31st Parliament · 1st Session
Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 10.30 a.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth:
That restoration of provisions of the Social Security Act that applied prior to the 1 978-79 Budget is of vital concern to offset the rising cost of goods and services.
The reason advanced by the Government for yearly payments ‘that the lower level of inflation made twice-yearly payments inappropriate’ is not valid.
Great injury will be caused to 920,000 aged, invalid, widows and supporting parents, who rely solely on the pension or whose income, other than the pension, is $6 or less per week. Once-a-year payments strike a cruel blow to their expectation and make a mockery of a solemn election pledge.
Accordingly, your petitioners call upon their legislators to:
And your petitioners as in duty bound will ever pray. by Mr Adermann, Mr Aldred, Mr Bourchier, Mr Carlton, Mr Cohen, Mr Gillard, Mr Barry Jones, Mr Lynch, Mr Martin, Mr Sainsbury and Mr Willis.
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 say we are concerned about the deteriorating standards of ABC radio and television programs.
Your petitioners therefore humbly pray that Parliament take immediate steps to appoint an independent inquiry into the ABC which:
And your petitioners as in duty bound will ever pray. by Mr Baume, Mr Cohen, Mr Howard, Mr Innes, Mr Lynch, Mr Nixon and Mr Staley.
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 plan to obliterate the traditional weights and measures of this country does not have the support of the people;
That the change is causing and will continue to cause, widespread, serious and costly problems;
That the compulsory tactics being used to force the change are a violation of all democratic principles.
Your petitioners therefore pray:
That the Metric Conversion Act be repealed to ensure that the people are free to utilize whichever system they prefer and so enable the return to imperial weights and measures wherever the people so desire;
That weather reporting be as it was prior to the passing of the Metric Conversion Act;
That the Australian Government take urgent steps to cause the traditional mile units to be restored to our highways;
That the Australian Government request the State Governments to procure that the imperial and metric systems be taught together in schools.
And your petitioners as in duty bound will ever pray. by Mr Aldred, Mr Baume, Mr Chapman, Mr Jull and Mr Shipton.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. This humble petition respectfully showeth:
That current requirements of the Commissioner of Taxation for the lodgement of Income Tax Returns by Registered Tax Agents restricts the trading of such agents to a period of 8 months in any fiscal year. The demands by the Commissioner for lodgement of Income Tax Returns before 28 February following the tax year is an imposition and a restriction, limiting the trading from twelve to eight months.
Your petitioners therefore humbly pray that the law should be amended to permit any registered tax agent to trade for a full year and lodge income Tax returns to the close of the respective tax year.
And your petitioners as in duty bound will ever pray. by Mr Aldred.
To the Honourable the Speaker and Honourable Members of the House of Representatives. This petition of citizens of Australia respectfully sheweth that:
Australia’s Aboriginal and Islander peoples have not been compensated for the loss of their traditional land, social and cultural independence and self-respect.
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 a major traditional Aboriginal land areas and reserves and former reserves as at 31 March 1978, 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 ever pray, by Dr Everingham. Petition received.
To the Honourable the Speaker and Honourable Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of North Queensland, support this protest at the unjust treatment by the Federal Government of people depending on the old age pension, which is considered to be below the poverty level.
That we protest at the Federal Government’s failure to provide all sections of the Australian community with conditions of retirement more comparable to that section who now retire in comfort under superannuation and long service leave schemes.
That immediate action be taken to provide that all sections of the Australian work force be allowed to retire under a more comparable level than that which exists at present.
That we protest at the re-introduction of the means test for people over seventy years of age, especially those people who have already been assessed by the Social Security Department before being placed on a full age pension.
That we protest at the Government’s failure to honour their promise to have pensions adjusted in line with the CPI cost of living adjustments, which is applied to all other sections of the community.
That the amounts allowed for earnings by single and married pensioners should be increased to a more comparable level to the high cost of living, before it affects the pensions.
That the amount allowable before a pensioner pays income tax which covers all forms of income, including the annual pension, should be increased, as the high cost of living warrants this consideration.
And your petitioners as in duty bound will ever pray,
Petition received. by Dr Everingham. Petition received.
To the Right Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of undersigned citizens of Australia respectfully showeth:
Our request for the Prime Minister to help stop the barbaric and inhuman slaughter of the baby Harp seals in Canada.
Your petitioners therefore humbly pray that a protest be sent to the Canadian Government objecting to the slaughter of Harp Seal pups.
And your petitioners as in duty bound will ever pray. by Mr Jull
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.
The petition of the undersigned citizens of Australia respectfully showeth objection to the Metric system and request the Government to restore the Imperial system.
And your petitioners as in duty bound will ever pray, by Mr Lynch. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled:
The humble petition of the undersigned electors of the Division of Flinders respectfully showeth-
We wish the pensions to be reviewed every six months.
Your petitioners therefore humbly pray that you will accede to our request at your earliest convenience.
And your petitioners as in duty bound will ever pray,
Petition received. by Mr Lynch. Petition received.
To the Honourable the Speaker and members of the House of Representatives of Australia in Parliament assembled.
The petition of residents and workers in the Newtown area of Sydney-
Respectfully showeth that the people of this inner city area will be considerably disadvantaged with regard to noise from aircraft and increased traffic hazards, from road transport to and from the airport, by any new runway at Mascot as proposed in the MANS Enquiry.
Your petitioners therefore pray that your Honourable House will reject any such proposals.
And your petitioners as in duty bound will ever pray,
Petition received. by Mr Les McMahon. Petition received.
To the Honourable Speaker and Members of the House of Representatives in Parliament assembled:
The undersigned citizens of Australia humbly pray that you reject the motion to be moved by Stephen Lusher MHR which proposes:
“to remove items from the standard medical benefits table which currently permit medical benefits for abortion “ and
“to cease the funding of medical benefits schemes through which claims for termination of pregnancies can be made”.
Your petitioners humbly pray that you support:
a woman ‘s right to choose
abortion as a claimable item under all health benefit schemes.
And your petitioners as in duty bound will ever pray, by Mr Sainsbury. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully sheweth:
That the funds available to the Pre-Schools in New South Wales for the salaries of teachers and the cost of maintenance and running, are decreased to an unacceptable level. We hereby register protest against the blatant actions of your Government in reducing Pre-school subsidies from 75 per cent in 1976 to 43 per cent in 1979. The electoral repercussions have yet to be felt on a State-side basis.
Your petitioners therefore humbly pray that the honourable members should:
Increase the funds available to Pre-schools in New South Wales.
And your petitioners as in duty bound will ever pray, by Mr Sainsbury. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Ballarat respectfully showeth:
The slaughter of the seal is unnecessary and very inhumane, and the method of using a spiked club to slaughter baby seals is absolutely disgusting. Many of these babies are skinned before they have died. The substances obtained from seals can be obtained from man-made products.
If this slaughter continues (and it occurs in only one month of each year), it is estimated, like many other animals and mammals, they will thus become extinct.
We, the undersigned, request that you act on this petition to encourage a ban on the slaughter of seals.
And your petitioners as in duty bound will ever pray, by Mr Short. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.
The humble petition of the undersigned students of the Drouin High School in the electorate of McMillan respectfully showeth:
Your petitioners therefore humbly pray that Parliament take immediate action to express concern to the needless slaughtering of baby Atlantic Harp Seals in Newfoundland Canada and that the Ambassador of that country be so informed. by Mr Simon.
The humble petition of the electors of the State /Territory of Victoria respectfully showeth:
That compensation benefits payable to injured Australian Government employees and Defence Forces personnel under the Compensation (Commonwealth Government Employees ) Act 1 97 1 should be increased as a matter of urgency in view of the financial plight of recipients, particularly those suffering long term incapacity and because of the significant increase in the cost of living which has occurred since compensation payments were last adjusted; and
That statutory provision should be made for the automatic adjustment of compensation benefits.
And your petitioners as in duty bound Will ever pray, by Mr Willis. Petition received.
– I give notice that on the next day of sitting I shall move:
That the Poker Machine Control (Amendment) Ordinance 1 979 ( No. 7 of 1 979 ), made under the Seat of Government (Administration ) Act 19 10, be disallowed.
– I give notice that on the next day of sitting I shall move:
That this House is of the opinion that no members of the Senate should be appointed Ministers of the Crown;
That because the House of Representatives is the people’s House and is elected on a basis of equal franchise it should have exclusive responsibility to form an executive government and initiate government policy;
That because the Senate is a house of review it should be free to review all proposed legislation and carry out its other review functions independent of the executive government and further that members of the Senate should not be inhibited in that review process by also having responsibilities to the executive government;
And therefore the House calls on the Governor-General following the next and subsequent general elections to appoint all Ministers of the Crown from the members of the House of Representatives.
– I give notice that on the next day of sitting I shall move:
That the House refuses to increase payments to any State in order to fund promises given in the course of an election campaign which do not have a valid economic base; and that this House therefore condemns the failure of the Australian Labor Party in Victoria to disclose the cost of its election promises established at not less than $ 1, 000m and the necessity to raise those funds from Commonwealth sources. 1798 REPRESENTATIVES 3 May 1979 QUESTIONS WITHOUT NOTICE
– I ask a question of the Prime Minister. Is the sale of $300m worth of commercial bills by the Australian Wheat Board a critical and urgent part of the Government’s monetary policy? If so, and in view of the fact that the Reserve Bank of Australia cannot instruct the Board to seek alternative sources of finance, will the Prime Minister guarantee that the Minister for Primary Industry, who alone has legal power to direct the Board, will promptly issue such a directive?
– I call the Treasurer.
– Cannot the Prime Minister speak for himself?
-Order! The honourable the Leader of the Opposition will resume his seat.
– The decision that an extra $300m of the first advance payment will be financed on the commercial market is a very important part of monetary policy at present. If the honourable gentleman will be a little more patient I think that he will see some public reference to it today. I understand from the Australian Wheat Board that the Wheat Board and the Reserve Bank of Australia have agreed that the overdraft of the Wheat Board from the Reserve Bank will be reduced by some $300m and that as a consequence that additional amount of $300m will be funded as indicated in the statement I made last Sunday week. In those circumstances the necessity for any direction to the Wheat Board from my colleague, the Minister for Primary Industry, simply does not arise. As my colleague indicated in answer to a question yesterday, the matter is academic.
-Has the Minister for Industry and Commerce received the most recent statistical information confirming the major industrial production and expansion in the motor engineering, glass and chemical industries in the city of Dandenong, thanks to the good policy of the Liberal Government? Is it also correct that Perkins Engines Australia Pty Ltd is obliged to pay a 25 per cent duty on all imported 4-cylinder car diesel engines? In view of the need for fuel economy will the Minister inform the House whether the Government is yet in a position to reduce or cancel this duty which is impeding the progress of this company? Before the Minister
Questions Without Notice answers I am sure that he would like to know that the Dandenong Australia Day Award Students are with us here.
– Order! The honourable gentleman has asked his question.
– I thank the honourable gentleman for his question. Both diesel and petrol engines for trucks can be imported duty free as part of the Government’s policy of encouraging the assembly of commercial vehicles in this country. That policy provides for duty free importations of commercial vehicle components generally with a bounty paid in respect of certain locally produced components to safeguard employment. In respect of the question posed by the honourable gentleman, for diesel engines for passenger cars and light commercial vehicles, the rate is 25 per cent. That rate was designed to protect the local automotive industry which has a very large investment in petrol engine production. The honourable member would no doubt be aware that there has recently been considerable activity in the conversion of petrol engines to permit the use of liquefied petroleum gas as fuel, in particular in metropolitan taxi fleets. I am informed, however, that conversion of a petrol engine to enable the use of diesel fuel is not commercially feasible and that this can be achieved only by replacing the petrol engine with a diesel engine. Whilst diesel engines have some characteristics different from those of petrol engines, they nonetheless are competing in the same market. Therefore permitting their duty free entry for use as original equipment or as replacement parts could be expected to have a disruptive impact on the local industry.
As the House is aware, the Industries Assistance Commission has been asked to examine and to report on assistance arrangements for the industry to operate after 1984 when the present automotive vehicle manufacturing plan is scheduled to end. I will take note of the suggestions the honourable member has posed to me. I am sure that the matter which he has raised will form part of the lAC’s consideration of the total question.
-I refer the Treasurer to his statement on tax avoidance on 4 April when he stated that no area would be immune. I refer him also to a recent decision which said that the legislation does not provide the Commissioner of Taxation with a discretion to prorate prime-cost depreciation for the proportion of the first year an asset is used. Is the Treasurer aware that as a consequence of this decision a taxpayer may purchase an asset on the last day of the income year and claim depreciation for the full year and not just 1 /365th of that year, thus substantially reducing his liability? In the case in question, did not the taxpayer increase his deductibility from a mere $103 to $37,488? Does the Treasurer acknowledge that this opens up a vast area of potential tax avoidance? Will he consider introducing an amendment to the relevant Act to give the Commissioner power to close the loophole?
-I say at the outset that I welcome the interest that the Opposition is now taking in the subject of closing tax avoidance loopholes. It really is very welcome to see a strain of bipartisanship so far as this subject is concerned. We on this side do appreciate it because honourable members opposite have been rather dormant on the subject for a long time. I have read the report of the decision which was made, I think, by a Board of Review. I think the decision is substantially to the effect described by the Deputy Leader of the Opposition in his question. The matter of an appeal against that decision is under consideration, I understand, by the Commissioner. I cannot tell the honourable member without checking with the Commissioner precisely where it stands at the present time. I will give consideration to whether some change to the law arising out of that particular decision is necessary and desirable. I will not at this stage try to indicate whether it is or it is not. I would want to take some further advice from the Commissioner before I did that.
– My question is addressed to the Minister for Trade and Resources. The House would be aware of a significant boost in rural incomes after many years of depressed returns. Can the Minister indicate whether this recovery in the rural sector is also being reflected in increased exports of farm products?
-The most recently revised figures by the Bureau of Agricultural Economics for exports of rural products for the year 1 978-79 indicate that the total value of agricultural exports will reach a record level of $5, 800m. This represents about a 15 per cent increase on the previous year. Wool exports this year are likely to reach $ 1,535m, which represents an increase of 19 per cent on the previous year. Exports of wheat are estimated at $9 10m. This figure, however, is slightly down, reflecting the poorer season in the previous year. Exports of meat are estimated at $1,7 17m, which represents an increase of 67 per cent on the previous year. These figures reflect the steadily improving situation of the prices received for rural exports, in particular meat. As yet they have not substantially reflected the improved seasonal conditions of this year. I am confident that next year’s export figures will be significantly higher than those for this year, reflecting the bumper crop, the greatly improved prices for meat exports and the satisfactory situation for wool. As I have said on many occasions, the health and importance of the rural industries are reflected throughout the whole economic circumstances of Australia. Just as hard times on the farm are reflected in economic problems for Australia, so too are good times reflected by improved economic circumstances such as those that are apparent in our economy today.
– I direct my question to the Minister for Home Affairs. Is it his intention, hi his capacity as Minister responsible to Parliament for the Australian Film Commission, to attend the Cannes Film Festival on the French Riviera during his overseas trip? Is it a fact that the Chairman of the Australian Film Commission will be going to Cannes? Is it also a fact that the marketing officer and the public relations officer of the Film Commission will be in Cannes at the same time, as well as the Film Commission’s representative in the United States? At a time when the Government is drastically cutting public expenditure, will the Minister agree that it is totally irresponsible for so many senior officers of the Film Commission to be in Cannes at the same time?
-I thank the honourable member for asking the question because it gives me an opportunity to indicate to honourable members that I will be attending -
– Tell us how you arranged the junket.
-The honourable member for Melbourne will remain silent.
-You should deal with him, Mr Speaker. It is hardly the way in which to speak.
– You are not in the High Court yet.
-Order! The Minister will resume his seat. I warn the honourable member for Melbourne.
-I still thank the honourable member for asking the question because it gives me an opportunity to indicate to honourable members that I will be going to the Cannes Film Festival. I will be going there for one day and I will be speaking at a luncheon given by the Australian Film Commission to leaders of the film industry throughout the world. I will be dealing with other matters in the course of this overseas visit, to which 1 will refer, and I would hope that honourable members opposite, as well as those behind me, would wish me well. I have no doubt that some of them will be somewhat envious but I feel that I will be performing my duty as a Minister to promote one of the success stories of Australia, and that is our film industry. I will be bipartisan about this matter and say that the Labor Government did something in relation to the film industry. This Government has continued its support of the industry. When I go to Cannes I will be bipartisan about it and talk about Australia and what Australian governments are prepared to do.
Tomorrow I hope to arrive in Peking. I will be there for a week on a goodwill visit to China. Again I hope that honourable members on both sides of the House feel that this is a well worthwhile venture in the sense that there is a real need to concrete relationships between China and Australia. One of the areas in which this is most necessary is the area of cultural interchange and relationships between the two countries. I hope I will have the support of honourable members -
- Mr Speaker, I raise a point of order in relation to relevance. The question that I asked was about a number of officers of the Department attending the film festival in Cannes. It did not have anything to do with the Minister’s junket to China.
-The Minister is explaining how he is going to get to Cannes. I think that is very relevant.
– May I say, Mr Speaker, that I propose on the way home to go to Ottawa. In the 1977 election campaign this Government promised to establish an art bank in Australia. It is the view of the Government that this ought to be established. The only place in the world where an art bank has been established with any success is Canada. I propose to look at the operations of the art bank in Canada. Earlier this week there was a condolence motion in relation to the sad circumstances of the death of the former honourable member for Grayndler. Reference was made to sport. Again, one other matter that we have been pursuing -
-Order! I ask the Minister to remain relevant to the Australian Film Commission.
-I will become relevant.
– I hope the Minister will become relevant shortly.
-Shortly, Mr Speaker. One of the matters that we have been pursuing as a Government is the establishment of a national sports lottery in Australia. New South Wales and Victoria have now agreed in principle to join the Commonwealth in setting one up. Canada had a very successful sports lottery in the lead-up to the Olympic Games, and I understand still operates one. I hope to be able to look at the operations of that lottery in Canada. I now become relevant. If I have some further time in Ottawa I would also like to meet representatives of the national film organisation.
– I address my question to the Minister for Post and Telecommunications. Following discussions with him, can he give me any assurance that the re-transmission of cricket tests and other cricket matches can be provided to country people in the many instances in which the Australian Broadcasting Commission provides the sole television signal?
– The proposition that the Australian Broadcasting Commission televise cricket tests to parts of Australia only involves some programming and technical difficulties. I am advised by the ABC that it is technically impossible, for instance, to carry the tests to only a very small percentage of the population- say 3 or 4 per cent in the really remote areas. But the ABC Chairman has assured me that the Commission would, if approached, be prepared to reconsider the proposal that the ABC telecast the cricket more broadly in regional and remote areas.
– I address my question to the Minister representing the Attorney-General. The question relates to the VIP Insurances Ltd collapse.
– The Minister is not here but go ahead, the Treasurer will answer the question.
– I think the front bench on the Government side is indicating to the honourable member for Hawker that the Minister representing the Attorney-General is not in the chamber at the moment but as the question involves insurance the Treasurer is willing to answer.
-I will be delighted with that. I preface the question by indicating that the Minister is aware that persistently I have asked a number of questions on VIP Insurances. He is also aware of the hardship that has been inflicted on about 70,000 policy holders. In relation to the recent wide publicity and disclosures by the liquidator and in view of the extradition treaty between Australia and Israel entered into in January 1976, have extradition proceedings been made to have Mr Makler extradited to Australia? If not, why has the Government failed to take this action? Can the Minister give an assurance that extradition proceedings will be prosecuted forthwith?
-After Question Time I will be in touch with my colleague the AttorneyGeneral. I will convey the question to him. I undertake, on behalf of my colleague the Minister for Employment and Youth Affairs, to give the honourable member an answer as soon as possible. I understand that the Minister representing the Attorney-General is indisposed this morning and that is the reason for his absence. I will try to get an answer for the honourable member as quickly as possible.
– I ask the Minister for Special Trade Representations to inform the House as to the present state of negotiations with the European Economic Community to obtain better access for Australian exports.
– Substantial progress has been made in recent weeks in the negotiations with the European Economic Community. As I have already announced, settlement is in prospect, importantly covering meat and dairy products, but settlement of a number of other issues is outstanding. The visit I made to Europe in March involved a number of discussions with Vice-President Gundelach who is also the Agricultural Commissioner of the Community, and a number of key Ministers of the nine member countries. During those discussions I stressed the need for long term access and significant relief from the restrictions which the Community has placed on our trade. In the result, the Commission obtained further authority from the meeting of the Council of Ministers in Luxembourg last month. Further, negotiations which I expect to be held with Mr Gundelach at the end of this month should give Australia better prospects for improved long term exports to the Community.
However, there are a number of other urgent matters of a bilateral nature which need our constant attention. For instance, recently the Community limited the volume of imports of apples by imposing a so-called voluntary restraint during a period when exporters from the southern hemisphere normally would be able to export freely. In respect of coal there has been a longstanding proposal for the EEC to give a subsidy on intra-European trade but recently the United Kingdom announced that it would impose import controls on all coking coal.
– A shame!
– I agree with the honourable member. I think the House will be aware of the action that the Government has taken in relation to sugar and the action that the Government has taken under the General Agreement on Tariffs and Trade. Wine is another product about which barriers to our trade have developed. We have continued to press for easier access. There is a little evidence that we are meeting with some success. I indicate to the honourable member and to the House that there are a number of issues of importance which need a continuing effort and which the Government believes must be made in the interests of our economy.
– I ask the Minister for Post and Telecommuncations whether he recalls a media release of 1 5 September 1 978 in which he stated:
Broadcasters will in future be held directly accountable to the public through public licence inquiry procedures and the requirement of broadcasters to adhere to a promise of performance as a condition of their licence.
How does the Minister reconcile this statement of principle with the breakdown of the public participation process at the recent Sydney licence hearings, the expulsion of public witnesses from the hearings by Commonwealth Police, and the resignation of a member of the Australian Broadcasting Tribunal, Janet Strickland, after stating that the hearings were a denial of natural justice? What does the Minister intend to do to guarantee principles of public accountability and involvement at the Melbourne licence hearings later this month?
– The Australian Broadcasting Tribunal has faced not unnatural difficulties in attempting to ensure that public accountability ensues and that broadcasters have a proper opportunity to respond to the views of the public in licence renewal proceedings. The procedures which the Tribunal has followed therefore have been obviously evolutionary. Since the Sydney hearings I have met the Tribunal and the Tribunal has been in close touch with the Government’s legal advisers. The Tribunal is of a mind to alter the procedures somewhat in order to ensure that, as far as possible, the procedures reflect the desire of the Tribunal to provide proper public accountability.
I would add that the Tribunal and the Government have had some discussions about the powers of the Tribunal and procedures in general. I should emphasise that the powers which the Tribunal possesses under the Broadcasting and Television Act to conduct its own procedures are wide powers and enable, I believe, public accountability to be a fact. Nonetheless the Government and the Tribunal have been discussing the procedures and powers with a view to the possibility of legislation, if it is thought necessary, in the Budget session of Parliament.
-Is the Minister for Primary Industry aware of the delays now being experienced by applicants for Primary Industry Bank loans; that is, delays between the approval of the loan, including the acceptance of the risk by the applicant’s trading bank, and the provision of loan finance by the Primary Industry Bank of Australia? What advice can the Minister give the frustrated farmer and the embattled local federal member of parliament on this problem?
– My sympathies have been with many honourable members in this place, but I have never really regarded the honourable member for Murray as being one of those who were more embattled. In terms of the specific question, it is true that some banks have apparently taken greater advantage of the Primary Industry Bank of Australia facility than others and consequently they have used up their share of the apportioned money. I understand that future applicants through those banks might well be faced with something of a waiting time until that bank’s turn of allocation of the available resources comes around again. Of course, there is an opportunity within the structure of lending for the banks themselves to take up that gap. As honourable members will know, there is a range of sources of funds from banks- overdrafts, term loan funds, farm development loan funds- and it is to these that the Primary Industry Bank facility has been added.
One of the advantages that we see in the Primary Industry Bank facility is that it does provide greater flexibility for the trading banks and, of course, in future other participating bodies, as a result of the availability of these additional funds. If because of arrangements to which they are privy there should be, in any instance, some delay in an applicant’s loan being processed, I would hope that the individual bank would see fit to provide a bridging loan so that the PIBA facility could be available to the borrower in due and proper time when the bridging facility itself could then be passed on. It seems to me that that is an obvious way by which the banks can assist borrowers and given the very significant advantage there is in long term lending, perhaps that borrowing on a short term facility, a bridging facility, might be a way that the banks can add to the range of facilities now available.
-Did the Minister for National Development tell the recent Australian Petroleum Exploration Association conference in Perth that domestic oil prices to apply from 1 July will be based on the price of light Arabian crude oil set by Organisation of Petroleum Exporting Countries last December? Would the OPEC increase of 9. 1 per cent which was made on 26 March last mean that an increase of at least $ 1 .20 per barrel is passed on into domestic crude oil prices? Given the resurgence in inflation, is it now untenable to pass on this increase from 1 July? Will the Minister now assure us that this will not occur?
– No, I will not give the honourable member an assurance that that will not occur. As I have said in this place before, the Government is considering its position on the calculation that has to be made on 1 July. It will take into consideration in that calculation the prices set by the Organisation of Petroleum Exporting Countries for market crude. That is all I have to say at this stage.
– My question, which is addressed to the Minister for the Capital Territory, refers to the supply of milk to the Australian Capital Territory market. The Minister will be aware of the much lower propensity of some milk suppliers to offer milk to Canberra at cut prices as was possible, in the short term, in the past three years. In view of the fact that the Canberra market deserves a stable price structure while maintaining high quality with a regular supply base, will the Minister inform the House whether contracts for terms longer than 12 months can be let this year? Is the Minister yet in a position to inform the House of the market share for each supplier in the coming period?
-I am aware of the interest of a number of honourable members in the subject of the milk supply to Canberra. Honourable members might well be aware that the tendering process for milk supply to the Capital Territory has been aimed at getting a quality supply at a reasonable price to the consumer. That is still the policy that is being implemented by me as the Minister. It would not be proper for me to say too much at the moment because tendering processes are going on. The process will be aimed at looking at matters such as quality, quality control, guarantee of supply, performance and maintenance of standards, the need to diversify sources of supply and the position of traditional suppliers to the Canberra market such as the Bega Co-operative Society Ltd in which the honourable member is very interested. On the other hand not only are the interests of dairy farmers involved but also the interests of consumers in the Capital Territory. The aim will be as I have stated. I have indicated to the milk authority that it may take into account the matter of long term contracts. It is not necessary for it to confine itself to a yearly contract. It could take into account contracts which might run for a longer period.
- Mr Speaker, I will have to be guided by you. My question should be directed to the Minister for Employment and Youth Affairs but he is not in the chamber. It could be directed to the Prime Minister or to the Minister for Industrial Relations.
-The honourable member for Sydney must make his selection.
– My question is directed to the Prime Minister. Is it a fact that between 1979 and 1985 Australia might expect between 40,000 and 50,000 skilled tradesmen to enter Australia as migrant workers? Is it also a fact that the Chairman of the National Training Council has estimated the shortfall of new tradesmen to be above 10,000 a year? Is it also a fact that the Appropriation Bills before the House reveal that the Government has reduced the 1978-79 Budget allocation for the Commonwealth Rebate for Apprentice Full-time Training by 9.5 per cent or $3.6m? Does the Government’s extensive reliance on migrants as a source of skilled tradesmen and its cutback in the level of CRAFT expenditure together with the savage reduction in National Employment and Training scheme approvals indicate that the Government has absolutely no commitment to provide training opportunities for the many hundreds of thousands of people rendered unemployed by the Government’s callous economic policies?
– I will consult the Minister for Employment and Youth Affairs. He can give a detailed answer to the honourable gentleman. The Government’s policies have been designed to encourage as many people as possible to undertake trade courses and apprenticeship courses. The CRAFT scheme, which was introduced in earlier times, had some considerable success in increasing the number of apprentices. That, of course, is desirable in Australia’s interests. The Government has paid a great deal of attention to training in many different forms, especially training of those who may lack work experience and the necessary basic skills. The Minister for Employment and Youth Affairs has advised me that the Budget allocation under the broad training schemes is expected to be expended by the end of the financial year. He will give further information in answer to the question that the Leader of the Opposition asked yesterday. However, I must say that honourable gentlemen would be assisted in getting detailed answers in this House if questions which required statistical answers were put on the Notice Paper. Honourable gentlemen are entitled to quote in this House whatever statistics they believe to be correct, but that course does not promote and advance Question Time very much.
– My question is directed to the Acting Minister for Health. Does the Government support the fluoridation of water supplies? Is there any evidence to suggest a link between fluoridation of water supplies and cancer, as suggested in a recent Four Corners program on Australian Broadcasting Commission television? Does the Minister feel that the program was balanced and reasonable?
– The Four Corners program referred to by the honourable member was screened on 2 1 and 22 April 1 979. The program highlighted a report that there is a link between fluoridation of water and cancer. The general tone of the program screened by Four Corners was critical of fluoridation, although it purported to present what was regarded as a balanced view. The criticism was unfortunate because fluoridation has been accepted widely as a safe, effective and economical means of controlling dental decay. I think it is fair to say that few health measures have been subjected to such intense investigation as has the fluoridation of water. The claim of recent evidence suggesting a link between fluoridation and cancer has been rejected categorically by the United States National Cancer Institute and other international authorities. It has been refuted in a recent report of a detailed study of no fewer than 46 United States cities, undertaken by the Centre for Disease Control. The World Health Assembly, which is the governing body of the
World Health Organisation, also has actively supported the fluoridation of public water supplies, and in May 1978 once again endorsed fluoridation and urged countries to develop programs. In addition, the National Health and Medical Research Council first recommended the introduction of fluoridation in 1952 and has reaffirmed that recommendation on many occasions. For the benefit of the honourable member and the public, I repeat that fluoridation has been accepted widely as a safe, effective and economical means of controlling dental decay. The Commonwealth Government supports the fluoridation of water supplies and introduced it years ago in the Territories under its control. So far as the States of Australia are concerned, the decision is one for the individual States.
– My question is addressed to the Minister representing the Minister for Social Security. Why has there been a 50 per cent cut in funds for the homeless persons program? Was this cut made necessary by a need to divert funds to homeless youth to bolster the faltering fortunes of Mr Dixon in the seat of St Kilda? Notwithstanding that transfer of funds, has there not been a net reduction in funds for homeless people, despite the rise in homelessness in Victoria as a result of the current recession?
– I will take note of the question that has been asked by the honourable member and furnish him with a detailed reply.
-Can the Minister for National Development inform the House of progress made in the conversion of government vehicles to the use of liquid petroleum gas? Can the Minister also report the efficiency of this alternative fuel?
– I shall take the last part of the honourable member’s question first. There is no question as to the efficiency of LPG as an alternative to motor spirit. I refer the honourable member to reports by, for example, the Royal Commission on Petroleum and the National Energy Advisory Committee which dealt with this subject and laid out in a very clear manner the advantages of LPG.
With regard to the question of the conversion of government vehicles to LPG, the House will recall that when announcing a package on LPG I said that 100 vehicles in the Melbourne fleet would be converted. I am happy to report that tenders have been received and that my colleague, the Minister for Adminstrative Services, is now looking at the contract that will be let as a result of those tenders. I hope that when we finally have the contract in place my colleagues on the front bench who drive in Melbourne will see fit to take advantage of the ability to convert their ministerial cars and, with great respect, Mr Speaker, you might also set a good example and convert your official car.
-Does the Treasurer recall the Prime Minister’s specific statement during the 1977 election campaign that a reduction of 2 per cent in interest rates in the following 12 months was a target that could and would be achieved and the Deputy Prime Minister’s promise to eat his hat if that reduction did not occur? Is it a fact that these promises have not been kept and that the interest rate structure is now moving up again? Can the Treasurer advise the House of the reasons for this reversal in the interest rate trend? Further, can he advise the House of arrangements that are being made to provide the Deputy Prime Minister with a hat?
– I am aware of the statements made by the Prime Minister and by the Deputy Prime Minister during the 1977 election campaign. Unlike some of the descriptions of those statements that have been used by members on the other side of the House, I say that the Prime Minister made a prediction and not a firm and unqualified commitment as is suggested by -
Opposition members- Ha, ha!
-Well, the honourable member for Lalor used the word ‘prediction’ in the first part of the question that I am now answering. That is an accurate description of what the Prime Minister said, so let us not distort what was actually said. The truth of the matter is that the sorts of interest rate reductions that were predicted at that time have not materialised, and there are reasons for that. But what ought to be borne in mind is that, notwithstanding the increases that have occurred recently in the longterm bond rate and in the interest rate on Australian Savings Bonds, the interest rate on Australian Savings Bonds at present is still 0.75 per cent below what it was in the middle of 1977 and the official interest rate on long-term bonds is presently lower than it was in the middle of 1977. There are reasons for this. I have explained, in this House and on other occasions, the reasons for the circumstances that made it possible in November of last year for this Government responsibly to reduce official interest rates, which were altered after that decision was taken and which altered the background against which interest rate decisions could be taken in the future.
I have said repeatedly over the past few weeks, and I will say it again, that no government is in a position to guarantee interest rates. I do not propose to guarantee interest rates in any area of the Australian economy. The only thing I can guarantee is that, so far as I am concerned and so far as this Government is concerned, we will continue to pursue to the maximum extent possible an anti-inflationary policy. Ultimately, the success of an anti-inflationary policy is the determinant of whether or not we will have higher or lower interest rates in this country. Ultimately, there remains the stark distinction between the Opposition and us that we are the party that will follow policies that in the long run will produce lower interest rates because we are committed to policies of anti-inflationary activity and lower deficits.
-Is the Minister for Primary Industry aware that some economists argue that income equalisation deposits are of little or no value as taxation benefits for many primary producers? Has the Minister advocated the use of IEDs? If so, can he advise of the benefits that would accrue to primary producers, the Government or both from investment in them by primary producers?
– I have been made aware of statements, particularly in Queensland, suggesting that the advantages of the income equalisation deposits scheme are not as great as I believe them to be and as the Government believes them to be. The objective of the scheme is not, of course, identical to that of tax averaging. The tax averaging concept is specifically designed to ensure that those with a markedly variable income pay tax on the same basis and with the same equity as those on a regular income. Through the changes introduced by this Government the tax averaging concept has been able to provide significantly towards the conclusion of that objective.
On the other hand, income equalisation deposits are aimed at ensuring that in States such as Queensland where there is a very marked variation in seasons, and regrettably also a variation in the markets for its products, capital can be set aside in a good year which will enable the pastoralist or farmer to take advantage of that money in a year when his income is significantly lower. There can be no doubt that that objective can best be fulfilled through an IED concept. The very tight restraint on the withdrawal of drought bonds, which preceded IEDs was one of the reasons for our introducing the flexibility in the IED system which did not apply to the drought bonds scheme.
I believe that the criticism in Queensland of IEDs is totally unjustified and that IEDs are a very worthwhile investment for the rural sector in the interests of both the individual land holder who has the facility to withdraw the money in a bad year and the rural community generally. The funds are also used to finance the Primary Industry Bank of Australia and to keep the interest rate down in that area. There is a real advantage in primary producers taking note of the IED scheme this year and I would hope that many might see fit to invest. I might add that, unfortunately people in the rural sector have not taken advantage of investing in other government paper and therefore the IED scheme is perhaps a facility having a flexibility which is preferable in their own interests.
– For the information of honourable members I present a report prepared by the Australian Wool Corporation on the operation of the limited offer to purchase scheme for wool in the Melbourne centre for the period 3 October 1977 to 2 October 1978 together with accounts audited by the Auditor-General.
– Pursuant to section 28 of the Broadcasting and Television Act 1942 1 present the annual report of the Australian Broadcasting Tribunal for the year ended 30 June 1978.
– Pursuant to section 30 of the Canberra College of Advanced Education Act 1967 1 present a report by the Council of the Canberra College of Advanced Education on the operations for the year ended 31 December 1977 together with financial statements in respect of that year.
– For the information of honourable members I present a study of certain developments in the regulation of petroleum marketing in the United States.
Motion (by Mr Sinclair)- by leave- agreed to:
That this House, in accordance with the provisions of the Parliamentary Papers Act 1908, authorise the publication of the paper.
– For the information of honourable members I present the text of a statement by the Minister for Science and the Environment (Senator Webster) relating to the establishment and declaration of Kakadu National Park.
-Mr Speaker, I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
-I do. In answer to my question the Treasurer (Mr Howard) said that I had merely used the word ‘forecast’ concerning what the Prime Minister (Mr Malcolm Fraser) had said about interest rates. The actual word I used was ‘promises’. I direct the attention of the House to an article in the Melbourne Age of 3 December 1977 under a photograph of the Prime Minister and the heading ‘Interest Rates to Fall, says Fraser’. The relevant part reads:
A reduction of interest rates by 2 per cent in the next 12 months was forecast by the Prime Minister, Mr Fraser, yesterday. ‘ It is a target that can be and will be achieved ‘.
He said he had been told that his prediction was optimistic.
But in a comparative period in the United States interest rates had gone down by 3 per cent and in the United Kingdom by more than 3 per cent.
He said he was talking about rates that directly affected people, such as, bank lending and home lending rates.
– I move:
The petulant announcement two days ago by the Minister for Business and Consumer Affairs (Mr Fife) that the Fraser Government is suspending the development of a national companies and securities commission scheme reminds us all too clearly of the failure of governments in this country to provide adequate machinery for the country’s development. As Victorians go to the poll this coming Saturday they should remember not only the land scandals in their State and the Victorian Liberal Government’s inadequate machinery for dealing with that sector of the capital and development market but also the scandals of the capital market. They should remember the so-called Rae report- the report of the Senate Select Committee on Securities and Exchange into the Australian securities market and its regulation- and what that report disclosed. Let me read some of the headings and headlines to jog our memories about the Rae report. They include: ‘Scathing in condemnation of many practices exposed’; ‘Improper practices in the making of new issues’; ‘insider trading’; ‘Share rigging and manipulation’; ‘Sundry abuses in the stock market’; ‘The Poseidon misadventure’; ‘The Minsec collapse’; and ‘The troubles of Patrick Partners’.
The Rae report was tabled in this Parliament five years ago. There have been many scandals and collapses since then. Need I go any further than to mention the collapse of Associated Securities Ltd and Computicket. The collapse of ASL, with its famous establishment names of Ansett and Bolte in the vanguard, would be of interest to the Victorian voters I mentioned earlier. But other collapses have occurred, including organisations such as Mainline, VIP Insurance, Parkes Development, the Queensland Permanent Building Society, Gollin Holdingsand so the list gets longer. At this time of unhappy memories about these collapses and scandals it is not sufficient to deplore the fact that we still have totally inadequate machinery for the regulation of the companies and securities sector. It also must be stated that we have a totally inadequate capital market, which is why the Opposition raises the subject in this debate today.
Before embarking on the capital market itself I should say something about the related subject of the companies and securities commission scheme. I assert that it is deplorable that we still have no new legislation and no adequate regulatory machinery in this respect. The Whitlam Labor Government introduced a national scheme and it was sabotaged by the LiberalNational Country Party dominated Senate in the name of States rights. It is deplorable also that when one State- New South Wales- exercises its right petulance raises its ugly head and all work is stopped by the Federal Government in this vital area. I place on record my belief that it is essential that the total package is prepared and agreed to by all parties before any legislation is introduced into this Parliament. The total package means not just the Commonwealth Bill setting up the commission but also legislation concerning companies, concerning a takeovers code, concerning securities regulations and so on. We do not want watered down legislation in these fields. I have already reminded the House of the scandals, of the white collar crimes against which the public- particularly small investors- need protection.
All the signs are that we shall get watered down, unsatisfactory legislation if we proceed in the way the Fraser Government has been going until now. The pressures will be for uniformity rather than reform. The lowest common denominator of the conservative States, of conservative State governments like those of Western Australia and Queensland will prevail unless we are careful. This would certainly be so if reformers were under pressure to agree to legislation hurriedly under the pressure of being told that the expensive apparatus was already in existence. If we went ahead and agreed to the setting up of that expensive apparatus which would be the result of the companies and securities commission Bill, reformers would be under that pressure. We ought to have the full package of legislation first and have it agreed to before any part of it comes into this chamber.
This is the essence of the argument between New South Wales and the Fraser Government. I hope wiser counsels will prevail here in Canberra and that we shall see progress with that package, that other legislation, which is nowhere near completion. Let me move more specifically to my motion on the capital market. On 21 February 1978, immediately after this House resumed after the last election, I gave notice of a general business motion which stated:
That a select committee of this House be appointed to inquire into and report upon the Australian capital market and to make recommendations concerning the need to maximise the availability of Australia’s limited capital resources to facilitate economic development.
This was taking up a concept raised by the Opposition in the previous Parliament. It was not something new. My view was than an inquiry into the Australian capital market was long overdue, a view also put forward in the reports of the Vernon and Jackson committees. The last such inquiry was conducted over 40 years ago during the 1937 Royal Commission into the Monetary and Banking System. Subsequently, I was first pleased but then when I looked at it more closely, I was rather disappointed when the Treasurer announced on 1 8 January this year the establishment of a committee to inquire into the Australian financial system. As a result of the Government’s belated move, I amended my motion and now move it in the terms which, for those listening to this debate, I will repeat:
That this House-
welcomes the establishment of the Committee of Inquiry into the Australian Financial System on 18 January 1979, and notes that it follows the initiative in this matter by the honourable member for Adelaide in the original Notice for General Business Thursday No. 8 submitted by him to this House on 2 1 February 1978 and
b) is of the opinion (i) that the membership of the Committee is too closely involved with the capital market to provide a completely detached analysis of its imperfections and (ii) that the terms of reference of the Committee (A) are couched in a way to justify claims of political overtones and (B) give insufficient attention to the social welfare implications of the financial system, particularly its impact on the housing market.
Let me explain my apparently contradictory reactions- on the one hand my welcoming of an inquiry, and on the other hand my fears that it may prove less than satisfactory. I was pleased about and welcomed such an inquiry because even a cursory examination of the structure of the Australian capital market indicates that it is in an unsatisfactory state. It consists on the one hand of traditional financial institutions and on the other hand of newer institutions outside the scope of existing legislation and regulations. The problems resulting from this structure are likely to increase because Australia’s total capital requirements will increase rapidly over the next decade, exposing the weaknesses of the capital market. This increase reflects a number of factors, among them the capital requirements for modernisation and growth in industry and the likelihood of a shift in the pattern of production towards resource-based export activities and other more capital intensive industries. There would probably be considerable agreement on a number of specific measures to improve the operations of the capital market. Dealing with the problems on an ad hoc basis, however, would run the risk of unforeseen side effects and increasing distortions.
For this reason it was my view, and the view of my Labor colleagues, that a full scale comprehensive inquiry was necessary. That is why we welcomed it. For this reason also, I not only welcome it but would signify that the Opposition would assist the inquiry in any way that it could, but we have then to look at the disappointments about the inquiry and its establishment. My disappointment and apprehension are the product of the unduly limited terms of reference given to this Committee by the Fraser Government and the unbalanced composition of the Committee ‘s membership as chosen by this Liberal-National Country Party Government. Not only had I hoped for a comprehensive inquiry, but a truly independent inquiry removed from both the bureaucracy and also removed from domination by vested interests- people representing certain segments in the market, indeed, interest groups of the market. I believe it is necessary to have that independence if there is going to be proper objective assessing of the market. Five people who have spent their lives in this capital market include one who is in the largest property developing company, another in the largest stock broking firm, another in the largest life assurance company, another in public banking, and a fifth one in private banking.
These five alone, without any of what I would call ‘salt and pepper’ to garnish them, are hardly the group to give this country a stimulating, progressive report. In other words, this Committee consists of a select group whose work is directly involved with the capital market and all of whom will be directly affected by the outcome of the inquiry. There has been no attempt by the Government to balance the Committee. There is no representative of small business, no reformer who is identified philosophically with the Labor Party. The Labor Party does represent at any one time between 45 per cent and 55 per cent of the people of this country, as any recorded poll would show. There is no scholar from a university on the committee. There is no independent outsider. Where is the person whose efforts can compare with the important contribution made by a great former leader of the Labor Party, Ben Chifley, those efforts which he made in contributing as a member of the 1937 Royal Commission into the Monetary and Banking System? By presenting a different approach to the subject, Ben Chifley stimulated discussion, opened new areas for consideration and broadened and benefited that inquiry enormously. There is no such person amongst the group of members of this inquiry. No attempt has been made to ensure representation of the users of the system, be they the general public or the Government. It is true that submissions can be made by interested parties; however, the presentation of good submissions is no substitute for that wider, more balanced committee membership which we advocate.
The inadequate composition of the Committee means that there will be strong, defensive interests at play at various fronts. The members may, and probably will, consider any criticism of their respective fields of endeavour as misconceived, as ill-informed, and for the most part not worthy of notice. Any criticism will to an extent be looked upon, construed by the Committee members of that market as criticisms of themselves. Reform of the capital market means different things to different people according to the interests of the persons concerned. For those actually involved in the market, it usually involves the removal of institutional regulations which fetter them, whilst leaving untouched or strengthened the regulations limiting the actual or potential competition from related segments of the market. I hasten to say that this is not a cricitism of the people themselves. I know they are all worthy citizens of this country. What I am sure of is that it is a criticism of those who appointed them without that ‘salt and pepper’ to stimulate the Committee which I referred to earlier.
The Committee’s terms of reference also are unduly restricted. Not only are social welfare and equity considerations completely absent, but also no mention is made of the use of the capital market for the purpose of government policy, especially monetary and balance of payments measures. Rather the issues which the Committee was asked to examine were prefaced by the preamble which I now read to the House. It states:
In view of the importance of the efficiency of the financial system -
Here is the important, underlined part- for the Government’s free enterprise objectives and broad goals for national economic prosperity, the Committee is asked to . . .
This is a partisan political preamble, not one which has general acceptance across whole areas of this country. We are concerned with this inclusion and the attempt by the Government to prejudice the conclusions of the inquiry as evidenced by this reference. As the advertisement relating to the inquiry has dropped this sentence, I can only speculate that others have expressed concern at the inclusion of this partisan political point also and that the Committee has decided to play down this term of reference. The inclusion of such a sentence would make the task of the committee very difficult, I suggest, if the Government wants balance. The Government is always ready to fly the free enterprise flag when it can see a benefit for itself. However, let us face it, this Government is happy to abandon its free enterprise principle when it suits it. Capitalise the gains and socialise the losses is the slogan which epitomises the actions of the Government. For a committee to have to try to second guess the Government in this area gives it an impossible task indeed.
The latest outrage to the free enterprise lip service which the Fraser Government has perpetrated in this field has been the instructions given to the Australian Wheat Board to raise $300m under its own steam. The terms of reference, together with the committee ‘s composition, have therefore virtually assured a list of recommendations which will seek to dismantle many aspects of government intervention in the capital market. Even though these may be correct recommendations and could, in some cases- perhaps in all cases- be supported on this side of the House, they will not be seen to be balanced and supportable by a large section of Australians because of the terms of reference and because of the composition of the committee. Important sources of inefficiency in the capital market may be overlooked and equity considerations are likely to be completely ignored. In considering regulations of the market, the committee may overlook the important role of regulation in achieving both social welfare goals and the objectives of government measures, particularly those dealing with monetary and balance of payments policies, as I mentioned earlier.
Equity considerations involve, among other things, the position of the small investor and the question of accountability of institutions. The life assurance companies, superannuation and pension funds are of growing influence and importance in the economy. These organisations are able to mobilise large sums of capital and through investment obtain significant shareholdings or even control of publicly listed companies. The positions of these organisations can have real implications for a company, say, in the case of a takeover offer or a fund raising drive. The decisions of these organisations whether to support such ventures have a far reaching effect both for the company and for the position of the organisation. Such decisions are made on behalf of a membership which, though nominally responsible for electing its governing body, has little or no recourse if it dislikes decisions made on its behalf. To suggest that members could withdraw is unrealistic and in many cases untrue, for instance, in relation to the Commonwealth Superannuation Fund. The question of how accountability can be instigated into such organisations is of great importance especially to the membership. Is it likely to be of great importance to the members of the Committee as constituted? That is the question I raise in this debate, particularly as social welfare and equity considerations have not been explicitly referred to in the terms of reference.
I could use many more examples of why I am apprehensive because of the limited terms of reference and because of the unbalanced membership of the Committee. Matters which should be taken into consideration will not duly be taken into consideration. I am happy to have the support of the honourable member for Parramatta (Mr John Brown). During his speech in this debate he will refer to the effect of the capital market on the housing industry in this country. I understand that he will devote a lot of what he has to say in this debate to that particular area. The examples I have given and many more I could have given and what the honourable member for Parramatta will bring to our attention, clearly indicate that market solutions cannot always be relied upon. Most insiders respond by saying that existing commercial lenders will usually be prepared to provide such funds where they can be shown to be commercially viable. That is not satisfactory. The issues need to be investigated. I am not confident that this will happen adequately with this committee and with these terms of reference.
I would have liked to have said something about the effect of taxation on the capital market but I notice that I have not the time to do that. One can only hope that the Committee’s members are aware of the dangers of narrowly interpreting their terms of reference and of taking predictably defensive positions in line with the interests of those segments of the capital market which they represent. Only if they are aware of this and take corrective action accordingly, will all the issues be assessed with the objectivity that is required. The Committee members should not have been put into this position. This has happened because of the Government’s errors in not establishing in the first place a truly independent inquiry with adequate terms of reference. I fear the resultant report will be of limited usefulness. In many instances the recommendations might only compound the deficiencies in the capital market.
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired. Is there a seconder to the motion?
– I second the motion and I reserve my right to speak at a later point in the debate.
– I welcome the initiative of the honourable member for Adelaide (Mr Hurford) in bringing forward this motion this morning. I must say that I was disappointed in his approach to it. I have always thought that the honourable member had a pretty good grasp of matters in the financial world and economics, but I am sorry he spent so long at the beginning of his speech haranguing the various failures in the financial world and really missing the point of some of the items that are put forward in his motion.
Firstly, the matter of inquiry into the capital market certainly is well overdue. It is a matter I referred to in a speech I made in this House on 20 September 1977 in which I outlined a series of reforms that could be implemented. Indeed, one or two of them have been implemented by the Reserve Bank of Australia in its approach to the sale of Treasury notes and bonds in recent weeks. I hope that the Committee that is set up will go into other matters covering a wide area. In the 1980s and into the 1990s Australia faces a critical shortage of capital. Today we are not making the best use of the capital that we have at our disposal. There are faults in the mechanism of the capital market. I hope that this particular inquiry will look at these faults and make recommendations.
One of the aspects of the motion this morning is the composition or membership of the committee of inquiry. The people concerned are certainly men of the market who are experienced and who have lived and worked the industry all their lives. I know that we can pin certain identifications to that and possibly expect certain answers. In these days with a highly sophisticated capital market and a need for training to understand what is going on, there is really not the time for a committee like this to have members around who have to be trained or to be educated with a general knowledge of what goes on in the capital market. Much reference has been made to a former Prime Minister, Mr Chifley, who really made his public debut in terms of the inquiry of 1937. If we read some comments made by a former Governor of the Reserve Bank of Australia who was on the secretariat at that time, we will find his reference to the fact that during the course of that commission, Mr Chifley really became educated in banking. This was reflected in the actions of Mr Chifley in 1945. 1 think that is borne out today in terms of who should be on the committee. I would defend the membership of the committee. There is no doubt that if we all sat down and picked the membership we would come up with one or two common names but at the end of the list we would have a few different names. There is no doubt about that. I would pick some names which are different from those which are on the present list. Nevertheless, on balance, I support the membership. Talking in purely political terms one would ask who would represent the trade unions and some of the outside organisations. I do not know of anyone in that area who speaks with knowledge about the banking system or the capital system in Australia. Most of the comments I hear are directed toward its destruction or its nationalisation. I make no bones about the fact that I defend the system as it is with the regulations that are required within banking to ensure fair play.
As an example of this the Leader of the Opposition (Mr Hayden), a person who is held to be an expert in these areas by the Labor Party, made some comments on a Brisbane television program last night. What he said demonstrates the level of his competence in relation to financial matters. He claimed that Bankcard is a monopoly. If his claim is correct, what about such things as cash payments and orders. There are any number of other types of credit cards in operation in Australia. He then went on to say that the revenue from the Bankcard system in Australia was something of the order of $70m a year, that the cost of setting it up was $20m and that therefore it is far too profitable. There is a big difference between revenue and net profit. There is a hell of a difference between capital investment and the return from that investment. No one from the Opposition or from the trade union movement would recommend himself to me as being suitable for an alternative appointment to this Committee if there is to be such a loose use of facts in the area to which I have just referred.
A further matter raised this morning concerned the political overtones in the establishment of the inquiry. I have found reference to that in only one article in a newspaper, namely, the Australian Financial Review of 21 January 1979. In some respects those sorts of comments are best left out of terms of reference. Nevertheless it is a fact of life that the system operating in Australia is a private enterprise one. People ought to be under no misapprehension as to what the public of Australia want. The inquiry would be mindful of this. The mentioning of it would be unduly sensitively received not by the community as a whole but only by those who hold a doctrinaire commitment to socialism or something of that nature. I reject that approach.
The second part of the motion moved this morning deals with social welfare implications and housing. I think it demonstrates that the proposer of the motion misunderstands the question when he brings forward social welfare aspects of a capital market inquiry. As I see it, social welfare aspects and housing are political questions which must be determined by the political parties and by the Government of the day. Political parties rather than a particular section of the capital market will determine their own views on these matters. If the capital market is allowed to meet the supply and demand, if it is allowed to move its interest rates in accordance with that supply and demand, if it were to use a free interest approach, it would probably have more money available for housing. In other words, housing finance would probably attract a higher rate of interest and there would be a fairly marked degree of success in raising whatever money was needed. If one wants to interfere politically- I support the principle of housing aid in Australia, and I think that these things should be looked at- one should do so by subsidising interest rates or by making grants to housing. Those are political decisions; they are not aspects of an inquiry into the capital market. They are two completely distinct propositions.
In the remaining time available to me I would like to look at some of the problems that face the Australian capital market at the moment. We have seen signs of a capital shortage in Australia in the last 10 years. As a result of inflation we have seen a build-up in the capital costs of development. These days the sheer size and magnitude of major mining or energy development presents cost difficulties. In recent times, with the advent of the Crawford report, we have seen an emphasis thrown back on to the manufacturing industry. The need for modernisation, new technology and new plant is involved in this area. We have to look around and see what we can do to improve the use and the husbanding of funds in Australia.
In recent times Australian household savings have been on the increase. I shall refer to some figures which I have before me. In 1960, 5 per cent of the gross domestic product represented household savings. By 1976 this had risen to 10 per cent. It is a question of how we get into that area to mobilise those funds for appropriate investment. Because of higher levels of government spending in recent times I think that in the 1 980s we will be getting to a position where there will be competition between the Government and corporations for funds. As can be seen from another table which I have before me, in 1960 the use of funds by government represented 33 per cent of all capital expenditure and the use of funds by corporations represented 48 per cent. The use of funds by private households represented 19 per cent. In 1976 the Government’s share had risen to 36 per cent; the corporations’ share had fallen to 42 per cent; and share of households had risen to 22 per cent. That indicates to me that in the 1 980s the position of the corporations will reverse and their share of the capital expenditure is likely to rise quite markedly. When this occurs, how are we to ensure that the least distortion is caused in the market? What improvements can we see?
I have always believed in the adage of the share market, namely, that a bit of sunlight is the best disinfectant. If we adopt that approach in relation to companies we should be able to look at some of the remedies that might be viewed by the Committee.
I would like to think that they should look at the solvency regulations, as well as the matter of solvency in relation to a number of institutions in Australia. I refer particularly to the building society movement. In the last ten years activities in the building society movement have left a lot to be desired. I hope that the Committee will look into the background of the accounting and auditing methods in order to test solvency and to test the reliability of management within the building society movement. If a lender of last resort system is to be guaranteed, the implications for the rest of the banking system of Australia are enormous. I hope that the inquiry will look at this area to see what can best be done. If building societies are to receive guarantees in the same way as banks do then the discrepancy in interest rates between savings banks and building societies cannot be sustained. The effect that that would have on the funds available for building would be enormous, not to mention the contribution to government and semi-government borrowing.
I turn to the matter of financial information. I have never been really impressed by the disclosures of some of the corporations and institutions in Australia, such as life assurance companies and banks. I can understand their sensitivity but as a whole they are doing themselves a disservice by not revealing the true position. I hope that something will be done to upgrade the level of reporting from the financial institutions. Another matter which might be looked at is the fact that there is no system of ratings in corporate, semigovernment or institutional borrowings. There is no service such as ‘Standard’ and ‘Poor’ in Australia. In America that service does an enormous amount to rate the bonds and, as a consequence, to make them more saleable. In Australia one is left very much on one’s own to check out the trustee, the company and the management. One does not necessarily take the word of the underwriter or the promoter. Unfortunately this came out very clearly in the Associated Securities Limited debacle.
I come now to regulations. There are a myriad of regulations within the market place. The Government has the ability to control interest rates and to put pressure on quantitive lending by the banks through the Reserve Bank. It has the right to make sure that reserves are held with the Reserve Bank and that there are adequate statutory reserve deposits and liquid government securities ratios which bring a fairly tight control on liquidity. It exercises exchange control. It has strong barriers to entry to Australia in various forms. This applies particularly to outside banking and to currency movements. Then we have what one could call the privilege circuit- the participants in the 30-20 area. I hope that the Committee of Inquiry will look deeply into this matter because of its implications not only for government borrowings but also for semi-government borrowings.
In Australia in the last two or three years we have seen an enormous growth in the use of semi-government borrowings. In the last two years the amount of money borrowed by local government and instrumentalities is larger than the debt borrowed by the Federal Government. There is still something of the order of $300m to be raised by semi-government and other instrumentalities before 30 June in order to complete the program. There is so much scrip around that there is a very real danger that this whole area of financing will come under some pressure in the next 12 to 18 months. I think that unless the Government looks at this matter we will find that it will not be able to sustain the interest rates in that area or support the various councils and projects operating with funds from that source.
Another matter I wish to raise is the question of stamp duty legislation. In Australia we have a totally inadequate debt security or mortgage market. This is brought about by the level of stamp duty in the various States. If we were to enable the transfer and marketability of mortgage securities in Australia we would be able to mobilise so much more of the domestic funds. These funds would move into the areas of greater creativity than the savings bank accounts which are so enormous today. There are also restrictions on capital exchange in Australia. The use of forward markets, which is common throughout the Western world, is frowned upon in Australia. We seem to have a complete phobia sometimes about the thought of free market movement.
In the last few moments that I have to speak, I would like to make a few references to taxation. The implications of tax on the capital structure of Australia are quite enormous.
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired.
– I do not want to spend too much time in commenting on what the honourable member for Ryan (Mr Moore) had to say. Strangely enough we on this side of the House respect the intelligence of the honourable member for Ryan. We are sometimes staggered to find that his intelligence languishes on the back bench over there while there are much less adequate people sitting on the front bench. Of course, we do disagree violently with him in political terms. However, I would like to bring my contribution to this discussion in line with the motion that we have moved about the personnel appointed by the Government to undertake this inquiry into the Australian financial system. I would also like to point out to the Government that the terms of reference just do not cater sufficiently for the reaction which the capital market, the financial system, has on the great mass of the Australian public. We deplore the absence of any sort of representation from the people who basically are affected by the system as it exists.
The Opposition welcomes the establishment of a committee of inquiry into the Australian financial system. It is a move which obviously is long overdue. The last inquiry into the financial system was the Royal Commission into the Monetary and Banking Systems which was held in 1936-37. Since that time, obviously, great changes have occurred in the Australian financial system and many new problems have arisen which require detailed investigation in 1979 and through the 1980s. For example, since the time of the last inquiry, the trading banks have diminished in importance- I do not think that we on this side of the House deplore that- whilst new financial institutions such as permanent building societies and consumer and wholesale credit arrangements have vastly expanded the scope of their activities. Competition in some financial areas has been eliminated by the development of facilities such as Bankcard, to which the honourable member for Ryan referred. I will not enter into that discussion as I think the Leader of the Opposition (Mr Hayden) put that case very clearly last night. I agree with his summation of Bankcard and I disagree with the honourable member for Ryan on that point. The Australian Resources Development Bank, which has a virtual monopoly in its field, and the role of the Reserve Bank have been called into question. All these issues need investigation. They really should come within the terms of this inquiry. It is of vital importance to our economic development that a financial system is developed which permits the maximum mobilisation and deployment of Australian capital by Australians for the benefit of Australians.
I would like to make a slight observation. Almost all the merchant banks which operate in Australia are overseas owned and controlled. Whilst recognising the necessity for an inquiry into the Australian financial system, the Opposition has great reservations regarding its composition and terms of reference. With regard to the composition of the inquiry panel, there is no doubt that the qualifications of those named are beyond question. The point we make is that whilst their qualifications might be impeccable there is a danger, as there is with all official committees, that the members are chosen with such regard for their credentials that they will put forward only the views of the establishment. Surely that is what this inquiry is all about- to see that the present establishment is thoroughly reviewed and in lots of ways overturned.
Another associated danger with such a committee is that the membership is too closely involved with the capital market to provide a completely detached analysis of its imperfections. Surely the existence of those imperfections is beyond question. The committee members appointed by the Government to this inquiry represent such interests as the Reserve Bank, the trading banks, the insurance industry, the securities industry and the real estate industry. All of these interests deserve to be represented, but it is very unlikely that any of them will question the basic assumptions underlining the financial system and, therefore, the inquiry will remain in most cases fairly superficial. There is no member on the committee who will be able to assess the evidence put before the inquiry independently of his own sectarian interests. The committee’s stance is, in fact, so apparent that most newspaper articles have already confidently predicted the recommendations which the committee will make some 1 8 months from now. It is perhaps worth remembering that the committee of inquiry of 1936 had a very different composition from that of 1979. It included a Supreme Court Justice, a chartered accountant, an economics professor, an official of the Victorian Treasury, a grazier and, of course, the Labor politician the honourable member for Adelaide (Mr Hurford) mentioned, the revered Ben Chifley. It was clearly more broadly based and more, independent than that which has beer appointed in 1979.
Whilst we do not advocate that the Government should firmly adhere to the pattern of the composition of that inquiry, we feel that the membership of the present inquiry should be broadened so that it can maintain a more independent stance. Another major criticism which the Opposition has regarding this committee of inquiry relates to the insufficient attention which is given in the terms of reference to the social welfare implications of the financial system. In fact, no specific reference has been made to this aspect of the financial system. Perhaps the only section of the terms of reference relating to social welfare can be found in paragraph (d) which recommends that the committee investigate:
Such other matters as the inquiry believes relevant to the generality of its inquiries.
This is not specific enough. The terms of reference should clearly state that the committee of inquiry must give special attention to the effect of any changes in the Australian financial system on disadvantaged community groups and the functioning of social welfare policies. The Opposition states and reiterates that that is the failing of this inquiry.
The terms of reference are all formulated with regard to entrenched establishments. Mention has been made of financial institutions, the securities industry and the money market, but no mention has been made of the effect of any changes to the financial system on the individual and the small investor. Surely the great mass of the Australian population falls in those areas. The small investor appears to be very much the pawn of governments and financial institutions. Little notice is taken of his needs and wishes. When we talk about the small investor, on this side of the House we do not talk about people buying shares in public companies. We talk about people who are buying their own homes.
They are investing in financial institutions by undertaking mortgages. Decisions affecting the wellbeing of small investors are imposed from above by an omnipotent body, the financial system, which appears to impose decisions independently of governments and the people. The one area in which the financial system has a major impact upon individual investors is the housing market. The desire to own one’s home has been described as ‘the great Australian dream’, and certainly no one would deny that every person should have the opportunity to purchase his own home. It would seem that this basic right is becoming increasingly difficult to achieve because of problems inherent in the financial system as it exists at present.
I would like to refer now to specific problems in the financial system as it relates to housing. I am sure most people would agree that these should be overcome. One of the most obvious problems facing the potential home buyer is the effect of rising land prices which is making it increasingly difficult for low and middle income earners to purchase their own homes. Between 1970 and 1978 in New South Wales, for example, the cost of a house and land has increased something like 131.1 per cent while the cost price index in that period has risen only by 120.3 per cent. There is a fair differential. To a large extent this situation has been brought about by widespread land speculation by big developers who buy land cheaply, develop it and then sell it at an enormous profit.
Another adverse effect of the financial system on the home finance market relates to the lack of co-ordination which exists between State and Federal financial policies which in the long term affect home buyers. A clear example of this was seen in 1976 when an Australian savings bond issue paying a highly competitive 10.5 per cent per annum forced building societies in New South Wales to raise their interest rates- hardly a proposal that was in line with the Government’s allegedly trying to get inflation down. Currently a lack of stability in the home finance market affects the availability of loans. The Eyers Committee of Inquiry into Housing Costs recommended the establishment of a Commonwealth secondary mortgage agency which would buy mortgages in bulk from home loan institutions thus smoothing out fund flows around Australia and allowing greater regulation of the State housing industries. Such a scheme would produce greater stability in the home finance market. Yet it has not even been mentioned in the terms of reference for the inquiry.
Another problem besetting the financial system which has been excluded from the terms of reference of this inquiry- it affects large numbers of potential home buyers- is the lack of security for building society funds. I noticed that the honourable member for Moore, who has left the chamber, alluded to this point. It is ludicrous that a mere rumour can start a run on building societies. A prominent example of this occurred in New South Wales in the last few months when some ratbag on the radio started a rather irresponsible and spurious run on building societies. This has led to only two of the building societies in New South Wales now providing loans. The run-down on investments because of the outbursts of this lunatic has been incredible. I note that he has been censured to some extent by the Australian Broadcasting Control Board. But the effect on the home loan market has been marked. Until the Government is prepared to do something about guaranteeing investors’ funds in building societies this situation probably will continue. It is obvious that nobody standing up in Martin Place yelling that the Commonwealth Bank is in jeopardy would cause a run on investors’ funds. Why should somebody be able to do so with building societies? I suggest to the House that building societies in New South Wales particularly are very sound; they are as sound as the banks. But until they have some government support for investors’ funds the possibility of this situation re-occurring will always be present.
The Minister for Finance (Mr Eric Robinson) recently indicated that the establishment of a national insurance scheme for building society funds will be made a matter of priority. I note that with some pleasure. However, it is unfortunate that such initiatives should be taken without falling into the specific terms of reference of the inquiry. I think that that should be an important area for this inquiry. That such an insurance scheme is long overdue is more than obvious. In Australia in the financial year 1 977-78 building societies lent almost $2 billion for housingalmost $2,000m. This figure was second only to that lent by savings banks and represented 25 per cent of the total money lent for housing. Institutions dealing with such vast sums of money surely need an insurance scheme to reassure their contributors.
At this point I make reference to the Canada Deposit Insurance Corporation, a body which was established in 1967 to insure depositors’ funds in member institutions up to a limit of $20,000. This was started by the Canadian Government. It is organised by the Government.
It is a source of great protection to building societies in that country. Should member institutions be found to be unsound following investigations their insurance is cancelled. This is the sort of guarantee which the investors of Australia need for their savings.
I have just spoken of the importance of establishing the confidence of small investors in permanent building societies. Another area where credibility is lacking to investors is in the composition of the boards of some building societies and superannuation funds. Many of these institutions are undemocratic in their management hierarchy and shareholders are not well represented at all. One needs to think back only to last year’s extraordinary lobbying procedures for the election of directors to the board of the New South Wales Permanent Building Society to realise that shareholders have little say with regard to the composition of the board. The undemocratic nature of the boards of many leading organisations does not always work in the best interests of potential home buyers. The practice of such organisations entering into the field of land speculation, for example, is highly questionable given that the majority of their shareholders themselves wish to purchase homes.
Other matters affect the home finance market. The need to establish a priority for housing by appointing a body such as the Australian Housing Corporation in order to secure the cash flows necessary to maintain production and sale of housing is one. The problem of financing the gap between the deposit and the loan required is another. All these problems need investigation. Under the current terms of reference of the committee of inquiry into the financial system none of them is specifically mentioned.
That is the basis of the Australian Labor Party’s complaint about this inquiry. We realise that the inquiry is necessary. We applaud its implementation. But we sincerely ask the Government to think about broadening the range of members who are on the inquiry and also broadening the reference to enable strong inquiries to be made as to how the financial market, the capital market, as it exists in Australia at the moment affects the great mass of the Australian people. As the honourable member for Adelaide suggested, almost 50 per cent of the Australian population supports the Labor Party in and out of government. Surely this great mass of Australians, the people who are contributing the bulk of the money which goes into financial operations in Australia, should be given a say in the inquiry. At this stage they are not. If we talk about somebody from the trade unions who is qualified in this area we could consider Bob Hawke who is a member of the board of the Reserve Bank. Why not have Bob Hawke on this inquiry representing the great mass of the Australian people?
Order! The honourable member’s time has expired.
– I am very glad to see the Australian Labor Party welcome the establishment of the committee of inquiry. It seems unfortunate that the motion of the honourable member for Adelaide (Mr Hurford) did not stop there at that rather than continue for another two paragraphs. It seems to me that everything that has been said so far by the Labor Party in this debate has missed the essential point. The honourable member for Adelaide started his speech in an embarrassed manner by discussing a matter which did not bear on this debate whatsoever. He referred to the New South Wales Government’s sabotaging of the attempts by the Federal Government and every other State government to introduce a national companies and securities commission Bill as soon as possible. It strikes me as extraordinary that the honourable member for Adelaide would have tilted at this windmill. It seems to me extraordinary, in the circumstances of agreement between the States to introduce this Bill which must be the precursor of all the other Bills that are to be introduced to bring about national control by agreement with the States in these vital areas, that the Labor Party in New South Wales, having agreed in discussions with the other States including the two Labor States which are going along with the Federal Government on this matter, should have sabotaged these proceedings.
I wonder why. I will suggest a reason which seems to be self-evident: A State election is to be held in Victoria next Saturday. The location of the head office of the proposed commission is of vital significance to Victoria. I support the proposition that it should be in New South Wales where the major activities in this area continue. The headquarters of the Reserve Bank, the major stock market and the major institutions are in New South Wales. Perhaps regrettably the major volume of company fraud has tended to be in New South Wales. That might not be a recommendation for having the commission located in New South Wales, but there is a strong case for doing so.
It is evident that it would be a matter of political moment in Victoria if immediately before the State election the New South Wales Premier were seen to be vigorously and violently supporting the proposition that such a commission should be located in his State. I imagine that the Victorian Labor Party and Mr Wilkes in particular would be infuriated by such a campaign in the couple of weeks running up to the Victorian election. There could be no other explanation for this curious attitude, this indefensible attitude of the State of New South Wales, if it were not for the fact that the Premier is avoiding discussion of the key matter of the location of the national companies and securities commission. As I have said, it is vital that this commission be set up first, the location decided and the advertisements put out to enable the appointment of the people who will be involved. Consequential things, vital things such as the takeovers legislation and the companies and securities legislation, cannot proceed until we have set up the commission and decided on its location and membership. The one State government in Australia, including many Labor governments, that is deliberately sabotaging the procedure is the Labor Government of New South Wales. If there is any other rational justification for this from the Labor Government in New South Wales, we have not seen it.
The Federal Government has decided not to proceed with the other legislation until the national companies and securities commission Bill is settled as agreed, and of course the Labor Government reneged on its agreement. The Federal Government cannot proceed with other legislative action because the first vital thing is to enact the national companies and securities commission Bill. That is immensely disappointing because there is an urgent need for the consequential legislation. There is an urgent need for the takeovers legislation to come into this place, and it was planned for the August session. It was to be introduced here and in other parliaments round Australia so that we could proceed with this urgent need for reform of the law. The draft companies and securities Bill was to be raised for public discussion in the second half of this calendar year. This was all agreed. The agreements were made with all the State governments, including the State Government of New South Wales. Yet here we have a basic refusal to proceed, I suggest for internal Labor Party political reasons. It seems to me a most disastrous situation that the State Labor Government has acted in this way. Surely a simple matter such as location can be resolved without this kind of political grandstanding by Mr Wran.
The fact is that the various companies Acts certainly require major amendments. As I understand it, 500 amendments to the proposed companies Bill were agreed to by the several State Ministers. It seems to me extraordinary that a party which continues to complain about corporate fraud, as the Labor Party does, has taken a role which will delay the introduction of this vital legislation that has been agreed to by the Ministers from all the States, including the Labor States. It is extraordinary also when one sees the way in which the Labor Party in this House tends to concentrate, as did the honourable member for Adelaide, on the seamy side, on the disasters, on the company collapses, particularly when it is recognised that the State governments control the companies Acts and the regulation of corporations in the States. It is extraordinary that the Labor Party in this House should continue to criticise the way in which Labor States have so incompetently administered those Acts that there have continued to be enormous defalcations, enormous collapses, immense frauds. As I understand it, very few people are residing in penitentiaries at Her Majesty’s expense as a consequence. I am not criticising in any way the extraordinarily high quality of the public servants involved. To my mind, people such as Mr Ryan in New South Wales have not been getting the support of the legislatures. I submit that it is vital that the Labor Party get off the pot on this matter, stop playing Victorian politics, and proceed with the national companies and securities commission Bill.
– Why don ‘t you talk to the motion? You have spent eight minutes on something else.
– I am glad that the honourable member for Parramatta complained that I took eight minutes talking about something else because that is exactly what the mover of this motion did. He was so embarrassed about the nonsense he was proposing in his motion that he started by spending eight minutes talking about the securities commission Bill. I have followed his lead, and I thank the honourable member for Parramatta for drawing that fact to the attention of the House.
Let us look at what the honourable member for Parramatta said. He said that this inquiry was too narrow and that it had to be broadened, particularly in two areas, one in the terms of reference and the other in its composition. Let us look at the terms of reference. They are as broad as possible; they cover everything. It is arrant political nonsense for any honourable member, when he can see what the terms of reference are, to say that building societies have been excluded or that anything has been excluded. That is totally untrue. The first point on the list of institutions to be dealt with by this inquiry is banks and nonbank financial institutions. For the benefit of the honourable member for Parramatta, non-bank financial institutions include building societies. It is disappointing that a debate on this topic should concentrate on such self-evident nonsense. If the honourable member for Parramatta does not think that the term ‘non-bank financial institutions’ covers building societies and believes that other things should be raised, I point out that the last requirement of the commission of inquiry is to inquire into, report and make recommendations on such other matters as it believes are relevant to the generality of its inquiries. Of course, that covers the financial system as a whole. I regret that the honourable member for Parramatta has tried to play politics with the people who are seeking housing, with people who are concerned about building societies, by falsely alleging that this inquiry will not cover specifically the building societies of this nation. Clearly it will do so, within its own terms of reference.
– It is very vague.
– The honourable member for Parramatta says that it is very vague. It may be vague to the honourable member for Parramatta that the term ‘non-bank financial institutions’ covers building societies. This may explain why a member of the Labor Party or ‘a reformer philosophically aligned with the Labor Party’, as the honourable member for Adelaide said, has not been appointed to this inquiry. Perhaps he would display the same degree of lack of knowledge as the honourable member for Parramatta has this instant displayed. I believe that the membership of this inquiry is a very impressive one. For anyone to say in this House that the little investor is not protected in this inquiry, that he is not represented, is once again self-evident nonsense. Mr Coates is the Chief Manager, Investments, of the Australian Mutual Provident Society, which represents the greatest collection of little investors in Australia. The AMP Society is not a big company; it is a collection of policy holders. It is the greatest single collection of small investors in Australia. Certainly the interests and attitudes of the small investor would be well covered by a man such as Mr Coates.
I suggest that the Opposition’s complaint about the spread of representation among the commissioners is self-evident nonsense. This is apparent when one considers what happened in the 1936 inquiry, when there were six pages of recommendations and 16 pages of objections. Do honourable members opposite want a minority report that is so much greater than the basic report that it becomes meaningless or do they want an inquiry that will have an effect, have a consequence, be meaningful. I draw the attention of the Opposition to the point made by the Treasurer (Mr Howard) when announcing the composition of the inquiry. He said: . . . from time to time the Committee might appoint consultants to provide domestic or international advice and expertise.
I hope that that will happen so that any complaints or possible criticisms, such as the politically motivated criticisms from opposite, can be met by the extension of the committee to include consultants of that nature. I believe that the first sentence of the motion moved by the honourable member for Adelaide is correct. I welcome the establishment of the committee of inquiry, and 1 imagine that the House will do likewise.
-As it is now two hours after the time fixed for the meeting of the House, the debate is interrupted.
Motion (by Mr Adermann) agreed to:
That the time for the discussion of General Business, Notices, be extended until 12.45 p.m.
-The question is: ‘That the motion proposed by the honourable member for Adelaide be agreed to’. Those of that opinion say aye, to the contrary no.
Mr HURFORD (Adelaide)- With your indulgence, Mr Deputy Speaker, I should like to explain that the Opposition is not taking this matter to a vote in order to allow time for another motion, which will be moved by the honourable member for Capricornia (Dr Everingham), to come before the House.
Question resolved in the negative.
For Vh years this Government has persisted in its subservience to the sectional interests of privilege and wealth. Nowhere is this more evident than in Aboriginal affairs policy, particularly in Western Australia and Queensland. The Government has clearly refused to use the constitutional powers available to it against such oppressive legislation as that currently endorsed by governments in those States. Too often we have had to listen to the Government singing its own praises. We have had to listen to the shameless distortions of the truth which climaxed last November when the then Minister for Aboriginal Affairs patted himself on the back for five grotesquely misrepresented so-called achievements in Aboriginal affairs in 316 years. Aboriginal Australians have suffered the humiliations of being the victims of this Government’s poorly camouflaged contradictions between policy and practice.
Aboriginals have stated many times the importance of their relationship with and their attitude towards their land. They have patiently explained that it is inseparable from their culture, their self-respect, their identity as individuals and as communities related to all life forms, land forms, weather changes and the wider universe. They thought and hoped that the Government would understand that. But the Government, by its actions, and despite the fine phrases it promotes in policy documents and in statements by Ministers, has demonstrated that either it cannot understand or that it does not want to understand.
In recent weeks, the Minister for Aboriginal Affairs (Senator Chaney) has developed a disturbing train of thought. He thinks that land rights are little more than a slogan and that claims are made- I quote from his address to the Frankston Uniting Church- ‘without regard to the legal and political realities of the Australian Federation’. With respect, I put it to the Minister for Employment and Youth Affairs (Mr Viner), who represents the Minister for Aboriginal Affairs in this chamber, that it is his Government that is unaware of the political realities in the Aborigines’ fight to regain their land. Let us take Western Australia as an example. I am sure that I do not have to spell out to honourable members the political reality of the current fight by the Aboriginal people in Western Australia for the basic right to vote. Nor do I need to point out the political and judicial reality of illegal actions by the Western Australian Liberal Party to deny an equal voice to Aborigines in an election for the seat of the Kimberleys. Nor should I have to spell out again that a referendum in 1967 overwhelmingly gave the Commonwealth the responsibility of ensuring the welfare and rights of Aboriginal Australians by giving it power to make laws concerning those rights- a responsibility which this Governnent continues to evade, with the excuse that the States also retain such legislative powers. The Federal Administration has subscribed to international obligations to protect human and minority rights. It cannot, before the bar of public opinion, pass the buck- not even a few cents of it- to the States. Rights are not for sale and nor is federation a device for evading duties by splitting them between different levels of government.
We have heard much of the Federal Government’s attempts to restore integrity to Aboriginal people by returning their land and encouraging initiatives. But how can this happen when we force on them local government administrations which have no relationship to the activities that the Aborigines see themselves as performing as Aborigines and in deciding and correlating in Aboriginal ways. The Fraser Government has refused to fund those land councils which Aborigines themselves set up because it argues that the Aboriginal Land Fund Commission and the National Aboriginal Conference have the necessary funds to do the job. But this Government has down-graded the NAC. Only one meeting a year is authorised by the Government. We now learn from Appropriation Bill (No. 3) that the NAC is to lose $323,000 of its original $505,000 allocation for this year. Whilst the efforts of the Aboriginal Land Fund Commission are heroic, it is powerless to purchase land when certain vested State government, mining or pastoral interests would prefer to keep that land within what they call sound land use planning guidelines. In other words, a fast buck comes before cultural survival. Questions in relation to preferential treatment to Mount Isa Mines Ltd over some of the islands, the McArthur River and Bing Bong sections of the Borroloola land claim in the Northern Territory remain unanswered. The deceitful secrecy of the Federal Government has not been explained.
In Western Australia, the Australian Land Fund Commission is hampered by hostility from the Western Australian Lands Department. The Commission’s tender for Laurell Downs Station on behalf of the Junjuwah Community was unsuccessful, even though its purchase offer was $5,000 above the highest bid received. The injustice is even greater when one considers that the community wished to use the small piece of land as a training centre for pastoral and agricultural work. The land went instead to a neighbouring pastoral station, Quanbun Downs. A request by the Lombadina Community for an area of vacant Crown land adjoining their reserve still has not been granted, even though the land formerly held temporary reserve status and the community has vastly improved that land by sinking bores, et cetera.
The Federal Government also plays its role in restricting the Commission. In successive years, funds available to the Commission have been frozen and invested. The Government now has established a tradition by which the Commission is penalised financially for funds unspent in a previous year. Moneys allocated to the Commission are now down by 79.5 per cent in real terms since the 1975-76 Labor Budget. The Queensland Premier has made his mark on the Commission just as much as the Western Australian Premier. But let me quote what the Western Australian Premier, who is a member of the same political party as the Federal Minister for Aboriginal Affairs, had to say. He said:
The Aboriginal people, whether as a race or as tribes or as individuals, do not have by reason or their aboriginality any legal claim to the territorial land of Western Australia. Nor have the Aboriginal people any moral claim of the exclusive right to the possession of the lands of this State.
Mr Deputy Speaker, I have agreed to limit my remarks at this time so that a reply can be made by a member of the Government. However, I point out that there is much more that I could say.
-Is the motion seconded?
– I second the motion, Mr Deputy Speaker.
– I thank the honourable member for Capricornia (Dr Everingham) for his courtesy in allowing me some moments to develop arguments, from the point of view of the Government, on what he has put forward. This is an important question and essentially I am one in this Parliament who, on matters relating to Aboriginals, seeks to develop to the broadest possible extent the consensus that I believe is possible in matters relating to the welfare and advancement of our Aboriginal people. I therefore am disappointed when I read a motion of this kind, which I regard as more likely to divide us than to bring us together to achieve meaningful advances for the Aboriginal people of this country. The motion is worth reading because whilst the words in it say one thing, I am not sure that the honourable member, in his remarks, has substantiated what he alleges in his motion. The motion reads:
That, in the opinion of the House, the Government has repudiated- , ‘ repudiated ‘ is the key word - its policy and legislation on Aboriginal affairs when these clash with powerful pastoral, mining or State Government interests.
The fact is that in no way has it been shown that the Government has repudiated its policy or its legislation in the area of Aboriginal affairs. The honourable member for Capricornia, both in his speech and in his substantive motion, referred to the question of Aboriginal self-management and self-determination in the State of Queensland. I believe that none of us has been altogether happy, not only with the way in which, over a long period, differences in approach between the Queensland Government and the Commonwealth Government have developed, but also with the conflict that has existed. However, the arrangements which the previous Minister for Aboriginal Affairs, the present Minister for Employment and Youth Affairs (Mr Viner), managed to develop brought the Queensland Government round to accepting the approach of the Commonwealth. We arrived at a settlement which, in a substantial form, accepted that there was a different way for Aboriginals to do things when compared with the way in which other Queenslanders were required to do them. It put aside the demand for assimilation which had been self-evident until that time in the Queensland policy.
Notwithstanding the runs that we have on the board and notwithstanding the successes that have been achieved, particularly in relation to the Aboriginals at Mornington Island and Aurukun, the honourable member for Capricornia wants to bring about a situation in which Aboriginals once more will be the pawns in a political exercise, a dispute between the interests of those of us in the Commonwealth Parliament who would like to act in a particular way and, on the other hand, the Queensland Government. The people we would be fighting over, as we were previously, would be the Aboriginal people in those two centres. I do not believe that it is in the interests of the Aboriginal people for us to resolve in the courts of this land disputes over who can make laws and rules for Aboriginal people, particularly when we can do so by agreement between governments.
I am not saying that we should run away from a fight. Of course, if the differences were so marked that they would be detrimental to the Aboriginal people we would say: ‘We stand or fall on this issue. Let us determine it. ‘ But that is not the case. We have achieved a remarkable degree of consensus. If we were to put that aside we would bring all the issues once more to the forefront. We would have to test in the High Court of this land the extent to which we have constitutional power over many incidental areas. We would have to test our constitutional power to make laws in relation to hospitals, schools and education and in relation to whether we could take over the land and deal with it in a particular way. The question of minerals and mineral rights in areas in which Aboriginals are living would be put at issue. I ask honourable members to mark my words. Those matters would not be put at issue nicely. We would not have a pleasant debate about them for a couple of weeks. The Commonwealth and the States would fight for years over what they saw as their respective rights. The pawns in that exercise would be the Aboriginal people. I for one would not support such an approach. The honourable member raised other matters in his speech which, because of the time allowed for this debate, I cannot cover. But the thrust of his speech which was so evident and which we have to confront is not one that I support. It is not one that the Government supports.
Dr Everingham (Capricornia)- I seek the indulgence of the Chair to explain that the Opposition does not propose to divide on this question on account of the time limitation.
Question resolved in the negative.
-It is now almost 12.45 p.m. The time allotted for precedence to General Business has expired.
-Mr Speaker has received a letter from the honourable member for Reid (Mr Uren) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The failure of the Government to provide an effectively administered system of public funds for urban development by State governments.
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-
-Mr Deputy Speaker -
Motion (by Mr Fife) put:
That the Business of the Day be called on.
The House divided. (Mr Deputy Speaker- Mr P. C. Millar)
Question so resolved in the affirmative.
– I move:
The Customs Tariff Proposals I have just tabled relate to proposed alterations to the Customs Tariff Act 1966. Proposals Nos 16 and 17 formally places before Parliament as required by law, tariff changes introduced by Gazette notices during the last recess. The changes contained in Proposals No. 16 formalise the Government’s decision on recommendations made by the Industries Assistance Commission in its report on nuts, bolts and screws, et cetera. The effect of the decision is that the majority of goods under reference will be dutiable at a rate of 25 per cent. The Proposals also contain administrative changes which have been adopted by the Customs Cooperation Council and to which Australia is a contracting party. No duty alterations are involved.
Proposals No. 17 formalise changes arising from the Government’s decision on recommendations made by the Industries Assistance Commission in its report on the Australian citrus industry. The decision means:
A duty rate on orange juice imports being the amount by which the value for duty per kilogram of total soluble solids is less than $2.40. Orange juice with a value higher than $2.40 will be free of duties; customs duties on citrus peels, citrus jams and marmalades, canned citrus and other citrus juices remain unchanged; the remainder of the goods covered by the Commission ‘s report will be duty free.
A comprehensive summary setting out the nature of the change to duty rates contained in Proposals Nos 16 and 17 has been prepared and is being circulated to honourable members. I commend the Proposals to the House.
Debate (on motion by Mr Hurford) adjourned.
Sitting suspended from 12.56 to 2.1S p.m. (Quorum formed).
Bill presented by Mr Howard, and read a first time.
That the Bill be now read a second time.
This Bill, together with another that I shall introduce shortly, contains provisions to implement the proposal that the then Minister for Aboriginal Affairs and I announced on 20 July last to the effect that certain revenues derived by Aboriginal communities and groups from the use of Aboriginal land for exploration and mining purposes be taxed by means of a withholding tax system. There is a clear need for certainty and simplicity in the rules governing tax on payments flowing to Aboriginals from mining operations. It is important for representative bodies, such as the Aboriginal Land Councils which, on behalf of Aboriginal communities, are authorised to negotiate terms and conditions on which mining may take place, to have a ready means of assessing the after-tax benefits of payments to the communities.
Under the present income tax law this would not be an easy task. Much of the mineral royalties and other payments that Aboriginal communities can expect to receive as a result of agreements for mining projects in the Northern Territory and elsewhere in Australia will be received in the first instance by various Aboriginal bodies having representative and administrative roles. Those bodies will form a conduit through which mining payments will pass to the benefit of Aboriginal communities. Because of the unusual nature of this structure and other related factors, application of the present law would present difficulties. It would mean that, in practice, the after-tax value of payments received for the use of Aboriginal land for mining purposes would not with any assurance be determined in advance by those negotiating on behalf of the Aboriginals. Perhaps more importantly, there could also be some quite inappropriate taxation effects. The new withholding tax will overcome these problems and will have a simple operation.
Broadly speaking, the tax, which will be a final tax not subject to later processes of assessment, will be collected by deduction at the earliest point at which revenues from mining activities are paid to representative distributing bodies, such as the Aboriginal Land Councils, or to Aboriginal persons or groups. Once a mining payment has borne withholding tax at the source in this way, subsequent distributions or applications or the after-tax proceeds, other than by way of remuneration for services rendered, will not be subject to any further income tax in the hands of the Aboriginal beneficiaries or of any interposed Aboriginal body. Specific tax exemption provisions in the Bill will ensure this.
Withholding tax is to be set at a fiat rate of 6.4 per cent of the gross payments to which it will apply. This rate, which will be formally declared by the second Bill, is a convenient way of giving expression to the Government’s decision that a tax of 32 per cent be applied to one-fifth of the gross payments. I stress that the rate was arrived at after most careful consideration. It takes into account that substantial amounts attributable to payments from mining operations can be expected to be expended on the provision of facilities and services for Aboriginal communities and for the benefit of people whose income level is low. On balance, the Government believes that a rate calculated in this way is a reasonable revenue contribution out of mining payments of this kind.
The formal provisions contained in the Bill for calculation and collection of the withholding tax follow closely the form of the existing dividend and interest withholding taxes. Whilst the formal legislative structure of the tax is to impose liability for the withholding tax in the first instance on the Aboriginals or bodies who receive the payments, the recipients are not actually called on to make tax payments. Under the withholding tax collection provisions, mining companies, governments and others who make the payments will carry this responsibility. They will be required to deduct withholding tax and forward the deductions to the Taxation Office in the normal way in satisfaction of the tax liabilities of the recipients. (Quorum formed).
As announced in the statement of 20 July 1 978, the withholding tax system is to apply to payments made on or after 1 July 1979. Opportunity is also being taken in this Bill to make two purely technical amendments to replace redundant references to departments that have been abolished. Being substituted are references to the departments that, under current administrative arrangements, have assumed functions of the abolished departments. Detailed explanations of the various provisions of the Bill are contained in a memorandum that is being circulated. I commend the Bill to the House.
Debate (on motion by Dr Cass) adjourned.
Bill presented by Mr Howard, and read a first time.
– I move:
This Bill is complementary to the Bill I have just introduced. It will formally declare the rate of tax payable in respect of mining payments made on or after 1 July 1979 relating to the use of Aboriginal land for mining and exploration purposes. Provisions governing the imposition of a withholding tax on the payments and machinery for collection of the tax by a system of deduction at source are contained in the earlier Bill. The combined effect of the two Bills will be to tax the payments at the rate of 6.4 per cent of the payments, which is effectively the same as a rate of 32 per cent applied to one-fifth of the payments. Details of the provisions of the Bill are contained in the explanatory memorandum being made available to honourable members. I commend the Bill to the House.
Debate (on motion by Dr Cass) adjourned.
Bill presented by Mr Groom, on behalf of Mr Newman, and read a first time.
– I move:
Briefly, the purpose of this Bill is to enable the Australian Atomic Energy Commission to borrow moneys from the Commonwealth or elsewhere and to give security and issue securities in respect of borrowings other than from the Commonwealth, to enable the Treasurer to guarantee repayment by the Commission of moneysborrowed other than from the Commonwealthand to provide that where securities are issued by the Commission, repayment is guaranteed by the Commonwealth. The opportunity is also being taken to make a number of technical amendments to some provisions in Part II of the Act which relate to the procedures, powers and operations of the Commission.
On 25 August 1977 the Government announced its policy that development of the Ranger uranium deposit would proceed on the basis of the Memorandum of Understanding between the Whitlam Government and Peko Mines Ltd and Electrolytic Zinc Company of Australasia Ltd. In this regard, honourable members will recall that in June last year, the Atomic Energy Act was amended to enable the Australian Atomic Energy Commission to participate on behalf of the Commonwealth in a joint venture with Peko-EZ. They will also recall that on 9 January 1 979 the Minister for Trade and Resources (Mr Anthony) signed the agreements and issued an authority under section 4 1 of the Atomic Energy Act to give effect to the Memorandum of Understanding. These documents were tabled in the Parliament on 20 February this year. In his Budget Speech of 1 5 August 1978, the Treasurer (Mr Howard) noted that a certain proportion of the Commonwealth’s share of the costs of developing the Ranger uranium deposits would be raised by the Australian Atomic Energy Commission through borrowings.
The existing provisions in section 27 of the Atomic Energy Act are inadequate to enable the Australian Atomic Energy Commission to borrow moneys on the semi-government market. Specifically the provisions do not authorise the Treasurer to guarantee borrowings by the Commission, and without such a guarantee the Commission would be unable to borrow within the maximum rates agreed by Loan Council for semi-government borrowings. The provisions of the Bill are designed to provide power for the Commission to issue public securities and to provide guarantee powers thereto. Clause 6 of the Bill amends a number of financial provisions of the existing Act In relation Lo borrowings by the Commission the amendments, which are in line with borrowing powers of other Commonwealth authorities, provide that the Commission may borrow moneys from the Commonwealth or elsewhere and may give security and issue securities in respect of borrowings. New section 30 sub-sections (5) and (6) enable the Treasurer to guarantee repayment of such borrowings and payment of interest. Provision is also included in new section 28 sub-section (2) for investment of moneys of the Commission not immediately required for the purposes of the Commission.
Division 3 of the Act concerning staff of the Commission is repealed by the Bill and replaced with staffing provisions to bring the Act into line with more recent provisions applying to the staff of statutory authorities. These provisions retain the co-ordinating role of the Public Service Board in relation to terms and conditions of staff employed by the Australian Atomic Energy Commission. In addition to amendments to the borrowing powers of the Commission which, as mentioned earlier, are contained in clause 6 of the Bill, that clause also makes technical amendments to a number of financial provisions of the existing Act concerning payment to the Commission of moneys appropriated by Parliament, use of bank accounts, application of moneys by the Commission, preparation of estimates, keeping of accounts and audit of accounts.
– I raise a point of order, Mr Deputy Speaker. I draw your attention to the disgraceful state of the House.
-The honourable member for Hughes is not required to raise a point of order. He is entitled to rise to his feet and immediately draw the attention of the Chair to the state of the House without engaging in debate.
- Mr Deputy Speaker, I draw your attention to the disgraceful state of the House.
– Order! A quorum is required. Ring the bells.
The bells being rung-
– I raise a point of order, Mr Deputy Speaker. I wish to draw your attention to the fact that there are only four members of the Opposition in the House.
-There is no point of order. The Minister will resume his seat. (Quorum formed)
– Proposed section 30B provides for an increase in the value of contracts from $50,000 to $200,000 above which ministerial approval is required. Other technical amendments will be explained as necessary in the Committee stage. I commend the Bill to the House.
Debate (on motion by Dr Cass) adjourned.
Bill presented by Mr Groom, on behalf of Mr Newman, and read a first time.
– I move:
The purpose of the Bill now before the House is to give effect to the Government’s undertaking to restructure the Pipeline Authority. The Bill varies several functions of the Authority prescribed in the Act. Firstly, several of the present functions considered inappropriate for the Authority are to be deleted. With the passage of the Bill, the Authority will no longer have unlimited power to buy and sell petroleum nor will it be required to ensure: Continuity of supplies of natural gas that is free from impurities; uniform gate-valve delivery prices throughout Australia; the retention and processing in Australia of condensate, petroleum gas and other substances derived from natural gas; and the control of petroleum reserves.
Secondly, the Bill clarifies the role of the Authority in the construction of pipelines. In future, any proposed pipeline construction project will require the specific authorisation of the Parliament. The Bill for the construction of a new pipeline will contain details of the route, limits of deviation and cost estimates. Thirdly, the Authority’s advisory role is being clarified in the
Bill. The Authority will be empowered to provide advice with respect to the conveyance or distribution of petroleum within Australia by means of pipelines to the Minister and, as approved by the Minister, to other bodies and people. This function will ensure that the Government has available advice from a body that has experience in the construction, maintenance and operation of a pipeline and that, in appropriate circumstances, advice can be provided to other organisations and individuals.
The Bill also amends the provisions on membership of the Authority. The Authority will continue to have five members but in future the Secretary to the Department of National Development will not be a member ex-officio. Provision is made for the appointment of a Deputy Chairman. The opportunity is also being taken to bring a number of provisions in the Act into line with provisions in other legislation establishing statutory authorities. In particular, the Bill places the Authority in a statutory relationship with the Public Service Board on matters relating to the staff of the Authority in line with government policy directed towards similar working conditions for all who are in government employment. The proposed amendments to the financial provisions of the Act will bring the legislation more into line with comparable provisions in other statutory authority legislation.
In conducting its business, the Authority is required to act in accordance with sound commercial principles and is funded only by way of its own earnings and borrowings on which it is required to pay interest. The Authority is generating sufficient cash flow to meet the costs of its day-to-day operations and also make a contribution towards its interest commitments to the Commonwealth Government. In brief, within a short time following completion of the MoombaSydney pipeline the Authority has become a net contributor to the Budget. I commend the Bill to honourable members.
Debate (on motion by Mr Uren) adjourned.
Bill presented by Mr Fife, and read a first time.
– I move:
The purpose of the Bill now before the House is to give effect to the Government’s decision to provide assistance to the manufacture in Australia of dental alloy. Following advice and recommendation from the Temporary Assistance Authority in its report No: 46 of 5 February 1979 entitled ‘dental alloys’, it has been decided to accord assistance by way of a scheme providing for payment of bounty at the rate of $15 per kilogram by weight of dental alloy which, during the period to which the Act is to apply, is manufactured at registered premises and sold for use in Australia. The bounty, which is to be payable from 22 December 1978, is intended by the Government to accord short term assistance to Australian manufacturers pending an examination by the Industries Assistance Commission of the long term assistance requirements of the industry. Because of the short term nature of the proposal, provision has been made for the scheme to cease on 21 December 1979 or such later date as is fixed by proclamation and for the amount available for payment of bounty not to exceed $45,000 annually. I commend the Bill to honourable members.
Debate (on motion by Mr Uren) adjourned.
APPROPRIATION BILL (No. 3) 1978-79 Second Reading
Debate resumed from 2 May, on motion by Mr Eric Robinson:
That the Bill be now read a second time.
Upon which Mr Willis had moved by way of amendment:
That all words after “That” be omitted with a view to substituting the following words: “whilst not opposing the pre* visions of the Bill, the House-
condemns the Government’s failure to adopt an economic strategy designed to reduce unemployment;
deplores its failure to fulfil its promises to reduce inflation and interest rates, and notes with alarm that both are now increasing;
rejects the Government’s determination to place the blame for its economic failures on wage earners, trade unions and the Conciliation and Arbitration Commission, and
expresses its disgust at the Government’s perverted and wasteful expenditure priorities as exemplified by its allocation of substantial funds in this Bill to indulge the travelling comfort of the Ministry whilst increasing the deprivation of the underprivileged “.
Mr DEPUTY SPEAKER (Mr Millar)Before the debate is resumed on this Bill I would remind the House that it has been agreed that a general debate be allowed covering this Bill and Appropriation Bill (No. 4) 1978-79.
-I intend to confine my remarks to the matter of public importance which was before the House today, that is, the failure of the Government to provide an effectively administered system of public funds for urban development by State governments.
-Order! The honourable member for Reid has considerable latitude in speaking to the question before the House and it is irrelevant whether he reconciles his remarks with the contents of the matter of public importance but he cannot properly identify his remarks as relating to a question that has been dealt with by the House.
– As you have just said, Mr Deputy Speaker, it can be a general debate. I want to draw the attention of the House and the people listening to this debate to the fact that earlier today the government of the day gagged a debate dealing with the incompetence and dishonesty of the Victorian Government. I will confine my remarks to that extent. Four main grounds, which I will set out, form my reasons for criticising the Victorian Government. The first is the misuse of Commonwealth funds by the Victorian Government and its improper use of taxpayers money channelled through the Commonwealth-State Housing Agreement and the Urban Land Council. Secondly, the breach of the agreement concerning the Urban Land Council entered into by the Commonwealth and Victorian governments. Thirdly, the irresponsible policies of the Hamer Government that have contributed to rising land prices and led to inflated housing prices and a rise in the underlying rate of inflation generally. Fourthly, the lack of adequate planning of the urban environment and the consequent immediate and long term problems that are caused. The wasteful use of public funds channelled through the Commonwealth-State Housing Agreement and the Urban Land Council is only one example of the corruption of the Hamer Government. Honesty in government has been rated as the most important issue in the forthcoming Victorian election. Dishonesty, incompetence and the corrupt squandering of public funds have been characteristic of the performance of the Hamer Liberal Party Government in Victoria -
– I rise to a point of order. Is it correct for a member of the Opposition or any other member of this place to criticise another government in this way, particularly -
– Order! The honourable member for Bendigo has indicated the nature of his point of order. There is no substance to the point of order.
– I am putting forward an argument as to the existence of corruption and incompetence in the Victorian Government. Over the past three years a lot of evidence has come out in the Press, the Parliament and the courts demonstrating the corruption of senior individual members of the Hamer Government. The report of inquiry by Sir Gregory Gowans stated that ‘there were reasons for concern, some weaknesses in the safeguards and controls and some instances of both negligence and outright dishonesty’. That was not said by me or another member of the Opposition. It was said by Sir Gregory Gowans, who inquired into the land scandals in Victoria.
Two former members of the Liberal Party, Francis and Jennings, have made accusations and counter-accusations. The Premier of Victoria, the former Minister for Housing and the Minister for Local Government have all been shown to have performed incompetently and irresponsibly and sometimes in collusion with greedy land speculators and developers. The Hamer Government has served the interests of its powerful business friends very well. It has used public funds to serve their private interests. In doing so it has totally disregarded the needs of the majority of the people of Victoria. In doing so it has caused problems in the Melbourne metropolitan area, undermined attempts at urban planning, boosted land prices beyond the reach of middle and low income earners and restricted the provision of social services.
Lest there be any doubts about that, I refer honourable members to an article in this morning’s Melbourne Age about a report leaked from the Federal Department of Housing and Construction. It is not simply an abuse of power by individuals that causes corruption. It is the whole orientation of Liberal governments to the interests of the wealthy, the spivs and the speculators. It is the logic of the system that promotes greed and encourages some people to make money out of the hardship of others that is the basis of the dishonesty and corruption that has been exposed in the performance of the Victorian Hamer Government.
- Mr Deputy Speaker, could I ask your advice? Is it a fact that we are talking on the Appropriation Bill and an amendment put before us by the Opposition which does not in any way relate to housing or land? Is that correct?
-The honourable member has made his point. The honourable member will resume his seat. I will rule on the point of order. Traditionally the Bills before the House provided virtually total latitude for honourable members to speak on matters of interest to themselves. In that respect, I dismiss the point of order.
– I want to state clearly the whole question, even though honourable members are rising in this House to try to stifle me from expressing my view to expose the corruption of the Hamer Government. Both are members of the Liberal Party- the honourable member for Hotham, a Liberal member of Parliament from Victoria, and the honourable member for Bendigo (Mr Bourchier), a Liberal member of Parliament from Victoria. What have they got to hide? Why will they not give me a fair go in the limited time I have to speak? Nine years ago in this House on 19 March 1970 I called on the Commonwealth Government to co-operate with the State and local government authorities to defeat the land speculators and usurers who are exploiting young people.
Motion ( by Mr Bourchier) proposed:
That the question be now put.
A division having been called for and the bells being rung-
– You are the biggest cheat the Parliament has ever seen. Call yourself a whip! You could not get a job serving drinks in a massage parlour.
– That is an idiotic remark by an idiotic person. That remark by the honourable member for Melbourne Ports should be withdrawn.
– It is not an unusual state of affairs that in the general confusion that attends the summoning of honourable members for a division remarks made somewhat irresponsibly from both sides of the House do not come to the notice of the Chair.
– If it is to be reported in Hansard I wish to have it retracted.
That the question be now put. The House divided. ( Mr Deputy Speaker-Mr P. C. Millar)
Question so resolved in the affirmative. Question put:
That the words proposed to be omitted (Mr Willis’ amendment) stand part of the question.
The House divided. (Mr Deputy Speaker Mr P. C. Millar)
Question so resolved in the affirmative. Original question resolved in the affirmative. Bill read a second time.
Leave granted for third reading to be moved forthwith.
Motion (by Mr Fife) proposed:
That the Bill be now read a third time.
– I wish to protest at the way in which the business of the House is being conducted.
Motion (by Mr Fife) proposed:
That the question be now put.
– This has been one of the finest examples-
-. . . of jackboot parliamentarianism I have seen in 20 years.
-The honourable member for Wills will resume his seat.
Question put. The House divided. (Mr Deputy Speaker-Mr P. C. Millar)
Question so resolved in the affirmative. Original question resolved in the affirmative. Bill read a third time.
Debate resumed from 5 April, on motion by Mr Eric Robinson:
That the Bill be now read a second time.
– I was speaking on the second reading of the previous Bill about the corruption of the Hamer Government in Victoria.
Motion ( by Mr Fife) put:
That the question be now put.
The House divided. ( Mr Deputy Speaker-Mr P. C. Millar)
Question so resolved in the affirmative.
-Order! The honourable member for Newcastle is not occupying his proper place.
- Mr Deputy Speaker, I understand that I can take a point of order. Does the result of that division mean that 22 Government members are absent from the chamber?
Opposition members- Shame! Shame!
Mr DEPUTY SPEAKER (Mr MillarOrder! The House will come to order. The question now is: ‘That the Bill be now read a second time ‘.
Question resolved in the affirmative.
- Mr Deputy Speaker, I ask that my dissent be recorded in accordance with the Standing Orders.
-The honourable member for Wills has been heard.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Motion (by Mr Fife) proposed:
That the Bill be now read a third time. Mr UREN (Reid) (3.18)-The expenditure before the - Motion (by Mr Fife) put: That the question be now put. The House divided. (Mr Deputy Speaker-Mr P. C. Millar)
Question so resolved in the affirmative. Original question resolved in the affirmative. Bill read a third time.
Debate resumed from 8 March, on motion by Mr Fife:
That the Bill be now read a second time.
– by leave- I wish to inform the House that the Government will move several minor amendments to the Customs Amendment Bill during the Committee stage. The amendments are in the course of preparation at present. I will ensure that all members of the House have copies of the proposed amendments at the earliest possible time. Briefly, the amendments relate to:
Date of Operation
It is proposed to enable the provisions of this Bill relating to personal searches by medical practitioners to be brought into operation at a later date than the date on which the rest of the Bill will come into operation. This is particularly to allow arrangements to be made with State governments concerning the use of State magistrates.
Magistrates’ Orders of Personal Search
The Customs Amendment Bill as presently framed gives a person the right to go before a magistrate in relation to a Customs or police request for a personal search, before undergoing that search. The proposed amendments will clarify the procedure under which the magistrate may order a search of a person.
Certificates of Medical Practitioners
The proposed amendments will provide for a medical practitioner to sign a certificate setting out the results of an internal body search conducted by him and that certificate will be evidence before the courts.
– The Opposition will move amendments to the Customs Amendment Bill 1979. Those amendments are available for circulation. We would have appreciated it if the Government had given us a chance to look at the amendments to which the Minister for Business and Consumer Affairs (Mr Fife) adverted. As we do not have them before us we will reserve our comments on them until they are available. We are also of the opinion that this is an appropriate piece of legislation to go to a legislation committee. All matters could then be discussed in detail.
The Customs Amendment Bill deals exclusively with the question of drug offences and the enforcement of the law in relation to them. It is important that we address our remarks to the Bill as drafted. The amendments which the Opposition will put forward are of great importance. They deal not only with penalties but also with the treatment of offenders and, in particular, the rights of privacy of the individual. I emphasise strongly that i e Opposition supports the thrust of the Bill and -ill not oppose its second reading.
The comments we have to make on this legislation are n< t nit-picking, nor are they designed to weaken t ie legislation. We believe that it can be improve J on the scores of both effectiveness and civil liberties. I make the point that the sledge-hammer approach is not always the best approach 1 am not accusing the Government of adopting the sledge-hammer approach in relation to this legislation, but I do not believe that it has shown sufficient sensitivity to some of the issues involved in the problem. We will cooperate with all reasonable steps open to the Government to alleviate the drug problem which is having such a devastating effect on many Australians, particularly young Australians. One must ask why this legislation has been introduced at this particular time; that is before the Royal Commission under Mr Justice Williams makes its report. The Minister in his second reading speech said:
As I announced earlier this year, the Government was not going to await the findings or the Royal Commission before taking any positive initiatives. The Royal Commissioner, Mr Justice E. S. Williams, fully supported the Government in this approach.
There is no mention in the second reading speech of the views of Mr Justice Williams as to this particular legislation. The approach being adopted by the Government seems, at the very least, to be pre-emptive of the Royal Commission. A distinction which is often made in relation to drugs is that between what are known as hard drugs and soft drugs. Many people feel that it is a distinction without a difference, which should not be made- that the so-called soft drugs are simply the point of entry into the nightmarish world of hard drugs. Other people seek the decriminalisation of possession of cannabis on the grounds that it has no proven harmful effects. On this question, I think that the verdict must be that which applies to the Scottish courts: Not proven.
To sanction legislatively a drug which has not been proved to be safe would, in my view, be irresponsible. However, it is quite undesirable that people should be given lengthy jail sentences for using a drug which they see as no more harmful than alcohol or tobacco. Most users of marihuana would see it as considerably less harmful. Most users of marihuana are also able to differentiate between it and drugs which have demonstrably harmful effects. Some, in my view, cannot and are easily led from the relative safety of cannabis to the more dangerous drugs. However, it must be recognised that it is these people who are most likely to switch to harder drugs if law enforcement authorities concentrate almost exclusively on the suppression of the marihuana trade. Our major effort should be on the harder drugs where the lives are being lost.
The legislation makes a distinction between cannabis and hard drugs by providing differential penalties for cannabis and hard drugs in relation to trafficable quantities. However, it places cannabis resin in the hard drugs category. In our view, cannabis resin is not a drug which is a killer and we believe that the same penalties should apply as apply for cannabis itself. The penalty is not insubstantial- 10 years, with or without a $4,000 fine. I also point out that the trafficable quantity for cannabis resin is one-fifth of that which applies for cannabis. We will be moving in the legislation committee an amendment to provide that the penalties for offences relating to trafficable quantities of cannabis resin should be the same as those for cannabis.
The other distinction often made in relation to drugs is between drug users and drug pushers. In my view this is an unrealistic distinction because it ignores the fact that many drug addicts are forced into the position of drug pushers in order to finance their habits. It is quite inappropriate to sentence an addict to a long period of imprisonment because he also happens to be a drug pedlar. Of course, as a drug pedlar, he is bringing to others a way of life which is often worse than death itself. But the fundamental cause is his own addiction, which no threat of heavy penalties will cure. Incarceration is never an answer. In any event, he is usually the easy person to catch. Only by treatment can his problems be solved.
Naturally, in legislation such as this, arbitrary distinctions must be made. The Customs legislation uses such arbitrary distinction by providing for offences in relation to firstly, trafficable quantities and secondly, commercial quantities. If a person has in his possession more than the trafficable quantity of a particular drug, he is presumed to have been engaged in commercial dealing unless he establishes the contrary on the balance of probabilities. Thus, the distinction between users and pushers who are not users is not always maintained. Everyone is presumed to be a pusher, unless he can establish the contrary.
In relation to commercial quantities, the presumption of commercial dealing is irrebuttable. In view of the enormous amounts which are involved in the definition of commercial quantities, that is not a proposition with which we would quarrel. However, certainly at the lower ranges of the amounts comprised in the definition of trafficable quantity, a person could have in his or her possession an amount which fell within the definition of trafficable quantity, yet was intended for private use. If that person could prove that the possession of the drug was not for commercial dealing, he or she would face a vastly reduced penalty- two years instead of 25 years. The burden of proof lies on the defendant, and that could be an extremely difficult burden for the defendant to discharge. Accordingly we are particularly concerned about proposed section 235 (2) (c) (ii)- a citation which reflects the complexity of the legislation. The provision to which I refer provides that: . . . where the Court is satisfied-
The effect of this provision is that a person can be sentenced to life imprisonment for a second offence for possession of a traffickable quantity. I would also point out that the effect of proposed sub-section (3 ) is that there is an irrebutable presumption that possession of goods was for the purpose of commercial dealing if that defendant has previously been convicted of an offence involving a traffickable quantity. The first offence need only be possession; it need not be commercial dealing.
Let us take an example. A person could have been convicted of an offence in 1976 for possession of 30 grams of cannabis for personal use. Until 1977 the traffickable quantity for cannabis was 25 grams. Since 1977 it has been 100 grams. That person could be convicted in 1980 of possession of 130 grams of cannabis for personal use. The result is that he faces a sentence of life imprisonment. That is quite absurd. These enormous penalties should be reserved for the big drug pusher, not for the habitual user. At the Committee stage, we will be moving for the deletion of sub-paragraph (ii) of proposed section 235 (2)(c).
The other matter which concerns us in relation to proposed section 235 is that with the new penalties for possession of commercial quantities, which are 1,000 times the traffickable quantities, the scale of penalties has become rather lopsided and bears a quite absurd appearance. As a result of the 1977 amendments, the maximum penalties for dealing in traffickable quantities were made 25 years imprisonment and/or a $ 100,000 fine. The maximum penalty for dealing in commercial quantities is life imprisonment, with no option. In realistic terms, there is very little difference between a life sentence and a 2 5 -year sentence. We are not opposed to life sentences for dealing in commercial quantities. Nor would it be reasonable to suggest that a person dealing in just under a commercial quantity- for example, 1.4 kilograms of heroin- should be able to escape a severe penalty. Yet the anomaly of the situation is that the same penalty is applicable to a person convicted of possession of 2 grams of heroin who is not able to prove that his possession was not for the purpose of commercial dealing. The person in possession of 2 grams of heroin is almost certainly a user; the person in possession of 1.4 kilograms is almost certainly not. He is the person who reaps the benefit of the user’s habit. To treat them the same is to miss the whole nature of the drug trade.
At the Committee stage, we will be moving amendments to provide that where a person is convicted of an offence relating to traffickable quantities of a narcotic, different penalties will apply if the quantity is less than 1 /200th of the commercial quantity or five times the traffickable quantity. The penalties which would apply would be 40 per cent of the penalties which currently apply for dealing in traffickable quantities. That would be 10 years or $40,000 for narcotic substances other than cannabis and 4 years or $2,000 for offences involving cannabis. Without such a provision, there is just too great a range at which people can be sentenced to 25 years imprisonment. It is all very well to say that the discretion should be left to the courts. The courts are obliged to give effect to the parliamentary intent, which appears under proposed section 235 to be that all offences involving a traffickable quantity should be severely punished. It may give some people in the Parliament a warm feeling all over to see anyone involved in drugs being sentenced to long periods of incarceration. It may satisfy their consciences. However, incarceration of drug users will not solve the problem. We must be discriminating in this area or we will fool ourselves that by providing horrendous penalties we are solving the problem. I hope that when the royal commission under Mr Justice Williams brings down its report, it will make positive recommendations about how best drug offenders who are also drug addicts, or even simply drug users, should be treated.
On the question of penalties, I draw the attention of the House to an article in the National Times by Dr Alfred McCoy on 7 April 1 979. The writer of that article draws on the experience of the United States, particularly the State of New York, in asserting that increased penalties are not the answer and can be counter-productive by lessening the chances of conviction. He also points out that arbitrary limits such as trafficable quantities and commercial quantities can be easily evaded by dealing in just under the prescribed minimum amount. He also points out that in the United States harsh penalties have led to the use of j juveniles as pushers. That is something that we must ensure does not occur in Australia.
One of the matters which causes us some concern is that relating to telephonic interception and other forms of surveillance involving the use of electronic listening devices. We are not opposed as such to the use of these devices. To oppose the use of modern technology by police would be quite unrealistic and quite absurd. However, there is a necessity for safeguard provisions to prevent the misuse of such technology. In its report on criminal investigation in 1975, the Law Reform Commission dealt with the issues raised by the subject of electronic surveillance. At page 107 of its report it stated:
First, we see no distinction in principle between telephone tapping and other forms of surveillance involving the use of electronic listening devices. Secondly, we think that the police ought not to be denied all the advantages of modern technology in fighting crime which itself uses it. Monitoring of conversations without the consent of either party ought to be permitted in certain narrowly defined circumstances. Such authorisations should only be granted by a federal judge or a judge of the Supreme Court of a State or Territory, and should be available only in respect of very serious offences. Such judicial authorisation should only be available when other investigative procedures have been tried and failed or would be impracticable. The authorisation should state with great particularity the offence, persons and places that are the subject of the surveillance. It should contain such other specific terms and conditions as the judge considers advisable in the public interest and should be valid for a period not exceeding ten days.
I make the point that none of the preconditions and safeguards considered by the Law Reform Commission to be necessary for the use of electronic surveillance has been written into this legislation, or the auxiliary legislation known as the Telecommunications (Interception) Bill. The Opposition is prepared to countenance the use of bugging devices on ministerial warrants in relation to the Australian Security Intelligence Organisation subject to the safeguards that we have outlined in the Senate debate which is now taking place. But we are not prepared to accept ministerial warrants in relation to this legislation, or the Telecommunications (Interception) Bill, in relation to offences against the Customs Act. The ASIO is not a law enforcement agency; it is a security service, and the principle of ministerial responsibility and accountability is appropriate to that area. We must, of course, ensure that the Minister is responsible and accountable. However, very different considerations apply here. The use of warrants to install bugging devices should not become an excuse for fishing expeditions. They should be used only to prove offences against the Customs Act which would be otherwise likely to go unpunished because of lack of evidence.
The use of bugging devices only by judicial warrant is important for the protection of civil liberties; it also is a necessity to ensure the effectiveness of law enforcement in the narcotics area. If Customs agents are given a virtual carte’ blanche to install listening devices without first having to justify the necessity for the issue of a warrant, there is a very real danger that they will become over-reliant on them and that the limited resources of Customs will be misallocated. Telephone tapping and electronic surveillance devices can be a useful supplementary law enforcement tool; overuse will result in a threat to civil liberties, and a decline in the effectiveness of law enforcement in the narcotics area generally.
The amendments that we will be proposing at the Committee stage will provide that warrants for electronic surveillance equipment may be issued only by a judge with the status of a Supreme Court Justice or Federal Court Justice. Secondly, that a warrant should be issued only if the judge is satisfied that a person has committed, or is reasonably likely to commit, an offence and that the use of a listening device is likely to assist customs officers in their inquiries and that other methods of investigations have been tried and failed, or would be impracticable or unlikely to succeed and that given the seriousness of the offence, or likely offence, the use of a listening device would be justified. Thirdly, that in emergency situations, warrants may be issued over the telephone by a judge. Fourthly, that warrants should be limited in their duration to 30 days.
In this Bill, warrants may be of 90 days duration. The Law Reform Commission in its Report on Annual Investigation recommended that warrants should not be of longer than 10 days duration. Clearly, 6 months is far too long a period for the duration of a warrant. I am prepared to concede that at times 10 days might be too short a period. The period of 30 days is already that which applies to mail interception under the Australian Security Intelligence Organisation Bill and we will be moving in Committee an amendment to provide that it is to be the period which is to apply to warrants issued for listening devices under this Act, and the Telecommunications (Interception) Act in relation to Customs offences. We are concerned that the ASIO legislation and the Customs legislation were introduced as a package on the same day.
This is likely to give the public the wrong impression that the ASIO legislation was in some way related to drugs.
The ASIO legislation and the Customs legislation raise very different sorts of considerations. We are prepared to support the use of phone taps and listening devices by both ASIO and Customs, but according to quite different safeguards. Despite all the rhetoric about how effective bugging and phone tapping are going to be, one is forced to wonder whether the real motive behind it is not the fact that it does involve a potentially vast infringement of civil liberties and therefore the certainty that it will create a headline. If it will prove effective, then we will gladly allow the Government its headlines. However, it is a remarkably singular approach to the question of law enforcement.
The basis of any large-scale operation in narcotics is financial reward. The scope for amassing huge sums of money by dealing in narcotics is immense. People in Australia are doing precisely that. However money is laundered, the result for those at the top of the distribution tree- surely the people we must want to catch- is that their personal fortunes grow. That money must show up somewhere, whether it be in expensive houses, cars, or bank accounts. It should also show up in tax returns. If that income does not show up in tax returns- and one would normally expect that it would not- then the difference between the disclosed income and the accumulated wealth would tend to raise a reasonable suspicion that the money had been dishonestly gained. At the New South Wales royal commission into drugs, many witnesses were asked to explain how they had accumulated huge wealth or appeared to have enormous incomes. The answers they gave were invariably that they had spectacular success in gambling. When asked to detail the bets they had made, they were unable to do so adequately. Totalisator and Totalisator Agency Board records as well as the records of bookmakers are very specific and can readily identify whether a particular bet was made.
It is not enough to simply say that one has bet $ 1,000 at 25/ 1 on horse A with bookmaker X, or that one has had 200 units on the winning TAB double at the Elizabeth Street Branch of the TAB. That can be easily checked and either verified or proved false. However, we should not need a royal commission to be able to get to the truth as to who is involved in the drug trade. A great deal of information exists on income tax records, either because of what they reveal or because of what is omitted by the taxpayer. That would be of immense value in law enforcement. I am certainly not suggesting that Commonwealth or State police should be given carte blanche to wade through the records of the Australian Taxation Office on fishing expeditions. In fact, I do not believe that the Commonwealth or State police should be given direct access to the records of the Taxation Office at all. However, subject to strict safeguards, I see great advantage in the Commissioner of Taxation being given the discretion to provide information to Commonwealth and State Attorneys-General.
The safeguards that would be required would be firstly, that the Commissioner would have to be convinced that reasonable grounds existed for the request for the information. Secondly, the taxpayer would have to be notified that the Commissioner had released information to the Commonwealth or a State Attorney-General and, thirdly, there would need to be safeguard provisions preventing the information from being used other than in the course of the investigation of a crime and being published other than in the reporting of a judicial proceeding for a crime. The right to privacy can adequately be protected without the need for blanket prohibitions such as that contained in section 16 of the Income Tax Assessment Act. Such a provision protects not the right to privacy of the overwhelming majority of Australian taxpayers, but rather protects those people with huge incomes or enormous accumulated wealth, which evidence suggests has not been gained honestly. The major amendment being made by this legislation- at least in terms of length- is the insertion of a new division 3 of Part XIII.
The Opposition has carefully considered this matter and we support the basic thrust of these amendments. It is money which is the raison d’etre for the narcotic trade, and it is perfectly proper that the Commonwealth should inflict pecuniary penalties on those who make money out of the misery and in some cases death of others. The greater a person’s involvement in the drug trade, the greater the potential pecuniary penalty.
The fact that a person could be bankrupted by a pecuniary penalty for large-scale dealing in drugs does not cause us to shed a tear. I hope that a few people who are kingpins in the drug distribution chain are caught and are bankrupted. This might make others think twice before they attempt to make this tainted money. We also support the fact that on the application of the Minister or the Comptroller for a pecuniary penalty, an ex parte order can be sought so that the assets of the defendant can be frozen. Such ex parte orders are to some extent a negation of the principle that a person is to be considered innocent until proved guilty. However, if during the proceedings the defendant was free to dispose of his assets, the court might well find that there were no assets left to deal with. This applies particularly to the disposal overseas of assets as some control could be exercised over the disposal of the assets within Australia. This however could be a cumbersome process and could involve questions of priority between the Commonwealth and innocent purchasers of the defendant’s assets.
In view of the undesirability of further litigation to try to get hold of the defendant’s assets after disposal which could certainly affect innocent parties, and because of the possibility of defendants being able to defeat the legislative intent of the provisions relating to pecuniary penalties, we support the provisions enabling the freezing of assets. We are not however able to support the alteration of the standard of proof beyond reasonable doubt to proof on the balance of probabilities. It needs to be made clear that despite the appearances that these provisions have of being civil remedies against drug traffickers, their consequences are clearly criminal. We can understand the possible difficulties of proving offences beyond reasonable doubt. We can also to a certain extent sympathise with the reasons why the Government has introduced a lower standard of proof. However, we cannot accept the proposition that the end justifies the means. The reason for the standard of proof beyond reasonable doubt in criminal cases is not the protection of the guilty; it is to protect the innocent. Too much can be made of the difficulty of convicting drug czars if the standard of proof applied is the normal criminal standard. It is our view that the questions which are pre-conditions to the ordering of a pecuniary penalty should be determined by a jury; that is, that the person has engaged in a particular prescribed narcotics dealing or that he has engaged in a course of prescribed narcotics dealings over a particular period, these questions should be determined by a jury.
Juries are not made up of foolish people. They are made up of the average person who has a lot of commonsense- the type of men and women that we all know, who live in our streets, travel on public transport and who can make a fair judgment of a situation. These people are always reasonable in their judgment. I do not believe that given the increased powers which are being given to Customs officers in the enforcement of narcotics offences it would be impossible to get a finding beyond reasonable doubt. The question boils down to whether one is prepared to throw out the window a principle which is a cornerstone of our criminal law system, which is designed to protect the innocent and make the Crown do its job. It can be somewhat misleading to talk in terms of figures, but in very rough terms proof beyond reasonable doubt is the best possible standard- a 99 per cent standard. But proof on the balance of probabilities is a mere 5 1 per cent standard. We cannot accept the balance of probabilities standard as reasonable, given the increased powers of Customs officers. Accordingly we will be moving amendments to this Bill at the legislation committee stage to provide for jury trial and proof beyond reasonable doubt on the threshold question which is whether a person has been involved in narcotic dealings for which a pecuniary penalty is payable.
The issues raised by this legislation are very complex, both in the legal sense and in relation to social consequences. The amendments which the Opposition will be moving are also necessarily complex. I would think that government members would have many comments to make, not only on the broad thrust of the Bill, which they can do at the second reading stage, but also on the detail of the Bill. The Minister referred to the extreme complexity of the Bill. I am pleased therefore that the Minister has given notice to the House that after the second reading the Bill will be referred to a legislation committee. We commend him for that. The Opposition does not oppose the second reading of the Bill but we give notice that we will be moving amendments at the legislation committee which we believe will improve the Bill. These amendments are already available for perusal.
-I am sure that the Deputy Leader of the Opposition (Mr Lionel Bowen) would not like to be seen as the drug traffickers’ friend. But in seeking to weaken this legislation before the House- the Customs Amendment Bill- through proposed amendments, he certainly gives the appearance of being just that. The Deputy Leader of the Opposition in his remarks attempted to draw a distinction between a trafficable quantity of drugs for which a penalty of 25 years is provided and a commercial quantity of drugs for which a life penalty is provided as defined in the legislation. He implied in his remarks that those involved in trafficable quantities were most likely to be addicts, whereas those involved in offences with regard to commercial quantities were most definitely traffickers. In fact, the evidence suggests that both these quantities of drugs are most likely to be held by traffickers, that is those profiteering from this scurrilous trade. In fact, addicts would hold significantly lower quantities for which, under existing legislation, lower penalties already apply.
In support of his case the Deputy Leader of the Opposition also drew on an article published in the National Times written by Dr Alfred McCoy. The fact is that Dr McCoy is recognised by very few agencies or authorities either within Australia or overseas as an expert on the drug scene.
– He is not the real McCoy.
– He certainly is not the real McCoy. Dr McCoy’s techniques include hypothesis on information gained from government officials at various levels or from Press articles and then making public statements, particularly in the Press, and following that, seeking public or official comment or debate on them. Apart from that approach the article he wrote in the National Times is significantly exaggerated. Certainly Dr McCoy would have great difficulty in substantiating a number of the statements contained in that article.
The article also contains substantial errors indicative of the inadequate research Dr McCoy has undertaken in respect of the legislation. For example, his article states:
Those convicted of conspiracy to import commercial quantities will receive a mandatory life sentence on the first offence.
Later he says:
A second conviction for dealing in trafficable quantities will face a mandatory life sentence on a second conviction.
However the legislation does not impose a mandatory life sentence for any offence. All drug offences covered by the Customs Act involving a commercial quantity and second offences involving trafficable quantities carry a penalty of imprisonment for life or for such period as the court thinks fit. So clearly, that demonstrates the inadequate research which Dr McCoy has undertaken in regard to this Bill. Dr McCoy in the article also asserted:
The use of the drug issue to grant ASIO telephone taps is not therefore a promising precedent.
The Australian Security Intelligence Organisation has always had authority to tap telephones. The amendment in relation to the tapping of telephones for drug offences in this Bill has no relevance to ASIO powers. Generally speaking the article is extreme, without balance or objectivity. In typical Dr McCoy fashion it makes statements and develops hypotheses with which few people would agree.
The legislation which we are now debatingthe Customs Amendment Bill- was introduced while I was absent leading the Australian delegation to the Commonwealth Countries Conference on Government Policy on Youth Affairs held at Chandigarh in India early in March. I had just spent several days in Thailand on the way to India investigating at first-hand the problem of drug trafficking between Thailand and Australia and particularly the sad evidence of increasing involvement of young Australians in that horrific trade. As a result of those investigations, I had reached the conclusion that, among other things, much stiffer penalties were required in Australia for drug trafficking offences. Stiffer penalties are among several significant provisions in this Bill. I was therefore glad to hear the news while in India that this Bill had been introduced into the Parliament. This legislation is essential to complement the work Australia and other nations are undertaking internationally to combat the major social problem of drug abuse. After gathering first-hand that information about trafficking problems internationally, as I said, I became convinced that tougher measures were required within Australia to complement our international co-operation to stamp out this dreadful trade which profiteers on a massive basis from the destruction of the lives and ultimately the death of many young people. This Customs Amendment Bill adopts that necessary tougher approach. While we should all have the greatest concern and sympathy for the victims of the drug traffic- those who become addicted to narcotics- there can be only the strongest condemnation for the cynical, immoral and greedy traffickers of these goods who thereby accumulate vast fortunes. This legislation is directed at those unscrupulous operators and not at their victims who are being actively assisted by government programs in health, education and welfare.
The legislation has several prongs directed at drug traffickers. Most importantly, the legislation increases the current penalty of 25 years to life imprisonment for offences involving what is denned as commercial quantities of narcotics. In the case of heroin this is defined as an amount of 1.5 kilograms. The maximum penalty of life imprisonment will be possible for a first offence involving commercial quantities of narcotics. The legislation also provides a life sentence for a second offence involving what is defined as a trafficable quantity of narcotics- in the case of heroin, 1.5 grams. These increased penalties are essential, not only from the point of view of retributive justice- acknowledging the tremendous destruction and ultimate death caused to young people who get hooked on the products of this trade- but also as a deterrent. Clearly traffickers regard their occupation as a business proposition. Therefore, if penalties are made sufficiently severe traffickers will measure those penalties against the rewards they receive from the trade. Sufficiently severe penalties will therefore discourage people from their involvement in drug trafficking. I believe that the courts must apply the maximum penalty on most occasions once this legislation passes the Parliament. To assist in that regard, State governments must also upgrade their penalties in the areas of responsibility they have for drug offences. I was glad to see this week that the Federal Court upheld a Crown appeal in the Tait case and increased the penalty applied to that individual. Once this legislation is passed the Government must monitor the sentences handed down by the courts under it. If those sentences prove to be too lenient I believe the Government should subsequently introduce further amendments to ensure that stiff sentences are handed down by the courts.
A further provision of the Bill linked to increased penalties is the capacity it gives the courts to freeze any profits or property derived from illicit drug trafficking and impose a pecuniary penalty equal to those ill-gotten gains. Quite often those involved in the drug trade wash the enormous profits they derive through investing them in legitimate business activities such as real estate or other financial activities. Hence, offenders have often been prepared to offset the risk of imprisonment against the knowledge that they have large illicit profits safely held in some form of investment during their detention available to be enjoyed once they are released from prison.
The new legislation allows the court to deny the traffickers the benefit of any assets or income derived from illicit drug trafficking. This acts as a further disincentive to those involved in the trade. The legislation will also allow narcotics officers to engage in telephone bugging for the purpose of intercepting information with regard to drug trafficking arrangements. The telephone has been a major weapon used by those involved in drug trafficking. The ability provided to narcotics officers to intercept the telephone calls of those who are suspected of involvement will be a major contribution to their detection and apprehension. The legislation also provides that internal body searches should always be undertaken by a qualified medical practitioner. Hence suspected traffickers will no longer have justification for objecting to an internal body search. This will further enhance the possibility of their detection.
The legislation provides for an offence of conspiracy and an offence of attempting to possess narcotics. These two aspects of the legislation are particularly aimed at the syndicate bosses- those people who are the brains and who provide the money behind the whole horrific trade but who never get directly involved in the handling of drugs. I believe that the Customs Amendment Bill will make a worthwhile contribution to the efforts being made to stem this horrific traffic within Australia.
In addition to this legislation the Government has also recently introduced other measures to cope with this developing problem. It has recently purchased three J Class high speed, ocean going patrol boats for use by narcotics agents stationed in our north-west coastal region. The Government has also instituted daily air patrols of our northern coast between Geraldton in Western Australia and Cairns in Queensland. These aircraft are fitted with special radar equipment to detect smuggling attempts by drug traffickers. The Government is in the process of establishing a far more sophisticated communications network to enhance the capacity to intercept smuggling activity. All of this effort, and more, is essential to cope with this growing problem.
Some people are sceptical about the beneficial effects of concentrating on stamping out supply while the demand for narcotics persists. But merely concentrating on the motivation of individual addicts ignores the fundamental fact that heroin is a mass market commodity with salesmen and distributors, just like cigarettes, alcohol or aspirin. There may be a rising number of young Australians who today are willing to use something like heroin because they are unhappy, bored or unemployed. They have the option of trying heroin or becoming lifetime addicts because heroin is neatly packaged in uniform doses, is sold at standard prices and is available at many distribution points in all major Australian cities. That marketing structure and the supply of the dreadful goods it is desired to push can be stamped out. If that occurs then a major contribution will have been made in preventing the spread of drug addiction.
There is evidence to suggest that the stabilisation of heroin addiction in the United States in recent years is due in no small measure to the success of the United States Drug Enforcement
Administration in squeezing the trafficking syndicates out of the United States market, thereby reducing the available supply. Clearly, with increased emphasis on this problem in Australia, we can expect success similar to that of the United States in stamping out the trade. Hence positive benefits are to be derived from concentrating on cutting off the supply, both at its point of entry to Australia and at its source.
Nevertheless, it must be remembered that this is only one prong of the necessary approach. There is also the need to concentrate on reducing the demand by rehabilitating existing addicts and dissuading potential addicts from indulging in drug taking. The present Government is strongly committed to both prongs.
The Commonwealth has assisted the States in an extensive program involving rehabilitation of drug addicts. It is also currently spending $lm a year on an education program designed to dissuade young people who may be contemplating trying out drugs from doing so. Additionally, $160,000 has recently been provided for the current short term concentrated campaign of advertisements which some honourable members may have seen over the last week or so. I have received many extremely favourable comments from constituents about the impact of these advertisements. So the Commonwealth Government is committed to both prongs- to stamping out the supply and to reducing the demand for drugs. This is necessary because over recent years the problem has been a growing one.
The experience which I derived from the few days I spent in Thailand investigating the problem indicates that over the past decade South East Asia has become the world’s largest producer of illicit narcotics and a major supplier of heroin for addicts in Australia. Within the region of the Golden Triangle, which covers northern Thailand, north-east Burma and western Laos border regions, the growing of the opium poppy is an old and accepted occupation. It is one crop which provides an immediate and lucrative return to the farmer and so sustains many communities in the area. The illicit drug trade derived from that source is undertaken by syndicates on an organised basis. The appeal of this trade to the criminal element is obvious.
Heroin trafficking is the most profitable business known. Estimates indicate that it costs $500 to purchase from Thai poppy farmers in the Golden Triangle the quantity of raw opium required to manufacture one kilogram of heroin. That one kilogram of heroin sells for $250,000 on the streets of Sydney. No other form of business activity, legitimate or illegitimate, can, through its sequence of manufacturing and marketing processes, derive a mark-up from $500 to $250,000. This profitability ensures that the cultivation of the raw product, the opium poppy, is a major industry within the Golden Triangle. It is the major economic activity for some 1,000 villages in the region, providing a livelihood for about 200,000 farmers.
Chinese merchants provide the link between these opium growing villages and the heroin manufacturing laboratories which are hidden away in inaccessible jungle in this mountainous region. These merchants virtually operate in the region as semi-autonomous warlords with mobilised armed guards to accompany their trading caravans. The heroin producing laboratories which are hidden away in the jungle are also heavily, guarded and protected from detection by sophisticated warning devices and by the fact that they are moved from place to place from time to time. All of these factors make the interception either of the raw material or of the drugs during manufacture extremely difficult. After manufacture, in order to avoid detection, various means of transport and various routes are used from the Golden Triangle to the points of distribution. The major point of distribution to the international market is Bangkok because it is reasonably adjacent to the Golden Triangle. It is also an easily accessible international centre from which to distribute the drugs overseas.
As far as Australia is concerned the syndicates responsible for the manufacture and international distribution of these narcotics are linked with crime syndicates in the eastern States of Australia for the purpose of smuggling the drugs into Australia and enabling their distribution. These Australian syndicates send paid couriers to Thailand to exchange money for the appropriate quantity of drugs which they then attempt to smuggle into Australia. There are people who might be described as amateurs who are also becoming involved in the trafficking of drugs from South East Asia to Australia. A third category of courier is the person who travels to South East Asia as an innocent tourist. While he is there he is approached- often the approach is unsolicited- in the street, in an hotel lobby or by a taxi driver and succumbs to the temptation to purchase a small quantity of drugs to take back to Australia in the knowledge that there is a tremendous profit to be made from such an activity.
Worthwhile attempts to cut off the supply have been made in Thailand. The most notable of a range of activities directed at the source of supply is what is called the crop replacement program which is being undertaken in the Golden Triangle. The purpose of this program is to encourage those farmers who are dependent upon growing opium poppies as a cash crop to grow alternative cash crops. That program has achieved significant success as a pilot program. On the basis of that success it is intended to extend that program throughout the Golden Triangle region. Of course, that will take some time because of the extensive nature of the region and the extensive nature of opium poppy growing in the area.
Linked to that attempt to stamp out supply is the second aspect of the fight which, of course, is the detection, interception and apprehension of those people involved in trafficking drugs between Thailand and Australia. There is significant co-operation in this between the Thai and Australian governments and their respective narcotics bureaus to maximise the apprehension of drug traffickers between the two countries. I believe that Australia should be extremely grateful for this co-operation.
Thailand has half a million drug addicts of its own who represent about one per cent of the population. Its resources are stretched to the limit in dealing not only with those addicts but also with the internal drug traffic which feeds them and seeks to enlarge their number. The contribution which it makes on top of this in attempting to prevent drugs from reaching Australia is, therefore, commendable. I believe that the assistance we provide in several co-operative ventures- the stationing of narcotics agents, training courses, the provision of detection equipment and our role in the regional intelligence network- should be significantly increased to ensure that we are more successful in cutting off the supply of drugs at its source. Traffickers detected in Thailand, if found guilty, face very severe penalties. Whilst I was in Thailand, I had the opportunity to visit in gaol the three Australians whose case has generated most publicity in the Australian media, namely William Sinclair, Warren Fellows and Paul Hayward. They are being held in Bangkok central prison which, in terms of conditions, is one of the better prisons in Thailand. Nevertheless the conditions are far harsher than in Australian prisons. Certainly on the basis of the evidence against them there is no doubt in my mind that they are guilty, and therefore must suffer the consequences of their actions.
– I think that the honourable member should withdraw that remark. These men are facing trial and here we have a man saying that he thinks they are guilty. One of the men is a constituent of mine whose mother is very agitated. I think it is disgraceful that the honourable member stands up in this Parliament and says that he thinks they are guilty before they are tried.
Mr DEPUTY SPEAKER (Mr Jarman)Order! The Deputy Leader of the Opposition has made his point. I ask the honourable member for Kingston to withdraw that remark.
– I understand they have pleaded guilty, but in view of the intervention of the Deputy Leader of the Opposition I will withdraw that remark. I think that the lesson to be learned from the case of these three men in particular and from other Australians being held in Thailand should serve as a terrible warning to any young Australians contemplating involvement in drug trafficking.
-Order! The honourable member’s time has expired.
– Whilst I support the Bill, I equally support the constructive amendments put by the Deputy Leader of the Opposition (Mr Lionel Bowen). Might I say that the opening remarks by the honourable member for Kingston (Mr Chapman) directed against the Deputy Leader of the Opposition were unnecessary, unwarranted and deplorable. It is high time that the horror of the Australian people at the illicit traffic in heroin and other illegal drugs is expressed in terms of the penalties proposed in this Bill. It is well known that Australian young people, with their love of freedom and pleasure, their relative affluence and, in many cases, their boredom and frustration produced by lack of work, lack of goals and, if I may say so, lack of leadership, are the targets for the commercial trade in heroin and other drugs grown and manufactured in South East Asia. The incredible thing to me has been the fact that in many countries in which these illicit drugs originate the penalties for trafficking in them in a commercial way is death by hanging or firing squad or life imprisonment in a dark and dingy gaol from which one is lucky eventually to emerge alive. Treatment for addicts of these drugs, such as heroin, usually consists of locking them up and almost forgetting them. Yet in Australia, only a few hours flying time from these southern Asian countries, which is the market place for illicit drugs and where huge fortunes have been made from their sale, much greater than the profits to be made in the country of origin, we are dithering about with fines of up to $100,000 maximum or gaol sentences of 25 years or so in a civilised gaol with all mod cons and with time off for good behaviour. Sometimes, unbelievably, the sentences have been suspended or bonds of good behaviour imposed.
When one looks at the profits to be made as opposed to any punishment, one may suspect that it would seem logical for anyone with money to invest in business to choose drug trafficking as the business with the highest possible profit for the least amount of risk. Usually the level of money available to anyone who wants to go into this dirty business is so high that, if one is caught, particularly in the Asian countries, it is an easy matter to buy oneself out of gaol with a few well placed bribes. During all this time the number of young people in Australia who are attracted into experimenting with heroin, and then swelling the ranks of the addicted, is growing. No one knows how many young heroin addicts exist in this country. It has been estimated that there are anywhere from 40,000 to 100,000 of these unfortunate young people. Added to this number, whatever it is exactly, must be many times that number who are on the fringes regrettably, of addiction. They are flirting with heroin, tasting it and saying to themselves: ‘I can control it; I am only a social user; addiction cannot happen to me’.
I have seen too many of these people in mental institutions over the last 20 years. How wrong many of these young people are is illustrated by the apparent growth in the number of addicts as indicated by the growth of the number of young people presenting themselves for treatment at treatment centres to overcome their addiction. I believe, from my research and from experts I know who have watched the growth of the heroin scene in Australia since 1968, that there has been a major escalation in commercial marketing of heroin in Australia since 1977. The products of this growth are now clamouring for treatment at centres seeking help.
When I said I know experts who have watched this situation since 1968, I meant people who have been actively involved in investigation, detection and prevention of leakages of narcotic drugs from the legal channels, medical channels, to the black market. Others in the police forces have tried to track down sources of supply, bring addicts before the courts and have them committed for treatment. Others have been involved in treatment and preventive education. The sad thing is that no matter how much effort is expended by people such as these, nothing seems to have worked to stem the irresistible tide of addiction to narcotics. On many occasions police work is finally frustrated when some magistrate, dispensing humanity to the offender, suspends a sentence, or gives a light fine when the maximum penalty should have been imposed. To my knowledge, nowhere in Australia, ever, have the maximum penalties available to the courts been imposed. One must ask, therefore, what assurance is there that the courts will now take any heed of Parliament’s attitude when the currently proposed penalties are brought into the force of law. Will the courts impose maximum life sentences, or will they go only half way? I fear the latter. I believe the Australian people are not ignorant of what has happened to our youth, in many areas, over the last few years. I believe they have been quietly looking for heavier penalties for drug trafficking for some time, and I therefore commend the Government for paying heed to these sentiments by means of the proposed Bill.
There is another thing to be considered. Assuming that the new measures of surveillance by phone tapping and heavier court penalties can be successfully put into practice and traffickers can be apprehended and sentenced, subject to the proposed amendment that we will outline later, we ought to consider the results. They will not be entirely to the betterment of the community, might I suggest. Several things will happen obviously. Firstly, the price of heroin will escalate. Secondly, this will bring increased crime in the form of theft in order to pay for the cost of each addict’s habit. More addicts will also turn to ‘pushing’. Thirdly, it will bring more holdups of chemists, more burglaries of doctors’ surgeries and more forgeries of prescriptions. Fourthly, there will be periodic droughts of heroin when a trafficker is caught. This will bring more addicts to the treatment centres pleading to be relieved of their withdrawal. It will mean a greater strain on our already slender treatment resources.
I am not saying that these effects are sufficient reason for us not to proceed with these penalties; we must proceed. But we must be prepared for the results of any enforcement activity. We must plan for the effects and we ought to provide for them. Drug addiction is a multi-factional social problem. It will never be controlled by a single strategy such as law enforcement. We ought to attack it from as many sides as possible. I suggest to the honourable member for Kingston that at present the health services of the States are being starved by this Government of vital financial resources to do this very thing. Equally, I believe, the State police departments and education departments are being starved of funds.
I wish to speak primarily now about the State health services in my own State, South Australia. In the present economic climate effective work in the area of the presentation and detection of drug dependence of all types, but especially the narcotic type, is being hampered by lack of finance and personnel. Already a major source of narcotics for the black market is the local doctor’s surgery where young people con prescriptions for a variety of drugs which they use as substitutes for heroin and sometimes together with heroin. The only way to stop this practice is for the State health personnel to have the resources to monitor the prescribing of narcotic drugs by doctors and to discipline those doctors who are found to be feeding the black market. The same applies in the areas of diversion from pharmacies, wholesale pharmaceutical suppliers and the like.
In Tasmania, for example, a doctor’s prescribing is watched under a computerised system. In my own State, South Australia, a very thorough system of surveillance of prescribing has had to be abandoned recently because of lack of staff and lack of funding by the Federal Government. There is now almost no knowledge of the amount of narcotics and other drugs diverted to the black market through doctors ‘ prescriptions, but it is known that the drugs so obtained are taken not only by the person who obtains the prescription; a large amount is also sold to other addicts. I regret to say that this is one important, largely neglected and ignored way in which the problem of narcotic addiction is being spread throughout this country and, through lack of staff, the State health services are unable to control it.
I believe that a similar state of affairs exists in the areas of education against drug abuse or the provision of alternatives to drugs by the encouragement of more sporting activity and provision of facilities for young people, to say nothing of the provision of more jobs. I believe that the same situation exists in the area of treatment. While on the one hand we know that the number of addicts is increasing in Australia many States are finding that they have to curtail their treatment facilities because of lack of staff, facilities and ability to carry out research into new methods of treatment of addiction. The problem is multifactional. This last aspect is of vital urgency since it is recognised that the current methods of treatment just do not work. If we are seriously concerned about what is happening to young people in this country we must look for effective methods of treatment as well as methods of prevention such as the locking up of drug traffickers. The irony of the situation is that the more effective are the measures proposed in the current Bill the more pressure will be exerted upon those community activities which I have mentioned which also attack the problem at which this Bill is directed. These other community responses, regrettably, will be rendered ineffective.
The honourable member for Kingston talked about what the Government is doing; we ought to look at what the Government is not doing. The regrettable fact is that it is cutting down vital financial resources to the States. Without those resources the problem cannot be overcome. The more effective are the police and customs officers the less effective will be education and treatment and control of diversion from doctors, chemists and pharmaceutical wholesalers. The total effect may be that nothing is achieved unless these other community responses are also strengthened at the same time. The tragedy may be that the Parliament, having passed the Bill, may feel that it has done enough and that it can rely on enforcement to protect our young people. It may feel that in heavy penalties for trafficking it has found a cheap substitute for treatment and education. Nothing could be further from the truth. We would be deluding ourselves and, shamefully, the people we claim to represent. I appeal to the Government, if it is sincere in its attack on drug addiction in this country, to make funds available to the States for other work in the drug area. Provided such work is strictly controlled and evaluated for effectiveness the money will be well spent. Certainly there is no cheap way out for the community in its battle with the problem of drug abuse and in particular the abuse of such dangerous drugs as heroin and the other narcotics.
The answer to the drug problem, if there is one, rests not only in imposing very heavy penalties as a deterrent- that is not the one and only answer- we must also recognise that the taking of illicit drugs, however, we may view it as a way of life, gives some sense of pleasure, satisfaction and fulfilment to the people who take them. It gives these people a sense of identity and purpose in life which is lacking for them in the normal pursuits of the rest of the community. We ought to acknowledge that fact. It may give them some temporary escape from the tensions, frustrations and boredoms of a culture which is not currently giving the opportunity to these people to achieve their fullest potential in the Australian society. It follows therefore that if we wish to prevent our young people from immersing themselves in the dead-end satisfactions and pleasures of drugs we must compete, as a community, with the rewards, thrills and pleasures of drug taking. Our society must develop the capability of delivering to our youth a lifestyle which is more attractive, rewarding and meaningful than illicit drug taking. This means that the Government must fund to a much greater extent than now the sporting, educational, cultural and spiritual activities of the country.
We need to foster and acknowledge at the level of local government, for instance, a wide range of all those activities which contribute to physical, mental and social development, particularly of our young people. We need to develop in our community a sense of national identity, direction and purpose. We are lacking that at the moment. Obviously this will cost money, but if it is well done it will be money saved since a community in which people are able to realise and develop their full potentialwhether physically, mentally or socially- will be a healthy community where the costs of repairing the self-damage to health by people will be greatly reduced. Certainly the money will be well spent if it is able to entice our young people away from wasting their lives in destructive drug abuse.
Mr CHAPMAN (Kingston) -Mr Deputy Speaker, I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– I do. The honourable member for Hawker (Mr Jacobi) at the beginning of his remarks commented on what I had said in rebuttal about the Deputy Leader of the Opposition (Mr Lionel Bowen). Lest there be any misunderstanding, in no way during my remarks did I intend to imply that the Deputy Leader of the Opposition was the friend of drug traffickers- merely that the Deputy Leader of the Opposition was giving that appearance by attempting to water down this legislation. I was referring to the matter of appearance and not to the matter of substance.
– I congratulate the honourable member for Hawker (Mr Jacobi) on his thought provoking address. He is well known on this side of the House for presenting his speeches in this fashion. The Minister for Business and Consumer Affairs (Mr Fife) in his second reading speech on the Customs Amendment Bill 1979 stated:
Drug abuse is a major social problem in Australia at the present time. It is a matter which the Government has addressed as a high priority. The Bill I introduce today is the result of more than 1 8 months work on a tough, but in the view of the Government appropriate, law to attack the real source of the problem, that is the people who organise and profit from the drug trade.
Bearing in mind those remarks I think that both sides of the House would agree that it is time that the Government took appropriate action and introduced necessary legislation. Some members may wish to disagree with some points of the legislation, but the thrust of it, I am sure, is acceptable not only to this Parliament but also to the whole of Australia. I think the general populace of Australia would regard it as one of the most welcome pieces of legislation. As the Minister said, the drug trade is organised in an unscrupulous and a totally immoral fashion. When we are dealing with people who have no facility to accept the principles and moral standards of this country I am afraid that there is not much point in trying to be nice. I congratulate the Minister for providing the amenities et cetera to the customs officers who will be in charge of tracking these people down and for providing the extra penalties that are so badly needed.
The honourable member for Hawker said in his remarks- I am not being critical of him; in fact, I thought that most of his comments were very positive- that there was a tendency to impose light penalties. However, I have been assured that in several recent cases the judge concerned has imposed the maximum penalty. In imposing that maximum penalty the judge indicated his concern at the inadequacy of the penalties available. I congratulate the judge. I hope that he will welcome the legislation and the stronger penalties that he will now be able to impose if necessary. We all know of cases where the penalties imposed appear to be rather trivial by comparison with the offence to which they are directed.
I call to mind a recent case in my area, and for obvious reasons I do not wish to mention names, in which a person accused of being a drug trafficker had supplied methadone to two young boys of 17 years of age. As a result, one of the boys died a tragic death and the other was treated and saved only by intensive care in hospital. The person responsible, who apparently was himself a heroin addict and had taken huge quantities of whisky to try to break the habit, was fined $300 and given a 12 months suspended sentence. That is a ridiculous situation. On the other hand, either on the same day or within the next few days, I read in the same newspaper of a person who was convicted of driving a car while his licence was suspended being sentenced to 14 days in gaol.
One wonders sometimes where we are going, and I congratulate the Government for taking positive action in regard to imported drugs and the problems they are causing and for providing adequate penalties. The Minister knows that I raised in the party room the possibility of a statutory minimum penalty at a much higher level than that which applies at present. However, he properly pointed out the problems in law associated with such a penalty. Nevertheless, I wonder whether this is a situation in which a judge should not have the right to vary the penalty but should impose a statutory penalty. In the State of Victoria, and I assume in other States, if one is proved to have been driving under the influence of a certain level of alcohol the magistrate does not have to consider the fine he will impose. A statutory automatic penalty is imposed. I believe that a similar situation should be applied to this terrible problem.
This Bill relates basically to imported drugs, the actions the Government can take, and the penalties that can be imposed. I think we should also be looking at the internal situation, although probably that is not within the jurisdiction of the Federal Government but is more of a State matter. An equal problem exists internally in relation to drugs. How often do we read of cases where marihuana growers have been caught? In some instances people have purchased a farm on a minimum deposit, although there may be a huge purchase price of many thousands of dollars, and have paid off the farm in a very short space of time. It must be fairly lucrative to be in the cannabis-growing business. One of the biggest problems facing law enforcement officers is that when they track down these people, and apparently they are fairly successful, the penalty imposed is not so significant as to cause any burden. I have an open mind on the question of marihuana. It has not been proved to my satisfaction that it is not addictive. It has not been proved that it does not lead to addiction to hard drugs. Marihuana is classed as a soft drug. I believe that it presents a great danger to the young people of this country, and in support of my comments I will quote from a statement by the American Medical Association House of Delegates. Before doing so, I want to say that if we believe that there is a problem for young people, and I believe there is- I think most of us have some doubts about the argument put forward that marihuana is ineffective- then surely tougher penalties should be provided to prevent people from making huge profits out of leading young people into what ultimately could be the end of the road, the taking of hard drugs. That is a matter that should be of concern to us. On that question, the American Medical Association report states:
The American Medical Association House of Delegates adopted a statement on marihuana that was consistent with research findings and patterns of usage prevailing at that time. The House found little conclusive evidence of longterm adverse consequences of marihuana use in the United States, but it did advocate ‘a policy of discouragement’ because of the ‘possibility of some deleterious effects on the user and on society at large which could constitute a major public health problem ‘.
That is a fairly accusatory statement in real terms. It is no use saying that the problem is not real, that no trouble comes from smoking marihuana. Under the heading ‘Implications for the User’, the report points out:
Any form of drug abuse can have more serious consequences for those individuals who are especially vulnerable.
We cannot make laws for individuals or for certain sections of the community. We have to make laws which apply to everybody and cater for those who are most affected. The report continues:
Children and adolescents are one such group. The effects of drugs on the young, who are in early stages of both physiological and psychological development, can be more pronounced and more persistent than effects on more mature persons.
Marihuana is potentially damaging to health in a variety of ways, but it can be especially harmful when used by a person who is immature, unstable, or already ill.
I think that we ought to take note of those comments. Further, the report states:
The sale and possession of marihuana are criminal offences under US federal law. Sale is a crime under all state laws, and possesion is a crime under most.
I believe that we should acknowledge that in this country. In this Bill the Minister has dealt with the problem of imported drugs such as heroin and has taken a positive step by increasing to a maximum of life imprisonment, without the option of a fine, the penalty for trafficking in drugs in a commercial quantity. I sincerely trust that those in authority who will impose these penalties on convicted persons will impose the maximum penalty. The sooner we see some people put away for life for selling this awful product the sooner there will be a reluctance to indulge in the practice, even though the profit is so high, as my colleague the honourable member for Kingston (Mr Chapman) has said.
I am somewhat alarmed to find, and I have mentioned this before in this House, that one of the problems we have in this country, aside from the importation of drugs, is that drugs of a chemical nature can be manufactured by persons with some reasonable expertise in the field of chemistry. To help them do this, they can buy from various organisations a booklet teaching them about basic drug manufacture. I am not going to go through that booklet again, except to mention that it quite clearly sets out the stepbystep procedures necessary to produce drugs such as LSD. We are to impose penalties relating to drugs such as heroin and we know its awful impact on society. I am sure that we all agree that chemical-based drugs have equally disastrous effects on human life. The Federal Government ought to play its part, and call on the States to play their part, in taking whatever action is possible to increase the necessary penalties, and to provide assistance to law enforcement officers so that they can track down drugs and prevent them from being made available. That would mean, of course, that we should also consider the simple matter of preventing such booklets from being sold in this country. It is remarkable that one can go to a bookshop and buy a book that will allow children, if they have had a basically sound education to make these drugs. It is about time that we had a look at that matter in conjunction with the excellent procedures undertaken by the Government in this Bill.
Finally, having expressed my concern about marihuana, I say once again that I was somewhat staggered to find that at a time when we are talking in terms of possible drug addiction and the effect of drugs, whether they be the so-called soft or hard drugs, on the young people of this country, we have a member of the other House who, not long after being elected to Parliament- I refer to an honourable senator from Tasmania- openly advocated that pot be legalised. I hope that this person will read carefully the transcript of what I have said. If he wishes, I will certainly be pleased to show him a copy of this booklet and also copies of what the Americans have found in their research into marihuana and its effect on young people. He might then have second thoughts on the matter. I am certain that he was only carried away with the rush of blood to his head at being elected to Parliament. When he reads the legislation of the Government in regard to the actions we have taken to combat the importation and use of hard drugs, I trust that he, along with many others, will have a second look at this sort of attitude.
-I suggest first of all that the honourable member for Bendigo (Mr Bourchier) read the report on drugs by the Senate Standing Committee on Social Welfare in which it recommended the decriminalisation of marihuana. The Customs Amendment
Bill is directed against a particularly reprehensible type of capitalist, described by the Minister for Business and Consumer Affairs (Mr Fife) as a ‘highly sophisticated businessman’, the profiteer in illegal drugs. The Minister’s second reading speech was much given to moral condemnation of these sleazy capitalists, these seekers of vast profits from the illegal drug trade. Indeed, it was an odd second reading speech on a Customs Bill because it contained a distinctly moralistic tone. For instance, the words ‘miserable’, ‘unscrupulous’ and ‘immoral’ occurred on numerous occasions. I think that we would all agree with this particular depiction of drug traffickers. But whether policies fuelled by moral outrage-, in which a moral stance is given pre-eminence over other considerations, is the best way of making rational laws to combat the drug trade in this country is, I think, more debatable. By ‘rational ‘ I mean laws conceived in the interests of the victims or the potential victims of the drug trade.
The Bill we are discussing has three major objectives. Firstly, it seeks powers- and I quote the Minister- ‘not commonly accorded to law enforcement’, to permit bugging, which is the use of listening devices to overhear personal conversations. There is a related Bill which would also provide Customs officers with the power to wire tap, that is to intercept telephone communications. Secondly, the Bill seeks to provide additional penalties for large-scale drug traffickers. Thirdly, in what is perhaps the most original part of the Bill, a scheme of pecuniary penalties is introduced to combat the sophisticated methods of disposing of or, as it is termed, the ‘washing’ of the profits of illegal drug trafficking. I shall deal in turn with each of these sections.
The first objective relates to the provisions for electronic surveillance by Customs officers in relation to drug cases. These provisions relating to bugging and wire tapping are unique. Never before has the Commonwealth sought to give these powers to officers of the Australian Bureau of Customs. However, it is true that under State law- and I quote the Minister again’Commonwealth narcotics investigators are presently able to be authorised in these States to use listening devices in relation to the investigation of drug offences’. The Minister went on to say:
From time to time they have been granted such warrants and, I assure this House, with devastating effect.
I might just add in parenthesis that this is a superb example of the thin edge of the wedge argument. We have to be careful on what slippery slope we are poised if Ministers can simply tell us, without one jot of evidence, that these tilings are used with devastating effect. Indeed, I would think that all members, particularly of the Government parties, should pay particular attention to the devices suggested in this Bill, given the potential extension of many of these provisions to white collar crimes- and much of this Bill relates very much to approaches that have been suggested elsewhere in the world for white collar crimes.
But let me return to my point. This is the first time in the Parliament of the Commonwealth that it has been proposed to give any officers, outside of Australian Security Intelligence Organisation officers, the power to use electronic surveillance, both bugging and wire tapping. This unique power is now to be bestowed on Customs officials.
It is important to recognise the range of bugging instruments now widely available. There are key-hole microphones, directional microphones which can be used at a distance to pick up conversations, infinity transmitters which can be placed in the telephone handset and even laser beam devices which, I am told, are capable of detecting sounds through the vibration patterns on window panes. An enormous range of electronic devices for surveillance is now available.
I want to say a little about the principle involved in electronic surveillance. First of all, the power to bug citizens, the power to wire tap citizens, is a power abhorrent to anyone who believes in the ordinary man’s basic rights, his right to privacy and his liberty to say what he wishes in the privacy of his own home. Unless we preserve an irreducible core of privacy our whole system of civil liberties will simply become a formalistic ritual.
Electronic surveillance is a far more insidious, far deeper affront to these basic rights than most other forms of intrusion because the individual is quite unaware of the invasion of his rights. The citizen is aware of the affront to his rights when the police search his home. He is aware of the act when officers intrude onto his property. Under our present laws, he has rights of challenge, appeal and redress. But to electronic surveillance, he has no such redress, because he is usually unaware that his privacy has been violated, that on some tape his most intimate conversations, his privileged communications, his utterances, be they unwise, revolutionary, conspiratorial, criminal, or just plain silly, are all recorded. Persons cannot ensure their privacy and their security even in their own home, against the intrusion of electronic surveillance.
In this sense, electronic surveillance is a rather super-powerful general search warrant and, in the same way as a general search warrant, is exploratory, unselective and indiscriminate in what it records. As I have noted, these devices would record conversations which are privileged between a suspect and his lawyer, between a suspect and his doctor and between a suspect and his wife. They can also, of course, record many conversations which would be of no relevance whatsoever to the suspected offence. Of course, they are much more powerful than a general search warrant because the intrusion is hidden, it is secret and unknown.
I merely ask honourable members to imagine the wealth of private, intimate, privileged material that would be collected as a result of the bugging and wire tapping of a house over a period of 6 months, as authorised by this Bill. The Law Reform Commission, when looking at this issue, warned:
People will feel constrained in their words and actions in the very place where they should feel most free. This is a very high price to pay for law enforcement . . . The insecurity of a society devoid of the opportunity of private communication has only to be stated to be guarded against.
I recognise, in this question as in nearly all questions of civil liberties, that we are involved in a delicate balancing act, in this case between the right of privacy and the justified needs of law enforcement. I have stated the case against electronic surveillance at its most powerful for two reasons. Firstly, I believe that a democratic society ignores the right of privacy at its peril. Secondly, there is no tittle of evidence that the Minister recognises this fundamental conflict. In his second reading speech there is no shred of evidence that he places any high valuation on privacy and no sense that this major invasion of privacy requires substantial public benefit to justify it. Therefore I urge the House to consider most carefully the surveillance provisions of this Bill and the wire tapping provisions of the Telecommunications (Interception) Bill as they relate to Customs.
We need to remind ourselves that in our kind of society, liberties are not destroyed by overt actions. Rather, their erosion is abetted by good intentions. This undermining of the rights to privacy in our society results from the pursuit of good causes. No one denies that the Minister is pursuing a good cause and is displaying good intentions in his efforts to eradicate the most squalid of our white collar criminals, the drug traffickers. It is their very squalidness, the universal detestation that Australians feel for drug merchants, that constitutes the greatest danger and should make us act very carefully. It is important that our detestation of alleged drug smugglers not blind us to their rights to privacy under law. One very simple reason for doing so is that to abridge their guarantees is to abridge them for all of us.
I am not totally opposed to the use of electronic surveillance by Customs officers in drug cases. I realise that it is quite unrealistic not to make use of new technology in criminal detection. In any society there has to be a balance, a trade-off between civil liberties and law enforcement. But let us not be stampeded into tilting this balance by the natural aversion we all have for drug traffickers. Let us not assent to this legislation without the most convincing evidence about the effectiveness of electronic surveillance in drug cases. To what extent will all this costly monitoring equipment be evaded by the real criminal element through codes, personal messages and pay phones? Is it a correct priority in the allocation of our resources?
If the balance must be tilted in favour of law enforcement let us minimise the tilt or shift by providing the maximum in practical safeguards. Honourable members on this side of the House have already suggested some of these. Firstly, there should be judicial authorisation rather than ministerial authorisation for the use of electronic surveillance. Such authorisation should state with great particularity the offence, persons and places that are the subject of surveillance. Secondly, I think that the limit on the period of authorisation should be at the most three months, not six months. Thirdly, it is important that the Parliament has some means of checking the effectiveness of the use of these intrusive devices. Therefore, on the basis of the reports provided for under section 219L, a regular report should be made to Parliament detailing the extent of surveillance activity in these cases and some measurement of the effect of such surveillance.
The second major objective of the Bill is to increase penalties for dealing in commercial and trafficable quantities of certain narcotic substances. The penalties are firstly life imprisonment for first offences involving a commercial quantity of the prescribed drug and, secondly, life imprisonment for a second offence involving a trafficable quantity of the prescribed drug. Such Draconian punishments which clearly satisfy society’s desire to punish the drug pushers will earn the applause of all moralists. Many will welcome the putting away for life of such evil racketeers. But should we, as responsible legislators, simply endorse and applaud such severity as justly deserved? I suggest that we should at least ask two questions. Firstly, will such increases in penalties in themselves help eradicate the drug trade? Secondly, will such increases in themselves help the victims of the drug traffic, the addicts? I suggest- admittedly I do so tentatively- that the answer to both questions is no.
The Minister rightly saw drug traffickers as highly sophisticated businessmen. He noted that the only consideration of drug traffickers is profit. That is the essential point. The question we need to ask is what effect will increased penalties have on the businessmen and their profits? The crude answer is that this Bill will increase their profits. The reason for this is that the drug market works like any other market. As the risks involved are increased the investor or seller expects a higher return, a higher profit. If the demand is inelastic, as it appears to be in the case of drugs, he will get it. Thus, quite clearly while this law will increase the risks to these people at the same time it will also certainly increase the prices and the profits. Economically, these Draconian sanctions create a crime tariff, increasing the profitability for those who can get through the net. As has been frequently pointed out, Draconian drug penalties in New York City have almost certainly exacerbated the serious drug problem in that city.
Interestingly enough, there is a plaintive passage in the Minister’s speech. He said:
In 1977 penalties applicable to drug offences were substantially increased.
However things got worse. The Minister continued:
In the light of this development the Government considered that it must again, and urgently, review the scale of penalties for drug offences.
Thus, after only two years the Government had to put up the penalties again. The definitive comment on the futility of these kinds of policies was made by Packer in his important book entitled The Limits of the Criminal Sanction written a decade ago. He commented on activities like those of the Minister when he stated:
As the lack of deterrent efficiency becomes apparent, penalties are increased in the hope that they will make up in severity what they lack in certainty … the successive increases in the penalties for trafficking in narcotics may be viewed as a fever chart of the deterrent inefficiency of that group of laws.
For the addict hooked on drugs who must be our prime concern the price increase as a result of the upping of the criminal tariff simply mires him deeper into a criminal environment, compelling him to steal and commit the whole range of petty crimes familiar in the drug scene. We must ask ouselves as legislators whether this is really the best way to act in the interests of the addict himself or herself.
A further series of dangers consequent upon a policy of very high penalties was pointed out in the National Times on 7 April. I draw the attention of honourable members briefly to them. They have already been mentioned in the House. One of the problems occasioned by the very high penalties in New York now is the use of juvenile pushers to escape the high mandatory sentences applicable to adults. Do we want to encourage the same kinds of developments here? Given the consequences of convictions- people will be put away for life- the dangers of bribery and the readiness to murder in order to silence witnesses will increase as they have clearly increased in New York City.
If we rely overwhelmingly, as this measure tends to do, on increasing the severity of the penalties we will simply exacerbate the problem with which we are trying to deal. We will certainly exacerbate the problems unless we accompany these severe sentences with much more constructive proposals than are envisaged in this Bill both on the supply and demand side. I point out to the Government that those who have studied this problem tend to agree that despite all the difficulties the British system which supplies drugs legally through medical practitioners and hospitals is more effective in combating the problem than is the American system. It is not totally effective. It has lots of problems. But by providing drugs legally through medical practitioners and hospitals two major achievements result. Firstly, the profits of the illegal supplier are cut down because a legal supply is available through the medical profession and hospitals. Immediately, one strikes at the very heart of the racketeers’ business, that is at their profits. Secondly, if drugs are supplied through hospitals and medical practitioners, there is a real chance to deal with the demand side. There is a much greater medical opening to the addicts themselves. I sincerely press upon the Government that if it is to have high punishments for traffickers, it must accompany them with constructive proposals on the supply and demand sides. Finally, I turn to the third objective of the Bill. This is perhaps the most original part of the Bill. It provides a scheme of pecuniary penalties to combat the sophisticated methods of disposing of, or laundering, the profits of illegal drug trafficking. The Minister himself pointed out how original this scheme is. He said: . . . the concept and detail of these measures have not been attempted in this form elsewhere in the world . . .
That originality from this Government deserves praise. Secondly, because it is original it needs peculiarly attentive scrutiny. It is an entirely new piece of legislation without clear parallels anywhere else in the world. It needs to be looked at very carefully indeed. I think that in many ways this is the most constructive part of the Bill because it strikes most directly at the profits of the drug racketeers. Therefore, because it aims directly at what they do with the profits they make, it is probably the most constructive section of the Bill. However, as I said at the very beginning of my remarks, as it provides a blueprint for tackling white collar crimes in general its legal implications need very careful consideration.
I conclude by saying that this is a peculiarly important Bill- a very critical Bill which has been brought into this House and which deserves the deepest consideration of its three major provisions. The Government needs to justify, much more than has been done, the use of electronic surveillance in this field. There has to be a balance between the rights of the individual to privacy and the needs of law enforcement. Secondly, we have to think seriously about the fact that the severity of the suggested penalties may simply add to the problems that this society faces in regard to drugs. Thirdly, the very interesting original last section needs, I think, very detailed legal scrutiny. I am afraid that I do not have particular powers in that field.
-Drug use is a part of the mainstream of activity in society. It falls into two categories- the licit section and the illicit section. I note that the previous speaker, the honourable member for Bonython (Dr Blewett), touched on the licit section of drug trading in Australia. I pay a tribute to him for a most balanced contribution in relation to a matter which is of great concern not only in Australia but also internationally. Quite obviously he shares the concern of many Australians. He expressed the need for caution. But, above all, he conveyed a deep interest in a matter which is not only a problem today but which will also be a problem in the future. I will comment on a few views which I hold but which are contrary to those that the honourable member quite sincerely expressed. They are not on matters of principle but on matters of application. It is always good in debate to follow someone who pays to the House the courtesy of understanding the legislation and who speaks in a manner applicable to maintaining the dignity of this House.
The Customs Amendment Bill deals primarily with the illicit trade in drugs in Australia. I hope that by introducing this type of legislation we will not only concentrate on the illicit trade but also keep in mind the dangers that can accrue in the licit trading in drugs. I know that our colleague in another place, Senator Peter Baume, has on many occasions highlighted the need to make sure that the medical profession and the pharmaceutical trade do not over-prescribe or dispense drugs in a situation which might be termed a pseudo-legal one. I suppose it is necessary when we are analysing legislation dealing with this fundamental matter to have a coherent, concerted and all-embracing policy formulated on the basis of net priorities and to be continually evaluating the measures which that policy promotes.
This legislation is good legislation. It treads the very narrow path between safeguarding human rights for our protection on the one hand and maintaining civil liberties for our basic freedom on the other hand. It is true to say that in any discussion on legislation one has to admit that it infringes on personal liberties and human rights. After all, if we are to live in our present society it demands that we obey its rules. If we disobey those rules the appropriate penalty is applicable. Therefore, methods are necessary to protect society from itself. This legislation falls within that general framework. I am proud to be a member of a party, a government and a parliament which in effect has rolled up its sleeves and has come to grips with illicit drug trading. It is the first time we have looked at the enormity of the problem. We have shown a determination not to play with words but to do something about it.
We are looking at the distribution of drugs. The essential motive in drug trading or drug trafficking is that of profit. I pay a tribute to the members of the judiciary for also being part of the legislative process by indicating to the Australian people that they will ensure and are prepared to ensure that the Australian nation remains free from the totality of dangers from drugs. In this regard I draw the attention of the Parliament to a statement made in the Criminal Court in Brisbane by Mr Justice Stable on 28 March 1979. The eminent judge stated:
The trade was so filthy from every aspect that Parliament in 1977 saw fit to pass drastic amendments to the Act, . . . ‘It is incumbent upon judges to do what they can within the bounds of the law to make such offences so expensive that those who have to do with illicit drugs will find that the road to easy money is too rocky. ‘
I am delighted that Mr Justice Stable saw fit in his position of responsibility to draw to our attention the problem as the judiciary sees it. The profit motive, of course, is the very kernel of the matter. It is a huge problem. If we look at the American system we find that the average importer supplies eight wholesalers, that each wholesaler has six retailers and that each retailer has six pushers who in turn each supply five addicts. Therefore, the supply from one importer can reach 4,320 addicts. It is interesting to note that the mastermind- the importer- does not handle the drug. He has other people down the scale who run most of the risks. Half an ounce of heroin purchased from overseas for $5 can bring a return of $1,800 in its final form. A kilogram of heroin is enough to supply 25,000 addicts. This legislation is part of the plan to contain that type of distribution.
It is unfortunate that not too much is known about the effects of increasing legal penalties for those who participate in drug trafficking and distribution. An excellent article entitled ‘Effects of Legal Restraint on the Use of Drugs- a Review of Empirical Studies’ written in 1976 by R. G. Smart states:
Virtually nothing is known of the effects of increasing legal penalties for narcotics and cannabis possession or trafficking.
So we live in pioneering days. I hope that in the years ahead we can look back at this first step with great pride- the first step of having had the courage to grasp the nettle, to create concern, to invite debate and to trespass on the grounds that people have looked upon as their own castle. The need to take action is great. I take on board the point that the honourable member for Bonython so aptly made- and I share his concern- about the preservation of basic freedoms in one’s own home. But I say to him that there comes a time when we have to exercise a sense of balance and establish a set of priorities. I submit that with this legislation we have to establish that balance. I remind the honourable member that in the second reading speech the Minister for Business and Consumer Affairs (Mr Fife), in dealing with the matter of the issue of warrants, said:
These warrants will be available only when there is objective evidence or reason to believe that conversations being overheard relate to persons involved in or places being used for narcotic offences.
That statement to me, when weighing up the problems and difficulties associated with trespassing, as it were, on civil liberties and private rights, seems to be a sufficient safeguard to ensure that Australia has the best of both worlds in maintaining the freedom of people and capturing those who are engaged in drug trafficking. Drug trafficking is a local, national and international problem. We find that opium grown in Burma can be refined in Thailand, shipped to
Malaysia and from there shipped to Australia via Singapore, Indonesia or New Zealand. I ask the Minister to be most co-operative in any dealings he has with authorities in other countries but this world-wide ring has to be smashed at its base. I feel the greatest personal sympathy for certain people who at present are awaiting trial in Thailand. I am not going to mention names but they include well known sportsmen who were a credit to their respective sports. However, for some unknown reason- one would have to suspect the profit motive- they went overseas and put themselves in the situation of being placed on trial. These people have relatives and friends. I hope the Minister will co-operate with the Thai authorities in ensuring that these people have a just trial and that if any penalties are imposed on them they are imposed as a result of being found guilty. We do need co-operation. We do have to support overseas countries because, as has been said previously in this debate, it is a big operation. Unless the big fish are caught it will be a continuing operation.
The honourable member for Bonython spoke about the problem in New York, the United States model. R. E. Glanville, in his excellent publication Drug Abuse, Law Abuse and the Eighth Amendment, stated that the authorities, after spending $US76m in administering their new laws, found that the new laws did not reduce the drug problem in New York. Pure logic raises the question of whether the problem may have been far worse than it is now if there were no laws against it. That is the great hypothetical question. One does not know the answer. But suffice it to say that after the injection of a mammoth amount of money to curtail the problem in New York it was found that the incidence of drug trafficking and abuse was as great as ever. They are sobering and worrying thoughts.
The previous speaker mentioned some of the problems of helping the drug addict as opposed to the drug trafficker. The Minister, in his second reading speech, made it quite clear that this legislation is designed to deal with drug trafficking. He commented on the fact that, in association with Federal and State Ministers, an enormous amount of work is being done in education and health. We could adopt the method used in Singapore, called Operation Ferret, where drug addicts are rounded up and isolated in drug rehabilitation centres. Then there is the United Kingdom model where drug addicts are registered. Under medical supervision they are able to obtain the very essential supplies of drugs to keep them going on a day to day basis. At least they are containing the problem and isolating these people so that these drugs can be administered to them under supervision. Above all, we are cutting down the opportunity for people to profit by their abuse of other people ‘s lives.
It is disheartening to realise that most people involved in drug taking are of the younger generation. The whole wide world is their oyster and they are going to be cut down in the prime of life. We have to admit that we live in a drug taking society. It poses the question: Have we lost our conscience?
– A lot of them are legal drugs.
– Quite so. This debate should be conducted on a non-partisan basis. I take on board the point the honourable member makes. It is worthy of being made and should be made. I suppose drugs relieve symptoms, expand minds and satisfy a myriad of personal needs. But why is there a need for drugs? Have we lost the art of living that was enjoyed by previous generations? Even in this legislation we are treating the effects, not the cause. It is necessary to continually monitor this important matter. How do we cope with the drug addict, short of money but with a consuming need for another dose? He cannot just be told that another dose will give him only temporary relief; that another dose will be at the cost of future misery. He just resorts to all types of behaviour, including stealing and robbery.
I fully support the Minister in this initiative. I share the wish of so many Australians for Australia not to become a dope fiend ‘s paradise. Australia has a coastline of 19,200 kilometres and it is difficult to have adequate surveillance. In a publication which I referred to earlier in my speech the author stated that the total coastline of America, including Alaska, is approximately the same as Australia and that if soldiers from the United States defence forces stood shoulder to shoulder along that coastline they still would not be able to overcome the drug problem. The drug problem is primarily a social and medical one, not necessarily a legal one. However, we are coming to grips with the legality of the problem. We want to protect the young. Unfortunately, the people who are engaged in the huge profit taking appear, in a personal sense, to be numb to the drug problem. Probably they look upon drug trafficking as an easy way of making a dollar; some freakish monster of history which will have no continuing influence upon future generations. They believe it is only a current problem. This Government knows that it is a continuing problem. The third part of the legislation deals with the property of people who have engaged in drug trafficking; people who, in an endeavour to defeat justice, in an act of defiance of the laws of the country, have sent their money to other countries or put it into real estate. Now they will pay the penalty and no one will profit. Under this legislation those people will forfeit their illgotten gains. It is good to see that the legislation has real teeth.
I am delighted to see that personal dignity has been maintained with regard to body searches. I congratulate the Minister on his very humane approach and the realisation that such searches are a personal affront to the dignity of so many people. The inclusion of such a provision indicates that the Government has looked at the totality of the question. I would ask the Minister to pay particular attention to the operation of the clauses which define commercial and trafficable quantities of drugs. It appears that people who are engaged in drug trafficking, in an effort to beat the laws of this country- (Quorum formed) Mr Deputy Speaker, I crave the indulgence of the House for another 20 seconds just to finish the point I was making. It is a point that should be made. We are dealing with a very difficult problem.
-(The Hon. Ian Robinson) - I grant indulgence to the honourable member to speak for a further 20 seconds.
– I raise a point of order, Mr Deputy Speaker. Under what Standing Order are you giving the honourable member an extension of time? Honourable members opposite may move for that.
-The honourable member for Wills has been a member of this House long enough to know that there is a discretion for the Chair in matters of the sort raised by the honourable member for Darling Downs. I am exercising that discretion.
– Will you exercise it next time in my favour?
– If the honourable member seeks it in the same circumstances he will be granted the same concession.
– I was asking the Minister to watch out for those who may seek to usurp the intent of the legislation in relation to the defined commercial and trafficable quantities of drugs. They may seek to bring in the same amount by bringing in reduced quantities of these drugs on several occasions rather than a large amount once. I would be most grateful if the Minister would consider that point.
– I am pleased to have seen the contributions made to this subject this afternoon. It is appropriate to praise the Deputy Leader of the Opposition (Mr Lionel Bowen) and honourable members on both sides of the House for their thoughtful contributions. I sincerely hope that when the matters which have been raised by various honourable members go before the legislative committee there is sufficient impartiality to allow the acceptance of some of the thoughtful suggestions and improvements which will be made to the Customs Amendment Bill in that process. It is obvious that honourable members on both sides of this chamber share an equal concern about the devastating effect that drugs can have upon the people of this nation. I believe that the Bill could be in no better hands than those of the Minister for Business and Consumer Affairs (Mr Fife). He is a reasonable man. No doubt, even in the preliminary stages he will ensure that some of the Opposition ‘s suggestions are accepted and written into the legislation.
I want to make reference to the area of privacy. For many years in this Parliament I was almost a lone creature in my outspokenness for the rights of the individual to maintain his privacy. Unfortunately today there has been a little inconsistency in the arguments put forward by honourable members on the other side of the House. They advocate certain courses of actions for this Government to follow. Yet what this Government is implementing are procedures which have long been existent in States with Labor governments. If Labor governments have not seen fit to alter the legislation the pleas of Opposition members in this House are a little hollow. Nevertheless, there is no escaping the report of the Law Reform Commission in 1 975 on the subject of the Criminal Investigation Bill which was alluded to by the Deputy Leader of the Opposition. That report stated:
First, we see no distinction in principle between telephone tapping and other forms of surveillance involving the use of electronic listening devices.
That is the view of the Law Reform Commission. I suggest, with sadness, that perhaps the various State governments have already given so much ground in this vital area of privacy that it is now unrecoverable. I notice that the honourable member for Wills (Mr Bryant) is nodding his head in agreement. In New South Wales, Victoria, Western Australia and Queensland the Minister in charge of customs matters or the comptroller-general already have the right to use listening devices under State legislation. In South
Australia the State police have the right of authorisation in this area. To its credit the Federal Government is tightening the controls in this area. Under this legislation the use of listening devices can be authorised only by the Minister. I do not agree that anyone other than a judge should be able to authorise the use of a listening device, but there is no escaping the fact that in five of the six States this authorisation is given at a much lower level. Indeed, in the Labor State of the recently retired Donald Dunstan it is a matter for the police to decide. That must not be forgotten. The Law Reform Commission report went on to state: … we think that the police ought not to be denied all the advantages of modern technology in fighting crime which itself uses it. Monitoring of conversations without the consent of either party ought to be permitted in certain narrowly defined circumstances. Such authorisation should only be granted by a Federal judge or a judge of the Supreme Court of a State or Territory, and should be available only in respect of very serious offences.
Again those words command my total agreement. The report continues:
Such judicial authorisation should only be available when other investigative procedures have been tried and failed or would be impracticable. The authorisation should state with great particularity the offence, persons and places that are the subject of the surveillance. It should contain such other specific terms and conditions as the judge considers advisable in the public interest and should be valid for a period not exceeding ten days.
It is a fact of life that there are aspects of this legislation which run completely counter to the wishes of the Law Reform Commission. However, that does not mean that what we are doing is totally wrong. Lest I be accused of being a friend of drug pedlars, traffickers or the ‘Mr Bigs’, I state here and now that I have absolutely no truck with them. As far as the three or four Australians in Bangkok gaols are concerned- I believe that I share the view of the vast majority of Australians- if properly found guilty and they end their life at the end of a Thai or tied rope, it is their business and their problem. It is yet to be proved that they were in fact trading in drugs and bringing hard drugs to Australia, but if they were, none of us in this House would be in a position to estimate the number of lives that they would have destroyed within the shores of this nation by so doing. If their guilt is proven that would be a just reward. Let it be understood that I am not pre-empting the findings of the court or any appeal which might follow. The point is that I, like the vast majority of my fellow countrymen, have no sympathy for drug traffickers.
One feature of this Bill that worries me is the reference to life imprisonment. Honourable members on both sides of this House know that these days life imprisonment means that one can be out on the street in eight years. A man who has destroyed a thousand lives might be asked to give only eight or nine years of his life in return. I ask the Minister for Business and Consumer Affairs (Mr Fife) to give consideration to altering the Bill to provide for minimum penalties to be imposed in certain circumstances. I know that this presents difficulties. I know that discretion should be left in the hands of the judiciary- the judge who presides over the case- but there is no escaping the fact that in later years parole boards frequently develop some sympathy towards a prisoner that is far removed from the realities of the harmful contribution for which he was sent to prison.
An area in which I am in total agreement with the Deputy Leader of the Opposition is his reference to the right of the Attorney-General to authorise the bugging of telephones for the apprehension of drug offenders. I realise that it might be pointed out that this proposition is contained in a Bill introduced into the Senate by the Attorney-General (Senator Durack), namely, the Telecommunications (Interceptions) Bill 1979, which is to replace the Telephonic Communications (Interception) Act 1960. But I cannot accept that the right to invade the telephone system should be placed in the hands of a Minister. The Law Reform Commission has clearly spelt out that in its view it should be something which is authorised only by a member of the judiciary- a member of a State supreme court, the High Court or Federal Court of Australia.
It worries me that, in the Australian Security Intelligence Organization Bill, and this new Customs Bill to a much greater extent we are giving the Attorney-General the right to open the door to an area which previously was regarded as sacred and an invasion of privacy, that is, access to telephone conversations. I believe that that is giving away a great right. This Parliament is giving its seal of approval to the removal of what was previously every Australian’s precious possession. I do not argue against the fact that in some instances the only way to apprehend the ‘Mr Bigs’ of the drug trafficking world will be to violate the privacy of the telephone line. But I believe that by reducing the authorisation of the interception of a telephone conversation to the level of a politician- let us not forget that the Attorney-General is a politician- we have come a long way from the attitude which originally existed in this country, an attitude that has long been affirmed by bodies such as the Law Reform Commission.
I plead with the Minister for Business and Consumer Affairs to consider the advocacy I made in the early stages of the life of this Bill - during consideration of it by the Government members committee and in the Government members party room- the same I am now making in the Parliament- that is, that we ensure that the authorisation to intercept telephone conversations is something that is placed in the hands of the judiciary. I accept with a certain amount of reluctance that listening devices will be authorised at the level of the Minister for Business and Consumer Affairs. I say to the Minister that this Parliament will probably place in his hands a great deal of trust in regard to the conversations of people that he will never meet or see. I ask the Minister to ensure before the invasion is authorised that the request is seen to be made on only most valid grounds.
I make a suggestion to the House in relation to this Bill. It causes me grave concern that it appears that if the Attorney-General and the Minister for Business and Consumer Affairs have the right to authorise telephone conversation interceptions and the use of” listening devices they will simply see the application for authorisation and never become aware of the final result. I plead with the Minister to have written into this legislation a provision whereby he will be given a report within a specified period on the outcome of every use of a listening device authorised by him. I believe that officers could go overboard in making application and abuse the system. If this Parliament is not to see the end result of such an approval the Minister should do so. If the Minister gave 100 approvals of which 99 came to nothing and he had a balanced approach to the subject of privacy, he would quickly recognise that the invasions of privacy are being overdone and that more care should be exercised before application for authorisation is made to him. I see the Minister is nodding. I am not going to interpret the nod as agreement to an amendment, but I think it is a recognition of the point I am making. I conclude my comments on this particular Bill with a plea that the Minister regard that suggestion very seriously and as most worthwhile.
– I am entering the debate briefly. 1 know my colleague, the honourable member for Lalor (Mr Barry Jones), wishes to make a short contribution and the Minister for Business and Consumer Affairs, (Mr Fife), wants to reply before 6 p.m., so we have not got a great deal of time. I refer to the Minister’s statement in the second reading speech that the Bill is not directed against the victims of drug traffic for whom we all have the greatest sympathy and concern. Government programs in the health, education and welfare fields are actively seeking to assist these persons. Over the last 12 months I have been conducting a drug awareness program for one of the community service groups. I am aware of some of the material that is available through the Commonwealth and State health education centres on this matter, and there is excellent material there. I am happy to say that the programs are not being conducted on a sensational basis, but are on a low key, sensitive and sensible basis. This measure deals with fighting the drug trade and the enforcement of penalties and assistance for detection. There is no doubt that these penalties will help as a deterrent or that the measures to increase detection will result in a larger number of people being convicted. Unfortunately, I believe it will be only the relatively minor offenders who will be detected under these circumstances.
The punitive measures have been used in the United States of America for some years and there are many who wax rich on the tragedy that occurs to human beings. They are the big boys. They are not detected. They live untouched with their money involved in stocks and shares and other legitimate businesses. I raise that because of the difficulty we have in Australia in policing the drug traffic. On previous occasions I have mentioned the problems which we have with our vast coastline in the north west and in Queensland. I want to raise briefly with the House whether we should not be considering how we could best carry out a scheme such as existed in the United Kingdom for some time and which exists in Sweden where there is a decriminalisation for the drug abuser, not the drug pusher. As the Minister points out, the profit motive is what is so important in this area and it seems to me that a properly conducted decriminalising program for the drug abuser may be more effective than increased penalties. The international scene concerns me in this area of detection. We hear about great co-operation with other countries and yet everyone knows the major source of these drugs is the Golden Triangle and so on. One wonders, if there is such cooperation between the international police forces and detection agencies, how the hell these drugs get out of those known areas of production.
I would like to refer briefly to the fact that in discussing drug problems the profit motive applies just as much to the question of licit drugs- as I think our colleague the honourable member for Darling Downs (Mr McVeigh) termed them- such as the analgesics, the alcohol and the tobacco. Whilst these hard drugs may be a major social problem, I suggest that the statistics would show that those licit drugs relying on the profit motive contribute to a much more major social problem than do the hard drugs. It is about time that we started talking about them. I read an article recently that the new teenage drug in the United States is alcohol because it is seen as socially acceptable amongst the older age group. For the same underlying causes of parental rejection, economic upset, et cetera, the kids take to alcohol. They join the peer groups that are also taking alcohol and then get into the other drugs. It is alleged that 3.3 million high school students in the United States have this sort of alcoholic problem. I would like to take it further, but I also would like my colleague, the honourable member for Lalor, to have the opportunity to speak, so I cede the floor to him.
-I rise to support the remarks of the honourable member for Scullin (Dr Jenkins). I think it is important that we put much more emphasis on the causes of drug abuse and addiction as well as trying to cope with the effects. I think the causes are really much more important than the effects. We cannot just cope with the effects alone. It is a classic example of shutting the stable door after the horse has bolted. We need to know far more about our human motivations. What is it about our lives that makes so many people dependent upon chemical crutches? We know so little about what really makes us tick. I think there is enormous hypocrisy in trying to distinguish between licit drugs, such as analgesics, alcohol and nicotine which overall are enormously costly and socially destructive. I know that many people, even those who are in this House who are users, would concede that although we come down unanimously very heavily against illicit drugs, it is important that we recognise that the profit motive, which can be despicable when it applies to illegal drugs, is also despicable in other ways.
I was struck by the strength of the Minister for Business and Consumer Affairs, (Mr Fife), in his stern denunciation of the profit motive in his second reading speech. Many people do good things and bad in search of profit- but he was confining his denunciation only to a specific area, illegal drugs- but people make a quick quid out of other areas as well. If the Minister’s words could be put without alteration into a Labor Party Bill, to make a State monopoly of the liquor industry would we have the same unanimity then? Or would he say: ‘Alcohol is a traditional drug of abuse that we have had for generations and we are not going to change the situation’? I believe that we really need to have a firm social attitude throughout the whole community against all drugs of addiction. I must confess that I speak as one of a small minority of wowsers in this community. It seems to me that we really widen the generation gap in this extraordinary hypocritical situation where the parents aged 40 or 50 are saying to the children aged 15 or 20: ‘My drugs of addiction are all right’-
– We get revenue out of it.
– We do get revenue out of it, as the honourable member for Scullin points out. However, the parents are saying also: ‘But your drugs of addiction are bad ‘. I think we can say that prevention is better than cure and that example is better than precept. If we do not want young people to be attracted to the drug culture, perhaps we ought to examine our own lives and examine whether they are not built around the idea of licit drugs. It may also be despicable to pursue a profit motive in legal drugs. We might ask if the market of the analgesic manufacture is to be applauded for sound business practice because it makes a profit, or do we say: ‘No, we have got to measure the destruction of human kidneys and so on when we are considering the way the community is going’?
I think it is also very important that we examine the practice in Great Britain, for example, where drug use is decriminalised. That is regarded essentially as a medical rather than a criminal matter. Certainly the experience in the United States is that jacking up the penaltiesthis happened in California where there has been an enormous increase in the penalties- has not been notably successful in actually reducing the incidence of use of illegal drugs. The final thing I wish to do is to express my concern that the principle once established of telephone tapping should not be abused. The road to hell is paved with good intentions- if I can use a third cliche in my speech- and I think it is very important that it is kept under the most vigilant safeguard and that the Minister is personally involved.
– in reply- It is evident from the number of honourable members who have engaged in this debate on the Customs Amendment Bill that there is, and rightly so, grave concern at the alarming increase in drug abuse in Australia. The increase in the addiction rate to drugs such as heroin and the number of drug-related deaths give some indication of the serious and vicious problem we are now facing. Let me reiterate a statement I made in my second reading speech. The legislation is not directed at the drug user. This is not the person who accumulates vast assets. This is not the person who organises the purchase, importation and distribution of commercial quantities of the drug. This is the person who is a victim of a well organised, unscrupulous and immoral business enterprise. Who would deny that the organisers, financiers and profiteers do not deserve financial ruin and hopefully deprivation of liberty? This is what the legislation seeks to achieve.
Arrests of drug traffickers and the quantities of drugs seized have increased significantly in the past five years. In 1978 heroin seizures increased over the previous year by 53 per cent: cannabis seizures by 986 per cent; and cannabis oil by 162 per cent. Seizures for the current year strongly indicate that this trend will continue. Notwithstanding these results much more needs to be done. The resilience of the international drug trade remains grimly impressive- further supplies become immediately available, couriers are replaced and new methods of concealment are devised. The pressure on enforcement is relentless and there can be little doubt that we still intercept only a small fraction of heroin and other drugs entering the country.
For these reasons it is essential that drug enforcement authorities have at their disposal equipment and techniques at least equal in sophistication to those utilised by the traffickers. It is essential that there is legislation permitting and controlling the use of these techniques and equipment and penalties which not only reflect the Government’s and the community’s concern but also hopefully will act as a deterrent to some or just reparation for others who do not heed the warning. I also point out that the Government will not be relying solely on the new legislative powers to upgrade narcotics enforcement efforts. Plans are being developed to further intensify customs activities at international airports to crack down on the smuggling of narcotics. The Government is very concerned at the increasing number of attempts to smuggle narcotics into Australia through airports and the growing tendency for young people to become involved in the narcotics scene overseas. Stronger detection methods are about to be introduced to combat this situation. Increased activities by Customs officers will include variations in the selection of passengers’ baggage for examination. In some cases all arriving passengers from particular flights will be subjected to baggage inspections.
I regret that these measures will result in some slight delay and inconvenience to members of the travelling public, the major proportion of whom are not associated in any way with narcotics, but as the narcotics problem is affecting the community at large the initiatives now proposed are necessary in the public interest. Law enforcement has not and will not become the panacea for solving the problem. Education, treatment and compassionate rehabilitation must all play a role in finding the long term solution. In this regard, through the administrations of the Minister for Education (Senator Carrick) and the Minister for Health (Mr Hunt), the Government is playing a leading role in the joint Commonwealth-State program which wascommended by the honourable member for Scullin (Dr Jenkins). However, enforcement is and must remain the first line of attack against those who would seek to manipulate one of society’s ills to their financial advantage.
I thank honourable members who participated in this debate for giving so much thought and attention to the measure. I am sure that all members of this House are trying to achieve the same result- a substantial reduction in drug abuse. The Deputy Leader of the Opposition (Mr Lionel Bowen) has indicated that the Opposition supports the Bill but that he will be moving amendments in the legislation committee. I inform the Deputy Leader of the Opposition and the House that the Government will give careful consideration to the Opposition’s amendments. I cannot, of course, indicate, until I have examined the proposed amendments, whether the Government will accept all or any of them. I repeat, however, my assurance that all amendments proposed will be carefully considered. It is the Government’s desire to have the best and most effective legislation enacted in this field. Of course, I will give careful consideration to all remarks made by honourable members.
Question resolved in the affirmative.
Bill read a second time.
Motion (by Mr Fife on behalf of Mr Sinclair) agreed to:
That this Bill be referred to a legislation committee for report by 24 May 1979.
Sitting suspended from 6.2 to 8 p.m.
-The following nominations of members to the legislation committee to consider the Customs Amendment Bill have been received. Government members are Mr Fife (member in charge of the Bill), Mr Carlton, Mr Chapman, Mr Hyde, Mr Lusher, Mr McLean, Sir William McMahon,
Mr McVeigh, Mr Ian Robinson, Mr Shipton and Mr Short. Opposition members are Dr Blewett, Mr Lionel Bowen, Mr Hurford, Mr Jacobi and Dr Klugman.
Debate resumed from 28 March, on motion by Mr Sinclair:
That the Bill be now read a second time.
-Before the debate on this Bill is resumed, I remind the House that it has been agreed that a general debate be allowed covering this Bill, the Wine Grapes Levy Collection Bill, the Wine Grapes Charges (Repeal) Bill, and the Wine Overseas Marketing Amendment Bill.
Mr FitzPATRICK (Riverina) (8.1)-The Wine Grapes Levy Bill, the Wine Grapes Levy Collection Bill, the Wine Grapes Charges (Repeal) Bill and the Wine Overseas Marketing Amendment Bill are all designed to ensure that the wine levy is paid in respect of all grapes and grape juice used in the production of wine, brandy and spirits for fortifying wine. With some qualifications, the Opposition has no objection to the wine levy applying to such grapes and grape juice. We are aware that this was the original intention of the Wine Grapes Charges Act 1929. However, because of some developments in wine industry technology the present Act does not authorise the levy to be collected in all instances. In the second reading speech of the Minister for Veterans’ Affairs (Mr Adermann), he referred to new methods of storing single strength grape juice at establishments producing the juice pending a decision at some future time to convert the juice to wine or wine manufacture or to sell it to another winery which would eventually manufacture wine from the juice. This is a situation in relation to which the present Act does not apply, and the Opposition feels that it is only fair that new technological methods should not provide a means by which to dodge the payment of tax once the juice is converted to wine.
In fairness to the wineries, the facts do not indicate that the wine makers are storing juice for this purpose. From my observations, from what I have been told and from what I have read of this matter, they are already incurring a loss by using this system, particularly during a period when there is no reason for concern about future supplies. At the present time there is a continuing over-supply of wine grapes. If there were any likelihood of a catch-up the wineries could still obtain dual purpose grapes from the dried vine fruits industry, which is always anxious to sell the dual purpose grapes to them. As a matter of fact, I notice from the report of the Wine Grapes Marketing Board that the tonnage of grapes available for crushing in the shires of Leeton, Wade, Carrathool and Murrumbidgee has doubled in the past eight years. This has meant that all wineries are constantly requiring greater storage capacity to cope with the increased tonnage, which is placing a strain on their finances and which is a contributing factor to the ability of some wineries to make their payments to the grower on time. The Board is looking constantly at ways and means of assisting in the way of payments to the growers.
Whether or not we agree with this method of storage, we believe that it should not provide a system for dodging the payment of tax. At the same time, the people responsible should take precautions to ensure that the incentive to adopt this system is not taken away from the wineries. At the present time the storing of grape juice is of greater assistance to the growers than it is to the wineries. Some of the growers have told me that already they are in tight financial circumstances. If the wineries had not adopted this system, some of them would have had to leave the industry.
On previous occasions when the Minister has introduced a Bill of this type he has often informed the House that the Bill has the approval of the industry, but I notice that in his second reading speech he states that these measures meet the concern expressed by the industry generally. I hope that that means that they have the approval of the industry, as has been the case on previous occasions. There seems to be some doubt about that, although generally these measures meet with approval.
The Bill provides that the levy is payable by the proprietor of the establishment in respect of grapes and grape juice when used in the manufacture of wine, brandy and fortifying spirits. From what I have been told, this is the tidiest way in which to collect the levy, but I emphasise to the House that no matter who eventually pays the levy it comes out of the grower’s income. If the grower were to supply in the absence of a levy he would get one price, but if the wineries knew that eventually they would have to pay a levy, then of course the grower would get that much less.
The Minister in his second reading speech said that the wineries will not be liable in respect of grape juice sold for consumption as such and that the levy will be payable on fresh juice equivalent when the juice is used for winemaking in those instances where it has been brought in from another establishment or has been stored. Once again, this appears to meet with the general approval of the people in the industry. However, because there is a large oversupply of grape juice, I believe that we should give some consideration to world wine production surpluses and the likely effect of that surplus production on our own wine production. I want to read again from the report of the Wine Grape Marketing Board, which states at page 1:
World wine production now approaches 30 billion litres. Production has risen 24 per cent faster than consumption over the past ten years.
For the year 1977 world’s surplus wine stocks was estimated at 2.6 billion litres.
It seems to me that, without adequate government protection, this world surplus presents a constant danger of the likelihood of dumping occurring on the Australian market, which of course would ruin a great many of our wineproducing areas. Later in my speech I want to make a comparison between government support in overseas countries and the support the Australian Government is giving to the wine industry in this country. But before I do so I should like to deal with the Australian wine surplus.
From the 1978 vintage there was a surplus of 50,000 tonnes within Australia. It is estimated that approximately 30,000 tonnes of this surplus was left on the vines in South Australia. Approximately 4,000 tonnes of shiraz were dried in Victoria, for which there is a limited market, and approximately 1 1,000 tonnes were crushed by the Wine Grapes Marketing Board for spirit, grape juice and white wine. From the figures, it is obvious that we need to make a close examination of our future marketing requirements. I am pleased to note that the levy will be used for controlling the export of wine, for the promotion in Australia and overseas of Australian wine and for research into the quality of Australian wine and brandy. There is no doubt that the levy will assist in the investigation of the production of Australian wine.
In connection with the oversupply situation, it was pleasing to me to read on page 2 of the Wine Grapes Marketing Board report that:
The Wine Grapes Planting Advisory Committee when it met in June this year, recommended that there be no extension of plantings of wine grapes in the 1978 season.
Under normal conditions there would be a surplus of red grapes. Local winemakers have already indicated they will require only about 50 per cent of projected red grape production for their purposes.
It appears from that statement that the authorities are giving due consideration to the oversupply situation. I think that is good because a lot of concern has been expressed in my electorate about the amount of spirit being held in stock by the Board. I feel that some mention should be made of this and that some light should be thrown on the report of the Wine Grapes Marketing Board. The position is that approximately 790,000 litres are held at present on behalf of the Board. The biggest percentage of this spirit is stored at Mc Williams, Yenda, Beelbangera and Hanwood. Miranda wines, De Bortoli’s wines and Toorak wines, at Leeton, also have spirits stored on behalf of the Board. Obviously the storing of such a large quantity of spirits will create a problem for growers in future seasons.
We still have the problem of the liquidity of growers. Unfortunately some growers were under the impression that the Government had provided money for shiraz growers. But this was not the case. The Government of New South Wales had provided a government guarantee to enable the Board to borrow money to pay for the processing of surplus grapes. I think that that is to the credit of the New South Wales Government. However, some growers have told me that they still have a problem with carry-on finance. The wine industry provides a large part of the income for many towns between Renmark and the Sunraysia area of the Riverina. I point out that it is interrelated with the dried vine fruits industry and the citrus industry. Although the Government’s action in introducing a citrus tariff was appreciated, it should also be mentioned that in any case this year there was no surplus of citrus juice overseas which would be likely to be imported into Australia. However, the Government’s assistance will afford some protection to the citrus industry in future years.
There are still many problems in that industry. In my opinion, the Government should show more keenness in coming to the aid of this section of rural industry. It seems to me that the Government is very reluctant to give the local wine industry the protection against imported wines and spirits that other countries give their wine industries. I again quote from the Wine Grapes Marketing Board report which reads:
Early in the year there was a spirit shortage in Spain, but attempts to sell to that country were quickly stopped by the European Economic Community, who, on hearing of the proposed sale, immediately placed a 55c per litre import duty on the spirit. This made any chance of a sale uneconomic.
We never see the Australian Government giving this type of protection to our wine industry. It is something at which the Government should be looking more closely. Japan showed interest in our spirit, but to sell would have meant competing with Argentina, which was selling spirit, not grape spirit, at a price which was barely the cost of processing. The negotiations ceased. The wine grape crop in California, due to rain, was below the tonnage estimated and this in turn caused a shortage of grape spirit. The Board is negotiating at present with a winery in California to sell some of the spirit there. But again, the price to be paid will be a problem.
I wish to say something else about the outlook in the Murrumbidgee Irrigation Area which, of course, is in my electorate. Although the biggest percentage of wine grapes grown in the Murrumbidgee Irrigation Area is of the white variety, the oversupply of red wine and surplus grapes, amounting to 100,000 tonnes within other areas of Australia must have its effect on the area. The Board feels that this situation will continue for another three years. Unfortunately, during that time, a lot of people will be affected. Winemakers indicated to the Board earlier this year that they would require only 50 per cent of red grapes which might be available for processing for the 1 979 vintage.
The Opposition does not oppose these Bills. We ask the Government to do everything it can to see that there is no discouragement of the wineries storing all this wine and grape juice because at present the growers are in a very dicey situation. We do not want to see the present arrangement for wineries upset.
-We are dealing with four Bills. The first Bill, the Wine Grapes Levy Bill 1979, will ensure that a levy is paid in respect of all grapes and grape juice used in the production of wine, brandy and spirit for fortifying wine. It replaces the Wine Grapes Act 1929. The proceeds of the levy form the income of the Australian Wine Board, which, under the Wine Overseas Marketing Act 1929, is responsible for controlling the export of wine, for undertaking the promotion of wine in Australia and overseas and for research into the quality of Australian wine and brandy. The levy is paid at the rate of $2.50 per tonne on fresh grapes.
The second Bill, the Wine Grapes Levy Collection Bill 1979, is complementary to the Wine Grapes Levy Bill 1 979 and facilitates the collection of the levy. The third Bill, the Wine Grapes Charges (Repeal) Bill 1979, is a machinery measure to repeal the Wine Grapes Charges Act 1929, which is to be replaced by the Wine Grapes Levy Bill 1979 and the Wine Grapes Levy Collection Bill 1979. The fourth Bill, the
Wine Overseas Marketing Amendment Bill 1979, contains a consequential amendment to the Wine Overseas Marketing Act 1929. It has been introduced to maintain arrangements for the appropriation of the proceeds of the wine grape levy to the Australian Wine Board for the funding of its operations. Vignerons and wine producers throughout Australia have told me that they are pleased with the Australian Wine Board’s efforts on their behalf regarding the marketing of wine in Australia and overseas and technical research. A large vintage was recorded in 1978 with 431,981 tonnes of fresh grapes being processed. Although yields were down, due to dry conditions, the quality of fruit generally was high. Wine makers expect 1 978 to be a good year for wine from most regions.
The crop was recently harvested in the Hunter Valley, which I represent, and also in the Mudgee district, which is a very fine wine growing district. Both the Hunter Valley and Mudgee district are well renowned for their quality wines. I will have something to say about them later. Sales of wine show a growth rate of around 6 per cent. This appears to be a satisfactory growth rate but most of the growth is in the dry white wine area where sales are booming. They increased by 28.4 per cent in 1 977-78. It is unfortunate that sales of dry red wine continue to decline despite the fact that some fine quality wines are coming from the wine growing areas of this country.
Sales of brandy have shown only a very slight increase, despite government assistance against imports and a national campaign by the Australian Wine Board promoting Australian brandy. In 1978 brandy sales showed an increase of 0.05 per cent. However, it is encouraging to note that for the final quarter of 1977-78 they showed an increase of 27 per cent on the corresponding period for the previous year. It is to be hoped that this trend will continue because brandy sales and marketing have given the vignerons and those engaged in the industry great concern. In 1 977-78, 98 per cent of the total sales of Australian wine were made in Australia compared with an average of 90 per cent in the 1960s. Great importance is attached to the domestic market by the industry and the Wine Board.
Export results have not been good in recent years. They fell again in 1977-78. The Australian wine industry is losing its market in Canada and the United Kingdom which to date have been our principal markets. There has also been a drop in sales to Japan. This is disappointing. Exports to South East Asian and oceanic regions, with the exception of Indonesia and New
Zealand, were more buoyant. Our total export sales in 1977-78 were $5,277,000, which indicates that the industry is important to this country. Canada took 34 per cent of our wine exports. It took 1,565 kilolitres for a record sum of $1,568,000. The United Kingdom took 10 per cent of our exports, buying 486 kilolitres for $415,000. New Zealand took 444 kilolitres for $664,000. Papua New Guinea- this is a surprise-took 360 kilolitres for $551,000. The United States of America took 227 kilolitres for $274,000. Japan accounted for only 3 per cent of our sales. It took 145 kilolitres for $163,000. Hong Kong took 6 per cent of our exports. It took 290 kilolitres for $282,000.
We have great problems in trying to gain access for our wine to the European Economic Community. Producers in the Community are heavily subsidised. It was noted in Hong Kong the other day that Bordeaux red wine was selling for $1.50 a bottle. It is difficult for Australia to compete in the EEC market when local wines are heavily subsidised. Great Britain is buying wine in bulk from Sicily and Cyprus. It is taken to the port of Hove which has a large tank farm, similar to a petroleum installation, where wines are stored and bottled. It is very difficult for our wines to gain access to the European market, particularly Great Britain. Australian exports of brandy last year amounted to $408,000. Exports to Canada, our biggest buyer, amounted to $255,000. I have already mentioned the loss of sales to the EEC and the subsidies which its members receive. The Australian Wine Board said in its 1977-78 report that the EEC countries are trying to reduce their massive wine supplies. Eastern European countries have also been exporting low priced wine apparently to gain hard currencies rather than make economic sales.
It has been very encouraging to note a large increase in the quantities of wine sold in Australia. In 1977-78 sales were 194,671 kilolitres. That figure is up by 6. 1 per cent on the previous year. It is the same rate of increase as was recorded in 1976-77. Dry white wine again raced away with an increase of 28.4 per cent. It now accounts for 39 per cent of the market. This compares with a sales increase of 27 per cent and a market share of 33 per cent in 1 976-77. 1 think that white wine is so popular mainly because people can consume more of it. It has a lesser alcoholic effect on them than red wines. That is the main reason for the white wines presently taking over from the reds. Sales of dry red wine and fortified wine continued their decline with falls of 8 per cent and 16 per cent respectively. Dry white wine now outsells dry red wine by 2.7: 1 whereas four years ago red wines outsold dry white wines. At the beginning of this decade red wine outsold white wine by almost 2: 1. It is also interesting to note that although we produce a considerable quantity of wine we import some wine. The main importing country with which we are concerned is France, which sold us 898,000 kilolitres in the 1977-78 season, Italy sold us 2,593 kilolitres, Germany sold us 2,128 kilolitres and Portugal sold us 1,534 kilolitres. There have been large increases over the past 10 years. Ten years ago the importation of wine was practically non-existent. There has been a large increase in imports of wine.
I have mentioned that quality grapes are produced in the Hunter Valley and the Mudgee area. These areas are in the electorate of Paterson. In those areas there has been a big switch to white wine. The vines are being switched from red to white by bud transplants to catch up with changing drinking preferences. This is a technical change which has proved successful not only in the Hunter Valley but also, I understand, in other wine growing areas of Australia. The growers have realised that they will have to produce more whites and less reds.
A major grafting program of grape vines is under way in the Hunter Valley, replacing the costly and drawn out process of planting new grapes. At the Saxonvale Vineyards hundreds of vines have been operated on and are doing fine. Buds from chardonnay, traminer and sauvignon blanc vines were transplanted there last spring on to 13 hectares of shiraz root stock, a red variety. Very few of the transplants have been rejected. The success rate has been 95 per cent. With transplants the new vines take only two years to mature compared with five years under the old system. So there is a tremendous advantage in using the transplant system. The cost of the operation is reduced by more than 60 per cent. The increased flexibility will satisfy fluctuating market needs and promises an end to the seesawing fortunes of wine production. The industry can no longer afford not to be able to supply market needs. Whites are popular at the moment but reds could swing back at any time.
The honourable member for Wakefield (Mr Giles) indicated in his address in this debate that there would be great technological changes in the industry and the transplant method that I have just mentioned is an example of the success that has been achieved so far by change. The Mudgee Winegrowers Association is very active in the Mudgee district where vineyards were established in 1858. By 1880 there were 13 wineries and 20 vineyards in this area. But following the Depression years it took a long while for the industry in the Mudgee district to recover. The industry has been reawakened in the past few years after it expanded in the late 1960s and the early 1970s. There are now 40 vineyards in the Mudgee area with total plantings of 570 hectares. They are small ventures. They supply table grapes for the Sydney market and grapes to the new crop of vineyards in the Mudgee district. This year, 1979, the wineries crushed 1,200 tonnes of grapes, the smallest crushing being 35 tonnes and the largest being 300 tonnes. There are 10 wineries in the Mudgee area at the present time. They include the Augustine Vineyard; Burnbrae Wines; Botobolar Vineyard; Craigmore Wines; de Windmolen; Huntington Estate; Miramar Wines; Mansfield Wines; Mudgee Vineyards; and Montrose wines. The wineries are run by families. The wine industry in this district is a family interest.
The industry provides employment and there is a great tourist industry in the area. As a matter of fact, $3. 5m has been invested in tourist facilities because of the wine industry in the Mudgee district. Most wineries are in the development stage. The Mudgee Winegrowers Association is doing a magnificent job to publicise the industry in the Mudgee area. It is producing quality wines which are acceptable to people who like wine, either white or red. The wine industry in country areas is providing employment for many people. It is also creating an interest in tourism. This encourages people to come to the Hunter Valley or to the Mudgee area. In the Hunter Valley over $100m has been invested in the past few years and the old established families and firms like Tyrrells’, Tulloch and Sons, the Rothbury Estate and the Wyndham Estate are doing exceedingly well. Some wealthy firms have come into the industry, particularly in the past five or six years, but because they do not have sufficient knowhow and because of the high costs- it is a heavy cost industry- they have run into difficulties. Unfortunately, some of them have gone to the wall and this has not been good for the industry.
Australia has a great opportunity to increase its export sales of both white and red wines. Many of the vignerons, particularly in the Hunter Valley, are taking advantage of the export incentives introduced by the Minister for Trade and Resources (Mr Anthony) and they are exporting large quantities of wine to the United States of America and to Canada. There is no doubt that there are opportunities to increase wine exports to these countries. Therefore, the proposed levy to provide promotional funds for the Australian
Wine Board is supported. It is doing a jolly good job. None of the vignerons whom I have met is unhappy with it. It is a good thing that this levy is being imposed. It will help the Board to increase its publicity for the export of Australian wine and also to publicise the sale of wine in this country.
– There are just a couple of points of clarification that I wish to make. One point that needs to be made concerns the commencement time for the operation of the Wine Grapes Levy Bill. Clause 5 allows for the levy to be imposed on prescribed goods used in the manufacture of wine on or after 1 January 1979. The complementary Wine Grapes Charges (Repeal) Bill provides for repeal of the existing Wine Grapes Charges Act on 30 June 1979. In other words, both measures will have a concurrent operation for the first six months of 1979 to ensure a smooth transition from the old levy system to the new one. Provision has been made, of course, to ensure that double payment of the levy on any grapes or juice will not occur as a result.
The honourable member for Riverina (Mr FitzPatrick) said tonight that the Bills meet the concern of the industry which means that the industry supports them. Indeed, there was continuing dialogue with the industry when the Bills were being prepared and at all stages the Government received encouragement to develop the proposals to close the loopholes in a fair and equitable way. A point was raised about assistance to the industry. That will be considered when the Industries Assistance Commission reports are received in the near future. The information that I have is that the report on spirits and spirituous beverages, including brandy, should be received about the end of this month and the draft report on wine and grapes is due at the end of this month. The final report is due at the end of July.
Perhaps it would be helpful if we recapitulated the main provisions of the bills because much of the debate, which was excellent, centred on the industry itself rather than the specific provisions in the Bills. The legislation does aim to correct the shortcomings of the present law which allows some grapes to escape liability for levy because of a lack of intention at the time of the crushing to use the resultant juice in the manufacture of wine. It does allow the extension of liability for the levy to include grape juice of all strengths ultimately used to produce wine, brandy or fortifying spirits irrespective of the intention at the time of crushing the grapes. It covers situations where grape juice is sold from one establishment to another or stored prior to being used for winemaking, but it ensures no liability in situations where grape juice is sold for consumption as such. The transitional operation of both the old and the new legislation until 30 June 1979 to facilitate the changeover process is also provided in the Bill and it provides for the closing of the loopholes contained in the present Act. That will enable the original intention of that Act to be fully met. It will ensure that all grapes and juice, finding their way into the wine and distillation industries, attract a levy. I thank speakers for their contribution to the debate. I think most of the points have been covered during the debate, in that reply, or in reply from other speakers. But if there are other questions I will refer them to the Minister.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Adermann) read a third time.
Consideration resumed from 22 March, on motion by Mr Adermann:
Question resolved in the affirmative. Bill read a second time.
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 Adermann) read a third time.
Consideration resumed from 22 March, on motion by Mr Adermann:
Question resolved in the affirmative. Bill read a second time.
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 Adermann) read a third time.
Consideration resumed from 22 March, on motion by Mr Adermann:
Question resolved in the affirmative. Bill read a second time.
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 ap prop list ion announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Adermann) read a third time.
Debate resumed from 22 March, on motion by Mr Adermann:
That the Bill be now read a second time.
– May I have the indulgence of the House to raise a point of procedure on this legislation? Before the debate on this Bill is resumed I would like to suggest that it may suit the convenience of the House to have a general debate covering this Bill, the Wool Industry Amendment Bill 1979, and the Wool Tax Amendment Bills (Nos. 1 to 5) as they are associated measures. Of course, separate questions will 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 two Bills to be discussed in this debate.
-Is it the wish of the House to have a general debate covering the two matters? There being no objection, I will allow that course to be followed.
-The Opposition supports the Bills before the House. They are machinery Bills in that they simply extend by a period of one year the provisions of previous Acts. When the Wool Industry Bill 1974 was brought in by the then Australian Labor Party Government it introduced the floor price arrangements which have continued to the present time. But it was originally introduced and designed to operate only for the 1974-75 season. It followed that the financing and accounting provisions provided in that legislation at that time were limited to operations in that season. The floor price scheme was introduced to meet the dire needs of the wool industry at the time but it has proven to be the major initiative of the Whitlam Goverment as far as the wool industry is concerned.
At the end of the first year of operation of the scheme the Australian Wool Corporation was holding large stocks of wool and the immediate sale of this would have damaged the wool industry. The AWC has continued to hold large stocks necessitating the continuation of the stock holding mechanism, that is, a buffer stock scheme. The Australian Wool Industry Conference has recommended to the Government that the scheme be permanent and that the market support fund should become a revolving fund. The Government has yet to agree to these proposals. The Wool Tax Amendment Bill relates to the 5 per cent levy introduced at the inception of the floor price scheme for wool on 2 September 1974 to provide a fund for meeting any operating losses on the floor price scheme. For administrative convenience the levy of 5 per cent is collected in conjunction with the 3 per cent levy. That represents wool growers contributions toward the financing of programs of wool research and promotion and the administration of the marketing functions of the Australian Wool Corporation.
The 3 per cent levy is a continuing levy and needs no annual amending legislation. The present levy of 8 per cent in total has been in force since August 1975. In 1978-79 it is estimated that some $56.5m will be raised from the 5 per cent levy and some $33.9m will be raised from the 3 per cent levy. An examination of the composition of these two funds shows that in 1974-75 the market support fund collected something like $43.6m. We go through to 1977-78 when $56m was collected. Analysing that year, interest received by that fund was $ 11.8m, less the net cost of the reserve price scheme of $ 10.6m. So at the end of the 1977-78 year, there was an accumulated credit balance of $ 135.3m in that fund. By and large over the past four years that fund has been increasing.
I refer to the funding of research and promotion which is matched by the government. In 1977-78 the 3 per cent wool tax contributed $23.6m and the government contribution was $ 19.9m. The amount of the 3 per cent wool tax going to research was $9.9m in 1 977-78 and the government’s contribution was $1 1.5m. In terms of the funding of research and promotion, overall in 1977-78, some $33.5m was collected and allocated by the Federal Government. Part of the promotion and research funds are spent locally and part of the promotion funds are spent overseas on the International Wool Secretariat which works to expand the demand for wool worldwide.
The persistence of a depressed world economy in 1977-78 set the pattern for the textile situation in which the IWS had to operate. The textile market was sluggish for much of the year even though there was no let-up in competition. In particular, the synthetic fibre companies had little success in resolving their problems of overcapacity. As a result of this, in spite of substantial losses made by many of these companies, particularly in Europe and Japan, the prices of synthetic fibres tended to ease even further, which increased the competitive pressure on wool. It could be several years before the synthetic fibre industry can resolve its capacity problems.
According to the International Wool Textile Organisation, wool’s share of total fibre consumption within the wool textile industry fell by 1.5 per cent to 33.5 per cent during the calendar year 1977. Although this still represents an improvement on the low point of 30.5 per cent recorded in 1 974, it was, in fact, a smaller share of a reduced market. Reduced wool consumption at the carding stage in nine major manufacturing countries fell by about 8 per cent. However, consumer demand at retail level held up well. I am talking about the year 1 977-78. The lower level of raw wool consumption is largely explained by stock adjustment. The early processing sectors had previously built up an inventory in anticipation of a rate of economic expansion which did not materialise.
Let us have a brief look at the strategy and operations of the IWS. In view of the substantial Australian stockpile the IWS Board decided in mid- 1977 to tilt operations temporarily to give additional support to fine wools. Branches were instructed to modify their promotion programs accordingly and additional research and development projects were introduced. This change in emphasis in IWS activities is expected in time to have an impact on demand for fine wools. At the Board’s meeting in June 1978, 1 think it was, it further decided to approve a special program in support of wools of 19.5 microns and finer. Although these superfine or extra fine wools form a relatively small part of the clip, they were over-represented at that time in the total stockpile. The main reasons for this were that the bespoke tailoring trade- the major outlet for superfine wools- has suffered a decline with the growth of better quality ready-to-wear suits; and drought conditions in recent seasons have had the effect of substantially increasing the output of these wools. This special program for extra fine wools will be additional to the agreed marketing plans for 1978-79 and will be financed proportionately by those countries producing them, particularly Australia and South Africa.
One could talk about the woolmark the wool blend mark and the various other programs of the International Wool Secretariat but I will not get on to that subject because I wish to speak mainly about wool marketing. Before I leave the subject of promotion I should point out that at the Agro 1 979 Conference the Minister said that part of the explanation for the more recent upturn in the wool market was due to Australia, New Zealand and South Africa spending large sums on the promotion of wool. Almost paradoxically at the same time he announced that the Bureau of Agricultural Economics had been asked to instigate a program of research and analysis on the subject of wool promotion, stressing that the point of the exercise was not to make the IWS an Aunt Sally. This is a constructive approach but it must be remembered that there have been well-informed and trenchant criticisms of the International Wool Secretariat, its activities, and its promotional activities in particular. Hopefully we will get a well-researched program of incisive and contructive criticism. But there are always difficulties in trying to evaluate promotion. I think all honourable members in this House are well aware of that and recall the rather tentative conclusions the Industries Assistance Commission reached in its report on the financing of rural products.
I wish to talk mainly about wool marketing, but the Bills give an opportunity to speak briefly about the industry in general and to review the progress of existing marketing activities. The 1977-78 season saw a continuation of the drought conditions which had affected most Australian wool producing areas in the preceding two seasons. Sheep mortality rates continued to be high, while lambing percentages and lamb survival rates were low. The decline in sheep numbers, therefore, continued into the 1977-78 season. Sheep numbers at the start of the season were 135.3 million, declining to 131.3 million by 31 March 1978, which is the counting date. Further, the ratio of opening population to numbers shorn was lower than normal. Only an estimated 143 million sheep and lambs were shorn for the season. As a result of poor pastures in many districts, fleece weights were low, averaging 4.2 kilograms per head, so that shorn wool production was an estimated 603 million kilograms. Although lamb slaughtering remained static, slaughtering of adult sheep declined by almost 15 per cent. As a result production of wool on skins fell to an estimated /0.7 million kilograms. Thus, the calculations show that total wool production for 1 977-78 declined a little on the previous season.
I now mention the raw wool market. The 1977- 78 wool season opened on a subdued note with the market indicator at 293c per kilogram clean. That was 7c lower than the figure at the previous season’s close. The market gradually improved during August and September, but the Corporation was required to purchase upwards of 25 per cent of offerings during this period. Improvement in prices occurred despite weak Japanese demand, which reflected the relatively slack textile activity in that country. Purchases by Japan from Australia during September were 39 per cent below the comparable 1976-77 figure. Price rises, mainly in the carding sector, saw the market indicator pass the 1976-77 closing level during October to the end of the month at 307c. From that time on the overall movement was down. The worst affected categories were the fine merino combings, broad crossbreds and cardings. The downward movement continued to the Christmas recess, with the market indicator finishing at 297c per kilogram clean. Increased buying from Japan last year led to a steadily improving market after the recess. During January, the Corporation’s purchases slowly declined under the influence of the increased Japanese buying. On 10 March last year the market indicator again reached 307c, equalling the earlier seasonal peak. Fine merino wools reached seasonal highs, as did the 24 and 25 micron categories.
I give this information as history because there has been a rather dramatic turnaround for the year 1977-78. The season closed at about 310c. By about February of this year we were looking at a market indicator of 322c a clean kilogram. This was the highest level for more than two years. I think the market topped at approximately 371c a kilogram a few weeks back, and it is about 365c a kilogram now. At yesterday’s sales the Corporation bought 19 per cent of the offering but it is too early to say whether there is another decline. By and large, over the last 12 calendar months, the prices for wool have come back to levels more profitable for the wool industry than previously. It is anticipated that the wool clip will yield in excess of $ 1,000m for the year
Let us now look briefly at the reserve price scheme. The Corporation bought, at a cost of $163m, some 493,000 bales of wool at auction and tender during 1977-78 which, of course, is the last year for which we have figures. The Corporation in that year received some $229m for the 694,000 bales sold during the year. The original cost of this wool purchased over a number of years was $ 191m and the Corporation therefore ended the year with a trading surplus on wool of some $39m. Interest paid on the wool held in stock during the year amounted to some $36m and other costs of administering the reserve price scheme, including storage and transport, amounted to $12m, giving a total cost of $48m. Rather than bore honourable members with figures, I merely point out that there are two categories of reserve price accounts. A net cost of $ 10.6m relating to wool bought since the introduction of the floor price in September 1 974 was debited against the market support fund- I referred to that earlier- which comprises growers’ contributions. A net profit of $0.8m was earned on wool bought before September 1974 and that was transferred to a separate reserve.
In 1976-77 the net cost was $20.28m after gross costs were deducted from a trading surplus of some $25m. By June 1978 growers had contributed about $202m to the market support fund since its inception in September 1974. The contributions in 1977-78 amounted to some $56m. As I said earlier the current balance in the fund is approximately $135m. During the last season for which we have figures, flexible reserves were applied in two major groups, namely, the broader crossbred combing section and the merino and crossbred carding group.
I now turn to inventories. Wool held by the Corporation in stock at the end of the financial year 1977-78 amounted to almost 896,000 bales, an 18 per cent reduction from the one million bales held 12 months earlier. The highest stock level during the season was reached in January 1978. Stocks at the end of the season were composed of approximately 25 per cent fleece wools of 20.5 micron and finer. Although the overall reduction inventory for 1977-78 was 201,000 bales compared with 236,000 bales for the previous year, the 1977-78 turnover was 1,188,000 bales, an increase of some 583,000 bales on the previous figures. I read those figures into Hansard to give some idea of the movements in the stocks and to point out that the stockholding job performed by the Australian Wool Corporation is a rather complex one.
I would also like to comment briefly on the limited offer to purchase scheme introduced during 1977-78. These operations commenced in Melbourne and in Fremantle on 3 October 1977 and were scheduled to commence in Brisbane on 3 July of that year. The Minister, in announcing approval for the scheme on 31 March 1977, said that the Government’s approach to the scheme was based on the Corporation acting as a catalyst for change directed at securing economies in the handling and distribution of wool. The emphasis therefore is regarded as being on demonstrating handling and selling economies. The Minister has tabled a report from the Australian Wool Corporation on the limited offer to purchase scheme. The report came onto my desk today. Apparently the Corporation has lost in the region of $ 135,000 for its first year of operation in the Melbourne centre. My comment on the limited offer to purchase scheme would be that we still do not know what the true story is with respect to the management of this scheme, Maybe it is in this report but I have not had time to read it. It is fair to say that the Australian Wool Corporation holds rather tightly onto information in respect to the operation of such a scheme. I do not think that we should damn it because a loss was incurred. It might be that there is an unarguable need to experiment and evaluate proposed marketing innovations. There may be lessons to be learnt from the alleged failings of this scheme. These need to be taken into consideration to see whether such schemes can achieve their intended objectives.
In getting on to more general matters with respect to wool marketing and wool marketing reform, at present there are three proposals for modifying the present marketing system. The National Council of Wool Selling Brokers and the Australian Council of Wool Buyers have each proposed setting up a wool exchange to handle all wool for export. The third proposal, which was recently prepared by the AWC at the request of the Australian Wool Industry Conference, envisages that all wool destined for export would be purchased from a single authority. This document only came into my hands today and it is rather weighty. The AWC maintains that there are three principal reasons for a need to change wool marketing at this time. The report is entitled ‘Supplementary Report on a Review of the Corporation’s marketing proposals for December 1973’ and by and large the Wool Industry Conference has been working on those proposals since that time. The three principal reasons that the AWC puts forward for a change in wool marketing relate first of all to its contention that there is no effective or equitable means of managing the flow of wool on to the market. Secondly, it maintains that the Corporation’s ability to act vigorously on behalf of individual growers in the market has been limited by its own position as a passive buyer. Thirdly, and probably more importantly, it maintains that the introduction of least-cost, most-effective systems for handling of wool in store and preparation for sale and shipment that would benefit the entire industry is constrained for two reasons. One is the maintenance at auction of individual ownership of wool to point of sale, and the other is the high level of fragmentation in the total distribution system, which also limits exposure of market information and compounds the problem of quality control, of clip preparation and packaging. Those are the contentions.
I will go back to these three major proposals for modifying the wool selling system. The National Council of Wool Selling Brokers proposal can be interpreted as the institutionalising of the present system, with more control of operations vested in growers’ hands by representation on the Board and the role of private buyers curtailed by requiring wool for export to pass through the exchange. It would seem that all exchange members would be required to use the same methods and have the same charges for services. The curtailment of private buying and the uniformity in methods and charges would effectively reduce the level of competition in the wool market and reduce the marketing options to growers.
The proposal also suggests direct purchase by bulk classers which could be an advantageous innovation. By contrast, the Australian Council of Wool Buyers proposal places emphasis on stimulation of competition among members of the exchange by permitting various methods of handling, selling and setting charges. However, the proposal would still effectively prevent private buyers from dealing directly with overseas mills. The export marketing system proposed that all wool destined for export be purchased from a single authority. It is claimed that such an arrangement would maximise grower returns, particularly insofar as it led to reduced marketing costs through the adoption of currently available technologies and modified selling procedures.
I think we need to discuss, before we evaluate these three proposals, some of the pros and cons of centralised marketing of wool. I have already said that the proposals by the Australian Wool Corporation going back to December 1973 are the ones the industry is working with and they more or less propose the rather centralised selling of wool. The industry is still arguing for it, as I have pointed out. There can be many arguments for and against these proposals. There is an ongoing debate. We need to look at it first of all from the point of view of the grower. I think we need to come to some sort of conclusion by way of analysis as to whether centralised marketing increases the producer’s bargaining power in the market. This will depend, first of all, on the extent a central marketing agency regards itself as representing the wool growers. Secondly, it will depend on the existence of excess profits already in the system which allegedly can be siphoned off. Thirdly, it will depend on the ability of the agency to be a market with equal or better efficiency.
If wc lock at these three dependencies from the perspective of the present system, I guess whether or not an agency regards itself as representing wool growers depends very much on the objectives of that agency and I would think that the A WC sees itself as representing the objectives of the grower. The present extent to which brokers and buyers, including private buyers, make excess profits depends on the degree of competitiveness among each category of firm. Price competition among brokers is minimal or non-existent and as brokers operate as agents for growers and buyers it can be held that this antagonism of interest is not conducive to marketing efficiency.
The Bureau of Agricultural Economics has shown that there is pricing inefficiency in the wool market but it is not so confident that this would necessarily be eliminated by a central marketing authority because of other problems such as the bureaucratisation, diseconomies of scale and so on and the fact that there is still scope for innovation within a competitive framework. I acknowledge that it could be argued that centralised marketing could give operational efficiency via rationalisation of capacity, and here I am particularly talking about storage. What we are doing here is trying to move wool from overutilised to underutilised storages. One could rationalise documentation. One could argue that one could more effectively introduce innovative methods such as technological change. But here again there can be dangers if the central marketing authority just goes for one major change. It may be better to carry out a range of experiments.
There is also the argument with respect to economies of size- for example, to increase the extent of interlotting and selling more small class lines as star lots. But here again I think one can put up a counter argument. Is it necessary to have a centralised marketing authority for this or not and are there diseconomies above a 20-bale lot size? Again the BAE’s evidence- the Bureau has gone into this to some degree- is not definite.
Problems also arise when a centralised marketing authority tries to set charges for services and when all the functions and processes in the market are integrated. As a result, the centralised authority virtually has to set some shadow prices. The final question is whether centralised marketing can achieve improved supply management. The implication is that a centralised marketing authority, by use of stocks, could supply reliably what is needed by the world wool fibre users. As buyers commit themselves to the processing of the wool they buy six to eight months ahead, it is important that supply and price are not subject to aberrations. However, buyers may be weary of a single monopoly seller if for any reason there were a sudden jump in prices as a result of the central marketing authority’s decision. Once such a decision is made the advantages may be lost. At present it is seen by many market economists that it is better to have many ups and downs as long as they are smoothed out. More importantly, how would a centralised marketing authority distinguish between short and long term factors in distinguishing trends from permanent changes?
If prices are set by negotiation where is the price signalling mechanism? At present there are many buyers and sellers in the market. Therefore there are market signals. The only danger with the situation in which the Australian Wool Corporation bilaterally negotiates some sales is that if there is too much negotiation the auction system tends to fail. The difference with this situation is that Australia is the dominant wool seller in the world whereas with wheat we are a price taker. We have to set a price subject to some rational economic forces. Our wheat industry is a price taker whereas our wool industry is virtually a price setter.
Against these thoughts on centralised marketing in general I wish to amplify my thoughts on some of the marketing innovations that have taken place in the immediate past. Firstly, no one really disagrees with the statement that the reserve price scheme has been an outstanding success in providing stability to the industry. However, and in emphasis of what I have been saying with respect to doubts I have on centralised marketing in general, it is now time to evaluate the gains and losses of the present scheme before proceeding with any of the three major proposals for modifying it. The Australian Wool Corporation maintains that there are hidden gains in the reserve price scheme. Although I may accept that, I would like more evidence placed before me.
The Bureau of Agricultural Economics made a recent study on losses and gains and came up with different conclusions. Although this study was qualified by the assumptions used and the lack of information on recent estimates of the price elasticity of demand for wool, it showed that one of the effects of wool market intervention was that a decrease in price variability of 24 per cent had resulted in a revenue loss of $46m. The BAE made the point that the study- or more accurately the simulation it used- should be considered as providing indicative rather than definitive estimates of the effects of the Australian buffer stock/reserve price scheme.
It is the wool growers who bear any losses or gains from stabilisation and they will need to decide whether the insurance premiums potentially paid for price stabilisation are warranted by the price risk cover purchased and any other benefits. The three modification proposals will need the closest scrutiny. I recall that 20 per cent , of wool growers receive only about 8 per cent of their incomes from wool. In a situation in which income equalisation deposit schemes operate there may be some who believe that the premium is too high. In other words they would rather get to the pure market mechanism. It should be remembered that the reserve price scheme does not and cannot stabilise growers’ incomes; all it sets out to do is to smooth out the aberrations in price. In any case, more and more close research is needed. The Australian wool marketing system has already exhibited flexibility and adaptability in responding to changes in the market environment.- These changes have occurred gradually through a process of research, evaluation and steady adoption. This is the direction I want to see continued.
In the time available I want to comment only by way of review or evaluation on the changes in the system over the past few years. Sale by sample and objective measurement was by far, and I guess still is, the most important catalyst in reform to selling and handling procedures in the wool industry. Sale by separation is a potential change flowing directly from sample selling, whilst sale by description is a further potential expansion of sale by sample. To date the major benefits of sale by sample and objective measurement have gone to growers and not to intermediaries. The size and distribution of future benefits need to be determined. It should be remembered that prior determination of monetary benefits is difficult. Should we go to total adoption or should we follow the usual pattern of sequential development in the market? Each grower has a different position, a different flock, and the cost of sale by sample and objective measurement might not always result in higher prices for him.
In conclusion, as the AWC has clearly pointed out, the evaluation of potential benefits from substantial changes to current marketing procedures can be only partly achieved. If proposals of the type being suggested are proceeded with the evaluation has to be done on the basis of doing it and then assessing whether it has been successful. It is my view that because major changes such as those being suggested have an unknown probability of not being as successful as expected they represent action which would expose the wool marketing system unnecessarily to high risks. This judgment is reinforced by the belief that once the changes were introduced they would be difficult to reverse and by the view that the main objectives of the changes can be achieved by other means.
– I support the Bills before the House. They are the Wool Industry Amendment Bill and the Wool Tax Amendment Bills (Nos. 1 to 5). (Quorum formed). It is significant that when the Australian Labor Party called that quorum only eight Labor members were in the House to show an interest in the wool industry. The Bills before the House are designed to extend for one year the wool tax proposals, that is, the 5 per cent levy for the Market Support Fund and the 3 per cent levy for research, promotion and the administrative charges of the Australian Wool Corporation. These Bills have the full support of the Australian Wool Industry Conference and also of wool industry groups throughout Australia.
As the honourable member for Werriwa (Mr Kerin) pointed out, during the current woolselling season the market indicator has varied from 307c per kilo at the beginning of the season to something like 364c per kilo last week. This is a significant improvement in and strengthening of the wool market. Not only has this strengthening appeared but also there has been a significant fall in the stockpile holdings of the Australian Wool Corporation. At the beginning of the 1977-78 wool selling season, the Corporation’s stockpile was in the region of 900,000 bales and by last week this had fallen to something like 450,000 bales. This means that by the end of this wool-selling season the stockpile could be 350,000 bales or less. In addition, there has been a reallocation of the types and styles of wool in the stockpile. Earlier the stockpile was dominated by a large collection of the finer types of wool. That has now been reduced so that the stockpile represents much more the spread of types throughout the Australian market. As the honourable member for Werriwa also pointed out, the Market Support Fund at the beginning of the wool selling season contained about $135m. Growers during that time contributed just over $200m. It seems that by the end of this wool-selling season the Market Support Fund could well contain a total of over $200m.
I think that this season has demonstrated significantly that there are a number of important features in the wool market in Australia. A5 the honourable member for Werriwa pointed out, the Corporation’s reserve price operations are acting effectively. In the past they have prevented extremely low levels of wool prices being obtained and they have avoided to some extent this year the sudden rises that occurred in the 1972-73 season. Those sudden rises in prices were of long-term significance to the wool industry. It had an effect on the decision of users to buy wool. The whole point is that questions have to be answered about the future of the Market Support Fund. To what level should the Market Support Fund be lifted? The Australian Wool Industry Conference has looked at this question. Its view is that once grower contributions to the Fund have reached $300m a reassessment should be made. The Conference supports, at this stage, the concept of a revolving fund. I feel that a revolving fund is a fair and equitable answer and will allow those wool producers who contributed earlier to the Market Support Fund to get some of their money back. The reserve figure of $300m could be reached by 1 98 1 . There is a requirement on the Government at this stage to make a decision. This is not something that can be ignored for much longer.
The 3 per cent of funds which is currently appropriated for research and promotion and to the administrative costs of the Wool Corporation may well require some reassessment. The honourable member for Werriwa touched on the International Wool Secretariat. A fair proportion of research and promotion funds which are contributed by growers and matched substantially by the Commonwealth Government is paid to the International Wool Secretariat. Australia operates the Secretariat in combination with a number of other wool-producing countries including New Zealand and South Africa. The effect of inflation world-wide and the devaluation of the Australian dollar over past years has meant that the Australian contribution to the budget of the International Wool Secretariat in real terms has dropped. In fact Dr Gerald Laxer the Managing Director of the International Wool Secretariat, visited Australia earlier this year. He pointed out very clearly that at least a 10 per cent increase each year for the next four years was needed in the Secretariat budget to enable it to retain the current level of effectiveness. In effect the budget is buying less and less promotion and research. It is quite clear that worthwhile benefits to the Australian wool industry are being achieved and have been achieved in the past by the work of the IWS. Therefore there is a real need to assess the requirements of the Secretariat.
The Minister for Primary Industry (Mr Sinclair) has announced a review by the Bureau of Agricultural Economics into the promotional activities of the International Wool Secretariat. I have some reservations about the adequacy of the Bureau of Agricultural Economics to conduct such an investigation. Similar investigations have been carried out in the past into the International Wool Secretariat, the last being the McKinsey report of 1 973-74, which looked at the organisation of the Secretariat. It was also required to look at its functions and the effectiveness of those functions. The Industries Assistance Commission to some extent, through its publications on research and promotion, looked at the activities of the International Wool Secretariat. In both cases the results were tentative and did not add very much to the evaluation of the effectiveness of the International Wool Secretariat. I have reservations about how effectively the Bureau of Agricultural Economics will be able to conduct such a survey. I wonder whether in seeking an evaluation in this way we are not sending a boy on a man’s errand. I will be very interested, indeed, to see exactly what the reports contain.
It is quite clear that, if we want the International Wool Secretariat to continue at the level at which it is functioning at the moment, there is a need for increased contributions to be made. Those increased contributions will have to be drawn from the members of the International Wool Secretariat. Of course Australia, being the premier wool producer in the world, is the premier contributor to those funds. It seems to me that there is a clear requirement for additional funds to be made available to the International Wool Secretariat. Where those funds should come from, I am not sure. One answer could be that they should come solely from government. It could well be argued that that should be so because the Australian wool industry is one of the least protected industries in Australia. It carries one of the biggest burdens of tariffs and of other artificial protection to Australian industry.
Over the years the wool industry has gained very little by way of support from the Australian Government. It has gained very little indeed if one compares it with many other industries and when one takes into account that this year, for instance, its contribution to Australia’s overseas earnings will total over $ 100,000m. I think that that puts the situation of the wool industry into perspective. So, there is at least a good argument in favour of the Government financing the increased requirements of the International Wool Secretariat, or at least a large proportion of them. After talking to grower organisations, I feel that they are prepared to match the Government and to supply jointly, with the Government, the additional funds required by the International Wool Secretariat.
Another possible source of funds which should be looked at is to reduce the amount of research funds which are made available from growers’ contributions and which also are supported quite generously by the Commonwealth Government. But when we consider the nature and the requirements of research into the wool industry we see quite clearly that there can be no fall off in the funds made available for such research. The wool industry still has many problems which have to be solved. Just to name a few, the whole area of wool harvesting still needs a great deal of research and’ further investigation. With increasing shearing costs and wool handling costs, it is very clear that much more detailed research has to be undertaken to find a cheaper and more effective way of removing wool from the saep
We have blowfly problems and disease problems. I can point quite clearly to one disease problem which is very worrying in my electorate, namely, the problem of rye-grass toxicity. At this stage, the Commonwealth Scientific and Industrial Research Organisation is making some limited attempts to find solutions to the problem, as is the Western Australian Department of Agriculture. Those problems are indicative of some of the problems which exist in the wool industry. It is quite clear that there can be no diminution in the level of funds made available for research. So I discard the suggestion that we should provide the additional funds in that way.
One of the other alternatives which I think could be looked at is that, as the Market Support Fund is growing, the 5 per cent contribution made to it could be cut back to, say, a 4 per cent contribution and the 1 per cent decrease in contribution could be added to the amount made available for research, promotion and the administrative costs of the Australian Wool Corporation. I understand that this suggestion has been raised with grower organisations but that they are unhappy with that solution. I ask them to look more realistically at the suggestion because it seems to me that it offers a realistic and sensible answer to some of the problems which exist. I repeat that, in my view, there is a clear requirement for, a clear obligation upon, and a clear justification for the Government to increase its contribution to wool promotion and research.
The honourable member for Werriwa (Mr Kerin) went quite deeply- much more deeply than I can- into the marketing situation faced by the Australian Wool Corporation. I am disturbed that the wool marketing proposals have been deferred. They were put up originally in 1973 and were supported by the Australian Wool Industry Conference over a period of years. They were reviewed in 1978, but no changes of any significance were made. The effect in the plan of brokers and a few other people was changed to some extent, but the basic aims of the plan, and the basic methods of achieving it, remained very much the same. Then, in March of this year, the Australian Wool Corporation announced that it would defer consideration of the marketing proposals. It felt that the time was not propitious, that they did not have support from the Government, and that they had doubtful support from the growers. However, the Corporation pointed out that it was not retreating from the view that it saw the recommendations in the marketing report as being the solution to the long-term wool marketing problems in Australia, and I support that view. The whole marketing area has now been referred back to the grower organisations by the Wool Industry Policy Committee, and it is expected that the matter will be considered at the next meeting of the newly formed Wool Council.
It worries me very much that again this may be a classic case of growers becoming complacent when things are going well in the wool industry. Having been a member of the Australian Wool Industry Conference and having served for many years in grower organisations, I am well aware that that is the case and that it happens quite frequently. The growers squeal and ask for government intervention and help and for changes in marketing when market forces are against wool. As soon as the market forces turn in favour of wool and things look rosy again, they are quite prepared to drop all claims for changes in marketing methods, handling and so on. I wonder whether this is another case of a short-term outlook in that regard. I appeal to grower organisations to look more closely at the marketing proposals put forward by the Australian Wool Corporation and not to fall into the classic position when things are going well of feeling that no change is necessary in the industry.
A brief look at the history of the wool industry since 1969 indicates quite clearly that the methods and the reserve price plans that have been implemented, and the activities of the Wool Corporation, limited as they are at the moment, are not sufficient and will not serve the long-term interests of the wool industry. Further basic and substantial change is still required. A number of factors have to be considered, and I think that these were referred to in part by the honourable member for Werriwa. There is still no control of wool going onto the market. It comes in seasonal gluts, not necessarily in the interests of either the growers or the users of wool. It is clear also that the Corporation’s situation is quite limited in that, as the honourable member for Werriwa said, it is a passive market participator. It cannot force the market in any way; it reacts to the market. I think it is even more clear that there are substantial savings to be made in the handling, transport, organisation and distribution of wool, and these involve significant costs at the moment.
I welcome the fact that the Wool Corporation has made experimental shipments of wool overseas on other than the Conference line. For instance, as an experiment it has shipped something like 80,000 bales outside the Conference line. I understand that it estimates the savings to be something like $500,000, which is significant indeed. I believe that there are many other areas where this could be done. Admittedly, sale by sample and objective measurement and sale by separation have gone some way towards solving the problems, but substantial savings could still be made. The limited offer to purchase scheme has brought about some improvements and has been testing methods of bulking and bulk classing and interlotting wools, but it is only a limited experiment and one in which I do not place much faith. Even more important is the fact that there is a requirement to put wool on the world fibre market as a competitive textile fibre. With our present fragmented selling and marketing system, this cannot be achieved.
I support the measures that are now before the House but indicate that no matter how healthy the wool industry appears to be, it has problems that must be resolved in the near future. I have referred to a number of those problems in my speech.
Mr FitzPATRICK (Riverina) (9.35)- I support the Wool Industry Amendment Bill and Wool Tax Amendment Bills (Nos. 1 to 5 ), so that the statutory accounting provisions in respect of a floor price scheme for wool may include the 1979-80 season.
We are indeed fortunate to have had speak in this debate a past member of the Wool Industry Council and a past member of the Bureau of Agricultural Economics. They have given us much technical and practical knowledge of the wool industry and wool marketing. I will try not to cover too much of the ground that they have been over.
However, I do want to draw the attention of the House to one of the statements that were made by the Minister Assisting the Minister for Primary Industry (Mr Adermann) in his second reading speech. He said that the floor price arrangement was introduced in September 197.4 and was designed to operate for the 1974-75 season only. I direct the attention of the House to that because I well remember the discussions when the floor price was first introduced by the then Labor Government.
There was then no doubt that it was a major plank of the Australian Labor Party’s platform. That was well understood by members of this Parliament and by people outside of it. Everyone knew that the intention of the Australian Labor Party was to have a continuing floor scheme. That was debated in meetings all over Australia and was something that the wool industry had been after for years. Of course, the Bill anticipated that the floor price would have to be increased along with the increased costs that the farmer had to face, and with the inflationary spiral generally. Therefore, provision was made for an increase in the floor price, and it was never intended that the scheme itself would continue for only one year. I do not know whether the Minister was referring to the accounting provisions only but his remarks made it look as if applicability for one year only had been the intention under the original Bill. I do not want anyone to get that impression.
One can well understand the shame of the National Country Party in not having introduced such a measure despite acting for so many years in coalition with the Liberal Party. It will never get away with the claim that the then Labor Government intended that the scheme should operate for one year only. Every woolgrower knows that the scheme, when it was introduced by the then Labor Government, was a milestone in the history of progress in the wool industry. Despite all the knockers in this House no one would want to go back to the uncertainty that existed before the Labor Government introduced this scheme.
As a matter of fact, Mr Von Bibra, who commanded some respect and authority in the wool industry of that time, had this to say:
The floor price scheme represents a milestone in the history of the wool industry. After very many years of dissension and debate within the industry and within the Government we now have a commercially viable marketing proposal which can overcome the crippling uncertainty that has been evident in recent times in the wool market That in itself will be of enormous relief to wool producers and wool users around the world.
It was certainly clear in this very knowledgable man’s mind that this was not a scheme that had been introduced for one year only. I think that there was every justification for such remarks because it was a Labor government which, after many years of dissension and debate, gave the industry some kind of security. It set up a scheme that guaranteed a floor price which was completely justified in commercial terms. It offered the growers of this country a reasonable level of income when the going was tough. Of course it did not represent a revolutionary change in wool marketing. It simply represented an assurance that wool prices would be kept at a certain level, and that is what has happened.
Whatever criticism may have been made in the intervening years, I have never heard anyone, either in this House of outside it, say that he wanted to go back to the previous scheme of deficiency payments whereby the government came to the party when prices dropped below 36c per lb. Of course, people would be foolish if they wanted to do so. We can all remember the unsatisfactory deficiency payments in the wool scheme that was introduced by the LiberalNational Country Party Government. The Labor Government legislation consisted of two measures: Firstly, the Wool Tax Acts were amended to impose a special 5 per cent levy on the sale of wool by growers in 1974-75. It was intended that the levy would provide a reserve for meeting any losses that might arise out of the floor price arrangement. Secondly, the Wool Industry Act was amended to provide for the establishment of a market support fund as a repository for the proceeds of the 5 per cent levy. It also laid down special accounting provisions for the reserve price operations. What has not been mentioned is that at that time the Labor Government had to guarantee $ 150m to start the scheme off.
The Wool Industry Act had to be amended to provide for the establishment of a market support fund. Since then, the continuation of the floor price scheme has involved successive annual amendments to continue the arrangements described in the original Bill.
As a member with an electorate that depends so much on the wool industry for its economic health and welfare, I have some satisfaction in knowing that this Government is introducing machinery amendments to carry on the worthwhile and nationally accepted floor price scheme introduced by the Labor Government. I can well remember in 1969, when I first came into this Parliament, wool growers asking when the Parliament would introduce a worthwhile and beneficial marketing scheme. For many years, such a scheme was sought from the Liberal-Country Party Government. But, in spite of the coalition Government’s being in office from 1949 until 1972 and in spite of many crises in the wool industry, that Government failed to come up with a scheme that offered any real assistance, any real support to the wool industry. It must go on the record that it was a Labor Government that did something about the matter. Surely honourable members can remember the meetings of angry wool growers in 1970. At that time 2,000 to 3,000 wool growers gathered to express their disappointment and disgust at the assistance they were getting from the then Government. In any case, it is good that we are keeping the Labor Government legislation updated to meet the present day prices and pressures.
Early this year I attended the Rural Outlook Conference. I suggest that some of the people who have been painting such a bright picture of the situation in the wool industry should consider some of the reports put out by the Bureau of Agricultural Economics at the time of that Conference. The forecast given by the Bureau of Agricultural Economics was that Australian wool prices would fluctuate between 316c a kilogram and 324c a kilogram clean, or 4 per cent to 7 per cent up on last year. The Bureau also remarked that although there were some positive elements in the outlook, demand for wool was expected to remain subdued, and auction prices realised by the Australian growers would depend critically on any movement in the value of the Australian dollar. It went on to say:
Between the beginning of 1977-78 and mid-November 1978, the value of the $A in terms of the official tradeweighted index fell by 10 per cent. The decline was greater when measured in terms of a basket of currencies of the major OECD raw wool-consuming countries. Over the same period, Australian auction prices increased by only 7.5 per cent.
I think this is the critical point:
This means that prices paid by overseas buyers actually fell on average, measured in terms of their own currencies.
So it is not such a great, buoyant market when we go into it a bit deeper. These are the facts and bearing them and the forecast in mind must convince everyone of the importance of having a sound floor price scheme. Any study of the wool market would be incomplete without some comparison between the private and auction prices for wool. I refer to the booklet, also put out during the Rural Outlook Conference, entitled ‘The Private Buying of Wool’. I do not want to go far into it but I do want to read the conclusion reached because I think there is a vital point made in it that has been overlooked by some people when discussing wool sales and private buying. It is stated on page 24: . . . there was no evidence of pricing inefficiency between the private and auction submarkets because of private buying. An inference that can be drawn from the foregoing evidence of price uniformity, is that the interdependence between the auction and private submarkets is likely to result in the AWC’s reserve price scheme at auction being generally effective in the private submarket as well.
That means, of course, that without the floor price the wool growers would not be getting so much from their private sales because the floor price keeps up the price in both cases. I think this is a point that is generally overlooked when people speak about private sales. It was nice to hear the honourable member for Canning (Mr Bungey) talking about the revolving fund. The House will recall that last year when the Wool Industry Amendment Bill was debated the Australian Labor Party moved an amendment that the revolving fund be set up. It is nice to know that once again this Government, although a bit late in doing it, is now getting behind the policies of the Labor Party. There is no doubt that many wool growers are referring to this fund. We said during the earlier debate that after seven years the chap who came in during the first year should go out and the plan should revolve accordingly. If the wool growers do not want the plan to operate for only seven years let it be 10 years, but surely at some time the grower who came into the scheme early is entitled to get his money back. This money should not be frittered away for any reason whatsoever. It belongs to the grower; it is there for his security. He should get it back eventually. The marketing of wool has been a topic of public controversy in Australia for many years. It will continue to be so. It is obvious from the remarks made by the two previous speakers that there is a good deal of contention still. In the meantime, it is very gratifying to see so many Government members supporting the measures introduced by the Labor Party.
-The purpose of the Bills before the House in the main is to extend the floor price scheme for wool for the 1978-79 season and to collect revenue from levies which will be credited to the Market Support Fund established by the Australian Wool Corporation. For administrative convenience, as the Minister Assisting the Minister for Primary Industry (Mr Adermann) pointed out, the special levy of 5 per cent is collected in conjunction with the 3 per cent levy that represents woolgrowers’ contributions towards the financing of wool research and promotion programs and the administration of the marketing functions of the Australian Wool Corporation. The Minister also pointed out that the present levy of 8 per cent has been in force since August 1975. When the scheme was introduced in September 1974 it applied only to the 1974-75 season. Legislative amendments have been required every year since to keep it in operation. This legislation is required to allow the scheme to operate in 1979-80. The purpose of these Bills is to continue the program.
I draw attention to the fact that the Australian Wool Industry Conference is in full agreement with this legislation. The floor price scheme has been essential in ensuring stability in wool prices since its introduction in the 1974-75 season. I am a great supporter of primary producer organisations such as the Australian Wool Corporation and the Australian Wheatgrowers Federation. I believe that governments should take full cognisance of the decisions that they arrive at. No one is perfect and no organisation is perfect. At the same time, primary producer organisations devote a tremendous amount of time and effort to studying the problems of their industries. While they are conscious of the need to give help to those industries which require it, nevertheless the decisions they arrive at and the representations they make are based on very sound research. I commend them for the work they do.
The flexible reserve price scheme was introduced at wool auctions in November 1970. Following a fall in wool prices late in 1970 the Australian Wool Commission, as it was then termed, commenced the firm reserve price plan in January 1971. This reserve price maintained the price of wool at an average of approximately 64c a kilogram greasy for the whole of 1971. I was Chairman of the Government Members’ Wool Committee when the flexible reserve price scheme was introduced. I well recall the concern expressed by a number of members in the Parliament as to what the ultimate cost to the Government would be. Those concerns were expressed pretty freely. The Government, to its credit, continued the scheme. In 1970 the Government was of our persuasion. However, although substantial quantities of wool were bought in, the price was maintained. As the price rose later on the wool bought in was released on to the market and sold profitably by the AWC, thus stabilising the price. This was brought about at no real cost to the Government, despite the dire forebodings of those members who were critical of the scheme at the time. Flexible reserve prices are now introduced when the market price rises above the floor price, and this serves to prevent the fluctuations in price caused by irregularities in demand. This has’been very effective.
– You want to learn a bit more about the scheme.
– All you would know, about wool is the wool that is sold in the shops.
– I sell a damn sight more wool than you do anyway.
– You only think you do, and you make many other mistakes as well. The floor price arrangements introduced in September 1974 were based on 250c clean for average 21 micron wool. This level was maintained throughout 1974-75 and 1975-76 despite large stocks being accumulated by the Australian Wool Corporation.
– Why are you wearing synthetics?
– Your comments are about as empty as you can make them. I think you ought to stick to something that you know something about, if there is anything that you know anything about. These prices were maintained during those seasons, and large stocks were accumulated during that time. This was the basis and the reason for this type of operation. It was not very well understood, as evidenced by the interjections I hear in the House tonight. The wool growers understand it; they benefit by it. It was to the credit of this Government that the price was maintained over that period. Despite the fact that the stocks were accumulated during those years, present stocks of wool have been scaled down and are at a satisfactory level. Indeed, I feel that possibly in the interests of the wool industry it is a good idea to have a certain amount of reserve stock available. At the present time the reserve stocks are quite satisfactory. The floor price was raised in 1976-77 to some 234c a kilogram clean compared with 206c a kilogram clean in 1975-76. The previous method of expressing floor price in terms of 2 1 microns was dropped at that time. Now it is referred to as so much a kilogram clean.
On 1 December 1976 the floor price increased further by the full extent of devaluation to 284c a kilogram clean. There were plenty of people who were quite opposed to any sort of devaluation in this country, but it did serve a purpose so far as that great export industry was concerned. In 1978-79 the floor price will be maintained at 289c a kilogram clean, and the 1979-80 floor price will not be less than this. That is the guarantee that the wool growers have. It is not only a guarantee of price to the wool grower, but it also serves a very useful purpose of enabling a buyer of wool to know that whatever the market conditions are he is not going to reach a situation in which next week he could be buying wool at a much different price from the price operating this week. This gives the buyer confidence that he can go into the market, knowing that that is the floor price and that his competitors will not get wool any cheaper than that. That is one of the great factors of the scheme, and one that is often overlooked. I mentioned previously the levy that the wool growers pay on the gross value of the sales. This is held by the Corporation Market Support Fund, as well as a 3 per cent levy which represents the wool growers contribution to research and promotion.
There is no question that this whole operation has been a wonderful thing for the wool industry. I well recall that people in my area were talking, and my area grows some of the finest wool in Australia, I might say.
– In the world.
– Yes, that means the world.
– That is the Maranoa electorate, is it not?
– Yes, it is Maranoa. Concern was felt then, despite what has been said tonight, as to what was going to happen to the wool industry. The wool growers were very worried about it. Finally a scheme was brought down which did preserve this industry. Now we find this established organisation, this established operation, is such that it has given great confidence to the wool industry generally. I can see this operation or something similar continuing well into the future. It is established, it can be maintained. There is a need for these sorts of fibres, and they have already proved their worth throughout the years.
The scheme does contribute to the wool industry, and through the industry to the sound economy of Australia. There was a time when, it was said, Australia rode on the sheep’s back. That statement does not apply to the same extent today, but wool still does play a very important part in the national economy.
The wool industry is labour intensive by comparison with some other primary industries. Because of that it contributes greatly to the progress and economic welfare of country towns and the people who reside in them. The- shearing, the treating of sheep, the mustering and the fencing work carried out in wool growing areas are of assistance to decentralisation. The tragedy is that there was a time when wool prices fell so low that the industry was unprofitable and this great contribution to decentralisation for our country towns was reduced to a great extent. Wool prices are now satisfactory and more people are coming back to the country towns, which is pleasing to see, but there is still a degree of concern about the number of shearers who will be available. There is also concern about the number of workmen who will be available to undertake repairs to farm improvements, such as fencing, which are rundown, and perhaps to do timber work and work on waterways, which contribute so much to the economic viability of the industry.
In a recent visit to the western areas I heard of some people complaining about the lack of labour to do this sort of work. So jobs are available in those outlying areas. It is essential that the wool industry should have available to it the type of labour that is necessary to maintain it. I am sure, as far as anyone can foretell the future, that those who are prepared to undertake this type of work would be assured of constant employment.
A responsibility rests upon the people of Australia generally to utilise the productive capacity of the nation. The wool growers are making a worthwhile contribution in this respect. An industry that is stabilised to the extent that this scheme has enabled it to become stabilised certainly will make a great contribution in that regard. Sometimes when appeals are made for assistance to rural industry I find a good deal of resistance on the part of many people who do not understand the problems of the industry. The resistance to the request for assistance that is being made by supporters of my party and by Government supporters generally is much greater than it is to requests for assistance from secondary industry. Assistance is readily handed out there. I do not condemn that because secondary industry does provide employment for the labour force, which is necessary for the balanced development of this country, but I do say that too often there are claims that the people in rural industry are asking for too much. The people in rural districts live under conditions well removed from the beneficial conditions that exist in metropolitan areas. I remind the House that it is only in recent years that some of those deserving towns scattered throughout this country- some of which are in the electorate of my friend the honourable member for Kennedy (Mr Katter) as well as in my own electorate and perhaps in your electorate of Forrest, Mr Deputy Speaker- have received broadcasting from the national television station. There are many towns that are still waiting for this facility. There are not too many people in Australia who are unduly concerned about the difficulties faced by the people who live in these areas and who contribute so much through the wool industry and other primary industries to the welfare of Australian people.
– Some do not even have telephones.
– As the honourable member for Mallee said, some do not even have telephones. Some of those who do have to pay trunk line charges for nearly all their calls. The cost to them of telephonic communication is very high. I just hope that the Australian Telecommunications Commission will take their situation into consideration. In fact, I know that it is doing so. I look forward to an improvement in the size of local call zones and local call facilities to encompass the nearest business centre so as to alleviate to some extent the heavy financial burden that rests on the shoulders of those who live in the areas where most of the wool growing takes place, even though some wool is grown in areas where communications are better than they are in the outlying areas of many electorates including my own electorate.
I commend the Government for introducing the Bills which I support wholeheartedly. I hope that the few comments I have made about the need for people to look at the balanced development of Australia will lead people to give some consideration to this matter. For example, funds are required to support the stability of the wool industry, despite the fact that the price of wool is reasonably satisfactory at the moment. I am sick and tired of hearing people say, as soon as the rain falls, that all the drought problems are over. As soon as cattle prices rise, as is now the case, we are told that the cattle producer does not need or deserve the assistance for which he sometimes asks. The difficulties are too readily forgotten. I hope that the Government will give consideration to the needs of wool growers, in particular- they are involved in the Bills we are discussing- and primary producers generally to allow them to continue to play the part that is the responsibility of the Australian nation, that is, the utilisation of the productive capacity of this nation. I support the Bills against that background.
-Mr Deputy Speaker -
– What do you know about wool?
– The honourable member for Fadden interjects: ‘What do you know about wool?’ As a matter of fact, about five or six years ago I made a speech in this House and after I had finished six Ministers from the Government side of the chamber came over to me and said that it was the finest speech on wool they had heard in this House. I will name them if honourable members wish. The honourable member for Maranoa (Mr Corbett) ranged fairly widely in the debate. I want to raise a serious matter now we have had a bit of fun. We would all agree that wool is Australia’s best known product. It may not be our major export today but certainly for 100 years it has been one of the major exports, if not the major export. It is probably the product for which Australia is best known. Australia is also known for the production of the finest quality wools in the world.
I raised a matter with a number of Ministers in this House. In fairness to them I say that they were responsive to the suggestion that at our international airports, where Australia receives some 550,000 visitors from overseas each year, there is not one shop that specifically sells woollen products. I think it is absolutely staggering that the product for which Australia is best known is not promoted in any way at the major international airports of Sydney and Melbourne. Other countries have their best productswhether they be batik clothing in Indonesia or silver or leather work- displayed so prominently that they are the first things to be seen after stepping off the plane. I have talked about this matter with the Minister for Primary Industry (Mr Sinclair), the Minister for Health (Mr Hunt) and the Minister for Trade and Resources (Mr Anthony). They have all agreed with the suggestion that we should have an Australian wool shop at the airports.
I am in the retail trade. I approached the Ministers and said that I would be prepared to do it myself. I am not prepared to do it now because I would place myself in an invidious position as a member of Parliament. Someone would say that I was getting special privileges. But I would like to see it done by somebody. We approached the authorities three years ago. Unfortunately, at the time the leases had just been let. The new leases now contain a provision that a wool shop could be one of the four or five shops at the international airport at Sydney. I wish to point out the conditions which were so prohibitive that no person in his right mind could possibly go into it. The shop that could be used was tiny- about 10 feet by 12 feet in size. Secondly, the person who leased that shop also had io take another shop inside it and sell newspapers. We are talking about a high fashion shop selling high fashion quality woollen goods. No one will sell newspapers as well. That is like Richard Hunt flogging newspapers and clothing at the same time. Then, the lease is for only three years. Can honourable members imagine anybody going into business in a high fashion quality store seriously contemplating spending thousands of dollars on beautiful decor when the lease is for only three years?
Then it is necessary to run the shop for about 18 hours a day using three shifts. It is necessary to give a tender price for the rent which is quite prohibitive. The fact of the matter is that it is just not on for anybody to do it, but it needs to be done. If it cannot be done by a private entrepreneur it ought to be done by the Australian Wool Corporation. There should be a shop at the Sydney airport and the Melbourne airport. A shop would show that we not only have the finest wool in the world but also that we make woollen products amongst the finest in the world. Some of Australia’s woollen manufacturers and textile manufacturers make blankets, rugs and suits which are among the best in the world. These products ought to be displayed at Sydney airport.
Approximately 90,000 people a month pass through those airports. They are the people who can afford woollen products. The half a million people who come from overseas are the people who have the money and therefore can afford to buy woollen products. When they leave Australia they want to take with them something that is representative of Australia. What better than a Australian woollen sweater, a woollen scarf, a woollen cap or a nice sports coat? I could go on and on. It is logical that Australia should have a shop selling these products at the Sydney airport. There are one or two shops there which sell a few kangaroo skins, mulga wood ashtrays and Opera Houses made out of fur. They are doing a job that needs to be done and I am not criticising them as they are quite good at it. But clearly they do not do the wool promotion job that I have been suggesting tonight.
I am sure that the response I have received from members in the House tonight is exactly the same response that I received from the Minister for Health, the Minister for Primary Industry and the Minister for Trade and Resources. But three years later nothing has been done. Personally, I am not interested in this shop any more but I would like to see it established for Australia’s sake.
– I compliment the honourable member for Robertson (Mr Cohen) for his contribution to this debate. There is no doubt whatsoever that when he puts politics to one side and is prepared to speak in a bipartisan fashion in the national interest he makes a very worthwhile contribution to this Parliament. The suggestion he has made tonight is one which I think ought to be taken seriously by the Government. Even if the Government has to provide rent-free space at the Sydney airport, it should be done. The purpose of the Bills before the House has been stated by probably everybody who has spoken. The Bills extend the provisions of the reserve price scheme for wool for another year in order to cover the purchases by the Australian Wool Corporation for the next season. There are the related Bills which provide the enabling legislation for the collection of the levy at the rate of 5 per cent for wool which is sold. This assists in the financing of the floor price scheme.
At present the wool industry situation is bright and it appears that it will continue that way for a reasonable period. Mr Maiden, Chairman of the Australian Wool Corporation, spoke a few weeks ago in Perth at the Agricultural Conference. He made some forecasts in relation to the sheep industry and said that sheep numbers would recover from their present low level, caused largely because of drought effects, and are expected to level out at about 145 million to 150 million head. Shorn wool production over the next few years should average about 700 million kilograms a year.
I am pleased that the wool industry is facing a period of relative stability. Prices certainly are satisfactory at present. The floor price which this legislation enables to be continued always provides that downside risk protection which is necessary in an industry like this.
As most honourable members would be aware, the market situation has been favourable since the opening of the season after Christmas. The market indicator is now something over 360c a kilogram clean. As I indicated, that is a satisfactory price, even though many wool growers have not yet recovered from the periods when the price of wool was certainly unsatisfactory, particularly in the light of rising costs which are always a factor in this industry. It is probably worth mentioning at this time that there are continuing problems in the wool industry especially in relation to negotiations for the award rate for shearing and other costs. The cost of chemicals continues to rise. The continued escalation in costs is a problem in the wool industry, as it is in all other industries. It is appropriate that the market should have responded at this stage. Growers now are in a position to get a reasonable return.
The stockpile has been reduced quite significantly in the course of this year. I believe that the Australian Wool Corporation has acted very responsibly in its management of the market, by use of the stockpile. The Corporation has maintained the market increase at a steady level. Market increases have not been allowed to run uncontrolled as they did in earlier years with the result that, at that time, serious repercussions occurred when readjustment was necessary.
The Corporation must continue to hold a reasonable stockpile of wool because, obviously, as soon as it has no stockpile, the Commission’s effect in the marketplace is minimised, if not totally eliminated. The question of what is a reasonable level at which to maintain the stockpile is a matter which will always be open to argument. Perhaps we should not let the stockpile fall bellow the level of 250,000 bales or 300,000 bales. Honourable members are aware that the Corporation has repaid the total debt which was funded by the Commonwealth when the stockpile was high. The industry is now operating completely on its own feet in respect of the stockpile and the floor price scheme. The industry is pleased about that. No organisation likes to be in a situation where it has to call on the Government for assistance, unless that is absolutely necessary. As my colleague, the honourable member for Maranoa (Mr Corbett), pointed out so well, it is proper for the Government to respond when the industry finds itself in areas of difficulty.
I understand that next year the industry will have contributed over the period that that levy has been in operation approximately $300m in total to the 5 per cent levy scheme. I understand that it is generally agreed in the industry that next year is an appropriate time to give consideration to future policies and management proposals for the industry. The proposition which I personally favour is that we get as soon as we can to a situation where that fund more properly services the industry and where growers are not making open-ended commitments year by year to it.
I have a couple of other matters which I think are relevant at this time. Following pressure from the industry and, of course, from the Deputy Prime Minister and Minister for Trade and Resources (Mr Anthony), who has been working constantly in this area, the Government of the United States of America has finally agreed to a reduction of 60 per cent in the tariff on wool which is imported by that country. That is an achievement for which this Government, particularly the Deputy Prime Minister, and wool industry leaders should take a great deal of credit. I believe that the proposition is commendable because the tariff cut agreed upon represents the upper level to which the Americans are allowed to negotiate. This proposition will start in 1980. The tariff will be cut by 60 per cent over three years. That is the minimum period over which a cut of this size can be made. The Australian wool industry has achieved a win on two points: The first is that Australia has received the maximum cut; the second is that the cut will be made in the minimum period possible. That is something which I think is commendable.
The other thing which I think is important to the industry as a whole at this stage and worthy of mention is the live sheep export market. This new and developing market has enabled people to get a reasonable price, in many cases a very good price, for old sheep. That is something which has not always operated in the past. It is particularly important that this live export market is kept open and developed and that we have this outlet for older sheep so that people are able to restock from the proceeds at a reasonable level.
I would like to mention a range of things in relation to marketing within the wool industry. The Bureau of Agricultural Economics has been doing some analyses of the various propositions that are around at the moment. It points out that there are three proposals for modifying the present marketing system. They are presently on the table. The National Council of Wool Selling Brokers of Australia has one, the Australian Council of Woolbuyers has one and of course there has been a third proposal from the Australian Wool Corporation in conjunction with the
Australian Wool Industry Conference and the policy committee which we have been informed recently has been shelved, for the moment at least. The BAE sees the proposal of the National Council of Wool Selling Brokers as the institutionalising of the present system with more control of operations vested in growers’ hands by representation on the board and the role of private buyers curtailed by requiring that wool for export must pass through the wool selling exchange. The BAE believes that all exchange members would be required to use the same methods and have the same charges for their services under this scheme. The curtailment of private buying and the uniformity in methods and charges would effectively reduce the level of competition in the wool market and reduce the marketing options which are available to growers.
The proposal from the National Council also suggests that direct purchase by bulk classers could be an advantageous innovation. By contrast the BAE sees the Australian Council of Woolbuyers proposal placing emphasis on stimulation of competition amongst the brokers by permitting various methods of handling, selling and setting charges. This proposal would still effectively prevent private buyers dealing directly with overseas mills. The Australian Wool Corporation in its scheme has proposed that all export wool should be acquired and that all the export be. .handled by a single authority. It is claimed that that arrangement would maximise grower returns, particularly in relation to reduced marketing costs and the adoption of currently available technologies and modified selling procedures.
A long hard look into the acquisition of all export wool by the Australian Wool Corporation was a healthy exercise for the industry in spite of the final decision, at this stage at least, against acquisition. The acquisition proposals spurred a lot of scrutiny at the present marketing system. This kind of scrutiny is needed if we are to keep on our toes and to keep ourselves open to improvements in wool handling and marketing. I feel that the decision to reject acquisition at this stage represents “the views of the majority of growers. I still remain unconvinced that export acquisition would guarantee growers a higher long-term net return than we could achieve by streamlining our present system. The exponents of acquisition have said that it would have several key advantages for growers. One of the main advantages would have been guaranteed payment within 15 working days of receival. This would have meant a cheque equivalent to the reserve price quickly. The other purported benefits would have included reduced transportation and shipping costs. As well, full-time wool appraisers and the reduced role for brokers would have added up to more profit for the grower. The advocates of acquisition readily acknowledge that it would cost growers an extra $ 18m to gain the benefits of some $37m to $48m in additional revenue. The $18m would be used by the Corporation to pay interest on the money it would have to borrow to pay growers within the 15-day period. Payment for the final sale of wool could be months in the future. There would also be additional storage, appraisal and administrative costs for the Corporation under the acquisition proposal.
As a wool grower I support the scrapping of the acquisition at this stage. The Australian Woolgrowers and Graziers Council has pointed out that $20m to $25m of the benefits from the proposal would have come from sayings in transportation. It believes that the saving can be made without the necessity of an export acquisition scheme. That leaves little net benefit on paper. The Corporation says that if all went well, in an average year it may only mean about $10 for each wool grower. The Bureau of Agricultural Economics has had real doubts about acquisition. In a recent newspaper the BAE stated as follows:
Because major changes such as those being suggested have an unknown probability of not being as successful as suspected, they represent action which would expose the wool marketing system to unnecessarily high risks.
The BAE has also argued that ‘the main objectives of the changes can be achieved by other means’. The present system can accommodate new handling and transport techniques. In this respect we ought to be looking to give the Wool Corporation more flexibility in the way in which it handles the transport and shipping of wool. A trial shipment recently indicated that we can save something like $7 or $8 per bale on the current Conference charges. This is something which needs to be looked at and I think the Government ought to co-operate with the Corporation and the industry in this respect. We ought to support the rejection of wool acquisition, at least at this time, but continue to pursue the savings that can be achieved in handling and transportation costs in the interests of all wool growers. I support these Bills wholeheartedly, as does the entire National Country Party, which always take a significant, permanent and positive interest in matters of this nature. I commend them to the House.
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 Adermann) read a third time.
(Nos 1 to 5) 1979
Consideration resumed from 22 March, on motion by Mr Adermann:
Question resolved in the affirmative. Bills read a second time.
That the Bills be now read a second time. Question resolved in the affirmative. Bills read a second time.
Leave granted for third readings to be moved forthwith.
Bills (on motion by Mr Adermann) read a third time.
Private Hospital Services- Death of the Honourable Sir David Brand, K.C.M.G. -Transfers of Public Servants - Pre-School Funding- Community Scepticism- National Companies and Securities Legislation- Parliamentary Privilege
Motion (by Mr Adermann) proposed:
That the House do now adjourn.
– I view with grave misgivings the aim of the Hospitals Corporation of America to penetrate the private hospital scene in Australia. HCA, through its wholly owned Australian subsidairy the Hospital Corporation of Australia, plans to build a 120-bed private hospital in Coniston in my electorate. HCA has been under investigation by the United States Secutities and Exchange Commission for bribery. These bribery charges should be aired and cleared up before HCA developments in Australia proceed any further.
I understand that the United States Securities and Exchange Commission charged HCA last year that: ‘Certain persons of power and influence in Saudi Arabia, including persons involved in supervising the hospital project,- the King Faisal Specialist Hospital, had to be paid off in the amount of 15 per cent on the contract charges to the Saudi Arabian Government as work on the project progressed.’ Questions have already been raised in the Senate on the issuequestions which Senator Guilfoyle has not yet answered. The Minister for Health (Mr Hunt) also remains suspiciously silent.
The company is the biggest private hospital organisation in the world. It unashamedly aims to make massive profits out of the sick. The man behind its success, Jack Massey, can claim the dubious credit of creating the modern fast food industry with the $500m Kentucky Fried Chicken empire. HCA owns 1 10 hospitals in the United States, Europe and Asia, employing more than 36,000 staff, including 6,300 doctors. In 30 cities in the United States an HCA hospital provides the only hospital care. The company, through its Australian subsidary plans to invest more than $45m this year in private hospital development in Australia- $28m of which will be raised from within Australia, including $18m from three Australian trading banks.
The move to take over the Australian market comes in the wake of consideration by the United States Government to restrict annual increases to private hospital revenues to 10 per cent. I understand that, according to the Hospital Corporation of Australia Managing Director, Mr G. White, the company plans to install 1,500 new hospital beds in Australia within the next five years and to build 30 new hospitals in Australia over the next 10 years. It expects at least a 1 5 per cent return on its investments. I understand that the Victorian Liberal Government has approved the leasing of land to this company in return for the construction of a 200-bed hospital with 50 public beds and a maternity wing.
How low can we stoop? This American-owned multinational wants to make huge profits out of Australia’s sick, while the Commonwealth Government and the health funds foot the bill through medical benefits. I challenge the right of such organisations to exploit the Australian hospital system. Should we allow our hospitals to be run to suit multi-million dollar hospital companies which wish to avoid governmental controls in their own country? This approach to health care could extend into more private control of x-ray clinics, pathology laboratories and other areas of health technology.
There can be no compromise between multinational takeovers of health care for profit and the best possible health system for the majority of Australians- a system a Labor government would introduce. We would go in the direction opposite to that of multinational private hospital associations. We would develop community health and medical centres to provide a full range of medical services. HCA will be licking burnt lingers if it goes ahead with its scheme to make ‘takeaway profits’ from the market of the Australian sick. It is this Government’s responsibility to ensure that American and other overseas based companies do not exploit our hospital system at the expense of the taxpayer. It is the responsibility of this Government and the Minister for Health to ensure that a company which faced bribery charges in the United States is not allowed to engage in that sort of activity in Australia. We must not allow foreign companies to move in and to take over yet another section of this country because their own country has become too hot for them.
– I want to pay a tribute tonight to the late Sir David Brand who died on 15 April 1979. This is the first opportunity I have had to do so since the recent recess. No member of this House has as yet given recognition to the contribution he made to this country.
– They have done it in the Senate.
– I know they have done it in the Senate. I think we should always do something like that in this House at the first available opportunity.
I want to read into the record the contribution made by this man. The Hon. Sir David Brand was Western Australia’s longest serving Premier. He retired from State Parliament in August 1975, having served as Premier for just under 12 years. He represented the State electorate of Greenough for some 30 years. He had a distinguished Parliamentary career, being elected to the State Parliament in 1945. He was Premier, Treasurer and Minister for Tourism from 1 959 to 1 97 1 and Leader of the Opposition from 1 957 to 1959 and from 1971 to 1972. He was first appointed to the Ministry as junior Minister for Housing, Local Government and Forests in 1949. From 1950 to 1953 he was Minister for Works and Water Supplies.
I have known the members of the Brand family for a very long time and I regret very much that I was overseas at the time of his death and was unable to attend his funeral. Sir David Brand was a greatly admired man in my State. He was admired and respected by all who knew him, whether they shared his political ideals or not. As a Premier and politician he made a great contribution to Western Australia, and therefore to Australia. His period of office in government coincided with the great development decade in
Western Australia’s economic history. But even more important than his concrete achievements which are there for the record, he will be remembered as a natural political leader who acquired by his own example and standards the respect and affection of his colleagues. He did not have to command respect because of his position; he simply received it naturally because of the kind of person he was. He was a decent man, a man with whom everybody could identify and a person who lived by very high codes of personal integrity.
Sir David possessed personal qualities which are only too rare in political life today. He was a strong and determined leader. But, in my opinion, the reason he was unique in modern political times was that there was no difference between his personal codes of behaviour, his sincerity, warmth and humanity and the way he governed and lived as Premier of Western Australia. He lived as one person with one set of high ideals and standards. Because of this there was no falseness about the man, no compromising of his principles and no false charisma. He brought a certain rare quality to political life and no person could have done more to enhance the profession of politics than Sir David Brand. He brought to it his own superb, courageous and widely respected qualities. I think that by those who read the history books of Western Australia in years to come he will be remembered as a great Premier. By those who knew him personally he will be remembered as a good, decent Australian who did so much by his own personal example to gain widespread respect for those traditional personal values which so often seem to be under challenge today. The death of Sir David Brand marks the end of a unique contribution to the political, social and economic development of my State. All Western Australians will look back with gratitude and in admiration of the contribution he made and the kind of person he was. On this occasion I extend my sincerest sympathy to his widow and to his family.
– I desire to raise a matter of some concern to Commonwealth employees located in Melbourne. I find it surprising and incredible that a government of this political complexion which talks about and against the evils of centralism seems to be hell-bent on transferring whole sections of important government departments from major metropolitan centres, where they are immensely relevant to both the business community and the provision of services, to Canberra. I refer particularly to the problems which now face employees in the Department of Employment and Youth
Affairs who have been requested to transfer to Canberra. Many of these employees were in the former Department of Employment and Industrial Relations whose central office was in Melbourne. By virtue of their location in that city they were much closer to the problems of industry and management. They feel that that caused them to make far more accurate predictions about the problems in employment and the management of the economy than came from some of their counterparts in Canberra. Industry needs to have dealings with the Department of Employment and Youth Affairs and Melbourne is close to a large amount of industry, both manufacturing and tertiary. Industry certainly needs to have that close contact. Apart from that aspect, there will be considerable personal problems faced by Commonwealth employees who are asked suddenly to shift home to Canberra for purposes which I believe ultimately will operate against the efficiency of the Department.
It is equally serious that this principle is also operating in the Department of Transport in respect of the Flying Operations and Airworthiness Division. That Division, which does not have dealings with Parliament or with Ministers, has to operate out of the larger metropolitan areas of either Melbourne or Sydney by virtue of the fact that, in order to fulfil its task of establishing the principles of aircraft safety, it needs to be in close contact with the two major airports. Any parliamentarian who has to suffer the problems of getting in an out of this place knows that to take the Flying Operations and Airworthiness Division out of a major centre such as Melbourne or Sydney and transfer it to Canberra is an exercise in centralism and political madness. Anything up to 50 per cent of the Division’s experienced and dedicated officers, who are men of great talent and capacity in this area, have already indicated that for family reasons they would not be prepared to make that transfer.
Given the problems in maintaining the continued effectiveness of air safety, it seems to me to be imprudent to the point of stupidity to decrease efficiency, to increase costs and to prejudice aviation safety by insisting that these men, who are performing their functions satisfactorily and well, who need to be close to a whole range of technical facilities and who need to be at major airports where there is a vast range of aircraft, shift their families and homes to Canberra in order to comply with some very centralised bureaucratic concept. I ask the relevant Ministers whether they can re-examine this situation in terms of this Government’s political philosophy.
I should think that it is the view of the vast majority of honourable members of this House that one of the problems in Australia at present is that there are too many public servants in Canberra and that too many important decisions are made on the basis of centralised decision-making which is completely remote from what is happening in the real world. I ask the Minister to make a major reassessment of this decision.
-Tonight I would like to make some comments about the situation concering preschool funding in New South Wales. There is widespread concern amongst parents and teachers within preschools and also within the community, which in many cases has supported not only the building of preschools but also their operation. The issue is one that resides in New South Wales for some reason or other and not in other States, and I think that it is important to try to counter some of the irresponsible and evasive claims that have been made by various New South Wales Government spokesmen. Preschool funding in Australia commenced in 1973-74. Prior to that time preschool funding, as far as the Commonwealth was concerned, was a State responsibility. The Budget in 1973-74 provided a children’s services program within which was preschool funding. Since that program started, payments from the Commonwealth for children’s services have amounted to $2 16m Australia-wide and $87m in New South Wales, of which some $55m has been made available for preschools over that period.
Other areas besides preschool funding that have been supported have been daycare schemes, before and after school care programs, vacation care schemes and family support programs. Those are areas which indicate the greatest need, often affecting single parents “and people who are forced to work- for example, low income families in which the mothers of young children are required to work because of economic circumstances. However, the Commonwealth and the States have agreed that preschool funding is a prime responsibility of the various States and that the Commonwealth’s role is merely to supplement that level of funding. Therefore, the Commonwealth has reduced its contributions to preschools and all States, except New South Wales, have in turn increased their contributions to preschools. However, the Commonwealth has recognised the great need to provide assistance in those other areas I have just mentioned. In fact there have been very substantial increases in recent years in the day care, after school care, vocation and family support areas.
For example in 1976-77 a total of $5.43m was allocated by the Commonwealth to New South Wales for those programs. The amount increased by 35 per cent to $7.3m in the next year and in 1978-79 increased further by nearly 50 per cent to $ 10.78m. We do not hear any members opposite or Ministers in the New South Wales Parliament referring to that fact; neither do they refer to the tremendous increase provided by the Commonwealth to the various States in terms of the tax-sharing formula. New South Wales alone received $73 8m from the 1974-75 Budget, and in the 1978-79 Budget received $ 1,458m which represented an increase of 98 per cent in five years - a very large increase. In the last three years the increases to the States have been 20 per cent, 16Vi per cent and 10 1/2 per cent respectively. This has been at a much greater rate than the amount the Commonwealth has gained from taxation revenue. In the same period taxation revenue increased by 69 per cent. All the States are better off than they have ever been. It is about time that some, New South Wales in particular, accepted their responsibilities under the new tax-sharing formula.
It is ironic indeed that New South Wales has not seen fit to increase taxes or had to impose any new taxes or increase significantly any charges. Many States are reducing revenue measures such as estate duty. It is certainly interesting to compare the situation in New South Wales which is providing a measly $3.33m to pre-schools, which is only 21 per cent of the total allocation to preschools, with the situation in Victoria which is providing $20m this year which covers to 67.2 per cent of the total cost. Is it that the problem in Victoria is six times as great as it is in New South Wales or does Victoria have six times as many pre-school children? Of course not. The problem is that the New South Wales Government is not prepared to accept its responsibility as all other States have done. A measly $4.9m has been provided by the New South Wales Government for children’s services. What is the amount in Victoria? It is not $4.9m but $33.5m. The figures speak for themselves.
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired.
-On 18 November 1978 at Jonestown in Guyana, 914 members of a religious cult called the People’s Temple died of poison- by cyanide in KoolAid in an extraordinary act of mass murder and suicide. This incident aroused such a universal sense of horror and revulsion that after the initial sensation faded and the story dropped from our front pages and colour television screens and after the handful of instant books was rushed into print, read and discarded, there was an understandable desire to forget about the Jonestown horror- because the mind reacts instinctively against too much horror. We blank it out and forget. This has prevented much rational analysis of what went on and why. Are there any lessons to be learnt from Jonestown? Are individual or collective acts of madness capable of being anticipated and prevented.
Arthur Koestler once argued in his book The Ghost in the Machine that the most appalling thing about the human race was not its aggression and violence but its appalling docilitythe fact that so many people are prepared to suspend their individual judgment or even their sense of self-interest in favour of a cause which captures them and makes them choose to subordinate themselves to the will of someone Other. The charismatic leader has rarely had difficulty in finding loyal followers who will beg him to relieve them of the crushing weight of free will. For the Reverend Jimmy Jones we could just as easily substitute the name of Field Marshal Idi Amin or Adolf Hitler.
We may understand more about the human condition from reading novels such as Joseph Conrad’s Heart of Darkness or Feodor Dostoevski’s The Brothers Karamazov than by wading the mountains of print which a generous Australian Government drops on us each day. Was Jonestown, despite its Guyanan Gotterdammerung, essentially an American phenomenon which reflects uniquely United States stresses and tensions whether racial, sexual or spiritual? Most of the cults now found in Australia are American in origin. The puzzling thing that ought to strike us and ought to strike our sense of scepticism is that the People’s Temple was never subject to effective filtering by the various systems which run through our society. For example, it had considerable exposure to the education system, to other churches, to the American political system, to the media generally, to the social welfare organisations, to the legal system generally and to lawyers, and somehow it never failed the test. What is wrong with our systems that they are so lacking in scepticism?
It is worth noting the support and encouragement that Jimmy Jones received from politicians, people who by their training and experience ought to have a healthy scepticism about charismatics in a rival discipline. But the people and organisations that used Jones or were used by him included Mrs Rosalyn Carter, the President’s wife; Vice-President Walter Mondale Governor Jerry Brown of California; LieutenantGovernor Mervyn Dymally of California; the District Attorney’s Office of San Francisco; and a San Francisco Mayor, George Moscone, who was killed a few days later. This happened in the richest and best educated State of the richest and best educated nation on earth. What of the role of the lawyers? Mark Lane and Charles Garry were tough, smart and sophisticated. Why did they not blow the whistle? The appalling common theme that runs through it all is the lack of scepticism- the lack of self-inquiry. Mr Deputy Speaker, I seek leave of the House to incorporate in Hansard a very interesting article which appeared in the New York Herald Tribune entitled ‘Unease Over Cults in US Grows in Wake of Guyana’.
The document read as follows-
UNEASE OVER CULTS IN U.S. GROWS IN WAKE OF GUYANA
This article is based on reporting by Jo Thomas and Nathaniel Sheppard Jr. It was written by Miss Thomas. It is the first of a series.
NEW YORK, Jan. 21 (NYT)- Some have been highly visible in airports and on street corners, offering flowers and soliciting donations, but until 9 1 4 persons died in Jonestown, Guyana, most of the thousands of Americans who have joined religious cults in the last decade remained in the nation’s peripheral vision.
There were groups that were considered odd, such as the Bo and Peep UFO cult or New York’s carpet-cleaning cult. And some practices seemed strange, such as the mass marriages arranged by the Rev. Sun Myung Moon. As religious groups, however, cults were protected by the First Amendment and by a general feeling that their aura of good intentions might, at worst, cloak fraud.
Then, last November, the Peoples Temple collapsed with a violence that raised fundamental questions about how the nation could deal with religious groups that wooed the young and the idealistic, then got them to give up their possessions, their family ties, their freedom and, at Jonestown, their lives.
Interviews conducted across the country with leaders and current and former members of groups commonly described as cults, as well as with relatives of the members and with persons who have studied cults, show that the groups share at least some of the following characteristics:
They have a living charismatic leader who says he has been given new, exclusive revelations about God or reality. Anyone who does not believe his teachings, he says, is not only wrong but also satanic.
The leader creates a family, often a communal living arrangement, and takes a name such as “Dad”. Members frequently take new names when they join and sever ties with their real families.
The leader sets absolute rules, but he does not necessarily obey them himself. He usually lives far more luxuriously than his followers.
The group has an apocalyptic view of the world, in which moral rules may be discarded in the service of the leader. Members also discard their belongings, their occupations and, occasionally, their regard for their own physical well-being.
Certain behaviour-control techniques are practiced, usually in a setting isolated from the outside world. Members see the techniques as a religious regimen. Outsiders call them brainwashing.
Although the Carter administration opposes any broad investigation of such groups on constitutional grounds, some members of Congress favor inquiries into their activities abroad and into the tax-exempt status they frequently have at home.
The complaints came first from parents who said their children had been brainwashed, a charge echoed by former members of some cults. The complaints were denied by the cults and many were virtually impossible to prove in court. A wave of kidnappings by parents ensued, and a new profession appeared- “deprogramming”, a way of erasing indoctrination.
There were reports that the Children of God had started practicing prostitution and that Synanon had changed from a group treating drug addiction into a cult that ordered mass divorces and vasectomies, abortions and beatings, and that it threatened those who tried to challenge it or to report on its activities.
Paul Morantz, a lawyer who had successfully sued Synanon on behalf of a couple who charged brainwashing, kidnapping and false imprisonment, was bitten by a rattlesnake placed in his mailbox. The rattlesnake attack resulted in charges of attempted murder against Synanon ‘s founder, Charles Dederich
The FBI raided the Church of Scientology, charging that church representatives had infiltrated federal agencies and placed electronic bugs in offices of the Internal Revenue Service. The raids yielded guns, dossiers on the church’s enemies, lock-picking and bugging equipment, and such items as a blackjack and a vial labeled “vampire blood. “
A House International Relations subcommittee, concluding an eight-month study of the Rev. Sun Myung Moon’s Unification Church, said it had found evidence that the organisation had systematically violated federal laws on taxes, immigration, banking, currency transactions and foreignagent registration, as well as state and local laws relating to charity fraud.
Estimates of the number of Americans who belong to cults range from 300,000 to 3 million, depending on who is counting.
The Church of Scientology claims a world membership of 5.4 million. The Love Family is so small- about 250- that members can all take the same last name.
The backgrounds of cult leaders are diverse. In recent years, cults have been started by an airline pilot, an engineer, a country-western singer and a real estate salesman, as well as by ministers of established churches.
Bo and Peep, who formed a cult in 1973 based on their prophecy that they would be assassinated, return from the dead and leave the planet in a craft from outer space, were Marshall Herr Applewhite, 47, a musician and opera singer, and Bonnie Lu Trousdale Nettles, 5 1, a professional nurse.
According to Robert Balch, a sociologist at the University of Montana who studied the group for several years, Bo and Peep videotaped the ‘final statement to the earth’, left it in Oklahoma and disappeared, along with 96 followers.
Ben Sebastian Sapio, 49, who founded a fundamentalist Bible cult called The Way, The Truth and The Life, was a hairdresser. In 1975, his group asked to sponsor 1 1 Vietnamese refugees, all Buddhists, at a commune in North Carolina.
The refugees spent a month with the group, and then left after complaints about their treatment were made to Sen. Jesse Helms, R-N.C. The refugees said that they had been worked hard by day, indoctrinated by night in English they did not understand, and prevented from leaving.
Mr Sapio and other leaders of the group announced last year that they were leaving North Carolina. Their whereabouts are unknown.
Stewart Traill, 43, a former vacuum cleaner salesman, founded a group in Pennsylvania called the Forever Family. After opposition arose from groups of parents of members, the group changed its name to the Church of Bible Understanding and moved to New York City, where members stand on street corners soliciting business for the cult’s carpet-cleaning company. The group also has a mission in Haiti.
Who is likely to join a cult? Prof. Ronald Enroth, a sociologist at Westmont College in California and the author of a book about cults, said in an interview that a typical cult member is 1 8 to 22 years old, white, middle or upper-middle class, and has at least some college education and a nominally religious upbringing.
Shari Smith, 25, was a lonely 19-year-old freshman at the University of Wisconsin when she struck up a friendship with an older girl who was a member of The Body of Christ, a group founded by Sam Fife, a minister from Miami, and C. E. Cobb, an airline pilot.
Miss Smith joined The Body for ‘a sense of security, friendship,’ she said- and was sent in January, 1973, to a farm it owned near Eupora, Miss. ‘A big thing with this group is demons- people are possessed,’ she said. ‘By hurting the flesh, you can make the spirit overcome the devil. They beat on me because I sassed ‘
She described their methods this way: ‘They tell you to kneel and put your hands on a chair, and then they take a wooden paddle and whip you a few times, three times if you’re lucky. The first time, I got three. Other times, I don’t remember. ‘ Rebellious people were tied to a bed or chair or on the floor. They put a headset on them and played preachers from the group. The length depended on how long they fought it. One day or two days. ‘
In December, 1 976, on a visit to her parents, Miss Smith said, she was persuaded during a deprogramming session to leave the cult. Neither Mr Fife nor Mr Cobb could be reached for comment.
In most cases, conversions to cults involve no coercive measures, and law enforcement officials therefore are generally reluctant to intervene. But some cults, usually small ones, have run into trouble with the law.
Raymond Alvin Archer, 29, who sold produce and is the founder of the Theocratic Commune Natural Health Service, was charged last summer with manslaughter after the bodies of his 1 -year-old son and 3-year-old daughter were found buried in the commune’s yard on Detroit’s East Side.
A former cult member told the authorities that the group advocated a strict died of raw fruits and vegetables and that the children were not given meat or dairy products. A medical examiner testified that he believed the girl had died of malnutrition. The cause of the boy’s death could not be determined.
Deaths Cause Outrage
In rural North Webster, Ind., Melvin Greider a 42-year- old farmer, and Hobart Freeman, a theologian, founded the Glory Barn Faith Assembly, which did not believe in doctors. The group attracted 1,000 followers and was the object of public outrage over the deaths in childbirth, between 1 975 and 1 978, of two mothers and seven infants.
One woman bled to death over a period of two days in the presence of a registered nurse. According to the local authorities, the nurse explained that she was in attendance only as a friend. No charges were ever brought against the Glory Barn.
Mr Freeman could not be reached for comment. Mr Greider parted ways with the group early last year.
In New York, Oric Bovar, a 59-year-old former opera coach who asserted that he was Christ, was found praying over the decomposing body of a follower who had died of cancer and was charged with failing to report a corpse. On 14 April 1977, the day he was to stand trial, he jumped from a lOth-floor window and killed himself. He had once said, according to some reports, that if he jumped out a window, God would bounce him back.
-I thank the House. I point out too the very important words used by the Grand Inquisitor in The Brothers Karamazov, by Dostoevski:
So long as man remains free he strives for nothing so incessently and so painfully as to find someone to worship . . . For these pitiful creatures are concerned not only to find what one or the other can worship, but to find something that all would believe in and worship; what is essential is that all may be together in it. This craving for community of worship is the chief misery of every man individually and of all humanity since the beginning of time. For the sake of common worship they’ve slain each other with the sword . . . Man has no more pressing need than the one to find somebody to whom he can surrender, as quickly as possible, that gift of freedom which he, unfortunate creature, was born with . . . The secret of man’s being is not only to live but to have something to live for . . . Man prefers peace, and even death, to freedom of choice in the knowledge of good and evil.
If people are frightened of freedom of choice, we are indeed in trouble.
Order! The honourable member’s time has expired.
– I rise to condemn the disgraceful, hypocritical, political machinations of the New South Wales AttorneyGeneral, Mr Walker, over the proposed national companies and securities commission. Of late, Mr Walker has been a very controversial character in New South Wales. He has been accused of incompetence, bias, political use of the law, disregard of traditional principles and abuse of the concept of the rule of law. These are matters for which he will have to answer to the people of New South Wales. But when he starts to use chicanery and double-dealing in his dealings with the Commonwealth over very important legislation, I believe that he should be exposed to the Australian people as a whole. What Mr Walker said when he announced that the New South Wales Government was not going to agree to proceeding with the Bill for the establishment of the commission was that the New South Wales Government wanted to have all the Bills brought forward at the one time. He was saying that the Bill to establish the commission, the companies Bill, the takeovers Bill and the securities Bill should all be brought forward together. Of course, that is entirely inconsistent with all the negotiations which had gone on beforehand and is quite inconsistent with the logical way to go about introducing the legislation.
-With which the other Labor States have agreed.
– Yes, it is inconsistent with the procedure agreed to by all the other States, both Labor and Liberal. As we have pointed out, the purpose of the Bill is to set up a commission which will do work, over a period of five or six months, to assist the Commonwealth and all the States to bring down legislation which will be acceptable to everyone. A thousand and one different matters will have to be worked out and included in the legislation. The expert assistance of the members of the commission would be invaluable. Of course, Mr Walker suddenly has decided that he is going to veto it. Why has he vetoed it against the expressed wishes of the Commonwealth and the other States? Can we believe Mr Walker and his statements at first sight? Obviously not. He gave the game away. In very uncharacteristic fashion he got himself caught out in an interview on Nationwide on 2 May. He started by saying that it was because he wanted all the Bills together. He said, ‘We are not going to take them piecemeal’. When the Minister for Business and Consumer Affairs (Mr Fife) took him on, head on, and pointed out that the proper way to go about it was to introduce the securities and exchange commission Bill first, he fell apart. The Minister said to him: ‘It seems to me that your Government has let you down or that you have. changed your mind’. Mr Walker suddenly opened up and said that the real reason was that there was ah undertaking between Ministers about the site of the commission. He then went on with a complaint that a so-called undertaking had been breached. I know of no public statement as to the siting of the Commission, and in any case, that requires agreement and appropriate consultation. Mr Walker was exposed for what he is- a man of complete and utter duplicity. I commend the Minister for Business and Consumer Affairs for the way in which he went on television. I would like to see more of our Ministers appearing on television and taking on some of these Labor fellows in New South Wales, who peddle all sorts of rubbish on talkback radio and on television. When our Ministers are here in Canberra doing their job for the nation, it is not easy for them to appear on television. I approve of what the Minister did. He exposed Mr Walker through his own mouth. Mr Walker has his own troubles about his jury trial Bill, his criminal division Bill and his Evidence Act. As I have said, he has to handle those in his own arena. But let us hope that on 18 May when the Ministers meet again to discuss this matter -
– After the Victorian election.
– Yes, after the Victorian election. Let us hope that Mr Walker will have a sudden change of heart and will divest himself of some of his political chicanery and make a sensible decision so that three and a half years of work does not go down the drain. This Government is not going to back off. It will try its best to do everything possible to put through the legislation. Let us not have this dog in the manger attitude. Let us hope that Mr Walker does this, otherwise he will be open to the most severe censure. It will be Mayday for Mr Walker on 18 May, and he had better come up with the right answers on that date.
-In the few minutes remaining, I want again to raise a protest in this House about an attack made on a private citizen under parliamentary privilege. I deplore the tendency in this Parliament and other parliaments throughout Australia to make attacks upon private citizens under parliamentary privilege. It is a practice that I believe should be stamped out. Since 1848 it has been the practice of the House of Commons that no charge of a personal character can be raised save upon a direct and substantive motion to that effect. It does this House no credit that once again we have had today a regrettable attack upon a private citizen under the cloak of parliamentary privilege. The attacker, whom I endeavoured to contact tonight, has been invited to repeat on radio the comments he made today in the House and he has declined that invitation.
The attack was particularly unfortunate when one takes note of the fact that there is already on the Notice Paper of this House a notice of motion in my name specifically dealing with this matter- not to attack a person but to exculpate him. I refer to motion No. 40 given by me on 22 March this year. I am not going to beat around the bush. I have not met the man attacked and I do not know what he is like. However, I am sick and tired of people standing in this House and other places and referring to people in the community as ‘ratbags’ and ‘lunatics’, which was the description applied today to a radio commentator, Mr Laws, in a speech made in this House by the honourable member for Parramatta (Mr John Brown). Whether Mr Laws is a ratbag or a lunatic I do not know, but I take this opportunity, for about the twentieth time in a parliamentary career going back to 1 966, to say that if members of this Parliament are going to use parliamentary privilege to smear and defame citizens in the community, they will have only themselves to blame if the community treats this Parliament with contempt. There was a case last year where a citizen of New South Wales was defamed in the South Australian Parliament under parliamentary privilege. It is happening over and over again. How any parliament can ask for the respect of the community when it defames decent citizens in this manner is completely and absolutely beyond my comprehension.
Question resolved in the affirmative. House adjourned at 1 1 p.m.
The following answers to questions upon notice were circulated:
asked the Minister for Post and Telecommunications, upon notice, on 18 October 1978:
– The answer to the honourable member’s question is as follows:
asked the Minister for Post and Telecommunications, upon notice, on 23 November 1978:
– The answer to the honourable member’s question is as follows:
(a) Postal and Telecommunications Department- not applicable.
Apart from formally indentured apprentices, an extensive training system exists in the ABC’s Engineering Division for both formal and on-the-job training of recruits- usually school-leavers- to meet the specified qualifications for Operations Officers and Broadcasting Engineering Officers. The number of trainees recruited over the past six years are:
asked the Minister for Veterans’ Affairs, upon notice, on 20 February 1979:
Will personal treatment entitlement cards be issued to repatriation beneficiaries entitled to the full range of treatment benefits to provide them with freedom of choice of a local medical officer.
– The answer to the honourable member’s question is as follows:
Yes. The Repatriation Commission hopes to issue personal treatment entitlement cards to certain Repatriation beneficiaries by the end of 1979. With the introduction of entitlement cards, veterans and war widows entitled to the full range of Repatriation treatment benefits would normally be able to attend any local medical officer or local dental officer of their choice without reference to the Department of Veterans ‘Affairs.
asked the Minister for National Development, upon notice, on 20 February 1979:
– The answer to the honourable member’s question is as follows: (1)and (2)Yes
asked the Minister for Veterans’ Affairs, upon notice, on 20 February 1979:
– The answer to the honourable member’s question is as follows:
Oil Spills (Question No. 3170)
asked the Minister representing the Minister for Science and the Environment the following question, on notice, on 21 February 1979:
What action has the Minister taken to implement the recommendation of the House of Representatives Standing Committee on Environment and Conservation in its report on Oil Spills that the Department of Science and the Environment, in conjunction with the Department of Transport, assess the feasibility of introducing cargo-tagging programs with a view to introducing such a system’ to Australia.
– The Minister for Science and the Environment has provided the following answer to the honourable member’s question:
I welcome the Oil Spills report of the House of Representatives Standing Committee on Environment and Conservation. My Department is currently studying the report, including the recommendation to which the honourable member refers. I also refer the honourable member to the Minister for Transport’s reply in this House to Question No. 3 1 56 on 6 March 1979.
Oil Spills (Question No. 3171)
asked. the Minister representing the Minister for Science and the Environment the following question, on notice, on 21 February 1979:
What action has the Minister taken to implement the recommendation of the House of Representatives Standing Committee on Environment and Conservation in its report on Oil Spills that the Minister assess the use of satellites in the field of detection and monitoring of oil spills to determine their suitability for incorporation in the Australian surveillance network.
– The Minister for Science and the Environment has provided the following answer to the honourable member’s question:
I welcome the Oil Spills report of the House of Representatives Standing Committee on Environment and Conservation. My Department is currently studying the report, including the recommendation to which the honourable member refers. I also refer the honourable member to the Minister for Transport’s reply in this House to Question No. 3 156 on 6 March 1979.
asked the Minister for Employment and Youth Affairs, upon notice, on 2 1 February 1979:
How many of the additional 230 apprentices taken into the Commonwealth Public Service will be attached to Commonwealth departments or instrumentalities in the Electoral Divisions of (a) Hughes and (b) Cook.
– The answer to the honourable member’s question is as follows:
asked the Minister for National Development, upon notice, on 21 February 1979:
– The answer to the honourable member’s question is as follows:
asked the Minister representing the Minister for Science and the Environment, upon notice, on 21 February 1979:
In view of the concern over the alarming rate of loss of coastal wetlands expressed by the Australian Heritage Commission in its 1977-78 Annual Report what action will be taken by the Government to secure the protection of remaining areas of coastal wetlands.
– The Minister for Science and the Environment has provided the following answer to the honourable member’s question:
State Governments are responsible for the protection, land tenure and land use of coastal wetlands and it is not the policy of this Government to directly intervene in matters which are the prerogative of the States.
Since the first European settlement began swamps and wetlands have been drained for agriculture, grazing, urban development and other uses. In recent times, however, a great awareness has developed of the undesirable side effects of the loss of coastal wetlands. The Commonwealth, which owns or controls a number of such areas, is particularly conscious of its responsibilities.
The extensive coastal wetlands of the Alligator Rivers Region to be incorporated in Kakadu National Park will be protected in accordance with a plan of management for the park.
The Management of that part of Towra Point in N.S. W. acquired by the Commonwealth Government and containing wetlands of international importance will be subject to negotiations with N.S.W. authorities aimed towards the long term conservation of the area and its native fauna and flora.
The Australian Heritage Commission which lies within the portfolio of the Minister for Home Affairs has advised that it has proposed for inclusion on the Register of the National Estate a number of significant wetland areas in all States and that the Government has provided funds through the National Estate Grants Program to identify wetlands of scientific and conservation significance.
CSIRO, through its Division of Land Use Research, undertook recently an investigation of the feasibility of an Australia-wide wetlands survey. This included a preliminary review of the literature on Australian wetlands, a number of pilot field studies, mapping of wetlands in New South Wales and Victoria for the production of an Australia-wide map on the distribution of wetlands, and a study of the hydrological aspects of wetlands.
In addition, CSIRO ‘s Division of Land Use Research recently completed an inventory of coastal lands of Australia which included information about the wetlands in a three kilometre wide coastal zone. The data, which has been computerised, could be of considerable assistance in planning the protection of coastal wetlands.
The House of Representatives Standing Committee on Environment and Conservation has announced an inquiry into Coastal Zone Management in Australia.
Australian Broadcasting Commission: Commissioners (Question No. 323S)
asked the Minister for Post and Telecommunications, upon notice, on 21 February 1979:
What are the (a) names (b) addresses (c) occupations and (d) terms of office of persons who are or have been Commissioners of the Australian Broadcasting Commission during the last 10 years.
– The answer to the honourable member’s question is as follows:
1.7.62- 30.6.65, 7.9.65-6.9.68, 7.9.68-6.9.71, 7.9.71-6.9.74.
1.7.63- 30.6.66, 1.7.66-30.6.69, 1.7.69-30.6.72.
asked the Minister for Post and Telecommunications, upon notice, on 21 February 1979:
What are the (a) names, (b) addresses, (c) occupations and (d) terms of office of members of(i) the Australian Telecommunications Commission since its inception and (ii) the Overseas Telecommunications Commission during the same period.
– The answer to the honourable member’s question is as follows:
AUSTRALIAN TELECOMMUNICATIONS COMMISSION-COMMISSIONERS SINCE I JULY 1975
(a) Mr A. G. Gibbs, A.O., (Chairman); (b) Railway Administrative Offices, 67 Spencer Street, Melbourne, Vic. 3000; (c) Chairman Victorian Railways; (d) 30.6.75-10.9.75.
Mr R. D. Somervaille (Chairman as from 10.9.75); (b) c/o Dawson Waldron, Solicitors, 22nu Level, 6G Martin Place, Sydney, NSW 2000; (c) Solicitor, Company Director and Chairman, Overseas Telecommunications Commission (Australia); (d) 30.6.75-29.6.80.
Mr T. E. May, (Deputy Chairman as from 1 1.6.76);
P.O. Box 167, Wahroonga, NSW 2076; (c) Company Director; (d) 30.6.75-29.6.80.
Mr J. H. Curtis; (b) Communications House, 199 William Street, Melbourne, Vic. 3000; (c) Managing Director, Australian Telecommunications Commission; (d) 30.6.75-29.6.80.
Mrs J. Hancock; (b) P.O. Box 295, Glenelg, SA 5045;
Research Assistant; (d) 30.6.75-29.6.80.
Mr K. C. Turbet (b) 451 Little Bourke Street, Melbourne, Vic. 3000; (c) General Secretary, Australian Telecommunications Employees Association; (d) 1.7.75-10.11.77.
Mr F. J. Green, CBE (b) Postal and Telecommunications Department, P.O. Box 84, O’Connor, ACT 2601; (c) Secretary, Postal and Telecommunications Department; (d) 29.7.75-28.7.80.
Mr P. 1. Nolan; (b) 254 La Trobe Street, Melbourne, Vic. 3000; (c) Secretary, Australian Council of Trade Unions; (d) 30.8.78-29.8.83.
Mr C. B. Quartermaine, DFC (b) Welcome Station, Laura, Qld 4871; (c) Cattleman; (d) 30.8.78-29.8.83.
- Mr F. J. Green is presently on sick leave pending retirement. Mr E. E. Payne, Acting Secretary, Postal and Telecommunications Department, has been appointed Acting Commissioner.
OVERSEAS TELECOMMUNICATIONS COMMISSION (AUSTRALIA)-COMMISSIONERS SINCE 1 JULY 1975
(a) Mr A. G. Gibbs, A.O., (Chairman); (b) Railway Administrative Offices, 67 Spencer Street, Melbourne, Vic. 3000; (c) Chairman, Victorian Railways; (d) 31.10.74-10.9.75.
Mr R. D. Somervaille, (Chairman); (b) c/- Dawson Waldron, Solicitors, 22nd Level, 60 Martin Place. Sydney, NSW 2000; (c) Solicitor, Company Director and Chairman, Australian Telecommunications Commission; (d) 10.9.75-29.6.81.
Mr T. E. May, (Vice-Chairman from 1 1.6.76-9.9.78); (b) PO Box 167, Wahroonga, NSW 2076; (c) Company Director and Deputy Chairman, Australian Telecommunications Commission; (d) 10.9.75-9.9.78.
Mr N. F. Stevens, OBE, (Vice-Chairman since 21.9.78); (b) c/- Arthur Young and Co., 50 Bridge Street, Sydney, NSW 2000; (c) Chartered Accountant, Company
Director and Chairman, Defence Industry Committee; (d) 11.6.76-10.6.79.
Sir G. B. Kater (Deceased); (b) -: (c) Formerly Chartered Electrical Engineer and Grazier; (d) 3.3.66-22.8.75.
Mr R. W. Turnbull, MBE; (b) Communications House, 199 William Street, Melbourne, Vic. 3000; (c) Formerly Senior Assistant Director-General, PostmasterGeneral ‘s Department (d) 1.2.73-1.10.75.
Mr J. H. Curtis; (b) Communications House, 199 William Street, Melbourne, Vic. 3000; (c) Managing Director, Australian Telecommunications Commission; (d) 22.11.74-28.7.81.
Mr F. J. Green, CBE (b) Postal and Telecommunications Department. PO Box 84, O’Connor, ACT 260 1: (c) Secretary, Postal and Telecommunications Department; (d) 29.7.75-28.7.81.
Mr H. S. Cottee (b) 448 Old Northern Road, Castle Hill, NSW 2154; (c) Company Director; (d) 21.9.78-20.9.81.
- Mr F. J. Green is presently on sick leave pending retirement. Mr E. E. Payne, Acting Secretary, Postal and Telecommunications Department, has been appointed Acting Commissioner.
asked the Minister for Foreign Affairs, upon notice, on 28 February 1 979:
– The answer to the honourable member’s question is as follows:
Belgium, Canada, Denmark, Finland, France, Italy, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, United Kingdom.
China, the USSR and other countries with centrally planned economies are known to have also been providing aid to Vietnam. (China ceased to provide aid to Vietnam on 3 July 1978.)
At the completion of their current aid programs, the Netherlands and the United Kindgom will provide only humanitarian aid to Vietnam.
asked the Minister for Employment and Youth Affairs, upon notice, on 28 February 1979:
– The answers to the honourable member’s questions are as follows:
The Electricity Trust of South Australia, Port Augusta, The Highways Department, Adelaide, The Commonwealth Department of Administrative Services, Adelaide, and two private firms in Ceduna.
asked the Minister for Defence, upon notice, on 7 March 1979:
Is he satisfied that adequate security exists to protect telephone communications to the Department of Defence and other national key points in Canberra.
– The answer to the honourable member’s question is as follows:
The adequacy or otherwise of physical security measures to protect telephone communications installations must be measured against the assessed threat. I am informed that the threat of sabotage against such installations is low and where these support the Defence Communications system the allocation of costly resources to provide additional physical protection would not be justified.
If the honourable member is referring to the degree of privacy which is afforded to users by existing telephone communications in Australia, my reply must be that no suitable equipment exists which would give a guarantee of protection at all times against the interception of voice communications over standard telephone systems.
The Department of Defence has embarked on a phased program to instal a secure communications system for voice communications throughout Australia (as well as for other purposes). This network will embrace the majority of Defence establishments and also will be available to other senior Government persons. As publicly announced on 8
February 1979, this network is to be known as the Defence Integrated Secure Communications Network (DISCON).
asked the Minister for Post and Telecommunications, upon notice, on 8 March 1979:
– The answer to the honourable member’s question is as follows:
Australia Post expects that the increased charges which came into effect for registered publications on 1 January will do no more than contain the shortfall between revenue and costs for this service to the same level as in previous years. In effect, then, the users of this service are continuing to be subsidised quite substantially at the expense of other postal users.
Australia Post tariff charges, including the charges for registered publications, are reviewed each year. When the review is undertaken this year, I will closely examine the proposals put forward by the Commission for charges for registered publications. Of course, such an examination of the charges will have to be made in the context of the overall budgetary situation and the prospective trading climate for Australia Post.
asked the Minister for Home Affairs, upon notice, on 20 March 1 979:
– The answer to the honourable member’s question is as follows:
I am informed by my Department as follows:
1 1,821 on scheduled flights from Australia; 6,91 1 on scheduled flights from New Zealand; 1,890 on unscheduled flights from various countries.
) Information on this matter is not readily available but an economic feasibility study which is being undertaken may provide information on this matter. I will let the honourable member know of any relevant figures arising from the study.
Norfolk Island promotes the Island as a tourist destination through a central authority, the Norfolk Island Tourist Board, which consists of representatives from all areas of the industry in Norfolk Island. The Chairman is Mr David E. Buffett
The Board ‘s promotional activities include:
promoting Norfolk Island in the media in Australia and New Zealand;
b ) sponsoring visits by travel agents both from Australia and New Zealand;
production and distribution of coloured brochures and posters;
participation in major travel industry seminars etc for example Talkabout in Sydney and Melbourne and Mate in Auckland;
assistance and encouragement to promotion of the Bounty Week Festival.
The Board is jointly funded by a grant from the Norfolk Island Administration and contributions from participants in the tourist industry in Norfolk Island.
asked the Minister for Employment and Youth Affairs, upon notice, on 21 March 1979:
– The answer to the honourable member’s question is as follows:
asked the Minister representing the Minister for Social Security, upon notice, on 2 1 March 1979:
– The Minister for Social Security has provided the following answer to the honourable member’s question:
Note: The figures for 1971 to 1977 are based on population figures revised after the 1976 census. The figure for 1978 is based on population projections prepared by the Australian Bureau of Statistics.
Between 1975 and 1977, some residentially qualified invalid pensioners were not transferred to age pension when reaching age pension age. The rates for these years are, therefore, somewhat under-estimated.
asked the Minister for Employment and Youth Affairs, upon notice, on 2 1 March 1979:
In what way will the Community Youth Support Scheme be affected by the introduction of the proposed Voluntary Youth Community Support Scheme.
– The answer to the honourable member’s question is as follows:
It is not yet possible to indicate what effect the proposed Voluntary Youth Community Service Scheme might have upon the Community Youth Support Scheme. Should the Government decide to introduce measures to foster the undertaking of Voluntary Community Service by unemployed young people, then its decision will ensure that the new measures are appropriately co-ordinated with existing manpower programs, including the Community Youth Support Scheme.
asked the Minister for National Development, upon notice, on 27 March 1979:
– The answer to the honourable member’s question is:
asked the Minister for Defence, upon notice, on 28 March 1979:
– The answer to the honourable member’s question is as follows:
1 ) (a) There are six radomes at Pine Gap and two at Nurrungar.
The radomes at Pine Gap were installed in 1968, 1968, 1969, 1969, 1971 and 1 977. The radomes at Nurrungar were installed in 1970 and 1972.
asked the Minister for Primary Industry, upon notice, on 5 April 1979:
– The answer to the honourable member’s question is as follows:
My Department has discussed with the Tasmanian Fisheries Development Authority a proposal to establish a fish centre in Hobart and the Department will be reporting to me on the matter in the near future.
Also my Department is undertaking, in close consultation with the Tasmanian Fisheries Development Authority, exploratory and experimental trawling in waters adjacent to Tasmania which will assist in determining the potential of the Tasmanian trawl fishery.
asked the Minister for Administrative Services, upon notice, on 23 November 1978:
– The answer to the honourable member’s question is as follows: ( 1), (2) and (3) The information provided at Tables A, B and C below is based on an analysis of records held by my Department. Complete details of the property holdings of the Commonwealth’s various statutory authorities are not held by my Department and no information on the holdings of such authorities has therefore been included.
It will be noted that cost details have not been provided as these have been regarded historically as matters of business confidence between the Commonwealth, owners and lessors concerned.
asked the Minister representing the Minister for Science and the Environment, upon notice, on 2 1 February 1979:
– The Minister for Science and the Environment has provided the following answer to the honourable member’s question: ( 1), (2) and (3) The report of the Australian Littoral Society was received in April 1978 and released publicly with the approval of the responsible NSW Minister and the then Minister for Environment, Housing and Community Development. The report is still under consideration by the Commonwealth and NSW Governments.
asked the Minister for Administrative Services, upon notice, on 29 March 1 979.
– The answer to the honourable member’s question is as follows:
Sales to State and Local Government Authorities Invitation of public tenders Private treaty transactions, at assessed market values Destruction, if items are deemed hazardous Free gift, where considered warranted.
Cite as: Australia, House of Representatives, Debates, 3 May 1979, viewed 22 October 2017, <http://historichansard.net/hofreps/1979/19790503_reps_31_hor114/>.