House of Representatives
6 March 1980

31st Parliament · 1st Session

Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 10.30 a.m., and read prayers.

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The Clerk:

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


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

  1. Present income tax laws are unfair to single income families,
  2. All marriages should be recognised as partnerships by allowing partners to divide their joint income for tax purposes,
  3. The family, which is the natural and fundamental group unit of society, should be an economic unit in tax laws,
  4. Children are Australia’s future and their individual care by a parent at home should not be discouraged by extra tax.

Your petitioners therefore humbly pray that Parliament will reform income tax laws to allow the joint income of husband and wife to be equally divided between them for taxation purposes.

And your petitioners as in duty bound will ever pray. by Mr Chapman and Mr Hurford.

Petitions received.

Australia- Japan Fishing Agreement

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

That the agreement between the Commonwealth and Japanese Governments granting Japanese long line fishing boats access to Australia’s recently declared two hundred mile fishing zone for a fee of $1.4 million will seriously imperil the world ‘s largest population of black marlin which inhabit the North Queensland waters and consequently endanger the invaluable tourist and ancillary industries in that area which depend on big game fishing.

Your petitioners therefore humbly pray that the Federal Government will declare:

  1. How many Japanese long line boats will be allowed to enter the Australian fishing zone in the year of the agreement;
  2. How many tonnes of black marlin the Japanese will be allowed to catch;
  3. What is the composition of the overseas interests, referred to by the former minister in his ministerial statement of September 25, which have expressed interest in carrying out feasibility fishing projects;
  4. Whether the Japanese-Australian fishing agreement includes provision for a portion of the foreign catch to be processed in Australia;
  5. What assurances on access to the Japanese market for Australian fish and fish products have been given by the Japanese;
  6. What was the basis for the calculation of the fee which the Japanese will pay for access to the AFZ;
  7. Were any guarantees given by the Japanese for the protection and conservation of black marlin numbers in the AFZ;

And asks that the Government undertake not to re-issue the licences to the Japanese fishermen next year when the terms of access are again reviewed.

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

Petition received.

Metric System

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

The petition of the undersigned citizens of Australia respectfully showeth objection to the metric system and request the Government to restore the imperial system.

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

Petition received.

Unemployment Benefits

To the Honourable Speaker and Members of the House of Representatives of the Australian Parliament in Canberra assembled. The petition of certain citizens respectfully showeth:

That the right to work without discrimination on any ground including, inter alia, discrimination on grounds of race, ethnic origin, marital status and/or sex is a fundamental human right;

That it is both the duty and the responsibility of society to fully support those denied work and therefore those who are unemployed as a result of society’s inability to provide full paid employment should be guaranteed an adequate income without discrimination on any ground, including inter alia discrimination on grounds of race, ethnic origin, marital status and /or sex.

Your petitioners therefore humbly pray that appropriate and adequate laws be formulated and passed to outlaw discrimination in Commonwealth employment, in employment of persons by statutory bodies and quasi-governmental organisations, in employment of individuals under federal awards, and in employment of all persons in areas over which Commonwealth and Australian Capital Territory equal opportunity legislation should have jurisdiction; and

That appropriate laws be formulated and passed to outlaw discrimination in the provision of unemployment benefits to all persons without regard to race, ethnic origin, marital status and /or sex.

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

Petition received.

National Women’s Advisory Council

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

That the National Women ‘s Advisory Council has not been democratically elected by the women of Australia;

That the National Women’s Advisory Council is not representative of the women of Australia;

That the National Women’s Advisory Council is a discriminatory and sexist imposition on Australian women as Australian men do not have a National Men’s Advisory Council imposed on them.

Your petitioners therefore pray that the National Women’s Advisory Council be abolished to ensure that Australian women have equal opportunity with Australian men of having issues of concern to them considered, debated and voted on by their Parliamentary representative without intervention and interference by an unrepresentative “Advisory Council”.

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

Petition received.

National Women’s Advisory Council

To the Honourable the Speaker and Members of Parliament assembled in the House of Representatives, Canberra. The humble petition of the undersigned members or organisations listed below and citizens of Australia respectfully showeth:

That the thorough nationwide investigations by the Working Party highlighted the need to establish the National Women ‘s Advisory Council.

That we believe the Council consistently and democratically demonstrates its wide representation of the interests of all Australian women, as shown by the Draft Plan of Action for the 1980 National Conference to be held in Canberra in preparation for Australia’s participation in the United Nations Decade for Women World Conference in Denmark, July 1980.

Your petitioners therefore humbly pray that the Parliament will continue its support of the National Women’s Advisory Council and its recommendations.

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

Petition received.

Report on Textiles, Clothing and Footwear

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

We, the undersigned, being persons actively involved in the footwear manufacturing or allied industries, draw attention to the undesirable results which would follow if the recommendations of the I.A.C. were adopted.

There would be a direct loss of at least 700 family incomes in South Australia, with many other jobs being lost in the tanning, rubber, and shoe component industries and also in other businesses servicing shoe manufacturers.

An efficient shoe industry exists in this country, and we believe that neither the industry nor our individual skills should be sacrificed.

We urge you to influence the Government to reject the Report and to continue restrictions on the imports of overseas footwear, particularly, from low cost countries.

Your petitioners therefore humbly pray that the recommendations of the Draft Report of the Industries Assistance Commission on textiles, clothing and footwear be rejected.

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

Petition received.

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Notice of Motion


-I give notice that, on the next day of sitting, I shall move:

That this House records its deep appreciation and sincere thanks

1 ) to all Members of the Australian Armed Forces who have recently served with great distinction in the Commonwealth Peace Keeping Unit in Zimbabwe and also to those who were appointed by the Australian Government to observe the conduct of the elections held last week, and

for the successful and important role played by the Prime Minister of Australia at the Commonwealth Lancaster House Conference which has led to a successful transference of power of Zimbabwe from the UK. to the new independent government of Mr Mugabe.

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– My question is directed to the Treasurer and is of great interest to concerned Australians. It relates to the manufacture and consumption of low alcohol beer. Is the excise on low alcohol beer levied at the same high rate as that on beer with a full strength alcoholic content? Would any benefits flow to the whole community if we encouraged a change in the drinking habits of Australians to low alcohol beer? Will the Treasurer assist these benefits to flow to the people of Australia by giving consideration to a reduction in the rate of excise on low alcohol beer? If the excise were reduced, would this action result in a reduction in the retail price of low alcohol beer? What effect would this have on the general health of the community?


-The answer to the first part of the honourable gentleman’s question is yes. The rate of excise is the same. As to the remainder of the question, I am sure that all honourable members have followed the comparative popularity of low alcohol beer very closely. I understand that sales of low alcohol beer have been very strong throughout Australia. The proposition put forward in the honourable gentleman’s question has already been put to the Government. The next time the question of levels of excise is considered, what he said and what other people have said in a similar vein will be kept in mind by the Government. The effect that a reduction in excise would have on the health of the community is, of course, a matter of opinion. I do not claim to be in a position to affirm what the honourable gentleman said, although I suspect that it would be to the advantage of the community if the general consumption of alcohol were reduced.

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– I address my question to the Minister for Industrial Relations. Has the Australian Wool Selling Brokers Employers Federation indicated to the Minister whether it intends to initiate deregistration proceedings against the Federated Storemen and Packers Union? Does the Government expect the employer to take the initiative in this sort of instance? What is the Government’s attitude to the matter?

Minister for Industrial Relations · CORANGAMITE, VICTORIA · LP

– I understand that the Australian Wool Selling Brokers Employers Federation is meeting this morning. I expect it to make its decision at that meeting. In relation to the second part of the honourable member’s question, I should point out that deregistration of a union involves the preparation and presentation of evidence to establish a prima facie case for deregistration. Only the employers are in a position to assemble and to present the required material. However, in relation to the third part of the honourable member’s question, which relates to the Government’s position, as I have said, the Government will give its full and immediate support to an application by the employers.

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Mr Kerin having addressed a question to the Prime Minister-


-The question is a hypothetical one. I rule it out of order.

Prime Minister · WANNON, VICTORIA · LP

-Mr Speaker, with your indulgence, I think it would be reasonable enough for me to say that other elements of the Government’s policy in relation to the Soviet Union would stand.


-The right honourable gentleman sought my indulgence to make that short reply. The indulgence is given retrospectively.

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– My question is directed to the Acting Minister for Education. Is there a demand for short courses and other recurrent education courses appropriate to colleges of advanced education serving rural areas? If so, is this demand being met or are opportunities being denied to people because of the low level of permitted expenditure and the difficult procedures required to be undertaken to obtain course approval at both Federal and State levels? If people are being denied these opportunities, can local colleges of advanced education be given positive encouragement to provide such courses through higher levels of permitted expenditure and the easing of approval restrictions?

Minister for Post and Telecommunications · CHISHOLM, VICTORIA · LP

– A wide range of short courses and other recurrent education programs is offered by colleges of advanced education. Programs are also provided by technical and further education authorities and universities. It is important, of course, that these programs be co-ordinated. There are State and Commonwealth arrangements for this purpose. In relation to colleges of advanced education in particular, amendments to the States grants tertiary education assistance legislation passed by the Parliament in the last session permit colleges to provide programs of continuing education approved by the responsible State authority. This recent change has been generally welcomed by the States and institutions have the opportunity to put forward proposals for change as part of the planning process for the 1982-84 triennium. As to the funding matter, I will draw that to the Minister’s attention.

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-I direct my question to the Prime Minister. In view of the Government’s persistence in recognising and thus according legitimacy to the genocidal Pol Pot regime despite the fact that it has long lost effective control of Kampuchea, will the Government invite Prince Sihanouk to Australia so that the Australian people will have an opportunity to hear the real story of what Pol Pot did in the years of his rule in Kampuchea? Further, how does the Government react to the comment made by Pol Pot’s henchman, Khieu Samphan, that Australian support was precious to the Pol Pot regime and that Pol Pot counted Australia amongst his closest supporters?

Minister for Foreign Affairs · KOOYONG, VICTORIA · LP

– I have indicated previously, on a number of occasions- I do not think in the Parliament, but certainly at Press conferences in Canberra and elsewhere- that if Prince Sihanouk wishes to come to Australia he will, of course, be readily admitted and we will look forward -

Mr Lionel Bowen:

– Have you invited him?


-It has been a form of invitation, in the sense that he has asked whether he would be welcome and I have responded that he would be most welcome. We were expecting him here during this month, but we were notified that the visit would be deferred to a later date. I received a message from him through the Assistant Secretary of State last week that he was still intending to visit Australia and felt that his visit would be in about the middle of the year. I can be no more precise than that. I have said that we would welcome him here.

Mr Lionel Bowen:

– An official visit?


– Let me give consideration to the nature of the visit when I know the timing and whether other people will be involved, et cetera. My answer to the thrust of the question is that we would welcome Prince Sihanouk here, not only because of the role he has played but also because he may conceivably have a role in seeking a political solution for Indo-China.

As to the second part of the question, it is not for me to go behind the mind of a person making a statement such as the one referred to. Australian policy remains the seeking of a political solution to the problems of Kampuchea. It is not merely that the prime and urgent aim must be the ferrying of supplies, the continuing supply of money, materiel and food to Kampuchea. Accompanying that, there must be endeavours to reach a political solution. I have had discussions in New York with the Vice Foreign Minister of Vietnam, Phan Hien, on at least two occasions on this matter, which is a factor frequently overlooked by members of the Opposition when they talk about Australian policy in this area. I have also discussed the same attitude with allies of ours, to see what pressure can be brought to bear.

The fact is that there can be no solution to the problems of Kampuchea unless we continue pressure for the withdrawal of Vietnamese forces and provide circumstances in which the Khmers are able to choose their own form of government uncoerced by others. In the meantime the humanitarian aid will continue. Tragically, that aid is running out in a matter of weeks. We will require further international consultation for the supply of funds. In conclusion, in regard to the first element of the question I reaffirm how much we would welcome the opportunity to discuss these matters and broader issues with Prince Sihanouk.

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– 1 address my question to the Prime Minister, who yesterday drew to the House’s attention the fact that Monday, 10 March, is to be commemorated and celebrated throughout the Commonwealth as Commonwealth Day. Does the Government still regard the Commonwealth as being important, significant and relevant in today’s world situation?


-At the Jamaica Commonwealth Heads of Government Meeting in 1975, a resolution was accepted that members of the Commonwealth should mark aside one day each year on which the Commonwealth would be noted and the purpose and achievements of the Commonwealth would be examined. A decision has been made that that day should be the second Monday in March, which this year is 10 March. It may be valuable to recall the uniqueness of the Commonwealth and the great diversity in the membership of the Commonwealth- a diversity in culture, religion, language and, in practice, social and political background. There is a shared historical association and, in that sense, a shared tradition; but the origins and backgrounds of the different countries of the Commonwealth are as diverse and different as they can be in the world.

The Commonwealth has shown a great resilience. Over the last 12 months, in a co-operative and forthright spirit, a number of contentious issues have been addressed and the Commonwealth has assisted greatly in reaching solutions. At Lusaka in 1979 there were threats of division, to which I referred yesterday, and many cynics believed that the Commonwealth could not and would not survive. I think they underestimated the goodwill of the general body of leadership of the Commonwealth and the determination to try to contribute to the resolution of great difficulties. The principles that were adopted at Lusaka have certainly been justified in the months since.

This year Commonwealth Day coincides nearly enough with the end of a grievous and damaging civil war in which many thousands of people have been killed and maimed. It coincides with the birth of a new independent nation and with a significant victory for common sense and reasonableness through what observers are now generally calling free and fair elections. I pay tribute to the Australian observer group, the Australian monitors and members of the Australian armed forces, who have contributed to the final result. I may have made the point yesterday that the very fact that that monitoring force came into being was instrumental in getting the front line states and the internal parties to agree to the Lancaster House settlement. In that sense, it was probably an essential part of the final outcome. We all hope, and I am sure all members of the Commonwealth now hope, that as the new Zimbabwe is born those in Rhodesia will put aside old enmities and build a peaceful, stable and prosperous region. I must say that to this point the signs are good, the omens are fair.

As to the future of the Commonwealth, since 1978 there have been five newly independent states and Zimbabwe is likely to be welcomed soon. The 1980 Commonwealth Heads of Government Regional Meeting will be held in New Delhi, and the dates set for that are 4 to 8 September. There will be three new members at that meeting. Kiraibati, Tuvalu and the Solomon Islands have achieved independence and status within the Commonwealth since the last Commonwealth Heads of Government Regional Meeting. The Commonwealth meeting itself will be held in Australia in 1981. The Commonwealth remains a forum for discussion about a number of important issues- economic developments in the world, energy costs, declining real economic growth, the special problems of developing countries, and the special problems of small island states. It emphasises greatly the need for international economic co-operation. So, there is an important and continuing role -

Mr Scholes:

- Mr Speaker, I raise a point of order. The matter on which the Prime Minister is making a statement is one on which the Opposition has no objection to giving him time to speak. This is a prepared statement, and the Prime Minister has been speaking now for five minutes in Question Time.


-Order! There is no point of order. The question was asked and the answer is relevant.


– In concluding, let me say that the Commonwealth does have an important and continuing role. It has demonstrated a very real relevance to the problems and difficulties of the last part of the twentieth century. What has happened over recent months has indicated that people of goodwill, with different backgrounds and seeking moderation and reasonableness, can contribute to the solution of grave and serious problems. I believe that that is something upon which the Commonwealth will be able to build in the years ahead. We need to remember that diversity does not mean division. There is no need for that whatsoever. Consultation and co-operation avoid confrontation, and the Commonwealth’s role is a real one. Peace and stability are independent of ideology, in many cases, and they are often independent of geography and traditions. Those things which bind the members of the Commonwealth together are real and vital. They are a living entity, which is vastly important if this world is to secure peace through the remaining part of the twentieth century.

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Mr James having addressed a question to the

Prime Minister-


-Order! The question is out of order. The right honourable gentleman is not answerable to the House for the quality of his wool.

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– The Minister for Industry and Commerce will be aware that three major new international hotel projects have been announced for Sydney. Are reports true that another 22 major hotel projects are planned around Australia? Can the Minister confirm that the legislation for the depreciation allowance will soon be introduced into the House?

Minister for Industry and Commerce · FLINDERS, VICTORIA · LP

-The Budget brought down by Treasurer Howard for this year is a milestone in the development of the tourist industry in Australia. As the honourable gentleman says, amongst the range of many significant initiatives taken in that Budget was the2½ per cent depreciation allowance on income-producing buildings such as hotels, motels and guest houses used for the accommodation of travellers. I am happy to say to the honourable gentleman and to the House that that initiative has been extraordinarily successful in generating new hotel-motel development required for the increasing surge of tourists to Australia.

In recent months, developments valued at in excess of $700m have been brought to my attention. They include the construction of a 400-room Adelaide Hilton, which is expected to begin in August of this year; a proposed tourist complex, with hotel and coach terminal facilities, in Canberra; major extensions to the Chevron Hotel at Surfers Paradise, costing some $10m and including a convention centre for 1,500 people; a 225-room Hilton hotel proposed for Sydney Airport, to which 275 rooms will be added at a later stage; and a hotel of 35 floors and 600 rooms to be constructed in the Rocks area of Sydney at an estimated cost of $45m.

Developers and tourist accommodation people in the industry have informed the Government that that2½ per cent depreciation allowance was a significant factor in the investment of the funds which are now flowing into this part of the industry. I might say generally that that depreciation allowance and the other initiatives taken by the Government in this Budget reflect the Government’s recognition of the increasing importance of the tourist industry as an earner of foreign exchange, as a significant employer of labour and, at the same time, as an important contributor to this country’s gross domestic product.

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– My question is directed to the Treasurer. I refer to the Government’s decision to raise the interest rate on Australian savings bonds by 0.5 per cent and the interest rate on semi-government securities by 0.8 per cent. Is it a fact that subscriptions to these bonds and securities have been slow? Is this because the public believes that interest rates in this country have not yet peaked?


– It would be a very brave exercise for anybody, including the honourable member for Reid, to make a judgment at this time as to whether the response to a decision which took effect on Monday has been fast or slow. It is altogether too early for that question to be answered properly. In fact, it was the subdued levels of subscriptions to the previous series of Australian savings bonds that led the Government to recommend to the Loan Council that that interest rate be increased. That was obviously the result of the relatively unattractive level of interest- 9.25 per cent. If the honourable gentleman wants to know some of the thinking of the Government about interest rates, I suggest that he be a little patient. I will be having something to say about that subject later today. Suffice it, in answering his question, simply to remind him and the House that since 1 July last year the interest rate for prime borrowers in the United States has risen by between five and six percentage points, and during the same period the rises for comparable transactions in Australia have been less than one percentage point.

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– My question is addressed to the Minister for Industrial Relations. I refer to bans that for 27 weeks have been applied to Victorian meatworks by the Australasian Meat Industry Employees Union. During this time some works have closed and all works have been reduced to operating on a four-day week. As the total industry is now on strike and 29 meatworks are closed indefinitely, can the Minister indicate what action is being taken to resolve this issue which is crippling decentralised meatworks such as that of the Countryside Meat Co. at Donald and placing hundreds of workers on a semistarvation existence?


– I am aware of the dispute to which the honourable member has referred.

Since September of last year members of the Australasian Meat Industry Employees Union have been taking industrial action in support of a log of claims which includes claims for unspecified work value increases, increased casual rate and daily hire loadings and a redundancy scheme. The dispute has come before the Conciliation and Arbitration Commission and it is still before the Commission. But the union has shown complete disregard for the proper industrial processes. Despite the fact that its claims are being heard in the proper way, the union has continued to take strike action such as the honourable member has described. The issues are complex but they must eventually be resolved before the Commission. I understand that it is proposed to hold a further hearing as soon as the parties involved can be called together. In the meantime, the only sensible course for the union to take is to end this senseless industrial disruption which is costing the members and their families money and completely disrupting the meat industry.

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-The Deputy Prime Minister will recall, in response to a question I put to him yesterday asking him to reconsider the Asmarfish joint venture between Tasmania and the Soviet Union, implying at least that there was a vast difference between the attitudes of the Tasmanian Premier, Mr Lowe, and me. Is the Minister not aware that on 22 February Mr Lowe asked the Prime Minister to reconsider his attitude to the fishing project in view of the Government’s insistence that trade boycotts would not apply to strategic materials- wool and hidesand in other areas where Government Ministers and their supporters stood to make substantial profits? Is he not aware that Mr Lowe’s request was very largely based on the Deputy Prime Minister’s own strong statement? The Minister said:

All you would be doing is to hurt yourself and there would be no sense in that arrangement.

Does the Minister agree that the refusal to go ahead with the fishing venture is hurting the State of Tasmania -

Mr Goodluck:

– It is not hurting at all.

Mr Hodgman:

– We do not want any Russian spies on Tasmanian soil.


– And that by his own definition there is no sense in such an arrangement?

Mr Goodluck:

– We like it down there.


– Tasmanian members object to 1,000 new jobs for Tasmanians. They do not want employment for their fellow Tasmanians.

Mr Goodluck:

– They want employment. They do not want Russians down there.


-Order! If the honourable member for Franklin and the honourable member for Denison continue to interject while a question is being asked, I will deal with them.


– Roubles in the wool bales are okay.


-Order! The Leader the Opposition will ask his question.


– Finally, in view of the Deputy Prime Minister’s ignorance in this House yesterday of the important request from a State Premier affecting the economy of Tasmania in a most substantial way and the potential welfare of thousands of workers, why was he not informed of this matter by the Prime Minister?

Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · NCP/NP

– I have nothing to change in what I said yesterday. When the Tasmanian Premier was initially informed he accepted and understood the reason for the decision. It is no use saying that the decision will not have an impact on the Russians. It does. They have been endeavouring for years to get special fishing arrangements with Australia to harvest Australian fisheries in our 200-mile zone. If the Soviet Union is not given a fishing licence, many other countries also want to get a licence to fish in Australian waters, and I am quite sure that other suitable arrangements can be made for operations to be based in Tasmania. Why the Leader of the Opposition continually wants to come to the defence of the Soviet Union or to make excuses for the Soviet Union is very difficult indeed to understand. He tries to find reasons to assist the Soviet Union. Maybe within his own party organisation there is some virtue in his having that attitude, but the Government has a consistent attitude and it will stick to it.

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-I ask the Minister for Home Affairs whether he has examined any international precedents for the promotion of alternative Olympic Games. Has he examined the actions of the Soviet Union in 1936 when it led socialist moves for 17 countries to participate in an alternative games in Barcelona? In view of this Soviet precedent, what further steps will the Minister take in support of a 1980 alternative games?

Minister for Home Affairs · WENTWORTH, NEW SOUTH WALES · LP

-I congratulate the honourable member on his tremendous interest in history. It is probably a good idea that honourable members who are trying to get a bipartisan approach to the boycott of the Olympic Games be aware of what the Union of Soviet Socialist Republics would have done in similar circumstances to those in which we find ourselves at the moment. As I understand it, in 1936 the USSR did boycott the Olympic Games, and it did so because of the clear indication from people like Dr Goebbels, whom the honourable member for Hindmarsh will recall, and Adolf Hitler in statements that they made about the Games. Let me refresh the memories of honourable members about those times. Dr Goebbels is reported to have said:

The Berlin Games show other nations what forces we -

That is, the Germans- are able to mobilise with our ideology.

That is reminiscent of the document that is being handed around to Communist Party activists in Moscow at the moment. It is no wonder that in 1936 the Russians reacted in the way they did. They stayed away from the 1936 Berlin Olympics. At the same time, it is also interesting to note that the Russians joined in an attempt to hold alternative games. With 16 other nations, Russia attempted to organise- I am sure that this will appeal to honourable members oppositewhat were called ‘workers’ games’ or ‘people’s games’. If we organised what are called workers’ games’, perhaps honourable members opposite would rush along to them. The fact is that these games were organised by the Russians and 16 other nations at that time and the only thing that stopped them going ahead in Barcelona, Spain, was the Spanish Civil War.

That is a very interesting part of history. It indicates quite clearly how the Russians would react to the present situation if they were put in our position; it indicates what they did in 1936. It is also interesting to note that an elimination match for the World Soccer Cup was played in Moscow recently between the USSR and Chile. The match was a draw and it had to be replayed, but in Chile. However, the Russians would not go to Chile, for political reasons. Because they would not play the match, they were eliminated and Chile went into the final. Similarly, in South Korea recently when the world shooting championships were on -


-I ask the Minister to make this a sprint event rather than a distance event.


-Everybody seems to be enthralled by this history. But I will be brief. The

Russians recently boycotted the world shooting championships in South Korea. Let us have no doubt about what the Russians would be doing if they were in our situation. Let us all bear that in mind and start to develop a truly bipartisan attitude towards the boycott of the Olympic Games.

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– I address my question to the Prime Minister. In view of the very strong stand that he has taken against the Russian aggression in Afghanistan and his powerful presence around the world in ‘trying to generate international reaction against it, will he adopt the same attitude to the equally, if not more, conscienceless Indonesian aggression against Timor? Does he realise that Timor is closer to Australia than Afghanistan is? If he will not take action to reverse Australia’s current stance, why will he not do so?


-The honourable gentleman knows quite well the actions of the Australian Government over a long period. The matter has been explained by the Foreign Minister and by me on many different occasions, and the honourable gentleman should well know that if there was to be a peaceful and earlier solution in that particular matter initiatives would have needed to be taken early in 1 975, and on deliberation they were not taken at that time.

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-Has the Acting Minister for Education received a report from the Schools Commission relating to the alleged ill-treatment of pupils in Tasmanian schools? Are these reports grossly exaggerated, and do they throw a grave and unnecessary reflection upon the professional status of all teachers in Tasmania, particularly as they were expressed at a political rally?

Mr Martin:

- Mr Speaker, I raise a point of order. The question of school teachers in Tasmania is a State matter, not one that is within the province of the Minister.


-The question is in order. It was very carefully drawn to avoid previous rulings.


– I thought that headmasters generally, indeed headmasters everywhere, had given the cane away these days. That has at least made life much easier for the students, if not for the teachers. My Tasmanian colleagues tell me that Tasmanian teachers are so good that they do not need to resort to corporal punishment. I will invite my colleague, the Minister for Education, to give his close attention to what the Schools Commission has said and to give the honourable member a substantive reply at a later date.

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– My question is directed to the Minister for Transport. I refer to the joint statement by the Federal and State Ministers for Transport on the accelerated program for the sealing of the Stuart Highway in South Australia and the views expressed by his predecessor and himself that no additional funds would be made available to South Australia for that program under national roads legislation. I ask the Minister whether he is aware of an answer given in the South Australian Parliament by the South Australian Minister for Transport, Mr Wilson, following the announcement of the accelerated program, in the course of which that Minister stated:

I am unaware of a statement by the Commonwealth Minister for Transport that there would be no additional Commonwealth funding, because, as the honourable member realises, this Government has said that to seal the Stuart Highway in six years would require $18,000,000 of extra Commonwealth funding and that to seal it in seven years would require something less than that- approximately $14,000,000.

As the South Australian Minister, Mr Wilson, obviously believes that additional Commonwealth funding is necessary to carry out this program, has the Government been most frank in its discussions with the South Australian Government?

Minister for Transport · GWYDIR, NEW SOUTH WALES · NCP/NP

-I have made the Commonwealth’s position on this matter clear on a number of occasions to most of the South Australian members of the Parliament. The principal point that I want to make is that the Commonwealth Government stands behind its commitment to provide for the complete sealing of the Stuart Highway by 1987. The Commonwealth grant to South Australia in 1 979-80 for the Stuart Highway is $4.3m. The truth of the matter is that no more money could be spent this year, even if more were available, because of the design and logistic problems that arise in the remote area in which the highway is to be constructed. The expenditure on the highway will increase over the next few years as the capacity to spend builds up. The level of funds needed is expected to be available as other national highway projects are finished. At my request a senior officer of my Department went to Adelaide recently to discuss the program for the sealing of the Stuart Highway. He is satisfied that the 1987 deadline will be met without prejudicing other planned roadworks. The Government will continue to monitor to ensure that adequate funds are available and will continue to be available in future years to meet the Commonwealth commitment. Whether the honourable member wants to start splitting straws on what the South Australian Minister says or what the Commonwealth Minister might say, I just repeat that the Commonwealth Government will stand behind its commitment to the South Australian Government on the Stuart Highway.

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– Is the Minister for Transport aware of reports that certain ultra-large fire tenders which have been installed at Australian domestic and international airports have allegedly failed to live up to the performance claims made for them by the manufacturers? Is the Minister further aware that fire tenders of this nature which are designed specifically for airport use and which are manufactured in Australia have been sold against all international competition in many other countries and have met the specifications and performance standards required of them? Will the Minister give an assurance that in any further purchases of machinery of this type the fullest consideration will be given to purchasing machines made in Australia?


– I am aware of the concern that is surrounding the purchase of those fire tenders. Indeed, a parliamentary committee- I think the Joint Committee of Public Accounts- has applied itself to the issue. I await its report with considerable interest. However, I think it is important for me to restate the way in which these fire tenders were purchased. The Department decided that it should re-equip its fleet of airport fire tenders with the most modern and efficient machines available. That is the first point. Sixteen 6,800-litre ultra-large fire tenders were bought from the Walter Motor Truck Co. of the United States through public tender. In addition, nine 9,100-litre Walter ultra-large fire tenders containing a significant Australian content will soon be delivered.

These highly complex vehicles were the lowest priced, technically acceptable fire tenders offered. So, there is no doubt about the correctness of the decision of the Department in this matter.

Mr Cotter:

– Except that they do not work.


-They do work. Statements like that are the statements that need to be countered. There were technical problems- minor technical problems mostly- with these tenders when they first arrived. They were a quite new tender. But most of those technical difficulties are being overcome. I do not want to commit myself or the Parliament unduly to them. I will await that report of the Public Accounts Committee because it has had the benefit of going to witness the operation of the fire tenders at Canberra Airport and, I presume, elsewhere. I have also asked my Department to give me a complete briefing and report on the background of the tendering and the reasons why this type of equipment was necessary to ensure the safety of people at airports throughout Australia. But, on present indications, they are undoubtedly the best technically and the most modern fire tenders available at the price that was acceptable to the Government at that time.

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– My question is directed to the Minister for Foreign Affairs and concerns East Timorese refugees. Is it a fact that an agreement was negotiated with the Indonesian Government in 1978 that would have allowed 600 refugees out of a list of, I think, 2,700 which was submitted by the Australian Timorese community to come to Australia by Christmas of that year? Is it also a fact that approximately 308 refugees have been permitted by the Indonesian Government to leave East Timor and that these people include almost no indigenous East Timorese? Finally, is it a fact that in consequence the Indonesian Government clearly has abrogated the 1978 agreement with the Australian Government? In view of the very strong stand that the Government has been advocating in relation to foreign affairs matters, will the Minister agree that it is incongruous that the Australian Government should not have been able to achieve the honouring of an agreement made in 1978 with the Indonesian Government? What action will the Minister and the Government take to ensure that the Indonesian Government honours the agreement of 1978?


-The honourable member’s question is primarily a matter for the Minister for Immigration and Ethnic Affairs. I was involved in the discussions in December 1978, as mentioned by the honourable member, and I have been following the matter very closely indeed. It was during my discussions with Professor Mochtar, the Indonesian Foreign Minister, in December 1978 that Indonesia agreed to have the first of an agreed list of refugees arrive in Australia around the end of December. Prior to that there had been lengthy delays. The Indonesians met their obligations under that agreement and the first of these refugees arrived a little over a year ago. I have been concerned, as have respective Ministers for Immigration and Ethnic Affairs, at the delay that then transpired. However, a number of refugees over and above those who were in an agreed list which was due to be examined in December 1978 have come to Australia. The numbers that have come in under that list have been exceeded, but they have not been examined in totality because some have come from that list while others have come from outside the list.

I am concerned at the delay. There can be no other answer than that. I have spoken with the Minister for Immigration and Ethnic Affairs who has informed me- as the House is aware, I arrived back in Australia only last night- that he is already in the process of writing to me about the matter. So, from his and his Department’s points of view the matter obviously has been before him. Only two and a half weeks ago, the matter was raised when I travelled through Jakarta. I hope that in the weeks ahead I can give the honourable member further information. I regret that on arrival back I can only outline the matter.

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-Is the Minister for Trade and Resources aware of the very severe damage being done to pastures and crops by the large and ever increasing number of kangaroos now evident in so many areas of Australia? I ask further: Can the Minister tell the House whether any progress is being made towards having the ban imposed by the United States in 1974 on the import of kangaroo products lifted in the near future?


– I answered a question on this point in the House last year. I said that the Government was making representations to the United States Administration to have the ban that was imposed back in 1974 lifted. Australia imposed a ban during 1973-74 and lifted it in 1 975 largely as a result of improved conservation measures and the controlled harvesting of kangaroos. But any thought that kangaroos are a threatened species in Australia is completely baseless. Mention has been made of the red kangaroo. The grey, the red and the western grey are very prolific today. Indeed, in some areas they are in plague proportions. It has been estimated that there are approximately 11 million to 20 million; various figures have been quoted as to the numbers. Any thought of these species being threatened is not real. However, the United States has not taken any action at this stage. There has been some discussion in that country about these particular species. It is the most prolific ones that have been slaughtered. As a result the United States has sent a leading biologist, Dr Anderson, to Australia- he is here at the moment- to see what the circumstances are on the spot. My Department, along with other Commonwealth departments, is facilitating his visit so that he can see at first hand just what a threat these kangaroos, where they are to be found in great numbers, pose to the livelihood of many farmers.

I do not think the Americans realise that there are probably many more of these species in Australia today than there were before the time of the white man. This is largely because of improved pastures and better water facilities which have enabled kangaroos to multiply in great numbers. For the United States to continue the ban means that market opportunities for skins and meat are limited; that is so particularly in relation to skins. If we can make it more profitable to harvest these kangaroos we will get better management and control of them, instead of having the useless slaughter that is now taking place. I think it is most unwise- indeed, it is unrealistic- of the Americans to think that they are doing anything favourable for these species by continuing the ban.

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Minister for Defence · Moreton · LP

– For the information of honourable members I present special details of flights of the Royal Australian Air Force for the period 1 July 1979 to 31 December 1979. Copies of this report are available from the Table Office.

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Minister for Employment and Youth Affairs · Stirling · LP

– Pursuant to section 36(3) of the Aboriginal Loans Commission Act 1974 I present the annual report of the Aboriginal Loans Commission 1 978-79.

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Minister for Health · Warringah · LP

– Pursuant to section 72(4) of the Health Commission Ordinance 1975 I present the annual report of the Capital Territory Health Commission 1978-79.

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Minister for Business and Consumer Affairs · Curtin · LP

– For the information of honourable members I present the report of the

Industries Assistance Commission on Rubber Products.

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Ministerial Statement

Minister for Defence · Moreton · LP

– by leave- Earlier this morning 144 members of the Australian contingent of the Commonwealth Monitoring Force to Rhodesia returned to Australia. On behalf of the Government, and I would presume to include all Australians, I wish to take this opportunity of placing on record the nation’s thanks to the contingent and its commendation for a job well done.

The Australian troops, under the command of Colonel F. K. Cole, discharged their monitoring tasks with efficiency and dedication. Their evident professionalism, displayed in difficult and demanding circumstances, has been outstanding and has won the admiration of those with whom they were operating. The contingent has a right to feel proud of the part it has played in helping to bring this troubled nation to what we must all hope to be the threshold of a new era of development- an era which we all hope will be characterised by greater peace arid harmony than was the case prior to the creation and development of the Monitoring Force.

As I pointed out prior to the contingent’s departure, its members were undertaking a most difficult and demanding task. In effect they were acting as uniformed ambassadors. They have proven to be fine ambassadors. The contingent left at a time when most Australians were about to enjoy Christmas with their families. The Government wishes the soldiers a happy return to their families. The contingent will remain in Perth tonight and fly on to Brisbane and Sydney tomorrow. Members of the contingent were drawn from various units throughout Australia. They will proceed on leave before rejoining their units.

As was announced by the Government last week, one Australian team of four remained in Rhodesia. The team of four, led by Lieutenant Colonel Hubble, is stationed at Bindura. It will take on a liaison role at regional level between elements of the Patriotic Front and the Rhodesian Security Forces. The decision that the team should remain at Bindura was made in response to a request from the British Government. The Government also places on record its appreciation of the work which this team is doing. I present the following paper:

Return of Rhodesian Contingent- Ministerial Statement, 6 March 1980.


-by leave-The Opposition joins with the Minister for Defence (Mr Killen) in congratulating the Australian forces for being in Rhodesia and performing the tasks with which they were charged by the Government of Australia in a manner which has obviously done credit to Australia. The problem of Australian forces serving outside Australia brings into focus a number of contingency matters which are under review and about which this House should, at the Minister’s earliest convenience, be notified. The Australian contingent in Rhodesia was relatively small, but its presence there placed some strain on the manpower availability of the Australian Defence Force. It followed an earlier abortive decision to send a force to Namibia. Had the request for such a force been agreed to in its original form almost unacceptable strains would have been placed on the Australian Defence Force. The Prime Minister (Mr Malcolm Fraser) in his statement three weeks ago announced that certain changes were to take place in the structure of the Australian Defence Force to make it easier to meet the demands of this type of mission and to make the Force better able to meet emergencies which may take place.

I am, however, disturbed by a report that it is intended to change the 1942 provision and to make persons under the age of 1 9 years available for overseas service. As honourable members know, 1942 was a time of great crisis in Australia. At that time the Government saw fit to exclude those who were under 19 from overseas service. That decision was reaffirmed by the incoming Government in 195 1. At this stage there does not appear to be- the Minister may be able to inform the House as to the position- a valid reason for a change. The only reason which comes to my mind is the difficulty in logistics of meeting the changes which the Prime Minister announced are to take place in Townsville. I think that meeting an immediate logistics or political requirement would be a poor excuse for abandoning a principle which was acceptable in great wartime crisis.

I understand that the announcement made by the Prime Minister regarding Townsville was not fully dealt with by the Army before it was made to this House. In fact, this change to reduce the age is to meet the problem of the lack of Service housing available in Townsville for married people, who would otherwise make up the major component of those moved to Lavarack barracks under the arrangements announced in the Prime Minister’s statement. The need for younger single men to implement those arrangements is to be met by dropping an arrangement which has endured for 40 years. I hope that when the Minister does make a statement to the House on defence he can make clear that the reasons for change are much more substantial than that. Unfortunately, I think that logistics have more to do with it than any other change in policy.

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Ministerial Statement

Treasurer · Bennelong · LP

-by leave- The purpose of this statement is to provide an assessment of the current state of the Australian economy; to put into context recent developments on the monetary front; and to inform the House of certain revenue decisions. More than six months have now passed since the Budget and it is therefore appropriate to take stock of the current performance of the Australian economy. This year’s Budget was designed to equip Australia to succeed in a world environment of rising inflation and intensifying competition. Subsequent developments have more than borne out the concern then expressed by the Government about the world economic outlook. World inflation has most certainly intensified, and the international economy has become more uncertain. Notwithstanding this difficult setting, the broad goals of the Budget are being achieved. Indeed, the Australian economy is now performing more strongly than thought likely last August. This is not to deny the persistence of some adverse factors.

At the time of the last Budget we expected inflation, as measured by the consumer price index, to rise by a little above 10 per cent for 1979-80. On the evidence so far this prediction remains unchanged.

However, additional inflationary pressures have developed since the Budget with potentially harmful effects. These make it more than ever essential that we maintain, indeed strengthen, the downward pressure upon inflation. Honourable members will be aware of the sharp rises in inflation overseas in recent times. Between December 1978 and December 1979, the Organisation for Economic Co-operation and Development average inflation rate rose from 8.4 per cent per annum to 12 per cent per annum. It was, of course, impossible to isolate the Australian economy from this development, which was a major reason why prices rose faster in 1979 than in 1 978. These overseas pressures persist.

At the same time, further pressure upon our inflation rate is coming from adverse domestic developments, principally in the wages area.

These developments, in the form of claims for additional wage increases, constitute a growing worry to the Government. Although the Conciliation and Arbitration Commission in the last national wage case discounted the consumer price index to cover the direct effects of policy measures, it refused to go further. As a result, the economy is in the process of absorbing a further 4.5 per cent rise in award wage rates. However, more alarming than this is the spread of wage increases on what appear to be increasingly tenuous ‘work value’ grounds in which the Commission is acquiescing. This adds a layer of wage increases on top of those obtained through the normal indexation process. A continuation of this will undermine the modest, but nonetheless encouraging, gains which have been made on the employment front over the past year. It is incumbent upon all who are part of the arbitral process to bear in mind that nothing will more quickly dissipate these gains than further excessive wage increases. The Australian economy cannot afford wage increases in excess of productivity gains, and those involved would do well to recall what happened when that last occurred in 1974 and 1975.

The Government remains convinced that general wage restraint is a crucial element in controlling inflation and sustaining economic recovery. To the extent that it does not occur, greater strain is placed upon other areas of policy, in particular, monetary policy. Against a background of sharply accelerating inflation rates amongst major industrialised nations, Australia has held the line remarkably well. For the 12 months ended December 1979, the Australian rate of inflation was 10 per cent against an OECD average of 12 per cent. Comparatively lower inflation and pragmatic management of the exchange rate have made Australian industry more competitive. This, combined with another buoyant rural season, is reflected in the strong growth in exports. For the first seven months of this financial year, the value of recorded exports rose by nearly 40 per cent over the equivalent period the year before. Of particular satisfaction has been the noticeable lift in manufactured exports.

Evidence of Australia’s enhanced economic reputation is not only to be found in our improved export performance. Our more stable and predictable economic climate has meant that, more than ever, Australia is seen as an attractive place for long term investment. The chief importance of the increasing interest now shown in Australia from abroad lies in its contribution to the growth of our future productive capacity and thus to higher levels of output and employment. Historically, Australia has largely financed its current account deficit through an inflow of private capital. In recent years, however, due to lower levels of private capital inflow, large overseas borrowings by the Government have been necessary to finance our current account deficit. Now, as a result of our strengthening external position, we have significantly reduced the amount of overseas borrowings. To illustrate, the total amount borrowed by the Government last financial year was $ 1561m. So far this year, a total amount of only about $470m has been borrowed.

This much improved external performance has been matched by a strengthening in many domestic economic indicators. Although profits are still below the levels required to ensure a return to earlier rates of growth in employment, there has recently been a recovery in business profits which is now being reflected in higher investment. All too often, the crucial role of private sector profitability in economic recovery is forgotten. Despite the inevitable effects of the reduced investment allowance, business investment recovered in the December quarter and the Statistician’s most recent survey of new capital expenditure by private enterprises points to further strong growth in the remainder of this financial year. More and more businessmen are displaying the confidence to make long term investment decisions.

The growth in capital investment has been broadly based. Naturally, the mining and resource industries are attracting large volumes of capital investment, but the appreciable lift in the volume of manufacturing investment should not be overlooked. Private dwelling investment also grew strongly over the course of 1978-79 and continued at a high level in the September quarter. With private dwelling commencements and approvals continuing to rise in the December quarter, further steady growth in this area can be expected over the balance of this financial year. Whilst there has been inevitable unevenness, production growth has occurred across a wide front. Of the 32 major indicators of production collected by the Australian Statistician, 24 increased in the latest three-monthly period when compared with the same period a year earlier. In 15 cases the increase in volume was in excess of 10 per cent. The overall gains are reflected in the 7 per cent rise in the ANZ index of industrial production for the year to December 1979. Whilst we cannot ignore the relatively subdued level of private consumption expenditure, there has been some recent evidence of greater growth. For the year to January 1980 the value of retail sales showed an increase of 13.3 per cent over the previous 12 months, which implies a growth in real terms.

In the Budget Speech, I said that I did not expect unemployment to improve in the year ahead, and it was estimated that employment growth of about one per cent would occur in 1979-80. On the evidence to date, the outlook on both fronts is rather more favourable. Total employment in the three months ending January 1 980 was 2.3 per cent higher than in the corresponding three months a year earlier. This rise was the largest over a 12-month period for 3V4 years and spread across all sections of the work force. The Budget-time forecast now seems likely to be exceeded. This growth in employment has, in part, been met by drawing people into the work force. However, the unemployment situation itself has also shown positive improvement. January was the third successive month in which unemployment was below the level of a year earlier. At the end of January 1980, approximately 440,000 people, or 6.7 per cent of the labour force, were unemployed compared with 7 per cent in January 1979. Although these improvements are pleasing, unemployment remains a significant social and economic challenge to all sections of the community.

For its part, the Government will continue to respond to that challenge on two fronts. Firstly, we shall pursue general economic policies designed to achieve lasting growth and thus a greater stock of jobs in the community. Secondly, we shall maintain a variety of training schemes aimed at improving the skills, versatility and mobility of the labour force. In this latter area the Government has, since the Budget, inaugurated with the co-operation of all State governments a program designed to smooth the transition from school to work for those most likely to experience difficulty in finding their first job. Overall, the economy’s performance has been somewhat stronger than foreshadowed in my Budget Speech. We are now well on our way to achieving a growth in non-farm product for 1979-80 of over 3 per cent.

The Budgetary Situation

This year’s Budget provided for an overall deficit of $2, 193m and a domestic deficit of $875m. As a percentage of gross domestic product, the projected deficit implied a reduction from the previous year’s outcome of 3.4 per cent to an estimated 1.9 per cent. The customary detailed mid-year review of Budget outlays and receipts has been completed. Putting aside for the moment the recently increased receipts from the crude oil levy, this review indicates that the Budget is very much on track.

On the expenditure side, growth during the first seven months of this financial year has been closely in line with that provided for in the Budget. I remind the House that, if the Budget projection of 9.1 per cent growth in outlays is fulfilled, it will mean that in the four years this Government has been in office growth in Commonwealth Government Budget spending will have averaged slightly under one per cent per annum in real terms. This contrasts markedly with an average growth of10½ per cent per annum in real terms in the three years to 1 976.

Since the Budget was brought down the Government has taken a number of far-ranging decisions about the size and composition of defence expenditure. The reasons for these decisions and their details have already been provided to the House by the Prime Minister (Mr Malcolm Fraser) and my colleague, the Minister for Defence (Mr Killen). These decisions imply an increase in defence expenditure from a current level of 2.6 per cent of GDP to approximately 3 per cent of GDP by the end of the current five-year defence program. Furthermore, those decisions involve increased defence expenditure of approximately $100m in 1980-81 and significantly increased amounts in subsequent years. They represent an essential but nonetheless major addition to the expenditure side of future Budgets. However, they will not add to Budget outlays in the current financial year. Increased defence expenditure will not be financed in an inflationary manner. Expenditure restraint has been one of the mainstays of our economic policy over the past four years. This will again be the case in 1 980-8 1 .

On the revenue side, I indicated early in January that additional revenue from the crude oil levy would yield about a further $440m during the present financial year. The mid-year review of receipts and expenditure has now revealed a downward revision in the estimated additional crude oil levy receipts to about $340m. This results from expected lower production of domestically produced oil in the third quarter. In looking to the final outcome for the Budget, I must enter the caution that variations can occur up to the end of the financial year. This is particularly so in the areas of company and provisional taxation.

Monetary Policy

In the Budget Speech I said that growth in the volume of money- M3- of about 10 per cent over the course of the year was judged to be appropriate. The stronger economic growth to which I have referred might, in other circumstances, suggest that a slightly faster rate of growth in the monetary aggregates would still be consistent with the Government’s antiinflationary policy. However, the overseas and domestic inflationary pressures I have detailed are such as to require firm adherence to the monetary outcome thought desirable at the time of the Budget. I therefore confirm the Government’s belief that an outcome of this order remains appropriate.

Recently, there have been a number of developments exerting upward pressure on monetary growth. Perhaps most prominent have been the rapid expansion of bank lending and limited sales of government securities to the non-bank sector. A key factor in monetary developments has been the rise in overseas interest rates. This surge in interest rates abroad- which continueshas inevitably exerted upward pressure on interest rates in all sections of the Australian capital market. The initial impact was less than expected. It was not until early this calendar year that it became clear that overseas rises were unlikely to abate in the short term. Local financial institutions, most notably the trading banks, experienced a rapid growth in demand for loans at current interest rates and it became increasingly difficult to sell government securities. In these circumstances, there were rises in market rates on government securities and the Reserve Bank adj usted rates on its ‘ tap ‘ stocks accordingly.

More recently, there has been a further round of increases in overseas interest rates which has been followed by additional rises in yields on Commonwealth Government securities. They rose in the market early last week by around 0.6 to 0.8 percentage points. Whilst no Government welcomes such rises, not to have allowed them would have undermined our capacity to sell government securities and our objective of containing the growth of monetary aggregates. The Loan Council has also approved increases in maximum yields on local and semi-government securities by a similar amount. Moreover, in order to ensure that Australian savings bonds continue to make an adequate contribution to restraining the growth in monetary aggregates, and in view of the increases which have already occurred in most private and official interest rates, the Loan Council has also approved a new series of Australian savings bonds with an interest rate of 9.75 percent.

These increases still represent very modest upward movements compared with rises which have taken place elsewhere. For example, since 1 July last year, interest rates for prime borrowers in the United States have risen by approximately 5!6 per cent and in the United Kingdom by 3 per cent, against a rise of less than one per cent for a comparable transaction in Australia. This very favourable comparison is a direct reflection of our better inflation performance and a basic overseas perception that both the Australian economy and our dollar are strong.

Looking ahead there will, of course, be some seasonal rises in short term interest rates as we enter the liquidity rundown in the June quarter. Some financial institutions will doubtless have to pay temporarily higher rates for their liquid funds. Nonetheless, the evidence before us is that the private sector as a whole is well equipped to meet the seasonal liquidity rundown. The Government- and the Reserve Bank in particular- will closely follow developments during the rundown period to ensure that there is no undue disruption or tightness.

As was noted in the Budget Speech last year, unexpected developments can significantly alter the outcome of projections properly based at the time they are made. For example, the currently projected outcome for bank lending during the course of 1979-80 is approximately $400m above that thought likely at the time the Budget was put together. Equally, current prognostications about the contribution of private sector foreign exchange transactions put it some $2 50m lower than thought likely at Budget time. Likewise, other decisions I shall shortly announce will have an appreciable effect upon the monetary situation.

Revenue Decisions

I now return to the question of the disposition of the estimated additional crude oil revenues of $340m in the present financial year. Three factors emerge very clearly from the economic assessment I have just provided. Firstly, the economy is growing more strongly than thought likely at Budget time. Secondly, developments at home and abroad have heightened inflationary pressures and expectations. Thirdly, whilst significant action has already been taken, continued firmness in monetary policy is required.

The Government in taking its decisions, has sought to make a responsible contribution towards mitigating adverse pressures within the economy and consolidating very evident gains to date. It has therefore decided to apply the entire proceeds of the increased oil revenue in this financial year towards a reduction in the Budget deficit. As honourable members might expect, the Government has, since my statement of early January, received plentiful advice and numerous suggestions from a wide variety of sources as to what to do with the extra money. My January statement made it clear that the additional revenue would not be allowed to open the way for general rises in Government spending. Although expectations have undoubtedly been raised that some tax reductions might occur this financial year, the Government believes that the considerations I have just outlined present a compelling case for not providing such reductions. However, the Government does believe that there is scope for some taxation reductions to be made next financial year without prejudicing our general objectives.

Within the scope available the Government has decided that priority should be given to reductions in personal income tax and has made two decisions affecting taxation levels in this area. Firstly, with effect from 1 July 1980, the rebate for dependent spouses will be increased from $597 per annum to $800 per annum. There will be equivalent percentage increases for daughter-housekeeper, housekeeper, sole parent, invalid relative and parent rebates and in allowances for children for zone rebate purposes. For example, the sole parent rebate will rise from $417 to $559 and the invalid relative rebate from $270 to $362. Secondly, the Government has decided to apply 50 per cent indexation of the personal taxation scale, also with effect from 1 July 1980.

It is not possible at this time to indicate with absolute precision the adjustments to be made to the rate scale from 1 July 1980. For one thing, the indexation factor is calculated for the year to the March quarter and it will be some time yet before the consumer price index figure for the current March quarter is available. I am, however, able to provide some illustrative figures on the basis of an assumed increase in the CPI in the March quarter, but I emphasise that actual figures to be applied cannot be determined until after the March quarter figure is known. For illustrative purposes we might assume that the average CPI figure for the four quarters ending March 1980 will be about 9.5 per cent above the level of the previous year. Discounting that figure for the effects of indirect taxes and the first two stages of the move towards parity pricing for oil, as already prescribed in the law, would produce an indexation factor of about 8. 1 per cent.

It would be consistent with past practice to discount also for the health insurance changes that were announced on 24 May 1979 and for the further impact of the Government’s decisions to move to full import parity pricing of crude oil. On present indications these adjustments would have the effect of reducing the estimated figure of 8.1 per cent by about a further 0.9 percentage points, producing a full indexation factor for 1980-81 of 7.2 per cent. On that basis half indexation, as proposed, would mean adjustment of the rate scale by 3.6 per cent with effect from 1 July 1980. That adjustment would itself have lifted the spouse rebate from its present level of $597 to $6 1 8 but, as indicated earlier, it has been decided to increase it to $800 and to effect proportional increases in other dependant rebates. In deciding to increase significantly the dependent spouse rebate the Government has responded to what it believes to be the relative disadvantage of single income familiesparticularly those on low incomes- under present taxation arrangements. The proposed increase of $203 per annum in this rebate means that the largest relative gains will accrue to low income families with a single breadwinner.

With indexation of the rate scale by 3.6 per cent the tax threshold above which the standard rate applies would increase from its 1979-80 level of $3,893 to $4,033. When allowance is made for the higher rebates, the effective threshold for a taxpayer with a dependent spouse would increase from $5,698 to $6,533 and for a sole parent from $5,153 to $5,779. I have had prepared a number of tax tables on the basis of these illustrative figures and I seek leave to incorporate these tables in Hansard. The tables show that all taxpayers will benefit from 1 July.

Leave granted.


-I thank the House. For example, a taxpayer on the standard rate with a dependent spouse will be $4.70 a week better off as a result of these changes. On the basis of the figures quoted, the changes are estimated to involve a revenue cost of about $6 16m in 1980-81. Legislation to give effect to these changes will be introduced in the current sittings as soon as practicable. As a result of these changes millions of Australians will receive an increase in their take home pay. Against this background the Government expresses the very firm hope that the Conciliation and Arbitration Commission will take full account of these tax reductions when making both its indexation and work value determinations.


Over the past four years this Government has worked hard to establish the preconditions for a return to firm, sustainable growth. The point has now been reached where there are sound prospects of self-sustaining growth in the private sector. We have no intention of parting company with the principal tenets upon which our economic policy has rested for. the past four years. The assessment contained in this speech and the decisions I have announced today should be seen within that context. Only by pursuing an uncompromising attack upon inflation will we be able to ensure that Australia’s great potential is realised in the 1980s.

We all understand that basic truth, and we shall not lose sight of it in our policies. I commend the statement to the House. I present the following paper:

Australian Economy- Ministerial Statement, 6 March 1980.

Motion ( by Mr Viner) proposed:

That the House take note of the paper.

Suspension of Standing Orders

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

That so much of the Standing Orders be suspended as would prevent the Leader of the Opposition speaking for a period not exceeding 29 minutes.

Leader of the Opposition · Oxley

– The statement of the Treasurer (Mr Howard) is a weak bromide. It certainly makes some contribution of some benefit to some people; but not much contribution and not much benefit and very few will draw upon it. It is certainly no substitute for a solution to the economic problems of the nation and it in no way can be presented as relief from the crushing and resented taxation burden that the Australian community has to bear. One of the glaring defects in this proposal is that no real contribution towards fighting inflation, which could have been made on this occasion, is to be made in the course of what remains of this fiscal year. The most important thing that should be done at present is to offset the hyper-inflationary impact and the contractionary effects of the savage petrol pricing policies of the Government by substantially reducing indirect taxes. That would have been one of the most sensible and constructive contributions towards fighting inflation and getting the economy moving again.

Having said that, I move on to observe also that this statement in effect makes a mockery of the pre-Budget hearings. The die is firmly cast. The supplicants from business, the industrial movement and community groups who come here will be put through an empty charade. There will be no meaning at all to their efforts in proposing to contribute to Government thinking. The whole impact of what the Treasurer has presented makes it clear that already the Government has defined clearly and precisely the parameters of fiscal and monetary policy for the next fiscal year.

What should be attended to in detail and with a great deal of vitality are the triple scourges that affect the economy as we enter the 1980s- soaring interest rates, inflation which is accelerating again, and, indisputedly, unemployment which will get worse in the course of this year. In all fairness to the Treasurer, one must acknowledge that he has faced squarely all of these issues. One must also add that they all defeated him. The trouble with the Government is that it does not have real economic policies, just as it does not have policies in any other area. Who is better to resort to as an authority than Mrs Margaret Thatcher, the Prime Minister of Great Britain. Last year when she came to Australia, she said:

I came to see how a conservative party without a policy-

I emphasise the words ‘without a policy’- could get such a resounding vote.

That is Margaret Thatcher talking about our Prime Minister, Malcolm Fraser; the iron lady discussing the wooden man. However, the Treasurer did not grapple with what is the nub of our economic problems right now; that is, the interaction between monetary policy and certain factors associated with the external account. Blind Freddy and his dog acknowledge what the problem is. Even the Speaker of this House acknowledged it this week in an address to a business luncheon. But the Prime Minister will not face up to it.

Let me put some facts on the slate so that we understand what it is all about. Present monetary policy is a formula for a self-accelerating escalator of inflation and contraction in the economyLet us understand what happens. Because of the condition of certain aspects of the external account, there is a very heavy speculative inflow of capital into this country. In turn, that increases total money supply, and increased money supply is fought by the Government with increased interest rates and other tighter monetary controls. The implication of that in its effect in the community is that, domestically, conditions are much tougher for our established manufacturing industry- our established employers of workers who have to support their families. Why is the money coming in? The Treasurer has sought to argue that the Government has been remarkably successful in keeping down interest rates in Australia, compared with the situations in other countries.

Government members- Hear, hear!


– Indeed, hear, hear! But there are costs involved in this because the money comes into Australia on the basis of calculations which are made. Those calculations are somewhat more complex than a simple accounting of what the interest rate is at any given time. Among others, there are three main factors that come into the calculation of people bringing money into Australia and as to whether people keep their money here once they bring it in. Obviously, the first factor is the relative level of interest rates. The second is how the Government is managing forward exchange cover, and at cost the Government is clearly managing it in such a way as to try to hold money here. However, the third factor concerns a calculation about wins or losses that might arise as a result of the condition of the external account and how that might move in the near future. The fact is that by resorting entirely to crude monetary measures, such as rapid increases in interest rates- allowing for all of those ingredients in the consideration of people who bring money to Australia, especially speculative investors- will be self-defeating. It will hoist interest rates much higher, aggravate inflation and contract the Australian economy in a quite damaging way. I say without any sense of satisfaction- with no comfort- that interest rates will not simply go higher but will increase by at least another threequarters of a percentage point in the course of the next several months.

All of the conditions that we look at, especially in relation to the level of reserves on our external account, are reminiscent of those that applied in 1972. Honourable members will recall how disastrous they were. The implications that flowed from that worked their way through the economy, adding to the enormous problems of an international economic collapse in the mid-1970s. To this day, the genesis of the problems we face now can be traced back to that situation. Of course, the man responsible for that was then Prime Minister McMahon, who spinelessly allowed the Country Party to prevent him from making appropriate adjustments to the external account. The result was that inflation on a massive scale was forcefed into the Australian economy. I say to the Treasurer that that is the core of the real issue that has to be discussed in this Parliament. That is the matter of greatest concern to the community, not the matter of fiddling with interest rates so that it is more difficult for average people in the community to buy a home or so that it is crushingly difficult for too many of them to repay the mortgage debts that they have on their homes. Those people should not be bearing the burden of this Government’s economic incompetence. These matters could be rectified with proper economic management.

It flows from there, because it is directly associated, that I make a comment about the Treasurer’s observation that the economy has performed better in the last 12 months than he or the Government generally would have anticipated. Of course it has. Let me tell honourable members why it has performed better in the last 12 months than was generally anticipated. It performed better in the last 12 months at enormous cost to Australian families because the whole implication of what the Government has been doing for some time is that it must maintain a severe squeeze on the Australian economy. The value of the Australian dollar has been artificially depressed for some time to maintain an artificial level of competitiveness externally. Look at the domestic economy; look at the national account. The movement in the economy was occurring not domestically- domestic demand scarcely moved in the last 12 months- but on the external sector. That is now short lived, but because of the artificial depression of the Australian dollar certain consequences flow in the wake of that, as anyone who understands fundamental economics would say. In all kindness, one must exclude a suburban solicitor who has practised in the small debts court.

The fact is that squeezing the domestic economy on the wages front and the employment front is part and parcel of such measures. That is why hell has been hammered out of the Australian economy at that level. That is why Australian families have suffered such a severe reduction in living standards in the last few years. We do not want, and the community cannot bear, a fifth year of Malcolm Fraser ‘s eonomics similar to the last four years. This country is suffering from greater unemployment, poverty, social distress and protracted recession, and less hope and confidence than it has at any time in the last 50 years. How much sympathy is there for the people of Australia from the richest, meanest and most unscrupulous Prime Minister in the history of the nation? I ask honourable members to listen to what he said, as quoted on the radio program PM on 28 February:

Jobs for the unemployed, accelerated government spending on welfare housing and increased Commonwealth financing of medical expenses, it’s time this sort of thinking . . . was labelled for what it is: Outdated, discredited, economic pipe-dreaming.

The people can go and jump in the lake. That is what was said by the Prime Minister of this country who is enormously rich, indisputedly enormously mean and indifferent to the welfare of the people of Australia. Where does the Government get the solutions to the great problems of the time? It seeks to write off the problems. Unemployment is increasing, yet the Government introduces a system of exclusions that prevent young people from registering as unemployed for several weeks. Not being satisfied with that, the Government rigs the system; it changes the definition, not once but several times, as to who will be registered as unemployed. Then, in case that does not work, for good measure it persistently abuses the unfortunate victims of its own economic incompetence.

What are the Government’s responses to the difficult issues of the day? It blames others, including the Australian Conciliation and Arbitration Commission, wage earners and Australian families because they want decent living standards. It blames the Treasury or the Reserve Bank, the unions or even people overseas, but never its cronies. As well as exempting its cronies from trade embargoes and boycotts- it wants to slap them on ordinary little people in the community, including athletes, young people who have a lot to lose- it wants to exempt them from this sort of criticism.

Let me bring into sharp focus the massive hoax that this statement is on the Australian people. The proposals will cost $6 1 6m next year. Do honourable members know what the Government will get as additional revenue from its iniquitous and hyper-inflationary petrol pricing policy? Just on the basis of increases already announced, it will get another $500m next year. The Government is predicting a wage increase next year of some 12 per cent. On that basis, gross pay-as-you-earn income will go up by 20 per cent. The difference between the 12 per cent and 20 per cent in terms of revenue, namely 8 per cent- the amount above what is justified- as represented by the tax claw-back, the rip-off from the Australian workers, will be of the order of $ 1,040m. That is the nature of the revenue that will be available to the Government- $500m from petrol pricing and more than $ 1,000m from tax claw-back paid by wage and salary earners, the families of the community. Of that revenue the Government proposes to give back some $600m in tax concessions. Thus, it will be some $900m ahead in that one area alone. In other words, in revenue terms it will be ahead by nearly one per cent of the gross domestic product of where it was in this fiscal year. So much for the generosity of the Government.

In this country, under the Fraser Government, which firmly pledged itself to reduce taxes, taxes have become the burden of discontent. As I have mentioned, there are to be no concessions this year from the $340m to be derived as a windfall revenue addition in this half of the fiscal year as a result of the increases in petrol prices set in January.

Let us consider some of the figures involved in order to get into clear focus just how savage has been the policy of this Government, which pretends to be for little government, for lower taxes. Let us contrast its record with that of the last Labor Government. I refer to the taxation and revenue figures for the Commonwealth Budget sector. Between 1973 and 1975 these averaged 24.5 per cent of gross domestic product. Between 1 976 and 1 979 they averaged 26 per cent, or 25.7 per cent if one wishes to be accurate. That is, every year on average the conservative government of this country, which pretends to be committed to reducing taxes, has extracted $ 1, 300m more in taxes than was the case during the period when Labor was in office. That represents $5, 000m more in taxes, on average, than was derived during the period when the Labor Government was in office

I move on to make another point in relation to the claims of the Government that it is committed to reducing taxation and wants to see equity done. The Treasurer, who is a neck ahead of anyone else in the tautological stakes in the Parliament this week, said:

The equity and fairness of a taxation system relates not only to the overall size of the tax take but also to the burden and distribution of that take.

It is a bit like saying: ‘The heat of the water depends on how hot it is. ‘ Let us examine what the Government has done. As a result of changes to the tax system, for which the Treasurer is responsible, everyone on weekly average earnings and less is now paying a higher proportion of income in taxation than was the case when Labor was in Government. In contrast, everyone receiving $20,000 a year and more is paying a smaller proportion of his income in taxation than was the case when Labor was in government. The present Government has sought to convert the basic concepts of justice and to penalise the poor for being poor, making them pay the way for the rich. The rich pay less; the poor pay more. They are the enshrined values of a great Presbyterian. I think that his church would flinch with embarrassment at the imposition of such a crude reversal of the principle of Matthew.

Let us examine further what those changes mean. Someone who is receiving $20,000 a year pays effectively $10.67 a week less in tax than was the case in 1975 when Labor was in office. Someone receiving the average weekly earnings of $ 10,000 a year is paying $2.80 a week more in tax than was the case when Labor was in office. Most people are in the $8,000 a year category. Such people pay $3.82 a week more in tax. The unfortunate people who are on $6,000 a year- of whom there are quite a number supporting families- are paying $4.88 a week extra in tax. It is remarkable how the Government looks after its cronies. Let me now make some comparisons. The figures I have given relate to wage earners with a dependent wife and two children. The taxpayer without dependants receiving less than about $ 1 5,000 a year will be given the enormous relief of 85c a week. The generosity of the Government is overwhelming. That sum would almost buy a pie if one could borrow another 5c or 6c. In contrast, someone receiving $500 a week will pick up an extra $2.35. Let me bring the comparison into sharper focus. A person without dependants who receives $8,000 a year paid $1.12 more tax this year than in 1975. Under the present proposals he is to receive a tax reduction of 85c. Thus he will still be some 25c a week worse off, after the reductions, than he was in 1975. No real improvement will have been effected. On the other hand, a person who receives $20,000 a year will pick up an extra $2.35 a week by way of reduction in taxes. But he is already enjoying a reduction of $13.48 a week in taxation compared with the level at which he was taxed in 1975. Thus he has become $15.75 a week better off over the period of office of this socalled conservative Government, but the battler on $8,000 a year has had his disadvantage reduced by a matter of cents only. He is still disadvantaged despite the changes.

One other point should be made here. Honourable members should devote some time to looking at the tables which have been attached to the Treasurer’s statement. He says that inflation will be of the order of 9.5 per cent from March quarter to March quarter next year. I say that that is nonsense, but we will wait and see.

Mr Howard:

– Those are the figures for this year.


– Well, I expect that the Government is hoping for an inflation rate of not more than 10 per cent in fiscal year 1980-81. If that is so who will be better off? From the table one sees that a person with no dependants who earns $10,000 a year will receive a reduction in taxation equal to 5.5 per cent. With inflation of the order of 10 per cent he will still be worse off; his position will not be improved at all. Some of these fictions ought to be exploded, and that is what we intend to do. In pre-tax terms, the average Australian family is some $13.40 a week worse off than it was in 1970. That is the level of improvement in gross income that families would have to obtain in order to restore their standard of living. Why were these things not attended to? I put to honourable members that nothing can be more important than attending to the real living standards of Australian families, not only because of our concern about the welfare of the family in the community but also because of a fundamental sense of economic concern.

I expect that in the course of this calendar year there will be an outbreak of wage demands in the economy. I believe that to be inevitable. It is the only way in which wage and salary earners can restore the living standards of their families. I invite honourable members to examine the iniquitous situation under which families have been disadvantaged. During the last four years, wages, salaries and supplements went up by 54.3 per cent. Indirect taxes went up by 80 per cent. Income tax went up by more than 92 per cent. In whatever way one measures it, such families had less money to spend, in real terms, at the end of that period than they had at the beginning of it. The top 10 per cent pay less tax. The bottom 10 per cent pay more. There we have the ingredients for the outrage that is justifiably being experienced in the community. This is why I argue that the Government should not be so tender where its cronies are concerned; that it ought to be developing a set of policies designed to achieve a workable wages-prices policy of which substantial and meaningful relief from both direct and indirect taxation is an essential ingredient.

Let me illustrate how the Government’s cronies are looked after. Between 1975-76 and 1 978-79, for the families of this country, the bulk of whom have to depend on wages and salaries, the increase in pay-as-you-earn income tax was 48 per cent. The increase in the wages, salaries and supplements on which they paid those taxes amounted to only 35 per cent. Thus, the increase in taxation was much more substantial than was the increase in the income on which they paid it. That is another illustration of how families are being disadvantaged.

I refer now to the haven of tax avoidance which, I say in all fairness, the Treasurer has tried to do something about. However, he has done it on a piecemeal basis, instead of introducing comprehensive legislation which would wipe out this iniquitous industry overnight. The increase in other personal income tax in that period was 9.4 per cent. But the income on which it was paid increased by nearly 57 per cent. Now, we can make some judgment of the size and the dimensions of tax avoidance in this country. The Government finds no discomfort about that at all. It ought to be unremitting in the determination to sheath home the tax liability of these people. What is happening is that to the extent that those people, the wealthy and privileged, are avoiding their responsibility and continue to avoid it they force a redistribution on to the little people, the average people, the families of this country which we all believe are the backbone of the nation but which the Government wants to cripple.

Let us look at company tax. It has increased by a little over 20 per cent, but the income of incorporated enterprises increased by well over 32 per cent. So both in the case of those people in the tax avoidance area as an industry and in the case of the corporate sector, the revenue liability, the tax liability, certainly increased, but, in relation to the income on which they paid it, at a much lower rate. In the case of income earners in the family, the rate of increase was much, much higher. That is the nature of cronyism. The motto of the Government is: Let the family suffer.

There is one other aspect of tax which deserves to be attended to. That is the iniquitous and hyperinflationary petrol tax. One can sympathise, as I have often done and as the honourable member for Blaxland (Mr Keating) has often done, with the problem of applying an appropriate pricing mechanism for a dramatically scarce resource. But, we do not just look through a narrow tunnel at one point or at one ingredient of a problem. We must look at the broad spectrum of it. If we do that we will recognise that is just one factor. There is another factor, and that is the difficulty of conquering inflation in Australia today. To the extent that there are substantial increases in the price of petrol, there will be a substantial addition to inflation within the economy. A trade-off has to be made. What do we really want to conquer, or is it just a matter of greed for revenue as it obviously is in the case of the Government?

That is why we say that it is quite wrong to immortalise the proposition that the Treasurer has converted every petrol pump in Australia into a branch office of the Taxation Office. Perhaps, one could change the advertising campaign of Esso Australia Ltd of the late 1960s ‘Put a tiger in your tank for a real take-off’ to the Fraser Government’s proposals: ‘Put a tax man in your tank for a real rip-off’. Look at what has happened in four years. Four years ago, on the evening that this government came to office it cost $ 12 to fill a Holden or Falcon petrol tank. It costs $25 today to fill a tank and we do not go any further for that $25. We are paying a lot more for the same amount of travel. Twelve dollars of that $25 that it costs to fill our tanks today goes straight to Mr Howard and his cronies in the Government, the Treasury.


-Order! The Leader of the Opposition will not refer to the Treasurer and ‘his cronies in the Government’. I ask him to use the proper term, which is ‘ Ministers ‘.


– I accept your rebuke, Mr Speaker. Four years ago, the amount of tax out of $ 1 2 was only about $ 1 .20 or $ 1 .30. Under the Fraser Government petrol prices have doubled. Oil producers income has trebled and government revenue has gone up 10 times. Let me put figures on that. Petrol has gone up from 75c a gallon to $ 1 .52 a gallon. Income for oil producers from this source has increased from $360m to $975m. But the Government has increased its take from $257m to $2,520m this year. It will be at least $3,000m next year, an increase of some $500m just on the basis of prices already announced. What has to be recognised by the Australian public is that the Fraser Government treats the taxpaying public like a vast flock of sheep ready for clipping at any time. Such is the regard that it has for its fellow Australians.

In relation to tax indexation, in 1975 the Prime Minister said that he firmly committed himself to the introduction of tax indexation. He said it is the only way to keep a government honest. We were foolish enough to believe that he could ever lead an honest government. Well, he has disabused that belief if it ever prevailed for long. In 1976, indexation provided was not 100 per cent, it was 93 per cent. In 1 977 it was down to 80 per cent; the next year down to 35 per cent. In the current fiscal year it is down to nought, nothing, it was eliminated. The Treasurer says that he is introducing 50 per cent indexation in this coming fiscal year, 1980-8 1. He is doing no such thing at all. This is a further deception of the Australian community. The indexation is only 37 per cent and nothing like 50 per cent at all. The Prime Minister, in his policy speech in November 1 975, said:

We will fully index personal income tax over three years.

We judge him not by his words but by the way in which he keeps his promises. I mentioned a little while ago the problem of interest rates which are soaring quite markedly. It was, after all, the Deputy Prime Minister (Mr Anthony) who promised that he would eat his hat if interest rates did not come down by 2 per cent within 12 months from 1977. That is why no one can understand him when he answers questions. He is masticating. It is very hard to swallow a sou’wester. But it is much more difficult for the Prime Minister who has to wear an asbestos hat because of the sorts of problems that he generates for himself.

Commonwealth bonds on a 10-year basis are 2.2 per cent higher than they were 12 months ago. The 180-day bank accepted commercial bills are 1.8 per cent higher. The rates are soaring. They are going to feed into housing interest rates. An increase of 0.5 per cent on the average mortgage means an increase in the repayment rate of at least $1 1 a month. This means that the deposit gap will widen by at least $1,000. These are things which have not been attended to in the course of the statement by the Treasurer to the Parliament today. The promise to reduce interest rates has been mentioned many times. They are taking off. That is bad enough, but to have the Treasurer propose a situation which now applies where it is possible, at some banks, to borrow overdraft money at 10 per cent and then invest it in totally secure risk free government bonds at 1 1.2 per cent is the height of fantastic nonsense. This means that we can borrow cheaply from financial institutions and then invest in government sources at a colossal advantage. We have heard of the man who broke the bank of Monte Carlo; the Treasurer is the goldfish salesman who wants to wreck the Australian Treasury.

Let me conclude on what I believe should have been done. Obviously, the interreaction between monetary policy and the external account should have been recognised before this by the Government. But there are other things that should be done. Real tax cuts have to be introduced, especially in indirect taxes, so that a wages and prices policy can be introduced to contain what will otherwise occur as wage push. A wage push is necessary to restore the living standards of Australian families because of the savagely punitive reductions that have occurred in their spending power as a direct consequence of the taxation and revenue policies of the Government. There is a need to stimulate the economy, not depress it further. There is a need to respond sensibly to the needs of people to generate jobs, both in the medium and the long term and a need to respond to the industrial structural problems of this country. Maintaining an artificially depressed Australian dollar in the way in which the Government has done is no solution. It has, in fact, the seeds of very serious problems.


-Order! The honourable member’s time has expired.

Monaro · Eden

– I would first like to congratulate the Treasurer (Mr Howard) on the statement that he made this morning. It is one of those things that the Australian people have been looking for. The Australian people are looking naturally to our Government to be the sort of government that will reduce taxes. That is what is happening. The Treasurer is a man with his feet firmly on the ground. He has not shirked away from the problems of the deficit; the problems of the family; or the problems of good management that is so necessary for people to produce in this country.

That is at odds with what we just heard from the Leader of the Opposition (Mr Hayden). He is always very big on talk and always very low on action. Of course, when he was Treasurer there was very little action. He spoke about a few of the things that occurred during the Labor Government’s period of office. He spoke about some of the things he saw as good. He spoke about the way wage earners were better off. But what he did not remember was that many of those wage earners who were better off in the short term, because of the massive increases in wages in that period and despite the massive increases in taxation, were put out of jobs. Those wage earners were the people who suffered because without an economy that is managed properly, without an economy where profits are not a dirty word, people have not got the confidence to invest and to produce jobs. That is what we are talking about, that is why we have produced an assessment on the economy today and that is what we are here to discuss in more detail.

The personality politics of the Leader of the Opposition flowed freely again. He has been using that system for a few weeks now. We are getting heartily sick of it. We want to hear about positive proposals from the Opposition. We do not hear any positive proposals. The Leader of the Opposition denigrates the producers of this country. He calls them cronies. He calls anybody whom we in this Government support cronies. What he needs to remember is that the producers of this country are the people who make the goods and provide the services that we can enjoy in an affluent society. It is no good rubbishing people because they are prepared to work. It is no good rubbishing farmers because they are prepared to export. These are the people who produce the goods that we need even for the purpose of looking after people on pensions and social security benefits. Unless we have producers, we do not have affluence, and we do not have people being looked after.

At the centre of the policies and the very doctrine of the socialist party is the belief that money grows on trees; that producers are people who should not be looked up to; and that people who just want to make schemes and talk are the only people worth worrying about. The Leader of the Opposition always assumes that his scheme of things possibly can help the working man. During the Labor Party’s three year period in office, the working man was bludgeoned, knocked around and his jobs were taken from him. Admittedly, he was given short term increases in wages, but that has not helped. The working man put that situation right by using the ballot paper.

The Leader of the Opposition talks about taxation. What did the Labor Government do to reduce taxation? What did it ever do towards tax indexation? It is all right to criticise the present Government for having to make a realistic assessment of how much indexation can be given at this time, but what was done in the period of the Labor Government towards tax indexation? Absolutely nothing! As the then Prime Minister often said, it was important to use the increases of taxation that came through inflation to fuel all those fancy programs that took money out of the pockets of the working men of Australia.

We talk often about economic policy and we use words of which many people have forgotten the meaning. We use terms such as ‘inflation’, interest rates’, ‘the deficit’ and ‘government intervention ‘. Occasionally it is as well just to take stock and realise what these things really mean. These terms have been bandied about quite freely by the Leader of the Opposition this morning. Often the Labor Party forgets just what inflation means. It was quite content to let inflation flow on to a time when in one year it ran at 17.6 per cent. The Labor Party forgot that in those periods the cost of businessmen ‘s stockintrade increased dramatically. This makes it very difficult for shopkeepers and for pensioners who have put money away for a rainy day. The value of that money reduces very rapidly. The Labor Party forgets about the effect on people such as those in the farming community who are caught by movements in world prices, have no comeback against increases in local costs and can only hope that the world market price goes up.

When members of the Labor Party talk about interest rates, do they remember the effects of increased interest rates on the ability of people to buy houses? Australia is a country in which the owning of a house is somehow sacred and where we still retain the highest proportion of home ownership in the world. People forget that interest rates increase the costs of development. Many projects in Australia were shelved in recent years because of high interest rates. That in turn increases the costs of development.

The word ‘deficit’ is often used. People forget what it means. People forget that, if we have a deficit, governments have to raise capital on the market, and when governments raise capital on the market that money is not available for the use of the people including those who want to buy houses or who want to build factories which will eventually employ more people. Often that aspect is forgotten. Honourable members should not forget also that, when we talk about deficits, we are putting the country into debt later. When we fund deficits, we borrow money. When we borrow money, we pay interest on it and, when we pay interest on it, we are paying interest on it next year, the year after and the year after that. Our children pay for the deficits of today. That is why I am very pleased that the Treasurer and the Government have decided to use some of the money that allegedly comes from what the papers are calling ‘a windfall tax’ on petroleum to help fund that deficit. It is tremendously important for us to remember that, just as households have to balance budgets, governments also have to think about the same basic principles.

The words ‘government intervention’ are bandied around. I hope honourable members on this side of the House are gradually remembering that Government intervention is one of the greatest problems in this country. It is a great problem because it takes resources away from the market areas, from the competitive areas, where people will find more efficient means of production. Governments have a very bad record of running enterprises. Governments have a very bad record of telling people which way they should jump. Of course, the whole socialist concept is that the government should make our decisions for us. Honourable members on this side of the House hope- perhaps not quite enough but we are moving gradually that waythat, if people are allowed to keep as much money in their pay packet as possible, and are allowed to make their own decisions, they will make a few blunders but the whole economy will run on far more efficient grounds.

Inflation, interest rates, the deficit and government intervention are all concepts that are often forgotten. Of course, they are only concepts useful towards what this side of the House wants and that is every Australian in work and every Australian enjoying the fruits of increased production. That is what we are heading for in this country and that is what we will not achieve if the voters of this country should be so stupid as to install the Labor Party again into power. Briefly, let us look at what Labor thinks about inflation as demonstrated by its very actions during the time when it was in power. It increased inflation. The figures are well known. The Labor Government increased inflation by the very simple device of encouraging wages to go up. It is all right to say that it is better for people to earn more money but if there are no profits in the economy it will be very difficult to find investment money to produce more jobs.

The Labor Party can crow about the fact that wages went up by 25.4 per cent in the year 1974-75. But what did that do? It reduced the profits from the entrepreneurs and from the battlers that the Labor Party is always saying it so heartily supports. Often the battlers are the people who are trying to make their way in life with a business, the people who are scratching for money, the people who do not want inflation. The Labor Party, during its term of office, absolutely fuelled this situation as it said it would be handy to increase government revenue through the taxation rip-off. The Labor Government positively increased interest rates by demanding money through the money market. It positively increased interest rates by the very device of already having increased inflation. What did it do? It brought the confidence in this country so low that there was an outflow of funds. In December 1972, we had $4,648m in reserves and this was cut back to $2, 588m by the time it went out of office in 1975. A lot of that money was squandered because people sent their money out of the country. They had no confidence in the Government and, of course, that in itself played on interest rates.

Did the Labor Party ever blow out the deficit! Honourable members should have a look at the figures. In fact Australia was budgeting for a surplus when Labor came into power. By the time the Labor Party went out of power in the financial year 1975-76, on the domestic market it was borrowing over $2, 900m, an incredible amount of money on which we have to pay interest right now. In the 1979-80 financial year, the Government to its credit has managed to budget for a deficit of $900m, a very big difference from $2,900m, and it is still getting lower. As a result of the measures announced today it will be lower still.

Our record is not what one would call magic. Our record is one of a government that has tried very hard to turn a very big ship around. It has taken a lot of work. At every point the Government has been denigrated by the Opposition. It has been denigrated for trying to keep wage demands within reasonable bounds. It has been denigrated for trying to cut government programs so that the money is effectively more in the hands of the individuals of this country who should properly make the decisions. The Government has cut inflation. It was 17.6 per cent during one year of Labor in office. It is now down to 10.2 per cent and it will be lower- I predict that quite freely- in the next few quarters.

Australia ‘s rate of inflation was 5 per cent over the Organisation for Economic Co-operation and Development average. What did that do to our balance of trade? What did it do to our terms of trade? Australia ‘s inflation rate is now 2 per cent under the OECD average. What is that doing to our terms of trade? Let us just look at the export figures. We have been denigrated this morning because at last the Government is seeing that the market rules interest rates. Yes, interest rates have gone up by about one per cent. The market has demanded that they go up by about one per cent. Let us just look at how much they have gone up in the last 12 months in the nations of some of our trading partners. As the Treasurer said today, in the United States of America interest rates have gone up by 5 Vi per cent in that period. We are faring far better than our trading partners in so many ways and all we get is denigration from the Opposition.

The problem of cutting expenditure is still with us. We have fixed expenditure in so many large areas of Government operations, such as social security. Our payments to the States are basically fixed and are massive. We have some scope at last for some sort of reduction in our education budget but basically it is still massive. We have done quite a lot in the health area towards asking people to stand on their own feet and to make their own decisions- perhaps to be more economical with health. Defence is another such area. Those five big areas means that our expenditure is difficult to cut. But we have cut it. We have cut it because we want the working man of Australia to have more money to spend, because when he spends money that is what creates production and that is what creates jobs.

The Labor Party is always talking about the battler. It has a hide. When the battler gets on in this country the country has a chance. He does not get on unless the economy is managed properly, unless there is a lessening of the ad hockery to which we became accustomed under the Labor Government. The management of this country is so important for the families, for our children and for our children’s children. We cannot afford to be sold out again by the irresponsible socialist policies of the Labor Party. We live in a capitalist society, an industrial society where individuals want to make decisions. The assessment of the economy by the Treasurer today and the measures introduced and made public are very welcome to the battlers, the working people whom we on this side of the House represent.


-Sadly, tragically, the policies of seeking salvation through stagnation continue. Today the Parliament and the Australian people have been treated to another example not only of those policies being explained and sought to be justified but also of a statement which sets out further taxation trickery of this Fraser Government. The Opposition feels so strongly about this matter that at the end of my speech I will move as an amendment to the motion: ‘That the House take note of the paper’:

That all words after ‘That’ be omitted with a view to substituting the following words: this House condemns the Treasurer for his, failure to-

1 ) provide immediate tax relief;

compensate car owners for the crippling burden of petrol taxes and to end the iniquitous tax rip-off through the petrol pump;

restore the real value of assistance to Australian families, particularly the family allowance;

initiate immediate cuts in indirect taxation with a view to reducing inflation; and

initiate measures to stimulate economic activity and create more jobs to reduce present appalling levels of unemployment’.

Surely we could have expected an end to the sleight of hand exposed by Mr Eric Risstrom of the Australian Taxpayers Association and by others at the time of the last Budget- a sleight of hand whereby this Government sought to pretend that it was giving something to the Australian people in the way of tax relief. All the Australian Government is doing is handing back in a puny, partial way the extra amounts that it has already ripped ofT the Australian people. In the statement made by the Treasurer today we were told again by this miserable, parsimonious Government that we are not to receive a single cent of the petrol tax moneys which are being extorted from the Australian motorists in the current financial year. When we receive it from the beginning of the next financial year it will be only partial and puny, as I have indicated. We were told in this statement that we can expect tax indexation in the next financial year. Yet the tax reduction will amount to a very small fraction of the general increases in taxation which are expected in the next financial year. In no way will the reductions compensate the Australian public, the Australian families, for what has been ripped from them in extra taxes in the current financial year. Indeed, the announcement by the Treasurer amounts to nothing more than token tax adjustment. That is why I refer to it as taxation trickery.

When we look at the method by which this Government will adjust tax by way of tax indexation in the next financial year, we learn first of all that it will make that adjustment only to the extent of 50 per cent. But it is to be 50 per cent of what? It is to be 50 per cent of a rate which has already been adjusted. Indeed, the Treasurer said in his statement that the rate of inflation during the current financial year will be adjusted by a number of measures and that the amount by which he expects tax will be adjusted by way of indexation is a mere 3.6 per cent. Yet the Conciliation and Arbitration Commission is asked to make adjustments in the light of these small tax reliefs. Nowhere in the Treasurer’s statement is there a sentence which suggests that the Arbitration Commission should take into account the extra imposts of the Government in the form of health charges and in the form of indirect taxes such as the Fraser tax rip-off.

Let us look at the taxation record of this Government. In August last year the Government brought down a Budget which provided for tax increases of $ 1,552m in net pay-as-you-earn income tax. That represents an increase of nearly 1 5 per cent. In that Budget it also provided for an extra $834m in the crude oil levy to be taken off the Australian people. This represents an increase of 70 per cent. Apparently, the increase in taxation in the current year of $2, 386m has not proven enough for this Government. Instead, further in pursuit of the Government’s disastrous import parity pricing policy, it has further increased the tax take from the oil levy by $340m. The amount of $340m, the figure mentioned in the Treasurer’s statement, is an adjustment downwards from the figure that had been bandied about in this country hitherto- a figure of between $440m and $450m. But what does that matter? None of that money will go back to the Australian people, from whom it is being taken, in the current financial year.

Incidentally, I make the point that the latest statistics available on income tax show that the Government collected 22.4 per cent more net PA YE income tax in the first six months of the current year than in the corresponding period last year. I will say something in a moment about the recessionary, stagnant effect this massive tax hike has had in the Australian economy. I ask the Australian people also to consider what the Government has really been up to. It has increased taxation dramatically in the current year. It will increase taxes further in the coming year as it chases the foreign price of petrol and reaps the taxation profits which will accrue to it under the conditions of accelerating inflation. According to the best information available to us, the world price of oil will soar by about 46 per cent to $US42 a barrel, probably in the current calendar year. In Australia it is likely to rise in 1980 from 31c a litre or $1.40 a gallon to 50c a litre or $2.25 a gallon. That is unless the Opposition’s campaign to force the Government to abandon the import parity pricing policy which it is pursuing at present is successful. The market clearing price is believed to be $US40 to $US42. It is expected that that market clearing price will, I repeat, be achieved in the current calendar year with disastrous effects for the Australian public if the current policy of the Fraser Government is continued.

This will have a dramatic effect, of course, on the rate of inflation in this country. It is estimated that a 10 per cent increase in the price of a barrel of oil adds one per cent to the inflation rate in our country. We of the Opposition recognise that some increases are necessary in relation to what is happening in the rest of the world and in particular the Organisation of Petroleum Exporting Countries oil price decisions. Our policy is to freeze the price- now that the Government has made such burdensome decisions- and phase in the increases in a less burdensome way. Currently 10.5 per cent of the disposable income of Australians is absorbed in maintaining a motor vehicle. Because of the policies of this Government and the increasing prices of petrol that will increase to between 13 per cent and 14 per cent over the next three years. It is no wonder that the Opposition, as mentioned in the amendment that I have already read to the House, condemns the Government for not compensating car owners for this crippling burden of petrol taxes. In this context, the Government’s offer of $600m in the next financial year is a mere pittance. It is not a tax cut. It is merely a token gesture towards limiting the extent of the massive new tax hikes. The oil prices already announced are expected to yield the Government at least $ 1,100m in levies in 1980-81. This could well double if the widespread expectation that I have already mentioned, that the price of oil will rise from $A26 per barrel to $A40 per barrel over the next nine months, eventuates.

The Treasurer promises a tax reduction for most Australians of between 85c if one does not have a spouse and $4.70 if one has a dependent spouse. This is all that he is offering in the next financial year. He is offering nothing until the end of this financial year. That is the mere pittance that he is offering in the next financial year. Tax increases on petrol will take at least twice this amount and tax increases due to the failure to index tax rates fully will take even more than that amount. That is why again I refer to his statement as one exposing tax trickery at its very worst. It will come as no surprise to the Australian people because of the history already of such trickery being perpetrated on them by the present Government.

I want to mention the economic impact of the Fraser Government’s policies; the continuation, as I have referred to it earler, of salvation through stagnation policies being perpetrated. A shiver will run through us all when we note the Treasurer’s words. I quote from his statement:

We have no intention of parting company with the principal tenets upon which our economic policy has rested for the past four years.

What shocking tenets they have been. What a rotten rate of unemployment, for instance, has been the result of the principles that this Government has followed in its economic policies. The past four years have revealed the economic policies of the Fraser Government to be completely and utterly disastrous for the Australian economy and the Australian people. The Government, the Treasurer is telling us, has learned nothing. We are to have those disastrous policies continued. What are the results? I hardly need to tell members of this House that the 10 per cent rate of inflation in the 1979 calendar year was one result, compared with 7.8 per cent in 1 978. That shows a worsening of the inflation rate. When it comes to unemployment, the Government makes much of an apparent increase in employment, but two-thirds of the increase is in part time work. There has been virtually no reduction in the large pool of unemployed. In January this year the figure was 434,000.

I am indebted to the honourable member for Lalor (Mr Barry Jones) for some new information which he brought to my attention. Dr Duncan Ironmonger of the Institute of Applied Economic and Social Research at Melbourne University has analysed employment, unemployment and potential labour supply averages for various calendar years from 1971 to 1980.

His work has shown that the real rate of unemployment at the moment is not in the 6 to 7 per cent area which is bandied about in this country, but between 1 3 per cent and 1 4 per cent. I seek leave to incorporate a table in Hansard.

Leave granted.

The table read as follows-


-I mention that among the list of woes that have befallen this nation because of the principles of this Government is the economic situation. Let us look at sustained recovery. We have heard about this for four years; yet we were treated to another bash of the workers in the opening paragraph of the Treasurer’s statement which we are debating. This divisiveness is destroying any prospect of a sustained recovery. We need an economic and social partnership. The Treasurer gives us social discord. We need to take representatives of the working people and representatives of employers into partnership with government to discuss how we can get increased productivity and increase the disposable income in the pockets of Australian people so that we can not only fight inflation- this Government has fought inflation unsuccessfully- but also concentrate on fighting unemployment and reducing that terrible social disease which is being suffered by this country at present.

The economy is supposed to be growing at 3 per cent. This is better than the Government expected, but what miserable expectations the Government had and what a miserable expectation a 3 per cent growth implies. It is miserable for the many who are in the unemployment pool now. When we look at investment, the Australia and New Zealand Banking Group index indicates that factory production is stagnant. Not surprisingly, capital investment in Australia is now also stagnant.

To conclude, the Government is continuing with its outrageously restrictive approach to the Australian economy. It has a regressive impact on the economy. There is nothing for the nontaxpayer, such as the single parent, on a pension. There is nothing for the family insofar as children are concerned. The great need is that of the family with children; yet there is no mention of family allowances being indexed. I move:

Mr DEPUTY SPEAKER (Dr Jenkins)Order! The honourable member’s time has expired. Is the amendment seconded?

Mr Dawkins:

– I second the amendment and reserve my right to speak.

Sitting suspended from 12.58 to 2.15 p.m.

Sir William McMahon:

-I want from the beginning to concentrate attention on what was said in this House not so long ago by the Leader of the Opposition (Mr Hayden). I will deal with facts and facts alone, not only as they relate to today and to the future but as they relate to yesterday. It will be seen that the Leader of the Opposition has little or no knowledge of economics and finance and therefore should not come into this House and be bitterly critical of the fiscal and monetary policies of the Government. Let me first of all deal with his statement that the Fraser Government has failed to use properly monetary and fiscal policy. As to fiscal policy, I will take the House back into the past as well as looking at this year’s Budget. Everyone ought to know that one of the great dangers to any country is the extent to which the outgoings of a government, the outgoings of Parliament, exceed the rises in the preceding year. The moment they get above the inflation rate, a government is in real trouble.

Let us consider what happened with outlays. In 1972-73 we were moving towards an election. We had made various promises, and therefore it must be taken that there had been an understandable failure to adhere to the strictest rules relating to the management of the economy. However, in 1972-73 the outgoings increased by about 12 per cent. But what happened in 1974-75? Honourable members will hold their breath when they realise that under Labor the outgoings went up to 46 per cent. Then came the present Leader of the Opposition, and in his years as Treasurer they were 22.5 per cent. These were incredible rises. They had to be reduced by the Fraser Government if we were to control inflation, if we were to control the money supply, and if we were to encourage overseas interests to invest here. In 1978-79 the outlays went down to 8.4 per cent. They were a little higher in 1979-80, but then we had a 15.4 per cent increase in revenues. That showed the quality of government fiscal management. The fundamental need for fiscal efficiency and administration is shown by the figures I have just given.

Then there is capital expenditure on the infrastructure. The Leader of the Opposition failed to remember that at the last Loan Council meeting very substantial increases of about $450m were granted to the States. They were to borrow overseas for infrastructure development. These moneys are being raised in the market place now. The projects will make a big contribution to development as part of the fiscal policies of the Treasurer (Mr Howard). The Leader of the Opposition then spoke about real tax cuts. This gentleman never seems to realise the great danger to this community of excess wage rises. He said that cuts should be made to restore wages and therefore to sustain the living standards of the wage earner. He should realise- he knows but would never be prepared to admit itthat this year so far there has been an increase in wages of 9.2 per cent. Any person with a brain in his head- I am not saying he has one, and I am not blaming him for the lack of it- has to accept that, with a 9.2 per cent increase in wage costs, there is a built-in inflation rate of the order of 5 per cent. That is the first thing I want to say about the Leader of the Opposition’s so-called policies. That wage increase raises the old proverb coined by Labor: ‘One man’s wage increase is the loss of another man ‘s job ‘.

Let me deal now with monetary policy, about which the Leader of the Opposition talks so glibly. He knows what money means, I am sure of that. He said that there was no genuine interest rate policy. Nine or ten months ago the Government decided to introduce new methods of note and loan borrowings. A tap system for loans was introduced. And so far as treasury notes were concerned, tenders would be accepted on the market at irregular intervals. That was a remarkable improvement on anything we had ever known before in Australia. It showed that the government has learned to adjust to market trends and market activities. Through borrowing and changes in interest rates the Government can control the money supply. And we will be able to reduce the domestic budget deficit about which I spoke previously.

The Leader of the Opposition also referred to interest rates. Whilst I believe that the Government was wrong two years ago when it decided that interest rates had to come down not withstanding market problems, it has now recognised that it can control one of two things- the interest rate or the quantity of money. It is either one or the other. The Government wants to control the quantity of money. The official money supply goal is 10 per cent. Whilst I do not agree that we will be able sensibly to get the money supply down to 10 per cent, the Government is moving towards achieving that objective. If we look at today’s figures we will see other movements in one of the elements in the money supply. That is in the banking system. It will be seen from the latest Reserve Bank return that the new and increased advances are down to a low level, indicating that under our monetary policy something has been done in each of the areas where action can take place. I do not mind giving the House the figures. Increases on new and increased advances went from $48m in October to $5.4m in January. That is another example which indicates that the Government does know what it is doing. Action has been taken to reduce the money supply.

Let me go a step further. I remember the one Budget that was introduced by the Leader of the Opposition. I had something to say about it then. When we left government in 1972-73 we had increased the purchasing power of the taxpayer by 12.2 per cent by means of that year’s Budget. Labor staggered along for a while under Crean as Treasurer. At that time it did its best to sustain purchasing power, although it fell slightly. But in the first Budget of the present Leader of the Opposition the taxpayer lost all of that 12 per cent. Opposition members will not believe it. They cannot recall what happened that long ago. Under Labor, taxpayers lost the total purchasing power increase plus 2 per cent more. If the Leader of the Opposition thinks that is a good result, then let the Australian people know it and the kind of taxation the Leader of the Opposition is proud of. If he wants to be proud of it, then let us proclaim it from the housetops and see what the electorate does to him at the next election. There will probably be a bigger defeat than on the last occasion.

Then on to unemployment. A subject we must not in any circumstances handle with a levity or looseness. I believe that unemployment is too high, but 1 frankly admit that the last figures, particularly on a seasonally adjusted basis, show that we are in a somewhat stronger position today than we have been for four or five years. The Opposition cannot deny the facts. For example, from December to January the figures fell. There was an improvement of 7.7 per cent. With school leavers, in whom I am particularly interested, there was a fall of 7.7 per cent, and with unfilled vacancies the figure was slightly better than last year. Looking at the seasonally adjusted figures issued by the Australian National University, Dr Hall claims that there has been an improvement. I think he is right. I do not think that the improvement is good enough, but at least the economy is steadily improving.

I come now to the figures mentioned by the honourable gentleman in regard to our achievements. He said that because of our actions in 1972 we have to take responsibility for what occurs in all subsequent years. That is obvious nonsense. I do not want to argue the point, because nobody could possibly take a great deal of notice of his remarks. Let me mention the Budget deficit. In my day, if we thought we would have a Budget deficit of $500m or $700m, we thought that was too much and we took dramatic action to try to reduce it. But in 1974-75 the domestic deficit was not $700m but $ 1,949m, and that increased to $2,900m in the following year.

Mr Hodgman:

– Shame on them.

Sir William McMahon:

– Yes, shame. Of course it is a shame. But I go further, this time to the consumer price index. At the end of 1972 the consumer price index was increasing at a rate of 4.5 per cent. It then went to 9.4 per cent in 1973, 12.9 per cent in 1974 and, when the Leader of the Opposition was Treasurer, 16.7 per cent. If those are records, I am proud of mine. But I certainly would not be proud of my record if I were the Leader of the Opposition. The other tremendously important factor concerns the growth in non-farm product. Normally, in the days before 1972 if the growth in non-farm product was 3 per cent we thought we were doing well. But in 1972-73 the growth in non-farm product was 6.3 percent; in 1974-75, 1.3 percent; in 1975-76,2.5 per cent and in 1977-78, 1.6 per cent. I believe that this year gross non-farm product will be not about the 2.2 per cent we might have expected at Budget time, but about 3 per cent.

I come back to the economy itself. I do not want to exaggerate the position, because we are now in a recovery phase and it has been remarkably good. But few people have drawn attention to changes in the dynamics of the structure of the Australian economy. The Australian economy is in a peculiar position because there have been improvements in respect of primary resources and exports. There has been import replacement and, as everyone knows, our situation with regard to fuel and energy has improved dramatically. Associated with that will be the induced investment in items such as metals, machinery, building and construction. I do not know that I can say anything but this: I believe that in those industries there are in front of us five to 10 years of unequalled development. They comprise a very favourable sector of the economy. But, on the other hand, we do have stagnation in retail sales, such as of furniture, textiles, clothing and motor vehicles. It is here that assistance must be given and it is here that assistance has been given in this Budget.

Let me mention just a few of the headlines in the newspapers. Here is one on production, which is a basic element of gross domestic product: ‘Production activity rises for 17 industries’. I heard the two Opposition members who spoke before me saying that investment in this country was going down. I have here an article by Kenneth Davidson, who never writes very favourably about the Government. His article is headed ‘Investment up: 17 per cent forecast’. That, to me, is a pretty good record. Let us look at our balance of payments. I do not think we have recently had figures quite as nice as these to listen to. We had an overall surplus of $223m, while there was a net capital inflow of $534m. That latter figure represents the confidence that other countries have in Australia. If other countries have confidence in Australia, would we not be wise if we ourselves were proud of our achievements and proud of what the Australian can do, provided only that he is given the incentive with which to prosper. With his prosperity, he can ensure that the country itself will do the same.

I turn- I must mention this in the time available to me- to the two dangers that face the country today. Without any doubt, I have to come back to the wage structure. We know that this year we can expect wage increases of the order of 15 per cent. A 4 per cent wage rise was given in the last national wage case, thereby writing $ 1,500m into the cost to the community. Because of current work value cases, another $ 1,500m will be written into the cost to the community. This is the most powerful source of inflation we know, along with the increase in crude oil prices and the maintenance of oil prices at international parity level. These are the dangers we face. They are not dangers we can overcome, but they are dangers that we must think of. Above all, we must give credit to the Government for what success it has achieved.


– I found it profoundly depressing to listen to the right honourable member for Lowe (Sir William McMahon) because last year he was somewhat critical of the excessively contractionary nature of the Government’s economic policy. This statement represents another drastic contraction as far as fiscal policy is concerned. It represents the taking out of the economy of something like $300m to $400m. That, on top of an already contractionary budgetary situation announced in the Budget last year, means that we are in for even more bad news from now on. It is a pity that the right honourable member was not as prepared to acknowledge that fact as he was only a few months ago. Indeed, the fact that he was optimistic as far as the employment situation is concerned further demonstrates that he seems to have lost completely his sense of proportion. The figures of the number of people in private employment- these are the figures which the Prime Minister (Mr Malcolm Fraser) is always wanting us to look at- show that there are fewer people in private employment now than there were at the time this Government took office. How the right honourable member for Lowe can be encouraged by that situation completely eludes me.

Deception and deceit will be the hallmarks of this Government when it is finally chased from office at the end of this year. The statement that was delivered today by the Treasurer (Mr Howard) represents the latest in a continuing series of attempts to distort the truth and to distract the Australian people. We are used to distractions by this Government. It attempted to take the mind of the people off the economy and other pressing domestic questions with its hysterical and exaggerated response to the Afghanistan situation. That blew up in the Government’s face and it has now been chased back to the domestic isues and it has been forced to face up to at least some of them. The Government was forced to face up to these issues because it knows that the Australian people understand what the crude oil levy is. They understand that they are being forced to pay world parity prices for local, cheaply produced, crude oil. They know that the Government will collect about $2.5 billion this financial year alone as a result of this policy. The Australian people are being asked to pay at least $2.5 billion more for their oil than they should have to pay, and they know that that $2.5 billion is going to the Treasury. They know that at least $350m of that amount was not budgeted for in the last Budget; that is, it was a windfall gain as far as this Government was concerned. The people of Australia have been clamouring for relief. They have been demanding that at least that amountthe $350m which was not budgeted for- be handed back to the people who have been paying through the nose for their petrol. It is now that the Government has been forced to act.

But, the Government, in acting as it did today, has again attempted to distract the people from the real issues. Of course, it was trying to get the tax weary Australian people off its back with a gesture- a token amendment to the tax schedules. But the people will not be satisfied with the changes announced today, and nor should they be. As I said before, the Government has collected $2.5 billion this year from the crude oil levy, of which $300m to $400m was not budgeted for in the last Budget but was in fact a windfall. Yet, not a cent of that $300m to $400m will be returned to the majority of Australian taxpayers who have contributed to that revenue through the petrol pump. All that is offered is the prospect of some adjustment to the tax scales after 1 July. This offer of marginal tax relief is to distract the people while the Treasurer stuffs something like $400m into his pocket. It really goes nowhere towards answering the real problems because none of the $300m to $400m will be returned to the people who contributed it.

It is interesting to note that the Government has taken this opportunity to adjust downwards the estimates for crude oil levy receipts. In January the Government announced that it expected that the increase in the levy over the budgeted amount would be something like $440m. The Government now says that the amount will be $340m. The excuse for this is that the level of local production in the final quarter of this financial year will be down and consequently the revenue gained from the production also will be down. It seems to me that this is just another example of the Treasurer twisting the figures in order to prove his own argument. He wants to remove the expectation of further tax cuts by artificially deflating the amount of revenue which the Government will receive from its crude oil levy. It seems to me quite unbelievable that production could decline by so much as to affect revenue by 25 per cent in six months. That seems to indicate that production in the next three months will be down 50 per cent on what it is in the current three months. I find that totally unbelievable. I would have thought that the absurdity of that proposition would have been enough to make even the Treasurer blush. But of course we see that he is conditioned to trotting out these sorts of figures at the Treasury’s behest.

This statement is a document of deceit and deception. We have come to understand that that is the Government’s game. Not only does the Government refuse to hand back any of the $400m which it has received by way of windfall revenue this year but also it will not even hand back any of next year’s increased revenue either. As I have already said, we understand that the increased revenue this year will be something in the order of $300m to $400m, depending on whom one believes. Next year the increase will be an estimated $600m. But, as a result of this statement today, none of that money will be returned to the taxpayers; none of it will be returned to the motorist. In fact, the cost of the concessions which were announced today will be more than totally met by the increases next year in the amount of personal income tax. That is to say, although there have been some adjustments to the tax scales there will be a substantial increase in the amount of revenue which the Government receives from personal income tax and, as a result, there will be ample money to fund the concessions which have been announced today. So none of next year’s increased revenue from the crude oil levy will be returned to the motorist, to the taxpayers. The crude oil levy will continue as a silent, ravaging tax to inflate the coffers of the Treasury.

This of course indicates that the adjustments to the tax scales are not all that they have been cracked up to be. For instance, a person with no dependent spouse- that does not mean just a single taxpayer; that could also mean a taxpayer whose wife is earning about $3,000 or moreearning $7,000 next year will pay $191 in tax over and above what he pays in this financial year. That is an increase in tax of 18.6 per cent. That figure should be compared with the projected 12 per cent increase by which that person’s income will grow. So not only will he pay more tax next year but also a greater proportion of his income next year will be paid in tax. The proportion of his income which will go in tax will increase by about 5 per cent. For a person on $ 12,000 a year the position is not much different. He will pay an extra $330 next year in tax. That is an increase of 12.3 per cent, and next year a greater proportion of his income will be paid in tax than this year.

One must admit that for those taxpayers who have a dependent spouse there will be some benefit. A taxpayer who can claim a dependant’s rebate will pay $12 a year less in tax next year than this year. That is 23c a week. Someone on $12,000 a year who can claim the spouse’s rebate will pay $ 127 more in tax next year than he pays this year. Admittedly, a smaller proportion of his income will go in tax next year but at the same time he will be paying more in tax in money terms. So people should not be deluded into thinking that these tax cuts are anything more than illusory. The important point is that only 20 per cent of taxpayers are eligible to claim part or all of the spouse’s rebate. Only 20 per cent of taxpayers will receive the sorts of benefits which the Government has been proudly proclaiming today. To put it another way, all but a very few people will pay more tax next year and at least 80 per cent will pay a greater proportion of their incomes in tax. So 80 per cent of the people will pay more of their incomes next year in tax payments to this Government.

It might surprise some people that that is the case, because we have been told that there will be 50 per cent indexation of taxation and an increase in the spouse rebate. One would think that the combination of those two factors would make a taxpayer better off next year than this year. But, as I have indicated, because of the way in which the indexation is to be applied people will pay a larger proportion of their incomes next year than they have this year. In order to understand this we have to look to page 18 of the Treasurer’s statement where it states the Treasurer has assumed that there will be a 9.5 per cent inflation rate for this year. He has deflated this figure by 1.4 percentage points to take account of indirect tax increases and part of the increase attributed to the oil levy. That gets the figure down to 8. 1 per cent.

The Treasurer further deflates this by 0.9 of a percentage point to take account of increases in health insurance costs and the most recent increases as a result of the crude oil levy. So he is left with a figure of 7.2 per cent which he says is the correct rate of inflation which should be applied for the purposes of tax indexation. He then slices that figure in half to give a tax indexation factor of 3.6 per cent- only a little over one-third of the real assumed inflation rate of 9.5 per cent. The Treasurer’s mathematics would be acceptable, I suppose, if it were not for the fact that people are actually paying more for their petrol and their health insurance. In fact in the last 12 months we have seen health insurance rates go up by something like $3.50 a week. Yet the Treasurer is content to remove completely the impact of that for the purposes of applying his tax indexation factor. The price of petrol has increased by 45c a gallon in the last year. Of course that means that the taxpayer is actually paying that much more for his petrol. But the Treasurer is content to remove completely the impact of that increase in the application of the tax indexation factor.

We see that the people will be substantially worse off as a result of these changes. No account has been taken of the increases in health insurance or the impact of the increase in the price of petrol. As well as that, there has been no attempt to increase the family allowance which is the single most effective way of helping families, whether they are single income or two income families. That is the most effective way of helping those families, yet the Government has done nothing. In this coming year the Government will make life worse than was the case in the last year for more than 80 per cent of taxpayers. As well, it indicates the obsession of this Government to contract the economy further so that we can look forward next year to an even worse employment situation and, I suggest, a worse situation with regard to inflation.


-I rise to support with great pride the paper that has been presented by the Treasurer (Mr Howard). I believe the document not only outlines the economic situation in Australia, but also plans for the future. Irrespective of how much the Opposition beats its gums and tells its stories of desolation, deception and everything else, it knows it is pushing gravel up hill because this is an extremely easy statement to understand. After four years in office, I feel that it is something which the Government can put forward with a certain amount of pride. All we have heard from the Opposition is an almost continuous epidemic of gloom, despair and destruction. Opposition members have been trying to spread that epidemic in continuation of their own three years in government. Of course, the destruction of the Labor Party is centred not just at the national level; it is very keen to bring about a similar situation in Queensland. Be that on their own heads.

The debate on this statement presents an opportunity for honourable members to remember what the Labor Party did when it was in power for three years. I mention a few matters. There was record inflation- irrespective of how the figures are calculated- and unemployment that soared in percentage terms at a rate greater than this nation has seen. The same situation applied in relation to interest rates, bankruptcies and so many other things. Yet Opposition members have the hide to come into this place and, through the three speakers who have taken part in the debate so far, has again tried to spread its own air of gloom and despair. It also presents an opportunity to remember what the Labor Party has been saying in the last 12 months- that the 1975 and 1977 elections wiped the slate clean. That might have been correct in some ways. The Leader of the Opposition (Mr Hayden) is the man who, as a member of the Government from 1972 to 1975, presided over the worst Budget brought down in this Parliament, and he also presided over the Medibank fiasco of which I think every Australian should be reminded.

I want to deal with those parts of this document which are concerned with the economy. Honourable members have heard mentioned an inflation figure of 10 per cent for 1979. That figure was increased to a great extent by the measures taken by this Government in relation to its world parity oil pricing policy and its health insurance scheme. If those elements are deducted from that inflation figure of 10 per cent, we come down to a respectable inflation rate of 7.2 per cent. It should be remembered that it was acknowledged that some of the policies adopted in the Budget that the Government presented in 1979 would push up the inflation figure. But how right those policies were. Two main aspects of those policies involved world parity pricing and getting out as far as possible from the Medibank situation.

Australia had a 10 per cent rate of inflation last year. Let us compare that with a rate of 12 per cent throughout Organisation for Economic Co-operation and Development countries. That is not a bad gain for a nation of the size of Australia. The Leader of the Opposition has predicted already that interest rates will have increased by a massive three-quarters of a per cent- that is his estimate- by the end of the year. My goodness, one has only to look at the situation in the rest of the world.

Mr Barry Jones:

– You sound like Joh.


– Joh is a fine man. ‘My goodness’, I say. The United Kingdom has had an increase in interest rates of 5 per cent since I was there in July 1979. The United States of America rate is spiralling at the moment, and is 17.25 percent.

Mr Barry Jones:

– Eighteen per cent.


– That is what happens overnight. The increase in West Germany has been in the range of 2 per cent to 3 per cent. In the face of all those external pressures- Australia trades with all those countries- I think that the nation, and the Government, has done exceptionally well to keep the increase in prime lending rates at this moment to 0.5 per cent. If a three-quarters of one per cent increase in interest rates is the only penalty we will have to pay by the end of the year we should think ourselves exceptionally lucky, if we compare our situation with what is happening elsewhere. Those interest rates in Australia shot up from 5 per cent to 1 1 per cent in the three years that the Labor Government had its finger in the economic pie.

Let us look also at the unemployment situation. As the right honourable member for Lowe (Sir William McMahon) said in his speech, we can be by no means complacent or proud of having 440,000 unemployed at the end of January. But that figure represents a decrease and there are more job opportunities. The nation is providing these job opportunities and the unemployment rate is coming down in comparison with the situation that applied at the same time last year. Let us remind ourselves of the predictions of gloom that emanated from the Opposition spokesman on employment during 1979. It was said that the unemployment figure would break the 500,000 mark. As we have just heard, even the honourable member for Fremantle (Mr Dawkins) indicated the same thing. It is a wonderful luxury for those honourable members to be in Opposition where they can make these predictions knowing that they will never be called upon unless someone is alert enough to remind them of what the consequences will be. So, there has been a modest gain in the unemployment situation and in relation to employment opportunities.

We have a Budget that is on target. We are talking in terms of increased revenue from the oil parity pricing levy of some $340m but, apart from that, the Budget is on target. Australia’s share market has been responding exceptionally well over the last six to nine months not only in the resources field but also in industrial fields. Our overseas reserves are at an all-time high and, as far as our attraction to outside people is concerned, tremendous amounts of money are coming into Australia for development and investment purposes. In addition to that, there has been an increase in the number of tourists coming to Australia because of our advance purchase excursion fares. More people are coming to Australia than there are Australians taking advantage of the chance to visit overseas. There is a difference of some 10 per cent in those figures. I believe that this has all occurred because of a constructive and responsible policy by this Government. If we had listened to the suggestions made by the Opposition from time to time, goodness knows where we would be; perhaps we would be worse off than the Labor Party was during its time of government.

Dr Edwards:

– That would be impossible.


– It would be impossible, but one never knows what these people can do. They should never be underestimated. I say to the Australian people that they should not underestimate the amount of destruction that a Labor government could still do to Australia.

Mr Lloyd:

- Dr Coombs is still about.


– Yes, and I mention again that the man who was Treasurer in that Government is still about; he happens to lead the Opposition. At the recent Outlook conference there were predictions that our rural exports will be up $2 billion for 1980. That figure might mean little to most people but it represents a 40 per cent increase on the 1979 figure. Our grain, meat, sugar and wool are all in demand on world markets. I speak particularly with the sugar industry in mind when I say that this situation has arisen because of the responsible agreements and policies that have been entered into and because of the preparedness of the rural sector to respond to the encouragement that the Government has offered.

Australia is singularly fortunate so far as energy reserves are concerned. So much is said about our reserves of oil. Australia has moved from a situation of 70 per cent self-sufficiency to one of 64 per cent self-sufficiency in oil. The interesting aspect of the document we are discussing is the fact that the earlier estimate of the increase in the levy of $430m has to be revised downwards to $330m. That is the result of our declining domestic oil production. It has declined from a situation of 70 per cent self-sufficiency to one of 64 per cent self-sufficiency in the space of just three or four years. In regard to alternatives to oil, known coal reserves throughout Australia represent 4!6 per cent of the world ‘s total known reserves. Although our reserves represent a small percentage of total world reserves they are very large in terms of their export potential and their potential for energising our industries and catering for our domestic requirements. Australia’s coal exports are the third largest of the 13 coal exporting countries. The industry has a tremendous future, not only domestically but on export markets. We should look more constructively at our policies to ensure that when the coal is put on the market it will be on the same basis as is oil today- in the knowledge that it is a finite product and should command a price similar to that which oil commands today. I understand that if we were to sell steaming coal at a rate equivalent to $24 a barrel for oil we should be getting about $50 to $60 a tonne for it. At the moment it is selling on the world market for $32 or $33 a tonne. Therefore we have a great opportunity in the future to be in a situation in respect of coal similar to that of the Middle East countries in respect of oil.

We are known to have 1716 per cent of the world’s uranium reserves. We have natural gas reserves sufficient to enable us to export, and we are now finding shale oil reserves which could in time bring Australia 100 per cent to selfsufficiency in meeting its oil requirements. I cannot claim that the Government can take any credit for the reserves that were in the ground but its policies of the last four years have encouraged people to embark upon research and development. The Rundle project is a direct result of the Government’s oil parity pricing policy. But for that policy Rundle would still be just another name on the index of companies in the share market, and its value would still be on the bottom.

I wish to refer to some of the things that are happening in my own division of Dawson in response to the tremendous development that is under way generally at the moment. Three companies are beginning to mine coal. They are Utah Mines, Capricorn Coal and Houston Oil. All are multinationals because the financial requirements could not be met by the Australian ownership. The multinationals are investing $250m in each of the three projects and associated secondary jetty and storage facilities. That represents an investment in Australia of $ 1 billion. Overseas investors know that they can invest in a stable economy which has a stable government. It is important to remember that in discussing this matter.

In the division of Dawson tourist developments are springing ahead. I understand that that is only a case of taking advantage of the increased number of tourists that are coming to Australia from overseas. Shale oil deposits have been found and will be exploited within the terms to which I have referred.

I support the thrust of the policy that has been enunciated by the Treasurer. There was a temptation to hand out funds. It is surprising how much the Government can be criticised for collecting funds by way of oil levy, yet find that the Opposition wants a finger in every pie to tell it how to spend that money. How would the Opposition spend it? I suggest it would just encourage the inflationary spiral all over again. This Government has resisted the temptation to give hand outs. It wishes to ensure that the deficit stays within bounds.

I believe that the relief that is to be given to single income families resulted only from the many representations concerning it that were made by numerous members of parliament. I remind the Treasurer that in order to give complete equity to the single income earner compared with the double-income family, the spouse rebate must be increased by some $500. Equity will not be restored until the spouse rebate is in excess of $1,300. I am more than pleased to see that some attempt has been made to bridge that gap or at least to narrow it. The same is true of assistance to sole parents and others who will benefit from indexation.

I am disappointed that the tax reductions proposed from 1 July 1980 represent a return to the style of tax indexation. Although tax indexation was brought into this Parliament about three years ago and has been effective in resisting inflationary pressures, it puts any government in a tight-jacket situation. I would like to be able to think that as of 1 July 1980 we will have made a reduction in the taxation payable by the taxpayers of Australia, because of the various factors taken into account at that stage. Every time I hear the word ‘indexation’ I am reminded of the statement of Mr Frank Crean, a former member of this House. He said: ‘If you index everything, have you indexed anything?’ That is a factor that ought to be taken into account.

I want to mention in my last breath, as it were, the crude oil levies from which the benefits described in the statement have resulted. Economists throughout Australia are unanimous in few things, but they are unanimous in praising the wisdom of this policy and the way in which the Government is making sure that Australia remains as self-sufficient as possible and encourages the search for alternatives. I hope that the proceeds, surplus though they might be to our requirements, will be reinvested in research and development related to those alternatives.

Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired.

Mr Barry Jones:

– I wish to support the amendment moved by the honourable member for Adelaide (Mr Hurford) and I take up his point about the extent of unemployment in Australia and the figures prepared by Dr Duncan Ironmonger of the Institute of Applied Economic and Social Research at Melbourne University. These suggest that the unemployment situation is more serious, and may grow far more serious, than we realise. Dr Ironmonger argues that the registered unemployment figures, from both the Australian Bureau of Statistics and the Commonwealth Employment Service, seriously understate the number of people who would like work if a job were available.

I draw attention to Dr Ironmonger’s forecast for the year 1980. He points out that 6,080,000 people are included in the employment survey. He forecasts that, of those, some 462,000 will actually be registered as unemployed by the middle of the year. However the Institute estimates that there is a hidden unemployment figure which it calculates as 509,000. That makes a total of 97 1 ,000. The potential labour supply is estimated as being 7,051,000. On that basis we have an unemployment figure of 13.77 per cent. The Institute points out that the potential labour supply is calculated to equal the surveyed labour force up to 1974; that thereafter it is assumed to grow at the rate of 2.6 per cent a year, with 2. 1 per cent being allowed for growth of population aged 15 and over and 0.5 per cent for increased rates of participation in the labour force.

We are going through the most conservative era of economic philosophy since the Bruce Government of the 1920s. It is very fashionable. Extremely conservative governments have been elected in the English-speaking world. The United States has probably the most conservative Democratic administration since the time of Grover Cleveland. The United Kingdom Government of Mrs Thatcher came into power offering all sorts of Friedmanite remedies which it was thought would restore the British economy; already there is evidence that they have come to grief. The New Zealand Government under Mr Muldoon has been rigorously conservative and deflationary since 1975. I note from the population figures released yesterday that in 1 979 the total population of New Zealand dropped by 500. New Zealand is a nation that appears to be contracting very rapidly. Australia can be put in exactly the same category.

The Dr Strangeloves at the Treasury tell us that all problems can be solved simply by reference to the infallible market; the market will solve all problems. It is true that the Keynesian economic policies which predominated after the end of World War II do seem to have run out of momentum. Friedmanite obscurantism seems to have filled the gap. We have a perfect example of that obscurantism in the submission of the Treasury to the Committee of Inquiry on Technological Change in Australia, the Myers Committee. I assure honourable members that it is not a parody. It defies parody. The following quotation appears at page 52:

The observed flexibility of the economy in coping with unpredicted change- the very factor that gives confidence that adaptation to change can occur successfully- is the facet of economic experience which is most difficult to embody in an econometric model. In the short term, inertia, regularities, repetition and customary behaviour provide some basis for economic forecasting. But the essence of technological change is that these relationships are transformed. The significantly and inherently unforseeable qualitative changes that can occur are impossible to forecast. Thus the oft-asked question ‘where will the jobs come from?’ is clearly incapable of specific answer . . . Fortunately, for general economic purposes it is enough to know that stronger employment growth will accompany stronger growth in demand and activity.

That is magnificent. It makes one wonder why Treasury has the gall to claim to be the intellectual powerhouse of the Australian Public Service. It is very interesting to look at Time magazine- the issue for 10 March 1980. I only wish we had Hansard in colour because the graph would come out extremely well. The graph shows that in the period from 1 976 to 1 980 in the United States there was no correlation at all between growth rates and unemployment levels. For example, we find that in 1979 when economic growth in the United States was only one per cent, unemployment was standing at 6 per cent. But, if we go back to 1 977 when growth was at a very high rate of 6 per cent, unemployment was 7 per cent. In 1976, when growth was 5 per cent unemployment was 8 per cent. We can no longer assume that there is an automatic correlation between growth and employment.

It is very important to recognise that there are basically two different types of work. One type of work is intensely susceptible to demand and the other is not. The two types of work really can be classified as ‘labour/ time absorbing’ work and labour/time saving’ work. The labour/time absorbing work remains highly sensitive to demand fluctuations, especially in the provision of personal services. If the demand for hair cuts, tooth fillings or funerals doubles or halves we can expect the number of dentists or hairdressers or undertakers to rise or fall accordingly. But where we have the provision of general services or goods on a massive scale that demand and employment maybe inversely related.

United States agriculture, an example I have given many times before, is notoriously the most productive agriculture the world has ever seen. Indeed, its very prolixity is a scandal. It produces so much that much of the commodity output has to be burnt or buried. But it is not a big employer. The mining industry is a great developmental industry. But it does not employ large numbers of people. For example, we are constantly being told that Western Australia is a great developmental State. But that developmental State, that State of excitement, Western Australia, has the highest level of unemployment in Australia. We have particular problems to be faced in Australia because of the intense concentration on service employment. About 72 per cent of the Australian work force is employed in services.

In the course of my researches I have concluded that Australia was probably the first service based economy anywhere. Manufacturing was never the largest employment sector in Australia, unlike Britain, the United States and much of western Europe where industry was dominant for decades after the decline of agriculture and before services became preeminent. Services displaced agriculture to become the largest employer in Australia some time between the colonial censuses of 1861 and 1871, shortly before Australia began its own limited industrial revolution with technology and investment capital imported from Britain. As early as 1881, 43.1 per cent of Victoria’s labour force worked in services. So we have always had a heavily service based employment. But we hear nothing from the Government, nothing from the Treasury and nothing from its economic advisers generally as to precisely what areas they see as the greatest prospects for employment over the next 10 or 15 years.

There is a total lack of a proper statistical base in Australia. The people who produced the SNAPSHOT model, as part of the IMPACT project, complain that they are working on a statistical base that is 1 1 or 12 years old. In order to produce the information for Government departments, they are forced to rely on data from 1968 and 1969. That is scandalous. We might as well resort to fortune tellers or rely on tea cup readers for information from governments about where we are going. There is a kind of optimism and airy assumption in government circles that new employment opportunities will arise. There is not a hint or the slightest suggestion as to where that employment can be found.

I think the assumption that a new ‘X’ industry will arise to generate a great deal of new employment is not reassurring. In the first Industrial Revolution areas of heavy employment and resource use were obvious, certainly by 1810. Steam power, textiles, shipping, mining and railways were all very large employers. During the second Industrial Revolution, between 1855 and 1895, the provision of urban utilities, water supply, electrification, gas, public transport, the development of metallurgy, motor vehicles, telephones and sewing machines were all very large employers. But in the post-industrial world it is very hard to see what will be the equivalent of the motor industry as a major new employer. It is certainly not the electronics industry which is a prodigous producer but not a great employer. I was interested to read a publication put out by the Committee for Economic Development in Australia and hailed by the Australian Financial Review. In the ‘Implication of Technological Change ‘, Dr Ieuan Mapperson argues: . . innovations may create employment in three major ways. Firstly, many innovations create altogether new industries with considerable employment capacity. For example, the technological advance which enabled the concept of television to be realised, carried with it the creation of a very large industry which has provided employment for a great many individuals and continues to do so. Secondly, innovations frequently create significant industry designed to service the innovation itself. In this respect the quite remarkable growth of employment in computer-related industries in Australia is an apt example. Many other historical examples could be quoted . . . Thirdly, by virtue of the considerable improvements in real incomes to which it frequently gives rise, technology contributes to secular increases in aggregate demand within an economy.

Dr Mapperson did not allow the use of statistics to interrupt the fine flow of his argument. His first point would have been strengthened if he had shown that the television industry is a growing employment sector. Is it weakened by the contraction of work in the electronics industry both relatively and absolutely where employment has halved in three years between 1976 and 1979? As to Dr Mapperson ‘s second point, it must be conceded that the computer industry in Australia took off rapidly from a zero base to employ about 78,000 people. But he avoids the question of whether this growth has led to a net loss in employment especially in clerical employment. The computer industry is a special case used by Dr Mapperson as his number one example. It is not just ‘an apt example’, it is his only one. It would have contributed to some sense of optimism about future employment to have had even the vaguest hint as to what numbers two, three or four would be. We should have had some early warning signs from the United States or Europe by now. But ‘X’ continues to be elusive.

Nevertheless, I must say that in the long term, providing that a Labor Government is elected at the end of this year, I have some confidence that employment levels can be restored. I seek leave to incorporate in Hansard a short excerpt from a book by Professor Dennis Gabor, a Nobel Prize winner, called Inventing The Future, which covers such a scenario.

Leave granted.

The document read as follows-

The present sum of working hours in the West, especially in the United States, is in no way in conformity with the level of our technology. It is kept up artificially, in the first place by enormous defence expenditures, and in the second place by waste. This is only partly a waste of products; to a much larger extent it is waste in unproductive man hours. The last is summed up in Parkinson’s Law . . . The tool pushers who have become unnecessary change into paper pushers whose numbers can grow beyond any limit because they can always give work to one another. Yet I am inclined to consider this growth not as a tumour but as a healthy reaction of a virtuous society in which people have been brought up to work not only to earn money but also because they want to feel useful, and to keep their self respect. Nobody has planned the growth of bureaucracy and of office work in general. It has come about by the unconscious wisdom of the social organism, which can be as admirable as the wisdom of the body. But who can be happy with a prosperity based on defence expenditures, waste, and Parkinson’s Law? I consider it as dangerous, not because it is ‘artificial’- all civilization is artificial-but because it is unstable. It is a makeshift device which will collapse in all probability, and its collapse might lead to war, unless there is the vision to guide us into a stable state . . .

Symptoms such as material waste, Parkinson’s Law, and irrational armaments can be interpreted in this sense as defence mechanisms of the social organism to stave off a danger- the danger of the Age of Leisure . . . It is not the symptoms which we must cure but their underlying cause- by bringing the fear out in the open and replacing it by hope in a worth-while future.

Mr Barry Jones:

-I thank the House. I am sure that the mysterious ‘X’, the big new employment creator, will arise, but it will not be based on a new invention or technological form. ‘X’ will involve an extension of labour-time absorbing work, the type of employment which does not face direct competition from technology, either new or old. Education is the area with the greatest potential for labour-time absorption, followed by home based industries, leisure and tourism, skilled craft work and welfare. ‘X’ will be dependent on the development of a more cooperative, or convivial, type of society.

Ruthless competition and social cost cutting will, if pushed to their ultimate limit, destroy Western capitalist society. Economic growth depends on rising levels of income and an equitable spread of income and employment. If technological advance leads to wholesale unemployment, destitution, and the concentration of wealth in very few hands, the whole rationale of a consumption based capitalist economy would be destroyed. Successive industrial revolutions have led to an expansion of spending power. The newly produced goods and services have been consumed. Can technology accelerate at such a rate that its product is not purchasable? If that occurred we would see the realisation of Karl Marx’s prophecy in Capital, Volume 1, that monopoly power would be concentrated in so few hands that capitalism would lost its profitability and the ‘expropriators will be expropriated’.

Debate (on motion by Mr Hyde) adjourned.

page 766


Motion (by Mr Thomson) proposed:

That the House, at its rising, adjourn until Tuesday, 18 March next, at 2.13 p.m., unless Mr Speaker shall fix an alternative day or hour of meeting to be notified by telegram or letter addressed to each member of the House.


-This is a customary motion. It is the sort of motion that we ought to pass through the House whenever we adjourn for a week or so. The point I make to honourable members is that we have been meeting for an average of about 65 to 70 days a year for a good number of years. If we are to attend to the business before the House the sitting days should probably be between 100 and 120 a year. To the average person outside this Parliament that does not mean very much. They would say: Well, 120 days out of 365 days is not much’. But it means that we should arrange the way in which we meet. Perhaps the Parliament ought to meet the first three weeks in February, March, April and May and the same period for, say, August, September, October and November and have a longer sitting week or something of that order.

There are 120 items on the General Business paper. A large number of those items ought to be discussed. There are a number of matters listed as Orders of the Day. Considerable legislative material is on the Notice Paper. There is one matter concerning tariff proposals and another concerning the petrol levy. We have to be prepared to change our mode of meeting, the times of meeting, and rationalise our times a bit better to the greatest possible advantage when this Parliament meets. It is a rare occasion that we have a debate on such matters as Afghanistan or human rights. Even those debates are stultified by the fact that one is not sure how far they will go.

I recognise that many people who come to this place do not want to discuss matters openly. They want to be elected to the Parliament but do not want to attend it. They like the pay days but they do not like the pursuit of the objectives of the place. In the 24 years that I have been here the periods of meeting have hardly been increased. I would suspect that we have trebled our actual legislation output in many areas and the complexity of matters before us has at least doubled. Honourable members here who may survive the next election- although looking at those on the Government side, I think there do not seem to be many who are likely to do thatshould give some serious consideration to getting more value out of our times of meeting.

Question resolved in the affirmative.

page 767



-As it is now past fifteen minutes to one o’clock p.m., the time allotted for precedence of General Business has expired.

Suspension of Standing Orders

Motion (by Mr Thomson)- by leaveproposed:

That so much of the Standing Orders be suspended as would prevent the business listed for General Business Thursday No. 12 taking precedence on the Notice Paper on the next General Business Thursday.


-Mr Deputy Speaker, the Opposition will support this motion. It is only right and proper that these matters which have been on the Notice Paper for months should be debated. Since this Parliament was elected, General Business Thursday notices have awaited debate. On an occasion like this we should not lose one of the very few opportunities that the Opposition and backbenchers generally have to debate matters of importance placed on the Notice Paper. It is quite unprecedented that a debate on a subject like this- ‘Small Business’ -of such great interest to so many in the community should have been postponed twice. It happened a fortnight ago- last Thursday week. It is happening again now. We know that the statement of the Treasurer (Mr Howard) was a very important one but it should not be a substitute for a debate on small business which this House has been waiting to debate for so long. We will be thankful for small mercies. We will support the suspension of Standing Orders and we hope that, on the second Thursday after we resume sitting, we will have an opportunity to debate this matter.


-Mr Deputy Speaker, it is all very well to move the suspension of Standing Orders to bring this item on for debate at a later stage. This is the second occasion on which this item has fallen due for discussion as a General Business item. On both occasions the Government has seen fit not to allow a debate on the matter. It will be listed again in three weeks’ time. In effect that takes care of Item 12 but this is the third year of the life of this Parliament. No General Business is to be conducted during the Budget session, according to the general principles laid down by the Government for the conduct of items of General Business. In effect that means that in three years this Parliament will have dealt with 14 items of General Business listed on the Notice Paper which were required to be placed on the Notice Paper, for practical purposes, on the first day of the sittings of this Parliament.

The facts of the matter are that the Government has had no significant business at all to conduct during the last three weeks. Today is the first occasion on which any significant business has been brought before the Parliament. That now has been truncated. In that period the Government cannot find the time for General Business.

Mr Carlton:

– You had a motion on the other day.


-I am aware of that. I am also aware of the fact that the Government is seeking to deny honourable members the opportunity to raise General Business items. These items have been on the Notice Paper for three years. There is an item on small business about which we hear a lot of lamenting. There will be a month between the time when it was due and the time when it was debated. Other items which should have come before this Parliament will not come before the Parliament because of these deferments.


-Mr Deputy Speaker-


-(MrGiles)-Has the honourable member something refreshing to add?


-Of course. It all depends whether a person is so dessicated that he cannot be refreshed whatever one says or does. The surrender of General Business is a very important matter. We ought to protect it. In fact, we have reached a stage where we should put aside a week, or one day a week of every meeting, for the discussion of General Business. As my colleagues, the honourable member for Corio (Mr Scholes) and the honourable member for Adelaide (Mr Hurford) have pointed out, there is a certain air of incompetence about the way that we are handling the business here. Why on earth should the statement of the Treasurer (Mr Howard) have been presented today at General Business time? Why do it that way? There has long been a tradition established of the forms of the House, Questions Without Notice, General Business, Grievance Day, Adjournment and so on. It is important that they be protected. The Government is running the country in a deplorable way and in many respects it is handling the affairs of this Parliament even worse. I continue to ask honourable members here to give serious consideration to this question of re-organisation of business in the Parliament. We should take the matter up with the Speaker. We should do whatever we can in our party rooms to bring back a bit of organisation.

Mr Scholes:

– There are 130 general business items on the Notice Paper at the moment.


-That is right. I pointed that out earlier, but as many of the honourable members opposite to whom I am speaking are slow learners, it is necessary to repeat it. One of the refreshing things about this Parliament is the increasing number of general business items being placed on the Notice Paper. Ten, 12, 15 or 20 years ago there were hardly any. It simply means that the ordinary member of parliament feels that he is being deprived of the opportunity to discuss matters. They are not placed before the Parliament by the Government, so he simply places them on the Notice Paper. But he might as well go home and mow his lawn instead, for all the chance he has of discussing such matters. If the Government cannot run the country any better than it is running this Parliament, it is no wonder that we are going backwards at a great rate.

Question resolved in the affirmative.

page 768


Discussion of Matter of Public Importance


- Mr Speaker has received a letter from the honourable member for Melbourne Ports (Mr Holding) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Fraser Government to intervene on behalf of the Pitjanjatjara people, in their fight against the South Australian Government which is freezing their land claims and giving mineral rights without consulting the local Aboriginal communities.

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-

Melbourne Ports

-Mr Deputy Speaker-

Motion (by Mr Thomson) proposed:

That the business of the day be called on.


-The Opposition objects strongly to this matter of public importance, which has rested on the Notice Paper, being treated by the Government in such a cavalier way. This is another example of a matter that is of great importance- in this case particularly to the Aboriginal community in this country- not being allowed to be debated in this House. I want it made known that, although we are not taking the matter to a vote on this occasion, we want our strong objection recorded in this House. We are not taking the matter to a vote because there are other matters which we want to debate. We are not going to spend our time just sitting in the chamber voting when there are other matters that we want to raise.

Question resolved in the affirmative.

page 769


Melbourne Ports

– I move:

That motion is seconded.


-The motion must be put in writing.

Mr Holding having submitted his motion in writing-


– The decision of the Government today to use its numbers to prevent any consideration by this -

Motion ( by Mr Bourchier ) put:

That the honourable member be not further heard.

The House divided. (Mr Deputy Speaker-Mr G. O’H. Giles)

AYES: 68

NOES: 29

Majority……. 39



Question so resolved in the affirmative.


-Mr Deputy Speaker, I think it is a disgrace that this House should spend the last two days on a question of human rights -

Motion ( by Mr Adermann ) put:

That the honourable member be not further heard.

A division having being called for, and the bells being rung-


-Order! While the bells are ringing I think I should warn the House that whether there is a division or not honourable members wishing to attend in the chamber while they are improperly dressed will not be allowed in or to vote in the future.

Mr Scholes:

– I raise a point of order on that ruling.


– It is not a ruling; it is a warning.

Mr Scholes:

– I would ask that the matter be referred to the Standing Orders Committee. It is not within the province of the Chair to deny a member of parliament his right to vote. Mr Deputy Speaker, the ruling you have given is not based on anything contained in the Standing Order but relates to a matter of practice.


-The honourable member will resume his seat. He is quite entitled to take the matter up with the Standing Orders Committee if he wishes.

The House divided. ( Mr Deputy Speaker-Mr G. O ‘H. Giles )

AYES: 70

NOES: 30

Majority……. 40



Question so resolved in the affirmative.

Question resolved in the negative.


-Mr Deputy Speaker, with your indulgence I would like to say that two Opposition speakers have now been gagged from speaking on this important matter of Aboriginal land rights. We have shown our disgust in two divisions. The Opposition will not waste time in having further divisions on this occasion. Instead we wish to debate the tax trickery of this Government.

page 770


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

Second Reading

Minister for Industrial Relations · Corangamite · LP

– I move:

That the Bill be now read a second time.

This Bill proposes amendments to the Conciliation and Arbitration Act designed to achieve more effective operation of the accounting and audit provisions in respect of organisations registered under the Act. Consistent with the Government ‘s policy of ensuring effective democratic control of organisations registered under the Act and the full and active participation of members of those organisations in their affairs, the Bill provides for appropriate accounting practices to be followed by organisations, the effective audit of their accounts and accountability, including the provision of information, by organisations and their officers to members.

By way of background to this Bill, honourable members will recall that, following the report in 1 976 of the Royal Commission into Alleged Payments to Maritime Unions, the Conciliation and Arbitration Amendment Act (No. 3) 1977 inserted in the Act a new Part VIIIAA to give effect to the recommendations of the Royal Commission concerning accounting practices and financial reporting requirements for organisations registered under the Act. In his report, the royal commissioner had expressed the view that the Conciliation and Arbitration Act and Regulations were not adequate to ensure that individual members of organisations, and the public, were able to establish the uses to which funds were appropriated and the financial state of the organisation. Briefly, Part VIIIAA of the Act requires an organisation to prepare accounts, supply copies of those accounts to members, present them for adoption at meetings, and file them with the Registrar. It does not itself make detailed provision for regulating the accounting and reporting practices of organisations. Detailed provisions are to be prescribed by regulations.

As I foreshadowed in my second reading speech on the Conciliation and Arbitration Amendment Bill (No. 3) 1977, a tripartite committee of the National Labour Consultative Council was established to consider the necessary regulations. That committee, during its deliberations, also discussed the substance of the provisions of Part VIIIAA of the Act and, in its reports to the National Labour Consultative

Council, it recommended a number of amendments to that Part. Several of those matters had also been the subject of representations to me by the Australian Society of Accountants and the Institute of Chartered Accountants. The NLCC committee has been engaged in long and detailed discussions and the Government has given full consideration to its proposals. Whilst it has not accepted all of the committee’s recommendations, the Government has recognised that a number of amendments to Part VIIIAA of the Act are desirable to make for more effective operation of the provisions of that Part. I would like to take this opportunity to express my appreciation of the work undertaken by the committee.

I turn now to the substance of the proposed amendments. The Bill proposes amendments which spell out in more specific detail than at present that, where an organisation is divided into branches, those requirements will apply both to the branches and to the organisation itself and that, in relation to an organisation itself, the accounts are to be the accounts representing the financial affairs of the federal body, excluding the accounts of its branches. It is the Government’s view that such an arrangement is essential in order to provide for the adequate disclosure to members of the financial affairs of their organisations and of the branches of which they are members. The royal commission had this to say on the question of disclosure of information:

It is essential in the interest of democratic control that the financial dealings of an organisation are presented in sufficient detail to allow those members interested to establish the state of the organisation’s finances, evaluate its financial administration and satisfy themselves that the financial transactions are in accordance with the rules and the decisions of the membership.

If organisations were to be permitted to prepare only consolidated accounts, it would be extremely difficult for individual members to derive from them any information about the financial affairs of, for example, their branches. In considering the regulations required under Part VIIIAA of the Act, the NLCC committee concluded that the regulations should prescribe the minimum contents of the accounts to be prepared and supplied to members, and that any additional information in relation to those accounts should be available to members upon request.

This Bill proposes amendments which will enable a member of an organisation, upon request made in writing and addressed to the secretary or a member of the committee of management of the organisation, to obtain such information in relation to the financial statements of the organisation as is prescribed. Alternatively, a member will be able to apply to the Industrial Registrar, who will obtain from the organisation the information sought and convey it to the member. Responses to such requests will have to be given within 14 days. I have two documents which outline what the regulations will prescribe as being the minimum contents to be contained in the accounts of an organisation, and the additional information in relation to those accounts which is to be made available to members upon request. I table those documents and seek leave to have them incorporated in Hansard.

Leave granted.

The document read as follows-


With regard to the minimum content of the accounts, they are to be such as to give a true and fair view of a the expenditure and income of the organization for the financial year and the previous financial year; and b the assets and liabilities of the organization as at the beginning of the financial year and the end of the financial year.

In relation to the expenditure and income statements, the accounts are to include: i the amounts (if any) of expenditure on- sustentation and capitation fees affiliation fees levies and collections paid salaries and other remuneration, including “lump sum “ allowances, of holders of offices falling within the definition of “office” in sub-section 4 ( 1 ) of the Act employees’ salaries and other remuneration including “lump sum “ allowances delegates’ fees and expenses donations fines and penalties meetings expenses office and administration expenses professional fees and expenses property expenses provision for long service leave provision for annual leave provision for superannuation provision for depreciation and amortisation other expenditure ii the amounts (if any) of income from- entrance fees and periodic membership subscriptions sustentation and capitation fees levies and collections interest dividends property income donations and grants other income iii any surplus where income for the year exceeds expenditure for the year iv any deficiency where expenditure for the year exceeds income for the year v the profit or loss on- a sale of assets b revaluation of assets vi transfer to and/or from special fund and/or levy accounts vii net surplus or net deficiency transferred to accumulated general funds.

In relation to the statement of assets and liabilities of the organization, the accounts are to include: i the following assets (if any)- cash on hand cash at banks accounts receivable loans receivable (including loans to members and/or office holders) pre-payments government and semi-government investments other investments fixed assets- real estate -other other assets ii the following liabilities (if any)- accounts payable loans payable provision for long service leave provision for superannuation accrued holiday pay other accruals other liabilities iii the following items- accumulated general funds levies and collections (funds) special funds required or authorized by or under the rules contingent liabilities levies/collection assets special fund assets

Where any of the items referred to above are not applicable to the financial transactions of an organization, the accounts are to be required to indicate this fact, i.e. they should contain a ‘nil ‘entry in respect of those items.


-I should also like to indicate at this point that, in view of the fact that these matters have been decided after long and detailed consideration by the National Labour Consultative Council, if at any time in the future it proves necessary to make changes to those regulations, those proposed changes would also be subject to consultation through that Council.

The Bill proposes a further amendment to enable the making of regulations which will require a statement by the committee of management of the organisation made in accordance with a resolution of committee of management and signed by two members of the committee, and a statement by the principal officer of the organisation responsible for keeping the accounts. The statements are to be in the nature of certifications in relation to matters concerning the accounts of the organisation, its register of members and observance of the Act, the regulations and the rules of the organisation. The Government endorses the view of the Royal Commission that such statements are necessary in the further interests of adequate disclosure of information. The Bill also proposes amendments concerning the appointment, remuneration and dismissal of auditors to align them more closely to similar provisions in company legislation. The Government recognises that the objects and functions of industrial organisations differ from those of companies, and this has been borne in mind in these amendments. Organisations will now have a choice as to whether they appoint individuals or firms as auditors, and will be able to appoint them on an on-going basis rather than annually, as has been the requirement in the past. The Bill makes provisions for remuneration of auditors and for security from dismissal.

Finally, the Bill proposes amendments to redefine the role of the Industrial Relations Bureau in relation to the investigation of the finances and financial administration of an organisation. Part VIIIAA currently provides that where reports are deficient or fail to show the required information, the Registrar shall request the Industrial Relations Bureau to investigate the finances of the organisation. If the Bureau is of the opinion that there has been a breach of the Act or regulations, it is empowered to refer the matter to the Federal Court. Under the provisions of this Bill the Bureau will be able to investigate only those matters referred to it by the Industrial Registrar, except that if in the course of those investigations the Director and the Registrar consider that there are grounds for further investigation, the Bureau may make such further investigations.

In summary, the provisions of this Bill are designed to remove ambiguity as to the obligations imposed on an organisation, as against its branches, and ensure that terms of a technical nature accord with accepted accounting terminology; require organisations and their branches to provide additional financial information to members upon request; support the making of regulations to implement particular recommendations of the Royal Commission into Alleged Payments to Maritime Unions concerning the contents of organisations’ financial accounts and statements by management committees and principal accounting officers as to the accounts of organisations, that register of members and observance of the Act, regulations and rules of organisations; bring the provisions concerning the appointment, security from dismissal and remuneration of auditors more closely in line with the provisions in company law; and re-define the circumstances in which the Industrial Relations

Bureau may investigate the finances and financial administration of an organisation.

The Government is confident that the legislation concerning the accounting practices and financial reporting requirements for organisations and their branches will make a significant contribution to ensuring that the affairs of employee and employer organisations are properly conducted in the interests of their members and will provide members with information to enable them to make informed judgments about the way their organisations are being managed and to take appropriate measures to have any irregularities rectified. The proposals are a further measure in pursuance of the Government’s policy of enabling members of organisations to be better informed regarding the affairs of their organisations and thereby encouraging greater ‘membership’ participation in the activities of organisations generally. The Bill is, therefore, consistent with the Government’s overall objective of advancing the rights of individuals within organisations and its passage will significantly enhance that objective. I commend the Bill to the House.

Debate (on motion by Dr Everingham) adjourned.

page 773


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

Second Reading

Minister for Veterans’ Affairs and Acting Minister for Primary Industry · Fisher · NCP/NP

– I move:

The purpose of this Bill is to amend the Pig Meat Promotion Act 1975. That Act provided that funds for the promotion of pig meat derived from a pig slaughter levy be channelled through a trust account. It also established a Pig Meat Promotion Advisory Committee to make recommendations to the Minister on promotion expenditure from the trust account and on the rate of levy for promotion purposes.

Under the present legislation, an officer of the Department of Primary Industry enters into contracts and agreements for promotion to implement the program recommended by the Committee. Work for the Committee is currently arranged through contractors, when frequently it would be better if carried out by Committee employees. The current levy of 13c per pig slaughtered yields about $450,000 a year. No government contributions are involved. The amendment Bill provides for some changes in the powers and responsibilities of the Committee. With promotion activities expanding, it is considered appropriate to make the promotion committee a body corporate with powers to promote and enter into promotion contracts, and to be able to employ its own staff.

The current trust account arrangements will be maintained and the program of expenditure will continue to be subject to ministerial approval. However, with a committee that is incorporated, and with promotion activities wholly funded by industry, it is appropriate for the Chairman of the Committee to be a producer representative rather than a departmental officer as at present. The Chairman will be nominated by the Australian Commercial Pig Producers Federation, the national producer body, from the two members representing the Federation on the committee. The amendments result from requests to the Government by the Federation. I commend the Bill to honourable members.

Debate (on motion by Dr Everingham) adjourned.

page 773


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

Second Reading

Minister for Business and Consumer Affairs · Curtin · LP

– I move:

The purpose of this Bill is to implement the Government’s decision to continue to provide bounty assistance to the shipbuilding industry in Australia. Under the Ship Construction Bounty Act 1975, bounty is currently calculated as a specified percentage of the lowest acceptable Australian tender price. (Quorum formed). The revised scheme, as proposed by this Bill, will commence on 1 July 1980, and will introduce a new simplified procedure under which bounty will be payable to eligible shipbuilders of vessels exceeding 150 gross tons and fishing vessels exceeding 21 metres in length, in an amount finally assessed as a percentage of the cost of construction or modification of such vessels in Australia. Fishing vessels must be for commercial purposes and it is not intended to use this bounty for defence vessels.

The new scheme follows the Government’s consideration of advice and recommendations by the Industries Assistance Commission in its report No. 219 of 25 July 1979 entitled ‘Ships,

Boats and Other Vessels not Exceeding 6000 tons Gross’. With one exception, the Government has decided to adopt the Commission’s recommendations for bounty assistance insofar as they related to that assistance after 1 July 1980. The Commission recommended that, in the first two years of the revised scheme, the industry be assisted by a bounty at the rate of 27V4 per cent of the construction cost of a vessel. It also recommended that this rate be reduced to 25 per cent in the third year, to 22 te per cent in the fourth year and to 20 per cent thereafter. The Commission considered that a reduction in the rate of 27V4 per cent to 25 per cent after two years would minimise disruption to those firms whose investment plans have been based on present levels of assistance. The Commission further recommended that, for vessels exceeding 1,000 gross construction tons, bounty be payable at a rate of 29lA per cent if construction was commenced before 31 December 1980. However,’ the Government has decided that the 27lA per cent bountry rate will be retained for more than two years until 30 June 1984, to further minimise the possibility of disruption to the local industry because of the current world over-capacity of vessels which is expected to continue into the mid- 1 980s. From 1 July 1984 to 30 June 1986 the bounty will phase down to the long term rate of 20 per cent.

The scheme, as proposed by this Bill, will thus provide for the payment to eligible shipbuilders of a bounty at the rate, in respect of vessels exceeding 150 gross construction tons but not exceeding 1,000 gross construction tons and in respect of fishing vessels exceeding 2 1 metres in length, for the purpose of commercial operations and based in an Australian port, and where construction of the vessel is commenced during the period 1 July 1980 and 30 June 1984, of 2716 per cent of the construction cost. This rate will phase down to 25 per cent for vessels commenced between 1 July 1984 and 30 June 1985; and to 2216 per cent for vessels commenced between 1 July 1985 and 30 June 1986. A long term bounty rate of 20 per cent will apply from 1 July 1986. In respect of vessels exceeding 1,000 gross construction tons, where construction of the vessel is commenced during the period 1 July 1980 to 31 December 1980, bounty will be payable at the rate of 29Vi per cent of the construction cost. From 1 January 1981 these vessels will attract bounty at the rates applying to vessels not exceeding 1,000 gross tons.

In addition to the bounty on construction, the Bill provides for a bounty to be paid in respect of the modification of vessels at the rate of 20 per cent of the cost of the modification providing that cost exceeds $400,000. (Quorum formed). This will replace the existing bounty under the Ship Construction Bounty Act 1975 of 25 per cent of the cost of modification providing such cost exceeds $500,000. Finally in relation to bounty assistance, the Government has decided that the present requirement for a ship-owner to enter into an agreement to repay bounty if a vessel built with the assistance of bounty is subsequently taken off the Australian coast or registered abroad, will not be adopted under the new scheme. However, vessels built for export will remain ineligible for bounty. If the level of activity in the industry in 1979-80 continues into 1980-81, it is estimated that the cost to the Commonwealth of the new bounty scheme in that year will be about $ 1 7m.

For the benefit of honourable members, I will now briefly outline other assistance measures for this industry. It has been decided that imports of vessels not exceeding 150 tons gross and fishing vesels not exceeding 2 1 metres in length will be dutiable at 25 per cent. This sector of the industry has a high degree of natural protection and the Government considers that continuation of assistance at about previous levels will not be inconsistent with promoting an efficient allocation of the community’s resources. Other vessels are dutiable at 2 per cent when permanently imported. It has also been decided that vessels will remain prohibited imports under the Customs (Prohibited Imports) Regulations. Nevertheless, under the shipbuilding assistance arrangements, importation of new vessels and certain second-hand vessels- for example, those over 10,000 tons gross- will be permitted, subject to such importation being in accordance with the Government’s shipping policy requirements.

The Government considers that the new arrangements will provide this industry with clear indications of its long term assistance levels, thereby creating a stable environment in which the industry can plan and develop. It is expected that the new bounty arrangements will encourage increased efficiency in the industry without significantly influencing the level of employment and activity. I commend the Bill to honourable members.

Debate (on motion by Dr Everingham) adjourned.

page 774


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

Second Reading

Minister for Business and Consumer Affairs · Curtin · LP

– I move:

This Bill is consequential to the Bounty (Ships) Bill 1980, and makes an amendment to the Ship Construction Bounty Act 1975, to phase out the bounty scheme under that Act from 1 July 1980. The Ship Construction Bounty Act 1975 currently provides bounty assistance to the shipbuilding industry in Australia based on a percentage of the lowest acceptable Australian tender price.

The amendment, as proposed by this Bill, will enable continuation of the arrangements under the existing scheme to apply in relation to eligible vessels for which tenders close before 1 July 1980. A new simplified bounty scheme, under which bounty will be assessed as a percentage of the cost of construction of a vessel, will commence on 1 July 1980 pursuant to the proposed Bounty (Ships) Bill 1980.I commend the Bill to honourable members.

Debate (on motion by Dr Everingham) adjourned.

page 775


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

Second Reading

Minister for Business and Consumer Affairs · Curtin · LP

– I move:

The purpose of the Bill now before the House is to implement the Government’s decision to provide adjustment assistance to smelters of refined tin in Australia. The Industries Assistance Commission in its report No. 223 of 13 August 1979 entitled ‘tin ores and concentrates’ recommended that export control on tin ores and concentrates and tin metal- other than those required by Australia’s obligations under the International Tin Agreement- no longer apply; that the smelting and refining of tin ores and concentrates in Australia be assisted by means of a bounty payable at the rate of $50 per tonne of refined tin produced from Australian tin concentrate; and, that the bounty be paid for a period of three years commencing on the date on which the export controls are removed.

In its report the Industries Assistance Commission considered that the removal of the export controls could improve returns to tin miners and expand tin mining activity in Australia. However, because the Government is concerned that the immediate removal of the export controls could lead to a sudden reduction in the supply of Australian tin concentrates, with a consequent adverse impact on the Australian smelting industry’s capacity to adjust to lower levels of activity or to find alternative supplies of concentrate, it has been decided to phase out the export controls during 1980 and 1981. Under these arrangements, in 1980 individual export permits will be granted to tin miners if supplies of Australian tin concentrate to local smelters are maintained at not less than 75 per cent of the respective miners’ deliveries to the smelters in the fiscal year 1978-79. In 1981 this proportion will be reduced to 50 per cent and all export controls- other than those necessary to meet Australia’s international tin agreement commitments- will cease at the end of 198 1 .

To complement the phasing out of export controls, the Government has decided to provide assistance to Australian smelters by way of a bounty scheme, commencing on 1 January 1980 and ending on 31 December 1982, at the rate of $50 per tonne of the weight of refined tin produced from Australian tin concentrate, providing that the refined tin is produced at registered premises during the period to which the Act applies. The Act provides that this bounty will only be payable in respect of refined tin, produced from additional concentrate supplies which miners deliver to smelters above their specified minimum levels which I referred to earlier. With the removal of export controls at the end of 1981, bounty will be payable in respect of refined tin produced from all Australian concentrate delivered to the smelters in 1982. On the assumption that concentrate deliveries to smelters will continue at the 1978-79 levels, the cost of the bounty scheme is estimated to be approximately $65,000 in 1980, $130,000 in 1981 and up to $250,000 in 1982.I commend the Bill to honourable members.

Debate (on motion by Dr Cass) adjourned.

page 775


Minister for Business and Consumer Affairs · Curtin · LP

– I move:

Customs Tariff Proposals No. 4 ( 1980).

The Customs Tariff Proposals I have just tabled relate to proposed alterations to the Customs Tariff Act 1966. Following advice and recommendations by the Industries Assistance Commission in its report No. 230 of 23 October 1979 entitled ‘Rubber Products’, the Government decided to adopt the Commission’s recommendations on levels of assistance to be accorded the local industry producing rubber products except for a minor variation in the tariff treatment of certain rubberised knitted or crocheted fabrics. The long term industry rate will now be 25 per cent, as recommended by the Commission, replacing general rates of up to 48 per cent. There is provision for some rates, in excess of the 25 per cent rate, to be reduced in stages.

The Commission considered that the level of assistance for rubber products should be closely related to the long term duty rates of 25 per cent for the tyre industry as both industries are closely linked through similar production technology and raw materials. The Commission had also recommended a two-year phasing period for certain products in order to achieve an orderly adjustment to the long term rates for the industry areas concerned. The Commission considered that a long term rate of 25 per cent would encourage a more efficient utilisation of resources through a reduction in those areas with relatively high levels of assistance and was of the view that the adoption of the recommended industry rate would not have a marked impact on local production.

The Government also decided that current rates of duty on certain rubberised, knitted or crocheted fabrics would be maintained and reviewed when the Commission’s final report on textiles is under consideration. The Proposals also contain an administrative change in relation to certain natural rubber sheets. No change in duties is involved. A comprehensive summary setting out the nature of the duty change has been prepared and is being circulated to honourable members. The new duties operate on and from tomorrow, 7 March 1980. 1 commend the Proposals to the House.

Debate (on motion by Dr Cass) adjourned.

page 776


Reference to Public Works Committee

Minister for Housing and Construction · Braddon · LP

– I move:

The two Commonwealth Scientific and Industrial Research Organisation divisions are presently located in unsatisfactory conditions at three different sites. (Quorum formed). Those sites are at Fisherman’s Bend, Fitzroy and the

University of Melbourne. The Clayton site is adjacent to Monash University and was acquired in 1961 for development as a major centre of CSIRO chemical research. The Parliamentary Standing Committee on Public Works has previously reported favourably on proposals for the location of three divisions on this particular site.

The proposed new facilities will comprise research laboratories, administrative accommodation, library extensions, stores and workshops, technical testing facilities, a special hazard laboratory and support facilities including roads, car parks and landscaping. Library and canteen facilities will be shared with the divisions already on the site and with the Division of Chemical Technology which is to be constructed in the near future.

Laboratory and administration areas for the complexes will be concrete framed and clad with low maintenance materials including concrete, masonry and light weight cladding. The design of the buildings and landscaping will complement existing site developments. The estimated cost of the proposal at February 1980 prices is $19m, being $8.85m and $10.15m for the Division of Material Science and the Division of Applied Organic Chemistry respectively. I now table plans of the proposed work.

Question resolved in the affirmative.

page 776


Approval of Work: Public Works Committee Act

Minister for Housing and Construction · Braddon · LP

– I move:

Basically this proposal involves the replacement of the three existing obsolete cranes with three new portal cranes of 30 ton, 5 ton and 3 ton capacity respectively. Ancillary works include crane rails, foundations, associated services and some work on an historic building. The Committee, in paragraph 53 of its report, recorded a number of conditions to be observed in the execution of the work, having regard to its environmental aspects. I indicate that these conditions will be met. The Committee, in paragraph 56 of its report, requests an examination of the present management practices on the island with a view to more centralised control and more responsibility being given to naval personnel. Again, this matter is being examined.

The estimated cost of the proposed work is $4.2m at June 1979 prices. The Committee has reported favourably on the proposal and has recommended the construction of the work. If the House agrees to support this motion work may proceed in accordance with the recommendations of the Committee.

Mr Keith Johnson:

-I do not oppose the motion. However, the Minister for Housing and Construction (Mr Groom) referred to paragraph 56 of the report of the Parliamentary Standing Committee on Public Works on the question of management. That was a matter of some concern to the Committee, although not one of reference to it. During its examination of the project certain aspects became apparent. That is why the Committee added that paragraph to the report. Cockatoo Island is owned by the Australian Government but is operated on lease by Vickers Cockatoo Dockyard Pry Ltd, a private company, on the understanding that any naval work required to be done will receive first priority. At the moment about 70 per cent of the work that is done at the yard is defence work and about 30 per cent is private work on ferries and the like. Taken together it means that the cost of the private work offsets the cost of the defence work.

It became apparent to the Committee that, because of the dual operation of the island, some bad housekeeping had crept in. For example, on the side of the island on which ships are constructed vines were growing through some fabricated steel parts which had been there for many years and seemed to be of no use. Cranes on the island had become obsolete and no one seemed to be responsible for their removal. For those reasons, the Committee made its suggestion and I was pleased to hear the Minister say that the Government was considering it seriously. It was of such concern to the Committee that it felt that reference to it ought to be made in the report and that it should thereby be brought to the attention not only of the Government but also of the Parliament.

I do not want to delay the House. I know that it has important business to deal with, but this matter is important also. I hope that when the work is executed the buildings shown on the location plan as buildings 78, 79 and 81, which are amenities buildings, and which will be partially demolished to allow for the provision of the new rails for the cranes, will be the subject of careful attention; that those amenities that are demolished will be replaced.

The Federated Ship Painters and Dockers Union of Australia made a submission to the Committee expressing concern about the standard of the existing amenities buildings. As one of those who spent a morning traipsing around the island and up and down the stairs of the amenties buildings, I agree with workmen that the conditions are not quite up to scratch. This places an obligation on the Australian Government, which will be demolishing part of these buildings. I should explain that the front part is to be demolished to make way for the new rails and cranes but the buildings are to be extended at the rear by a like amount.

Mr Les Johnson:

– Does it include the canteen?

Mr Keith Johnson:

-It includes the canteen, which is only small. The men work in small groups, eat in small groups and have change rooms for small groups. It is very important for the morale of those very hard-working men on the island that their amenities be brought up to scratch.

Question resolved in the affirmative.

page 777


Bill returned from the Senate with an amendment.

page 777


Bill returned from the Senate with amendments.

page 777


Ministerial Statement

Debate resumed.


-I first congratulate the Treasurer (Mr Howard) on his statement, which was frank and clear. It was of considerable benefit both to the House and to those in the wider community who, in the management of their own affairs, must understand where the economy is moving at any one time and contribute, with that greater knowledge, to the greater production of that economy.

The statement indicated that a 3 per cent real growth rate was being achieved in this financial year. That is the figure for the non-farm sector; it would be higher if the farm sector were included. The statement indicated also that a substantially enhanced rate of investment was taking place. Therefore, both currently and for the future the economy looks considerably brighter than it has for a long time, in fact right through the seventies. Nonetheless, if I may express myself in loose terms, the Opposition saw fit, to take the Government apart on the state of the economy. The form of the Opposition’s attack indicates something of the problem that is faced by all democratic governments in managing their economies.

This Government, in common with other governments in democracies, knows what has to be done to regenerate economic activity and full employment. It receives remarkably consistent advice from economic advisers of very high standard around the world. I refer to the organisation for Economic Co-operation and Development, the staff administering the General Agreement on Tariffs and Trade, our own Treasury, the Reserve Bank of Australia and so on. The advice has been pretty consistent- that the Government must control public sector expenditure and eliminate deficits, and in this way control inflation and allow the economy to grow in the private sector. I repeat that that advice has been consistently offered; yet we had an attack on the Government which set out to repeal not only all the laws of economics but those of arithmetic also. No one, by virtue of coming to government or obtaining a seat in the House of Representatives, suddenly acquires the ability to do that sort of thing. Some facts of the real world are immutable. The laws of economics, or at least those that are broadly agreed upon, and certainly those of arithmetic, are immutable.

Inflation will not be reduced unless the money supply growth is limited. If it is not, inflation will increase as the money supply expands. Money supply growth cannot be limited unless the public sector deficit is limited or interest rates are bid up even higher than they are now. The deficit cannot be limited unless the public sector expenditure is contained or taxes are increased. Without increasing the deficit it is impossible both to increase public sector expenditure and reduce taxes. Without higher interest rates or taxes it is impossible both to reduce inflation and increase public sector expenditure. Alternatively, increased public sector expenditure will be associated with at least one of the following: Increased taxes, increased interest rates or increased inflation. Decreased taxes will be associated with decrease to public sector expenditure, increased interest rates or inflation. Without increasing inflation, interest rates can be induced to fall only by cutting public sector expenditure, increasing taxes or both. Those who deny these simple truths must be either fools or knaves. It is not for me to categorise.

I wish to say just one thing about a future fiscal commitment that the Government must take into account and the sooner it takes it into account the better. It is important that the electorate understand and accept that better defence must necessarily mean the sacrifice of some other aspirations. To attempt to opt for both guns and butter at the same time is to defy reality. To pretend to do so would be deception. Defence expenditure is justified by the chance, however remote it may be, of war. The economic capacity to handle war is as much part of defence preparedness as is the possession of frigates, tanks or fighter bombers.

Although larger appropriations for the expendables of training such as fuel and ammunition should be expected, it would not be possible to appropriate usefully very much more in the next Budget without a degree of mobilisation that would not be justified now. It may be necessary to place orders now for hardware that will heavily commit future Budgets. Now is the time to think about financing those purchases. The means by which the Australian people might forgo other desires in order to pay for their defence are threefold. They can accept a reduction in the amounts allocated to other public expenditure; they can pay higher taxes; or they can subscribe to public loans. In the end they will probably do some of all three since they are not mutually exclusive.

In contemplating public expenditure cuts, it has to be remembered that health care, education, welfare and States grants comprise 69 per cent of the Commonwealth Budget. High proportions of State Budgets also go to health, education and welfare. Any meaningful expenditure reduction must be felt by those items- they are the bulk of the expenditure. It is important that the States share the burden of restraint. Given the need and the political will, very great reduction could be achieved in each of these areas by concentrating money and free goods on the needy alone and encouraging the middle class to pay its own way. Since precipitous and drastic change is difficult economically, administratively and politically, the sooner we start the better. Heavy increases in taxes, should they become necessary, will not come easily from the present tax base.

Income tax is becoming increasingly hard to collect as more peple participate in the cash economy and avoidance becomes even more and ever more sophisticated. The capacity to raise more taxes requires a broad based tax on consumption, a retail turnover tax, value added tax or whatever. We should set about rearranging our tax structure to make it more equitable and efficient and, at the same time, give it the capacity both to yield some of the revenue which will not in the future be collected by the present oil levy and to provide the capacity to expand as necessary to cover future defence expenditure. In the meantime it makes little sense to cut tax at a time when the Commonwealth Government’s annual deficit is still very high.

I applaud the decision to apply the additional oil revenues to reduction of that deficit. A smaller public debt now will significantly enhance our capacity to pay for our defence in the future. What is more, in the meantime the capacity to form capital in the private sector will be enhanced. Our economy should become larger and stronger. In the short run, diplomatic moves aside, there is nothing that the Government can do that is more important to our future defence capacity than to reduce the deficit. These are the same things, if the worst does come to the worst and Australia does not face a defence crisis, that will enhance economic growth. They are the same things that will make our economy stronger in the future whether that strength be used to defend Australia or just to enjoy a higher standard of living.


-What a hoax is this statement which was made by the Treasurer (Mr Howard) today. Not only has he reneged on his promised tax cuts for this financial year but also his benefits which will operate only from 1 July are very small and are most inequitable. Despite the petrol pump rip-off and his own admission that no extra defence expenditure is necessary this year, I repeat that there will be no tax relief offered this financial year at all. The Treasurer says in his statement that the Budget predictions regarding the deficit and the domestic deficit are right on target, meaning, I presume, that the deficit for this year will be some $2,200m with the domestic deficit at $875m which is a reduction of $ 1,400m. Now we find that the $340m windfall revenue to the Government as a result of the Organisation of Petroleum Exporting Countries increased prices last December of $6 a barrel will be used solely to reduce the deficit. So, we find that the Budget, on those figures, will be even more deflationary than what was predicted last August. It will have a deficit down to $ 1,850m, with a domestic deficit of $535m- with an enormous reduction in one year of $ 1,750m. There is a real contradiction there because that is a very deflationary set of figures which has further entrenched unemployment.

But contradictorily the Budget was also inflationary, as a result of the increased petrol prices which result from the Government’s import parity pricing policy. I might point out at this stage that I have some figures here from Dr Duncan Ironmonger from the Institute of Applied Economic and Social Research at Melbourne University which show that the real level of unemployment in Australia today is some 462,000 people with a hidden unemployment figure of some 500,000. This, of course, means that some 13.5 per cent of the potential work force is unemployed, rather than 6 per cent plus that the Government states is unemployed. The Treasurer, in his statement, also blames wage increases for the rate of inflation. I point out to him that average weekly earnings for the last financial year have barely kept pace with consumer price index increases. In relation to minimum wage levels, I wish to quote from the Treasury paper ‘Round-up of Economic Statistics’ for the month of January. It states:

Average minimum award wage rates again showed little change in October. Average minimum award wage rates for adult males fell by one per cent to SI 66.3 1, 7.6 per cent higher than in October 1978 . . .

So much for the argument that the Government’s wage rises are the prime cause of inflation. Of course, the cause is not wage increases. One of the most significant factors influencing inflation is the Government’s oil pricing policy which, of course, sets out two categories of oil, old’ and ‘new’, ‘old oil’ being oil which was discovered prior to September 1975.

Let us look at this import parity pricing policy for old oil which, in the main, comes from the Esso-BHP fields in Bass Strait. The Government is selling to the refineries oil at $24.77 a barrel which costs 94c a barrel to produce. On 35 per cent of that production the total revenue goes to the company which, in the main, is Esso-BHP, less $3 a barrel to the Government. That is worth some $600m this year to Esso-BHP. The other 65 per cent goes to the Government, less $2.33 a barrel to the oil company. That is worth this massive $2.4 billion in Federal revenue about which we are talking. What we would like to know is: What will be the Government’s position with regard to the further $2 a barrel price increase in the price of Arabian light crude which already has been announced? Will the Government add that to the present price come 1 July? Will OPEC, when it meets in May, increase the price of oil even further? Some of the judges on the international oil scene are saying that perhaps the price might go as high as at least $33 a barrel. That would be a conservative estimate. If that actually happens and the Government passes on not only the $2 a barrel increase which has already occurred but the rises that will most certainly occur in May, we could be looking at another $7 or $8 a barrel increase in the price of Australian indigenous crude which would raise at least another $600 billion revenue for this Government. That would just about offset the cost of these tax measures that have been announced today to operate from 1 July.

Let us now look at the effects of this inflationary policy. Petrol at the bowser, undiscounted has gone up since 1977, under this Government, from 16c a litre to 34c a litre. No wonder inflation is rising. That is one of the major factors. It has been calculated that, this financial year, inflation will rise by some 2.5 per cent or 3 per cent as a direct result of these oil pricing policies. Such a rise could create a contraction in total employment equal to 1.5 per cent of the total potential employment figures which amounts to about 75,000 jobs. Those two points- contraction in employment with a loss of some 75,000 jobs and an increase in the inflation rate by up to 3 per cent- bring out the economic costs of the Government’s oil pricing policy. The question that the Treasurer has not answered is: On 1 July, will the Government increase the price of oil yet again? What effect will that have on the price of petrol and liquefied petroleum gas? It is $1.50 plus a gallon now and LPG is some $250 a tonne. I ask the people of Australia: What will the price be after 1 July if this Government follows its present oil and gas pricing policies?

One factor that I would like to outline relates to another area of the Government’s oil pricing policy, that of new oil, which, of course, is less favourable to the Government and more favourable to the oil companies. To explain this, the best example is the Esso-BHP field at Fortescue currently under development in Bass Strait which holds some 280 million barrels of oil. At the current price of some $25 a barrel, Esso-BHP is looking at approximately $7 billion of revenue from that field which, under the present policy, will be exempt from levies and excise duties. A $500m-odd cost of development and extraction means that after company tax of 46 per cent the company will make some $4 billion profit from the decision to classify Fortescue as new oil. So with regard to the Government’s new oil policy there is not only a rip-off at present regarding old oil but there will be a new oil rip-off going directly to the oil companies.

In the name of restraining growth in the money supply, the Government has decided to keep for itself the total of the massive $2.4 billion petrol tax rip-off this financial year. It says that it is concerned about increasing capital inflow, increases in wages, and a rapid expansion of bank lending. So Australians are denied tax relief this financial year because the Government is afraid of setting even higher interest rates to the current long term bond rate level of 1 1.2 per cent. Honourable members will remember the promise made by the Prime Minister (Mr Malcolm Fraser) to bring interest rates down by 2 per cent; they have increased by 1V4 per cent. The Prime Minister was out 3.5 per cent in his prediction. However, the point is that interest rates have increased as a result of what would have been a very deflationary Budget had it not been for the inflationary effect of the misguided extortionary petrol policies.

If the net result of a reduction in the 1978-79 domestic deficit of $ 1 ,400m is to increase interest rates generally, can we expect even greater attempts to reduce the deficit in 1980-81 by even further reductions in capital expenditure to the States and by continuing the policy of pricing Australian oil and petrol in line with the action and in the interests of the Middle East oil producers?

Actually, capital inflow should not have been a factor causing increased interest rates this year. When capital outflow and undistributed income of foreign multinationals operating in Australia are taken into account, we can see that there has been a net outflow of capital from Australia amounting to $3, 100m over the past seven years, $354m of it in 1978-79. Although net capital inflow amounted to $329m in the December quarter of 1979, allowance has to be made for undistributed income which is really a component of that net capital income and is, in fact, generated from within Australia. We see that capital inflow should not have really been a strong factor in rising interest rates.

What further pressures can we expect on interest rates when capital inflow builds up as a result of the rather bullish, unrationalised development predicted by the Government, especially in areas such as the North- West Shelf, natural gas development for export purposes, increased coal mining, especially in steaming coal, and in the refining of alumina and smelting aluminium. So far, announcements in this field amount to a total investment of $4 billion to $5 billion to 1985. To this one can add the estimated costs for increased electricity generation which will amount to almost $2 billion in New South Wales alone and possibly $350m spent in New South Wales in 1979-80. If capital inflow increases in tune with these developments, can we expect further measures to reduce real wage levels, to reduce federal and State capital expenditure, and the raising of even further tax revenue from the outrageous oil prices to counter this increased inflow and these miserly tax cuts which are to commence in 1980-81?

These measures outlined today offer no relief to taxpayers in 1979-80 for income tax or from the oil levies. In 1980-81 the measures still offer no relief from increases in the price of oil, petrol, and LPG. They offer no reduction in indirect taxes, no increases in family allowances, which have not been indexed since 1 976 and as a result of that non-indexation a wage earner with a wife and two dependent children is losing at least $4.70 a week. The measures offer no relief from the exorbitant contributions necessary for health insurance today and no increase in unemployment benefits to the 500,000 odd registered unemployed people in Australia today, particularly those without dependents, whose benefits have not been indexed since 1975 and are currently pegged at $36 a week for those under 18 and $5 1.45 a week for those over 18. It promises half tax indexation- discounted tax indexation- after 1 July. Whilst the inflation rate is some 10 per cent we are going to get tax indexation at only 3.6 per cent as a result of various discounting factors.

There will be no restructuring of the tax scale. That will result in a most inequitable situation, because to introduce tax indexation without restructuring the tax scales is rather like putting the cart before the horse. In the present situation there are only three categories for taxation. That is not enough. There ought to be an increase in the number of stages at which people are taxed. The so-called tax cuts are in line with the inequitable tax measures that the Government has taken in the last four years. Early last year it offered tax cuts to wage and salary earners. They were heavily slanted then in favour of very high income earners, as are the present proposals. Let us just look at the situation. Indexation at 3.6 per cent will result in a person who is earning just over $4,000 a year saving $46.29 per annum. A person earning $34,000 a year will save $ 168 per annum.

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


– I rise to commend to the Parliament and the Australian people the statement by the Treasurer (Mr Howard) on the economy and to reject the amendment moved by the Opposition. The response of the Opposition today has been entirely predictable. It wilfully contrives to misunderstand what the Government is doing and makes every attempt to obfuscate, to hide from the Australian people what the Government proposes. I say again that the Opposition misunderstands and misrepresents what we are doing without offering any effective proposals or policy of its own and it seeks to hide from the people just what is being done.

What this debate is about, to put it bluntly, is what we have done and will do with the so-called oil money. Before I go any further, let me say that I recognise that Australians are understandably concerned about high petrol prices. In that respect I stress, firstly, that petrol prices in Australia are amongst the lowest in the world. The level of petrol prices in Australia is about half that in the United Kingdom, Europe and Japan. Secondly, just about every other developed country follows the policy of pricing petrol at world prices. Thirdly, if in government the Australian Labor Party, for all its fulminations and noise, would tax petrol to the same extent or to an even greater extent than we are doing.

Mr Dobie:

– Greater, in fact.


-A greater extent, indeed. It would do so because applying world parity prices is the only proper action to contain demand and expand supply. In short, it is the only responsible thing to do. I am certain that the Australian people recognise this fact.

What is being done with the proceeds of the oil levy? The clear answer is twofold. First of all, it is being used to the end of maintaining the upturn that is taking place in the economy and of bringing to reality the unprecedented surge in development that is getting under way in this country, all of which means new and additional jobs for Australians. To maintain that thrust, we have allocated most of the levy in effect, to reducing the deficit in the Government’s operations. To put the position as briefly as I can, that deficit, amongst other factors, fuels money supply growth and hence inflation. To allow an acceleration of inflation would be to wreck all that I have been saying we are seeking to achieve, namely, the growth of the Australian economy and more jobs for Australians. That is the first and major charge on that revenue.

Secondly, over and above that, there is a sum on an annual basis of the order of $600m- that is a not insignificant amount in any context- which responsibly we can allocate to cutting other taxes. What have we done with that sum? We have devised measures by which that money will help most, the most deserving members of our community; in short, the low income families, the single income households with children. Some people- a considerable number- who would otherwise be subject to taxation will not have to pay any tax at all. On an income of $7,000 per annum- I know that that is a very low income- the reduction in tax of $4.70 a week that is proposed represents a reduction of 65 per cent in the tax payable. That amount of $4.70 a week represents a reduction of 22 per cent in the tax payable on an income of $ 10,000. This is what is being proposed by the Government. It is being obscured in a welter of selective statistics presented in particular by the Leader of the Opposition (Mr Hayden).

I ask the Opposition: What would it have done with the oil money? From the amendment moved by the Opposition, I take it that its answer to that question is that it would initiate immediate cuts in indirect taxes. Which indirect taxes would it cut? Would it cut taxes on cigarettes and alcohol rather than give this high measure of assistance to the low income households of Australia? What would it have done? It has not told us. The Government proposes to assist the low income family man in Australia in the ways I have outlined. The rest of the money, in effect, is applied to maintaining the momentum of advance of the economy. As I have said, that means jobs. I want to dwell on that point for a moment because it is relevant for two reasons: Firstly, because responsibly the tax relief to which I have referred cannot be effected until after 1 July; and, secondly, because we hear so much loose talking down of the Australian economy. I say to the Opposition that the Australian people who are listening to this debate know better than that.

Let me point for a moment to the situation of the economy to which the Treasurer referred. The level of unemployment is of the order of 9,000 people lower now than it was this time last year. For the third successive month it is lower than the level of the corresponding months last year. More positively, employment last year increased by the order of 122,000 people; there were 122,000 additional persons in employment. Investment plans- plans for developing the country and providing more jobs for Australians -have increased by 17 per cent this half year compared with last year. That represents the surge in the development of the country to which I have referred. Why is this development taking place? It is taking place because of our policy of combatting inflation as a number one priority. Inflation in Australia, although higher than we would like to see it, is of the order of 10 per cent. In the United States last year the inflation rate was in excess of 13 per cent. According to the most recent figures for January, the annual inflation rate in the United States is in excess of 1 8 per cent, and the interest rate to prime borrowers is 17 lA percent.

The thrust of the economy has come from our policies to contain inflation and to restore in particular the competitiveness of the Australian economy in the world scene. That is what has been achieved to the point where our national competitiveness is comparable to the high level it was at some 10 years ago. As a result of that, as I have said, employment is up; unemployment is down, as our factories and industries can compete more effectively with imported goods, and as we can compete more effectively in selling goods overseas. Over the last 12 months our manufactured exports have been up some 30 per cent. Exports of furniture including sales to Sweden, are up something like 80 per cent. Those manufactured exports in effect create the order of 300,000 jobs. Double that by following the policies that we are pursuing and we will have made a very big inroad into the unemployment problem.

That is the way it is happening and the way this Government is going to keep it happeningkeep the lid on inflation and maintain our national Australian competitiveness. In the interests of doing that, in a difficult situation where the money supply from a variety of factors- some of them associated with the very success of our policies, for instance, the inflow of capital from overseas- is expanding, in effect we have to allocate a large proportion of these additional receipts to contain the deficit in the public accounts. That is where a large proportion has gone and that is where it must go in our present circumstances. That is why the tax relief to which I have referred, the considerable assistance that we offer to low income families by these tax changes, is deferred until 1 July. The importance of that is, as I have said, to maintain the thrust of the advance of the economy and thus to maintain jobs.

If that is not what the Opposition wants let it tell us what it does want. What would it do? The Opposition would let it rip. That is the sort of inference one can draw from what its members say. So we get back to the irresponsible policies that were put into effect the last time the Australian Labor Party was in office. The thrust of those policies has not changed. We heard about them at the time of the last Labor Party Conference. There was an outline of a policy that did not so much as mention the word ‘inflation’. What does the Left of the Labor Party care about inflation? The Labor Party put down a policy which the future member for Wills described then as gutless, as a sellout to the Left, as indeed it is.

We reject the amendment that has been moved by the Opposition. The Government has acted responsibly. It has acted to maintain jobs for Australians. It has moved explicitly and especially to help the low income families of this country. The people of Australia will not be hoodwinked by the facile criticisms and the easy options that the Opposition would suggest.


– I will not waste any time in answering the rhetoric of the honourable member for Berowra (Dr Edwards). His comments were shallow, if not empty. I support the amendment moved by the honourable member for Adelaide (Mr Hurford). In the Treasurer’s statement we are discussing the long-awaited tax reimbursements promised by the Treasurer (Mr Howard). The proposed tax reimbursements are part of a package which will give us money with the one hand and take it away with the other. The greatest concern in relation to the Treasurer’s statement is the continuing monetary policies of this Government as expressed in the statement. One of the sad things about this House is that rarely do we have the opportunity to discuss in depth an economic statement. At least now that we are given an opportunity, we can try to examine the Treasurer’s statement in that way.

Whether it is in this Parliament or in the newspapers of Australia there is a lack of discussion about the depth of the economy and the future role that we should play. There are two newspapers in Australia that are generally respected for their coverage of economic questions. They are the Australian Financial Review and the Melbourne Age. As is the case with all daily newspapers, their journalists try to write brief and readable articles that have news value so the papers can sell. They normally rely on recent statistics and the immediate comments of individuals and groups which they believe are newsworthy. Sometimes the journalists write indepth articles but, even then, they rely on the superficial indicators of economic trends. They only rarely probe beneath the official figures and the simple theories to explain the causes and effects of these trends. In this House, the debate on economic questions rarely reaches the standard of the Australian Financial Review. It is an insufficient standard. In this House we should not be concerned merely with the latest economic indicators. We should be concerned not just with popular economics but with the deeper questions of political economy.

The tragedy is that when political economic questions are raised they are usually neglected, simplified or distorted in the media reports. So the politicians aim their level of discussion to the level of the newspapers. Usually it is not to the level of the better, more informed newspapers. We should realise that the media in Australia are big business. Most media outlets are controlled by four corporations identified with the names of Fairfax, Packer and Murdoch. There is also the Melbourne Herald group, which is now interconnected with the Fairfax group. It is not surprising, therefore, that these newspapers generally represent the corporate sector view. The Australian Financial Review is outstanding as an advocate of free trade, at least in its editorial line. Its editors have a curious belief in the so-called free market forces and speak on behalf of the private corporate sector that has an obsessive fear of government intervention, even though government intervention is essential to the profit and profitability of the corporations involved.

It is not good enough to be told by the Treasurer of this country what the latest figure is for the price of gold or wool. We can read that in the Australian Financial Review. It is not good enough for the Treasurer to tell us that inflation is rising in other countries so that we do not have to worry here; that interest rates are rising in other countries so we do not have to worry; that unemployment is high in other countries so we do not have to worry so much. The fact is that inflation is rising in Australia; interest rates are rising in Australia; unemployment is high and rising in Australia. The people of Australia are being hurt, and they are deeply worried.

The Treasurer cannot tell us why these indicators are rising. He does not tell us about the effects of these rises on the ordinary people. His concern, and the concern of this Government, is not for people, it is for the corporate companies. So long as the corporate companies are making profits the economy is doing well and the Government’s policies are working. That is the major concern of this Government. It represents a small elite, the corporate sector, and that must be understood. When people understand that, they will realise what this Government stands for. For instance, the National Country Party once really represented farmers and rural dwellers, but more and more now it represents the wealthy mining companies. That has to be understood when we are dealing with these economic questions.

Many people are not working. Many people in this country are not doing well. There is vast unemployment and a great deal of injustice. This Government has the audacity to continue to blame the workers for the problems of the economy. It is part of its corporate approach to transfer the blame to the workers. The Government says that it is workers’ wages that are to blame, not the pricing policies and the corporate strategies of the big companies, not the Government’s petrol pricing policy. That is not a statement of fact, it is a statement of false opinion. What the Government calls wage restraint is in fact wage reduction, a cut in living standards for the majority of the working people of this country.

Let us look at the things the Government does not tell us, the important statistics that are hidden or even suppressed. The Government has suppressed figures which show recent levels of foreign control not only of Australian industries but of our vast mineral resources. It is willing to tell us that there is around $16.3 billion of investment in major mining and manufacturing projects at committed and final feasibility stages. The Government boasts of this great achievement. It is willing to tell us that $5 billion of this investment has been allocated for aluminium projects, but it is not willing to tell us that the five corporations involved in the aluminium projects are mostly foreign owned and controlled. It is not willing to tell us the costs of energy supplied to these companies, the taxation being paid by them, the amount of profit they send out of the country, the tax concessions they receive, the public cost of the government assistance they are given, and the social costs of the problems they cause. For example, 33.7 per cent of total company income was paid overseas in 1977-78, and to illustrate that I seek leave to incorporate a table in Hansard.

Leave granted.

The document read as follows-

(Source: Australian Bureau of Statistics, derived from National Accounts and Foreign Investment Statistics).

Note: Preliminary 1978-79 Foreign Investment figures (ABS, 5304.0 January 1980) show:

  1. record level of foreign investment in Australia in 1978-79 of $3,321 m ($359m higher than 1977-78), $ 1,964m (or 59 per cent of total foreign investment) was invested in enterprises.
  2. income payable abroad was a record $2, 156m surpassing the previous record of $ 1,833m in 1 977-78.

-I thank the House. In fact, the Government makes it difficult for people to obtain this information. The people are kept in ignorance of the effects of these massive corporate investment decisions on their lives, on their changes of getting a job, on the towns in which they live. In fact, the Government is willing to pass repressive civil and industrial legislation to intimidate people about asking these questions and to prevent unionists finding the answers. They are delving for information but are finding it extremely difficult to get. These corporations should be held to account for the social impact of their investment decisions. The Government should account for the massive transfer of wealth that is occurring in Australia as a result of the cutbacks in social services, housing, health, education, welfare, public transport and the protection of people’s living environment, to make room for the expansion of public assistance to the private sector. It is transferring more and more wealth away from the great majority of the people across to these few powerful corporations. That is the whole philosophy of this Government. If the corporate sector is healthy, the Government believes that the economy is healthy. That is not in the best interests of this country. The Government supplies cheap electricity to these corporations and the construction of ports and roads is heavily subsidised. The

Government should be accountable, and I stress this, for the political effects of these economic policies. These things should be brought out into the open, and the Government should explain itself and give details of why things are done and how decisions are made.

Let me consider the impact of the Government’s policy of import parity pricing of crude oil, which has resulted in a large windfall gain for the big foreign owned oil companies and a large rise in government revenue. That policy is tax paid by every motorist for every mile he travels. In fact, every petrol bowser is a tax collector for Fraser and his Government.


-(Hon. Ian Robinson) - Order! The honourable member knows that there is a correct way to refer to the Prime Minister.


– The Fraser Government. In my electorate of Reid, 57 per cent of people travel to and from work each day by car. In the outlying suburbs of Sydney and Melbourne three out of four people travel to and from work by car. I seek leave to incorporate in Hansard details of such travel taken from the last census statistics.

Leave granted.

The document read as follows-


– Those figures show that in respect of the electorate of Macquarie in the outer western suburbs of Sydney, 67 per cent of people travel to and from work by car. In the La Trobe electorate, in the south-eastern corridor of Melbourne, 75 per cent travel to and from work by car. In the Bowman electorate, in Brisbane, 69 per cent travel by car, and the figure for the whole of Perth is 7 1 per cent. The people who travel to and from work every day by car are being fleeced through this special tax. The Fraser Government taxes people for travelling to and from work. Since the Government has been in office it has charged the motorist an additional 77c a gallon for petrol. In November 1975 the cost of petrol was 75c a gallon and in March 1980 it was $1.52 a gallon. In other words, petrol prices have more than doubled under this Government. Some 22 per cent of that rise has been given to the oil companies, which to a great extent are foreign owned. In 1978-79 the Government gained an additional revenue of $ 1,200m, and Exxon-BHP gained $325m. Exxon, which in this country is known as Esso, is the biggest oil company in the world and the world’s wealthiest company. It is clear who gains and who loses from this Government’s policies. The income of the oil producers has trebled under this Government from $360m in 1975-76 to $975m in 1978-79. The Government says that the real cause of increased costs is workers wages. It denies the real cause.

Let me look more closely at what the people are losing. In 1974-75 the Labor Government allocated $702m for public housing. In 1979-80 this Government allocated $359m, a cut of 66 per cent. In 1974-75, 19,000 public dwellings were commenced. In 1978-79 only 9,500 were commenced. Under this Government, social problems are growing because the Government is transferring wealth away from the great majority of the people across to the wealthy sector. That is the great sin of this Government, and I believe that at the end of the year the people will censure the Government and remove it from office because of its selfish sectional policies.


-Order! The honourable member’s time has expired.


– I have been asked to keep my speech to 10 minutes; so I will not indulge in any backchat with the honourable member for Reid (Mr Uren). I will simply address my few comments to the paper brought down by the Treasurer (Mr Howard). Firstly, I will look at the background to the international economic scene. The dynamics of world economics have changed enormously since the end of last year. At that point we were looking to a relatively mild American recession, a period of relative pick-up in international trade and certainly a pick-up in the Australian trading scene with commodity prices taking an upturn. At the beginning of this year we saw a complete turnaround in the American scene. The likelihood of the managed recession has been completely deferred. America is now in a state of high consumer spending and a record level of consumer credit. There is an expectation that the American recession now will not take place this year, particularly in the political circumstances, and that as a consequence the 198 1 effects could be rather drastic in terms of world trade, given the primary rate in America at present, America’s currency problems and its oil problems. If we look at the other area of concern- the United Kingdom- we see that economic forecasts there are bleak. There is an inflation rate running at 20 per cent and a major monetary policy which is having a severe effect on the business interests of that nation.

Against that sort of background, we look at what is happening in Australia. Australia has done remarkably well in the last 12 months in terms of a pick-up in the gross domestic product, a pick-up in metal prices and a pick-up in the rural sector. All of this has added very considerably to the economic prosperity of this nation. This is reflected in the high levels of consumer spending and the high levels of corporate profits in this nation. Against this background we should look at the Treasurer’s statement and what brought it about. It was brought about by the imposition of a petrol tax to bring Australian produced crude oil prices up to world parity prices- in my view, an imaginative step when it was first taken and imaginative in the way in which it was taken. The fact that it has made a tremendously significant contribution to government revenue is by the way. It certainly has created some expectations which I do not believe can be met.

The possibilities of the Government applying this revenue in the most appropriate way were most welcome in the statement made this morning by the Treasurer. I applaud the Government’s decision not to make distributions from that income in the current year. In my view, it is most important that the domestic deficit be reduced as sharply as possible because the big issues confronting Australia at the moment are management of the money market and interest rates, and how this is achieved in these difficult circumstances. There is no doubt that, if we attempt to crowd out the money market with bids from the public sector, the pressure on interest rates will continue unabated. At present, in this area there are very considerable private demands from the corporations in regard to large issues and from corporations and individuals in regard to re-financing from overseas borrowings into the Australian currency. We have also had a significant increase in business activity as a whole. In the government sector, overhanging the whole of the money market at the moment are redemptions or rollovers of a very significant amount. These can really be looked at only in terms of the amount of money that is available. If the Government is not to reduce its domestic deficit, then it too must be in the market bidding for funds. This will only have the effect of forcing up interest rates in the short term.

I do not see any immediate hope of a downturn in interest rates. I believe that the June quarter will be tight because there are two factors working here. One is the high level of government securities currently held. When the holders of these securities come to pay their taxes in the June quarter, they will find that because of rising interest rates their capital sum or their money involved will be less. As a consequence, when they come to liquidate they will suffer severe losses on these holdings, and that, in itself, will have some impact on liquidity.

On top of that, one should look at the amount of liquidity that is coming in from overseas. This morning the Leader of the Opposition (Mr Hayden), when responding to the Treasurer’s statement, pointed to exchange rates. I think that when he did so he was hoping to show that speculators were using exchange rates in large measure to punt against the Australian currency. From my observations, I am bound to say that I think that our exchange rate, being so closely identified with the American dollar, is inclined to be a little undervalued in relation to European currencies. But in terms of our close association with the American dollar I am frightened that the Australian dollar, being seen in the context of a highly inflationary American economy with portents of higher American inflation rates, will slip, largely because of this leakage. So, as the rest of this year goes by some form of review will be necessary to ensure that in the break of the American economy, which I believe will probably be in 1981, our currency is not unduly devalued in terms of the other currencies of the nations with which we trade. This would have a very bad effect on the Australian economy and certainly would add to inflationary pressures here.

We in this nation are very lucky that we have such a rich resource backing to our economy and our currency. It is the basis on which we are surviving and on which we have pulled ourselves up in the last three or four years. At the end of last year the Reserve Bank produced a table- a very imaginative piece of work- in which it showed the various world currencies against their potential resource backing. Much to my surprise, Norway topped the poll. Australia ran third. It goes to show how fortunate we are and how much we would have going for us if only we had the confidence in the nation that the nation deserves. I hope that those people who go round knocking the nation in the way in which they do will reflect on that fact.

In my view, interest rates will undoubtedly be the keystone of concern in the next six months. Huge amounts of money in the semi-government area are floating into the money market. The differential in rates is not sufficient to fill the various loans from the various authorities. The recent move in interest rates is still too short to cover that enormous amount. I hope that we will do something in this area, possibly to draw some of the local governments together to bid on a bigger basis rather than have such a spread of bidding from small councils and authorities throughout the nation. By doing this, I believe, we would have a better chance of mustering the capital that is required in that area for the enormous works which are being undertaken and which will necessarily have to be undertaken if development projects are to proceed. Unless this is done, the massive amount of money in the capital market that will be bid for by both the government sector and the private sector will undoubtedly be penalised. I think the Government is beholden to look to the possibilities of some rearrangement of the handling of semigovernment securities.

I conclude on the subject of inflation. There is no greater challenge to the Western world than inflation. Unless it is competed with, conquered, contained- call it what you will- the whole fabric of Western society will be destroyed. The institutions in which we have been brought up and in which we believe will certainly not be able to sustain inflation rates of 20 per cent. The whole concept of change is alarming to me. It is alarming to see the American economy now accepting for the first time that inflation is acceptable and something to be lived with. Once upon a time, American citizens were very strongly against any inflationary pressures. They were very strongly endowed on the strength of their standard of living. Today, unfortunately, they are learning to live with inflation. Hence, their propensity to save has gone and is running exactly opposite to the Australian saving pattern. I believe that the policy we are following to hold our money supply and to contain inflation will certainly put Australia in the competitive position to face the very difficult times it will be facing in 1 98 1 .


-This Government is notorious as the Government which has broken more promises than any other in the whole history of Australia. Having reaped the massive harvest from the oil taxes, it is now handing out a very tiny carrot indeed as an election stunt. Let us have no illusions about it; the Government is starting to prime the pump ready for an election later this year. Going hand in hand with all the Government’s broken promises is a Prime Minister who is known to be more selfindulgent than any Prime Minister in the history of this country- for that matter, in the history of the whole of the Western world. As an example, when the Prime Minister (Mr Malcolm Fraser) stayed at Claridge ‘s Hotel in London recently with his party of 32 people occupying 43 rooms it cost $20,000 for the beds alone, not including the rest of the expenses.

Mr Roger Johnston:

- Mr Deputy Speaker, I raise a point of order. I do not believe that the honourable member is speaking on the Bill at all.


-(Hon. Ian Robinson) - There is no point of order.

Mr Barry Jones:

– There is no Bill either.


– That is right. We are not considering a Bill. The honourable member for Hotham has not been a member of this House long enough to understand the difference in proceedings. I was referring to the dreadful, disgraceful record of broken promises of this Government. It almost borders on corruption. I will give examples of just a few of the broken promises. The Prime Minister undertook to give tax indexation annually, as he put it, ‘to keep the Government honest’. He gave no tax indexation in the Budget last August and even now he proposes to give only half indexation. I will return to that issue later. The Prime Minister undertook to maintain the urban development scheme. It has been absolutely and completely destroyed. It was one of the best examples of improving the quality of life in the outer suburbs of the great cities such as Melbourne. The honourable member for Lalor (Mr Barry Jones), who is sitting behind me, represents an area in the western suburbs of Melbourne. I represent the electorate of Chifley which is out in the western suburbs of Sydney. Schemes such as the urban development scheme are the only way by which to improve the quality of life and the facilities available to the general public in those areas. What did the Prime Minister do with that scheme? He absolutely destroyed it.

He wants to look after his little studs at Nareen. He is more concerned about selling wool to the Soviet Union. The Prime Minister also undertook to retain full wage indexation. In every national wage case that has gone to the Conciliation and Arbitration Commission since this Government came to power, the Government has asked the court for only partial indexation or no indexation at all. The Prime Minister undertook to reduce inflation. It is already back into double digit figures. He said during the last election campaign that he would reduce interest rates by 2 per cent. Interest rates have already risen by 1 te per cent. He said he would reduce the money supply- M3. It is now galloping as hard as it can go. The Prime Minister said that there would be a job for everyone that wants to work. Yet the unemployment figures are growing month by month. In my region 5 1.3 per cent of those unemployed at the end of December were young people. The Prime Minister undertook to maintain Medibank, which of course has suffered a slow and agonising death. He said he would maintain the Australian Assistance Plan.

I turn now to the question of what we might call tax equality. As I said, the Prime Minister will give only half indexation although he promised full indexation. Yet he is making it look like a very juicy carrot indeed. He says that he wants to help particularly those in the lower income groups. Look at the tax rate schedule which has been brought out. I refer firstly to a schedule, which was drawn up before these tax reductions were announced today, showing the incidence of tax in the middle and lower income groups. A person on $6,000 a year in 1979-80 will pay $4.88 a week in tax more than in 1975-76 after adjustments for inflation. A person on $10,000 will pay an extra $2.80 a week. A person on $25,000 a year will save $20.35 a week in tax and a person on $50,000 a year will save $47.73 a week in tax under this Government’s tax policies after adjustment, that is, in real money terms. I seek leave to have this interesting schedule incorporated in Hansard.

Leave granted.

The table read as follows-


– I thank the House. I turn now to the schedule incorporated with the statement of the Treasurer (Mr Howard). It shows that a person on $7,000 a year will save $28 1 in tax in a year; a person on $10,000 a year will save $313 in tax a year; a person on $13,000 a year will save $345 in tax a year; a person on $20,000 a year will save $504 in tax a year; a person on $27,000 a year will save $579 in tax a year; a person on $33,000 a year will save $643 in tax a year; a person on $38,000 a year will save $864 in tax a year and a person on $50,000 a year will save $993 in tax a year. Yet this document was brought down in this Parliament by the Treasurer as an example of helping the small people! Let us see where the help is to be given.

It is to be given to those in the high income brackets. They were given the greatest assistance. These changes only add to what occurred when the last reductions took place when the tax levy- which should never have been imposed in the first place- was removed. That resulted in massive benefits for high income earners, making the rich richer and the poor poorer. These changes announced today also perpetuate assistance to those people in the high income brackets as compared with those in the middle and lower income brackets

One of the reasons for this effect is the viciousness of the present tax scales. There are only three graduations in the present tax scales. This means that once a person goes beyond one graduation into the next he faces a massive increase in taxation. The Australian Labor Party states explicitly that it is well and truly time for a complete restructuring of the tax scales and guaranteed annual tax indexation. Instead of having three graduations there should be a minimum of six and, if possible, eight. Labor would make sure that assistance and taxation reductions are given to those in the lower, lower middle and middle income groups and would guarantee tax indexation to keep the government honest. That is the attitude of the Labor Party. That is a sound and firm policy that would ensure that everyone would get a fair go.

The system of having only three graduations for tax should be looked at very carefully by the Government. Under this system the public is being fleeced. What does the Government want to do now? It wants its tax reductions to be taken into account in the determination of the national wage cases. But it has already taken more from average wage and salary earners through the petrol tax than it will give through the tax reductions. In other words, the Government is trying to prevent the valid flow on of revenue from petrol price increases to wage and salary earners by way of wage increases at national wage cases. The Government is collecting nearly $400m extra revenue. I would say that the Government has underestimated the amount when it refers in the statement issued by the Treasurer today to a figure of $340m as being the amount to be collected from the petrol tax from January to June this year. It will give back only a portion of that money next financial year; that is from 1 July. In other words, it will collect this money from 1 January to 30 June this year. It has decided that from 1 July it will then give a little trickle of it back to the public.

As the honourable member for Reid (Mr Uren) said before, is it any wonder that there is a branch of the Taxation Office at every petrol bowser? Yet everyone knows that there will be another huge petrol price increase from early July. It is said that it will be of a further 5c to 6c a litre. This situation has been brought about by the Government’s own policy. The Government is culpable for having carried out this policy. This situation has been brought about by its own world parity pricing policy on oil. So that there is no doubt about it; these massive increases in the oil levy have brought to the Government a bonanza in the vicinity of $2,400m. This is being carried on time after time- every six months at the very least. The public is being charged and it has to pay; then the Government gives a little of it back.

What this country really needs is a Prime Minister and a Treasurer who have economic expertise. The present Prime Minister is a grazier. His Treasurer is a suburban solicitor. Neither has any economic expertise whatsoever. The Leader of the Opposition (Mr Hayden) is an economist and undoubtedly has expertise in economic management, as has the shadow Treasurer, the honourable member for Gellibrand (Mr Willis), who is also an economist. He proved himself in a practical way when he was research officer with the Australian Council of Trade Unions and, accordingly, can be counted on by the public to be a man who will be able to manage the economy and to bring to the office of Treasurer very much needed expertise. That is what this country needs more than anything else. It does not need a hillbilly farmer and a local solicitor running the economy, but two people who have a little expertise and qualifications in relation to these matters. That is what is needed.

Today, when I was occupying the chair in this House, I was shocked when I heard the honourable member for Berowra (Dr Edwards) admit in this Parliament that the Government is reducing the deficit by- he did not say ‘an underhand tactic’ but that is what it is- an underhand tactic of obtaining extra tax from the public by way of the petrol tax. That was admitted. He stated here in this Parliament words to this effect: ‘The Government is reducing the deficit and it is utilising the funds obtained from the petrol tax to reduce that deficit’. In other words, it is another tax on the little people- the average motorist and the average wage and salary earner. Is it any wonder that I say, as I said at the beginning of my remarks, that this Government is the most dishonest, corrupt government this country has known. It is more notorious for broken promises than any other Government in the history of this country, and the document it has brought down today is an absolutely deliberate attempt to trick the public once again, because the Government is starting to prime the pump for a future election.


– I applaud the Treasurer (Mr Howard) and the Government for the statement which was made today. In this statement the Government has honoured the commitment that it made to return the oil levy windfall funds to taxpayers. That is a commitment which I believe is well honoured. I agree totally with the Government’s decision to provide the tax benefits which are to start on 1 Julythe beginning of the next financial year- and to apply what revenue there may be available this year to the reduction of the deficit. I believe that to be eminently in the national interest and in the interests of the economy as a whole. Nobody can deny that a strong domestic economy is in the interests of all Australians. I think it would have been not so wise to have decided to take steps which would not necessarily have been in the best economic interests just to provide some small tax cuts prior to 1 July.

The amount of money which is available to be returned to taxpayers has altered as a result of a downturn in production in Bass Strait over the third quarter of this financial year. That has had the effect of reducing from $440m to $340m the amount of windfall revenue to go to the Government in the last six months of this financial year. It is fair to say that on an annual basis the amount of windfall revenue would be in the area of $700m in a full year. Of course, that figure is based on present knowledge and it is not possible or responsible for any government to try to project what the amount of revenue might be in the next year. On present knowledge it is fair to assume that it would be about $700m. In the statement which was made by the Treasurer today it is stated that the Government has returned $6 16m of that windfall to taxpayers.

I believe that in having done that the Government has honoured fully the commitment that was made by the Treasurer and by the Government earlier. I believe also that the return to taxpayers of this money in the form of tax savings will more than compensate most people for the extra petrol cost which has resulted from the Government’s oil parity pricing policy. It is clear that the revenue which comes to the Government comes not only from private motorists but also from commercial motorists and other road users. Those commercial road users are paying the levy along with the private motorists. I think it is true to say that in most cases the private motorist is being more than compensated for the extra petrol bill which he has to face as a result of the Government’s policy.

I applaud the Government because the way in which the tax system has been restructed as a result of the distribution of the windfall oil money has been designed to assist families. There can be no doubt that over recent years there have been anomalies in the tax scales. This arises largely because in a two income family situation there are two tax-free thresholds available, whereas in the case of a single income family there is only one tax-free threshold available. For that reason, anomalies have developed. Double the amount of tax-free area has been available to a two income family as has been available to a one income family.

To a large extent the decisions announced by the Treasurer today are designed to remedy that situation and to provide some relief for single income families, particularly those with dependants. The amount of relief which will go to most of those taxpayers will be approximately $4.70. The reductions in total tax paid by most families with single incomes and with dependants will be between 65 per cent and 14 per cent. That represents very significant reductions in the amount of total tax paid in a year. Of course, the number of people who pay no tax at all will be raised significantly. One of the other appealing things about the structure, as it has been presented to the people of Australia, is that it does not advantage those people whom the Opposition calls rich. The percentage benefit falls as the income level rises and, in money terms, the amount of benefit does not exceed $6.20 a week.

Mr McVeigh:

– It helps the poor people.


– As the honourable member for Darling Downs says, it does help the poor people. It is designed to do that and it is proper that it should. It does so because this Government has a commitment to families, to those who form the backbone of our social structure and who have in recent years found themselves in an anomalous situation vis-a-vis their counterparts in two-income families. I congratulate the Government on the way in which this change has been brought about.

I wish to refer briefly to the record of this coalition Government in the area of taxation. There is no doubt that that record is unsurpassed. The Government has done more to reform, to make more equitable, the taxation arrangements that apply in Australia than has any other government in the country’s history. I would like to run through a few of them to remind honourable members of what has been achieved. In the area of personal taxation, the Government’s actions have included reducing the seven steps in the scale to three; achieving a situation in which 90 per cent of taxpayers pay the standard rate of 32c in the dollar and a larger number than ever before pay no tax at all; and raising the provisional tax threshold to $1,000, so that a large number of people no longer have to pay provisional tax.

The Government has abolished totally all gift and estate duties. It has introduced an investment allowance which, for the period between 1 976 and 1978, applied at the rate of 40 per cent and which between 1979 and 1986 will operate at a rate of 20 per cent. The retention allowance for private companies has been raised from 50 per cent to 70 per cent. Sales tax on motor cars has been lowered from 2 7 te per cent to 15 per cent. For primary producers tax averaging has been vastly improved. The $16,000 limit has been abolished. Averaging cannot operate against the financial interests of the farmer. The Government has also introduced income equalisation deposits as further assistance to farmers in handling their fluctuating incomes.

In the field of combating tax avoidance the Government has done more than has any other in history to ensure that those who have been avoiding taxation pay their proper share. That is obviously equitable and in the interests of the entire community. If some people are evading or escaping their proper tax liabilities and responsibilities others obviously have to pay more in order to compensate.

I conclude by saying that there is absolutely no comparison between this Government’s record and the disastrous record of the Opposition in taxation matters. We all know the extent to which total taxation rose dramatically- 100 per cent in a couple of years- under the Whitlam Government between 1 972 and 1 975. 1 want to give one or two examples of the amount of tax that would be paid by people on average weekly earnings in different years if Labor’s 1975 Budget scales, which were introduced on 1 January 1976, still applied, compared with that which is payable under this Government ‘s scales. In January 1976 a taxpayer with a dependent spouse and one dependent child would have been paying $27.85 under both scales.

Sitting suspended from 6 to 8 p.m.


– Before the suspension for dinner I was going to draw the attention of the House to some of the differences between taxation in Australia if the Labor Party rates of 1 975 which began in January 1 976 had continued and the rates which have operated under the coalition Government. I was saying that for a taxpayer with one dependent child, in January 1976, under both schemes- the Labor tax scheme and the Liberal-National Country Party tax scheme- the amount of tax paid would have been $27.85 a week on average weekly earnings in that year. On average weekly earnings by January 1978 under the Labor scales, tax paid would have risen to $43.45 whereas under the coalition the tax paid would have been $37.40. The tax paid on average weekly earnings by January 1980 under Labor would have been $60.35 whereas under the coalition it would have been $34.50. In July 1980 the estimated average weekly earnings will be $255. If the Labor scales had continued the amount of tax paid by a taxpayer with dependent spouse and one dependent child would have been $65.80 as opposed to $43.70 which would be paid under the scales which are now being introduced by the coalition. So, I think it is true to say that there is absolutely no comparison between the performance of the present coalition Government and that of our predecessor, the Labor Party when in office. This humane and equitable statement which has been made by the Treasurer today is something which all Australians will welcome, particularly those who are single income families with dependants. I commend the Government and I commend the Treasurer.


– I wish to comment on the statements made by the honourable member for Hume (Mr Lusher) with respect to the taxation scales under the Australian Labor Party Government. He said ‘if those scales had continued’. I think the emphasis should be on the word ‘if. What is engaged in and what the Government often engages in is purely a mathematical exercise looking at the tax scales of that time. It does not take into account the changes since. It becomes hypothetical. If the Labor Party had remained in government it is quite feasible and it is quite clear in my mind that it also would have changed tax scales. We would have done quite a bit about taxation. Actually, in the period of the Labor Government and the period of this Government there have been lots of changes with respect to taxation and taxation scales. A lot of attention has been paid to taxation in this country since the Asprey committee, particularly, brought down its recommendations and since there has been so much debate on taxation within the community.

I say quite openly that this Government is to be commended for its activities with respect to tax avoidance. It seems to me that when we talk about tax revolts the people who should be revolting are the wage and salary earners who have no choice. They simply have to pay the tax rates set down. They have no choice to avoid tax. But we will not go on to that. We really need to get this matter into some sort of focus. It is all right to engage in a mathematical exercise and to say what would have prevailed under the Labor Party if it were still in office, but that is four years ago. It is simply nonsensical to assume that that scale would have continued for four years when, quite evidently, during our period in office we did change the tax scales and, quite evidently, since this Government has been in office it has also brought in changes to the whole system of taxation. Taxation does hold the minds of members on both sides of this House.

I think that it can be fairly argued that, when we compare ourselves with other countries that have social welfare systems that people in the Labor Party see as desirable and essential for the sorts of problems people see themselves in in this sort of a society we have now, in many ways we do not pay enough taxation in this country. I know that is a terribly unpopular thing to say. But the minds of members of the public seem to be always focused on personal income taxation. In the countries that have very decent social systems the people simply pay a lot of tax through indirect taxes. All the emphasis on personal income tax in this country is a little misguided. It seems to be quite paradoxical to me that it escapes the attention of members of the public that now they too are paying enormous amounts of indirect taxation particularly through the oil parity pricing policy of this Government. There the increase in indirect taxation is quite immense. But, I do not want to get drawn into these sorts of hypothetical arguments. I simply point out that, while the statements of the Government and the honourable member for Hume may be mathematically valid, in political terms I think there is very little to them.

I would like to spend some of my time just trying to convey to the House the disappointment, if not the cynicism and resignation, of people in electorates such as mine with respect to the Government’s measures announced today. An economy like ours is locked into the international system- something that this Government, when in Opposition, would never acknowledge- and whichever way we go, this economy is going to face big problems. Whatever party is in power, it is going to have to take options and choices and many of these choices will be hard decisions indeed. My electorate is an electorate suffering from the policies of this Government because the hard choices that this Government is making tend not to advantage the people like those in my electorate. The policies tend to advantage those who can get by quite well, thank you. The disappointment is there for people in electorates such as mine purely and simply because these people have been built up by the Press and by leaks from the Government of some expectations of tax cuts. I guess the easiest way to get a vote is to talk about tax cuts. It is a bit sad that these people have seen headlines: ‘Tax cuts definitely on the way’ or ‘Oil levy is going to give the Government a windfall of $400m or $600m’ or whatever the calculation is. Then they are greeted with a statement like this.

My electorate is an electorate with a high welfare component. It is not like the electorate of Macarthur, which I last represented in this House, where we had a wide spread of activities. It was a very broad electorate. Werriwa is, sadly, a welfare electorate. It is an electorate that has many, many people in it who have no choice but to depend on the social welfare systems that this country has developed. For example- I am not particularly proud of the fact- the electorate has the fourth highest number of unemployment beneficiaries in New South Wales. Quite funnily the electorate of the honourable member for Wentworth (Mr Ellicott) and the electorate of the right honourable member for Richmond (Mr Anthony) have higher numbers of unemployment benefit recipients than mine, as has the electorate of the honourable member for Sydney (Mr Les McMahon). But mine is the fourth highest.

In other areas of social welfare there is quite a very large proportion of the people, the highest in New South Wales. I have the highest number of class A widows and I have near the highest number of single parent families. In other words, it is a classic welfare electorate. There is not much in this statement by the Treasurer (Mr Howard) for an electorate such as mine. The attitude of people in Werriwa will, quite frankly, be: What is in it for me?’ Unfortunately, when it sinks in they will find out that there is not much in it for them at all. They will be greeted by the headlines tomorrow: ‘$4.70 tax rebate for the average family man’. When it is finally translated down to dollars and cents for them they will find out that the fellow without a dependant is 85c better off and the fellow with a dependent wife is $4.70 better off. The fact remains that only about 20 per cent of taxpayers claim a dependant.

For the single parent families it is all right to have this lower threshold, this rebate, but the single parent families in my electorate simply do not have jobs; so they do not receive anything. Before we look at what is in it for people in electorates such as mine, I think we need to look at what has been taken off the people in electorates such as mine. We should consider this before we actually get on to the minuscule benefits which are contained in the Treasurer’s statement. The Government has waged war on the poor and those least able to cope in our society. While companies are now making record profits, welfare assistance has been slashed. That hurts electorates such as mine. Programs have been dismantled and pruned and the cost of health care has more than doubled while the system of health insurance has been reduced to hopeless confusion.

Under the impact of deflationary monetarist economic policies, inflation is continuing at 10 per cent and is rising. Unemployment is increasing. Real wages have declined and the incidence of taxation has been shifted away from the richer to the poorer taxpayers. ‘Join in the tax revolt’, is the slogan of the wealthy. The ironic fact is that those who should be revolting are those who cannot dodge tax as can the big business friends and the professional friends of the LiberalNational Country Party.

For the deprivations being imposed on Australians by this Government, the Government mostly blames the victims. Those with the least capacity to pay for health care have to go through the humiliating process of calling themselves disadvantaged. The unemployed have to be hassled to receive a benefit which is rapidly falling in value. The humanity of our welfare services is best exemplified by the Government’s attack on the human rights of 600 Greek Australians suspected of getting invalid pensions that they did not deserve. So much for our multicultural society and the policies of this Government towards our migrant communities. The director of the Department of Social Security says: After all, paraplegics and quadriplegics can get a job’. I have people in my electorate who just cannot be declared 85 per cent incapacitated. They are on unemployment benefits or sickness benefits for the rest of their lives. When people come out and say: ‘After all, paraplegics and quadriplegics can get jobs’, one simply has no idea of the sort of impact that that has on some individuals who just cannot escape the situation that they are in.

Amazingly, today the Treasurer devoted a page of his speech to employment and unemployment. He then got back onto the well-worn theme of the fight against inflation first. I do not know when this Government will realise that the benefit of reducing inflation is being achieved at a minimal cost to the 93 per cent of the work force who are employed but at an intolerable cost to the 6 per cent who are not. Unemployment means that the economy is underemployed and out of balance. The reason why the economy is slack is that it lacks consumer demand. If another 500,000 people were employed -that is, if the society was fully employed and the economy is fully employed- it would make a great difference to this country.

I simply do not believe that we can solve the sorts of problems that we have in this society.

The same applies in other developed Western societies. We just cannot solve it with traditional monetarist or Keynesian solutions. Unless we accept the structural problems in our society, we are simply not going to get anywhere with it. Before we even tackle the economics of what has to be done about these sorts of problems, first of all we have to get back to whom we represent, rather than sitting here in the Parliament and putting forward proposals that accord with the theories of some economic theorist who may or may not have valid arguments to back his case. That is why I talk about the simple problem of the need for humanity and the way that these decisions announced today by the Treasurer and the Government affect people in electorates such as mine. Those people who have jobs in my electorate are paying a level of tax that is already the highest in Australia ‘s history.

In the last Budget, which we are still working through, there the income tax take was $15.1 billion. That was up by 18.2 per cent in nominal terms or 8.2 per cent in real terms. That was a rapid rise on the year before and it means that, as a proportion of total revenue in this year, it is the highest ever in Australia’s history. If one looks at the real tax increase by the present Government, in 1976-77 it was 3.2 per cent. The next year, the Government achieved quite a reduction with a 0.3 per cent increase. There was a 0.7 per cent increase the following year. In 1979-80, the increase is 5.4 per cent. The Treasurer’s measures have done nothing to reduce taxes or hand back to the people the amounts that they are paying out in petrol tax. That is why people will be disappointed. They thought that they were going to get something back and they will not. An economic point of view of the Government and the Treasury is that the extra money we will get from the petroleum levy must go towards reducing the deficit. There have been intimations that some of that money should go to defence also. I do not debate that but I think that the Government could have afforded to hand more money back to the people.

What of the deficit? The Government made great play of the way it was going to manage the economy. The deficit would have been enormous if it had not been for the oil tax revenue. It would have been well over $5,000m. We would have been in desperate straits if we had not been paying so much of this indirect tax. It has been calculated that there will be over $400m extra this year. The Government says that it will hand back $6 16m, but it will not get back to the people who really need it. People in my electorate are paying $5 or $6 a day for petrol to travel to work. Recently I wrote to the Treasurer asking whether he could look at section 51 of the Income Tax Assessment Act to give people an opportunity to claim, as an income tax deduction, the money they spend when they travel to work. Of course, he pointed out that the High Court and the Income Tax Review Board have always ruled against such a move to give it to wage earners as well as business men.

The Treasurer’s attempts today really are attempts to deceive taxpayers. Despite the Treasurer’s boasts of tax cuts about 80 per cent of Australia’s taxpayers will be paying a higher proportion of their income in tax in the next financial year as a result of the policies announced today. Only 20 per cent of taxpayers’ claim dependant’s rebates. They are the only people who will benefit significantly from the tax changes. Everyone else will be paying more tax because the one-third indexation offsets only a small portion of the effects of inflation on tax payments. The way to regard this measure announced by the Treasurer is that one really will be paying slightly less in the year ahead.

I will not go onto the Government’s broken promises as I started off by saying that I accept that we do have economic problems and there are hard choices to be made. The marginal changes that the Government has brought in today barely touch the regressiveness of the tax changes of the last four years. In many ways the Government’s failure to do anything to remedy that situation is quite amazing- it is astonishingbecause it had a chance to do something about it. More importantly, even though it is claiming that it will help some of the disadvantaged it really shows that its priorities are as misguided as ever. Very little of the $6 16m- or whatever has been calculated- will go to the relief of poverty. People on our salary level will get quite a bit more.

Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired.


– I was disappointed to hear the honourable member for Werriwa (Mr Kerin) who used to represent Macarthur purporting that the Government’s tax cuts were an attempt to deceive taxpayers. I would have hoped for better of the honourable member for Werriwa. I am sorry to hear that he is so caught up with the dogma of his party that he is not prepared to give credit where it is due. There is no doubt- and the Government parties would not pretend otherwise- that income earners without dependants have not received any son of major benefit. The whole point of these concessions has been to aid the family, to aid the aged and other low income earners. The $600m-odd of tax savings which the honourable member for Werriwa pretends do not exist has been directed to these people. These are the people who are most in need. For a man of the calibre of the honourable member for Werriwa to dismiss $600m-odd worth of tax concessions demeans him in this House.

It is appalling for him and his colleagues to ignore the very real benefits and the very real help that is being directed towards the lower income groups in this society through these present changes. For the honourable member for Werriwa to say that people will be paying more as a result of these current policies is arrant nonsense. There is no doubt that some income earners without dependants in real terms will be paying more despite the concession that has been granted to them and despite other concessions that have been granted. In other words, the normal process of the graduated tax scales, even despite the improvements that we have created, will inevitably mean that as incomes go up so do taxes. Under the previous Labor Government incomes went up but taxes rose at double their rate.

Dr Edwards:

– The great tax rip-off.


– As the honourable member for Berowra says, the great tax rip-off that took place under the previous Government was evident in those days. In the three years of that Government there was no attempt to diminish the rate of taxation. It needed all that money to pay for its hand-outs. It needed that money to pay for the votes it bought or endeavoured to buy from the people of Australia. Under this Government there have been continual reductions in the rate of taxation- reductions which did not take place under the previous Government. It is arrant nonsense for apologists for that Government, having been members of it, to come into this House and to talk about the automatic rise in taxes. In fact the present Government has reduced the rate of tax rises from the appalling rate of 33 per cent a year that was the case under the previous Government to something less than 1 3 per cent even before these latest tax cuts were announced. We have chopped the rate of annual increment of taxes- that is, total taxation- from 33 per cent under the Labor Government to something like only 1 3 per cent at present.

Let us look at the positive part of today’s tax news, which no member of the Opposition has been prepared to concede. To the Opposition everything is always black. How bored the people of Australia must be to hear this continual knocking. It is a knocking, by the way, that is reflected by some members of the media who have been going around the place today talking about the 85c tax cut. The reality is that it is the pensioners, including those who live in my electorate- I imagine that the pensioners who live in the electorate of the honourable member for Werriwa (Mr Kerin) will not thank him for his comments- and particularly those receiving superannuation payments or other small incomes and the workers with dependent wives who are the big winners under today’s tax cuts. They are big winners. It shows what small minds members of the Opposition have in refusing to concede even this self-evident point. They are so obsessed with their talk of a tax cut of 85c that they cannot see where the $600m is being spent.

The fact is that a pensioner or any other low income earner with a dependant will now pay no tax whatsoever on anything he earns up to $125 a week. This is a dramatic improvement. It represents an increase of $16 a week or 15 per cent in the amount of tax-free income that can be earned and it represents a tax saving to low income earners of over $5 a week. In annual terms, it means that a low income earner with a dependent can receive up to $6,533 a year without having to pay any tax whatsoever. That represents a rise of $835 a year. These new rates, which will apply from 1 July, will also provide a $4.70 tax cut to the taxpayer who has a dependant and who earns up to $300 a week. This is the significant point. It is even more important than those major cuts in the taxes that pensioners will have to pay or, in fact, the removal from thousands of pensioners the obligation of having to pay any tax whatsoever. I remind members of the Opposition that if their tax scales, the Hayden tax scales, had continued to exist, 500,000 more lower income earners would have to pay taxes.

Mr Kerin:

– Honourable members opposite say ‘if. Let me remind them that there have been two elections since those tax scales were introduced, and on both of those occasions the Labor Party refused to promise to cut taxes. It was given the opportunity to do so. We offered to cut taxes and we have done so. We have cut tax rates. In the course of those two elections the Labor Party refused to accept the challenge to cut income tax rates. In fact, in the 1977 election it rejected out of hand the suggestion that there could or should be a reduction in income tax rates. The Opposition’s policy is for the maintenance and the increase of taxes, which, as I pointed out to the House the other night, the Leader of the Opposition (Mr Hayden) stated quite clearly in his Frank Chamberlain lecture when he said that it was a dispiriting philosophy for people to talk about reducing taxes and therefore reducing big government. It is a very dispiriting philosophy, according to the Leader of the Opposition, that people should want to cut taxes and cut big government. He listed Fraserism as one of those dispiriting philosophies which lead to reduced taxation. His economic spokesman, the honourable member for Gellibrand (Mr Willis) said that Labor would face a major problem in restoring the size of the public sector and an even more difficult problem in convincing the people of Australia that they should pay more taxes to enable it to do so. For honourable members opposite to come into this House and talk the sort of nonsense that they are talking is absolutely appalling.

Let us take the current reduced tax rates, particularly as they apply to the family man and the pensioner with a small income, and compare them with the Hayden tax scales- the scales which the Opposition has refused to promise to reduce in two elections. The new reduced tax rates which we have announced today represent for the average wage earner with a dependent wife and child a reduction of 33.6 per cent from the Hayden Budget scales of 1975. That represents an increase of $2,532 in the level of income that can be earned without paying any tax whatsoever. Under Hayden that level for an income earner with a dependant was $4,001. The present Government’s changes in the tax threshold have saved lower income earners at this level from paying tax on $2,532 a year. This represents a tax saving of $ 1 5 a week when compared with the Hayden scales- the tax scales that the Labor Party has twice refused at the elections to promise to reduce.

Our proposal represents a 63 per cent rise in the tax threshold; in other words, the maximum income in the tax-free zone or the amount of money one can earn without having to pay any tax whatsoever. This threshold has risen by 63 per cent under the present Government as a result of these latest changes. This is a considerably higher rise than the increase of 56 per cent in the cost of living over that period. In other words, despite the maliciously wrong, misleading and disgraceful statements by so many members of the Opposition to the effect that the lower income earner has suffered under this Government, in fact, he is far ahead. The lowest income groups have benefited by a far greater amount than the increase in the inflation rate over this period, as can be seen. There has been a 63 per cent rise in the amount of money they can earn without paying any tax whatsoever as against a rise of only 56 per cent in the cost of living. They have received a real benefit. There is no doubt that these latest changes concentrate the major part of the $600m-odd of tax cuts on families, on taxpayers who support a dependant. They are the people, particularly if they are lower income earners, who are receiving the biggest percentage benefit.

The charge we have announced has been introduced in response to a social need. It is a response to a recognition of where the difficulties involved in tax lie in an inflationary situation which was generated- let us remember this- by the particular problems in the period from 1973 to 1975 under the previous Government. We have diminished that rate of inflation. There is no doubt that the lowest income earners and the families are the people who have suffered most. This Government has the compassion to meet their needs. What concerns me is that the Opposition has the deception to endeavour to pretend that action to alleviate these problems has not taken place.


-I do not think that anyone outside the Liberal Party could ever confidently assert that the Fraser Government is a compassionate government, whatever else might be said about it. I do not think that is a view which is held within the community generally. I think it is sometimes seen to be a tough government. In certain respects it is seen to be a heavily discriminatory government, a government which discriminates in favour of particular groups and against other groups. I do not believe that the Australian people will be confused or misled by this election gimmick that comes in the form of the mini-Budget. I think they understand some of the basic issues which underlie Government economic policy. They understand that the economy in Australia is facing serious problems along with other international economies. They recognise that the roots of this problem go back over a number of years. I believe they recognise that Australia will never successfully achieve a worthwhile economic policy if it does not take into account the international scene and international pressures.

It is quite extraordinary that the Government should have brought down this economic statement which distributes the massive windfall gains that have been achieved through petrol taxes. How ironic it is that this Government is now pretending somehow that it is being generous in distributing $600m, when in fact without warning the Australian people before the elections in 1975 and 1977- indeed it did the reverse and promised that it would reduce taxes- it has massively increased indirect taxation through the petrol tax.

The Government’s justification for those massive increases is that somehow they are related to energy policy; yet what has this Government done to develop coherent national energy policy? What has it done within the society to shift resources towards the creation of a society which is more economical in its use of energy? I believe that this Government, as it is in so many other respects, is dishonest when it talks about its energy policy. Its policies are not directed towards solving any fundamental problems but indeed go to the reverse. On the one hand we slug the motorist an additional $6 or $7 a week- I think that is the figure the honourable member for Werriwa (Mr Kerin) gave for his electorate- and on the other hand, for example in the aluminium industry, which is getting off the ground, we cannot give the country’s energy away cheaply enough. We can give overseas companies and powerful corporations all the concessions in the world, but the ordinary man and woman have constantly found that under this Government they have to bear a greater and greater burden.

That is what this Government is about. It is transferring any burden, making life harder, not for the wealthy, the major corporations and companies but for the ordinary average person. I do not think that headlines about an extra $3 or $4 a week in tax returns will fool anyone. People know that life is much worse, much harder, under the Fraser Government than it ever was in the period leading up to the onset of that Government. According to every indicator that they might consider in their daily experience they know how hard life has become under this Government.

The Government has $600m to spend. It is to spend it on tax cuts. At the same time, the average person knows that inflation under this Government is just as high now as it was when the Government came to power, and by the end of this year inflation could be much worse. Despite all the sacrifices that working people have made in the past four years they know that every time they go into the supermarket they will have to pay that much more for basic necessities. They were promised the reverse. The price of goods is going up week by week. People are finding it hard to buy the basic necessities they need to feed their families.

It is not just inflation but also unemployment that is a problem. Employment under this Government is less secure than it has been under any other government in the period since the Great Depression. People can talk about marginal changes in rates of employment and unemployment, but according to the official figures unemployment is at least twice the level that it was four years ago. If one looks beyond those official figures one finds that because of bidden unemployment, unemployment is very much greater than the figures indicate. Threequarters of a million people in this country can be regarded, I believe quite firmly, as unemployed. Many of the people who are employed are working part time whereas they would have been working full time three or four years ago.

Tens of thousands of people who were in the work force have withdrawn from the work force because they know it is simply futile to attempt to get a job. Many of them are young people in the beginning of their working lives. They are being sacrificed because of a deliberate act of economic policy. Many of them are older. They have skills that they have contributed to the economy and they deserve better than being thrown prematurely on the scrap heap because the Government does not have any answers or solutions despite all its promises. People derive their incomes from employment and those who are in employment know that their real incomes have declined. Whilst the Government promised full indexation, the reality is that once it got into power it successively went to the Australian Conciliation and Arbitration Commission for a movement away from full indexation to plateau indexation, then to half indexation, and then it argued for no increases at all. That has influenced the Commission and people’s real wages have fallen dramatically over the past four years. There is no talk about real wage overhang these days. There is no suggestion of that. People have lost in terms of their wage incomes and taxation which, rather than being reversed under this Government, has gone up in the form of both direct and indirect taxation.

Many people are not employed and they are dependent for their income on social security benefits. Under this Government there has been a real decline in the incomes of those who are dependent on social security benefits. If one looks at the relationship between benefits and the poverty line at present they are aware of the enormous gaps. For example, pensioner and supporting parent beneficiaries, supporting two children, are currently $12 below the poverty line. That is what we have to think about when we talk about transferring wealth- a single person supporting two children while trying to survive on $85.70 a week. No one in this House imagines that he could survive with two dependent children on that amount of money, but that is what the Government is asking them to do. There is nothing in the Treasurer’s statement today that would do anything about that.

For unemployment and sickness beneficiaries the situation is much worse. For example, a single person with two children is a massive $2 1 below the poverty line. Such a person is being asked to live on $76.70 per week. It may be a mother with two children who is dependent on sickness benefits. Who could possibly expect anyone to live at that level? We give $600m away but no social priority is given to the people with the greatest need. Despite a great deal of talk by this Government, nothing in the Treasurer’s statement does anything for a person in that position.

The social wage is not simply made up of people’s incomes. It covers, for example, housing. People on pensions are very often dependent upon public housing. No other national government in the post-war period has done less for public housing than has this Government. When one looks at the standard of much of the public housing that has been built in the post-war period, much of which exists in my electorate, one sees the lack of maintenance, the inadequate size of the rooms that people have to live in and the poor quality of the materials. The Government is doing absolutely nothing about such conditions. The Government might say: ‘But our priority is not with those kinds of people’. The previous speaker said: ‘Our priority is more with the working people’. What chance has the working person in our community at the present time of purchasing a home, of getting into home ownership, under this Government’s policies? Interest rates are returning to their highest level ever, despite the Government’s promises. This Government makes promises so easily: ‘Interest rates will be down 2 per cent’, but that was an election promise, and we know that anything the Prime Minister (Mr Malcolm Fraser) says in an election context cannot be believed. The reality is that people simply cannot acquire housing anywhere if they earn around or below average weekly earnings. I refer honourable members to an important discussion paper put out by the Victorian Government’s Task Force on Housing Policy Review. This report, referring to the shrinking options for the purchase of housing amongst lower income groups in Melbourne states:

By 1977, with interest rates even higher . . . and further inflation of house prices relative to wages, the range of attainable Local Government Areas in Melbourne (44 in 1 972) had been reduced to only one: Footscray.

For lower income earners, that was the only choice, the only municipality within the city of Melbourne where they could expect to purchase a house. The issue of transport is surely crucial in terms of a government which says that it is on about energy and energy policy. Transport is a crucial element in relation to people’s real wages and incomes. The honourable member for Werriwa (Mr Kerin) referred to what it was costing people to run a car to work. Has the Government moved towards public transport? Has it moved towards any positive alternatives in the use of energy in the transport area? I put it to the House that it has not. Indeed, in the last Budget it reduced funds for the urban public transport program. While the Government said that it was on about a new national energy policy, which involved slugging the Australian motorist, it did absolutely nothing to increase the number of buses in outer suburban areas, to improve the quality of trains, to establish public transport systems in the provincial cities and rural areas. It did absolutely nothing beyond what it was already doing. The Government does not really believe that an energy policy is a priority in any real sense. It is using the gimmick of import parity to milk Australian families for more and more money so that it can hand out that money to its friends.

I do not believe that anyone who seriously examines the statement made today by the Treasurer is going to be fooled into thinking that it fits into any kind of real strategy. This Government has no sense of economic strategy. It has done no analysis of what is going on in the Australian economy. It has no strategy in terms of the restructuring of Australian industry, no sense of how employment might be created. Those things just are not priorities for this Government. It is not making a priority of the conditions of the working people and the lower income people in this country, and this morning’s statement reflects that fully. It reflects a government which is without heart, a government which is shallow, a government which is running out of options and is trying to buy an election in the meanest way possible, a government which is deserting its strategy, whatever that may have been, and a government which has run its course and has very little longer to live.


-In my opinion, the statement made today by the Treasurer (Mr Howard) deserves the endorsement of all those Australians who look to their government to provide responsible economic possibilities designed to foster economic growth and employment, and to place emphasis on the well-being of the low income, single income family. The honourable member for Batman (Mr Howe), who has just spoken in this debate, talked about compassion. What the honourable member for Batman and other members of the Labor Party mean by compassion, as I understand it and as the experience between 1972 and 1975 under the Whitlam Government indicates, is that compassion equals governments spending more and more money for more and more people.

Mr Howe:

– No government has ever ripped money out of people’s pockets like your government did. What about petrol taxes?


– I will come to petrol taxes in a moment. The effect in the years from 1972 to 1975, under those very policies which the honourable member for Batman and his colleagues say were compassionate, was to create inflation and unemployment and, through that, to create social unrest and disorder in the whole of the social fabric of this country. I say to my friend opposite that compassion sometimes requires responsible, tough policies.

Mr Howe:

– -Sacrificies.


– I listened to the honourable member. I ask him to listen to me. Popularity does not equal compassion. Popularity often is the converse of compassion, and it is about time the Labor Party understood that. Day by day, more and more Australians are coming to realise it in the light of the experience of the last few years. What the Treasurer has done today is to reflect compassion through responsible economic policies. What he has done is to reflect a continuation of the same sound economic policies this Government has pursued over the last four years. As I said, those policies have not always been popular, particularly with those people who in the years of the Whitlam Government were deluded- and deluded is the correct term -

Mr Baillieu:

– Deceived.


-‘ Deceived’ is a better wordinto believing that government funds were somehow manna from heaven, funds that the Government somehow could pluck out of nowhere, at no cost to individuals and at no cost to the economic fabric of this nation. We now know just how wrong those beliefs were. They were the policies pursued under Labor, and we now know, with hindsight, that they were policies which brought this country to near disaster and bankruptcy in 1974 and 1975. The proof of the pudding is in the eating. It is not in the theory, it is in the practice. Lest it ever be forgotten, the chief architect of those policies between 1972 and 1975, and particularly in 1974-75, was none other than the present Leader of the Opposition, the honourable member for Oxley (Mr Hayden). He was the Treasurer for only the last six months of that time, but he was the chief architect of the economic policies of the Labor Government during that period. It distressed me greatly to come into this chamber and listen to the statements of the honourable member for Oxley in particular, and other Opposition spokesmen. He knows that what he said today is simply not in accord with what his economic principles teach him. He knows that to make a country grow and create new employment opportunities, which is what we are all about, involves a sense of responsibility. It does not involve preaching gloom and doom, and the Leader of the Opposition has done nothing other than that for the last four years. He knows that it also involves governments having to bite the bullet and say to the people from time to time -

Mr Uren:

– The hard Treasury man, you know; that great public servant.


-I will not go into what happened while the honourable member for Reid was a senior Minister in the Labor Government. If he wants to play it that way, I will be in it for sure, but I do not think he would come out of it too well. The Leader of the Opposition knows full well that it cannot be left only to the Government to create employment opportunities and growth in any country. Government is only one part, and a relatively small part, of the total fabric of an economy. It is an important part in the sense that if it does not set the parameters for that economy correctly, then the rest of the country will not be able to function in a proper, responsible, solid way. I am sure that honourable members on both sides of the House would have to agree with me that governments should not let their own spending run wild and that they should take account of the gap between how much they spend and how much they raise. Governments do not have money of their own. They receive money which they can spend only through taxing people or through short term borrowing, but in the end that has to be paid for by taxation. Only if governments can exercise a responsible balance between their spending and their revenue can they set the framework in which a mixed economy, a basically private enterprise economy such as ours, can run. That, I submit, is precisely what this Government has done over the last four years. It is precisely what the Treasurer has continued to do today. It is precisely that which the Opposition seems unable to grasp as a simple basic fact. I am sure that we would all like to do this, that and the other for every individual in our community, but it is not quite as easy as that. And that is what the Labor Party fails to understand.

The honourable member for Batman, if I understood him correctly, admitted or accepted the fact that in 1980-81 the Government was going to give away- that was the term he used- $600m. He said, if I understood him correctly, that that $600m would be to no benefit and that all the Government’s priorities were wrong. I remind the honourable member for Batman of just where that $600m is going. In essence, that $600m is going to low income, single income families in our community. If the honourable member for Batman believes that that is a bad priority in a community such as ours, then I am sure that many people throughout the nation will have been very interested to hear him say so.

Today, the Leader of the Opposition made several comments on the Treasurer’s statement on which, in the limited time available to me, I would like to comment. The Leader of the Opposition said that Australia was now in the most retractive, recessionary situation it had ever been in for 50 years. That is simply nonsense. It is not a gross distortion of the truth; it is an untruth. Admittedly, the economy of this country at the moment is patchy, but if we look at the overall state of the economy we find an economy which is growing faster now than it has done for several years. Business investment in the private sector is picking up. Consumer expenditure is not as healthy as we would like, but it is growing, and it is growing at a not unhealthy rate. Employment is now higher by 140,000 than it was 12 months ago. Unemployment is still far too high- we all accept that- but it is lower than it was 12 months ago, and that has been the case successively for the last three months. The external account is very strong. Exports in the first seven months of this year were 40 per cent higher in value than they were in the preceding period. That is not due just to higher prices, mineral booms and good rural seasons; it is due to factors such as a much more competitive, cost conscious situation in Australia, which is leading to a very significant, very desirable, very necessary growth in manufactured exports, for example.

The Leader of the Opposition said that in the Treasurer’s statement there were no measures to contain or to fight inflation. That shows a level of ignorance of basic economics. The Leader of the Opposition, who professes to understand economics, must surely have had an aberration. Does he not know, for example, the effect of a reduction in the Budget deficit on the money supply, on the interest rate situation, on the whole economic growth situation of this country? He also said that in the statement there was no move towards tax relief. That I find absolutely incredible, unless he says that tax relief to low income, single income families is not something that we ought to be pursuing in this country.

In my last two minutes I would like to touch very briefly on the question of petrol pricing. The Leader of the Opposition described our policies today as hyper-inflationary pricing policies. He obviously has not read what his spokesman on minerals and energy, the honourable member for Blaxland (Mr Keating), has said on this very subject. The honourable member for Blaxland has said- and this is on record; he has even said that he vetted the comments which are on record- that if Labor were returned to office it would not lower the price of petrol. He said that, basically, the only difference between the Government and the Opposition on the petrol pricing policy was that Labor would adjust prices at a slower rate. He also said that Labor would substitute a resources tax for the oil production levy, but that that would raise more money than the present levy. If it would raise more money, it would cause petrol prices in this country to be higher than they now are. Not only that, it would kill exploration stone dead and would leave this country in a disastrous situation, as the 1980s progress, in terms of the availability of petrol in Australia.

There are many more things that one could say to refute the absurdity of what the Opposition has been saying today, but time does not permit. Speakers from this side of the House know and those who have been listening to the debate must surely realise the fallacy, the hypocrisy and, worst of all, the knocking, negative gloom and doom that the Opposition presents to this country at a time when we need confidence and when we have every right to be confident.

Amendment negatived.


-With your indulgence, Mr Deputy Speaker: There are many more people in the Opposition who would have liked to have spoken in this debate, but I have done a deal with the Government Whip and those organising Government business that we will not -

Mr DEPUTY SPEAKER (Hon. J. D. M. Dobie)- In that case, you have the Chair’s indulgence.


-Thank you, Mr Deputy Speaker. I would just like to relate to the House that, although there is much in the speech of the honourable member for Ballarat (Mr Short) that Opposition members would have liked to have answered, we have done this deal and have decided that we will not sit in divisions. We were air lowed an extra speaker on both sides of the House on that ground. That is why we are not going to a vote on this matter. We do feel very strongly about our amendment, which shows the taxation trickery of the statement of the Treasurer (Mr Howard) and of the particular decisions taken. But I repeat: We will not sit in divisions on that matter.

Original question resolved in the affirmative.

page 801


Second Reading

Debate resumed from 28 February, on motion by Mr John McLeay:

That the Bill be now read a second time.

Smith · Kingsford

– The Bill is self-explanatory in the sense that it provides for the filling of casual vacancies in Senate representation from the Northern Territory and the Australian Capital Territory. At present, we have provision for the filling of casual vacancies in Senate representation from the States. Those vacancies can be filled on the basis of the States themselves selecting for the casual vacancies people of the same political party as those whose vacancies they are filling. There have already been some examples of that in the Senate. There has been a very intelligent look at a method of solving the problem of casual Senate vacancies.

We had a very unhappy experience in 1 975 when a casual vacancy in the Senate was caused by the death of a Labor senator from Queensland. The vacancy was filled by a person who purported to be a member of the Australian Labor Party but who came to Canberra with the deliberate intention of rejecting the Labor Budget and thereby, indirectly, caused the dismissal of the Labor Government. The events of 1975 have clearly shown that parliamentary democracy in Australia has suffered a severe setback from which it has not recovered. Of course the Governor-General of the time has not recovered from it either and is not able to come back to Australia.

Mr Graham:

– Who appointed him? Who gave him the job?


-The point I want to make, without the help of interjections which probably would only add more fuel to any further comments I would want to make -

Hon. J. D. M. Dobie

– The honourable member has the protection of the Chair.


-Thank you, Mr Deputy Speaker. Unless we alter the legislation dealing with representation from the Territories, should a vacancy occur in the Senate for a Territory seat it would have to be filled at a byelection. That is unnecessary, expensive and difficult. It is logical, reasonable and certainly acceptable that we should follow the same pattern as we have followed in respect of vacancies occurring in the Senate for State seats, namely, that the seat should be filled by a person of the same political party to which the Senator who vacated the seat belonged. I propose that the words chosen and approved by the political party’ be included in the legislation. Both sides are in agreement that under the legislation a person of the same political party should be appointed but the question arises as to whether the legislation has achieved what it was set out to do. In that respect we are not in agreement. In relation to casual vacancies from the Northern Territory, clause 3 of the Bill proposes to insert a new section 9 in the principal Act which reads: 9 ( 1 ) If the place of a senator for the Northern Territory becomes vacant before the expiration of his term of service, the Legislative Assembly of the Territory shall choose a person to hold the place until the expiration of the term -

There is no objection to that but proposed new section 9 (3) states that where a vacancy has occurred it shall be filled by a member available to be chosen or appointed from the party of which the retiring senator was a member. I make the point that we should add the words ‘chosen by the party’.

My views today are virtually the same as they were when legislation in respect of States casual vacancies was before the House on 17 February 1 977. A person may be a member of the same party-and thus approved of in the view of that parry-but he should not be appointed to the vacancy unless he is chosen by the party for the position. A person may say: ‘I qualify within the ambit of the legislation. I am a member of the party. The party has no objections to me’. It would not really fit political professional intelligence for him to be appointed to the position if he were not chosen by the party. In the debate in 1977 1 was using the expression ‘approved by the party for the vacancy’. That seems the same as chosen by the party’. I think that the Bill before us at present should have words added that would remove any doubt. We want to make it clear that the person appointed should be chosen by his party for the vacancy. So in Committee we will move amendments to this effect so that the words ‘chosen by the party’ would be added to that clause.

The Opposition is also concerned about another matter relating to vacancies from the Northern Territory. The Bill deals with the situation in which a vacancy occurs while the Assembly is sitting but if the vacancy occurs while the Northern Territory Legislative Assembly is not in session the vacancy shall be filled by the Administrator of the Territory with the advice of the Northern Territory Executive Council. We propose to move an amendment to provide that the vacancy be filled by the Executive Council. This is the same as saying that it will be filled by the Administrator but we want it stated clearly that the Executive Council should make the appointment. To that extent the amendment the Opposition intends to move is a machinery amendment.

I draw the attention of the Minister for Administrative Services (Mr John McLeay) to what would happen if the Northern Territory Legislative Assembly is not in session. The Bill provides that when the Assembly is not in session the casual vacancy would be filled by a person who would hold the position until the expiration of 14 days from the beginning of the next session of the Legislative Assembly or the expiration of the term, whichever first happens. I read that provision as saying that, if a casual vacancy occurs when the Legislative Assembly is not in session, it is filled by the Administrator or the Executive Council until the Assembly comes into session. But then what happens? Proposed new section 9 (2) does not seem to state what would happen. I would think that the Assembly would then choose a person, who may be the person appointed by the Administrator with the consent of the Executive Council; but it may not be. We need to indicate whether the person previously appointed would be confirmed in the position or an alternative person would be appointed. Of course that person appointed would have to comply with the provisions in proposed new section 9(3), that is, be chosen by the political party.

According to the strict terms of clause 3 it could be interpreted to state that the only provision contained in this clause is that the casual vacancy shall be filled until the Assembly meets but there is no provision after that as to what the Assembly is to do. So whilst the first part of the clause states that the Assembly may fill a vacancy if the Assembly is not in session there may be a temporary filling of the position, but there is no follow-up as to what the Assembly is to do. So in the Committee stage I propose to move an amendment which I think the Government ought to consider. It provides that where an appointment is made by the Administrator acting with the advice of the Executive Council under the provision which provides that the person appointed shall hold office until the Assembly comes back into session, at the expiration of that period the Assembly shall choose a person- who may well be the person appointed by the Administrator- in accordance with subsection ( 1 ).

What I am saying to the Government is that I think that we have a gap in the legislation. What I have said also applies to casual vacancies in the Senate for positions from the Australian Capital Territory. Proposed new section 9 (2) provides that where the position of a senator from the Australian Capital Territory becomes vacant it shall be filled by the Senate and the House of Representatives sitting and voting together. In the view of the Opposition it would be better to fill the vacancy by a decision of the Australian Capital Territory House of Assembly. It is the body able to judge the situation. The position should not be filled according to a decision of the Houses of this Parliament sitting together. Obviously this Parliament would have to be advised to some extent and to rely on that advice. The House of Assembly could feel overlooked or downgraded if the decision were made by this Parliament independently. The House of Assembly is capable of” applying the law. Its members are elected to represent the people of the Australian Capital Territory. The law helps by providing that the political parties concerned would choose the persons to fill such vacancies. The Assembly would merely have to approve the choice. This procedure would also save the rather tortuous process of our having to meet at a joint sitting and I think it would be much more efficient. If the Parliament is not in session- or if the House of Assembly is not in session, if the amendments to be moved by the Opposition are accepted- the Governor-General may appoint a person to fill a casual vacancy until the expiration of 1 4 days from the beginning of the next session of the Parliament or the next sitting of the House of Assembly. But what happens after that? If one then looks at what the Opposition is proposing, the House of Assembly will then either confirm that person in the position or select another person, acting in accordance with proposed new section 9(3), which provides for a person who is a member of the same political party to be chosen- if our amendment is accepted- by that party. While making a speech at the second reading stage, I am also endeavouring to explain in detail the amendments which have been circulated.

If I can summarise what I have said, those amendments will become very clear. In dealing firstly with the situation of a vacancy arising, I think the words ‘chosen by that party’ ought to be added to sub-section (3) of proposed new section 9. The Opposition will move accordingly at the appropriate time. To overcome any doubt, whilst a person may be a member of a party and available, the Opposition wants that person to be chosen by the party. That is why those words chosen by the party’ ought to be added to the end of that proposed new sub-section. The Opposition feels that in the Northern Territory it is appropriate that the Executive Council and not the Administrator should make these appointments. Perhaps there will be some argument about that, but the Opposition feels that that is the way it should be. In regard to the Australian Capital Territory, the Senate and the House of Representatives should be relieved of the responsibility of filling a Senate vacancy; it should be left to the Australian Capital Territory House of Assembly so to do.

Finally, we come to the situation where casual vacancies are filled in the interim when the Parliament is not sitting. The Bill provides that in the Northern Territory such a vacancy would be filled in the first place by the Executive Council and, in the case of the Australian Capital Territory, by the Governor-General. The situation needs to be tidied up so that, in the case of the Northern Territory, once the Legislative Assembly resumes, and in the case of the Australian Capital Territory, once the House of Assembly resumes, they can then confirm or otherwise deal with those appointments. I feel that there is a gap in the Bill as it is presently drafted. Accordingly, I invite the Minister to direct his mind to that situation. The Opposition agrees with the spirit of the legislation. We have no objection to the Bill on that account, but in the Committee stage the Opposition will express objection to the way the intention of the Bill has been expressed.


– I rise to support the Senate (Representation of Territories). Amendment Bill 1980, which is now being debated in this House. This legislation makes provision for the filling of casual vacancies of senators representing either the Australian Capital Territory or the Northern Territory. The distinction that has been made between the Australian Capital Territory and the Northern Territory is a most appropriate one. I have spoken in previous debates dealing with the constitutional development of this country and have made particular reference to the development that has been occurring in Commonwealth territories. In the case of the Northern Territory, it is not so long ago that this Parliament passed legislation to confer upon that Territory selfgovernment. By doing so it set upon a course with the Northern Territory whereby the Northern Territory could gain that degree of independence that would make it a State, like the six original States of the Commonwealth.

I think that there is a parallel between what is happening in Australia in terms of constitutional development and some of the problems that have arisen in some other parts of the world. However, the parallel parts on one major element, and that is that in the case of Australia the constitutional development of the Northern Territory is aimed at the Northern Territory remaining an integral part of the Commonwealth but assuming a different status within the Commonwealth- that of an equal partner with the original six States. If one looks to southern Africa and the recent successful elections in Zimbabwe, one finds that one of the reasons for the major problems was that there was difficulty in the process, firstly, of conferring self-government and, secondly, of granting independence.

But once a territory with its parent government embarks upon that course of conferring selfgovernment, there comes a time when the legislation of the parent parliament ceases to grant on the subordinate the power to make subordinate legislation and the legislation of what had been a subordinate parliament or representative body assumes a degree of efficacy that means that it cannot be unilaterally withdrawn by the power conferring the legislative authority. Australia did the same, peacefully and very successfully, in the case of Papua New Guinea. Australia was the conferring power. There is now no way in which the power of the Papua New Guinea Government could be withdrawn by this Parliament. There will come a time in the case of the Northern Territory, now that it has self-government, when this Parliament, de facto and ultimately de jure, will not be able to withdraw the powers conferred upon the Legislative Assembly of the Northern Territory.

Let us contrast that situation with that which prevails in the Australian Capital Territory. In a result which I must confess I found quite astounding, the people of that Territory said that they did not want to have legislative power, that all they wanted was a talking shop which could give advice, and that they wanted this Parliament to continue to legislate for them. Therefore, the people of the Australian Capital Territory must be placed in a quite distinct position from that of the people of the Northern Territory. Therefore, whereas it is appropriate that the elected representatives of the self-governing Legislative Assembly of the Northern Territory should select the successors to replace any senator retiring in a casual circumstance, it is quite inappropriate for the Australian Capital Territory House of Assembly- the advisory assembly or the talking shop of the Australian Capital Territory- to have that power. That power must remain with this Parliament that has the legislative responsibility for both the Commonwealth functions and the State-like functions in relation to the Australian Capital Territory.

Mr Donald Cameron:

– They shouldn’t have senators.


– My colleague says that the Austraiian Capital Territory should not have senators. That is a point of view with which I do not agree. The High Court on two occasions has said that this Parliament has power to confer upon its territories the right of representation both in this House and in the Senate.

Mr Donald Cameron:

– It is wrong.


-That is the highest court in the land, and on two occasions it has found that this Parliament has the power to do that. In the remaining minutes I have available to me I want to bring to the attention of this Parliament the urgent need, on the next occasion when we are seeking some constitutional reforms, to clarify the powers of this Parliament in relation to the discretions that are available to this Parliament in granting representation to territories and new States. At the last Constitutional Convention there was on the notice paper a resolution that invited the delegates representing the States, territories, local governments and this Parliament to recommend that the Consitution be amended as follows: to require that Representatives and Senators from the Territories and new States are chosen by the people as is now provided in the case of the original States;

I find it quite peculiar that the Constitution should appropriately require that the representatives of the original States, sitting in this Parliament, should be elected by the people but that this Parliament should have the power to have appointed representatives from either territories or new States. It is urgent that this Parliament addresses itself to the problem and reachs the conclusion that a constitutional amendment is necessary to ensure that for all time, insofar as the discretion is exercised to give the Territories and new States the right of representation in this Parliament, those representatives should be chosen by the people. Some who have expressed views about systems of government with which I do not agree would or could seek, with majorities in both Houses of this Parliament, to bring into it appointed members, in order that they could have appointed Cabinets and Ministers. I believe that would lead to a breakdown of the fundamental Westminster system under which our democracy is secured.

The second recommendation in the resolution on the notice paper at the Constitutional Convention was designed- to ensure that once Parliament has decided that the people of a Territory or a new State shall be represented in the House of Representatives by a number of Members in excess of one, the number of Members is in the same proportion to population as the number of Members chosen by the people of the original States (other than a State for which the guaranteed minimum representation of five Members is assured . . .

At this point I must explain that under the Constitution the representatives in this Parliament of the original States are present in proportion to the populations of those States. There have been recent High Court cases affecting that also. The one proviso is that an original State- I emphasise original’- cannot have fewer than five representatives in this Parliament. As a matter of interest, the State of Tasmania has now, and always has had, more members than its population would justify. It was one of the original contracting parties to the Commonwealth compact. Under that compact, the State of Tasmania must for all time enjoy that degree of representation. However, I cannot understand the claim that there should be such a guarantee in the case of Territories or new States. I believe that if Territories are to have representation in this Parliament it should be given to them in this House in proportion to their population. Whether they be a new State or Territory they should not be given the privilege of an original State, one which joined originally the Commonwealth compact.

Mr Donald Cameron:

– The representation is six, not five.


-It is five in the House of Representatives. I believe that my friend is looking at the provision relating to the Senate. There is in the Constitition a provision which requires that the original States shall have equal representation in the Senate; that their numbers shall be not less than six but shell be equal at all times. When we examine the question of the representation of a Territory or new State in the Senate we find again a paradox. We have to select what we regard as the paramount principle. There is a nexus between the House of Representatives and the Senate and the people of Australia have voted upon that issue. On the last occasion they indicated that they wanted that nexus preserved; that the House of Representatives should have twice as many members as the Senate.

Therefore, to preserve that balance, in my view a Territory or new State should be given in the Senate no more representation- beyond two- than is represented by the ratio. One has to recognise the facts as they are: The territories each have two senators, when a Territory or new State has more than four representatives in the House of Representatives. That representation should continue to rise as representation in this House rises, until such time as the number of senators is equal to the number representing the original States: but there must be twice as many members in the House of Representatives as there are senators.

It is very important that this Parliament at the earliest opportunity should seek an amendment to the Constitution to provide a guarantee concerning the original Commonwealth Compact in order to ensure that the representation from the Territories and new States is limited in the way in which I have described- limited by the population in the case of the House of Representatives and limited, in the case of the Senate, to one senator for each member in the House of Representatives. Until that action is taken and a limit is placed on the discretion of this Parliament, it is open to this Parliament in some fit of fantasy at some time in the future to exercise a discretion which could destabilise the federal balance between the original States and any new States or Territory. Therefore, the matter should be given serious attention on the next occasion on which we examine other provisions of our Constitution that may be in need of some reform.

My final comment is that until the Constitution is amended in the way I have described, or at least in such a way that the Territories and new States cannot obtain representation that is greater than that of any of the original States in relation to their population, the Northern Territory will find it very difficult to proceed down the path from self-government to statehood. Many of the original States will not be prepared to admit a new State with a very small population, though vast areas of land, to the compact between the States upon the basis that one of the conditions of that transformation from Territory to State is that that new State should have five members in this House and 10 in the Senate; notwithstanding that its population could be substantially less than would justify that representation upon a population basis.


– I welcome the Senate (Representation of Territories) Amendment Bill and support the amendments proposed by my colleague the Deputy Leader of the Opposition (Mr Lionel Bowen). Before making a few remarks about the Bill I must compliment the honourable member for Sturt (Mr Wilson) on his breadth of vision in trying to present proposals to overcome the inequities in the representation of people in the Territories. It is very refreshing to hear someone from his side of the House say something constructive and positive about the under-representation of the people of Canberra. I will return to that subject later with some very revealing figures. I hope that other honourable members with tunnel vision about Canberra and about how the people here should not be represented at all will stay and listen to those figures and learn some of the facts. I repeat that I compliment the honourable member for Sturt. It is a pity that there are not a few more like him on the other side of the House.

We have learned from bitter experience that we can no longer rely on conventions. Even though we relied on them for many years- the Westminster system is based on conventions and they have served the British Parliaments for hundreds of years- we have learned that we can no longer do that. It was precisely on this issue of filling the casual vacancies before the momentous events of November 1975, that the first major break in observance of conventions occurred. Once that convention was broken it became very easy for the conservative forces of this country to go on breaking one after another until they became meaningless. It is quite apparent that we can no longer rely on those conventions. Those forces observed them while it served their purpose to do so, but broke them when it suited them to do so. They knew that once they had been broken they could no longer be regarded as conventions. Therefore, it is very essential and important that the conventions be replaced by very clear procedures which spell out in an unambiguous way the legal and constitutional forms by which casual vacancies should be filled.

In relation to the Northern Territory the Bill achieves in a reasonably democratic manner what the Government set out to do. I would object to the Administrators being given the responsibility of nominating someone to fill a casual vacancy if the Northern Territory Assembly is not in session. I do not say that with any disrespect to the incumbent. I would prefer that if the Northern Territory Legislative Assembly was not able to nominate a person, it should be done by the collective decision of an executive council. No longer can we rely on the convention that a person who has been nominated by a particular government will act in an objective way. We have learnt by bitter experience that we just cannot rely on this. Therefore, we would prefer to see that responsibility given to an executive council in the Northern Territory rather than to the administrator.

It must be remembered, of course, that when people say ‘Yes, the Northern Territory has selfgovernment and the Australian Capital Territory rejected it’ the Northern Territory was not given the opportunity to reject self-government. Nor has any State in Australia ever been given the opportunity to reject self-government. It was seen as a responsibility which people should accept. It was something that the present Government promised to the people of Canberra and then dodged the issue by putting on a phoney referendum and frightening the life out of people by not telling them what it meant and not telling them what it would cost. So, it was inevitable that self-government was rejected. I suggest that if a referendum were held in the Northern Territory or anywhere else under the same circumstances it would have been rejected. A referendum has never been held for selfgovernment in any State or Territory, except the Australian Capital Territory. I would not crow about that. It is to the discredit of this Government that it did not give self-government as it promised it would. The former Minister for the Capital Territory, Mr Staley, went a long way towards it, but he was knocked back in Cabinet. Do not let us hear that nonsense.

Mr Donald Cameron:

– Your people would not accept it. Be honest for a change, Ken.


– That is quite correct. The Government has given the Legislative Assembly in the Northern Territory the right to replace the casual vacancy, but when it comes to the Austraiian Capital Territory it says ‘No’ and returns to the old patronising, paternalistic attitude that the people of Canberra are too stupid to make a decision for themselves and the Government has to make it for them. The people of Canberra are too ignorant, irresponsible or in some way are different from the people in the rest of Australia and they must not be left with the responsibility of saying who they want to represent them in the Senate. The result now is that the two Houses should come together in a joint sitting so that almost 200 politicians from all over Australia would decide on the replacement for the casual vacancy in the Senate. What utter nonsense.

I am sure the majority of people in both Houses of this Parliament would not want to be involved in that process, despite what our friend on the Government side says. I am sure the majority of them would take a democratic attitude and say: ‘Look, these people are elected to the House of Assembly. Even though they have no executive or legislative power, they have been elected in a democratic fashion by the people of Canberra. Surely they are the people who should decide on the replacement for the Senate vacancy, with the proviso that they came from the same party from which the vacancy emanated’. I think that is a reasonable proposition. If the Government were fair dinkum and reasonable about democratic procedures it would agree to that. What nonsense calling a joint sitting of almost 200 people from all over Australia to tell the people of Canberra who should represent them in the Senate.

We have 18 democratically elected people who are quite capable of doing that, who know what the people want and who can make a judgment about the value of the people offering their services, based on their experience and on their past performance. They know that if they nominate somebody it will be somebody who will act in the interest of the people of Canberra, not in the interest of the particular government which happens to be in power at the time. I think it is a preposterous idea to call a joint sitting of both Houses of this Parliament- almost 200 members- to cany out that function which could be carried out by elected people. It is an insult to the people of Canberra and to the members of the House of Assembly to deny them the right to do so.

The other problem with this legislation, of course, is that it makes no provision for the replacement of Independent senators. It is all very well to say at this stage: ‘All right, it is not likely that we will have an Independent senator’. But I think we should show a bit more foresight and look ahead to the time when there will be more than two senators in the Australian Capital Territory. It is quite possible there could be an Independent senator in the Australian Capital Territory. If a casual vacancy occurs, then here again, I think the House of Assembly is the appropriate body to make a choice and is quite capable of making a democratic recommendation as to who should replace that Independent senator. That is a gap in the Act. There is no provision for that at all. In the light of experience in South Australia I do not think we can altogether discount the possibility that there will be Independent senators.

This Bill, of course, just confirms the way that this Government consistently discriminates against the people of Canberra. It treats them as something less than full citizens; it treats them as people who cannot make rational decisions about who should represent them; it seeks to impose these paternalistic and patronising procedures on them. I want to get back to the question of equitable representation which I was pleased to hear the honourable member for Sturt discuss. I think all members should be aware of the significance of the size of the population of the Australian Capital Territory as it relates to other States and Territories. Here people are getting up and saying that the people of Canberra should not have any Senate representation and that they are overgoverned. The facts are, of course, that Canberra has approximately half the population of Tasmania and Tasmania, I might tell honourable members, has no fewer than 579 elected people representing them. Canberra has more than twice the population of the Northern Territory.

Mr Donald Cameron:

– What has that to do with it?


– It has something to do with one vote one value, my friend. It has twice the population of the Northern Territory and the Government members have the audacity to say that we are overrepresented. I ask honourable members to listen to these figures. If we add together all of the elected people in State, local government and Federal Government, in New South Wales there is one elected person to 1,378 electors; in Victoria the figure is 947 electors for every one elected person; in Queensland the figure is 952; in South Australia on elected person for every 613 electors; in Western Australia the figure is one to 484; in Tasmania the figure is one to 466; in the Northern Territory one to 788. When we come to Canberra, what do we find? We have one elected representative for every 5,854 people. Honourable members opposite have the hide to say that we are overrepresented.

If we discount the members of the House of Assembly who have no real power, in those chambers, organisations or institutions that have real legislative or executive power there is one to every 32,000 electors. It is no wonder that people like the honourable member for Canberra (Mr Haslem) and I are run off our legs and are driven into the ground. I do not know how we cope with it, really. The honourable member for Canberra is scratching what is left of his hair. It is a very real problem and people should be aware of the underrepresentation of the people of Canberra compared with the States. There is no comparison. We are grossly underrepresented. I was talking to an honourable member from the Government side the other day who has no fewer than 17 State electorates in his Federal electorate.



– You have 21, we have none. The honourable member for Canberra and I have to do all the work of a State member, a local government member and a Federal member. So members ought to get off our backs and consider what a tremendous job we are doing for the people of Canberra. Really, I do not know what other members do in some of their electorates. When speaking to a member the other day he said he dealt with immigration and Telecom. I said: ‘Good on you. On top of that we have health, housing, education, employment and the whole lot’. So let us not talk about the nonsense that Canberra is overrepresented. We are grossly underrepresented. I think that a lot of serious consideration should be given to the sort of view that was being put by the honourable member forSturt.

As much as this legislation is needed, I think it is a gross insult to the people of Canberra to say that casual Senate vacancies should be filled by a joint sitting of the two Houses of the Federal Parliament. It is utter nonsense. If the Government is fair dinkum about democratic procedures and wants to give the people of Canberra a fair go the least it could say is that those casual vacancies should be filled on the recommendation of the House of Assembly the members of which have been democratically elected by the people of Canberra. They know the sort of person they want. They know the reputations of people and can make a judgment that will reflect the wishes of the people of Canberra. This matter should not concern people who have no real interest in what goes on in Canberra. I commend the amendments which my colleague, the Deputy Leader of the Opposition, has foreshadowed.

Mr Donald Cameron:

-Mr Deputy Speaker, I want very quickly to put a view which probably will not be described as a popular view in this House but it is one which I have long held. I have always held the view that the Australian Capital Territory had no entitlement to senators. If the Government Whip moves a gag on me, I will move him out of his seat. I have long held the view also that if the Australian Capital Territory provides a problem -

Motion ( by Mr Bourchier) agreed to:

That the question be now put.

Original question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Smith · Kingsford

– As indicated during the second reading debate, the Opposition approves the main purpose of the Bill, namely, to have casual vacancies in the Northern Territory and the Australian Capital Territory filled without the need to hold by-elections. The Opposition disagrees as to the manner in which the Bill proposes that those vacancies be so filled. I ask leave of the Committee to move the amendments to clause 3 that have been circulated in my name. These are the amendments numbered ( 1 ) to (5).

Leave granted.


-I thank the Committee. I move:


-Well, that is another matter. The Minister will know that it is a political party and it endorsed its candidates. There would be no difficulty in that regard. We must have parties that endorse candidates. I mention another point again. We would like the Executive Council in the Northern Territory to be the body to fill the casual vacancy and the Australian Capital Territory House of Assembly to be the body to do that in the Australian Capital Territory. That is the second part of the amendment. The third part of the amendment deals with the question of when the House of Assembly in the Northern Territory or the Australian Capital Territory House of Assembly are not in session. There are provisions in this legislation for the fulfilment of the casual vacancy on a pro tern basis. Here I am using words from the second reading speech. On a pro tern basis, these vacancies will be filled until the Assembly comes into session. It does not say what the Assembly can do when it comes into session.

The Opposition’s amendment says that where that happens, where one gets a pro tern vacancy, the place of the person so appointed shall become vacant at the expiration of that periodthat is, when the Assembly period comes into operation- and the Legislative Assembly shall choose a person who could well be the appointed person in accordance with sub-section ( 1 ) of the Act. In other words, it may approve of the pro tern arrangement or it may do something else. It may be that the political party concerned has had an opportunity to make a choice. It might not have had a chance to do so on a pro tern basis. There the Act is weak. Unless something is done about it we will get into a vacuum. Where the Houses are not in session a pro tern appointment is made until they are in session and that is the end of the matter. It does not afford the House an opportunity to fill the vacancy permanently rather than on a pro tern basis.

Mr Donald Cameron:

- Mr Chairman, my comments will be brief.

Motion (by Mr Bourchier) agreed to:

That the question be now put.

Amendments negatived.

Mr Lionel Bowen:

– I am disappointed at that result. The Opposition did not call for a division. But we want our opposition noted. If that is the position, there is not much point in the Opposition proceeding with its other amendments.

Mr John McLeay:
Minister for Administrative Services · BOOTHBY, SOUTH AUSTRALIA · LP

- Mr Deputy Chairman, I feel I should say something. I appreciate the contributions of those honourable members who have taken part in the debate even though some of them really were not debating the Senate (Representation of Territories) Amendment Bill 1980. This is not a reflection on you, Mr Deputy Chairman -

Mr Lionel Bowen:

– Or me either.

Mr John McLeay:

-Or the honourable member for Kingsford-Smith either. To get back to the significant points, it seems to me that most of the argument has been about whether this Parliament -

Mr Donald Cameron:

- Mr Deputy Chairman, I take a point of order. The honourable member for Bendigo has moved that the question be now put. I ask: How can the Minister be entitled to speak?

The DEPUTY CHAIRMAN (Hon. Ian Robinson)- Order! There is no point of order. The honourable member for Bendigo moved that the question be put in relation to the amendments. That matter has been disposed of. The question now before the House is that the Bill be agreed to. I have given the call to the Minister for Administrative Services.


-Thank you, Mr Deputy Chairman. It seems to me that the argument has mostly turned on whether this Parliament, or the House of Assembly, should nominate the person to fill a vacancy. I take the Committee back to my second reading speech and quote from the words that were used there. I regret that the honourable member for Fraser (Mr Fry) used a rather emotive expression; he talked about a ‘phoney referendum’. I cannot comprehend how any referendum can be phoney. The second reading speech says: the Australian Capital Territory House of Assembly has neither legislative nor executive power and having regard to the results of the referendum held in 1978 where Australian Capital Territory electors said that, in effect, they did not see that body having anything resembling the status of a State parliament, it seemed more appropriate to provide that the selection of a replacement senator for the Australian Capital Territory lie with the two Houses of Federal Parliament.

That is a perfectly respectable argument. I would leave it at that. The other significant point that the Deputy Leader of the Opposition (Mr Lionel Bowen) raised- which he used in his summing up a few moments ago when he was dealing with sub-section (9), Part II- was this question of a vacancy occurring when this Parliament or these Parliaments were not sitting. I think that I should draw to his attention and to the attention of the Committee that particular sub-section again. In very simple lay language, which is the only language I understand, it states:

If the place of a Senator for the Australian Capital Territory becomes vacant before the expiration of his term of service, the Senate and the House of Representatives, sitting and voting together, shall choose a person to hold the place until the expiration of the term, but if the Parliament is not in session when the vacancy is notified, the Governor-General may appoint a person to hold the place until the expiration of 14 days from the beginning of the next session of Parliament or the expiration of the term, whichever first happens.

I say to the Deputy Leader of the Opposition that at that point the vacancy occurs again. I have only one other point to make because I do not want to spend too much time debating the issue. I am sure that I have some support in that regard. I wish to refer to the debates in the House of Assembly, which is the sort of mini-parliament which the Opposition suggests it should be.

Mr Cotter:

– It is local government, isn ‘t it?

Mr John McLeay:

-That is my view. It is a rather expanded form of local government. I have obtained copies of the Hansard reports. I should like to refer to portions of two speeches. One is a speech by Ms- I am not sure how that should be pronounced.

Mr Kerin:

– It is short for manuscript.

Mr John McLeay:

– It is short for manuscript. It is a speech by a lady named Horder. She said:

Clearly, a meeting or a sitting of the joint houses is a most impractical way of operating.

I will not quote all of her remarks because I am trying not to waste too much time. She continued:

I do not believe that they can possibly reflect the interests of the ACT.

So she went on. She continued:

It is also an impractical way to operate and I would suggest that it would be a very costly exercise. The people of Australia would be paying far more indeed to organise a joint sitting than they would for a by-election.

The same sorts of comments were made by Mr Pead. I will not quote what he said, but the thrust of his remarks was the same. I repeat what Ms Horder said:

The people of Australia would be paying far more indeed to organise a joint sitting than they would pay for a by-election.

But a joint sitting does not cost anything because we are all here. That is obviously an argument which can be rejected.

Mr Barry Jones:

– Your logic is impeccable.


-I thank the honourable member very much. If he can find some argument with the logic I would like to hear it. I could move for the suspension of Standing Orders or do anything he likes. We cannot get anything less than nothing, so far as I am able to determine.

Mr Lionel Bowen:

– Nothing from nothing is nothing.

Mr John McLeay:

– Exactly. The cost of a by-election is quite substantial. The cost of the last House of Assembly election in this Territory was $115,000. We are talking about $115,000 versus nothing. I think that that ought to settle the argument. I do not believe that there is any more collective wisdom in the Australian Capital Territory House of Assembly than there is in the two Houses of this Parliament. I believe that that assertion pertains whether we select for a place in the Senate someone from a political party or an Independent. I regret that I cannot accept the amendments moved by the Opposition.

Mr Donald Cameron:

-Mr Chairman-

Motion ( by Mr Bourchier) agreed to:

That the question be now put.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Mr John McLeay)- by leave- read a third time.

page 811


Second Reading

Debate resumed from 13 September 1979, on motion by Mr Fife:

That the Bill be now read a second time.

Mr John McLeay:
Minister for Administrative Services · BOOTHBY, SOUTH AUSTRALIA · LP

- Mr Deputy Speaker, may I have your indulgence to suggest that the House have a general debate covering this Bill, the Bounty (Rotary Cultivators) Amendment Bill 1980 and the Bounty (Drilling Bits) Bill 1980 as they are associated measures? Separate questions will, of course, be put on each of the Bills at the conclusion of the debate.


-Is it the wish of the House to have a general debate covering the three measures? There being no objection, I will allow that course to be followed.


-The House is debating cognately three bounty Bills - the Bounty (Rotary Cultivators) Amendment Bill, the Bounty (Drilling Bits) Bill and the Bounty (Polyester-Cotton Yarn) Amendment Bill. Let me say at the outset that although these three Bills are not the stuff of controversy, they are very important measures for many people in the community whose jobs depend on the subsidies which come from the taxpayers in this instance. Because these Bills do not represent the stuff of controversy, of course they will not achieve one line in any newspaper or one word in any radio or television report in this country. That reminds me that it is sad that it is only when there is controversy, when there are real differences, that there is any news of this Parliament. The general idea which is given to the public, of course, is that the Opposition is always objecting. That is just not true. When measures are good we support them. That means that when we do not support anything there are very good reasons for our not doing so.

The Opposition does not oppose these Bills. Both the Bounty (Rotary Cultivators) Amendment Bill and the Bounty (Drilling Bits) Bill conform with the recommendations of the Industries Assistance Commission, whilst the Bounty (Polyester-Cotton Yarn) Amendment Bill is an interim measure pending the outcome of the final IAC report on the textiles, clothing and footwear industries.

The purpose of the Bounty (Drilling Bits) Bill is to provide short term assistance to Australian manufacturers of cemented carbide drilling bits with diameters greater than 105 millimetres for use with percussion rock drills in Australia. Assistance is to be given by way of a scheme providing for the payment of a bounty scaled on the basis of bit size, ranging from $40 for bits exceeding 105 millimetres but less than 127 millimetres in diameter, to $ 160 for bits of 203 millimetres in diameter and above, with the important proviso that the Australian content of the bits exceeds 50 per cent. The assistance is to be short term in nature and payment of bounty is not to exceed $150,000 annually. As I have already indicated, although this may seem a small measure to some people, it is very important to those people who will actually be the recipients of this particular bounty, and it is important for employment of people in this community. It is important that the assisstance should be paid in this way, by way of bounty, so that the costs are not added into the further processes which operate to make up the final product.

The purpose of the Bounty (Polyester-Cotton Yarn) Amendment Bill is to extend until 31 August 1981 the operation of the Bounty (Polyester-Cotton Yarn) Act 1978. The Minister for Business and Consumer Affairs (Mr Garland), who is at the table, would not have taken part in the thrilling debate on the Bounty (Polyester-Cotton Yarn) Amendment Bill 1978, so he suffers -

Mr Barry Jones:

– We all remember it.


-The honourable member for Lalor remembers the debate on that Bill only because I took part in it. Of course, I have an advantage over the Minister inasmuch as I did so. This Bill is an interim measure pending consideration of the final report by the Industries Assistance Commission on the textiles, clothing and footwear industries. That report was originally expected to be made late in March but the latest information I have is that perhaps the Government’s decision will be given a week or two later than that.

Mr Garland:

– The report will be a week or two later.


– I stand corrected. Even if the report is made available a week or two later than the end of March, the Government’s decision is all important, and I trust that it will be announced by the end of June. I hope a decision will be made by the end of June, because there is enormous uncertainty in the important textiles, clothing and footwear industries pending a Government’s decision on this report. I do not pretend that the decisions will be easy ones for the Government, but the Government will be acting in political interests and not in the national interest if it extends the time for making its decision beyond June.

The Government has announced its extension of the bounty scheme for polyester-cotton yarn to give at least 12 months notice of assistance to help future planning by importers, retailers and manufacturers. The Government would know, I trust, because of the excellent advice it receives from its advisers, that just one year’s extension will not be enough. We need more important decisions about the future of this industry for the proper time scale to be available for the important decisions to be made by the industry.

The scheme provides for the payment of a bounty of $ 1 . 1 5 per kilogram of the yarn consisting of a special mixture of polyester and cotton fibres. The annual limit on the amount of bounty payable is not $150,000, as it was in previous legislation, but $600,000. This annual limit remains for the period of extended operation.

I would like to make some comments on the textiles and clothing industries and the forthcoming final report of the Industries Assistance Commission as it is very applicable. The textiles and clothing industries have been suffering a recession for many years. We in the Australian Labor Party are very concerned with the state of these industries. These industries and the footwear industry are major employers especially in regional centres. These industries in having such an influence on these centres, of course, have a marked influence on the economy of the regions.

The Labor Party is firmly committed to the survival of a strong and viable clothing and textile industry in Australia. We are looking to increase the efficiency of the various industries, to make them internationally competitive and to reduce their reliance on protection. As consumers and taxpayers we are not the only ones who hope this can be achieved. I know that those working in the industries want to rely less and less on tariffs and bounties and any other forms of assistance that may be given, because the less Government assistance that they have to rely on the greater the security for future employment and investment of those industries.

In order to ensure that we achieve a viable textile and clothing industry and a viable footwear industry, the Australian Labor Party, in the former case, will establish a textile and clothing authority. That authority will operate under the umbrella of a reformed Industries Assistance Commission; in other words, the authority will be a sub-commission of the reformed IAC. That authority will have three full time commissioners and two part timers. One of the part timers will be chosen from a panel submitted by employers and one from a panel submitted by employees. It is envisaged that those working full time on this type of work will also devote attention to the related footwear and allied leather goods industries in a separate authority or sub-commission which will devote its attention to the footwear industry. Similarly, with the footwear industry there will be two part time members, one from a panel which has been submitted by the employees and one from a panel submitted by the employers in that industry.

I repeat that there will be co-ordination within the reformed Industries Assistance Commission. There will be a sub-commission involvement of these authorities in the regulatory functions for the industries. The textiles and clothing authority will bring together the work being done on tariffs in the Industries Assistance Commission, on quotas in the Quota Review Committee and also coordinate the industry productivity groups which are involved in restructuring the industry and which emanate from the Department of Productivity. The role of the authority will be not only to make recommendations to government, which will then make the final decisions, but also to monitor those decisions on a region by region basis and, it is hoped even a firm by firm basis. May I say how delighted I am at the response received by the Australian Labor Party from the many firms in the industry to this new initiative on the part of the Labor Party to ensure that there is a more rational government regulatory mechanism in ensuring that there will be an improved managed change within a sensitive and highly labour intensive industry such as the textiles and clothing industry.

At present some of the work which I have mentioned is being carried out in a fragmented way by such diverse bodies as the IAC, the Quota Review Committee, the Department of Productivity and to an extent by the Department of Business and Consumer Affairs and the Department of Industry and Commerce. However, some very important aspects of this work are not being carried out at all. By setting up a textiles and clothing authority this fragmentation of government regulation will cease and any gaps in the government’s services will be overcome. I want to make it quite clear that in no way will the setting up of such a regulatory authority substitute for the work that goes on in the divisions that are related to areas like this in the Department of Business and Consumer Affairs or the work of the Australian Manufacturing Council and underneath that the industry advisory committees which work under the leadership of the Department of Industry and Commerce.

The aim of the new Labor Government, which undoubtedly will be elected at the end of this year, through its various authorities, will be to maintain employment where no alternative exists and to maintain that employment at the least possible cost to consumers and taxpayers. We appreciate that no one in private industry wants to rely too much on government assistance because this leads to too much insecurity in employment and too much uncertainty for those who have risked their investments. It is our opinion that the only way to improve our overall productivity as a nation and the only way to improve the general standard of living of all our people is by concentrating our resources on those things that we do well, by concentrating our efforts on those areas where we are most competitive; in other words, by concentrating where least government assistance in one form or another is needed.

Our growth record compared with that of other developed countries over the past 31 years- and 28 of those 31 years, incredibly and sadly for the welfare of this country, have been Liberal years- is poor. We have not been concentrating on those things we do well. We have suffered from what has become known as McEwenism, trying to be Jacks of all trades, concentrating on everything, failing to get economies of scale, doing things in bits and pieces. However, these general principles have to be qualified in some cases by the special circumstances existing in various regions of Australia which are heavily dependent upon particular industries. Such regions are to be found in Victoria and Tasmania when considering the textile and clothing industry. In Tasmania, both Launceston and Devonport are heavily dependent on the clothing and textile industry. We believe that the Government has an obligation to ensure the security of those regions. Labor’s textile and clothing authority, to mention just one- I could have mentioned the footwear authority- will provide the flexibility of approach required to ensure continuing employment in those regions.

Not only are our general principles qualified by the needs of regions, the need to ensure continuing viable existence to sensitive, highly labour-intensive industries, but this managed change, this structural alteration, which is the jargon term used so often, can be done only when there is a high level of activity. It is no good having all these high principles about transferring resources to those things we do well when a gap is left from where the resources have been transferred. For instance, it is no good thinking that workers in a textile factory in Launceston, if that were phased out, and God forbid that it would ever happen, could transfer to a growing minerals and energy industry in the north west of Western Australia. It just does not happen that way. Resources are not transferred as easily as that.

Given our concern for the textile and clothing industry, the Labor Party will monitor carefully the recommendations of the Industries Assistance Commission in its final report on the industry. Indeed, we will monitor very carefully subsequent government actions arising from that final report. Let me state categorically that no matter what recommendations are made by the IAC, Labor will not terminate quantitative restrictions applying to this industry until that can be done without jeopardising employment in the regions dependent on the industry. At the present time it would seem that those quantitative restrictions are best operated via the quota mechanism. I know that quantitative restrictions, for instance, are operated from the European Community and from the United States by other means, but we do not have the muscle and the power of those regions. Therefore, even though the administration of quotas means a bag of worms for those who have to carry them out, they are probably the best way of achieving quantitative restrictions.

In summary, Labor believes that there is a place in Australia for a competitive textile and clothing industry and that to a large extent it must be located in regional centres such as Launceston and Devonport, where there is little alternative employment. We believe that we must do all we can to ensure that the industry is competitive. Furthermore, we believe that this industry must specialise in those products which integrate as much as possible with the production of our trading partners, particularly in East and South East Asia. The textile and clothing authority will be the machinery to achieve those objectives.

The purpose of the next Bill under consideration is to amend the Bounty (Rotary Cultivators) Act. The Bill extends the bounty scheme for one year, but at a reduced rate. The present Act provides assistance for the manufacture and sale of self-propelled pedestrian-operated rotary cultivators, tillers and hoes. The bounty is payable at a rate of $40 per kilowatt of output of the engine incorporated in the prime mover of those implements. Once again, such an engine must have an Australian content in this case of not less than 60 per cent. The amount payable is limited to $60,000 per annum. The Bill before the House provides for an extension of the scheme but for payment at a reduced rate of $20 per kilowatt of power output of the engine incorporated in the prime mover. In addition, the limit on the amount available for payment during that period has been removed. We of the Labor Opposition are pleased to see that on this occasion the Government has decided to accept the IAC recommendations. Last year, when the original Bill was introduced, the Government rejected the advice of the IAC and doubled the rate of assistance awarded. At that stage, no reason for the decision was given. We forced a reason to be given eventually, but it was a poor performance that such information was not given to the House at the time.

Although we are not opposing any of these Bills, we believe that certain questions must be put to the Government concerning the use of bounties. At the present time the Government seems to see bounties as a solution to the many problems of the various parts of the various industries. However, a package of policies designed to improve the efficiency and international competitiveness of our industries is much preferable to the use of bounties. We see policies other than bounties as essential. Bounties do not give security, as I said earlier. The recipients dc not know when the bounties will be terminated.

To summarise, firstly the Government must stimulate the economy in a controlled way in order to increase consumer demand for the products of the various industries. Secondly, the Government must introduce positive industry programs designed to encourage the revitalisation of existing industries into more competitive and viable concerns. Thirdly, the Government must introduce more far-reaching and positive manpower policies to increase the mobility of workers through training, retraining and job search subsidies. Instead, however, the Government is providing only temporary assistance in isolation. It seems that the Government has a naive hope that business stability will result from an enforced lowering of inflation rates and that, in consequence, market forces will magically bring about an upturn in economic activity and an improvement in the viability of Australian industry. That quite unconvincing reasoning, which has failed to be validated by the experience of the last four years, is being further perpetuated, as we saw in the statement made today to this Parliament by the Treasurer (Mr Howard). It seems inevitable that by relying only on varying assistance the Government would have to incorporate panic measures to sustain struggling industries. Of course, long term planning would be desirable, but it does not seem to be on the menu of the present Government. We in the Opposition believe that the correct package of policies, which can strengthen our industries, make them viable in the long run, and return us to full employment, should be introduced, but while we have this Fraser Government such focusing on the medium and long term is unlikely to happen. In conclusion, I state again that although we are not opposing these Bills there are a number of questions which need to be raised on them, and that I have done.


– I want to raise one matter, and only briefly. It relates to the Bounty (Polyester-Cotton Yarn) Amendment Bill. Problems do exist in areas where selective bounties are applied to goods. I draw the attention of the Minister for Business and Consumer Affairs (Mr Garland) to a problem which has recurred over a considerable period, namely, that protection is given to one level of an item, but at another level that item is able to be imported into the country in competition with other Australian goods. The example I give is yarn or cloth being excluded from import on the basis of a Bill or a tariff where such yarn or cloth is to be used in a further manufacturing process in Australia, while at another level the totally manufactured product, including the restricted items which are barred to the Australian manufacturer, is allowed to be imported without restriction on to the Australian market. This situation occurs in too many cases and it is a serious disadvantage to some Australian manufacturers. I raise that matter because it is important to a large number of Australian manufacturers. Raw materials are not available to them, while goods made from those raw materials are allowed into Australia without restriction.

Minister for Business and Consumer Affairs · Curtin · LP

– As was indicated by the Opposition spokesman, the honourable member for Adelaide (Mr Hurford), I enter the debate for the first time. In doing so, I want to respond to his remarks. He used the debate to develop Labor Party policy in respect of these difficult protection areas, and I think it is only right to comment that what he is suggesting- I wrote down his words, namely, a rational, regulatory body- would set up another enormous structure in an attempt to amalgamate the functions of a number of bodies. Actually, I think he said ‘in addition to a number of departments and bodies’. He said that those bodies would continue to operate, so he must have meant ‘in addition to’. He would have this body operating in a rational way; but, in the course of his remarks, he indicated disagreement with a number of suggestions which have been made by the Industries Assistance Commission, which surely must be one of those rational bodies that he would like to see operating.

What all this amounts to is this: The Labor Party, if it were in government- I thought it was a bit thin when the honourable member said with such confidence that he expected his party to win the election at the end of the year- would see that a body was set up. It invites people to think that somehow that will solve the problems of determining the proper level of protection. The fact is that resolving the level of protection is very difficult, and the situation just raised by the honourable member for Corio (Mr Scholes) is one such difficulty. I will reply to the honourable member for Corio by letter very soon on that point. The fact is that the matter cannot be put off and given to some other body because it is essentially a matter of judgment and a matter that is political. There is no way that a body can be set up which will take that matter off the Cabinet table and enable the Cabinet to avoid it, and nor should the Cabinet avoid it. I remind the honourable member that Labor, when in government, by its anti-business approach, its across-the-board, without notice, without inquiry, 25 per cent tariff cut, brought many firms and businesses in this country to ruin and many others to the brink of ruin. That is the Labor Party’s record and that is what this procedure would lead to. I just make that point. I think the country knows it very well, but I think it needs to be made since the spokesman for the Labor Party, the honourable member for Adelaide, developed the proposition so much.

I thank the Opposition for its support of these three Bills and its acknowledgment of the importance of their contents for certain persons and industries. I am not in a position to indicate how quickly the Government will deal with this final Industries Assistance Commission report on textiles, garments and footwear to which the honourable member alluded earlier in his speech; but I will say that I expect that the Government will want to deal with it as soon as it receives it. I expect that report to be received, if not by 31 March, then very soon thereafter. I expect, although I cannot give any assurance, that it will certainly be dealt with before June.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr Garland) read a third time.

page 815


Second Reading

Consideration resumed from 28 February, on motion by Mr Garland:

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.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr Garland) read a third time.

page 815


Second Reading

Consideration resumed from 28 February, on motion by Mr Garland:

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.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr Garland) read a third time.

page 815


Minister for Immigration and Ethnic Affairs · Balaclava · LP

- Mr Deputy Speaker, I seek your indulgence to make a personal explanation.


-The Minister has the indulgence of the Chair.


– Last night, in the debate on the Human Rights Commission Bill, I concluded my speech with a criticism of the Right to Life Association. I concluded that criticism with the statement that I believed that honourable members should oppose the activities of the Association by defeating both amendments then before the House. In particular, I used the expression that honourable members should recognise that ‘it’- the Association- ‘is behind the motion of the honourable member for Swan’. When I used the expression ‘behind’, I meant supporting’. I do not retract any of the criticisms I made of the Right to Life Association; in fact, I am astounded by my moderation. But I make it clear to the House that when I used the expression ‘behind’ I meant that the Association was supporting the motion and supporting it in the intimidatory way to which I referred- not that the Association instigated the motion and not that it was using the honourable member for Swan (Mr Martyr) as its mouthpiece.

I respect the honourable member for Swan. I recognise that he was the author of his own motion. I happen to disagree with his motion, but I never in my wildest dreams imagined that anyone else was the author of it, least of all the Association. The honourable member’s supporters dissociated themselves from that Association. It has been drawn to my attention that several people construed my remarks as accusing the honourable member for Swan of being the Association ‘s spokesperson. I just want to make it quite clear that that was never my intention. I meant ‘supporting’, not ‘instigating’.

page 816



– I present the 1 3th report of the Publications Committee.

Report- by leave- adopted.

Mr GILLARD (Macquarie)- by leave- The Joint Committee on Publications in its report on the Parliamentary Papers Series included a recommendation that the Clerk of the Parliament advise the Chairman of the Committee on any occasion when an author body has failed to meet a statutory requirement to table its annual report within the stated period or within a reasonable time following completion of the period. The Presiding Officers, in their joint statement of 24 November 1978, indicated their support for this recommendation and they undertook to implement it. The Presiding Officers stated that three months would be regarded as a reasonable time within which a report should be table. The Committee has now received details in relation to the 1978-79 financial year. I seek leave to have the details incorporated in Hansard.

Leave granted.

The document read as follows-


Details for 1978-79 Financial Year






N.B.: Dates listed for tabling are those of first tabling in either House.


No report for 1978-79 financial year as at 4 March 1980

Aboriginal Loans Commission Act

Air Navigation Act

Australian National Airlines Act

Australian National Railways Act

Broadcasting and Television Act- Special Broadcasting Service

Coal Research Assistance Act

Commonwealth Employment Service Act

Defence Force (Papua New Guinea) Retirement Benefits Act

Dried Fruits Research Act

Education Research Act

Fishing Industry Act

Fishing Industry Research Act

Health Insurance Commission Act

Home Savings Grant Act 1964

Housing Assistance Act

Industrial Research and Development Grants Act and

Industrial Research and Development Incentives Act

International Monetary Agreements Act National Health Act

States Grants (Aboriginal Assistance) Act

Stevedoring Industry Finance Committee Act

Superannuation Act-

Commissioner for Superannuation

Superannuation Fund Investment Trust

Trade Union Training Authority Act


Interim reports only for 1978-79

Albury-Wodonga Development Act ( 14 November 1979)

Defence Service Homes Act (8 November 1979) (Interim statement, 13 September 1979)

Homes Savings Grant Act 1 976 ( 8 November 1 979)

Honey Industry Act ( 12 September 1979)

Seat of Government (Administration) Act-

Health Commission Ordinance- Capital Territory Health Commission (20 November 1979)


1978-79 Reports not tabled in 1979 but tabled between 19 February and 4 March 1980

Aboriginal Land Funds Act (2 1 February 1980)

Aboriginal Land Rights (Northern Territory) Act- (21 February 1980)

Australian Meat and Live-stock Corporation Act -Interim Report- 1 1 October 1979 -Final Report-26 February 1980

Criminology Research Act- Australian Institute of Criminology-(21 February 1980)

Royal Australian Air Force Veterans’ Residences Act-(21 February 1980)


1978-1979 -Reports Tabled After 1 October 1979 but Before 23 November 1979

Administrative Appeals Tribunal Act (13 November 1979)

Atomic Energy Act ( 13 November 1979)

Australia Council Act (20 November 1 979)

Australia- Japan Foundation Act ( 1 5 November 1979)

Australian Bureau of Statistics Act-

Australian Bureau of Statistics (8 November 1979)

Australian Statistics Advisory Council (8 November


Australian Capital Territory Electricity Supply Act (20 November 1979)

Australian Film and Television School Act (21 November 1979)

Australian Film Commission Act ( 1 3 November 1979)

Australian Heritage Commission Act (23 October 1 979)

Australian Industry Development Corporation Act (10 October 1979)

Australian Institute of Aboriginal Studies Act (15 November 1979)

Australian Institute of Marine Science Act (25 October 1979)

Australian Overseas Projects Corporation Act (8 November 1979)

Australian Shipping Commission Act (22 November 1979)

Australian Tourist Commission Act (2 1 November 1 979)

Australian War Memorial Act (2 1 November 1 979)

Broadcasting and Television Act-

Australian Broadcasting Commission (14 November 1979)

Australian Broadcasting Tribunal (20 November 1979)

Coal Industry Act ( 1 3 November 1 979)

Commonwealth Legal Aid Commission Act (22 November 1979)

Commonwealth Serum Laboratories Act (8 November 1979)

Compensation (Commonwealth Government Employees) Act (20 November 1 979)

Conciliation and Arbitration Act (20 November 1 979)

Criminology Research Act- Criminology Research Council (20 November 1979)

Curriculum Development Centre Act (22 November 1979)

Dairy Produce Act-(Interim 18 September) (15 November 1979)

Darwin Reconstruction Act (2 1 November 1979)

Environment Protection (Alligator Rivers Region) Act (15 November 1979)

Export Finance and Insurance Corporation Act (8

November 1979)

Family Law Act (20 November 1 979)

Great Barrier Reef Marine Park Act (22 November 1979)

Housing Loans Insurance Act ( 1 4 November 1979)

Immigration (Education) Act ( 15 November 1979)

Independent Schools (Loans Guarantee) Act (22 November 1979)

Industries Assistance Commission Act (8 November 1979)

Insurance Act ( 17 October 1979)

Law Reform Commission Act (22 November 1979)

Legislative Drafting Institute Act (25 October 1979)

Meat Research Act (9 October 1979)

Metric Conversion Act (25 October 1979)

National Capital Development Commission Act (25 October 1979)

National Gallery Act (21 November 1979)

National Library Act (21 November 1979)

National Parks and Wildlife Conservation Act (25 October 1979)

Oilseeds Levy Collection and Research Act (8 November 1979)

Ombudsman Act ( 1 5 November 1 979)

Papua New Guinea (Staffing Assistance) Termination Act (9 October 1979)

Parliament House Construction Authority Act (22 November 1979)

Pipeline Authority Act ( 1 3 November 1979)

Postal Services Act (7 November 1979)

Prices Justification Act ( 10 October 1979)

Racial Discrimination Act (9 October 1979)

River Murray Waters Act (20 November 1 979)

Seat of Government (Administration) Act-

Consumer Affairs Ordinance- A.C.T. Consumer Affairs Council ( 14 November 1979)

Legal Aid Ordinance- Legal Aid Commission (A.C.T.) (9 October 1979)

Snowy Mountains Engineering Corporation Act (10 October 1979)

Snowy Mountains Hydro-electric Power Act (20 November 1979)

States Grants (Schools Assistance) Act (1977) (20 November 1979)

Telecommunications Act (2 1 November 1979)

Tobacco Industry Act ( 1 8 October 1979)

Wool Industry Act (14 November 1979)


1978-79 reports tabled before 30 September 1979

Anglo-Australian Telescope Agreement Act (27 September 1979)

Australian Science and Technology Council Act (20 September 1979)

Bounty (Agricultural Tractors) Act (29 August 1 979)

Bounty (Books) Act (29 August 1979)

Bounty (Commercial Motor Vehicles) Act (29 August 1979)

Bounty (Drilling Machines) Act (29 August 1979)

Bounty (Metal Working Machine Tools) Act (29 August 1979)

Chicken Meat Research Act ( 1 1 September 1 979)

Commonwealth Banks Act (25 September 1979)

Dairying Research Act ( 1 8 September 1 979)

Export Market Development Grants Act and Export Expansion Grants Act (23 August 1979)

Pig Industry Research Act (27 September 1 979)

Pig Meat Promotion Act (20 September 1 979)

Poultry Industry Assistance Act (27 September 1 979)

Reserve Bank Act (23 August 1 979)

Science and Industry Research Act (20 September 1979)

Ship Construction Bounty Act (28 August 1979)

Trade Practices Act ( 1 8 September 1 979)


– I thank the House. Briefly, the details show that as at 4 March statutory requirements for reports in 23 Acts had not been fulfilled for the year ended 30 June 1979. Interim reports only had been recieved for a further five and five other authorities did not report on the 1978-79 financial year until the current sittings. Nineteen reports for 1978-79 were received before 30 September 1979 and a further 62 reported between 1 October and 23 November 1979. At the meeting of the Joint Publications Committee today, the Committe resolved that:

  1. the details Tor 1978-79 should be presented to each House as soon as possible so that they are available Tor Senators and Members,
  2. the responsible Ministers should be asked to give reasons Tor the delays that have occurred in each case,
  3. in some cases the requirement that reports be tabled within the three months of the end of the financial year may be unrealistic.

The Joint Publications Committee is of the opinion that a four-month target date would be more reasonable, and strongly believes that the reports for a financial year must be available to senators and members before the summer adjournment period. The four months period after 30 June will enable authorities to prepare reports and have them produced and tabled before the end of the Budget sittings. I must point out that the Committee is aware that two reports referred to in the incorporated list in fact were tabled in each House this morning. However, the list was closed off as at 4 March. I am confident that the procedures which have been developed will enable the Parliament more effectively to discharge its responsibilities in the oversight of Commonwealth activities.

page 818


Honourable Member for Eden-Monaro- Aboriginal Land Rights- Death of Mr Francis John Davies -Immigration-Human Rights- Liquefied Petroleum Gas


-It being past 10.30 p.m., I propose the question:

That the House do now adjourn.


-The honourable member concerned in my remarks tonight has been advised that I would be taking this matter up. It is of such a nature that I think it requires some explanation. I have here two documents. One is an envelope which, as honourable members will see, has on it: ‘House of Representatives, Canberra, A.C.T.’ It is addressed to Mr G. Howse, 26 Booth Street, Queanbeyan. It has on it of course the necessary postage stamp of 25c applied by the machine which is normally used in the offices of honourable members. The other document I have is a publication called Survey. Honourable members will note that it is stamped in ink at the top ‘With compliments,

Murray Sainsbury’. It has attached a compliments slip with the words ‘Forwarded with the compliments of Murray Sainsbury, M.P., Member for Eden-Monaro.’ The back of the slip has been smudged with ink, as has the ink on the front of the publication. Obviously as the slip has been turned back the ink has stuck to it.

The publication is the January-February 1979 edition of Survey which states on the front that it is ‘A monthly digest of trends in the Soviet Union and other socialist countries’. The headline on the front page reads: ‘Future Belongs to Socialism’. Underneath it has a photograph with a caption which reads:

Black Sea resorts are recreation for workers from the Soviet Union and other socialist countries free from the worries about unemployment, inflation or economic security which plague the West.

An article inside is headed: ‘How long to find a job?’ and another is headed: ‘Soviet views on sea-farming for food of future’. I have made some inquiries about this document. I found that it is the official organ of the Socialist Party of Australia, a breakaway from the Communist Party of Australia and a very extreme, fanatical organisation which is fanatically pro-Moscow. I am a little surprised that an honourable member of this Parliament would use his facilities to send a document of this type to members of the general public. I understand- I may stand corrected on this-that last year the honourable member for Eden-Monaro went to the Union of Soviet Socialist Republics, Hungary and Romania. Many people go there. That is okay.

Mr Morris:

– Who is this man?


– The honourable member for Eden-Monaro. Many people go to these countries, but it is another thing when they come back to Australia and start distributing propaganda of the Australian pro-Moscow group of the Community Party. I am very deeply concerned about this.

Mr Barry Jones:

– You don’t think he’s a KGB plant?


– I do not suggest that the honourable member is in this category. I do not suggest that he is necessarily a plant but I ask whether he is an undercover agent of the proMoscow Socialist Party of Australia, which I have said is a very extreme pro-Moscow breakaway group from the Communist Party. Is he using his parliamentary position to propagate the policies of the Kremlin? I also wonder whether the Australian Security Intelligence Organisation knows anything about this. I think it ought to know and that it ought at least to inquire deeply into this matter.

Mr Scholes:

– There is a long history of conservatives in this connection in Great Britain.


– As the honourable member for Corio pointed out, documents recently released in the United Kingdom have made extraordinary exposures of the activities of conservatives in the United Kingdom who, it turned out, were acting in concert with Russian agents. I hope that the honourable member for EdenMonaro has some explanation about this matter. On the facts as presented to me it would appear that he is distributing literature which is proMoscow. Finally, I am also deeply concerned about the future of Australia and its security.

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

Monaro · Eden

– I came into the chamber this evening knowing that something would be said about one or other of my activities. It has been interesting to hear the concentration on my activities I have heard. I must say that I do not recall having sent Mr Howse that publication but I am sure that if I had thought of it I would have done so. I have noticed a number of these documents. It just shows the fairmindedness of people on this side of the House that we are prepared on occasions to propagate to people the views that are held not only on this side of the House but also on the other side of the House. The honourable member for Chifley (Mr Armitage), since I have been a member of this House, has made himself out to be some sort of a clown in this place. We have enjoyed many of the things that he has done, and I do take -

Mr Armitage:

-Mr Deputy Speaker, I raise a point of order. I brought up a serious matter which affects the security of Australia. The honourable member is trying to treat it with levity in speaking of clowns and all that sort of thing. He said that he still has a large number of these publications. He has not said where he got them from.

Mr DEPUTY SPEAKER (Mr Millar)Order! There is no point of order.


– The thing that intrigues me is how on earth the honourable member for Chifley manages all this gutter rubbish and innuendo. I remember that a couple of years ago he was trying to make something of an action of my colleague, the honourable member for Macquarie (Mr Gillard). He does this sort of thing. Obviously he has contacts all through the place. I would say that the contact he has here happens to be a senior member- in fact, the secretary- of the Federal Electorate Council of the Labor Party in my own electorate. Mr Howse is a man who I see from time to time and whose company I rather enjoy because he is a little like the honourable member for Chifley- he is worth a little bit of comic relief. Certainly I have enjoyed it and I welcome the opportunity to show that I do have an open mind.

Mr Armitage:

– Where did you get it? Answer the question.


-I do read that magazine; it came through the mail. I suppose all I can say about that is that I got it in an unsolicited way through the mail. Perhaps the honourable member for Chifley could ask that in future his friends do not send it directly to me but that they deploy it to some members of the Labor Party to save me the trouble of doing so.


-Today the Opposition endeavoured to raise a matter that is of very great importance in the northern part of my electorate. I refer to the Pitjantjatjara land rights argument in South Australia. Unfortunately, the Government would not allow that discussion to go on. I am sure that that is not in any way to its credit. The history of land rights in South Australia goes back to the early Dunstan days. The Labor Government in South Australia led the way in the provision of land rights for Aboriginals. It established a South Australian Lands Trust, which was able to hold land in trust for various Aboriginal groups. It was the forerunner of land rights legislation. Of course, it was not something that was relevant to the people in the north-west- people who are still tied to their tribal culture and who are still living in isolated areas in that part of the State.

Contact was made with the Pitjantjatjara council and discussions were held with the idea of producing a Pitjantjatjara land rights Bill. At all stages it was done in close consultation with the people involved- the Pitjantjatjara people. A working party was established on which the people were represented so that they could look at every facet of this problem. Finally a Bill was drafted. As I have said, that was after very close consultation with the Pitjantjatjara council. This Bill was then introduced into the South Australian Parliament but because the South Australian Government at that time did not control the upper House, the Bill ran into opposition and was delayed.

As a result of that the matter was referred to a Select Committee which, of course, was made up of members from both sides of the Parliament. The Committee came down with some suggested alterations. The matter had reached that stage just prior to September of last year. In September the South Australian Labor Government was defeated and the Bill lapsed. Since then the Pitjantjatjara people have been very concerned because prior to the election it was stated by the Liberal Party that in any Bill it introduced the question of land rights would not be covered as closely as it was in the Labor Party’s Bill. The local Liberal candidate in that election put out a pamphlet in which he said that he would alter the Pitjantjatjara land rights Bill to protect the rights of miners. In no way is the Liberal Party interested in protecting the rights of these people.

That is the situation at the present time. I have visited the area on two occasions in the last six months and I am well aware of the concern of these people. A mining settlement has been established not too far away from one of the Aboriginal settlements. Problems arise when unsophisticated people come in contact with white settlements. Already there has been a murder of an Aboriginal and there is now the problem of liquor coming into the area, which problem has not arisen before. If something is not done to stop the encroachment of prospectors and others into these areas the future of these people looks dark.

The Pitjantjatjara people are extremely concerned and in their own way they have become quite well organised. They are articulate and are able to put their own points of view. They have been to Adelaide and have had discussions with the Premier. I was a member of a deputation that met the Premier in Port Augusta, and we discussed that same matter. The Premier tells them that they will have the same rights as any other South Australian, but he will not give them the land rights promised by the previous Government. It appears that the Government will give them leasehold to the land, but not mineral rights. This type of legislation might just as well not be brought in at all. If these people are not to be allowed to control who comes on to their territory and who roams over it searching for minerals, then the Government might as well do nothing.

If the introduction of a Pitjantjatjara land rights Bill that gives those people the right to control who comes into the area is not supported, an independent group of people will be destroyed- a group of people who still have their own culture and pride, and who know what they want. I suggest that honourable members on the

Government side should get on to their own Minister for Aboriginal Affairs (Senator Chaney)- he has made statements about working in with the State Minister of Aboriginal Affairs- to see that these people get a fair go.

Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired.


-After Question Time on Tuesday this House stood in silence as a mark of respect to my predecessor, the former member for Deakin, and tonight I take the first opportunity to place on record my tribute to him. Frank Davis was first elected to the House of Representatives as the member for Deakin at the general elections of 1 949, and subsequently in 1951, 1954, 1955, 1958, 1961 and 1 963. He was a member of the Joint Committee of Public Accounts from 25 September 1952 to 14 October 1958 and was a most distinguished chairman of that Committee from 16 March 1960 to 1 November 1963. He was a member of the Australian delegation to the Commonwealth Parliamentary Association conference in New Delhi in 1 957 and an observer at the regional conference in Sarawak in 1960. He was leader of the Australian delegation to the Commonwealth Parliamentary Association conference in Kuala Lumpur in 1963 and in 1966 was the Australian parliamentary representative at the United Nations. Following his retirement from Parliament he became Chairman of the Commonwealth Serum Laboratories Commission, and remained as Chairman from 1 967 to 1 974.

In 1967 he was awarded the Order of the British Empire by Her Majesty the Queen and, following his retirement as Chairman of the Commonwealth Serum Laboratories Commission, he was made a Companion of the Order of St Michael and St George. He died on 28 February after two months in hospital and a long illness. His wife, Thelma, was at his side at the time. There were many qualities which endeared Frank Davis to his constituents, to honourable members on both sides of the Parliament and, in fact, to all those who knew him.

Prior to 1945 Frank Davis was Chairman of the Young Nationalist Association in Victoria. In that capacity he attended the conference called in Albury by the former Prime Minister, Sir Robert Menzies, to form the Australian Liberal Party. He was a foundation member of the Liberal Party of Australia and was one of those responsible in no small part for formulating then great democratic principles on which the Liberal Party was founded. He was Vice-President of the

Victorian Liberal Party from 1947 to 1949. As I have just stated, he entered the House in 1949 when the Australian people first swept the Liberal-Country Party coalition into office. He was one of the leaders in the campaign to oppose the Labor Party plans to nationalise the banks, a proposal which was abhorrent to all thinking Australians.

Frank Davis had many fine qualities. Although he had no children of his own, he was a father figure to many. The wise counsel and friendship that he gave to all his friends, and to other members of Parliament, is well known to all who knew him. Whilst he never sought the spotlight, the work he did in this Parliament stands as a memorial to his energy and to his capacity. As one of his constituents for many years and as President of one of the Liberal Party branches in his electorate, I am well aware of his untiring efforts on behalf of not only the electors of Deakin and this Parliament but also all of the people of Australia. I would like to quote from my maiden speech made in this chamber, from this seat, some 14 years ago. While paying tribute to my predecessor, Frank Davis, I said:

Disraeli once said of his predecessor: ‘I succeed him. I am afraid I cannot replace him ‘. For my part I can claim to succeed Frank Davis. If at some future date I can also claim, even in part, to have replaced him, I will feel that my entry into this Parliament has been worthwhile.

I am not in a position to say whether I have replaced Frank Davis, even in part, in this Parliament. That is not for me to judge. We are all different. I suppose that one person can never really replace another. The fact remains that Frank Davis was a very fine member of this Parliament. He rendered a great and meritorious service to his country. I know that I speak on behalf of all who knew Frank Davis and his wife when I express our heartfelt sympathy to Thelma in her sad loss at this time. The one, and one only, consoling fact is that perhaps this parliamentary system of ours will undoubtedly continue to produce future members of the calibre of Frank Davis to lead this great and advancing nation, which we are proud to acknowledge as our nation, into future years, for generations of Australians who are not yet born.


-On 8 November 1979, as reported in Hansard of that date at page 2786 I raised during the grievance debate a matter relating to what in my view was a gigantic ripoff of a Chinese couple in my electorate by a Sydney solicitor, Mr W. J. Lee. To refresh honourable members’ memories, this solicitor had sought payments in cash from this couple of nearly $ 10,000 on the pretence that he could have their Australian residence legalised. Subsequent to that speech I put certain questions on notice. I seek leave to have them incorporated in Hansard, with the replies.

Leave granted.

The documents read as follows- (Question No. 5164)

Mr James:

asked the Treasurer, upon notice, on 21 November 1979:

  1. Will he study my speech which was made on 8 November 1979 during the grievance debate, concerning the activities of a Phillip Street Barrister, Mr W. J. Lee (Hansard, page 2786).
  2. Will he refer my speech to the taxation authorities and ensure that senior officers of the Taxation Office are assigned to study this case.
  3. Will he ensure that this case will be pursued by the Taxation Office with the same vigour as was the case with the investigation into the incomes of the garbage collectors in the Newcastle region, N.S.W., who were deriving extra income from the collection of empty bottles on their rounds.

Mr Howard: The answer to the honourable Member’s question is as follows: (1), (2) and (3) The speech made by the honourable member would have come to the notice of the Commissioner of Taxation who is responsible for the administration of the income tax law. However, the secrecy provisions of that law preclude the Commissioner from commenting in any way on the taxation affairs of any person or on any action that might be taken against a person. (Question No. 5165)

Mr James:

asked the Minister for Immigration and Ethnic Affairs, upon notice, on 2 1 November 1 979:

  1. 1 ) Has his attention been drawn to my speech of 8 November 1979 during the grievance debate which concerned the activities of a Phillip Street Barrister, Mr W. J. Lee (Hansard, page 2786).
  2. If so, will he make available to senior investigating officers of the Taxation Office, who may be interested in the activities of Mr Lee, all departmental files on which Mr Lee has made representations during the last 10 years.
  3. ) Will he make a statement indicating the availability of these files.
  4. Will he also provide the Taxation Office with a list of the names of the Chinese nationals resident in Hong Kong on whose behalf Mr Lee made representations to his Department but which were not successful.
Mr MacKellar:

– The answer to the honourable member’s question is as follows:

  1. Yes.
  2. , (3) and (4) The Department will co-operate fully if the Australian Taxation Office seeks its assistance.

-I thank the House. I am absolutely appalled by the answer given to my questions by the Treasurer (Mr Howard). I do not want to know what action the Commissioner of Taxation will take in this matter. I would be happy just to know that the taxation authorities will take steps to look into the financial activities of Mr Lee. The former Minister for Immigration- I hope his successor will stand by him- has said that his Department will cooperate fully with the Taxation Office if requested. I would have thought that the Treasurer would have been most anxious to follow up this most blatant case of exploitation. In today’s Sydney Morning Herald an article appears under the heading ‘Migrant racket: new move by government’, as follows:

The Department of Immigration and Ethnic Affairs moved yesterday to investigate allegations published in the Herald yesterday that an immigration racket in South Korea and Australia netted its principals S3. 5m.

Members of Sydney’s Korean community have named one solicitor in Sydney believed to be involved in the racket.

However, it is understood the department is aware of allegations relating to another two Sydney solicitors . . .

I repeat, the sum mentioned was $3.5m. What action will the Treasurer direct the Commissioner of Taxation to take over these allegations?

I know that an immigration racket exists. Following my speech on 8 November last, I was approached by a person whose name has appeared frequently in the Sydney Press in relation to the Cessna case. This man asked me to go easy on Mr Lee. I said: ‘Look, Lee has got to go- he is a crook. He has ripped off my constituents and I am anxious to see that they get some satisfaction. I want them to get their money back.’ This person said ‘Leave it to me’ and led me to believe that at a subsequent meeting to be arranged he would endeavour to arrange some satisfaction for my constituents. In the meantime, my constituents were being pressured by some leading members of the Chinese community in Sydney and Newcastle, as well as by Mr Lee, to drop the allegations. I told my Chinese constituents: ‘Sit tight. We might have a chance of getting the money back’.

Another meeting was arranged between the go-between and myself. This took place at the Hornsby railway station on a Friday when I was en route from Canberra to my home. I had advised my leader of what I proposed. This meeting proved to be a total waste of time. What the go-between wanted me to do was publicly withdraw charges made against Mr Lee. He said that if I did this I would get assistance in my next election campaign. I said: ‘I am retiring’. He said: ‘All right, what about a nice dinner with a wallet and $500?’ I said: ‘No, no, no. I am not a money man. I will be receiving enough to live on from my parliamentary pension. ‘ I was outraged. All subsequent contact was by telephone and always my main thought was to try to get some of the money back for my constituents. On 20 November 1979, $7,300 found its way into an account at the Commonwealth Bank at Newcastle West. The account number was 78680.


Order! The honourable member’s time has expired.

Opposition members- Oh!


– Give me another minute.


-Is it the wish of the House that the honourable member for Hunter be given an additional minute in which to speak?

Leave granted.


-I thank the House. I repeat that $7,300 found its way into the Commonwealth Bank at Newcastle West. The account number was 78680. The account was opened in the name of Mrs Elaine Boyd- my secretary- trustee for Samson and Rosetta Man, the Chinese couple. The money has since been transferred- on 21 December 1979- to account number 620391-60 in the name of Samson Man, at the Rural Bank in Newcastle. I presume that the money came, either directly or indirectly, from Mr Lee. I now ask the Treasurer: Is not the return of this money to my constituents tantamount to an admission of guilt? Will he now take steps to follow this up? I may add that it cost my constituents nothing for legal advice, not one cent. My chambers are always open.


– I seek a moment of indulgence, not the opportunity to make a speech. I refer to the explanation made by the Minister for Immigration (Mr Macphee) immediately before the adjournment debate tonight of views that he expressed about me last night. Several of us on this side certainly got the completely wrong impression. I accept his explanation made personally this afternoon and earlier tonight, and hope that he accepts my explanation of the response to his comments I made on a Melbourne radio station this morning.


-My purpose in rising is to make some points in relation to the liquefied petroleum gas issue which is of concern to so many members and of course to the Government. The problem has arisen because of recent Prices Justification Tribunal decisions that have increased the price of LPG from $62.42 per tonne before excise in January 1979 to $224.45 per tonne before excise in February 1980. Excise has remained stable at $27.55 per tonne over the period. Those prices are ex-refinery and obviously do not include freight.

Over the last year the PJT has been moving towards export parity in its pricing of LPG and the recent major rise of $105 per tonne completes this process. I do not need to explain to the House the problems this has caused for domestic consumers, local government institutions and motor vehicle users in particular. The effect has been dramatic. It has been aggravated by the freight factor as well.

There is no doubt in my mind that the problem that has arisen involves confusion between the concept of import parity and export parity. The Government’s parity pricing policy for fuel is an import parity policy, not an export parity policy. I support the Government’s policy and would not suggest that we move away from it, but I emphasise that it is not an export parity policy. In my view, we need to forget about the export parity concept. When oil comes into the refinery it is at import parity. Either the world price has been paid or the oil has been levied. That satisfies the Government’s policy and that should be an end to it. There is no justification for then pricing what comes out of the refinery at export parity. Apart from anything else, such action only distorts the prices received for the mix of petroleum products that comes out of the refinery.

I make the point that if it was profitable for refineries to sell LPG at $62.42 per tonne a year ago, how much more profitable is it to sell LPG at an administered price of $224.45 per tonne a year later? I seek leave to incorporate the balance of my speech in Hansard.

Leave not granted.


-It being 1 1 p.m. the debate is interrupted. The House stands adjourned until Tuesday, 18 March next, at 2.15 p.m., unless an alternative day or hour of meeting be notified by telegram or letter addressed to each member of the House.

page 823


The following notice was given:

page 823


The following papers were deemed to have been presented on 6 March 1980, pursuant to statute:

Defence Amendment Act- Interim DeterminationsStatutory Rules 1980, Nos. 33, 34, 35, 36.

House adjourned at 11 p.m.

page 824


The following answers to questions were circulated:

Motor Vehicle Noise (Question No. 4675)

Mr Morris:

asked the Minister for Transport, upon notice, on 19 September 1979:

  1. 1 ) On what date was each type of motor vehicle required to conform to the provisions of ADR 28.
  2. What are the provisions of ADR 28 in respect to motor vehicle noise for each class of vehicle.
  3. Which authorities are charged with responsibility for the policing of ADR 28 in each State and Territory.
  4. At what stage is inspection carried out.
  5. Have infringements of ADR 28 been recorded since its introduction; if so, by whom.
  6. What penalties are proposed in case of infringements of ADR 28.
Mr Hunt:

– The answer to the honourable member’s question is as follows:

  1. 1 ) Motor vehicles are required to conform with the provisions of ADR 28- Motor Vehicle Noise- as from the following dates-

Passenger cars, passenger car derivatives, and multipurpose passenger cars- 1 January 1974. Petrol engined trucks and buses-1 July 1974. Motor-cycles and diesel engined trucks and buses- 1 July 1 975.

  1. The maximum noise levels permitted under the provisions of ADR 28, when measured in accordance with the test procedures specified in the ADR, are as follows-

Motorcycles up to 125 ml engine capacity- 82 dB(A)

Motorcycles 125-500 ml engine capacity- 84 dB(A)

Motorcycles over 500 ml engine capacity- 86 dB(A)

Three wheeled motor vehicles- 85 dB(A)

Passenger cars, passenger car derivatives and multipurpose passenger cars- 84 dB(A)

Buses up to 3.5 tonne gross mass- 85 dB(A)

Buses over 3.5 tonne gross mass- 89 dB(A)

Buses over 3.5 tonne gross mass and over 150 KW engine power- 92 dB( A)

Other vehicles not exceeding 3.5 tonnes gross mass- 85 dB(A)

Other vehicles over 3.5 tonne gross mass- 89 dB( A)

Other vehicles over 12 tonne gross mass and over 150 KW engine power-92 dB( A)

  1. , (4), (5) and (6) The responsibility for motor vehicle regulation rests with a variety of authorities in the several States and Territories. The Commonwealth is not in possession of the information being sought in these questions.

East Timor (Question No. 5281)

Dr Klugman:

asked the Minister for Foreign Affairs, upon notice, on 1 9 February 1 980:

  1. 1 ) What was the substantive text of the United Nations General Assembly resolution on the question of East Timor in November 1979.
  2. Which countries voted (a) for and (b) against the motion and which countries (c) abstained from voting and (d ) were absent for the vote.
  3. ) Has there been a previous occasion where the Union of Soviet Socialist Republics voted one way and none of the 6 East European countries (Bulgaria, Czechoslovakia, German Democratic Republic, Hungary, Poland and Romania) voted the same way.
Mr Peacock:

– The answer to the honourable member’s question is as follows:

  1. Following is the text of Resolution 34/40 adopted by the General Assembly on 2 1 November 1979.

The General Assembly

Recognising the inalienable right of all peoples to selfdetermination and independence in accordance with the principles of the Charter of the United Nations and of the Declaration on the Granting of Independence to Colonial Countries and Peoples, contained in its resolution 15 14 (XV) of 14 December 1960.

Bearing in mind the part of the Political Declaration adopted by the Sixth Conference of Heads of State or Government of Non-Aligned Countries, held at Havana from 3 to 9 September 1979, relating to East Timor.

Having examined the chapter of the report of the Special Committee on the Situation with regard to the Implementation of the Declaration on the Granting of Independence to Colonial Countries and Peoples relating to the Territory.

Having heard the statements by the representatives of Portugal, as the administering Power, and of Indonesia.

Having also heard the statements by the petitioners, including the representative of the Frente Revolucionaria de Timor Leste Independent.

  1. Reaffirms the inalienable right of the people of East Timor to self-determination and independence in accordance with General Assembly resolution 15 14 (XV);
  2. Declares that the people of East Timor must be enabled freely to determine their own future, under the auspices of the United Nations;
  3. Expresses its deepest concern at the suffering of the people of East Timor as a result of the situation now prevailing in the Territory;
  4. Calls upon all parties concerned to facilitate the entry into the Territory of international relief aid in order to alleviate the suffering of the people of East Timor;
  5. Requests the United Nations Children’s Fund and the Office of the United Nations High Commissioner for Refugees to render, within their respective fields of competence, all possible assistance to the people of East Timor, particularly the children and those seeking to leave for another country for purposes of family reunion;
  6. Requests the Secretary-General to follow the implementation of the present resolution and to report thereon to the General Assembly at its thirty-fifth session;
  7. Decides to include in the provisional agenda of its thirtyfifth session, the item entitled ‘Question of East Timor’. ‘

    1. 2 ) Voting on the resolution was as follows:

In favour: Afghanistan, Albania, Algeria, Angola, Barbados, Benin, Botswana, Brazil, Burundi, Byelorussia Cape Verde, Central African Republic, Chad, China, Congo, Costa Rica, Cuba, Cyprus, Democratic Yemen, Equatorial Guinea, Ethiopia; Gambia, Ghana, Greece, Grenada, Guinea, Guinea-Bissau, Guyana, Haiti, Iceland, Iran, Jamaica, Kenya, Lao People ‘s Democratic Republic,

Lesotho, Liberia, Madagascar, Malawi, Mali, Mexico, Mongolia, Mozambique, Nicaragua, Niger, Portugal, Rwanda, Saint Lucia, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Swaziland, Sweden, Togo, Trinidad and Tobago, Uganda, Ukraine, USSR, United Republic of Tanzania, Upper Volta, Viet Nam, Zambia.

Against: Australia, Bangladesh, Chile, Columbia, Egypt, Honduras, India, Indonesia, Iraq, Japan, Jordan, Malaysia, Maldives, New Zealand, Oman, Papua New Guinea, Paraguay, Philippines, Qatar, Saudi Arabia, Singapore, Sudan, Suriname, Syria, Thailand, Tunisia, Turkey, United States, Uruguay, Yemen, Zaire.

Abstaining: Argentina, Austria, Bahamas, Bahrain, Belgium, Bhutan, Bolivia, Burma, Canada, Czechoslovakia, Denmark, Dominican Republic, El Salvador, Fiji, Finland, France, Gabon, Federal Republic of Germany, Guatemala, Hungary, Ireland, Israel, Italy, Ivory Coast, Kuwait, Lebanon, Luxembourg, Mauritania, Morocco, Nepal, Netherlands, Nigeria, Norway, Pakistan, Panama, Peru, Romania, Samoa, Spain, Sri Lanka, United Arab Emirates, United Kingdom, United Republic of Cameroon, Venezuela, Yugoslavia.

Absent: Bulgaria, Comoros, Democratic Kampuchea, Djibouti, Dominica, Ecuador, German Democratic Republic, Libya, Malta, Mauritius, Poland, Solomon Islands, Somalia.

  1. To be precise, while the USSR voted in favour of the resolution, Czechoslovakia, Hungary and Romania abstained. Bulgaria and the German Democratic Republic were absent when the voting was held. Such a voting pattern by these countries on the Question of East Timor has not been repeated on any previous occasion. I am unaware of such a voting pattern being duplicated on any other United Nations vote.

Kampuchea (Question No. 5282)

Dr Klugman:

asked the Minister for Foreign Affairs, upon notice, on 1 9 February 1 980:

  1. 1 ) What was the substantive text of the United Nations General Assembly resolution on the situation in Kampuchea in November 1979.
  2. Which countries voted (a) for and (b) against the motion and which countries (c) abstained from voting and (d) were absent for the vote.
Mr Peacock:

– The answers to the honourable member’s questions are as follows:

  1. On 14 November 1979 the United Nations General Assembly adopted the following resolution (number 34/22) on the situation in Kampuchea.

The General Assembly

Noting with great concern that the armed conflict in Kampuchea has escalated and is seriously threatening the peace and stability of South-East Asia,

Deeply regretting the armed intervention by outside forces in the internal affairs of Kampuchea,

Gravely alarmed that the present conflict may spill over to neighbouring countries and increase the danger of further involvement by outside Powers,

Deeply distressed by the widespread hardship and deprivation and the large-scale famine being suffered by the people of Kampuchea,

Seriously disturbed that these developments have resulted in a continuing large exodus of people from Kampuchea to neighbouring countries, thereby causing them severe problems,

Noting with deep appreciation the roles played by the United Nations and other national and international humanitarian organisations in rendering relief assistance to the civilian population of Kampuchea, and the initiative of the Secretary-General in convening the Pledging Conference for Emergency Humanitarian Relief to the People of Kampuchea held on 5 November 1979, as well as the pledges made by the various countries at that Conference,

Convinced that a political solution which will ensure the sovereignty and independence of Kampuchea is essential for bringing about durable peace and stability in the region,

Reaffirming the right of all peoples to determine their own future free from outside interference,

Emphasising that all States shall refrain, in their international relations, from the threat or use of force against the sovereignty, territorial integrity or independence of any State, and strictly adhere to the principles of peaceful settlement of disputes and of non-interference in the internal affairs of other States,

  1. Strongly appeals to all States and national and international humanitarian organisations to render, on an urgent and non-discriminatory basis, humanitarian relief to the civilian population of Kampuchea, including those who have sought refuge in neighbouring countries;
  2. Calls upon all States to take urgent measures to resettle from these countries the displaced Kampucheans;
  3. Welcomes the continuing efforts of the SecretaryGeneral to co-ordinate relief assistance and to ensure its distribution to those for whom it is intended;
  4. Urges all parties to the conflict to co-operate in every possible way to facilitate the humanitarian relief efforts;
  5. Calls upon all parties to the conflict to observe fully the fundamental principles of human rights;
  6. Further calls upon all parties to the conflict to cease all hostilities Forthwith;
  7. Calls for the immediate withdrawal of all foreign forces from Kampuchea and calls upon all States to refrain from all acts or threats of aggression and all forms of interference in the internal affairs of States in South-East Asia;
  8. Urges all parties to the conflict to settle their disputes by peaceful means in accordance with the Chaner of the United Nations;
  9. Appeals to all States to refrain from any interference in the internal affairs of Kampuchea in order to enable its people to decide their own future and destiny free from outside interference, subversion or coercion, and to respect scrupulously the sovereignty, territorial integrity and independence of Kampuchea;
  10. Resolves that the people of Kampuchea should be enabled to choose democratically their own government, without outside interference, subversion or coercion;
    1. Requests the Secretary-General to follow the situation closely and to exercise his good offices in order to contribute to a peaceful solution of the problem;
  11. Also requests the Secretary-General to explore the possibility of holding an international conference on Kampuchea as one of the means for implementing the present resolution;
  12. Further requests the Secretary-General to submit to Member States a report on the situation at the earliest appropriate opportunity;
  13. Decides to include the item entitled ‘The Situation in Kampuchea’ in the provisional agenda of its thirty-fifth session.

    1. (a) In favour: Argentina, Australia, Austria, Bahamas, Bangladesh. Barbados, Belgium, Bhutan, Bolivia, Botswana, Brazil, Burma, Canada, Chad, Chile, China, Colombia, Comoros, Costa Rica, Democratic Kampuchea, Denmark, Djibouti, Ecuador, Egypt, El Salvador, Equatorial Guinea, Fiji, France, Gabon, Gambia, Federal Republic of Germany, Ghana, Greece, Guatemala, Haiti, Honduras, Iceland, Indonesia, Ireland, Israel, Italy, Japan, Kenya, Lesotho, Liberia, Luxembourg, Malawi, Malaysia, Maldives, Malta, Mauritania, Mauritius, Morocco, Nepal, Netherlands, New Zealand, Niger, Nigeria, Norway, Oman, Pakistan, Papua New Guinea, Paraguay. Peru, Philippines, Portugal, Rwanda, Samoa, Saudi Arabia, Senegal, Singapore, Solomon Islands, Somalia, Spain, Sri Lanka, Sudan, Surinam, Swaziland, Sweden, Thailand, Togo, Tunisia, Turkey, United Kingdom, United Republic of Cameroon, United States, Upper Volta, Uruguay, Venezuela, Yugoslavia, Zaire.
    1. Against: Afghanistan, Angola, Bulgaria, Byelorussia, Cuba, Czechoslovakia, Democratic Yemen, Ethiopia, German Democratic Republic, Grenada, Guyana, Hungary, Lao People’s Democratic Republic, Mongolia, Mozambique, Nicaragua, Poland, Sao Tome and Principe, Ukraine, USSR, Vietnam.
    2. Abstaining: Algeria, Bahrain, Benin, Burundi, Cape Verde, Central African Republic, Congo, Dominican Republic, Finland, Guinea, Guinea-Bissau, India, Ivory Coast, Jamaica, Jordan, Kuwait, Lebanon. Madagascar, Mali, Mexico, Panama, Qatar, Sierra Leone, Syria, Trinidad and Tobago, Uganda, United Arab Emirates, United Republic of Tanzania, Zambia.
    3. Absent: Albania, Cyprus, Dominica, Iran, Iraq, Libya, Romania, Saint Lucia, Seychelles, Yemen.

Nuclear Reactors (Question No. 5349)

Dr Klugman:

asked the Minister representing the Minister for National Development and Energy, upon notice, on 1 9 February 1 980:

  1. 1 ) Is the Minister able to state how many nuclear reactors generating electricity are presently operating in (a) the United States of America, (b) the Union of Soviet Socialists Republics, (c) Belgium, (d) Switzerland, (e) the German Democratic Republic, (f) the Federal Republic of Germany, (g) Italy, (h) Finland, (j) Sweden, (k) France, (1) Japan, (m) the United Kingdom, (n) Norway and (o) Spain.
  2. Which other countries have nuclear reactors in commercial use.
Mr Anthony:

– The Minister for National Development and Energy has provided the following answer to the honourable member’s question:

  1. 1 ) As of 1 February 1980, the number of nuclear power reactors of 30 Mw capacity or more declared as in commercial operation for generation of electricity in each of the countries specified were:

    1. USA: 71
    2. USSR: 24
    3. Belgium: 3
    4. Switzerland: 4
    5. GDR: 4
    6. FRG:11
    7. Italy: 4
    8. Finland: 2
    9. Sweden: 6
    10. France: 14
    1. Japan: 22

    2. UK: 33 (n) Norway: Nil
    3. Spain: 3
  2. The following countries also have nuclear reactors in commercial use: Argentina, Bulgaria, Canada, Czechoslovakia, India, Korea, Netherlands, Pakistan, Taiwan.

Military Service in the Netherlands (Question No. 5350)

Mr Leo McLeay:

asked the Minister for Foreign Affairs, upon notice, on 19 February 1980:

What is the liability of Australian citizens of Dutch descent for military service in the Netherlands?

Mr Peacock:

– The answer to the honourable member’s question is as follows:

Military service of between 12 and 18 months is compulsory in the Netherlands for all male citizens between the ages of 18 and 35. Australian citizens between those ages who also possess Netherlands citizenship may receive a call-up notice while visiting the Netherlands. It is possible to lodge an appeal with the Ministry of Defence for exemption from military service. Grounds for such an appeal include demonstrating that one is temporarily visiting the Netherlands and possesses evidence of intention to return to another country of residence within a period of six months.

Where an exemption is not granted, persons liable for service are obliged to report for a medical examination. Potential conscripts who pass the medical examination are forwarded conscription papers, which can take six months or more. During the period between the medical examination and the receipt of call-up papers, a dual national who holds the passport of his other nationality may leave the Netherlands. However, on return to the Netherlands before the age of 35 the obligation to complete military service remains.

Persons returning to settle in the Netherlands after reaching the age of 25 are normally exempt from military service provided they did not leave the Netherlands to avoid conscription.

Any Australian citizen of Dutch descent who is planning to visit the Netherlands and who has doubts about his obligation to undergo military service should make enquiries of the Netherlands authorities in Australia prior to departure from Australia.

Parliamentary Visits to Australian Antarctic Installations (Question No. 5353)

Mr Leo McLeay:

asked the Minister for Science and the Environment, upon notice, on 19 February 1980:

  1. 1 ) Which members of the Australian Parliament have visited Australian Antarctic installations since January 1 975.
  2. 2 ) What provision is made for members of the Australian Parliament to inspect Australian installations at the Antarctic.
  3. Is he able to state what provision is made by other Governments with bases at the Antarctic for members of their national Parliament to visit their country’s installations.
Mr Thomson:
Minister for Science and the Environment · LEICHHARDT, QUEENSLAND · NCP/NP

– The answer to the honourable member’s question is as follows:

  1. (a) Mr P. D. Falconer (Casey, Victoria), Senator M. Townley (Tasmania) and Senator D. M. Devitt (Tasmania) visited Macquarie Island 10-22 March 1977 on M.V. Thala Dan.

    1. Senator Townley flew over Macquarie Island on 7 September 1977 in an RAAF Orion aircraft which carried out an air drop of mail on the island whilst on a Southern Ocean training flight.
    2. Senator Devitt visited Casey and Macquarie Island on M.V. Thala Dan, 10 January-13 February 1978.
    3. The then Minister for Science and the Environment, Senator J. J. Webster and Senator D. S. Jessop (South Australia), Chairman of the Senate Committee on Science and the Environment accompanied a proving flight by a U.S. Navy Hercules aircraft on 31 January 1979 on the McMurdo-Casey route, spending a short time at Casey.
  2. No special provision is made for members of the Australian Parliament to inspect Australian installations in the Antarctic. Visits by expedition ship require an absence of 4-6 weeks from Australia in the period November-March. Continuation of U.S. flights to Casey could provide similar opportunity for visits by a small number of members but is subject to annual arrangements. Short visits by air cannot yet be guaranteed.
  3. It is not known what provision is made by other Antarctic nations for members of their national Parliaments to visit their country’s installations. However, it is known that United States and New Zealand parliamentarians have access by aircraft.

Maritime Search and Rescue Activities (Question No. 5375)

Mr Dawkins:

asked the Minister for Transport, upon notice, on 20 February 1 980:

  1. 1 ) What was the cost to the Commonwealth of the search and rescue mission in relation to the tragic loss of the Charleston between Tasmania and Victoria in December 1979.
  2. What was the (a) annual cost and (b) number of maritime search and rescue activities during each of the last 5 years.
Mr Hunt:

– The answer to the honourable member’s question is as follows:

  1. The cost to the Commonwealth of the search for the Charleston was $493,467.
  2. (a) The identifiable costs to the Commonwealth of search operations during each of the last five financial years were:

1974-75-$338,083; 1 975-76 - $23 1 , 785; 1976-77- $369,112; 1977-7 8-$ 73 8, 3 5 5; 1978-79-$459,432.

  1. The number of incidents requiring search action during each of the last five years were:

1974-75-81; 1975-76-41; 1976-77-79; 1977-78-48; 1978-79-44.

Murray Valley Salinity and Drainage (Question No. 5405)

Mr Jacobi:

asked the Minister representing the Minister for National Development and Energy, upon notice, on 20 February 1 980:

  1. 1 ) Has the Government accepted the recommendations of Maunsell and Partners in their Murray Valley Salinity and Drainage Report.
  2. If so, will the Government guarantee specific finance for the States for future years to enable the $75 million 5 year program recommended in the report to proceed on schedule.
  3. What sum will the Commonwealth guarantee to provide to each State and in which years.
  4. What funding will the Government provide for the 25 year program, estimated to cost $ 1 23 million, which has also been recommended in the report.
  5. As the Maunsell report notes that a number of State sponsored studies and investigations into the salinity problem have taken place since 1975, but few proposals have been implemented, will the Minister take action to prevent further reports being called for that would further delay action on this urgent problem.
Mr Anthony:

– The Minister for National Development and Energy has provided the following answer to the honourable member’s question:

  1. 1 ) The Government will consider the implementation of those components of the consultants’ recommendations relevant to action by the Commonwealth under the National Water Resources Program. In fact, assistance is already being given to the States for urgent salinity control and drainage projects identified in the consultants’ earlier interim report.
  2. , (3) and (4) It is not practicable to guarantee specific levels of assistance in each year to the three States as a number of the projects included in the recommended plan of action have not yet been approved by the States.
  3. Yes, except where further information is required on individual projects.

Motor Vehicle Fuel Research (Question No. 5412)

Mr Armitage:

asked the Minister representing the Minister for National Development and Energy, upon notice, on 20 February 1 980:

  1. 1 ) Has the Minister’s attention been drawn to a report in the Sydney Daily Telegraph of 7 February 1 980 which indicates that Professor Owen Potter, Chairman of Melbourne ‘s Monash University, Department of Chemical Engineering, had stated that New South Wales and Queensland black coal could fuel a revolutionary car engine designed to beat the energy crisis, but that the Federal Government had refused Professor Potter and his team of NERDDC engineers and coal researchers funds to finance further work on the engine.
  2. If so, have funds been refused for the project and what was the reason.
  3. Will the Government reconsider the request for funds.
Mr Anthony:

– The Minister for National Development and Energy has provided the following answer to the honourable member’s question:

  1. Yes.
  2. Under the National Energy Research, Development and Demonstration Program about $2.7 million has been committed so far for research and development related to fuel conservation in motor vehicles. A comprehensive program in this area covers development of more fuel efficient engines, investigation into alternative fuels and petrol extenders, studies of vehicle usage and driver behaviour, and electric vehicles and battery systems.

In 1979 Professor Potter applied for assistance under the NERDD Program to develop a coal fired fluidised-bed combustor suitable for use in a steam powered vehicle based on the Pritchard steam engine. This project was not recommended for the following reasons:

  1. The thermal efficiency of the steam engine is substantially lower than that of existing prime movers used for transport.
  2. Air pollution would be a difficult problem to overcome.
  3. Alternative systems offer better prospects, for example electric vehicles or utilisation of synthetic fuels derived from coal. The latter alternative has the advantage that existing storage/distribution infrastructure and the present vehicle fleet would need no modification. Professor Potter points out that a ‘coal to oil scheme’ wastes energy due to conversion losses. However the resultant liquid fuel is used in a much more efficient engine than the steam engine, resulting in less energy wastage than results from burning coal directly in a steam engine.
  4. The cost of the project was very high (in excess of $1 million) and no proof of concept was offered.

    1. On the basis of the above consideration NERDDC was unable to recommend Professor Potter’s application. Should he wish to submit further proposals they will be given the careful assessment which all applications for Government support in energy research, development and demonstration receive.

Nuclear Power Stations (Question No. 5475)

Mr Uren:

asked the Minister representing the Minister for National Development and Energy, upon notice, on 2 1 February 1980:

Is the Minister able to state how many nuclear power stations were (a) ordered, (b) cancelled and (c) deferred during 1979 in (i) Japan, (ii) the United States of America, (iii) the United Kingdom, (vi) France, (v) the Federal Republic of Germany, (vi) Canada, (vii) Italy and (viii) OECD countries, and in each case what was the generating capacity.

Mr Anthony:

– The Minister for National Development and Energy has provided the following answer to the honourable member’s question:

Information on nuclear power stations ordered, cancelled and deferred during 1979 is not fully available. As at 28 February 1 980, the following data are to hand:

Petroleum Exploration (Question No. 5501)

Mr Humphreys:

asked the Minister representing the Minister for National Development and Energy, upon notice, on 26 February 1980:

  1. 1 ) Has the Minister’s attention been drawn to a report in the Australian of 10 January 1980 entitled ‘Local Oil Search Loses its Drive ‘.
  2. If so, and if there is any substance in the report, how can the Government equate its huge revenue collections from the crude oil levy and the huge windfall profits of the oil companies with the reported lack of exploration.
Mr Anthony:

– The Minister for National Development and Energy has provided the following answer to the honourable member’s question:

  1. Yes.
  2. Petroleum Exploration activity has shown a marked increase in the period 1975 to 1979. Exploration drilling and expenditure has increased from 25 wells ($65m) in 1975 to 51 wells (an estimated $190m) in 1979. Estimates by the Australian Petroleum Exploration Association (APEA) indicate a further increase in exploratory drilling in 1980. There has also been a strong surge in seismic activity, from 7,800 kms in 1975 to 43,400 kms in 1979. Seismic surveys are the basis for selection of drilling sites and consequently the marked increase in seismic activity in recent years represents a sound basis for increased exploratory drilling in the future.

Although exploration expenditure is an important indication of industry confidence it should be considered in conjunction with development expenditure. Development drilling and expenditure show the same strong trend, 4 wells and $85m in 1975; 56 wells and $145m in 1979. As a result, the combined expenditure on exploration and development in 1979 was a record and this upward trend is still continuing. For example, in Bass Strait, $240m is planned for new construction and field development in 1 980 and more than $ 1 billion has been committed over the next 4 years.

This very encouraging position is a sure sign that this Government’s policies have restored the confidence of the petroleum industry and this is further reinforced by the fact that in recent years 70-80 per cent of petroleum exploration funds have come from company profits.

Cite as: Australia, House of Representatives, Debates, 6 March 1980, viewed 22 October 2017, <>.