatworks of Tancred Brothers would be very interested to hear what he has to say.
- Mr Deputy Speaker. I raise a point of order. I think that the honourable member for Macarthur has misinterpreted my remarks. I was very critical of Mr Cassell on one point. I was certainly not critical of the points made by the honourable member for Riverina.
– In that case, if the honourable member for Parramatta is saying he does not agree with the honourable member for Riverina, I express surprise. I would have thought that anyone involved in the meat industry would recognise that the points which the honourable member for Riverina was making were pretty unreasonable. The situation is typical of matters raised by honourable members opposite. They are always demanding inquiries when matters are raised, even in a scurrilous way or without any evidence being produced. It now seems to be the style of the Opposition to raise allegations against people. We hear talk about the Mafia, repeated accusations against front benches on this side and demands for inquiries when there is no evidence whatsoever.
It seems to me that this is a style of opposition which is regrettable. If and when the honourable member for Riverina and Mr Cassell can provide some evidence on this matter it would then be worthy of serious inquiry because there is no doubt that it would be a scandal if there were such a Mafia actually at work.
As I understand the situation- I think that the honourable member for Parramatta would support my view- generally the actions of commission agents, who in fact purchase for several buyers, could well be held in some areas to be some form of conspiracy. They are buying for several buyers in the same way as some people sell for several sellers. The point is that my experience of this market would suggest that those commission agents tend to push prices up rather than down because their rewards are related directly to the highest possible price. I suggest that it is very easy to make allegations or wild statements. It is even easier to demand that these allegations be inquired into, but it would be much more difficult- apparently it is beyond the Opposition- to provide the evidence that would suggest that such an inquiry should take place. No evidence has been forthcoming.
I suggest that it is most unfortunate that people like cattle producers who have been through a very difficult period are being misled in this matter by a false prophet. There is no doubt that they are looking for someone to blame for the fact that they have had a bad time and I guess that the easiest thing to do is to blame the bloke who buys the cattle from them. I think it is unfortunate that some honourable members opposite, certainly not all of them, would foster that view simply by promulgating it in this place without having determination and any sincere belief in the view that they should support it. It seems to me that this suggests a real lack of an understanding of the facts and a willingness to feed the distress of so many cattle producers.
I believe that what we have to look at in this debate are the realities of what is happening in the meat industry and matters relating to exports and export charges. I think it would be appropriate to mention at the moment that some companies in the meat industry- very few, I admit- are prepared to state their real profits out of meat trading. The honourable member for Parramatta cited an interesting set of statistics on profitability or what happened to a piece of meat bought in one centre and sold in another. From the annual report of the corporation of which I am a director I have prepared a table showing the distribution of the average sale price per pound of meat on a live weight basis. The table shows that from the average sale price of 25.04c per lb that is received by this corporation for its meat, 10.5c goes out in payments to graziers for livestock. That is roughly 41.8 per cent. The reason I am making these points is that the last time a matter of this sort came before this House some honourable members opposite kept talking about the dramatically diminishing proportion of the final sale price that was going to the producer. They were stating that there was a rip-off in the middle by other corporations, by processors, for example, and that somehow this was improperly taking money from producers. The facts are totally different from that and this is why I want to labour the point, if I may, before this House.
The next largest amount to be distributed from the average sale price is 7c per lb which is for operating expenses and general overheads. That is roughly 28.4 per cent of the total price. An amount of 5.25c, or 21.2 per cent, goes out in labour costs. That, roughly, is half the amount distributed to the producers of the cattle. That represents an enormous increase in recent years. In fact, that proportion was far worse when cattle prices were lower than they have been in the last 12 months. The next cost item concerning this company- I admit that this item has less relevance as far as other companies are concerned in the sense that this company does buy in some meat from external sources- involves an amount of 1.5c, which represents about 5.8 per cent of the price. Government taxes is the next biggest item. Taxes represent 0.5c, which is 1.4 per cent of the total price. Funds retained to finance loan repayments and future expansion, that is retained profits, in effect take 0.25c or 1.2 per cent. The shareholders take 0.04c in dividends. There is the big rip-off. Out of 25.04c per lb that is received by this corporation on the sale of meat, 0.04c is the so-called rip-ofT!
It is appalling that although this is public information someone on the Opposition side of the House should get up and promote a line of nonsense being perpetrated by the leader of the Cattlemen’s Union of Australia whose only chance of having any meaningful voice is to generate membership by a form of proselytising, which certainly is not appropriate to the meat industry. I would have hoped that it would have been more involved with honourable people. I would have thought that that kind of promotion was something that the honourable member for Riverina should not support. The facts are evident. The facts are here. The facts are that only 0.2 per cent of the proceeds- I repeat, 0.2 per cent of the proceeds- from the average sale price on 1 lb of meat is paid to shareholders in dividends. In other words, the 900,000 head of animals processed by this company provided a profit of approximately $2 a head, and that is supposed to be a rip-off. I submit that those sorts of charges are nonsensical.
The other point that I think should be stressed with some vigour is the point made by the honourable member for Paterson (Mr O’Keefe), and that related to the ludicrous expense involved- in fact, financed by the levy collected under this legislation- in dual meat inspections. The company in which I am involved suffered severely, unfortunately, in its Mount Isa operations from the conflict between the Queensland State meat inspectors and the Federal meat inspectors. The State inspectors were claiming that if any meat sold locally had been inspected by a Federal inspector they would ban the works. I do not know how these people expect a corporation to handle a situation in which it has an export order for forequarters and a local order for hindquarters. Who is going to inspect the meat? Is the Commonwealth inspector going to inspect the front part of the beast and the State inspector the back part of the beast? We have this absurdity, this nonsensical situation, which apparently cannot be dissolved. It has been going on for years. It has resulted in the closure of the new Mount Isa meat works which was endeavouring to provide an essential service to cattlemen in the far west of Queensland.
– The kosher operators have made a fortune doing things like that. What are you talking about?
-I do not mind kosher inspection. It is great if someone makes more money out of the sale of meat being killed in a particular style. That is fine. All I am objecting to is the fact that when a company is endeavouring to sell forequarters to one market and hindquarters to another market, Commonwealth meat inspectors spend their time fighting with State meat inspectors about who should inspect the beast. Not only are they fighting about it; it results in the closing down of a meat works, puts people ‘s jobs at risk and prevents primary producers from having a market for their cattle. I suggest that the honourable member for Paterson was totally accurate in requesting that some action be taken on this ludicrous situation.
I also would express some surprise at the honourable member for Riverina complaining about the increase in the levies in the legislation under discussion. That is an extraordinary statement coming from a member of a Party which had imposed a levy of $5 a head on export cattle. That, of course, was withdrawn by the present Government and replaced by a $1 a head levy. That $5 a head levy was an extraordinary rip-off. When the cattle industry collapsed and the prices went down the Labor Government maintained that $5 a head levy, which raised $25m, and out of the kindness of its heart said: ‘We recognise the industry has a problem. We will lend you back that $25m at interest’. That is the way in which the great Australian Labor Party helped the cattle man when prices went down. It maintained the levy at $5 a head for export cattle and lent the proceeds back to the primary producer. There was a rip-off the proceeds of which it then lent back and charged interest. I hope the cattle producers of Australia remember the events of those years.
I stress that in fact this Bill is not at the moment raising the levies themselves. It is basically raising the maximum amounts that can be collected under these levies. In fact, the Minister for Primary Industry (Mr Sinclair), in his second reading speech, specifically stated:
The maxima are being raised at this time, primarily to enable doubling of the operative rates for the meat processing research components-
The meat research components represent only lc in respect of cattle and buffaloes. The amount is being raised to 2c. Big deal! I do not think anyone could protest violently about that matter, particularly when one considers the amounts of money involved. The other maxima are being increased because it is evident that there will be a need for rises sooner or later, but that will be done in conjunction with the industry. I think it is vital to point that out. The Minister, in his second reading speech, also said:
These increases in the operative meat processing rates have been recommended to the Government by the Australian Meat and Livestock Corporation after consultation with, and with the support of, the Producer Consultative Group, the Exporter and Abattoir Consultative Group and the Australian Meat Research Committee. These industry groups are unanimous in wishing to increase the funds available to support meat processing research at the CSIRO meat research laboratory at Cannon Hill, Queensland.
Is it reasonable to protest against a rise from lc to 2c when in fact -
– Who is protesting? We are supporting it.
– There was a statement of regret from the honourable member for Darling that these levies were going up.
– I am now the member for Riverina, not the member for Darling.
– I had hoped when the transconfiguration took place and Darling was no longer Darling but Riverina that the honourable member would recognise the significance of the fact that the industry supports what the Government is doing. The Minister also said:
The increases in the other maxima will enable future increases in the operative rates to be undertaken by changes to the regulations.
The point is that the industry has been totally supporting this proposition. I do not believe that there is immense scope for disagreement- I am glad to see that the honourable member for Parramatta endorsed that view- in what this Bill is all about But I would stress that the amounts are becoming significant and show a determination by the Government and the industry to attack these problems in a serious way. For example, obviously there will be an increase from the modest $21,000 involved in the eradication of disease this year. On the basis of current estimates only $21,000 from the livestock export charge will go towards the eradication of disease; only $11,000 will go towards cattle; and only $93,000 will go towards sheep and lambs. However, the amount of the livestock slaughter levy for the eradication of disease, which is the major item, is $7. 85m, according to current estimates. That is a significant amount. I think the industry recognises the need to spend that sort of money. The livestock slaughter levy on cattle, of course, was $4.4m and on sheep and lambs it was $ 1.38m. There are other items, such as the chicken meat levy, which are not relevant to this debate.
The problem that I see and that I think some members of the Opposition may have found attractive is that there are retrospective elements in this legislation, which no doubt is of interest to some people. It is retrospectivity that I support and I am certain the Opposition supports. It relates to the fact that compensation may be paid in respect of loss- this is where cattle are destroyed on a property which is declared a disease area- arising from action taken from the time an outbreak of the disease is first suspected to exist by providing that the Minister may make a declaration of an area in respect of a disease retrospective. I totally support that proposition. I cannot imagine why anyone would take objection to retrospectivity in that context.
I welcome the fact that the Labor Party is supporting this Bill. I found some points of objection in what the honourable member for Riverina had to say. I believe that the industry is totally behind the Government in respect of this legislation, just as this Government has been totally supportive of the industry. The industry has received such a better go under this Government than it received under the previous one that it strikes me as unfortunate that people such as Mr Cassell should be able to have their nonsense peddled in this place. I regret that this sort of thing was introduced into the debate. I think the facts clearly show that this Government is supporting, has always supported and will continue to support the beef industry.
– I support the legislation. However, I must say that I am very surprised that the honourable member for Macarthur (Mr Baume) should come into this place and shed crocodile tears for the meat processors. No doubt I was one of the people to whom he referred when he spoke about allegations being made about the profits that the exporters have made in recent times. I do not retract any of those statements whatsoever. Figures produced by the New South Wales Department of Agriculture- they are not my figures- show quite clearly that the meat exporters and the meat processors generally were profiting at the expense of the producers. The figures show quite plainly that over the period they were kept the share of the processor increased by 300 per cent. It went from something like 7 per cent of the consumer’s dollar to over 20 per cent. No doubt that share will come back when cattle prices go up. I hope it will, but I am not sure whether that will be the case. Certainly the record shows that they have done extremely well. It is nonsense for the honourable member for Macarthur to come in here and shed crocodile tears for these very wealthy meat exporting companies. They have done extremely well over many years.
I will have the figures brought up to date. I did not bring them into the House with me tonight because I did not think the honourable member for Macarthur would want to talk about them. I thought he would be too embarrassed to do so. I will make them public in respect of the share of the consumer’s dollar that the processor gets and also the profit record of the leading meat companies in Australia over the last few years. I can assure the honourable member that they have done very nicely indeed and that there was no need for him to come in here and shed crocodile tears about them. The Vesteys, the Borthwicks, the Andersons, the Hookers, the Walkers, the Anglisses, the Playfairs and the Tancreds have all done very nicely thank you. They have been able to do nicely because in many parts of Australia they are able to manipulate the market. They not only own the killing works but also own a lot of the cattle. So they can feed the cattle into the killing works to suit themselves and the poor old independent producer has to take what is left. They can manipulate the market in a way which disadvantages the small producer and advantages their own production.
– Are you making that allegation?
– This happens in Queensland and the Northern Territory. There is no question about it.
– Are you making that allegation?
– I will produce the figures.
-Order! The honourable member for Macarthur has already spoken. I suggest that he contain himself.
– I am not impressed by the figure of one twenty-fifth of a cent to which the honourable member for Macarthur referred. If a person holds millions of shares in a meat works that is killing millions of head of cattle, it amounts to a lot of money. It can be a very small amount for each pound of beef or whatever, but it can still amount to a very nice profit. My only regret about this legislation is that those people who have made big profits at the expense of the producers are not being asked to contribute towards the research levy. They are the people who should be contributing much more heavily to this fund because they are the people who have made the most out of it. A substantial increase has been proposed. The amount that has been proposed for meat research has been doubled; the amount for meat processing research has been quadrupled; the total levy possible for the above components for the administration of the Australian Meat and Livestock Corporation has been doubled; and the maximum rates levyable on exportable livestock- live cattle, buffalo, sheep, lambs and goats- have been increased.
The money is to be used to finance meat research. We have to acknowledge that the future of the industry, to a large extent, depends on the sophistication of the manner in which we carry out research. If we are not prepared to invest in research we will not progress and compete with other countries. The other problem in relation to research is that cattle research is necessarily long term and the people who are running research projects have to be assured of some continuity of funds. Therefore the increase in the slaughter levy and the export levy is justified on these grounds. Unfortunately there has been a decline in the number of sheep slaughtered and this has reduced the amount of income that is available for research programs. This has been accentuated by inflation.
I would like to talk briefly about the actual programs and look at their histories because over the years they have been steadily reduced in line with reductions in real income. For example, in the sheep industry program of the Australian Meat Research Committee- including the projects which are carried out by the Commonwealth Scientific and Industrial Research Organisation at Cannon Hill and about which honourable members have spoken- 73 projects were being undertaken in 1972 but only 42 projects were being undertaken in 1976. In the cattle industry program, of a total of 236 projects that have been commenced since the fund was instituted 15 years ago, only 72 projects are still being supported. Obviously some of them have been concluded successfully while some have been abandoned as being unfruitful. Changes in emphasis have also occurred in the beef industry so that the research is directed more towards containing costs rather than the original emphasis on increasing production.
Funding has also increased on the marketing side of the industry. An increase in the export charge on animals being exported live will assist with the projected accelerated marketing initiatives. Of course there is an urgent need for additional research in several areas. For instance, in the sheep industry program there is an urgent need for large scale research to be conducted into the genetic control of the blowfly. This is a very important area of research because it bears on the labour costs of controlling blowflies. Internal parasite control in sheep is an arduous and expensive exercise. A large co-ordinated program is needed to overcome the problem of resistance to drenches. The reduction of farm costs of course is a problem for all primary producers. Many new projects should be funded in this area to save costs of transport, bruising, the lowering of quality, the handling of produce, slaughtering techniques and market research. Carcass classification of course is a very crucial area. There is also a possibility of research into the development of computer selling of livestock
Another interesting item is the mini-care sheep program. Because of the decline in the availability of stockmen there is a need to develop a program to produce sheep by genetic means which will require less care. Sheep, through genetic breeding, may not require drenching and may not be susceptible to worms. There are other programs such as a co-ordinated program relating stock to crop growth programs or wheat research programs to determine which sorts of crops should be grown in conjunction with sheep or cattle. The lucerne aphid project requires a lot of very expensive and time-consuming work in the genetic breeding of aphid-resistant lucernes and the development of biological controls against aphids. Work is going on in this area but it needs to be maintained and stepped up.
In the cattle industry program exciting work is being done at Cannon Hill with electrical stimulation of carcasses. This sounds rather esoteric but I understand that this method produces more tender meat which is lighter in colour and is more easily boned. I wish they would send some of it down here so that we could try it out in the parliamentary dining room. Also work is going on at Cannon Hill to relate meat properties, such as tenderness, to genetic determinants. It has been found that animals with what is called double muscling have weaker connective tissues and therefore yield meat that is less tough. This is a very scientific approach to improving the industry. It is very time-consuming and very expensive but I think we have to face up to the fact that we have to bear the costs of this sort of research if we are to keep up with the rest of the world in producing top quality beef.
I want to refer briefly to the Livestock Diseases Bill 1978 which concerns the Australian Capital Territory. This Bill ensures that there will not be legislative bottlenecks if some emergency occurs or if there is some outbreak of a very serious disease. People might think that it is of no interest to the Australian Capital Territory but they might be surprised to know that there are 18,000 head of cattle and 150,000 head of sheep in the Territory. They do not have votes but their owners do. I am sure that they would support this legislation because they would want to have the benefits of the protection of any disease control measures that are taken within the Commonwealth. Of course we do not want the ACT to be an enclave where cattle can be moved into the
Territory and out of it in order to evade some livestock disease control legislation. Of course the Canberra Abattoirs is situated in the ACT and the holding paddocks are in my electorate. Large numbers of cattle come into and go out of the ACT. It is quite important that these provisions of the Livestock Diseases Bill should be extended to cover the ACT in case of outbreaks of foot and mouth disease, bluetongue or any other exotic disease which can be extremely serious. A lot of people travel into and out of Canberra. So it is quite important that we have this legislation. I am sure that the small numbers of producers in Canberra would support this type of legislation.
I want to pass a few remarks about the beef industry in the Northern Territory because I think it is in a very vulnerable position in relation to the beef industry in the rest of Australia simply because its domestic market is extremely restricted and it is very dependent on the export market to the United States of America, a fairly unpredictable market and one which is subject to severe cyclical changes. It is also dependent to some extent on livestock exports to South-East Asia. This market was developing into quite a profitable venture until the advent of the bluetongue scare which fortunately did not develop into a disease although the presence of the virus was found. This has had a very detrimental effect on the exports of live cattle from the Northern Territory. They almost stopped. They are starting again in a very limited way but we are still feeling the effects of the scare. It pointed up the inadequacy of our research faculties. It pointed up the inadequacy of our diagnostic services because we had to send samples of blood overseas and wait for several months before we knew the results. We were very fortunate that there was not an actual outbreak of the disease which could have swept over the whole of Australia. It could have been disastrous. That would have been made easier because we did not have adequate research and diagnostic facilities available in Australia
One of the biggest problems in the Northern Territory is that the meat processing facilities are in the hands of a couple of private operators. Hooker’s, I think, and Vesteys own the Katherine and Wyndham meatworks. They also own about 30 per cent of the land and the beef cattle in the Territory and are able to manipulate the market. They are able to nominate a price for livestock at their killing works and people can take it or leave it; they have no choice. They can go to either Katherine or Wyndham, but both meatworks are owned by private enterprise people, who naturally are more concerned with maximising their own profits from their own herds than with looking after the interests of the smaller producers, who feel very vulnerable. There is no competition in the market, and if a Mafia exists anywhere it is certainly in the Northern Territory. I do not know what the position is in New South Wales, but I think what my colleague, the honourable member for Parramatta (Mr John Brown), was attributing to Mr Cassell may apply quite well to the Northern Territory, from my knowledge of how the system works there. The producers there have had a very rough time. The live market they were building up quite nicely has practically disappeared and they are fighting very hard to get it back. I think that the Government could be much more active in re-promoting that market, sending people overseas to assure buyers that there is no real danger of bluetongue, that it was only a potential danger and that they can buy livestock from Australia with confidence. Some of the countries are doing that; others are still playing safe and will not have anything to do with our livestock.
It is good to see that the industry is recovering. It will go through its cycles again, but there is no doubt that while the producers were having a tough time the processors were really having a picnic. They made a lot of money out of the very low prices that the producers had to contend with for many years, and I hope that for a few years now the boot will be on the other foot and we will see the producers getting a better share of the profits available in the market. As a result of our investment in research, we hope that the consumer will get a better quality product at a reasonable price. For those reasons, the Opposition supports the legislation.
-First of all, I should like to say how disappointed I am that the Minister for Primary Industry (Mr Sinclair) is not in the House tonight. Last week we debated the Primary Industry Bank Amendment BUI, and again the Minister was not in the House. I do not think it is very satisfactory that the Minister should simply come here and give a second reading speech, which basically is written for him by his Department, and then take no part in the debate. We have had the Minister for Post and Telecommunications (Mr Staley) and the Minister for Defence (Mr Killen)- that is Killen of Cunnamulla and the Condamine- at the table for the Government and now we have the Minister for Environment, Housing and Community Development (Mr Groom) there. I have nothing against those Ministers, but if we are to raise matters in a debate on an issue as important as the beef industry I think the Minister himself should be here with his advisers so that at the end of the debate he can answer the queries raised. We need to have a few answers to some of the matters that have been raised.
The honourable member for Macarthur (Mr Baume) attacked my colleague, the honourable member for Riverina (Mr Fitzpatrick), basically misunderstanding what the honourable member had said. All he said was that some charges had been made by the Cattlemen’s Union which needed to be answered, particularly those in respect of entitlements and the traffic in entitlements. Similarly, the honourable member for Parramatta (Mr John Brown) was making the point only that he did not necessarily disagree with what Mr Cassell was saying but he did disagree very strongly with Mr Cassell using emotive terms such as ‘Mafia’. I am sure that all members of this House who represent electorates where primary industry interests are concerned, particularly the beef industry, agree that there needs to be a mutuality of purpose, that we need to act as one for the sake of the beef industry.
The Opposition is not opposed to these three Bills. I guess we are a little surprised at the steep increase in the levy, which is over 100 per cent for cattle and buffaloes, but of course, in a way it is an ambit arrangement in that it sets the upper limit. The Bills give us a chance to debate the levies on the industry and issues associated with the marketing of beef. In that context, I should like to quote from the Budget Speech of the Treasurer (Mr Howard) this year, in which he said:
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.
This year the Commonwealth Will pay some $25.5m to the States for the bovine brucellosis and tuberculosis eradication campaign. Of that amount, about $7. 9m wil be recouped from the producers. Outlays for meat export inspection and animal health services undertaken by the Bureau of Animal Health are estimated at $35.5m, but only $3.2m will be recouped. It is not clear from the Treasurer’s Budget Speech whether he wants to bleed more funds from producers for disease eradication expenditure or whether it is in the area of meat inspection that most of the grab will take place. The basis of the Government’s commitment in this area has been to assist producers in competing overseas and to encourage exports. I am not so sure, as others are, that it is possible to cut expenditure or do away with meat inspection or with the dual inspection system. However, I point out that all members who have spoken in this debate have raised the problem of dual inspections. In fact, it has been raised in nearly every debate on the beef industry that I can recall. We need some answers on this matter. Someone has to pay because the overseas countries require certification of meat by the national government. Thus, export meat inspectors are employed by the Commonwealth and certify the exports of meat in accordance with the requirements laid down by the importing countries. Certification is a commercial necessity. Quite frankly, there are no overseas markets and no export earnings from meat without it.
In the six years from 1973-74, and including estimated expenditure for 1978-79, a total of $ 136.5m has been spent on the meat inspection service. The Government has footed the bill for more than $106m, and that does not include a few extras amounting to $ 11.4m. I give those figures and raise the matter of the Treasurer’s Budget Speech because if he reimposes the export levy we will be faced with a cost of $20m or $30m a year, which will be as nothing compared with the amount that has been spent by the Government in trying to get the beef industry out of trouble. The Prime Minister (Mr Malcolm Fraser) in his most recent electoral talk and the Minister for Primary Industry have spoken in enthusiastic terms of the return of some prosperity to the rural sector. The part of the rural sector that has experienced the most distress over recent years has been the beef industry, particularly the beef specialists, and we are all pleased to see that at present conditions are better, in respect to both climate and markets. However, any improvement in the climate or in market access has little to do with the efforts of this Government which in my opinion, has done little of a lasting nature to assist the beef industry in the areas where it will count the most in the long term. Some extra money has been provided to help the beef industry through the difficult times since 1974, and reconstruction money has been allocated specifically for the beef industry.
I am afraid that our Ministers now have a reputation worldwide of seeming to want headlines back home about what a tough fight they are putting up against the dragons of the European Economic Community, the United States Congress and the Japanese Livestock Industry Promotion Corporation. In fact, overseas correspondents have recently reported that the EEC officials are convinced that Australia is not really interested in getting trade concessions in Europe. First, we had the foray by the Minister for Special Trade Representations (Mr
Garland), who did little but annoy the EEC officials and Ministers with some puny sabre rattling. Next we had the Minister for Trade and Resources (Mr Anthony), who did some more of the same and allegedly amazed officials by announcing that he had obtained some assurances that barriers would soon be lowered to Australian exports of beef.
The most recent headline catching trip was that of the Minister for Primary Industry, who knew full well before his departure that it was highly unlikely that President Carter would sign into law the countercyclical beef BUI, or whatever it is called. Strangely, the explanation given by President Carter for his decision did not mention that he had been lobbied by our Minister, but simply stated the truth, namely, that he wanted the option of being able to control imports and to have flexibility or some measure of controlling inflation.
The point is that more Bills will be introduced into the United States Congress as the mid-term elections have not perceptibly changed America’s political attitudes in the Congress or in terms of the electoral pressures on it. I hope that our Department and our Minister point out that, as exports constitute only something like 7 per cent of the total United States beef consumption, they have very little impact on stability of prices in that country and that to propose a countercyclical BUI is not really very sensible. We all know that in Australia’s interests, it is better to have set import quotas each year. The beef lobbies in the United States, Japan and the EEC are just as strong, despite our constant sabre rattling, headline hunting and abuse, at times.
The beef industry, I think, is another area where the Government’s broken promises, or at least shattered expectations, are well in evidence. Polls of farmers on matters such as general policy approaches by the Government and specific policies such as petrol pricing clearly demonstrate this. We all know that the Australian beef industry has been in a financial crisis situation since 1974. The crisis of liquidity had its origins in the 1973 Organisation of Petroleum Exporting Countries oU crisis; one consequence being the sudden and complete closure of the Japanese market to Australian export beef. Such a dramatic closure in an export market more than demonstrated inadequacies in the present methods of marketing Australian beef. I make the point that it is indeed unfortunate that in the ensuing four years research into beef marketing has centred on the quantification and dimensions of the cattle industry crisis rather than on providing a direction out of the crisis, both at the economic level and the political level, to ensure an improvement in the marketing structure of the Australian beef industry.
Although I acknowledge that the seasons and markets have improved overall, I believe that the fundamentals of Australian agriculture itself are in fact unchanged. Any excessive short term optimism is not sufficient criterion for any long term policy formulation at this time. I do not want the producers to be carried away with the temporary upturn. In my previous occupation in the Bureau of Agricultural Economics I was associated for over a year with surveying primary industry in respect of horticulture. The results of these continuous surveys are publicly available. By using models based on survey figures it was shown recently by the BAE that some 15,000 wheat-sheep zone farms, particularly those under 500 hectares and even with small levels of debt, are now non-viable or will become non-viable in the next five to eight years. It was shown also that some 14,000 grazing-cropping farms in the high rainfall zone also are likely to be in severe financial difficulty in the next five to eight years.
What we have to realise about the beef industry is that even in the really good years of 1973 and 1974- the boom years- many fellows in the industry were in trouble. The BAE recently published an article with an analysis on sensitivity built into models in terms of how the beef farms would respond to different situations. For example, in respect of people in the beef industry presently earning less than $5,000 a year in the pastoral zone, if prices for beef went up by 10 per cent there would still be 42 per cent of them in trouble, instead of 43.9 per cent; and so it goes on through the figures. In the wheat-sheep zone only 2 per cent of the people would be any better off, and in the high rainfall zone- that is where most of the beef producers are- only 3 per cent would be any better off. Looking at the situation of all producers in the pastoral zone, if beef prices went up by 10 per cent from the very low base at which it is at present they would only be 16.4 per cent better off; and so it goes on right through the figures again. Looking at the situation of all producers in Australia, if there was an increase of 10 per cent their incomes would rise by about 6.6 per cent.
Although I think that the present situation is rosy, I think the long term future for Australian agriculture is still very problematical. We need to realise that what a lot of the surveys of the beef and grazing industries are showing is that the lower 25 per cent of producers are in desperate trouble, whereas the upper 25 per cent are doing exceptionally well. That is what makes it very difficult for the Government in applying a policy overall that would help all beef producers. In a rural sector where 20 per cent of income earners live below the poverty line and 38 per cent of the sector exists almost entirely on income earned off-farm, I think it is illusory to be optimistic because there is a short term upturn in the fortunes of the beef producers or to use this short term upturn as a reason for not formulating long term, if not visionary, policies.
The models to which I referred incorporated various levels of inflation and, while no one would argue that lower inflation will not help, it will not greatly affect those predictions. The rural sector faces continuous pressures and the present measures of adjustment are not adequate if we look at the overall picture. Viability does not relate just to farm size, fertility or level of debt as any single explanation; the key immeasurable farm input is that of management. The reason why often small farms are viable and large farms are non-viable often relates to the ability of the individual farmer as a manager. As said earlier, the beef industry has been concerned particularly with marketing for some time now- «ind quite rightly so.
Some of my colleagues tonight have referred to Mr Cassell and his most recent emotional statements with respect to the beef Mafias. He says that there are cartels operating in various centres. I agree with the honourable member for Macarthur (Mr Baume) who says that Mr Cassell has not produced any real evidence of this. I believe that there may well be collusion, but often it will not even affect the price. Often buyers may be aware of an excess of supply in certain markets, but again to prove it or to provide evidence of it is very difficult indeed. In some studies where small centres have been looked at and there have been only three or four buyers, compared to large centres where there have been many buyers, the price difference just simply has not been there; it has not been reflected in the sales figures. The only price difference that has been detected is in the smaller centres. Quite often there have been smaller lots in those centres and therefore there has been a premium paid in the larger centres for larger lots. Any time there is a shortage, any collusion falls away and the prices rise. By and large, I still believe that in the various systems of selling beef in this country the law of supply and demand still exists. Instead of highlighting alleged Mafias, I think that Mr Cassell should be pressing for more livestock market reporting services so that the farmers themselves can compare the prices being gained at different centres. I believe that, once we have decent reporting services, it will be quite probable that the differences in prices received from various centres will often reflect transport costs from those centres.
The final point I would like to make is in respect of stabilisation. There has been a lot of talk in the beef industry about stabilisation. Quite often the farmers are thinking about stabilisation in the context of price support. If we are to have stabilisation in the beef industry there are quite a few problems to which the Government needs to address itself. The major problem is that, if we are to have price support, eventually some sort of storage will be needed, and then the problem is perishability. Of course, another problem is that we do not have sufficient product description at this time, as we do not yet have beef classification. There are other series of proposals centring on the buffer stock fund, which would be unpopular at present, because at most levels for which it has been proposed beef producers would be paying in now. But the logic, the rationale, behind a buffer stock fund for beef assumes that the fund can do better than the grower in terms of the funds of growers being paid in and paid out at various times in the beef cycle. I am not quite sure that that applies. There may be problems in capital markets, but I think the advantages of a buffer stock fund would be outweighed by other considerations.
The final matter I wish to raise is that some growers have been a little concerned about the Australian Meat and Livestock Corporation getting all this money for promotion purposes. I think the House would agree that promotion is excellent as long as there are marketing systems to take advantage of it. I am not sure that the AMLC has expanded far enough or fast enough, but at last it is getting expertise. I think we all hope that it soon will be able to get some new markets. As I said at the outset, the Opposition does not oppose these Bills. We are very much in favour of them.
– in reply- I wish to respond very briefly to the remarks made during the debate. I apologise to the House for not being in the chamber during the debate but I was observing in part the operation of the Legislation Committees. I must commend the chairman and the members of the respective committees. I believe that the new procedure is working admirably and that it certainly enhances the committee deliberations of this chamber.
A number of questions have been raised in relation to these livestock measures. A series of questions was raised by the honourable member for Parramatta (Mr John Brown). Let me advert to them briefly. I was told that he asked three questions. I shall read the responses into the Hansard record. He asked, firstly: Who is responsible in the event of the outbreak of an exotic animal disease, the Department of Health or the Department of Primary Industry? The response is that the State departments concerned with agriculture in fact are responsible for eradication procedures within each State. The Department of Primary Industry is responsible for coordinating State plans and programs and for administering the Commonwealth-States arrangements for sharing eradication costs. The Department of Health is responsible for keeping these diseases out of Australia through its quarantine service. It does not have responsibility, however, for eradication measures when quarantine is breached.
The second question asked by the honourable member for Parramatta was this: Can the Minister assure the House that contingency plans and preparations for the eradication and control of exotic diseases are ready and available? Contingency plans for all the important exotic animal diseases were prepared by a technical committee of Commonwealth and State veterinarians. The committee is responsible for continually updating these plans. In addition, training exercises utilising the plans are held regularly in each of the States and Australian veterinarians are sent to gain first hand experience with exotic disease emergencies in overseas countries. This year two veterinarians were sent to Latin America to study the African swine fever outbreak. Those two veterinarians in fact were sent to Brazil and to Dominica. Now that they have returned they will be involved in updating the Australian contingency plans for this disease.
The third question was this: Can the Minister assure the House that in the event of a serious exotic disease outbreak, affected stock will be slaughtered promptly and that compensation will be made available? He referred to the 1975 fowl plague incident in Victoria and he claimed that there was a 60-hour delay between the tentative diagnosis and the final definitive diagnosis which enabled compensation to be paid. The Commonwealth-States agreement for sharing the eradication costs of the more serious exotic animal diseases states precisely and specifically the cost sharing arrangements that will apply from the time the disease is suspected, regardless of whether or not the follow-up definitive diagnosis confirms the original suspicion. This agreement, confirmed by correspondence between the Prime Minister and the Premiers, enables the State departments concerned with agriculture to commence eradication operations as soon as the exotic disease is suspected in the knowledge that eradication costs will be shared.
I commend those honourable members who have spoken on these Bills. I believe that there is no more important general area which affects the well being both of livestock producers and consumers. Indeed, I think there is no area where the correlation of the interests of the producers on the one hand and the consumers on the other cannot be identified in the consequences of these measures. Of course, they are intended to try progressively to ensure that we preserve to the maximum extent the health of the Australian herd and that we try to ensure that any exotic diseases which enter Australia from overseas are contained and eradicated through the procedures that are outlined in the legislation, the procedures to which I have just referred or in the practices of the Bureau of Animal Health.
In the last few years the Bureau of Animal Health has been called upon to turn its attention to very serious problems. I believe that this Bureau functioned effectively and responsibly in for example, combating the bluetongue virus outbreak in Northern Australia. Many people fear that, perhaps by operating in the way in which it has, it has promoted concern, disturbed overseas customers and disrupted traditional selling patterns. I do not accept that proposition for one moment. I believe that had the Bureau of Animal Health not acted totally responsibly by reporting to overseas consumers the exact nature of the outbreak and the virus, we might well have faced in the future the complete closure of markets which are very strict in the manner and form of the health clearances given to Australian livestock and to Australian meat. I believe that the Bureau of Animal Health has operated most effectively. I see these Bills as complementing its capability to continue to do so in the future. I commend the Bills to the House.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Groom) read a third time.
Bill reported from Legislation Committee with amendments.
Ordered that consideration of the report be made an order of the day for the next day of sitting.
Consideration resumed from 14 September, on motion by Mr Sinclair:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Groom) read a third time.
Consideration resumed from 14 September, on motion by Mr Sinclair:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Groom) read a third time.
Debate resumed from 17 August, on motion by Mr Peacock:
That the Bill be now read a second time.
-On 17 August last the Minister for Foreign Affairs (Mr Peacock) introduced the Asian Development Fund Bill which authorises a futher contribution by Australia to the Asian Development Bank for the purposes of the Asian Development Fund. Pursuant to clause 4 of the Bill, the amount to be appropriated is approximately $96.8m. The Bill provides that the Asian Development Bank will have the capacity to expend that money for the purpose of the Asian Development Fund. That contribution by Australia and similar contributions by all other contributors to the Bank virtually doubles the size of the funds that are available for Asian development purposes. As the Minister indicated, it provides an opportunity for bipartisan support for development in the area of the Asian Development Fund.
The Opposition supports the Bill. We have noted the provisions relating to concessional funds. The Asian Development Bank made its first loan 10 years ago. The Asian Development Fund was established in 1974 to provide funds to countries with a lower per capita gross national product. Both ordinary capital, that is, that provided by the Asian Development Bank, and special funds, that is, those provided by the Asian Development Fund, have been greatly increased in recent times. Ordinary capital increased in 1977 by 135 per cent- from $3,707m to $8,71 lm. The increase to the Fund projected by the Minister is of the same order. As I have indicated, our contribution on this occasion will be approximately $96. 8m.
Whilst supporting the Bill and accepting the Minister’s invitation to express support for both the Bank and Fund, we want to make the point that it is appropriate that there should be some analysis of and a little more probing about what has been happening to the funds and the type of development that has taken place. We submit that that analysis has not been apparent in the course of the Minister’s second reading speech. As a result of rapid expansion of its ordinary capital and now of the Fund the Bank has much increased liquidity and it should be in a position to make lending decisions and commitments on a much greater level and at a much greater rate. However, we have not been told anything about Australia’s attitude to the lending policies of the Bank. For that matter, we have not been told anything about the debate on aid strategy, which is apparent from the Second Asian Agricultural Survey which was commissioned recently by the Bank. The Asian Development Fund is a special facility for loans to lesser developed countries, broadly those with a 1975 gross national product of less than $US350 per capita and particularly those which have been adversely affected by world economic developments. Fund loans also vary from ordinary loans in their application. An analysis of the situation shows that 17.16 per cent of the ordinary loans were applied to agriculture and agro-industry projects, compared with 56.73 per cent of the Fund loans applied to that sector in 1977. 1 seek leave to incorporate in Hansard a table showing ordinary loan approvals and special Fund loan approvals by sector in 1977.
The table read as follows-
-I draw attention to this table because of the questions raised in the Second Asian Agricultural Survey, which is a survey dealing with the impact of rural development projects which it says has ignored the basic questions of land rights and employment in rural areas. This is the second survey. The first survey was in 1968. If honourable members look at the analysis of that survey they will find that it raises some fundamental issues as to whether the aid or funding program has been as effective as would have been hoped in that 10-year period. The analysis talks about the problems of unemployment, how they will increase and how a solution really cannot be seen. It talks about the problems of land reform and how it cannot see a solution to them because of what is deemed to be the high rate of tenancy. A typical example of the high rate of tenancy is the fact that one-third of the farmers in Sri Lanka, the Philippines and Pakistan are tenants. The problems that this high rate of tenancy brings to this region are indicated. There is talk about the problems of a revolutionary force challenging the entire ideological and institutional framework and social existence.
As the House would know, if one is reduced to a state of penury on the basis that one’s only source of income is part of the produce that one produces from the land, it is not necessarily a guaranteed income. Anyone who ever had the opportunity to go to Vietnam, as I did in 1973, would have seen that some of the basic problems in Vietnam were related to the fact that many of the people had no real right to land ownership; they were merely tenants. The real instability in the whole of that area was on the basis of where did their future lie. If one looks at the communes of China one will see that the revolution in China was directly related to land reform in that country. In the past the peasant had nothing but a percentage of the produce and if there was a drought he faced extinction and death from starvation. Is it any wonder that if one does not look at the basic problem of land reform one will be virtually looking at the emergence of a revolutionary force based on the assumption that there must be a better way of life. That is the point we want to make this evening. We do not know what heed has been taken by the Government or by the Asian Development Bank of the Survey. The Survey reported:
Despite the introduction of superior agricultural technologies, the rural population has not shared much in the benefits. Rural poverty is widespread and what evidence is available suggests that it has worsened in the past decade.
The report continued:
There continues to be a substantial gap between yields contained at the experimental station and those obtained by farmers.
There one sees the problem of the farmer giving up the ghost in terms of what is in it for him. It is possible to get production at an experimental farm but what is the point of that if he is only a tenant farmer and there is no real benefit to him. That is a major problem. The report continues:
Major problems appear to be a lack of properly trained operators; the inability to organise farmers and rural workers effectively so that the potential for higher levels of production, efficiency and employment can be realised; inadequate extension and input delivery systems; and structures of asset ownership in the village, which allow the better-off farmers to benefit disproportionately from different methods of production.
In simple terms the report means that the gulf between the rich and the poor, the feudal landlord and the landless labourer on the debt burdened peasant becomes wider. I make that point. The report also states:
The impression gained from the experiences of the past decade is that many government programs were worked out as responses to short-term situations, and that insufficient consideration was given to assessing the implications for the long-run orientation of policy.
It is to this aspect that we particularly draw the Minister’s attention. We feel that his speech really did not address itself to the problems indicated by the Survey. The report of the Survey continues:
The most optimistic view which can be taken of the food situation is that the region is not much worse off now than at the time of the First Asian Agricultural Survey.
This was conducted 10 years ago, namely, in 1968. The report continues:
The problem of rural poverty has considerably worsened in the past decade and is aggravated by increasing inequalities of incomes.
The new technology essentially did nothing to curtail the growing number of landless labourers.
The Survey forecasts three major trends for the next decade. These are: Firstly, food grain deficits in Asia six times larger than in the 1 970s; secondly, deteriorating terms of trade for nonfood agricultural exports so that balance of payments constraints on development will become more severe as food grain imports rise but are not financed by a corresponding expansion in export agriculture; and, thirdly, large scale unemployment in the most populated developing areas of Asia with the exception of a handful of East Asian nations.
During the last decade great hopes have been held for the effects of new technology, new food grains and family planning. Instead, basic inequities, such as the feudal land relations pervading much of Asia, have perverted the application of technology and resulted in even greater inequities as technological benefits accrued only to the wealthy farmers. A low income trap has operated over the past decade by which low purchasing power among the poor masses, aggravated by the growth of a poor rural proletariat, has reduced the incentive to increase agricultural production. The only sector that expanded rapidly was the export-oriented manufacturing enclave.
South East Asia was a net exporter of food grains in 1972. That was directly attributable to the rice exports of Burma and Thailand. By 1985, however, rice exports from Thailand will have dropped to less than one-half of the 1972 volume and Indonesia’s food grain deficit will have grown to six times its 1972 level. The net result for South East Asia is a food grain deficit of relatively massive proportions. The estimate is 14 million tonnes, a figure 26 times greater than the small surplus of 553,000 tonnes in 1972. Industrialisation, such as there is, is not absorbing labour and a labour surplus continues to grow in the rural sector.
The Opposition makes this point about land reform. What is keeping back industry and damaging agricultural improvement is a set of basic problems in domestic economics. They are lopsided land ownership with very few large land holdings and a multitude of very small farms. Again, there is increasing alienation of land, producing a high level of tenancy and the growth of a landless rural proletariat. These problems are, quite frankly, bigger obstacles to development than some of the international issues promoted by developing countries. In Australia we have heard the slogan of ‘land rights’. It has come to stand for a principle of social and political justice, particularly for the Aboriginal people. However, in Queensland I must say that we have not adhered to our constitutional responsibilities. I believe that we must maintain that principle if our approach to other countries is to have any integrity. In our views, fundamental changes are needed in rural land ownership in our neighbouring countries if development assistance to them is to have any real value. Just as we in Australia are concerned about employment, so our neighbours need to be concerned about employment. Developing manufacturing industries essentially for export will not solve basic economic problems, especially if these industries are mainly in the hands of foreign investors and if there is nothing more sophisticated than what is deemed to be the trickle-down spread of an economic benefit. For this reason we ask that the aid proposals should be reviewed. They should be reviewed in the light of their impact on employment and in the light of land tenure. We ask that our directors in the Asian Development Bank push for such an approach.
We have raised these issues in the broader debate. The Opposition is not opposing the legislation but it wishes to have an audit of what is happening from the point of view of beneficial results. The Second Agricultural Asian Survey was very critical about whether the money spent has been worth the value that has been obtained for the reasons that I have mentioned. It is for that purpose and in a spirit of bipartisanship that the Opposition has raised these matters. We hope that the Minister will take a closer look at the substance of what the Bill is all about. The matters I have raised come within the ambit of his portfolio. He should not allow them to be glossed over on the basis that this is merely an appropriation of money and that the Bill will read well. The Opposition asks: What will be the results?
We are very anxious in the light of what has now been deemed to be a decade of perhaps giving aid in the wrong direction that there should be some report to the Parliament as to whether we could not do better. The three principles to which I have referred relate to unemployment, land tenure- the question of tenancy being too high- and the disproportionate gap that is everwidening between those people who have land and those who have no rights to it.
-As the Deputy Leader of the Opposition (Mr Lionel Bowen) has said, the Asian Development Fund Bill is an important measure in the context of Australia’s participation as a donor country in the continuing matter of international assistance by the relatively rich countries of the world, to foster the development and growth of the poor countries- the developing or less developed countries, or LDCs as they are referred to. The Bill is particularly important because it relates to the Asian and Pacific regions, the areas of most immediate concern to Australia. As the honourable member pointed out, the Bill authorises Australia ‘s contribution- Australia’s full proportionate share as that has emerged over the years since the Asian Development Fund was established- to the second replenishment of the resources of the Fund. The Asian Development Fund is the ‘soft’, so-called, lending operation of the Asian Development Bank. The use of the word ‘soft’ should not be misunderstood. The position is analagous to that of the International Development Association which is the comparable affiliate of the World Bank. The World Bank, as is the case with the Asian Development Bank, is concerned to finance soundly based development projects as assessed by quite stringent standards. I stress that point in relation to the comments that the Deputy Leader of the Opposition has been making about the worth of* the Bank’s activities. I suggest that he begin some initial consideration of that matter by checking out the annual reports of the Bank.
The annual report of the Asian Development Bank for 1977 which I have in my hand gives a pretty detailed account of the work and the important projects which have been financed by the Bank and the Fund. The purpose of the Fund, as is the case in respect of the International Development Association on a global basis, is specifically to assist the poorest and least developed countries with long term credits for sound projects but to assist them on a concessional basis. That is the so-called soft aspect of the operation. It is of the greatest importance because of the massive and crushing burden of debt servicing and repayment which the poorer developing nations currently face.
As I said, the Bill before us is an important measure in relation to which the Government welcomes the bipartisan support evidence in the speech of the Deputy Leader of the Opposition. He dwelt on the problems of land tenure and land reform in these countries. The point is an important one. But these problems of land tenure and land reform, I suggest, are hardly matters for the Asian Development Bank, let alone for this Government. The Second Asian Agricultural Survey to which the Deputy Leader of the Opposition referred also stressed that development in these countries could be set back by weak world prices for primary export commodities. I want to stress that in this context this Government has taken a very positive and constructive role, and acting as a mediating influence between nations of the West on the one hand and the developing countries on the other in seeking to bring into existence the Integrated Program for Commodities and the common fund to finance them proposed by the United Nations Conference on Trade and Development. This is held to be particularly important by the developing countries. I will come back to that point later. But that is an area which is an appropriate sphere of action for this Government The Goverment has not been found wanting.
The scale of operations of the Asian Development Fund is significant. The initial fund amounted to half a billion dollars in United States currency. The first replenishment of its resources for the period 1976 to 1978 was $US800m, and this, the second replenishment, will amount to SUS2.15 billion for the four-year period 1979 to 1982. That is a very significant expansion of the Fund. However, I want to stress that in the context of what needs to be done to assist the developing countries of the world even $2 billion- that is to say $2,000m- over a fouryear period is a relatively small amount. This Parliament and Australians generally need to understand that the magnitude of the necessary transfer of resources, for that is what it comes down to, from the rich countries to the poor countries must be massive if any real progress is to be made. Voluntary efforts like the Freedom From Hunger Campaign are of the utmost importance in getting people involved in the issue in a personal way, but only governments and large scale commercial activity can come up with the resources on the necessary scale.
The further importance of voluntary organisations is then that they play a role in achieving the necessary political will for action at government level. We do encounter questioning as to why we should get involved in diverting resources to overseas countries when there is so much needed to be done in this country’ in relation to the poor, education, health and so on. The answer to that is that it is very much in all our interests to be involved in assistance to the developing countries. In the ultimate that case is summed up in this way: A peaceful world cannot exist one-third rich and two-thirds hungry, as
President Carter put it not so long ago. The developed, rich countries must contribute to the assistance of the less developed on humanitarian grounds- the obligation of those to whom much is given to help those with so much less- but also on the grounds of straight, long term economic and political self-interest, the interest of all of us in a more stable, workable and peaceful world system.
There is a great deal of talk of a so-called ‘new international economic order’ dignified with the initials NIEO. Whilst it is unreal to look for radical change, much more can and must be done. Indeed, I note that in recent years the quantum of development aid has fallen significantly in real terms; it is now proportionately less than it was in the 1950s and 1960s- Though on the other side it has to be said that the increase by the Organisation for Petroleum Exporting Countries in oil prices from late 1973 has involved a massive transfer of command over resources to the oilrich among the developing countries. We need to recognise that developing countries covers a very diverse group. The oil-rich countries, as I have just said, must be distinguished from the non-oil developing countries, and the South Koreas, the Taiwans and the Brazils of the world must be distinguished from India, Bangladesh, Argentina and so on.
What I would like to stress again is that the world has a considerable stake in the greater economic health of the developing countries. That was evidenced, among other things, by the place of the non-oil developing countries in particular in the recent period of massive imbalance in the international payments system. The cumulative balance of payments deficit of the non-oil less developed countries from 1973-74 until recently has been in excess of $100 billion financed by official development aid, by other international assistance and large scale commercial lending. I think what needs to be appreciated is that $100 billion plus of international deficitfinanced spending has made a not insignificant contribution to the underpinning of world demand and thus to holding up world economic activity during this period. At the same time this contributed to the workability of the world’s international payments system by the LDCs, in effect, thus shouldering along with the United States the lion’s share of other countries’ surplus. The reality of this great increasing interdependence needs to be more widely recognised.
To revert to the Asian Development Fund, its purpose is to finance projects within developing countries of the Asian and Pacific regions to increase the productive capacity of those economies and thereby raise current living standards and enhance the prospects of further growth. As I have said before, the report ofthe Bank indicates the sort of thing that has been done. But in the nature of things the principal source of the wherewithal for growth and development of countries remains their own resources. In this respect what the developing countries most prize and as was pointed out by the agricultural survey by the Asian Development Bank referred to is the establishment for their commodity exports, which are by far the major source of their export income, of international commodity stabilisation schemes and a common fund to finance them.
One is bound to acknowledge that there is opposition with an admixture of scepticism to this proposal from some Western sources. This is based in part on ideological grounds, in part on the anticipated cost, and on scepticism as to the workability of individual international commodity schemes and the view that a package of such taken together is no more likely to be so. Australia has not been prepared to accept this attitude. That is not surprising in the light of our experience with, for example, sugar and the dizzy heights, over $1,000 per tonne, to which the price rose in 1974 and the abysmally low price now. Of course, some might say that the current International Sugar Agreement negotiated last year and in effect the first of the international agreements of the United Nations Conference on Trade and Development program, does not give too much ground for optimism. The thorn in the flesh, of course, is the nonparticipation of the European Economic Community and its large scale subsidisation of exports being dumped in third markets. Must we accept that as permanent? That is the issue in that case.
Without pursuing the argument more fully the fact is that Australia has given genuine and practical support to the Integrated Program for Commodities and the Common Fund on the basis of our general commitment to assistance to the developing countries and our own interests. We have been able to fulfil, as I said before, something of a mediating role between the position of the major Western countries on the one hand and the Group of 77 representing the developing countries on the other. This matter was much discussed at this year’s conference of the InterParliamentary Union and I seek leave to incorporate in Hansard for the information of honourable members the resolution on this subject that was passed at the recent Bonn Conference of the Inter-Parliamentary Union.
The document read as follows-
Concerned at the adverse evolution of the economic situation ofthe developing countries.
Noting that the trade and monetary system currently governing international economic relations contributes to increasing the inequalities between developed and developing countries, thus constituting a serious threat to world peace and security.
Recalling that the prices of the products imported by developing countries have risen considerably while their incomes from the export of primary commodities have dropped, resulting in an excessive increase in the foreign debt of developing countries, which, together with the rate of the interest, which is often very high, represents a very costly, crushing economic burden for each of these nations, and introduces dangerous elements of instability and crisis into the international credit and financial system.
Deeply disturbed at the increasing recourse to protectionist policies which adversely affect the healthy growth of international trade in general and the prospects of developing countries in particular.
Considering that the economies of the developing countries are themselves very diverse, and aware of the fact that developing countries have been making significant efforts to diversify their economic activities and traditional trading patterns.
Recalling the previous resolutions of the InterParliamentary Union on the establishment of a new international economic order.
Deeply committed to the achievement of the objectives assigned to the Integrated Program for Commodities by resolution 93 (IV) ofthe United Nations Conference on Trade and Development (UNCTAD).
Very concerned at the inadequate progress achieved in more than one year at the UNCTAD negotiations on individual commodity agreements and a common fund within the framework ofthe Integrated Program for Commodities and on official development assistance.
Noting furthermore with regret that the Negotiating Conference on the Common Fund held last November in Geneva was suspended without an understanding as to the resumption of the negotiations and that no real progress has since been attained.
Gravely concerned that the multilateral trade negotiations currently underway in Geneva may result in the developing countries emerging with an adverse balance.
Convinced ofthe relevance, for the 53 countries of Africa, the Caribbean and the Pacific, of the STABEX system of stabilization of export earnings applied within the framework ofthe Lome Convention.
Stressing the role of Parliaments and parliamentarians and the importance of the public opinion of all countries, and particularly that of the developed countries, for the achievement of the objectives of a new international economic order.
Convinced of the importance, for the development of the economies of the developing countries, of the creation of a common fund which would be capable not only of governing commodity buffer stocks but also, within the limits to be set by the parties concerned, of taking and financing measures for market promotion, research and diversification and general improvement regarding certain commodities.
Concerned at the disproportionate burden which the external debt servicing of the developing countries, particularly of the poorest among them, currently places on their economies.
Aware of the need to increase and diversify the amount of official development assistance and to relax its terms,
Convinced that the objectives of equitable prices for commodities supplied essentially by the developing countries, maintenance of the purchasing power derived from their exports and reduction of their external debt are closely linked to the reform of the international monetary system,
Convinced of the importance, for the developing countries, of a preferential and non-reciprocal treatment to correct the inequalities between developed and developing countries in international trade, which are the cause of the profound disparities between their respective levels of development,
Calls on the members of the National Groups to take action in their respective Parliaments in order to encourage their Governments:
– It may be said that the resolution has something of a slant towards the aspirations and policies of the developing countries, but the problems and the economic and political implications for Australia and the developed world generally are nonetheless the real for that. Certainly the resolution underlines the political significance for the Third World of the issue of the Integrated Program for Commodities and the Common Fund. It is seen as a critical test of the political will to increase assistance to the Third World. If the Common Fund is a difficult area it can surely be said that it is only one among all the daunting and complex issues involved in this matter.
My time has been shortened so I will round off my remarks. Crucial issues face the world in this general area. I would perhaps in concluding mention one of those and that is how to come to terms with the increasing levels of military spending and the international trade in arms which has grown so rapidly since about 1973. The facts of the matter are that in 1975 nonOPEC developing countries spent of the order of $24 billion on military expenditure and received $17 billion in official aid. The questions are: How might arms manufacturers be discouraged from pursuing sales, how might the receipt of aid be made conditional in this respect so that countries with a high level of military spending would get less or no aid? One is perhaps entering a dream world in this area, but the issue is a very relevant one. In the interests of other honourable members who wish to speak to this measure I conclude my remarks on that note. The dangers, the problems and the challenges in this are are immense. Let us not be accused of evading our responsibilities in these great issues.
-The Bill authorises the second replenishment of the resources of the Asian Development Fund established in 1974 as a primary source of funds for the Asian Development Bank’s soft loan operations, that is, its concessional long term loans. As previous speakers have pointed out, this second replenishment is a substantial increase over the first. It is virtually a trebling of the total contribution. It is similarly a trebling for Australia. I think also there can be no doubt that this substantial increase was necessary, indeed vital, to the work of the Asian Development Bank. I think it is necessary to maximise the funds which are primarily for use of the poorest countries in the region. There was already great pressure on the concessional loan funds. Indeed, at one stage in 1977 the funds were reported as being near destitute. Therefore there is a need for their substantial replenishment. The need for the Asian Development Bank to raise the ratio of concessional loans to ordinary loans from the present ratio of roughly 1:3 has been recognised by the Bank itself. There is a need for concessional loans to limit the burdens of indebtedness affecting most ofthe poorest Asian nations.
In introducing this Bill the Minister for Foreign Affairs ( Mr Peacock ) said:
This Bill provides an opportunity for honourable members once again to demonstrate their bi-partisan support for the Asian Development Bank and its Asian Develoment Fund as an effective and efficient development finance institution and our willingness to provide the poorest developing countries in our region with highly concessional assistance through this organisation.
As the Deputy Leader of the Opposition (Mr Lionel Bowen) indicated, the Opposition supports this replenishment because we see the concessional loans as a high priority for development assistance, particularly for the poorest nations in the region. But while supporting in principle the Bank and the Fund we cannot in honesty give them that bland and uncritical endorsement offered by the Foreign Minister in his second reading speech. The glossy and rather cosy superficialities of the Foreign Minister are increasingly insufficient as a response to the growing and tragic dimensions of the problems now facing the poorest of the Asian nations. We need in fact a far more critical appraisal of the Asian Development Bank and of the Development Fund, not just for the sake of criticising it but so that Australia can ensure a much more creative and constructive input into the work of the Bank. The Minister has frequently advocated discussion and debate on foreign affairs but his cursory, bland and rather superficial second reading speech on this Bill does little to encourage such debate.
Undoubtedly the Bank and the Fund have great virtues and I wish in no way to undervalue these. For instance, unlike most of the other regional banks, the ADB has, from the outset, from the very beginning, been an active partnership between the industrialised nations of Europe and North America and the developed and developing nations of the Asian region. It was not a development bank imposed from or conceived outside the region; from the beginning it was conceived as a partnership between the region and the industrialised nations. Many of the virtues and much of the success of the ADB stems from this original conception. We on this side of the House welcome the breadth of the Asian nations involved in the ADB. There is a broad geographical definition of Asia, which includes such countries as Papua New Guinea, Fiji, the Gilbert Islands, the Solomons and Tonga. This is very important given the present concentration or emphasis of Australian foreign policy on the South Pacific.
We on this side of the House also welcome the ideological breadth of membership in the ADB. It contains, on one side ideologically, countries like Taiwan and South Korea and on the other side ideologically, Laos and Vietnam. It is this breadth, both geographically and ideologically, that is a very important achievement and a strength of the ADB. The Bank has been successful in securing funds from a number of nonregional member countries which otherwise have been rather neglectful of the Asian region. The ADB therefore has acted as a successful conduit for non-regional funds which otherwise would not have been available to Asian countries. If I go on like this I will sound very much like the Foreign Minister, that is, simply euphoric and uncritical and therefore unconstructive as far as our foreign policy goes.
Let us recognise some of the problems of the ADB. There is the technical problem of loan disbursement. For example, only about 25 per cent of the amount of loans approved to date under the Asian Development Fund actually has been disbursed and only about 40 per cent of loans approved under the ordinary loan arrangements actually has been disbursed. There is clearly a serious problem of implementation for the Bank when such a small proportion of the loans approved has actually been disbursed. Obviously we all recognise that this implementation problem derives very much from the difficulties that the borrowing countries have in organising the efficient spending of funds; indeed, the poorer the country, usually the greater the difficulty in organising such expenditure, and that is why the disbursement ratio of the Development Fund is much lower than that of ordinary loans. Nevertheless, I do not think that the Bank can escape all blame for this disbursement problem.
The Bank’s procedures are, in many ways, too complex and too bureaucratic. The Bank itself admits that it is short on loan administration staff to administer the actual implementations of the loans. The Bank is too highly centralised. There is a need for more permanent offices in countries where liaison is in considerable demand. We have to recognise, and we have to say, that this disbursement problem is a significant one; it is one for which the Bank cannot escape some responsibility and its performance in this coming period must be improved. It is needful, I think, to say in this Parliament- it is one of the things the Foreign Minister should be saying and making clear- that the ADB needs to improve the disbursement procedures.
The ADB has a rather centralised, hierarchical, rigid bureaucracy. Already I have noted that there is insufficient decentralisation. There are some signs that this unwillingness to decentralise is as great as the unwillingness to delegate authority as to the costs involved. The ADB bureaucracy has been characterised as overly cautious and marked by a reluctance to act. Perhaps the high and tax free salaries, plus the virtual impossibility of being demoted or fired, all lead to rigidity in the ADB bureaucracy. Perhaps, more importantly, the bureaucracy tends to be separated in origins and experience from the needs of the borrowing countries. For instance, the centralisation, primarily in Manila, tends to cut off the Bank from the broader experiences of the borrowing countries. The salary levels make it too easy for officers of the Bank to get out of touch with the thinking and aspirations of the masses of the poor in the societies with which they are concerned. Again, based at least on 1977 analyses, most of the key posts in the Bank tend to be dominated by personnel from the developed countries.
I think that we in this Parliament ignore these organisational defects. Australia should play a role in striving for a more flexible, less hierarchical, perhaps less permanent bureaucracy for the ADB. We should support greater decentralisation of the bureaucracy and, above all, the creation of a bureaucracy that is more responsive to the needs of the borrower countries.
But the fundamental reason why it is impossible to share the Foreign Minister’s bland euphoria about the ADB is that the Bank, we in Australia and the agencies of the developed world are failing to stem the growing poverty and the growing inequality of the bulk of Asian peoples. The success stories of a few Asian countries and urban pockets within some other Asian countries should not blind the ADB, we in Australia and the developed world to the fact that the condition of the rural masses in Asia is deteriorating and continuing to deteriorate. Whatever our purpose in Asia, whether positive, humanitarian or the creation of the socioeconomic conditions for pluralist democracy, or simply negative, that is, the prevention of communism and the stemming of revolutionary uprisings, all those purposes are doomed if we cannot reverse the declining living standards of the rural population and the growing income inequality in Asian societies.
The source of this pessimistic assessment of mine is a document already mentioned, that is the 1978 Second Asian Agricultural Survey commissioned and published by the ADB as Rural Asia: Challenge and Opportunity. That survey jettisons the false euphoria of plenty amongst development planners, which was reflected in the First Asian Agricultural Survey of 1968; a false euphoria of plenty still shared by the Foreign Minister. Let me cite some of the grim and dismal findings from the survey. Firstly, it reads:
There is a general consensus that the problem of rural poverty has considerably worsened in the past decade -
It has considerably worsened in the past decade- . and is aggravated by increasing inequality of income. Indeed, it is now estimated in the countries we are concerned with that 3SS million people are living below the poverty line.
I seek the leave of the House to incorporate in Hansard a chart produced by that survey. The chart illustrates the proportion of the rural population living in poverty.
The document read as follows-
Cite as: Australia, House of Representatives, Debates, 15 November 1978, viewed 22 October 2017, <http://historichansard.net/hofreps/1978/19781115_reps_31_hor112/>.