31st Parliament · 1st Session
Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 2. 1 5 p.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Right Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth:
That the proportion of pensionable people within our community is increasing at a significant rate. The number of people over 63 years old will rise from approximately 8.S per cent of the population as it was in 1970 to over 10 percent by 1 990 and about 1 6 per cent by the year 2020.
That technological change is accelerating the trend towards earlier retirement from the workforce.
That the above factors make incentives for self-provision in retirement years a matter of great urgency if future generations of Australians are to be spared the crippling taxation which would be necessary to fund such provisions from social welfare.
That Australia is in urgent need of locally raised investment capital for national development and that life insurance and superannuation funds are important mobilisers of such capital.
Your petitioners therefore most humbly pray that the Government will forthwith take the steps necessary to:
And your petitioners as in duty bound will ever pray,
Petitions received. by Mr Burns, Mr Carlton and Mr Dawkins. Petitions received.
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 representatives without intervention and interference by an unrepresentative “Advisory Council “.
And your petitioners as in duty bound will ever pray, by Mr Calder and Mr Katter. Petitions received.
To the Honourable Speaker and members of the House of Representatives of the Australian Parliament assembled. The petition of certain citizens respectfully showeth:
Their support for and endorsement of the National Women ‘s Advisory Council. We call on the government to continue to maintain the National Women’s Advisory Council and increase Federal Government support for its activities.
And your petitioners as in duty bound will ever pray, by Mr Baume. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that:
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 d duty bound will ever pray,
Petition received. by Mr Clyde Cameron. Petition received.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That the retail price of Australian rum is too high and should be reduced to enable the average Australian to buy it.
Your petitioners therefore humbly pray that steps be taken to reduce the excise duty on Australian rum.
And your petitioners as in duty bound will ever pray, by Mr Donald Cameron. Petition received.
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,
Petition received. by Mr Jarman. Petition received.
To the Honourable Speaker and members of the House of Representatives in Parliament assembled the petition of the undersigned citizens of Australia respectfully showeth:
That there is an urgent need to ensure that the living standard of pensioners will not decline, as indeed, the present level of cash benefits in real terms requires upward adjustment beyond indexation related to the movement of the consumer price index, by this and other means your petitioners urge that action be taken to:
Taxation relief for pensioners and others on low incomes by:
And your petitioners as in duty bound will ever pray. by Mr 0’Keefe Petition received.
To the Right Honourable Speaker and members of the House of Representatives in Parliament assembled. This humble petition of the sportsmen and women and citizens of Australia respectfully showeth that:
Valuing the Olympic movement as an historic expression of all that is worthwhile in human endeavour and conscious of the important role competitive sport plays in maintaining health and the spirit of achievement in everyday life.
Honouring the high principles consistently pursued by the International Games Administration of keeping the movement free from religious, racial and political considerations.
Realising that the Olympic movement owes its resilience and very existence to the citizens of the nations from whom spring the participants in the contests and that the survival of this movement is the cherished hope of all communities.
We the undersigned sportsmen and women and citizens of the Commonwealth of Australia by this humble petition respectively pray that the Australian government do all in its power to ensure the participation of a full Australian contingent in the XXII Olympic Games to be held in Moscow, USSR, from 1 9th July to 3rd August, 1 980.
And your petitioners as in duty bound will ever pray, by Mr Les Johnson. Petition received.
-I give notice that on the next day of sitting I shall move:
That this House deplores the shameful action of Mr Bjelke-Petersen in seeking to subvert Australian foreign policy, in attempting to separate Queensland from the rest of Australia in international affairs and in giving unashamed and gratuitous comfort and support to the cruel and callous aggression of the Soviet Union.
-I give notice that on the next day of sitting I shall move:
That this House-
1 ) noting proposals for the neutralisation of and peace in Afghanistan asserts that the only neutralisations to be successful since World War II, for example, Austria, developed when those wanting peace bargained from strength; and
finds that the Australian Prime Minister therefore has sought genuine peace in Afghanistan and the Opposition has seriously prejudiced it by seeking to bargain from weakness.
– Is the Prime Minister aware of the statements made last week by the Premier of Queensland that an Australian boycott of the Olympic Games would not help the unfortunate people of Afghanistan and that only 30 per cent of Australians now support such a boycott? Has the Queensland Premier arranged to meet the Prime Minister this week, as he promised publicly on Friday, to discuss his changed view of an Olympic Games boycott? If so, will the discussion take place? If the approach is yet to be made, will the Prime Minister accept the request of the Queensland Premier to enter into such a discussion? Finally, can the Prime Minister say whether any State Premier now actively supports the proposal for a boycott of the Olympic Games. If so, will he identify that Premier?
-The honourable gentleman, of course, earlier supported calls for an effective boycott of the Olympic Games and indicated that he would join it. Of course, that is a past matter. Since then his view has unfortunately changed. When I made a major statement to the House on the subject of Afghanistan I indicated that the time span of public attention tends to be short. If the Soviet invasion had been of Papua New Guinea or of Indonesia with upwards of 90,000 troops and 30,000 to 40,000 more troops on the borders, that would have been something much closer to us and the time span of our attention clearly would have been very much greater.
I am quite sure that the Premier of Queensland would not want to do anything that would support or encourage a communist cause. I do not believe, especially in the face of the revelation of atrocities that have been committed by the Soviets in Afghanistan since the invasion, that the Premier of Queesland would want to see the Australian flag flying over Moscow and having the Australian national anthem sung in Moscow. The Premier has not approached me about these matters. He has not sought to arrange a meeting. If he wants to discuss these matters with me I will do so. I am always delighted to meet the Premier of Queensland, a notable Australian, who has done much for Queensland and who did a very great deal to reveal the iniquities of the Labor Government in the period leading up to 1975. I believe I know the Premier sufficiently well to know that he would support very strongly the sentiments about the Australian flag and the Australian anthem which I have just indicated.
-Has the Minister for Primary Industry seen the reports of a shocking loss of life through burns or drowning of 40,000 sheep which were on shipment to abattoirs in the Middle East? Has the Minister seen earlier reports of the terrible suffering of horses while being shipped to abattoirs in Japan? Will the Minister, if necessary in conjunction with the Minister for Transport, take the necessary action to ensure that carcass trade be promoted and that there be no further shipments of live animals overseas?
– I am not prepared to seek to stop the shipment of live sheep to the Middle East. I would be interested to know the Labor Party’s attitude on this question. As usual, it is ambivalent on all issues and seeks to be expedient on most. The reality is that the loss of sheep on this ship was very unfortunate. But let us keep this matter in perspective. Some 24 million sheep have been exported through the live animal trade over the last 10 years. It is regrettable that a significant loss in one accident of this nature should occur. When one recognises that between 9 million and 15 million sheep are lost each year in Australia through natural disasters one gets a better perspective of the events that occurred with the sheep lost last week.
In respect of the 24 million sheep that have been carried over 10 years, it is my understanding that losses have been reduced up to this point anyway- that is up to the loss last week- to some 2 per cent to 3 per cent per ship load. When one recognises that on the average farm throughout Australia in 12 months losses exceed 8 per cent or 9 per cent through natural disasters, again one gets a better perspective of what occurred through this loss. I understand that the Department of Transport has very stringent regulations in respect of the carriage of sheep, horses and livestock generally. The observance of these is monitored by the Royal Society for the Prevention of Cruelty to Animals and they are in accord with that organisation’s wishes. I think it would be inappropriate to disturb the present arrangements because of the unfortunate loss of the one ship last week.
– My question is addressed to the Prime Minister. I ask: Was the Prime Minister accurately quoted when he was reported as saying recently that the use of defoliants in Vietnam was ‘quite responsible and sensible’? Has his attention been drawn to today’s editorial in the Illawarra Daily Mercury, which states that he ‘really is out of touch with current thinking’ in his claim that the use of defoliants in Vietnam was quite responsible and sensible?
– What about the Cunnamulla Watchman?
– I know it is a matter of great hilarity!
-Order! The honourable gentleman will continue with his question.
– On 5 October 1977 did Australia accede to a convention prohibiting biological and toxin weapons? Does the convention commit Australia to exclude completely the possibility of bacteriological or biological agents and toxins being used as weapons? Is this consistent with his statement yesterday that the use of such weapons was ‘quite responsible and sensible’?
-Australia has always taken a strong position in relation to the use of biological or chemical materials as weapons in warfare. I will get the full record of Australia’s position in relation to that for the honourable gentleman. The honourable gentleman does well to remind the House that there are international conventions on this subject. One aspect of the reports in the newspapers is not correct, that is, the claim that I had referred to the use of defoliants such as agent orange. The words ‘such as agent orange’ are not in the transcript of my remarks. I understand that the reports in three newspapers all came from an Australian Associated Press Pty Ltd report and that a correction is being sent out from the AAP office.
The circumstances- not the sole circumstances, but a significant part of the circumstances- in which Australian troops and forces were using defoliants in Vietnam need to be understood. The Vietcong were adept at making their way through the jungle and coming close to entrenched positions and encampment areas. Clearly, the Australian base camp at Nui Dat and other encampments would have been very much safer if there was a clear area around the perimeter of those bases- a clear area for fire, a clear area for protection. That necessitated, in one way or another, the knocking down of the vegetation to establish a clear line of fire for the protection of Australia’s troops. I am not saying that they are the only circumstances in which defoliants were used, but it was in those circumstances that I was making the remarks that the decision to use defoliants was a responsible and sensible one. It was a necesary element of the protection of Australia’s areas in Vietnam. I would have thought that all honourable gentlemen, whether they agreed with that operation in Vietnam or not, would want Australian soldiers, since they were there, to be able to operate in the safest possible way. It is against that background that I say that I do not believe that any members of this House should or should want to criticise the use that Australia made of defoliants in that instance. Serious issues have arisen as a result of later advice and later concerns, and the Government itself is very sensitive to those matters.
– I ask the Prime Minister a question. Has the Government yet made up its mind how it will handle claims made by the Vietnam Veterans Association of Australia in relation to the exposure of Australian servicemen in Vietnam to herbicides and other chemicals?
-There has been a great deal of concern about this matter in the Australian community and a great deal of concern amongst veterans themselves. There has been a good deal of questioning in this Parliament as to what agents, in a chemical sense, might have been used by Australian forces in Vietnam, and the Minister for Defence has tabled papers in relation to that matter. I would like to make the point that the more important aspect, I believe, for this Parliament and for the Australian people is whether or not any Australian soldiers became subject to the influence of, or could have been affected by- either in the short, the medium or the long term- exposure to chemicals in a variety of forms in Vietnam itself. We know, for example, that agent orange was used by United States forces. I do not know at this moment whether our own troops were in, or patrolled, areas in which that particular defoliant had been used by the United States so that it could therefore have rendered Australian soldiers subject to some degree of contamination by agent orange, even though it had been spread not by our people but by the United States. So the real question to which the Government needs to address itself- and it has been addressed by both the Minister for Veterans’ Affairs and the Minister for Defence- is whether Australian personnel were open to contamination as a result of the use of chemicals in Vietnam. I refer to chemicals in the broader sense, not just in relation to defoliants but maybe for other purposes as well.
The Minister for Veterans’ Affairs has indicated all along the concern that he holds, that the Government holds and that his department holds- it has a very special responsibility in relation to all matters affecting veterans- about this matter. He has itemised the steps that have been taken to this point to put the Government into a position of being able to deal with it. Later today he will be announcing, in a quite major statement so far as this matter is concerned, the decisions of the Government up to this point. He will be announcing the details and broad-based studies of the short, medium and long term effects. The Minister and the Government are concerned not only with whether there have been some effects as a result of exposure to chemicals in Vietnam but also with whether there could be longer term effects unfolding in the future. These matters all need close and careful examination.
The Minister will be emphasising that if claims have been rejected up to this point in relation to contamination by agent orange, and the study reveals any matters that could at a later point assist veterans in making a claim, they will be enabled and indeed encouraged to reopen their particular claim as a result of the study. In other words, it is a study which, in a very real sense, will be designed to elicit the facts over the whole range of matters involved, and therefore ought to be one which I believe would be of significant assistance to veterans who believe that they are in a position in which they should make a claim, or who suffer some result flowing out of service in Vietnam which they believe entitles them to a claim. Therefore these matters are important. The Minister for Veterans’ Affairs will be making a detailed statement about them very shortly.
I come back to the central point. Although the Minister for Defence has given a great deal of information to the Parliament on what our own forces may or may not have used in Vietnam, the important point really is the risks to which Australian servicemen were subject and the measures that are to be undertaken by the Government to make sure that those risks can be properly assessed. That will then assist Australian servicemen if there is a problem in pursuing their own claims under the Repatriation Act.
– My question is directed to the Prime Minister. Was the Prime Minister, as Minister for the Army from January 1966 to February 1968 and as Minister for Defence from November 1969 until March 1971, fully briefed as to the nature and extent of Operation Ranch Hand, the code name for the defoliating program used initially by American armed forces in Vietnam and involving the use of agent orange and other defoliants? Were Australian armed forces in Vietnam responsible for any, and if so what, aspects of Operation Ranch Hand within their own defence perimeter? Was he, as Minister for Defence, or were Australian forces in the field, informed by the United States of its decision in October 1969, based on reports from the National Institute of Health on the physical dangers of various herbicides, to discontinue Operation Ranch Hand in populated areas?
– I call the Minister for Defence.
– I simply indicate -
– I rise on a point of order. Is this proper, Mr Speaker? I asked a question of the Prime Minister, not in his capacity as Prime Minister but in his capacity as Minister for the Army and Minister for Defence in a very specific period. I questioned him about matters which should have been the subject of briefing to him and within his knowledge. How can he refer those matters to a subsequent Minister who might have no knowledge of them except an historic knowledge?
-The honourable gentleman ought to know, and I will repeat what I have said in the House before, that, under the Standing Orders, a member asking a question has no right to require that it be answered in a particular way or by a particular Minister. There is therefore no point of order. I ask the honourable gentleman in the future not to take as a point of order that which he now knows not to be a sustainable point of order.
-The records to which the honourable gentleman has referred are held within the Department of Defence. That Department is the custodian of the records of the Department of the Army of the day and of the Department of Defence of the day. I will consult those records and provide the honourable gentleman with the information he seeks, if that information is available.
– My question is directed to the Minister for Primary Industry and concerns the Kelly report on the dual inspection of meat, which was brought down recently. Has the Minister studied this report? Can he state what action the Government intends to take in regard to the recommendations made in the report?
-The Kelly report bears very heavily on the problem that exists with dual meat inspection services, a matter the States recognise as being a problem, as does the Commonwealth. Following the tabling of the report, copies were sent to the State Ministers for agriculture, and the Prime Minister has written to the Premiers and to the Chief Minister of the Northern Territory seeking their views on the report. I hope that the response from the Premiers and the Chief Minister will lead to the resolution of a matter that has been bugging the meat industry for a long time. Without doubt, the question of dual meat inspection services and the costs thereof is a complete annoyance to the meat industry, and I can understand how it feels.
-The Minister for Defence will recall that in 1975 he declared that the Australian defence force could not defend Botany Bay on a sunny Sunday afternoon. Is it a fact that in each year since then, defence expenditure has remained wedged firmly at 2.6 per cent of the gross national product? Is it a fact that in 1976 the Minister announced a five-year defence program of $ 12,000m but that already there is a shortfall in that program of over $ 1,500m in real terms? Is it also a fact that the recently announced five-year program does not take up any of the shortfall and, in fact, in its total objectives falls short in the capital equipment acquisition targets of those outlined in the 1976 five-year program? In the circumstances, can the Minister now credibly propose to defend Botany Bay on any sort of day, let alone on a sunny Sunday afternoon, or is he prepared to confess that his administration of the Department has been an abject failure?
– I do not know who it was who wrote the poorly constructed question for the honourable gentleman. Nevertheless, I will flatter him by answering it. The fact of the matter is that, from the last year of the Labor Government’s period in office, expenditure on capital equipment has gone from the order of 5 per cent to over 1 5 per cent. Within the very near future it will be of the order of 25 per cent. Apart from that, the honourable gentleman has a very poor memory indeed. I explained to the House the circumstances under which when I was in the Opposition- not as Minister for Defence- I made a reference to Botany Bay. I think that it is possibly deserving of recapitulation.
I was in Rockhampton in February beating up goodwill on behalf of the present Government parties. I was at the Leichhardt Hotel. I was late for a meeting and the telephone rang. A man held himself out to be speaking from the Overseas Service of the British Broadcasting Corporation and asked about the state of defence preparedness- mark this- under a Labor government. I said: ‘Well, the way things are going with this lot at the moment we would not be able to defend Botany Bay on a hot Sunday afternoon’. I am glad to be able to inform the honourable gentleman of two things: If anybody from the BBC rings him at the Leichhardt Hotel in Rockhampton, he should hang up. Beyond that, we can today defend Botany Bay on any afternoon.
-I ask the Prime Minister whether his Government has embarked on a substantial program of assistance to voluntary agencies for the construction of aged persons accommodation, in particular for nursing home care and, in fact, whether the Government has appropriated some $450m so far for that purpose of which it has not spent some $200m. If that be the case, can the right honourable gentleman suggest any reason why anyone in his right mind would want to demonstrate against that sort of government assistance or why anyone should want to encourage the sort of demonstrations against it that we saw yesterday? If that sort of demonstration is to take place, does it mean, in addition, that elected representatives will no longer be able to go about their business without subjecting themselves to the obvious danger involved in violent demonstrations?
-The honourable gentleman is right to draw attention to the fact that the Government during its period of office has embarked on a very major program, which is affecting all areas of Australia, to provide accommodation for aged persons and for disabled and frail aged persons. I think that this program is achieving enormous benefit in many communities right around Australia. Over $200m has been spent up to the present. Before Christmas Senator Dame Margaret Guilfoyle announced a commitment to a further three-year program to cost an additional $225m. So in broad terms that brings the total commitment of the Government to around $450m. The honourable gentleman is right when he says that some of the expenditure is prospective over the next two or three years. It is a most significant program which is doing a very great amount of good. It is the kind of program which I would have thought was bipartisan in its nature. The people who are supported in these homes, especially the frail aged and those in need of fairly intensive nursing home care, are getting the kind of service which was not previously available and which was not available in their homes.
I was asked by the Melbourne City Mission to open a nursing home in Fitzroy. Incidentally, it is the first such home to be opened in Fitzroy, an area which is very much in need of such homes. During the time of this Government, decisions have been made for a commitment of over $600,000 for this home which would cost about $ 1 m. I only regret that such ventures in Fitzroy have not been pursued earlier. I know that Senator Dame Margaret Guilfoyle has quite deliberately tried to encourage the building of aged persons accommodation in areas which might have a particular need. This particular Melbourne City Mission home in Fitzroy is one of those. Fitzroy is an area of need. That need is being met by this Government. It had not been met before now. On that basis I think that everyone would have been surprised to know that
Councillor Kevin Healy of the Fitzroy Council moved a motion to express the Council ‘s concern at the invitation to me, as Prime Minister, to open the Harold McCracken Nursing Home in Fitzroy.
– He works for Ted Innes.
-Exactly so. One of the reasons given for that motion was that the Melbourne City Mission Board is controlled by businessmen who have no sensitivity to working class areas and to working people.
– Fair comment.
– That is pretty right.
– An honourable gentleman says ‘fair comment’ and another honourable gentleman says ‘that’s pretty right’. It ought to be known that that is the judgment, therefore, of those honourable gentlemen about the quality of the work of the Melbourne City Mission. That, obviously, is the feeling of the Opposition and I hope that Hansard picks up who made the interjections.
The Melbourne City Mission has for over 125 years serviced the less privileged people in the Melbourne community. Quite clearly, it does work of enormous value. That kind of comment is an enormous insult to somebody like Mr McCracken who has given service since 1938- that is, for 42 years- on the Melbourne City Mission. He is a person whose only thought, whose only concern, is the service of his own community and the service of people who are less privileged than some others. For that kind of comment to be made in this journal- a comment coming from the Fitzroy Council, from Councillor Kevin Healy or others- is a very extraordinary matter indeed. Councillor Healy said that he hoped there would be a huge demonstration. He said it was expected. It is worth noting that when these invitations are made, generally politicians from all parties are asked if they have an interest in the locality. But on this occasion the local Federal member of Parliament, Mr Innes, State members and the Mayor of Fitzroy, Councillor Tim Harding, indicated that they would boycott the opening. The Council, as I am advised, is a Labor council from start to finish, with the exception maybe of one or two members.
But that is only the first part of the instalment. In the later issue of the Melbourne Times there is a comment by the Reverend Bruce Addison, the Director of the Melbourne City Mission, indicating that he was appalled that attempts were being made to politicise the event. He pointed out that I was asked to attend because I was Prime Minister and that whoever had been Prime Minister, from whatever party, would have been asked to the opening of that first aged frail persons home in Fitzroy because it was regarded as a very significant event in the history of Fitzroy and in the history of 125 years of service to the community by the Melbourne City Mission. Then, of course, there were further comments that Senator Grimes did not attend. Councillor Kevin Healy had again said that he did not doubt that there would be a fair bit of noise when Fraser arrived and departed and that he could not guarantee a peaceful demonstration. Of course it was not a peaceful demonstration. The kinds of missiles that were used on that occasion could be hurled 50, 60 or 70 yards. That makes it very difficult for the protection of any person. There was also a suggestion by the manager of opposition business, the honourable member for Adelaide, Mr Hurford, that I should not appear in certain areas for fear that there might be a demonstration. His suggestion is one that establishes the circumstance in which the Labor Party, if it wanted to organise a demonstration, would then create the circumstance whereby the Prime Minister could not appear. That is a total and absolute absurdity. Why should anyone believe for one minute that the opening of an old persons home should result in a riot? I would have thought that the honourable member for Melbourne and other Labor members would want to come out and condemn that kind of disturbance in a very forthright way.
It is worth noting a letter in the same paper, the Melbourne Times of 28 March. It is by Sister Katherine Kingsbury, a Director of Nursing for the Harold McCracken Home and a winner of a Churchill fellowship to go overseas and to study the most advanced and latest techniques in delivering health care to people in such homes in an imaginative and far-sighted way. She wrote: 1 find it incredible that an elected councillor of Fitzroy Council should call for ‘a huge demonstration’ at the opening of the Harold McCracken Nursing Home.
She went on to say:
He and anyone who joins with him must have it on their conscience that they are putting at risk the life and wellbeing of extremely frail and dependent aged people who are in care at the nursing home. Whilst not denying the right of any person to express their opinion, I would like to state that my prime concern in this matter is for our patients’ safety and security.
That is a very proper matter. It must have been the prime concern of everyone. The opening ceremony had to be shifted from outside- an open air environment- to a place inside the church. That did not prevent the demonstration continuing outside. In speaking with the patients at that home after the opening, it was clear that the noise and the riots that had occurred, which resulted in a number of arrests, had left a deep mark on some very elderly and frail people. I believe that everyone would want to condemn this demonstration. I also believe that members of the Australian Labor Party, whether represented adequately within this House or not, would also want to condemn overwhelmingly that demonstration.
– Did the Prime Minister, in the full glare of publicity following the Hilton Hotel bombing in February 1978-, promise that policemen injured in that incident would receive Commonwealth assistance on top of their normal police entitlement as a result of the circumstances in which they were injured? Is it a fact that none of the additional compensation promised has been given to the injured policemen?
– I will see what is on record about this matter. I recollect that the compensation matters are ones for the New South Wales Government, involving members of the New South Wales Police Force carrying out their own responsibilities and duties, admittedly in most extreme circumstances. I will examine what the record shows in relation to that and advise the honourable member accordingly. I would like to remind him, especially since the Deputy Leader of the Opposition made some comments on radio this morning which were entirely out of character -
– They were justifiable.
– We must accept that they were out of character. The Leader of the Opposition says that they were justifiable. I think it is worth noting that Mr Wran, as Premier of New South Wales, knew quite well that that call out was necessary and supported it very strongly indeed. The New South Wales Police and the Premier of New South Wales cooperated very fully in the subsequent security exercise to safeguard visitors to Australia.
– I refer the Prime Minister to the fact that there are large areas of drought in Australia, particularly in parts of Western Australia and Queensland, and I ask: What action will the Commonwealth Government be taking to assist the States?
– There is growing concern in rural Australia about the fact that the part of the continent suffering a very dry period is perhaps the largest at any time for several years. Whilst the situation in many parts of the country is one of concern, in a matter of relatively short time it could develop into a real and substantial drought over much of the country. That will be the case if autumn rains fail to fall over a large part of the country. Quite apart from that, we know that there are a number of areas in Queensland, Western Australia, New South Wales and other parts of the country that have been suffering a dry period for a long while.
– For four years.
– Yes, some parts of Western Australia have been suffering it for four years. Special arrangements have been entered into between the Commonwealth and the Western Australian Government because of the particular difficulties of producers there, some of whom have been without harvests and crops virtually for four years in a row. There are standard measures for drought declared areas which the Government stands ready to implement with the States and which do not need the prior approval of the Commonwealth. They are concessional loans to primary producers for carrying on, restocking and restoration purposes; freight subsidies for primary producers; subsidies for the carriage of water to central dispersal points for primary producers; and assistance to State, local and semi-government authorities for the disposal of helpless and unusable stock. It is also open for any State to propose additional measures to the Commonwealth, which would be shared in a financial way in accordance with the normal pattern if the States wish to do so. Sir Charles Court of Western Australia has done this in relation to the long and prolonged drought in that State. We would obviously stand ready to give serious and urgent consideration to any special requests in these kinds of circumstances. Financial assistance arrangements for drought are included with provisions for other natural disaster assistance. We support the States’ expenditure on natural disasters when they are beyond the capacity of a State to meet from within its own resources. Again, there are set formulas for that to be worked out.
I was discussing this matter earlier with the Minister for Primary Industry. Because of the growing concern around Australia the Minister will be assessing the current arrangements as they have operated in the past to see whether he, after examination, should recommend some changes in the arrangements. This represents a very important part of Commonwealth-State cooperation. We stand ready to listen to matters put to us by the States. For our own pan we will be re-examining the matters so that Australia can be as well prepared as possible to meet what everyone hopes will not be, but which on some of the omens could be, a very severe and difficult drought.
-I refer the Prime Minister to the fact that on 26 March I asked the Minister for Veterans’ Affairs whether the Government would make inquiries of the Vietnamese Government concerning agent orange. The Minister was unable to answer. Accordingly I ask the Prime Minister whether any inquiry appointed by the Government will request information from the Vietnamese authorities. Further, would it not be responsible and sensible of him to lay the ground for receiving cooperation from the Vietnamese by reinstating our modest aid program to Vietnam?
– I will see what information is available to forward to the honourable gentleman in relation to the first part of his question. I would also indicate that I find it difficult to understand the philosophy which indicates that when a country has invaded another country; when a country has 22 army divisions on a territory of another; when a country has pursued policies which have resulted in an exodus of refugees from Vietnam itself which is even larger than that which moved out of Germany in the 1930s; when it has pursued policies in Kampuchea resulting in a further massive flow of refugees from Kampuchea to Thailand; when it has taken actions which, if allowed to go unfettered, would lead to a significantly destabilising influence in the whole South East Asian area; such a country really stands as one that would be in the front rank to gain aid from Australia.
There are many countries deserving of aid. Many countries are determined to do nothing more than work for their own well-being and for the improvement of the standard of living of their people. We cannot say that Vietnam is short of resources. She is exporting many of her resources under the enforced efflux of refugees. She is consuming and wasting a much larger part of her resources in the continued war against Kampuchea, which involves 20 or 22 divisions in Kampuchea and which involves Russian subsidies of $3m a day. In those circumstances, how many members of this House really believe that Vietnam should gain a place on Australia’s aid program? Let the Vietnamese Government change its policies and earn that place.
– Will the Minister for Transport give any indication as to what action has been taken by the Australian National Line to have an Australian Federal Police investigation into the allegations made in the Bulletin against the alleged payroll ghosting practices of members of the Federated Ship Painters and Dockers Union of Australia?
– I have had further discussions with the chairman of the Australian Shipping Commission, Mr Neville Jenner, today. He has informed me that the Commission has resolved to invite the Australian Federal Police to undertake an investigation into the allegations that have been made in recent weeks. I expect the chairman to act accordingly. The Government is concerned about the allegations against the Australian National Line. I have arranged for the chairman of the Australian Shipping Commission to meet the Minister for Administrative Services, representatives of the Federal Police and me at the earliest opportunity. Beyond that, I do not believe that I can make any further comment.
– This matter has been under discussion and before the Government for some time. The Minister for National Development and Energy, Senator Carrick, was overseas for a couple of weeks. That delayed the final conclusion the Government will reach on the matter. When that decision is taken I am sure the Minister will be making the appropriate statement.
-Has the Minister for Employment and Youth Affairs seen a statement today by the honourable member for Macarthur advising that he has employed an Aboriginal girl as a trainee under the National Employment Strategy for Aboriginals? Can the Minister explain the nature of this scheme and how other members and the community at large might become involved in assisting Aboriginal people?
– The honourable member for Macarthur is to be congratulated on the initiative which he has taken. He is the first member of this House or the Senate to engage an Aboriginal person under the Commonwealth’s National Employment Strategy for Aboriginals. It comes about in this way: Whilst the Commonwealth has embarked upon a national strategy to increase the number of Aboriginals employed by private enterprise and to increase the number of training opportunities available to Aboriginals in private enterprise, the Commonwealth thought that it should give leadership in this area. It has done so quite significantly by offering about 550 positions in Commonwealth departments and authorities under the National Employment Strategy for Aboriginals. In addition, the Government has offered to provide funds to State government departments and instrumentalities to participate in this scheme. Up to the end of January 857 Aboriginals had been employed in Commonwealth and State government departments and authorities- 506 of those in Commonwealth departments and authorities.
Employers in the private sector are funded under the Commonwealth’s National Employment and Training Scheme. Of course, the Commonwealth meets the whole cost of wages payable to the person employed in Commonwealth departments and instrumentalities and likewise in State departments and instrumentalities. The NESA scheme provides training for up to 12 months for the particular person. It is an extremely valuable opportunity for all members and senators on both sides of the Parliament to provide employment or a training opportunity to the Aboriginal people of Australia and to join the Commonwealth in what is a very significant initiative that it is taking both in regard to employment in the Commonwealth Public Service and in private enterprise. This follows very successful launchings of campaigns in Dubbo, Lismore and Kempsey in New South Wales, Port Augusta in South Australia, and Cairns and Townsville in Queensland. These follow upon the national launching of this program by the Prime Minister in Sydney about three weeks ago. I commend the honourable member for Macarthur for the initiative he has taken. I commend NESA to all honourable members of this House.
– I refer the Prime Minister to his weekend statements dealing with atrocities in Soviet occupied Afghanistan- atrocities which deserve the strongest condemnation. However, I ask the Prime Minister. In view of his concern for human rights -
Government members interjecting.
– Honourable members will allow nothing to stand in the way of their natural ignorance.
-Order! I remind honourable members on my right that it is very difficult to control the noise level while an answer is being given if the question cannot be asked in silence.
-Mr Speaker, I will start again. I refer the Prime Minister to his weekend statements dealing with atrocities in Soviet occupied Afghanistan- atrocities which deserve the strongest condemnation. However, I ask the Prime Minister: In view of his concern for human rights and the prevention of atrocities such as those in Afghanistan how does he justify the continued recognition by his Government of the Pol Pot regime, guilty of the most immense and monstrous atrocities that the modern world has known? Can he still not see how this recognition will be seen by many, and interpreted as such, as an endorsement of the actions of the Pol Pot regime which, incidentally, is now seeking to send an official representative to Australia in the expectation that it will be received by the Prime Minister and perhaps even receive a sympathetic ear?
-This Government has demonstrated a concern for human rights in a wide variety of areas over a very long period. Where it has been able to act with effect it has acted with effect. In Zimbabwe the efforts of this Government, over the period of the last year, have been instrumental in helping to establish a situation of equality and a free transition to full independence overcoming the situation where there were inadequate human rights for one section of the population and, as a result of that, continuing conflict and continuing war. As a result of what the Commonwealth has done, as a result of what Prime Minister Thatcher and Lord Carrington have done, and as a result of the agreements reached and the elections held in Zimbabwe there now appears a prospect for peace in Southern Africa of a kind that has escaped Southern Africa in the past. This is not to say that there are not continuing difficulties and continuing concerns. Of course there are. But I cite that as an example of how the Government has acted where it has been able to act with effect in a forthright way.
The thrust of the honourable gentleman’s question ought to be read in conjunction with a statement which was very clearly made, which gave an insight into the policies of the Australian Labor Party of a kind which has not appeared from debates within the House of Representatives. It is important because the statement that I will read to the House has come from somebody who is a personal protege of the Leader of the Opposition and who has supported the Leader of the Opposition against the hierarchy of the old Australian Labor Party in Queensland on more than one occasion. On 6 March 1980 Senator Georges said:
With all its limitations, there is more dignity and morality in the Soviet Union than there is in our own society . . .
Against that background, against the background of depredation, subversion, war and conflict, whether it be in Kampuchea or Afghanistan, or interference in Africa or anywhere else, how Senator Georges can say that, how the Leader of the Opposition cannot deny him- because not to deny him is to support the same statement- is beyond belief. On the other matter questions have been asked of the Minister for Foreign Affairs on many occasions. The honourable gentleman knows the intricacies of the matter and I have nothing to add to what has been said by the Foreign Minister.
-Can the Minister for Home Affairs advise whether any other actions have been taken, or statements made in recent days, that support an effective boycott of the Moscow Olympic Games?
-I thank the honourable gentleman for his question as it gives me an opportunity to bring to the attention of the House events which occur and which support the belief, which I have consistently stated, that there will be an effective boycott of the Olympic Games. A most significant event is that over the weekend the Australian Yachting Federation decided that it will support the Government’s view that an Olympic team should not be sent to Moscow. This is all the more significant having regard to the fact that arrangements had been made by the Federation to ship its boats overseas later this week. I have had discussions since then with the President of the Federation and I have indicated the Government’s willingness to provide funds to the Federation to enable its members to go overseas and engage in top level international competition. A sum of up to $45,000 will be provided for that purpose. If members of the Federation go overseas but do not go to the Olympics it is most unlikely that they will be provided with funds by the Australian Olympic Federation. In those circumstances their budget is assured.
The attitude of the Government in this respect is completely consistent with its attitude to other sporting bodies. If those bodies decide, at the request of the Government, not to go to the Olympics in Moscow they will be assisted to engage in top-level international competition overseas. It is also completely consistent with my attendance at a meeting in Geneva to assist other countries that are like-minded to organise competition of this description in the form of an international sports festival later this year, preferably towards the end of August,
Some other significant events that occurred over the weekend underpin the statement I have already made. First is the fact that President Carter has indicated that he will be asking that licences be denied for the export of United States goods and services earmarked for the Moscow Olympics and has asked the Commerce Department to revoke licences for goods not already shipped. Also prohibited are transactions and payments associated with the Games, including the final instalment of $20m owed by the National Broadcasting Corporation for television rights and the shipment by NBC of additional broadcasting equipment. Clearly that will underline the determination of the President of the United States that a United States Olympic team should not go to Moscow. I have no doubt that the Olympic committee in the United States will take due notice of that and follow the President’s lead.
It is also significant that Dr Hans Apel, the West German Defence Minister who is visiting Australia, indicated over the weekend that he believes that there will be European support for an Olympic boycott of the Moscow Olympics. Another matter of significance that I ascertained over the weekend is that the decision of the British Olympic Association to go to Moscow has a qualification to it. That qualification is as follows -
– I rise to order. The lengthy replies of Ministers have again permitted only seven questions to be asked by Opposition members during Question Time. Mr Speaker, I ask you to request Ministers to make their replies brief. At present replies are an abuse of Question Time and an abuse of the Parliament.
– I call the Minister.
- Mr Speaker, the decision of the British Olympic Association had a rider to it and the rider is this: Naturally, should circumstances change the BOA would re-examine the situation. The British decision should be examined in that light. I bring those facts to the attention of the House. Another matter that has come to my attention is a report about a statement in a handbook -
– I take a point of order. Mr Speaker, the Opposition would be delighted to give the Minister the opportunity to make a statement on the subject. The Minister is abusing Question Time. If he wishes to make a statement, we will be delighted to debate it with him.
-Order! I indicate to the honourable member for Robertson that there is no substance to the point of order. It amounts to a protest. Although the answer is long, I have permitted the Minister to continue simply because he is responding to a question and there has been no repetition in what he has said. It has all been new material that he has put forward, in the sense that he has not repeated himself in any way. I call the Minister but ask him to draw his answer to a conclusion.
– Over the weekend a quotation came to my attention from an official handbook called Soviet Sports- Questions and Answers, published in Moscow in English by the Novosti Press. I ask Dawn Fraser and all other members of sporting associations in Australia to take this into account. It is as follows:
The view popular in ne West that ‘Sport is outside politics’ finds no support in the USSR. This view is untenable in our country . . . When, for instance, Soviet representatives call for the expulsion of the South African and Rhodesian racists from the Olympic movement this is, of course, a political move … So whenever someone says that sport lies outside the framework of political relations, we feel their remark is not a serious one.
That is a very clear indication of the attitude of the Soviet Union and how it will use our athletes for the purpose of underpinning its foreign policy.
- Mr Speaker, I claim to have been misrepresented and wish to make a personal explanation.
-The honourable gentleman may proceed.
-During Question Time the Prime Minister (Mr Malcolm Fraser) quoted from a speech in the Senate by Senator Georges and implied, at least, that Senator Georges was speaking on behalf of the Opposition, of the Labor Party, and more specifically of myself. Senator Georges was not. He was expressing a purely personal view, one with which I disagree. It is not a reflection of the attitude of the party. It stands on the same sort of level as the repudiation by Dr Edwards and the condemnation by Mr Bjelke-Petersen of Mr Fraser’s Olympic boycott for athletes; that is, while they are expressing a personal view they are not speaking on behalf of the national coalition.
-by leave- Mr Speaker, I wish to inform the House of modifications to the amounts and categories of portfolio investment overseas that may be undertaken by Australian residents. Prior to September 1972, there was a virtual embargo on all portfolio investment overseas by Australian residents. Since that date, some modest portfolio investment overseas has been permitted. Exchange control approval has generally been given for investments by institutional investors, public companies and the like of up to $lm in any period of 12 months. Individual investors have normally been permitted to invest up to $10,000 in any 12-month period. Eligible investments have included portfolio investment overseas in stocks and shares and purchases of real estate, but have not included investment in loans or other fixed interest securities.
The whole question of exchange control, including portfolio investment overseas, is currently under notice before the Committee of Inquiry into the Australian Financial System and the changes that I am announcing today are of course without prejudice to any recommendations in the exchange control area which might come from that Committee and are essentially adjustments within existing policy. The modifications will take effect from 1 April 1 980. They include increases in the limits for overseas equity and real estate investment, and a widening of the range of eligible investments including, within limits, certain longer term fixed interest securities.
The new annual limits for equity and real estate investments are being increased from $10,000 to $40,000 for individuals, and from $lm to $2. 5m for listed and substantial unlisted public companies and institutions. Substantial private companies, which meet certain financial standards, will be eligible for an annual maximum investment of $250,000. The increases in these limits somewhat more than offset the effects of inflation since the present limits were set. Within the new limits, individuals may now also invest annually up to $10,000, substantial private companies may invest up to $100,000 and public companies and institutions may invest up to $lm in marketable fixed interest securities with not less than one year to run to maturity at date of purchase. Investments in bank, money market and similar short term deposits, as well as loans to non-residents, will continue to be not permitted.
It remains necessary to obtain exchange control approval for all portfolio investments overseas. All limits will be administered on a financial year basis, which in the case of businesses will normally be the financial year adopted for their own accounting purposes. The new limits are non-cumulative from year to year. However, in special circumstances to allow a specific investment project to be accomplished, such as the purchase of a residence overseas or a strategic holding in an overseas company or business, consideration may be given to allowing two financial years’ entitlements to be taken together. Full details of the new arrangements will be available from any office of the Reserve Bank. I commend the changes to the House.
-by leave-The statement today by the Treasurer (Mr Howard) is unsatisfactory for a number of reasons. Firstly, he acknowledges that the question of exchange control and Australian investment overseas is under investigation by the Campbell Committee of Inquiry into the Australian Financial System. Yet the Treasurer announces changes to these provisions without waiting for the findings of the Committee of Inquiry set up by his own Government. Those findings may be completely at variance with today’s announcement. Surely it would have been more sensible to await the Campbell report before implementing changes.
Secondly,, the Treasurer gives no reasons for these changes apart from a passing reference to the effects of inflation. In the course of that reference he has admitted that the increases are greater than those which would be warranted by inflation. Why have these changes been made? The House simply has not been told. We can only guess at the pressures that have been brought to bear on the Government to increase the scope for Australian investment abroad. It seems that the Government is continually caving in to pressures from powerful interest groups.
The Treasurer himself has been especially embarrassed by continually having to back down on measures which he initially supported wholeheartedly, such as the foreign tax credit system, the retail sales tax, the newsboys’ tax on family allowances and, most recently, the crackdown on trusts. Which interest group has had the Government ‘s ear on this occasion?
Finally, this statement is inappropriate in the context of the Government’s attitude to foreign investment in Australia. The electorate has been subjected to a constant barrage from the Prime Minister (Mr Malcolm Fraser), the Deputy Prime Minister (Mr Anthony) and other Ministers concerning the investment boom in Australia’s resources. In order to facilitate this development the Government has been progressively eroding its foreign investment guidelines, until they have reached their current meaningless state, in order to attract as much capital as possible into Australia, with little regard to the effects on the Australian economy of the level of foreign ownership of industry. In this light it makes little sense to encourage the sending of investment moneys out of Australia. It would have been more sensible not to have changed the limit on Australian portfolio investment overseas but to have encouraged the investment of these moneys within Australia in order to increase local participation in our own development.
– by leave- Mr Speaker, during the last few months, there has been increasing concern by honourable members of this House, by the media and by individual veterans and their representative organisations that contact with herbicides and other chemicals in Vietnam may have had an impact on the health of veterans such as to cause long term disabilities. There is also increasing concern that contact with these chemicals, sprayed for various reasons ranging from defoliation to disease control, may also have caused malformations in children born after the period of the veterans’ service in Vietnam. The Government has been acutely aware of that concern. Since the matter first came to notice we have moved without hesitation and with all speed to attempt to resolve the issues that have arisen. In my statement to the House on 2 1 February of this year, I set out in very comprehensive terms the nature of the disabilities from which some veterans had reported they were suffering, and the manner in which our generous repatriation system, which has been developed, tried and proven over many years, was able to assist. In addition, I mentioned the initiatives we had taken, without delay, in seeking to find a responsible resolution of the problems raised by the veterans.
One of the difficulties with which we are faced and which we share with the United States authorities is to establish scientifically that the symptoms and medical problems being experienced by veterans and their families are due to the exposure of the veterans to herbicides or chemicals, of which agent orange is the most notorious, during the veterans ‘ service in Vietnam. I hasten to add that, insofar as the disabilities of the veteran himself are concerned, our repatriation system does not require that cause be proven. It is enough that a relationship, a link, be found between his disability and his service for us to accept his disability as service-related and to admit the veteran to the pension and treatment benefits that would then flow. But we cannot, even given the generosity of the repatriation system; accept without question that exposure to herbicides or chemicals in Vietnam must inevitably be the cause of the delayed long-term health problems which are the subject of current claims.
It was because of the real need to resolve this question of whether or not exposure to herbicides or chemicals would result in health problems that the Government acted immediately the possibility was brought to notice, in a positive way. We arranged that a repatriation commissioner should visit the United States of America to study at first hand the various endeavours that are being made in that country to resolve like problems. The problems may be alike but the magnitudes differ enormously. We had about 41,000 servicemen in Vietnam; the United States had two and a half million. But that wide difference is no more than a statistical fact. Our concern is as deep as we believe to be that of the United States authorities.
We also asked the scientific body most appropriate to the task, the Commonwealth Institute of Health, formerly known as the School of Public Health and Tropical Medicine, at the University of Sydney to inform the Government whether it was possible to establish, as a matter of scientific fact, that exposure to herbicides or chemicals in Vietnam could have an influence on the health of veterans or produce an unusual incidence of abnormalities at birth of veteran’s children. My statement to the House on 2 1 February set out the nature of the study suggested by the Institute and explained that its feasibility had to be tested, as the data necessary to guarantee a valid result are both comprehensive and could be difficult to obtain. Subject to the availability of certain data which appears at this stage to be forthcoming, the Government is now satisfied that this major study is not feasible but essential if a satisfactory scientific resolution to the question is to be reached.
It may be helpful to the House if I give some brief details of the nature and scope of the study that has been proposed by the Commonwealth Institute of Health. The basic design of the study will be a comparison of three groups of veterans. These are Australian veterans who were in Vietnam and were definitely exposed to herbicides and other chemicals of significance; Australian veterans who were in Vietnam but were not judged to be exposed to herbicides or chemicals but perhaps exposed to other environmental hazards; and a matched and comparable group of Australian veterans who did not go to Vietnam and have not been exposed to the herbicides and other chemicals used there.
These groups will be compared to see whether there are differences in the incidence of defined illnesses in the veterans themselves; differences in the incidence of certain genetic defects in their offspring compared with the control group; and differences in the incidence of birth defects in their offspring and the incidence of abortion in their wives. This is known as a cohort study.
There are basic criteria that have to be met before the study is feasible, such as, information on the names and units of veterans and their geographical locations in time in Vietnam; at least 90 per cent and preferably more of those veterans must be able to be traced in Australia; the usage of herbicides and chemicals by geographical areas and times must be established; medical records “before service and at enlistment, if any; and records of births and deaths in Australia, maintained by the State Registrars-General, and other records such as those of the Department of Social Security and of the Australian Bureau of Statistics.
The study would progress by means of an assessment of every veteran in the cohort and his children by means of interview by a specially trained team. In addition, the assessment would utilise existing hospital records and records of mortality and morbidity. Data would be collected on potential confounding variables such as smoking, occupational hazards and the use of drugs and medicines. Any suggestions of positive findings which appeared would be studied in greater depth, involving comprehensive interviews by specially trained field workers. The task of statistical collection, analysis and interpretation would be enormous. Some 60,000 veterans, whose families would be expected to include approximately 100,000 children, would be interviewed and a questionnaire would have to be completed about each. We estimate that a full time specially trained work force could be engaged for about a year on this task. We have decided to ask the Commonwealth Institute of Health to press on with the study as quickly as possible.
I am aware that this decision will not be universally acclaimed. For instance, we know as a result of the visit of Mr Medbury, a member of the Repatriation Commission, that the United States of America is engaged in a very large research effort. There are two major epidemiological studies of veterans and several smaller studies of workers who have been exposed to components of agent orange under way in that country. There are also laboratory studies designed to establish whether any of the components of agent orange may produce genetic damage or induce alterations in males that may result in their fathering malformed offspring. It might be suggested that we await the result of such research work, rather than embark on our own. The Government does not accept that ‘sit back, wait and see’ attitude. We are aware that even the initial, far from final, results of these American surveys appear to be at least two years away, that even these major studies may not produce conclusive results, and that, in the eyes of the Australian veteran community- by which we are prepared to be judged on our record- the United States studies of United States veterans may not be relevant to our Australian experience.
It has also been suggested that we may be able to speed up the results and reduce the very heavy costs by sample surveys of say 2,000 or 3,000 of the 41,000 veterans who were in Vietnam. My very best advice is that there would be very real problems with the validity of any conclusion drawn from such a sample survey. The comparative rarity of occurrence of the diseases in the community as a whole is such that no less than the entire Vietnam veteran population, compared with a control group of similar composition that did not go to Vietnam, of about 20,000 must be covered by the survey. I hope that every Vietnam veteran, irrespective of any doubt he may have about any possible effects of exposure to herbicides or chemicals, will come forward at the appropriate time to participate in the survey.
A request has been made that instead of this major epidemiological study, a form of judicial inquiry be set up. It has been suggested that this inquiry should have, as a basic proposition, the presumption that a vast range of symptoms covering virtually all medical conditions are caused by exposure to herbicides in Vietnam. It is envisaged that, in this inquiry, this presumption should be rebutted by the Commonwealth. It cannot be proved that a causal relationship between each and every condition within that vast range does not exist- proof of such negative association is not possible in the circumstances. In addition, the available scientific literature on which such an inquiry must largely depend was studied as recently as 1977 by an agency of the World Health Organisation. It concluded that further studies including those of an epidemiological nature, such as will be done in Australia, were needed to resolve the question.
In considering the nature of this form of inquiry, the Government was not able to see how it would help resolve the most distressing of the problems faced by some Vietnam veterans. It would not assist in assessing the medical condition of the members of the veteran’s family, in establishing what treatment and disability pension payments would be appropriate, and in helping him to make decisions as to whether or not he and his wife should have more children. There would be nothing personal or immediately helpful to the veteran in such an inquiry. What I am saying is that more than the question of compensation, important as that is, has to be considered. The government, the Department and I as the Minister are concerned about the Vietnam veteran who says to us: ‘I would like to start a family. What are likely to be the problems or effects? What are likely to be the long term health problems that might develop if there is some problem from these chemicals and herbicides?’ A judicial inquiry might deal with the compensation angle but it would not take us one inch along the road to answering the questions to which I believe we have to try to find answers to resolve the problems, concerns and worries of many people. For all these reasons the Government has decided that the request for this form of inquiry must be refused.
In this rejection, and in the decision to press on with the major epidemiological study of which I first informed the House in February, the Government is most evidently not seeking to avoid any issue, but rather must be seen as intent on seeking answers to questions that so understandably are distressing to Australian veterans and to their families. The expenditure on the survey will exceed $2m and it will extend, in its major phase, over some two years. However, it is expected to provide scientifically valid results that will give a basis for understanding which will be invaluable not only to enable the Government to move to whatever further measures are appropriate but also as a significant contribution to medical scientific knowledge throughout the world. That inquiry will be undertaken with all speed. We believe it is likely to prove the only way that the Australian veterans of service in Vietnam can be given the assurances that they so understandably need.
To enhance world-wide as well as local acceptance of the study, it is intended that a small group of scientists, independent and with worldwide credibility as epidemiologists, be established to assess and endorse the methodology of the study and to comment on any alterations which may become necessary in the study during its course. I propose to announce the composition of that select group to the House as soon as practicable but the continuing progress of the study will not be held up awaiting these appointments. I continue to say, as I said when the first complaints were made, that those veterans who feel they have been affected by herbicides or chemicals during their service in Vietnam should lodge a claim with my Department so that medical examinations can be carried out to establish a diagnosis and to make recommendations to the independent authorities which make the determinations on whether any disabilities found could be linked with their service in Vietnam.
I reaffirm what the Prime Minister (Mr Malcolm Fraser) said in the House today relating to war veterans making claims associated with agent orange or with other chemicals or herbicides who find that those claims are not accepted or are rejected. If, as a result of this study, we find information which suggests that there is a link between these herbicides and human health, those applications will be immediately and automatically taken up and reviewed in the light of that information. I have said on earlier occasions that the Government has acted with all speed and understanding in this matter. I have kept the House informed of developments as they have occurred. I am pleased to inform honourable members now of this very significant further step that the Government has decided to take to resolve the uncertainties underlying the question of whether exposure to herbicides, during the Vietnam conflict, has had or may in future be likely to have, an impact on the health of Australian Vietnam veterans and their children. I trust that all honourable members, on a bipartisan basis, will support and assist the study that the Government now proposes shall be immediately undertaken.
-by leave- The Minister for Veterans’ Affairs (Mr Adermann) made a statement a few weeks ago along similar lines in which he indicated the Government’s intention to look at the possibility of such an inquiry. He has now brought forward that decision, together with some elaboration on the nature of the inquiry. Two new items appear to me from the statement. One is that the Minister has included other substances, along with herbicides, in the inquiry and the second is that he has decided against holding a judicial inquiry, which has been requested by Vietnam veterans. I will touch on those aspects of the statement.
The Minister said that the Government had moved with all speed to attempt to resolve the issues, but I point out that it is over three months since his statement of 18 December on the same subject. It may be that the Government should have concerned itself with these matters in the days when Operation Ranch Hand was being conducted in Vietnam and was being discussed in the Australian and world Press. Great demonstrations, protests and discussions went on then about how this chemical warfare was unacceptable and in breach of the conventions to which I referred the Prime Minister (Mr Malcolm Fraser) at Question Time today and to which this Government became a signatory in 1977. They are conventions forbidding the use of toxic chemicals as weapons of war. The Prime Minister’s response today was to the effect that they are not weapons. That may have a rather hollow ring to people who are suffering long term effects. The United States veterans administration has found at least two people in the United States of America suffering from a long-standing skin condition called chloracne. Whether that indicates that there may be long-standing effects in other tissues and organs or even in the offspring of these exposed people we have yet to find out. Of course, that is the object of the inquiry.
It was not until last month that a repatriation commissioner was sent to the United States to study the state of play of investigations in that country. I suggest that in view of the widespread knowledge of and controversy surrounding these matters it is quite likely that extensive reports came before the then Government, and in particular before the present Prime Minister during his terms as Minister for the Army and Minister for Defence, when young men going to Vietnam for Australia were being acclaimed as heroes by the Government. The Prime Minister was visiting them in Vietnam, but apparently not following through the reports which even at that time were starting to be compiled in Vietnam and America. The Minister assures us that any suggestions of positive findings that appear will be studied in greater depth involving comprehensive interviews by specially trained field workers.
I am sure that those affected would like a positive assurance that more will be done than to study in greater depth any positive findings. I think that the first requirement will be to make those positive findings public and available particularly to the persons claiming damage under the veterans’ affairs legislation. As the Minister points out, the Australian law provides that the benefit of any doubt in the minds of a repatriation tribunal be given to the claimant. If there are positive findings, I think it quite proper and legitimate to study those in greater depth, with comprehensive interviews by specially trained field workers. But it is also legitimate that those positive findings, even at that early stage before they have been studied in depth, should be made available to the public and to the claimants.
The Minister has assured us, as has the Prime Minister- the Minister reiterated this today- that if prima facie evidence comes forward, these claims that have been made by veterans will be reviewed. The veterans will not have to make a new claim. I suggest that the Government should go further. If it finds in the course of its investigations- it will investigate as many as possible of the claims of Vietnam veterans- that there are any positive findings, I would hope that those veterans concerned would be informed of the findings and encouraged to make claims, whether or not they have previously made a claim. I think it is not sufficiently fair and reasonable simply to review old claims.
The Minister says that the statistical correlation will take about a year. Of course that will not be the end of the story. He says that the American surveys on which we will depend heavily appear to be at least two years away. He says also that the expenditure on the survey will exceed $2m- that is, the survey that the Government has now proved- and that the survey will extend in its major phase over some two years. But that is just a major phase. Goodness knows how much longer it will be before all the details are worked out to get scientifically valid results. So I think that again it is important not to wait until every ‘ i ‘ is dotted and every ‘ t ‘ is crossed before the findings, however tentative, however partial, however poorly substantiated, are made available. They should be made available progressively as the inquiry proceeds. I strongly urge the Government first of all to table all previous reports, not just the two reports which the Minister for Defence (Mr Killen) tabled last week. I understand a major sifting operation is going on through the Vietnam War records to look at all possible reports and records about the exposure of Australians to herbicides and the like. The progress reports should be tabled or in some way published. I am concerned at the degree of secrecy that has emerged already. When I telephoned the Commonwealth Institute of Health last week to inquire about its policy of progressive release of information, I was not put through to any person concerned with the inquiry. The switch attendant informed me that her instructions were that all inquiries regarding this matter were to be referred either to the Repatriation Commission if it concerned individual claims or to the Department in Canberra, or the Minister. When I rang the Department I was informed that all inquiries on policies of that nature should be referred to the Minister. I rang the Minister’s secretary and he offered to send me a copy of the Minister’s previous statement which had been made in the Parliament. I know that bureaucracy does tend to blanket itself as far as possible with all sorts of safeguards against something being let out which could be damaging to itself or embarrassing to the Minister or to the Government, and I suppose that is a legitimate function of bureaucracy. Nevertheless, I think it is also a legitimate function of a government which keeps telling us, particularly recently, of the dangers of big government, that it should be aware of the danger of closing avenues of legitimate inquiry to persons to whom the Government has an obligation- people making claims for damage due to war service. I think they are entitled to a great degree of open government or, as it is now styled in the United States, to the freedom of information policy. I think there is a very great and urgent need for this in all departments, particularly in this matter.
With regard to the broadening of the inquiry beyond the original term ‘agent orange’ which has captured public imagination to include herbicides, I am pleased to see that the Minister is now extending the inquiry to other chemicals. I point out particularly that in law it may be that the contaminants of the herbicides are far more important than the herbicides themselves. Indeed, it may be that by-products and environmental products as a result of the distribution and permeation of herbicides in the environment may have produced other substances which should be studied as well as the herbicides themselves and their components.
The Opposition welcomes the statement that the Government is not prepared to sit back and wait and see. We feel that perhaps the Government could have moved quite a lot sooner and it could have been a lot more frank, particularly in the Vietnam years before the present Minister became responsible in the area. We should have the results of the overseas inquiries, not just the American inquiries, but surveys in Vietnam. I think it is important to note that on 27 March, a few days ago, the Minister for Defence promised me that he would be tabling any such reports. I trust that will not be too long in coming.
The Minister objects to the concept of a judicial inquiry, implying in his statement that as recently as 1 977 an agency of the World Health Organisation conducted an inquiry. Presumably the results of it are public and we will be able to have access to them. The Minister’s implication is that this obviates the need for a judicial inquiry or in fact shows that a judicial inquiry would be of no use at this stage, that it would simply come up with the same conclusion as the WHOnamely, that we need further studies of an epidemiological nature, the very type of studies of which the Minister and the Government now approve. That may be so but let us look at the WHO report. Let us see if it was in nature judicial, if it was open to claimants to put their case, if evidence was called from the epidemiology that was already known years and years ago in Vietnam, some of which was published in the United States, and it has been sifted through. If it has not, then I suggest there is need for a judicial inquiry to run concurrently with the medical epidemiological studies. At the very least, there is need for the medical inquiry, the epidemiological inquiry, to be open and for the monitoring of that inquiry by a small group of scientists with world-wide credibility as epidemiologists which the Government is also to set up. There is need also for the monitoring by that group to be made public. There should just not be advice to the Commonwealth Institute of Health.
We have not been made aware whether the findings of the WHO inquiry or any others have confirmed any of the claims now being made by veterans. We do know, on theoretical grounds, that a very broad range of synthetic substances including such biologically potent substances as herbicides are suspect of causing mutagenicity -in other words, a change in the gene structure of all kinds of organic matter across a very broad range of species. This can lead to the same sorts of damage as radiation, namely tumours, malignant growths and changes particularly in developing embyro which lead to birth defects and deformities. I do not know of any studies which have established that such genetic damage is passed on by the male parent after many years of exposure. In other words, I do not know of any evidence that sperm cells carry such genetic damage to the next generation. Nevertheless, there is no theoretical reason why this should not happen. It is important that this aspect be examined urgently. I welcome and the Opposition welcomes the Government’s undertaking to look at this matter from the point of view of paying reasonable compensation if the claim is established.
In conclusion, I would like to mention that this is not the only chemical which may have very serious long range effects as a result of war service and weapon testing. We are now hearing that the people who were exposed at Maralinga may have claims about very grave and longstanding effects. I am sure that the Minister will be also taking up this matter in the near future.
– I seek leave to make a statement. I will not take up much time of the House.
Leave not granted.
The following Bills were returned from the Senate without amendment:
International Development Association (Further Payment) Bill 1980.
Payroll Tax (Territories) Assessment Amendment Bill 1980.
Bankruptcy Amendment Bill 1980. Customs Amendment Bill (No.2) 1 1980.
-Mr Speaker has received a letter from the honourable member for Gellibrand (Mr Willis) proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The increasing degree of foreign ownership and control of Australian industry and resources under the Fraser Government.
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-
-In October 1975 the then Opposition announced its foreign investment policy, which commenced with these words:
A Liberal National Country Party Government will take strong measures to ensure that Australians have maximum control and ownership of our natural resources and industries.
What a joke the Fraser Government has made of that policy. Rather than maximising Australian ownership and control, the Fraser Government’s policy has been designed to maximise foreign investment regardless of the degree of Australian ownership. Projects are being approved with up to 100 per cent foreign ownership and with no requirement to provide Australian ownership of any specific degree by any specific time. Hundreds of foreign takeovers of Australian firms occur each year, many of them without any government investigation. Firms with only 25 per cent Australian equity are regarded as Australian owned and are treated as such. Real estate of up to $250,000 can be and is being bought up without requiring approval. The result of all this is that our industries and resources are rapidly becoming more and more subject to foreign ownership and control. So much for the Fraser Government’s promises of strong measures to ensure maximum Australian control and ownership.
Like so many of the Fraser Government’s promises, the promise made in this case cloaked the real intention to do the opposite. Like the promises to maintain wage indexation and Medibank, to reduce interest rates and taxes, to provide jobs for all who want to work, and a myriad of other Fraser Government promises, the promise to ensure maximum Australian ownership has been honoured only in the breach. The Government’s real policy and intent of foreign investment at any price, has been planned for and progressively implemented throughout the Fraser Government’s period of office. It began with the establishment early in 1 976 of the Foreign Investment Review Board, ‘which replaced the Foreign Investment Advisory Committee established by the Labor Government by merging two previously existing interdepartmental committees. Labor’s Foreign Investment Advisory Committee was therefore composed of public servants from a number of government departments and had the basic and essential role of examining or screening foreign investment proposals, takeovers or new ventures to ensure that these proposals were in Australia’s interest.
The Fraser Government’s Foreign Investment Review Board is composed principally of businessmen rather than public servants with the deliberate intention, according to the Government ‘s 1976 foreign investment kit for companies, of giving the Board a free enterprise flavour so that it could provide an efficient, practical and sympathetic link between the Government and foreign investors.
The businessmen appointed to the Board are Sir Bede Callaghan, the Chairman, and Sir Willian Pettingell. Sir Bede had for many years been Chairman of the Commonwealth Bank and Sir William is a director of many major companies. The third member of the Board is a Treasury official. The Board’s approach to foreign investment has been quite different from that of the Foreign Investment Advisory Committee. Rather than acting as a backroom, screening and advisory body, the Board became a welcoming committee to foreign investment and even an active solicitor of foreign funds. Sir William Pettingell ‘s perception of its role, doubtless reflecting government policy, was revealed in a speech which he gave in August 1976 in which he was reported as saying:
The Foreign Investment Review Board wishes to become a catalyst at the Australian end of new investment decisions by foreign companies.
Clearly he is saying there that the Foreign Investment Review Board saw its role as being to stimulate and initiate foreign investment proposals rather than screen and determine whether proposals are in Australia’s interest. He went on to say:
If companies have plans they should approach the Board informally so that we can discuss the position and come to some arrangements before a formal application is made.
So much for a thorough screening process to ensure that foreign investment is in Australia’s interests. Clearly the Board ‘s role is not that of a screening agency, but rather as a lubricant to assist the inflow of foreign capital. It is hardly surprising, therefore, that Board members have even made overseas trips to encourage foreign firms to invest in Australia. In 1 976 and 1978 the Chairman and the executive member of the Board made overseas trips to drum up foreign investment. In regard to the 1978 visit the Board stated in its 1979 annual report that the visiting members ‘gained the strong impression that prospects for increased foreign investment in Australia in the 1980s were very good’. This is the sort of statement one would expect from a businessman ‘s overseas mission rather than from a body supposedly established to ensure that foreign investment proposals will provide net economic benefits to Australia and be otherwise beneficial.
Quite irrefutably, therefore, the Foreign Investment Review Board, as established by the present Government, has a completely different role from its predecessor under the Labor Government. It acts on the basic tenet of Government policy that the more foreign investment we can have in Australia the better and that its job is to ensure that as many proposals as possible are put forward and accepted. In these circumstances, consideration of the need to maintain Australian ownership and control of our industry and resources has inevitably received a low priority.
That is aptly demonstrated by the fact that the Board has rejected only a handful of foreign investment proposals. From the time of its establishment in April 1976 the Board had considered 4,437 proposals by the end of December 1979. Of that number, 810 proposals did not require approval under government policy- therefore they went through; 2,413 were approved without conditions, of which 2,361 were foreign takeovers; 1 , 1 84 were conditionally approved, of which 1,083 were takeovers. Thirty of the 4,437 proposals were rejected. One in every 148 was rejected. These figures show that Australia has now virtually established an open-door policy for foreign investment. With only a one in 148 chance of being knocked back, foreign investors have been given the message that the array of guidelines to which they are nominally supposed to adhere to achieve approval is just a meaningless charade.
The Fraser Government’s nominal guidelines were in any case more permissive than those established by the Labor Government. They differed from the Labor Government’s guidelines in several respects. Firstly, the Labor Government’s policy stipulated a maximum of 50 per cent foreign ownership in all new mineral developments, whereas the Fraser Government’s policy merely accepted the desirability of the 50 per cent limit, but then stated that if the local equity was not available and the project was not considered to be against the national interest, the investment could proceed provided satisfactory arrangements to seek Australian equity were agreed upon. Secondly, the Labor Government required 100 per cent Australian ownership of new uranium developments, but the Liberal Government’s policy reduced it to 75 per cent. Thirdly, whereas Labor was concerned that Australian real estate did not become foreign owned except in certain specific circumstances, the Fraser Government’s policy merely made some foreign acquisitions of real estate examinable under the guidelines.
Although these differences may not have seemed particularly significant at the time, they opened the door to an unprecedented sell-out of Australia’s resources to foreign interests. In particular, the much vaunted flexibility of the 50 per cent rule for resource projects has rendered that limit completely meaningless. As my colleague the honourable member for Blaxland (Mr Keating) demonstrated in this House last November, many resource projects are being approved with less than 50 per cent Australian equity and the international oil companies in particular are being allowed to buy up our coal companies at an alarmingly rapid rate. Nor is there any real insistence by the Foreign Investment Review Board, as is supposedly required under the guidelines, that companies being allowed to proceed with less than 50 per cent Australian ownership should obtain Australian equity in the future. Although the company may give vague assurances of its intention to obtain Australian equity in the future, no specific proposal is required, nor is any timetable insisted upon for fulfilment of that promise.
The uranium guideline has also proved insufficiently low for the Government’s purposes, so the limit on foreign ownership has now been reduced to 50 per cent, having been first reduced from 100 per cent to 75 per cent. This was done firstly to accommodate the 50 per cent controlling interest of the Esso company in the Yeelirrie project and then to allow the British Petroleum company to hold 50 per cent of the Roxby Downs copper-uranium development in South Australia. In all of these cases where Government flexibility is exercised the Foreign Investment Review Board is supposed to ensure initially that efforts are made by the joint venturers to obtain Australian equity to meet the nominal limits on foreign ownership. However, there is little evidence that the Board insists that the venturers make an attempt to find Australian equity. The Government’s guidelines on real estate have proved similarly meaningless. Thus it has allowed 100 per cent Japanese ownership of the $50m Yanchep property development in Western Australia. The $100m Iwasaki tourist centre at Yeppoon in Queensland has been allowed to proceed on the basis of 100 per cent Japanese ownership. Foreign investment in real estate worth less than $250,000 is now not even subject to supervision. This is said to be one reason for the boom in the Sydney property market.
Although the Government could hardly have operated its foreign investment guidelines in a more accommodating way for foreign investors, it nevertheless sought to ease them further in 1978 by introducing a concept of Australianisation Under this concept a company with at least 25 per cent Australian ownership, by appointing a majority of Australians to its board and declaring its intention eventually to become Australian owned, can be treated as being 50 per cent Australian owned. However, no timetable is required for achievement of 50 per cent Australian ownership and no penalty applies to a company for failing to fulfil its commitment or for simply changing its mind and deciding, after benefiting from the Australianisation process, not to become Australian owned after all. Accordingly, this process is a farce. It indicates the extraordinary lengths to which the Government has gone in its attempts to induce further foreign capital into Australia regardless of the costs.
As I mentioned earlier in regard to the Foreign Investment Review Board statistics, an extraordinary number of foreign takeovers has been allowed under this Government. One reason is that it is Government policy not to intervene except in special circumstances in proposals where the total assets of the company or business being acquired are less than $2m. This amounts to giving foreign investment a completely open go at Australian small business, with the result that foreign takeovers of small businesses are quite numerous. Indeed, in the Foreign Investment Review Board’s latest annual report it is noted that three-quarters of the acquisitions involving a change from Australian control to foreign control were of businesses with total assets of less than $2m. Of course, even where approval is needed the Government has taken an extremely permissive approach, as shown by the fact that it has approved 3,444 foreign takeovers in the three and three-quarter years to December last year.
In sum, therefore, the Government’s actions in this regard over the last four years have amounted to a gross deception of the Australian people. While promising to maximise the Australian ownership and to establish foreign investment guidelines that give some appearance of adherence to that objective, it has simultaneously sought to assure foreign investors that the flexibility of the operation means that the guidelines provide little, if any, barrier to entry. The result has been an unprecedented sell-out of Australian industry and resources. However, the exact extent of this sell-out cannot be discovered because in 1978 the Government further demonstrated its complete lack of concern about foreign control of our industry by disbanding the foreign participation section of the Australian Bureau of Statistics and thereby ceasing the collection of statistics on the level of foreign ownership and control of our industry.
So we just do not have up-to-date figures on the extent of foreign ownership. However, from the latest figures that are available we know that the level of foreign ownership and control of Australian industry was already high. In mining the latest figures are for 1 976-77. They show that foreign controlled companies account for 59 per cent of value added in that industry. In manufacturing the latest figures for the whole industry are for 1972-73. They show that 3 1 per cent of value added was foreign controlled. A limited study undertaken in 1976 showed that of the top 200 firms in manufacturing, 86 were foreign controlled and accounted for 22 per cent of value added by manufacturing industry. In relation to financial corporations in 1976, 34 per cent were foreign controlled. In the insurance industry in 1976, 15 per cent of the life insurance industry and 50 per cent of the general insurance industry were foreign controlled.
There can be no doubt that developments over the last few years would have considerably increased all of these proportions of foreign ownership and control. There can be no doubt that they will all increase much further still if current policies continue to apply. It is imperative that this does not happen. We must establish the means of developing our nation and our resources without losing ownership and control of them. We must recognise, too, that foreign investment is like an addictive drug. The more we have of it, the more we need. This situation comes about through the increase in income payable overseas on those foreign funds invested. The income payable on our foreign funds at present amounts to $1.9 billion- almost $2 billion- or $130 a person per annum in Australia. Thus in order to have a surplus of new foreign investment over income payable on previous foreign investments we must raise almost $2 billion a year from overseas in new capital investments. But that will in turn create further profits payable overseas in future years and so we will require still more foreign investment.
We must get off this crazy treadmill. This extremely permissive policy is endangering our national independence. Furthermore, the attempt of the Prime Minister (Mr Malcolm Fraser) to represent this policy in Los Angeles in the United States in January this year as being ‘broadly acceptable to all Australians’ is quite contrary to the facts. It is completely unacceptable to the Australian Labor Party and to the majority of the Australian people. The next Labor Government will be very concerned to ensure that foreign investment does not involve a continuing increase in foreign ownership and control and that such investment proceeds only after an examination to ensure that it provides net economic benefits for Australia. It will also be very concerned to develop alternative methods of raising funds for the important task of national development in such a way as to enable resource development to proceed with the ownership and control in Australia rather than in foreign hands.
-The speech of the honourable member for Gellibrand (Mr Willis) was an interesting one and one to which I listened very carefully. Two things emerged very sharply from what he had to say. Firstly, in the whole of his speech there was not one word of praise for the contribution that foreign investment has made, is making, and is likely to continue to make to the development of Australia, to the creation of new jobs to employ Australians and to the development generally of the wealth of this country. The second interesting thing about the speech- it really flowed from the absence of any words of praise for foreign investment- was the extremely critical tone that he adopted towards foreign investment in this country. It highlights very much the tensions that so clearly exist within the Australian Labor Party on such matters as foreign investment. It is one of those areas about which honourable members opposite can never make up their minds. It is one of those areas in relation to which the honourable member for Gellibrand will spend 15 minutes raising the old bogey of foreign domination of our resources, invoking suspicion and cynicism towards multinational corporations. Yet in another environment, according to another set of circumstances and perhaps with other needs in mind, the Leader of the Opposition (Mr Hayden) as recently as September last year at an ALP seminar in Perth said:
It is no embarrassment to the Labor Party to accept foreign funds for development where risk capital or technology is not available from Australian sources.
He went on to say: . . . but we will not delay the proper development of our great country if Australian investors are not prepared to take the risk, lack the expertise, or so on.
Interestingly enough, against what the honourable member for Gellibrand has said, Mr Hayden said:
In the area of ownership and control we would require 5 1 per cent of Australian equity in all new resource projects, except where companies were progressively shifting the level of foreign equity downwards, at a rate, and on terms, acceptable to a National Labor Government.
I have already mentioned that this requirement would not be allowed to become an impediment to desirable development.
That was the voice of sweet reasonableness on that occasion about foreign investment. We have just had 15 minutes of sustained attack upon foreign investment by the honourable member for Gellibrand. He seeks to establish that this Government has totally ignored the guidelines that we laid down in 1976. I will come back to the circumstances of the establishing of our policy and the way it has been administered, particularly in the resources area. I think that he mentioned coal projects. I will stand corrected if my recollection is wrong. I would like to point out to the House in this connection that of the 10 new coal developments considered by the Government, eight met the guidelines, one is subject to conditions aimed at ensuring 50 per cent Australian equity at the production stage or as soon as possible and the other project has been held up until additional Australian equity can be obtained. That is hardly the action of a government which is totally ignoring its own guidelines. Here we have a resource- coalwhich is potentially the greatest export earner this country has. Quite clearly, on that information the Government is completely honouring the guidelines that were laid down in 1976. The honourable member for Gellibrand made a great play about the differences between what we have done in this area and what the Australian Labor Party would have done if it had remained in office. I plead guilty to the fact that the Government has adopted a far more realistic and beneficial attitude towards foreign investment. Foreign investment has been important in the development of Australia. It is important now and it will be important for the future. Rational economists on both sides of the political argument in Australia recognise the truth of this. They also recognise that so many of the old shibboleths about foreign investment which keep emerging inside Labor Party forums and occasionally in public- most recently today from the honourable member for Gellibrandjust do not accept realities. I think it is depressing that whereas, on occasions, it was possible to point to the development of a bipartisan approach towards foreign investment over the past few years, the Labor Party has moved so far away from that approach.
No better illustration of that, of course, is to be found than in the resolutions adopted at the Adelaide conference of the Labor Party last year. Its foreign investment policy on that occasion was more concerned about establishing a pimping system for multinational corporations that operate in Australia than developing rational guidelines for a sensible development of the resource industries of this country.
The fact of the matter is that this country does not have, at the present time, sufficient capacity to provide the capital needed to develop our giant resource projects. That is not to say that we cannot make our capital markets more efficient and, therefore, more effectively marshal domestic capital towards the development of those projects. It does not mean that there is not enormous scope for improvement in that area. Of course, that is one of the principal reasons why this Government has established an inquiry into the entire Australian capital market system.
We want to know what impediments exist against Australian investors taking risks for the development of this country. But until the gap can be filled from domestic sources, it is in our overwhelming interest to allow foreign capital into this country on sensible terms. If we deny the entry of that capital into this country we are not hurting the overseas investors nearly as much as we are hurting Australia or denying the opportunity of new jobs in new industries to Australians, not to foreigners. The Labor Party’s shortsightedness in this area is no better demonstrated than in its failure to realise that if we deny foreign participation in so many of these projects it means we do not have a project. The Labor Party talks as if the alternatives are there. The fact of the matter is that we do not have the necessary capital resources in so many cases to develop these projects.
There is nothing clandestine about the foreign investment policy of this Government. It was not sprung on the Australian people by surprise. There is no confidence trick and no broken promise. No policy within our overall economical approach received more detailed attention when the Government parties were in Opposition in 1975 than the development of our foreign investment policy. I remember very clearly it involved quite a lot of work and a visit to Canada by the then Opposition spokesman on economic matters, my colleague, the Minister for Industry and Commerce (Mr Lynch). The policy was laid out very clearly before the election in 1975. We made it very clear that if we were elected to government things would be different in relation to foreign investment. We would not scare it away; we would not, as did the previous Labor Government particularly per medium of the former Minister for Minerals and Energy and some of his colleagues, make foreign investors feel unwelcome to take an interest in this country. We said that our foreign investment review procedures would have a distinct free enterprise bias. We make no apology whatsoever for that. This Government happens to believe that people who are practitioners in free enterprise have a better idea than most as to what is required to make free enterprise work. What we want in this country is a partnership between government and free enterprise in making decisions.
I would like to take the opportunity provided by this debate to place on record the Government’s appreciation of the work that has been done by Sir Bede Callaghan and Sir William Pettingell, the private enterprise members of the Foreign Investment Review Board, for the past four years. I hope that the honourable member for Gellibrand was not, by implication, casting any doubt or voicing any criticism of the work that those two gentlemen have done. I think that they have served the Foreign Investment Review Board extremely well over the last four years. The Board has made a very sensible contribution towards the development of sensible and workable guidelines for the operation of foreign investment in Australia. Of course, as I said earlier, things are different in relation to foreign investment now that we are in government.
Historically, this country has always needed large amounts of private capital inflow to counter-balance our current account deficit. It has always been traditionally a large net importer of capital. Unfortunately, the honourable member for Gellibrand cannot seem to grasp the fact that if we have a current account deficit we must either seek to balance that by large amounts of capital inflow or alternatively we must have government borrowings. The honourable member for Gellibrand does not want it either way. He comes into the House today and criticises our foreign investment policy for being too permissive and, by implication, says that if the Labor Party had been in office over the past four years there would not have been nearly as much foreign capital coming into this country. Yet on other occasions, he comes into this House and criticises the Government for officially borrowing overseas to supplement our reserves. How else are we going to cover the deficit unless we are prepared to adopt a sensible approach to foreign capital coming into this country? He does not want to have it either way. He thinks that difference will be made up out of thin air. The fact of the matter is that this country w-11 continue to need large amounts of foreign investment. But it will not get it on any terms. Our policy has not been honoured only in the breach.
I have indicated very clearly in reference to a major resource such as coal that the contrary has been the case. We have not adopted a policy of foreign investment at any price. We have established guidelines. The honourable member for Gellibrand knows as well as I do that it is just not going far enough to look at the number of projects that have been approved or the number of applications that have been approved. One also has to take into account the fact that the mere existence of foreign investment guidelines means that a large number of projects that might otherwise have been submitted to the Foreign Investment Review Board in fact have not eventuated. I believe that over the last four years we have regained the ground that was lost between 1 972 and 1975 from the point of view of overseas investors, in the stability and long term acceptability of foreign investment. Most importantly I have found, as have other honourable members of the Government and indeed spokesmen for the Opposition, that when we have gone overseas or have spoken to overseas interests wanting to invest in Australia, that people who are prepared to risk their money want a degree of predictability and security for their investment. Why should it be otherwise? Why should not companies that are prepared to take enormous risks in the development of this country have the opportunity of security and predictability?
The honourable member for Gellibrand has forgotten that it was a famous Australian Labor Party Prime Minister who invited multinationals into this country to establish a motor vehicle industry. He did it because on that occasion Australian companies were not able or willing to do it. He seems to have forgotten that the great industry that has provided thousands of jobs and hundreds of thousands of motor vehicles for Australian people over the last 30 years was started by some of these dreaded multinationals that are maligned and treated as corporate lepers in the document adopted by the Australian Labor Party at its Adelaide conference. The case for foreign investment in this country not on any terms, not at any price, not on a ticklemytummy basis, but on a sensible basis of partnership where that can be achieved, is a very strong one indeed. It is a policy that has served this country very well. Over the last four years it has been administered in a way that has made it possible for this country to really develop so far as our resources are concerned. Over the past four years, particularly over the last 1 8 months to two years, we have seen the real fruits of development within Australia of a far more stable and predictable economic climate; a climate that is increasingly attractive to the sort of long term economic commitment of so many large financial interests overseas.
We have seen the development also of a far more sophisticated approach by Australian companies and the Australian financial system. I really despair of the capacity of the Australian Labor Party to come to grips with the fact that the financial circumstances in which this country operates have changed very greatly even over the past five or 10 years. Not only do we have this debate but also the honourable member for Gellibrand- who is the alternative treasurer of this country; the person who would be in charge of economic matters if the Labor Party was elected- has spent 15 minutes throwing cold water on the whole idea of foreign investment. Only a few minutes earlier he criticised me for making some relatively modest adjustments to the rules that relate to portfolio investment overseas by Australian residents. Once again the Labor Party is demonstrating a colonial mentality towards international economic matters and this matter of public importance deserves to be rejected.
-The Opposition is not against foreign investment. But any foreign investment ought to ensure that our vast non-renewable mineral and energy resources are exploited in the national interest and not the exclusive preserve of overseas corporations. I agree with what the Treasurer (Mr Howard) has said. There is a need for a multi-factional approach. We need to galvanise the capital markets in this country. We certainly need sound company law, security law and stock exchange regulations. Might I suggest to the Treasurer that he is locked in on the twin cliches of self-regulation and market forces. Under that concept he will not get the regulations needed in that area in this country.
The Government’s foreign investment policies are disastrous. They smack of duplicity and fail to protect the national interest. This Government has a policy for domestic political consumption which requires majority Australian equity in new projects. In practice it has a policy really of anything goes. Whenever Ministers of this Government travel to the United States they bend over backwards to assure foreign corporations that they are welcome in Australia at any price. When I was in Wall Street for four hours I found the same concept. All those corporations were interested in were the guidelines to be laid down for foreign investment by the Government. They did not want any guidelines.
A fortnight ago Senator Carrick assured United States businessmen that the Government’s foreign investment policy was so flexible that it would bend to almost any contingency. The Government’s so-called Foreign Investment Review Board exists merely as a smokescreen for the Government to conceal any criticism made about foreign investment. If you were honest, you should admit that the Board itself has become nothing more than a tout for foreign investment. The members of that Board, particularly Sir Bede Callaghan, act as though their job is to promote foreign investment and not to review it. The Government should call it the Foreign Investment Promotions Board and be honest about the matter. From available figures over the last 12 months we see that the Foreign Investment Review Board considered 1,725 proposals of which it rejected 12; that is 0.7 per cent. Of 1,713 proposals which were approved nearly half of the total expected foreign investment, or a little over $2m was payment for assets. Clearly the Government is selling off the farm. Much of the recent massive level of foreign investment has been to take over energy resources, whether it is coal, oil, shale or uranium. The huge overseas companies are swallowing up the alternative energy resources that this country has. The same thing happened in the United States. In the process, this Government is cancelling out this country’s independence to determine what is to be done with its energy resources and who will benefit from this.
It is the oil company plunder of Australian energy resources that is at the heart of this uncontrolled foreign investment. I ask the Treasurer: Why? Oil company penetration of resources stems from the fact that Australia will soon become one of only two advanced Western countries that will be net exporters of energy. The International Energy Agency, in its recent report, clearly indicates that Australia will be the biggest exporter of coal by the year 2000. Present exports are only 40 million tonnes. The IEA predicts that Australia will have to meet orders for 195 million tonnes. This situation stems from the IEA assessment that there will be a shortfall, within the next 10 years, of something like 10 million barrels of crude oil a day. World coal production must at least triple by the end of the century if the West is to have adequate energy supplies to accommodate even moderate economic growth. Australia has to make a firm commitment in this area.
The scenario of vastly increased Australian coal exports clearly explains why oil companies are moving to tie up coal reserves. The control of our coal reserves obviously will be a key factor in the determination of world energy prices. The government will have no control over that at all. In effect large overseas corporations are becoming de facto energy policy makers in this country, just as they are in the United States, where the 20 biggest oil companies control 94 per cent of United States oil reserves; 1 8 companies control 60 per cent of the natural gas supply; 16 of the 18 companies own oil shale interests; 1 1 companies possess huge coal reserves; 16 companies have bought into uranium; five companies own solar energy companies; and the only geothermal lands in production in the United States are owned by a large oil company. With such interlocking control over the energy market price manipulation is inevitable. It is in this country at the moment. The Minister mentioned coal. For the information of the Minister I point out that, in Queensland the level of ownership has reached almost 50 per cent in relation to noncoking coal and 20 per cent for coking coal. The proportion of Queensland ‘s coal resources that is foreign owned and controlled is probably more significant than these figures indicate. In New South Wales the proportion has risen enormously. Notable examples are the British Petroleum Co. which has a 49 per cent interest in the Clarence reserves and a 100 per cent interest in the Burragorang Valley reserves. Shell Company of Australia Ltd has a 37 per cent interest in the Yellow Rock reserves and a 45 per cent interest in the South Bulli reserves. Tragically, this foreign ownership of our coal resources under the guidelines of the Government increases every day. I suppose that Sir Roderick Carnegie, the chairman of a large foreign corporation in Australia, summed it up better than anybody on the Australian Broadcasting Commission program ‘Faces of the Eighties’. Arguing for less reliance on foreign capital, he said: . . . People don’t realise the cost. If you get two dollars in 1979 from overseas invested in equities, those owners want a dollar a year from 1990 onwards forever. What I’m saying is: That’s a very high price, but in political terms, it doesn’t seem a high price because they see the two dollars coming in today, but in 10, II years time, a dollar a year going out is an enormous price to pay. And I think we in Australia have got to make certain that our money isn’t tied up in savings deposits; it is mobilized forming projects with more Australian ownership’ … I think that at the present moment the attitude is too often that we should continue our reliance on the international oil companies for source of capital. That’s an easy way, but in the long term I don’t think it’s going to create the kind of jobs for young Australians which I want for my kids.
That brings me to the core of the problem. We simply have to be more critical about which foreign companies are allowed to exploit our resources. We have to see foreign investment as a last resort, not a first easy option. We have to tighten up the assessment of foreign investment proposals and subject the claimed benefits to a follow up check. We have to close loopholes such as the naturalisation qualification of foreign corporations, which is completely unenforceable and farcical. We have to cease the hypocrisy whereby Japanese, British or French government owned agencies- statutory bodies, if you like- are welcomed in glowing terms to participate in this country and there is an angry and emotive response from the Treasurer and his cohorts whenever the Australian Government moves even in the mildest way to exercise some control over the activities of the mining sector. The action of the Government would be a laughing matter in Britain and Western Europe.
Above all, the Government has to make a genuine attempt to mobilise the Australian capital market in the key resource sectors. We ought to have done it in 1972-73; this Government has failed to do it. At a time when our resources should provide us with unprecedented strength and leverage, this Government is selling our future prosperity to foreign corporations. The Government is like a primitive tribe which sells its riches for a string of beads. The Government has done this time after time. It will wake up to that, as governments have done in the United States and Canada. One can see from Trudeau’s statement of less than a fortnight ago that the Canadians have woken up to the fact that one thing a nation can rely on is its energy and mineral resources. If we do not have control of them now we will be in trouble when the crunch of the international energy crisis comes in five or six years from now. The aluminium industry is vertically integrated from bauxite to aluminium. We may develop it in this country but we will have no control whatsoever over the pricing internationally or within this country. That goes for tin, zinc and copper as well. The Government has sold this country out at a deplorable and alarming rate. One thing that distinguishes my party from the Government parties is that my party believes that any foreign investment, welcome though it be, ought to be subject to very severe scrutiny, not in the short term of three years but in the long term of 1 0, 1 5 or 20 years.
– It surprises me that the Opposition should bring forward this matter of public importance for debate as it has given the Government the opportunity to show off with a certain amount of pride about its record in this area, not to defend itself, and to highlight the Opposition’s current policy and record in this respect. I suppose we should be obliged to the Opposition for bringing this matter forward in this way. I would like to comment on some of the matters raised by Opposition speakers in this debate. As the Treasurer (Mr Howard) said, the Opposition is only seeking to re-establish the policies that the Labor Government laid down between 1972 and 1975. That is not selling out the farm; that is buying back the farm. What we heard from Opposition speakers indicates the amount of illiteracy that the Opposition brings to this argument as far as economic policies are concerned. In fact, it would also indicate that if the Opposition were to gain power we would have the same system as we had from 1972 to 1975 under which there was no economic control. The guidelines laid down for foreign investment would just dry up the availability of funds.
This debate gives us the opportunity to indicate that our policy is one of controlled encouragement against the Opposition’s policy of positive disencouragement. Between 1 972 and 1 975 we saw a drying up of foreign investment associated with a slow-down or a complete stop in the development of our resources. Penalties also were imposed on resource companies. I mention the coal levy as just one of those penalties.
When we talk in terms of Australian participation, what do we mean? We are talking about the private enterprise system to which this Government is dedicated, not about the nationalisation to which the alternative proposition of the Opposition would lead us. The Government’s participation in private enterprise, whether Australian owned or foreign owned, is to the extent of the taxes it reaps as a reward. I would rather have a 49 per cent or 50 per cent share in a company with a certain earning capacity than a complete share in a loss, which would be the result if we were to nationalise, as the Opposition undoubtedly would want us to do.
In mentioning controlled encouragement, I am not talking only about the Foreign Investment Review Board. We are quite happy to admit that there is flexibility that allows us to look at propositions in the interest of all Australians. I do not think we are at loggerheads on this argument. But the conditions of Australian participation are always involved in the making of any decision.
The export licensing provisions that this Government controls certainly have a major effect on any foreign investment. In fact the complaint, if any, of any company operating in Australia today with international capital would be about the degree of control that this Government exercises in relation to its export licences. That is the way it should be if we are not to sell off the farm. The foreign investment guidelines, applied with a certain amount of flexibility, provide for foreign participation only to the extent that the Australian capital market cannot provide it. I think that should be borne well in mind. If Australian capital is available, the Government requires its use of necessity; if it is not available, the flexible guidelines offer encouragement. The resource development policy became a desert because of the guidelines that the Labor Government applied.
I want to make a comment in connection with the degree of foreign investment. We have been presented with certain facts and percentages today. On 24 October last year Mr H. M. Knight, the Governor of the Reserve Bank of Australia, said: . . . net capital inflow has, over recent years, added an amount equal to about 7 per cent of domestic savings to funds available for investment in Australia.
So where is the mass sell-out about which the Opposition is complaining? I venture to say, in answering the Opposition’s argument, that the 7 per cent mentioned would not have been necessary if Australians did not lock up their savings, as they have in the past. They have done so only for one reason. The average Australian will invest in something that is gilt-edged. However, he is very slow to back up something which involves a bit of risk speculation. I think that basically that is what we are arguing about.
Certainly Australia is rich in energy resources. For instance, Australia holds 4.2 per cent of the world’s coal reserves and 17.5 per cent of the world’s uranium reserves. The percentage in terms of tourism is unkown. But how are we to develop these resources with limited capital? As the Treasurer said, we already rely on overseas borrowing to balance our Budget deficit. If we are to develop our massive resources, which we cannot leave in the ground, we will need to borrow further from overseas and the profit which the Opposition now complains is being reaped by international companies would be taken up in interest or dividends. I think we should be more than satisfied with the fact that other countries are prepared to invest in Australia. The relative rate of return to overseas investors, just on investment alone, is these days between 15 and 20 per cent in their own country. Australia should be happy at the rate of investment that has occurred, but we have not arrived at this situation by mere accident. Only the fact that this Government has been in power since December 1975 has given overseas investors the necessary security and has resulted in their funds being invested here. Only for that reason do we attract overseas investment to such an extent.
I refer now to an example of what one foreign investor, the Utah Development Company, which has been much maligned by the Opposition, has given Australia by its interest in an activity in respect of which we could not ourselves raise the necessary risk capital. Utah has given Australia three townships with an infrastructure of water, power, rail, port facilities and roads. These are all assets for the future. Those mines will not be there forever. It is up to Australians who are complaining about the absence of Australian participation to take up that challenge. I refer to the associated and alternative industries which can service these infrastructures. That is the part that Australians can play, in investing their savings.
Only last Thursday we had before the House a motion complaining of a lack of incentive to small business. What I have just referred to is an example of a positive incentive for small business. It should get behind the opportunities provided by multinational infrastructures and in so doing create the profits and incomes that they seek. Reference has also been made to a supposed selling out of Australia’s mineral reserves. It might come as a surprise to some members of the Opposition to learn that before a licence is granted to mine coal reserves in Queensland the applicant must prove that reserves equal to three times the quantity to be mined are present. Where is the selling out of reserves under that arrangement? I repeat that a licence is granted to take only one tonne of every three proven to be in the ground. The other two must remain to await possible future Australian exploitation.
Many aspects of this matter of public importance warrant examination if we are to look to the future. We will not have the Iwasakis developing in Australia, or have our coal mined, developed and exported if we lay down stringent guidelines based on inflexible principles.
– You have got the Japanese worried anyhow.
– May I just mention Japanese investment, because that is one area in which the Treasurer (Mr Howard) has played a very important part. The Foreign Investment
Review Board refused Mr Iwasaki permission to bring in more capital for the purchase of more Australian assets, without embarking upon development. The guideline is clear. The Japanese must perform before they will be allowed to bring in any more capital for that type of investment. That is the kind of guideline that we require be observed. These matters should be brought out.
The Labor Opposition has merely reemphasised that its 1972-75 mentality persists. It refuses to accept that the United States was developed by the use of foreign capital and that Australia must do the same in cases when it cannot raise the necessary capital itself. However, controls must always be imposed. I believe that the export licence and foreign investment policies that we have laid down can be implemented with a degree of flexibility that will preserve safely the future of all Australians and yet will give Australian investors the opportunity to participate. I ask honourable members opposite: If we are to put concrete boots on foreign investment, as they would have us do, how are we to develop our shale oil and coal resources in the future?
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired. The discussion is concluded.
Debate resumed from 20 March, on motion by Mr Howard:
That the Bill be now read a second time.
-I seek your indulgence, Mr Deputy Speaker, to suggest that the House has a general debate covering both this Bill and the Income Tax (International Agreements) Amendment 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.
-There being no objection, I will allow that course to be followed.
-The Bills that are now before the House are not particularly controversial and are not opposed by the Opposition. However, they raise some interesting points. I shall deal with each in turn. Firstly, the Income Tax Assessment Amendment Bill deals with a variety of matters. One is that tax deductibility for expenditure incurred by candidates in seeking election to the Legislative Assembly of the Northern Territory is introduced. This is a quite reasonable measure which brings candidates in the Northern Territory in line with those for State and Federal parliaments. The change is, of course, supported by the Opposition.
Another change is that gifts of more than $2 to the Child Accident Prevention Foundation are to be made tax deductible. Of course, the Opposition does not oppose this change but would appreciate the Treasurer (Mr Howard) giving the House the reasons for choosing this charity as against many other worthy charities for which tax deductibility is not available. Neither in his second reading speech nor in his Press statement of 26 February announcing this measure did the Treasurer give any reason for selecting this charity, which we agree is worthy and worthwhile, above others. What guidelines is the Government using to determining which charities will qualify for tax deductibility and which will not? They are not apparent in any of the Treasurer’s public statements and we would like to know what they are. The Parliament and the public have a right to be informed about this matter.
The third change created by the Income Tax Assessment Amendment Bill is that of extending the period for valuing property donated under the taxation incentive for the arts scheme from 30 days before and after the making of a gift to 90 days. Again, this is a quite reasonable change which will facilitate the operation of the scheme. We do not oppose it. The fourth measure contained in this Bill is to remedy the law relating to the taxation of royalties derived by nonresidents. Australian source royalties paid to non-residents are intended to be subject to normal Australian tax unless subject to a tax treaty, but a recent decision by the Victorian Supreme Court in a case involving the Volco Corporation has opened up a means by which such tax may be avoided. The Bill seeks to close off that loophole and is therefore strongly supported by the Opposition.
The fifth measure contained in the Bill is the provision for shareholders rebates for capital subscriptions to eligible petroleum companies. The Income Tax Assessment Act currently provides that a 30 per cent rebate is allowable on money subscribed to certain off-shore petroleum exploration and mining companies. Entitlement to that rebate is dependent on the company’s lodging a declaration with the Commissioner that the company has spent or will spend the money subscribed on off-shore exploration or mining. By lodging such a declaration the company forgoes corresponding deductions under the Act for eligible petroleum outgoings. This is an incentive to subscribe to exploration companies because shareholders know that they will get the rebate, but the company, to claim it, would need to have accessible income and there is a strong possibility that many exploration companies would not have any such income.
This legislation extends the provision to onshore petroleum mining and exploration and has also extended anti-avoidance provisions. Such provisions in respect of this concession are very important as in the past it has been used for wide-scale tax avoidance. It was for this reason that Labor abolished the concession when it came to office in 1972. However, as measures were subsequently devised by the Australian Taxation Office to limit greatly the scope for tax avoidance through this provision, we did not in, I think, 1977 oppose its re-introduction in respect of off-shore activity and with further tightening of the anti-tax avoidance provisions we do not oppose its extension to on-shore activity.
The Income Tax (International Agreements) Amendment Bill raises perhaps more interesting issues. Its purpose is to give legislative effect to two new double taxation agreements, that is, between Australia and the Philippines and Switzerland, and to amend the rather long-standing double tax agreement between Australia and the United Kingdom. I believe that it is worth while raising some general issues in respect of double taxation agreements. Such tax treaties have become an essential feature of the international income tax system and are directed towards eliminating international double taxing, preventing tax evasion and simplifying the obligations of taxpayers.
Two chief methods of relieving double taxation are used. Firstly, taxing rights over certain classes of income are reserved entirely to the country of residence of the person deriving the income. Generally, these are commercial profits if the recipient has no permanent establishment in the country of origin; also air transport and shipping profits, pensions, civil service remuneration, remuneration for personal services if the visit does not exceed 183 days, teaching remuneration and cultural royalties. Some of these categories may vary between individual treaties.
The second method used to relieve double taxation is that all other income may be taxed by the country of origin but the taxing powers for some classes of income are limited. In regard to dividends, tax is generally limited to 15 per cent to ensure that the effective tax on the dividend income, that is, the tax on company profits plus the tax on the dividends imposed by the country of origin, is less than the tax on the dividend charged by the country of residence, otherwise there would be a disincentive for continued investment in the country from which the dividend is derived. In regard to interest tax is often limited to 10 per cent so that residents of the borrowing country are not at a disadvantage when seeking loans for business purposes.
As to royalties, tax is again limited so that manufacturing rights and know-how can be obtained for development purposes at a reasonable cost. Royalty and interest payments to a foreign business carried on through a permanent establishment in the country of origin are not taxed at favourable rates. Most treaties also contain provisions authorising the revenue authorities to adjust reported taxable profits, where they do not reflect results which would be expected to accrue if the parties were not at arm’s length. These provisions, of course, are quite important. Because transfer pricing is widely regarded as being an important aspect of multinational companies’ activities, it is important that the tax authorities have the right to amend the pricing decisions of companies and, therefore, amend their declared profits so that the tax payable by the companies in the country of origin is the proper one and not some understated figure which can easily occur through the use of transfer pricing. These tax treaty provisions may result in a loss to revenue of one or other of the treaty countries, but this has been accepted by governments in the light of the favourable impact of the agreements on trade and investment flows.
In regard to tax treaties, Australia has double tax agreements covering the United Kingdom, the United States of America, Canada, New Zealand, Singapore, Japan, Germany, the Netherlands, France and Belgium. Limited agreements covering air profits are in force with France, Italy and Greece. As Australia unilaterally exempts residents from tax on most classes of foreign-source income taxed abroad under section 23 (q) of the Income Tax Assessment Act, it is only in certain areas that foreign credit provisions are required. Australia’s treaties, although varying in some respects, generally follow the principles outlined in what I have just put and are closely in line with the Organisation for Economic Co-operation and Development model convention on tax treaties.
The Philippines treaty differs from those treaties we have normally adopted in the past, and there are a number of points of difference. Firstly, under the legislation now before the House, the Philippines will limit its tax on dividends- normally 35 per cent- paid by
Philippine companies to Australian residents to 15 per cent where the shareholder is a company and 25 per cent in other cases. Australia will apply the same limits, which are normally 15 per cent all round. The Philippines will limit its tax on interest payments to 1 5 per cent in most cases. Australia’s limit is 10 per cent. Normally, in the Philippines the rate is 15 per cent for companies and 30 per cent for individuals. Philippines tax on royalties will be limited to 25 per cent, or 15 per cent in preferred areas, whereas it is normally 35 per cent. Australia will limit its tax on royalties to 25 per cent, whereas normally that amount would have been exceeded.
Various advantages are pointed to by people supporting the idea of tax treaties, and at least one substantial disadvantage. That disadvantage is that the country which is a net recipient of foreign investment funds is likely to lose tax revenue from such tax treaties. Of course, that is the case with Australia in regard to almost all of the tax treaties we have, but probably it is not the case with the Philippines, where the loss of revenue would be incurred by that country. This is because in most cases Australia has less foreign investment from Australia in those countries with which we have the double tax agreements than they have in Australia. Therefore, the concessional tax rates which apply on dividends paid overseas under these tax treaties mean that the amount of revenue lost by Australia through the treaties will be greater than that incurred by the countries with whom we have agreements. That is a certain disadvantage. On the other hand, there are various advantages. Firstly, the double tax agreement quite clearly provides for certainty in regard to the taxing of international transactions. It is highly desirable people know what their likely tax liability is and are not in a situation of being unsure as to whether they will be liable for double taxation or not. It is obvious that a double taxation agreement facilitates foreign investment by limiting the tax on dividends. We are not, as the Treasurer tried to say in the previous debate, anti-foreign investment. So long as the foreign investment is on the right terms, the Australian Labor Party is quite prepared to support that foreign investment. We concede that double tax agreements can assist to facilitate foreign investment, which should be allowable under appropriate guideline.
Another advantage of the tax treaties is that they facilitate overseas borrowings by local companies by limiting the tax on interest payments. If there was a likelihood of higher tax being imposed on the interest payments from Australia, clearly the rates of interest demanded by lenders to Australia would be higher than will be the case with the tax treaty applying and the lower rate of tax on those interest payments. A further advantage is that tax treaties encourage overseas entertainers, professionals, and people of that kind to come to Australia by ensuring that their income is taxed only once. If they thought they would be liable to double taxation they might be very reluctant to come to this country. The treaties also provide the Taxation Commissioner with the ability to reconstruct transfer pricing arrangements, a factor to which I have already referred.
As I understand it, it is possibly and probably more effective to have this arrangement contained in the tax treaties than simply to rely on section 136 of the Income Tax Act, which nominally gives the Taxation Commissioner power to adjust transactions so as to accord with appropriate pricing policies and to overcome the problem of transfer pricing by multinational companies. I understand that the use of the tax treaties in this regard is increasing, that is, that the Taxation Commissioner increasingly is relying on the tax treaties to adjust the recorded or reported profits by multinational companies in this country for tax purposes to take account of transfer pricing arrangements. The tax treaties facilitate this happening both by strengthening the power the Commissioner has under section 136 and also by making it easier to obtain information from the country from which the investor comes, therefore making it much easier to make the appropriate adjustment to reported profits. It can be argued that such tax treaties keep prices down in Australia in that if foreign companies had to pay higher levels of tax they may increase their prices accordingly. Of course, this would not be a problem if we had appropriate prices supervision in this country, but in the current circumstances it may have some validity.
On balance, it would seem there is much to be said for such agreements. It is imperative that if we are to have such agreements, they do not become a means of enabling Australian investors to have increasing resort to tax havens through the operation of section 23 (q) of the Income Tax Assessment Act. The Act, as it now stands, facilitates certain tax avoidance arrangements by exempting Australian residents from tax on significant categories of income from overseas. Under section 23 (q), if the foreign-source income is subject to income tax in the country in which it is derived, then that income is exempt from further Australian taxes. This is so even if the income is taxed overseas at minimal rates or if no tax is actually paid due to local concessions.
There are three exceptions to the operation of section 23 (q), all giving a credit for foreign tax paid. Firstly, in regard to foreign dividends, these are taxed in Australia. Section 46, however, allows companies a rebate of tax for any dividends received and thereby exempts local companies from tax on foreign dividends, even if both the dividends and the profits out of which they are paid are not taxed in the source country. In effect, only individuals pay further tax on foreign dividends. Income from Papua New Guinea is taxed in Australia, and interest and royalties are taxed when they are received from a country where tax is limited by an international tax treaty. Those are the three exceptions to the general operation of Section 23 (q).
The operation of section 23 (q) has encouraged tax avoidance through the use of tax haven countries which provide favourable tax treatment by levying either no tax at all or only low rates of tax. Some notable tax havens are Bermuda, the Bahamas, the British Channel Islands, Hong Kong, Liechtenstein, Luxembourg, Nauru, the New Hebrides, Panama and Switzerland, with whom we are now to have this tax treaty. To make use of a tax haven it is necessary to set up some sort or business operation in the haven country and to divert income, which would otherwise have been taxable in Australia, through that operation. Once the income has been taxed in the haven at a low rate it can be brought back into Australia free of further tax.
For example, a simple means of doing this would be for an importing business to set up a purchasing company in Hong Kong which sells goods to its Australian parent at a high price. In this way the most profit is made in Hong Kong where the tax rate is 15 per cent to 17 per cent rather than in Australia where the tax is 46 per cent. The use of such devices to divert profits is rife, according to an Australian Financial Review article in July 1978. That article reported that about one-quarter of a sample examined by the Australian Financial Review involving 120 of Australia’s top companies have subsidiaries operating in Hong Kong or other tax havens. Some examples of profits made in tax haven countries discovered by the survey were: In Hong Kong- the Broken Hill Pty Co. Ltd, $1.2m; the Pioneer Concrete Company, $3.2m; Thiess Holdings Ltd, $1.4m, Comalco Ltd, $718,000 and the Nylex Corporation Ltd, $431,000; in the New Hebrides-Burns Philp and Co. Ltd, $1. lm and W. R. Carpenter and Co. Ltd, $415,000; in Luxembourg- Comalco Ltd $59,000; in Bermuda- Commonwealth Industrial Gases Ltd $368,000, the Lend Lease Corporation $150,000; in Guernsey- the Australian and New Zealand Banking Group Ltd, $136,000; in the Bahamas- James Hardie and Co. Pty Ltd $638,000; and in Liechtenstein the Dunlop company, $67,000. It is clear that these amounts are not tremendously large, although some of them are over $lm. But the important point is that this small survey by the Australian Financial Review showed that many of our top public companies are using these tax havens for some kind of tax avoidance.
Private companies are less open to disclosure. Many large private companies or trading trusts are reported to channel most of their big profits through tax havens. The use of tax havens is not without its problems. There are provisions in the Act which try to prevent their use for tax avoidance. Section 136 and sections 38 to 43 give the Commissioner of Taxation power to reconstruct dealings between a local company and a foreign company which are designed to depress Australian profits. Section 3 1 deals with the purchase of trading stock not at arm’s length. More serious problems arise from exchange controls. The Reserve Bank of Australia cannot grant authority to certain transactions with listed tax haven countries without the production of a tax clearance certificate from the Commissioner of Taxation. The Commissioner will not grant a certificate unless he is satisfied that no tax avoidance implications are involved. These provisions, however, seem to have been generally ineffective given the continued use of tax havens. The Master Tax Guide published by the printing firm of CCH Australia Ltd looks at the exchange control regulations and considers that some of their provisions ‘can be expoited if it is necessary to do so to set up and maintain a tax haven structure ‘.
The same publication says that any attempt by the Commissioner to apply section 136 usually gives rise to considerable difficulty. This view is backed by the report of the Asprey Taxation Review Committee which considers section 136 and other parts of the Act directed at this problem to be inadequate. It seems that new measures are necessary to stop this form of tax abuse. In addition, there are two other unfavourable aspects of the operation of section 23 (q). Firstly, in regard to equity, two individuals or companies with the same total income can pay markedly different amounts of tax because one gets income from overseas and the other from within Australia. Secondly, it acts as an incentive for the diversion of economic activity away from
Australia to countries with lower levels of taxation. The Treasurer acknowledged these facts and the tax avoidance problem when on 8 June 1978 he announced the Government’s intention to introduce a system of taxing Australian residents on their foreign source income with credit for any foreign taxes paid. He described the existing mixture of exemptions and credits as a hotch potch. He said that the Government: . . . considers that such outdated and inconsistent rules cannot be retained. The Tact that major elements of the foreign source income of Australians are not taxable in Australia seriously prejudices the equity of the tax system.
The foreign tax credit system he proposed to introduce was along the lines of the Asprey Committee’s recommendations to overcome the problem, but those proposals never got off the ground. On 25 October 1978 the Treasurer announced that because of ‘a large number of submissions from a significant spectrum of the Australian business community the Government has decided not to proceed with the measures’. So in a few months the Treasurer backed down completely on what he said was a necessary change to overcome the mixture of exemptions and credits which he described as a hotch potch and to overcome the tax avoidance which resulted from that hotch potch. This is yet another example of the Government’s capitulation in the face of concerted lobbying by powerful vested interests, as is the case of the retail sales tax, the so-called newsboys’ tax on family allowances and the tax crackdown on trusts. It is no wonder that the business community lobbied hard against these proposals, considering the unfair tax advantages which it stood to lose.
Yet none of the arguments against the scheme mentioned the tax avoidance implications. They reportedly complained of the disincentive to Australian companies to invest abroad, the inability of Australian companies to compete on an equal footing with local companies in overseas markets, the difficulties in attracting Australians to take employment overseas, the worsening relations with developing nations as their development oriented tax incentives are offset by higher Australian tax and the reduced Australian employment because of a fall in exports to firms operating overseas. None of these arguments is sufficiently convincing us to overcome the tax avoidance argument and the equity implications of not having a foreign tax credit system. Why should companies which invest abroad pay less tax than is paid by a comparable local company simply because their profits are made off-shore, especially, as is often the case, when those profits are further subsidised by the use of cheap foreign labour? Far from creating jobs in local export industries, there is the distinct possibility that Australian jobs may be lost by companies taking their operations overseas in search of tax incentives and of cheap labour. Generous concessions to exempt the first $10,000 of foreign income were proposed for individuals in recognition of the increased costs and inconvenience-although this is not always the case- of working overseas. This would have given these taxpayers much more favourable treatment than that given to all other taxpayers.
Not all would agree that Australian tax revenue should be foregone to encourage industrialisation in Asia, especially with the problems it is posing for local industry. If such an effect were deemed desirable, it could be had through tax sharing provisions designed to give a tax credit in Australia for tax incentives in industrialising nations. This is preferable to a blanket exemption with its tax avoidance implications. The Treasurer promised that the Government was giving close attention to further measures specifically designed to reduce the scope for avoidance under the existing rules relating to taxation of earnings from international transactions. Eighteen months later nothing has been heard of these measures and its seems that the use of tax havens by companies and by individuals continues unchecked with consequent losses to Australian tax revenue. It is imperative, in our view, that some form of foreign tax credit system be introduced as quickly as possible to stop these abuses.
In this context, it should be mentioned that the Whitlam Labor Government took action early in its period of office to restrict tax avoidance through tax havens by the use of exchange controls. The action taken by the Labor Government took the form of conferring on the Reserve Bank the power to withhold the granting of exchange control authority specifically on the ground that the prohibited activity would involve, assist or was associated with the avoidance or evasion of Australian tax. This was a very sensible use of non-tax provisions to overcome some tax avoidance. These provisions were widened in 1974 to give the Governor-General comprehensive powers to make regulations on foreign investment and to provide for the issue of tax clearance certificates by the Commissioner of Taxation as a prerequisite to the granting of exchange control authority to certain transactions with tax haven countries. These measures represented a comprehensive attempt to stop the flow of funds into tax havens for tax avoidance purposes. They have since proved to be less than adequate, but at least Labor attempted to tackle the problem.
On the other hand, this Government has admitted that the problem exists but has backed off from taking any action against it. Mention of the fact that Labor took this action in respect of the use of tax havens by exchange controls to overcome the problem of tax avoidance in that way raises the general question of Labor’s action to tackle tax avoidance when it was in office and the Government’s continued misrepresentation of the position. The fact is that although many Government members continually assert that Labor did nothing when it was in office to tackle tax avoidance, the Labor Government did take a number of measures. I have already mentioned one of them but there were several others; in fact, quite a few others. Let me go through them. I have mentioned them in the House before but because Government members persist in saying that Labor did nothing about tax avoidance when it was in office, I repeat the list of measures taken by the Labor Government. Tax avoidance through purchase of companies with accumulated bad debts or losses was ended. Restrictions were imposed on the carry forward of excess distribution by private companies in order to avoid undistributed profits tax. The use of Norfolk Island, Cocos (Keeling) Islands and Christmas Island as tax havens for avoidance of personal and company income tax was ended. Payment of dividends to artificial companies in Papua New Guinea and other tax havens as a means of avoiding undistributed profit tax was ended. Dividend and interest going to Papua New Guinea was made subject to withholding tax, thereby preventing use of Papua New Guinea to avoid payment of withholding tax. Subscriptions to pseudo-exploration companies were ended as a form of tax avoidance. Avoidance of withholding tax on interest payable to overseas residents by means of initial payment of such interest to an overseas branch of an Australian business was ended. So there is a fairly extensive list of measures taken by the Labor Government to overcome tax avoidance as it was occurring in Australia at that time.
Since Labor went out of office, there has been an explosion of tax avoidance. Tax avoidance is far more prolific today that it was when Labor was in office. So it is not true to say that Labor did nothing about tax avoidance. I have listed the many measures that Labor took when it was in office. As I said, since Labor went out of office, there has been this veritable explosion of tax avoidance. For those who doubt that this is the case, let me give them some figures. The Commissioner of Taxation publishes each year the number of participants in blatant tax avoidance schemes which he has identified. Let us just look at the figures which have come out since 1975- 76. In 1975-76, which is the last year which could be attributable to the Labor Government, the Commissioner of Taxation discovered 86 1 participants in blatant tax avoidance schemes. In 1976- 77, the number was 2,227-a very substantial increase. But in 1977-78, the figure was 10,224. In 1978-79, it was 11,253. So I ask honourable members to compare those figures with Labor’s 861 in 1975-76. Quite obviously there has been an absolute explosion of tax avoidance activity while this Government has been in office. All the blustering of the Government about what it has done to chop off tax avoidance does not alter that fact. Despite the fact that the Treasurer has come into this chamber time and time again with various bits of legislation to close off particular tax avoidance schemes, there still exists an extremely high level of tax avoidance activity, just in this area of blatant tax avoidance schemes alone, let alone all the other tax avoidance loopholes the Treasurer has allowed to continue.
It is absurd for this Government to say that because it has taken all this legislative action to close off particular schemes that proves it has done more about ending tax avoidance than did the Labor Government, as the Treasurer tries to say time and time again. That just does not hold water. One might as well say that a government today which brought down legislation to solve, say, the drug problem, had done more about the drug problem than any other previous Government. Of course that would be true because the drug problem today is so much worse than it was before. So it is with tax avoidance. It is so much more prolific now that if a government did not take at least the kind of action that this Government has taken, it would be absolutely reprehensibly deficient in its duty to this country. Of course the Government should be doing far more than it is to block off tax avoidance. It really is only playing games with the tax avoidance industry. Later this year, in the not too distant future, the Labor Party will spell out a number of ways in which we will make sure that the tax avoidance rip-off of this country comes to an end.
Order! The honourable member’s time has expired.
-The Income Tax Assessment Amendment Bill 1 980 and the Income Tax (International Agreements)
Amendment Bill 1980 cover a number of issues. Many of those issues have been referred to by the honourable member for Gellibrand (Mr Willis). Some of these issues are of a brief nature. First of all, there is the double taxation arrangements which have been amended to take account of arrangements with the Philippines and Switzerland. There is also a minor amendment regarding the double taxation arrangements with the United Kingdom. The honourable member for Gellibrand dwelt on these issues at some length. I want to deal with some other aspects of the Bills particularly oil exploration, and I can only conlude that the absence of comments in this area by the honourable member for Gellibrand would indicate that he is satisfied with the actions that this Government has taken.
Before moving on to that aspect, I mention that the Bill also makes amendment to the Act to take account of election expenses for members contesting the Northern Territory elections. Of course this is a machinery measure which comes out of the determination of self-government recently given by this Government. It also ratifies tax deductions for gifts to the Child Accident Prevention Foundation of Australia and I am sure that members of this House and the people of Australia will applaud this as being a very worthy cause. It also extends the valuation time limit with regard to donations of works of art. I understand that this was necessary because there was some difficulty in obtaining a satisfactory valuation for some works of art within the previous time limit set out in the Act.
I now come to the tax incentives provided for on-shore petroleum exploration. This measure comes from an announcement in the 1979-80 Budget and it deals with subscribed capital for oil exploration. So far this Government has provided incentives for off-shore petroleum exploration. It is now necessary to provide the same incentives for on-shore oil wells and oil exploration. Both of these Bills are an example of this Government’s continued determination to amend the taxation laws so as to ensure more equitable tax collection while at the same time ensuring that incentive for Australia ‘s development continues. I was rather sorry to hear the honourable member for Gellibrand indicate that perhaps this Government had not done enough on tax avoidance and tax amendment. During his speech he heroically read out a list of achievements in tax amendment by his Government. Quite honestly, compared with the amendments to the tax Act which are now designed to cut out tax avoidance and which have been instituted since the Fraser Government came to power in 1975, the honourable member’s list looks very minute.
I turn now to the alteration regarding the share capital subscribed for petroleum development. It covers share capital subscribed after 2 1 August 1979. Rebates will be paid on that capital and any capital subscribed prior to that date will of course be taken into consideration. Capital subscriptions after that date are of course affected by the new amendment. Currently, a rebate of 30c in the dollar is available on share subscriptions and, as I have said, after 2 1 August 1 979, this rebate will also apply to the on-shore wells.
The honourable member for Gellibrand also mentioned that some years ago people were taking up shares in mining and oil exploration companies, claiming the taxation rebate and then selling their shares. I am pleased to say that that has now ceased. I do admit that it was the honourable member’s Government which brought in amendments to discontinue that operation. I do applaud that kind of work. The amendment before us today further strengthens the safeguards which have been built into the Act. Up until now the taxation rebate on share capital subscribed for petroleum exploration has been available only if that money was spent by the exploring company within two financial years of its being subscribed. This amendment seeks to extend that period to four years and, of course, further strengthens the safeguards in the Act.
I would like to mention the importance of oil exploration to Australia. It is fair to say that under the previous Labor Government, from 1972 to 1975, oil exploration was not encouraged. There is any amount of figures to prove that. I would like to mention just a few. In 1972 total expenditure on oil exploration in Australia was $109m. As the people of Australia will recall, the Labor Government came to power in 1972. The Labor Government remained on the Treasury benches until 1 975. By the end of those three disastrous years, the expenditure on oil exploration had diminished to $65m- it had been almost halved. I think it is fair to say that the Government of that day dismantled many of the incentives available to the mining and petroleum industries. The result of the dismantling of those incentives is very apparent in those figures. Currently the situation has been retrieved, due to the initiatives of this Government. In the calendar year 1979 the expenditure on oil exploration grew to $228m. In the financial year 1980-81 it is estimated that $477m will be spent on petroleum exploration. Those figures were supplied by the Australian
Institute of Petroleum Ltd in its gazette of March 1980.
It is probably also fair to say that the comment is made in this gazette, referring to the $477m which is to be spent this year, that slightly more attention is being paid to the on-shore sites and less attention to the off-shore sites. As further evidence of this increased expenditure and what it means to Australia, the gazette goes on to say that the total length of seismic testings this year is expected to be more than 26,000 calorimeters, an increase of 30 per cent over the previous years. They are substantial figures and they do mean a lot to Australia. Of course, this increase in oil exploration has really been a result of the economic stability that has been provided by this Government and a result of the interest and incentives given for such exploration; but, more so, it is a result of the sensible move to import parity pricing for Australian oil.
Although the people of Australia do not want to pay more for their petroleum products- they will try to resist paying more for anything- the import parity move is a sensible move. It is not that far back when Australians were paying 20c per litre for petrol. Today they are paying 34c to 35c per litre for petrol. We do not like that, but if members of the Australian public stopped to look at comparable petrol prices in other parts of the world they would find that we pay less for petrol than most of the developed countries of the world. Canada’s petrol is still cheaper per litre than our petrol. Petrol in the United States of America is about the same price. When we look at the position in the developed countries throughout Europe we see that they are paying in excess of twice the price that is being paid for petrol in Australia today. Although we do not like these increases, although the motoring public resists paying them and complains about it, compared with other countries of the world we are well off.
It is important that Australians have a clear understanding of the current world oil situation. In this regard, I seek leave to incorporate in Hansard a table on world oil production in 1 979. The table was drawn up by the Australian Institute of Petroleum Ltd.
The table read as follows-
– When we look at this table, I think we should understand that of all the oil producing countries of the world Australia rates only a lowly twentieth position. Even though we may be satisfied with what we are producing today-about 70 per cent of our total oil requirements- we are very low in the quantity of oil that we produce. We are very low in our oil reserves when compared with those of other countries. To put it in another vein, in the twentieth position of oil producing nations of the world, on the 1979 figures, the amount of oil that Australia produces is well below one per cent of the total oil production.
I must confess that I have always been guilty of believing that the major amount of oil is produced in the Middle East countries, and combined it is, but the largest single country producing oil is the Union of Soviet Socialist Republics. Last year the Soviet Union produced almost 18 per cent of the world’s total oil production. To put that in perspective with the Middle East countries, Saudi Arabia, which is the largest producer, produced 1 5.6 per cent. If one takes all the Middle East countries together one finds that they produce only about one-third of the total oil production. So the Soviet Union- we hear little about its oil production- is by far the largest oil producer. When one looks at this table and studies the details, one will see the reasons why it is so important that Australia continues with strong incentives and why Australia must continue to encourage large scale oil production. The table which has been incorporated in Hansard shows that Australia still has a long way to go before it can say that it is in a stable and safe situation.
There is little doubt that the Organisation of Petroleum Exporting Countries intends to raise crude oil prices as high as the world market can bear. It wants to do this so as to divert the largest possible economic benefit to its member countries. Its desire is to prolong the income producing capacity for its depleting oil resources. We cannot blame OPEC for having this attitude, but it does mean that oil prices in the future will increase at least at the rapid rate that they have continued in the past. It is important that the Bill which is now before the House plays its part in ensuring that oil production in Australia is to continue. I hope that it will continue at a greater rate and I hope that our exploration companies will be successful.
It is all right to look at the profits of those companies that have found oil and to say, ‘Let us get our hands on that’, as does the Opposition. But what people do not consider is the amount of money in Australia that is used for oil exploration by companies that do not find oil. For their sake and for the sake of Australia we must continue to provide incentives, we must continue to provide economic stability and we must continue to have world parity so that there will be a reward should those companies be successful. I certainly support the Bills which are before the House. I particularly support the Income Tax (International Agreements) Amendment Bill which amends the petroleum incentive schemes in Australia. Oil exploration in Australia is extremely important and must continue at a high level.
– I am concerned about the Income Tax Assessment Amendment Bill and the Income Tax (International Agreements) Bill which are before the House. The aspects about which I am concerned are those that have particular application to the deduction which is currently being extended to what is commonly called oil exploration expenditure from the off-shore to the on-shore sections. The Opposition does not oppose the Bills. We did not in fact oppose the legislation that was introduced into this Parliament, I think back in 1978, to allow on a restricted basis a tax deduction for certain amounts of oil exploration expenditure. However, I have grave reservations as to whether the Government’s decision was a wise one. My opposition to that decision is based mainly on my philosophy. On a philosophical basis, the aspect I am concerned about is the large extent of overseas holdings in Australia primarily in respect of the off-shore exploration leases in the Exmouth Gulf area.
It may be of interest to the House to know just what the equity figures are in relation to Australian participation. There is a very low percentage of Australian participation. I can cite some of the exploration that is going on in the area. The Philips company, a Dutch company, was granted operator permit, permit No. WA84P, which covers an area of 32,300 square kilometres. The Mobil company, which is really a foreign owned company despite various subterfuges to try to make out that it has an Australian content, owns 20 per cent. The Philips company owns 20 per cent. Gulf Oil, an American company, owns 20 per cent, Mount Isa Mines Ltd owns 20 per cent, that is the Australian component, and British Petroleum owns 20 per cent. We can see from my figures that the area covered by that one permit in the Exmouth Gulf area is 80 per cent overseas controlled and 20 per cent Australian controlled.
An area of 32,500 square kilometres is covered by the Woodside Petroleum company’s permit No. WA90P. Woodside Petroleum- again an overseas company- owns 50 per cent. The California Asiatic Oil Company, again an overseas company, owns 16-2/7 per cent and British Petroleum- a British company- owns 16 per cent-odd. The Shell company owns &Vs per cent and Hematite Petroleum Pty Ltd- an Australian company- owns only 8% per cent. So the Australian component of that particular exploration lease is only 8’/4 per cent. Hudbay Oil (Australia) Ltd is the operator of permit No. WA93P which also covers an area of 32,500 square kilometres. Hudbay- a Canadian company- owns 40 per cent. Canadian Superior owns 30 per cent and Pan Canadian- both Canadian companiesowns 20 per cent. The only Australian component is the 10 per cent owned by the Australian Oil and Gas Corporation Ltd.
The Esso company is one of the largest multinational corporations in the world. I do not have time to give the House the history of Esso but it basically runs through the Exxon oil company back to the Rockefellers- in my opinion the greatest exploiters in the history of the world. I think the history of old man Rockefeller should be compulsory reading for every honourable member of this House. It shows the exploitation that went on and how by controlling monopolistic situations they control a tremendous amount- without going to the figures- of the wealth of the world. One can really see their tentacles. They are like little snakes running off. They control so much of the capital in the whole of the world. Esso is one of the greatest multinational corporations that the world has ever seen. That position has been achieved in the lifetime of old man Rockefeller and passed down through his sons at various stages even to Nelson D. Rockefeller, a former Vice-President of the United States. All that is wrong with the capitalistic system can be seen in the Rockefeller situation. The Rockefellers own Esso.
Esso is the operator of permit No. WA96P in the Exmouth plateau area. Esso also owns 50 per cent of the area covered in permit No. WA97P, which also covers 32,500 square miles. Strangely enough, it must not be a good one because Esso has allowed Hematite Petroleum Pty Ltd, an Australian company, 50 per cent interest in the area. So the prospects of discovering oil there, I would suggest, are not very bright. To build up its total Australian content, Esso has probably slipped in what we would call a fizzer well. I would suggest that the only people who know whether a well is likely to be productive are those who have a seismographic plan and can work it out. Esso has made a dummy run, in other words. It is selling us the three card trick, to put it quite bluntly, to overcome guidelines in relation to Australian content. It has whacked it all in under permits WA96P and WA97P and allowed an Australian company 50 per cent interest. I reckon that when the crunch comes all those wells will be found to be dead wells. That is how Esso has overcome some of its problems.
I have grave misgivings as to whether or not the solution to the problem of oil exploration cannot be found from capital within Australia. Some of the large superannuation companies and insurance companies which are Australian owned and controlled- I think this would be far better from a policy point of view- should be encouraged to take up greater development of our natural wealth. I realise that there is a basic difference between the philosophy of the Liberal Party and the philosophy of the Labor Party on this issue. To put it in a nutshell, the Australian Labor Party- I will not go through the whole of its policy- believes basically in a far greater degree of Australian participation than does the present Government. That is where the policies of Labor Party and the Liberal-National Country Party Government are basically in disagreement. As an Australian, I feel that Australians should have a far greater participation in the mineral wealth and the oil wealth of Australia. It sickens me to see the amount of money which is being milked out of the EssoBHP wells down in Bass Strait and sent overseas to the American multinational corporations. Esso allows Broken Hill Proprietary Co. Ltd an interest but whips off the rest perhaps by devious means back to its home country, the United States, back to the multinational headquarters. I have very grave reservations as to the whole philosophy that prevails and the real ethics of the matter.
I will not speak any further on that particular aspect because the Liberal Party philosophy and the Australian Labor Party philosophy are entirely different on this issue as to whether the mineral wealth of Australia should be owned by Australians. The Liberal Party philosophy basically is that we should seek overseas exploitation of our mineral resources. I think it is a false premise that there is not sufficient capital in Australia- we can call it risk capital if you wishto try to exploit our mineral resources. Frankly, I do not think that the Government has tried hard enough to find or given sufficient incentives for Australian equity participation. To that extent, I criticise the Government for its basic philosophy. Added incentives should be given to encourage Australian development not only of our off-shore petroleum resources but also of our on-shore petroleum resources. I feel that if adequate incentives were given to Australian companies the capital would come in.
As far as I can see, that is the basic difference between the attitude of the Liberal and National
Country parties and the attitude of the Labor Party. To put it rather bluntly, the coalition is more interested in big business. We are interested in the smaller type of people who put money into insurance companies and into superannuation funds. If adequate incentive was given to smaller groups of people, I am certain we would get sufficient capital coming into Australia. The part that intrigues me is that when there is a war- for example, during the two world wars between 1914-18 and 1939-45- there is never any shortage of money to fight the war. It always seems to come not from the big companies and not from the multinationals but from the ordinary people of Australia. It was these people- the ordinary Joe Blow in the street- who helped to finance the wars. They paid through taxation and loans- call them liberty bonds or whatever. What would be wrong with setting up some sort of scheme involving, for example, oil bonds to encourage greater Australian participation. Maybe I am a dreamer; maybe I am not.
I feel that if the right incentives were given, the people of Australia, rather than shovelling their money down the throats of poker machines, would contribute. Deep down, the people of Australia are very loyal. They are nationalistic. The mistake is that we have never encouraged them to be nationalistic. Rather than shove their money down the throats of poker machines, they should be encouraged to participate in the development of their own country and to develop a nationalistic spirit. This is something that to a large part, is lacking in Australia at the moment. We do not have that nationalistic spirit. Governments should be seeking to encourage a spirit of Australian nationalism, a belief in our own country and a belief that we can do it even though there are only 14 million of us. I am certain that with the strength that the Australian people have, they would accept the challenge and would do it. In that fashion we would get greater Australian participation. Instead of shovelling their money down the throats of poker machines, betting it on the horses, spending it on the grog or on whatever it is that most of the money seems to be spent, the people should be encouraged to invest it in the development of Australia. They do have this national spirit and the Government and Opposition should be encouraging it to help develop the mineral and oil resources and to stop the money being floated off into the multinationals. These companies will exploit us and Australia will end up as a hole in the ground or a hole in the sea. I have said enough on this matter.
I hope that the Government realises that the Opposition has grave reservations about this legislation. Perhaps we should have opposed the original Bill when it came into the House in 1 978 when certain concessions were given. There were political reasons for giving those concessions. They were not given for taxation reasons. It was not the decision of the officers of the Australian Taxation Office. It was a political decision which the officers of the Taxation Office inserted into the law. Those officers of the Taxation Office are terribly loyal. I worked there for 34 years and my loyalty was to the government of the day, as a true public servant’s loyalty should be. The officers of the Taxation Office merely implement the decisions of the government of the day. When the matter is a political one they have no say in it. They put up the whys and the wherefors as to why something should or should not be introduced. The Treasury probably put up a paper stating the pros and cons on why it should not be introduced or why it should be introduced. The government of the day makes a decision and it is a political decision. The officers of the Taxation Office and Treasury merely implement these decisions.
I am concerned about some of the provisions of the Bill. In particular, I am concerned about the alteration of the royalty provisions. I give credit where it is due. I am not just a harsh critic of governments. I do not think the role of the Opposition should always be just to hammer out criticism irrespective of whether the Government is doing a valid thing. Quite frankly, I think that we would have a better parliamentary system if there was more agreement that some governments do good things. Let us be honest about that. This Treasurer (Mr Howard)- I say this without any hesitation at all- has been one of the better Treasurers in regard to the implementation of tax avoidance legislation I have seen in the ten years that I have been in this Parliament. Maybe I will be criticised by my Party for saying that but I have never been frightened to speak up. I will always speak up irrespective of the cost. My speaking up in the past has cost me my preselection for the Labor Party when the left wing forces tried to knock me off. They did not succeed. They knocked me off certainly but another moderate was selected to take my place. I am happy to say that my successor who will win the seat, Mr John Mountford, the present Mayor of Canterbury, will do an excellent job in this Parliament. I treat him as a very able successor.
I would like to speak now about the royalty provisions which are being inserted into the Act. The reason they are inserted in the Act is to counter tax avoidance schemes. I will give some evidence of the deviousness of one company in particular in tax avoidance. This company made it necessary for the Government to introduce the amendment to the Act. The company was Aktiebolaget Volvo. It arose out of a case, Aktiebolaget Volvo v. the Federal Commissioner of Taxation, in the Supreme Court of Victoria. The judge hearing the case was Mr Justice Jenkinson. The reference is the 1978 Australian Tax References, Volume VIII which are published by Butterworth. I am not giving a plug to Butterworth, really. I am certainly not giving a plug to the CCH Australia Ltd, either. Marilyn Duff happens to be, shall I say, the wife of the present Attorney-General of New South Wales. She goes under the name of Marilyn Duff. She is quite a tax expert. I do not know to what extent she has been advocating tax avoidance. I would not know. I am not saying that she does. But I have my doubts. I certainly am not giving credit to CCH services. I am giving credit to Butterworth Services. Personally, I do not believe in people working under a name like that. I do not think it is quite fair. I will say no more.
The outcome of the Volvo case hinged on the definition of a royalty. Volvo went through a very complicated scheme of arrangement to try to get away from the provisions of the Income Tax Assessment Act which defined what a royalty was. It had a devious scheme. It formed a company in Australia called Volvo Australia Pty Ltd. There were agreements between Volvo Australia and Volvo of Sweden. The taxation officers assessed it as a royalty. On the way the objection was treated, it finally found its way into the Supreme Court in Victoria. Due purely to legal technicalities the ruling judge, Mr Justice Jenkinson. found that the Taxation Office and the Taxation Commissioner had not made out a case in law. Consequently it was necessary to make more specific references in the amending taxation legislation to define a royalty and to include it in that legislation. The devious scheme that the Volvo company in Sweden had to channel the profits back to Sweden- from what I call its bodgie subsidiary in Australia- allowed that company to get away with millions of dollars. The Treasurer and the taxation officers, to their credit, recommended to the Government the necessary legislation to prevent this avoidance. The Government, to its credit, is putting that legislation through the House today.
I fully support the amendment. The Opposition spokesman and shadow Treasurer, Mr Willis, and I fully support what the Government is doing. The Treasurer deserves full credit for taking in all cases the steps referred to him in the past, except for a few which I know conflict with overall Liberal Party philosophy, to make these amendments to the Income Tax Assessment Act and to chop out as many of the tax avoidance schemes as he can.
Mr DEPUTY SPEAKER (Mr Drummond)Order! The honourable member’s time has expired.
– I would like to congratulate the honourable member for Banks (Mr Martin) for his very fair-minded approach to the hard work being done by the present Treasurer (Mr Howard) on matters of tax avoidance. There is a large degree of support and sympathy from honourable members on this side of the House for the honourable member for Banks who has performed with some distinction in this House. We regret as he has said that there was an attempt to roll him by the left wing of the Labor Party and he has ultimately lost his pre-selection.
The major purpose of the Income Tax Assessment Amendment Bill and the Income Tax (International Agreements) Amendment Bill is to give effect to a Budget decision to extend the present tax rebates for share capital subscribed for petroleum exploration and developmentwhich already exists off-shore- to activities onshore. I stress this because we are restoring, in a much improved way, an incentive which was removed by the Australian Labor Party Government in 1973. The consequences of that action were appalling for this nation in that the amount of exploration and developmental drilling for oil fell sharply. I want this to be totally and completely recognised by this House. We are restoring an incentive which should never have been dropped and which resulted in a disastrous reduction in exploration activity for oil at the very time that the oil crisis around the world was beginning. The Labor Government was so obsessive about the fact that anyone who actually made a profit was doing something evil and wicked, that it was prepared to cut off the search for oil in Australia despite the fact that the world oil crisis was already under way.
This evening the honourable member for Gellibrand (Mr Willis), in his trumpeting of the great taxation avoidance achievements of his government, said that subscriptions to pseudo exploration companies were cancelled by the Whitlam Government. He used the word ‘pseudo’. The fact is that the Government cancelled all the genuine ones too. It was one of the greatest examples of Ministerial incompetence in this area.
-The Government was throwing out the baby with the bath water. The Government complained that there was some tax avoidance. There is no doubt about the fact that there were some tax avoidance devices open to people within the system that had existed. I concede that that is so up to the Labor Government’s decision in 1973, to block them. There is no doubt that there was tax evasion if that is what the honourable member for Wills (Mr Bryant) would like me to say. The key point is that by blocking the whole system the Government blocked genuine investment in genuine oil exploration to the major detriment of this nation. Our restoration of this incentive is of major significance to the search for oil, a vital element in Australia’s future economy.
Sitting suspended from 6 to 8 p.m.
– Prior to the suspension of the sitting I was pointing out that the benefits being conferred on exploration companies and shareholders in exploration companies in effect represent the restoration of the benefits that existed but in a less satisfactory form before 1973 when they were in fact removed by the Labor Government. I pointed out that the honourable member for Gellibrand had asserted that among the many taxation measures that followed the advent of the Labor Government was the cancellation of subscriptions to pseudo-exploration companies. I made the point that, unfortunately, many genuine exploration companies lost the benefit of those tax concessions as well as the pseudo-exploration companies. I am certain that everyone on this side of the House would concede that tax ramps were involved. As a result, the amount of activity in oil exploration declined dramatically. I seek leave to incorporate in Hansard two tables which demonstrate the level of activity in petroleum exploration and drilling during recent years.
The tables read as follows-
-I thank the House. Those figures are most significant. They show that in 1972, which the House will recall was the last year of office of the previous Liberal-Country Party government, 62 on-shore wells were drilled. By 1975 that number had in fact fallen to six. In other words, the kind of legislation introduced by the Whitlam Government had such a dramatic impact on on-shore exploration that instead of 62 wells being drilled there were only six.
I am glad to say that the number has risen from six under the last year of the Labor Government to 30 last year under the present Government. Following the statement last August in the Budget that the legislation we are debating was to be introduced, the forecast for 1 980 is that between 48 and 64 on-shore exploration wells will be drilled in Australia. This, if course, is a dramatic recovery and of great significance to the Australian economy in view of the massive shortage of oil in our nation and the terrible impact it has on our balance of payments situation if we are continually obliged to import large quantities of oil. I submit that this increase in the number of on-shore wells could not have taken place had the policy implemented by the Labor Government between 1973 and 1975 persisted. I would suggest that the increase from six in 1975 to a projected total of up to 64 in the present year is dramatic evidence of the benefit of specific stimulus to the oil industry as a result of the kind of tax concession proposed under this legislation.
I concede that there are some problems with this tax concession. There is no doubt that the Australian Petroleum Exploration Association is concerned on two scores. First, the Association says that the 30 per cent rebate allowed to subscribers to oil companies as a tax benefit is not enough. It also says that the proposal is unreasonable in that this tax benefit is not capable of being returned to the company if shareholders are unable as a result of different laws to take advantage of it. For example, they would not be able to take advantage of this benefit if they are overseas residents. APEA has engaged in a study of the effectiveness of these tax benefits.
I would submit with some vigour that if the choice is between having an amendment such as the one now before us, which provides an incentive even though APEA says it is not enough, and having no laws which provide this kind of incentive the burden of benefit clearly rests on having the sort of law that is being introduced in the amendment before us. The fact is that the previous situation did allow a massive number of tax dodges to occur. There is no doubt that many of the companies that were started during the period before the Labor Government withdrew this benefit were created not to search for oil or to mine for minerals but in fact to mine the stock market. So there was no doubt a fair case for the Labor Government withdrawing that benefit. But it is extraordinary that the Australian Labor Party has stated that it supports the Government’s restoration of that benefit with sensible safeguards, whereas its spokesman on the economy still describes the withdrawal of the benefit to both good and bad companies simply in terms of the cancellation of benefits to pseudoexploration companies. I would think the extraordinary collapse in the number of on-shore wells drilled- from 62 in 1972 to only six in the Labor Government’s last year of office- shows the dreadful impact this policy change by the Labor Government, which was a deliberate and determined policy change, has had at just the worst time in our history.
The tables which I have incorporated in Hansard also demonstrate that in 1980 there will be a significant increase in the total value of the wells, that is, exploration and development both on-shore and off-shore. Of course, immense cost is involved in the off-shore area. There has been an increase of something like 50 per cent between 1979 and 1980 in the total cost of oil exploration and development wells drilling. A total of $477m is to be spent in the current year. This is a dramatic recovery, assisted by the Government’s changes in tax policy. There is no doubt that this has been stimulated by the shortage of oil and the very high price that oil now obtains.
We should recognise that under the Government’s oil policies discoverers of new oil will in fact get a high price for that oil. Let us recognise that without the Government’s oil parity pricing policy there would be much less incentive for people to search for oil. We have seen that when we reduce that incentive we reduce activity. One of the benefits of our world parity oil pricing policy is that there has been a 50 per cent increase, after deducting the usage in the meantime, in Australian reserves of oil since the oil crisis began and certainly since this Government came to power. Compare that record with what happend under Labor when the number of on-shore wells for example, fell from 62 to only six.
The initial concession was introduced in 1977 by the present Government to cover off-shore wells. Let us recognise that this legislation, which extends that concession to cover on-shore exploration in effect benefits the generally smaller Australian companies which tend to dominate on-shore search whereas, of course, large international corporations tend to play a much larger role in off-shore exploration. Let us face it, offshore costs are enormous compared with onshore exploration costs. The House would be aware from the tragedy that occurred the other day in the North Sea that the risks of off-shore are far greater as are the costs.
I strongly support, as I am certain all Government members support- the Opposition has also expressed support- the restoration of a very sensible situation in that now on-shore oil exploration corporations are to be given this benefit. I believe that it will be a strong stimulus to the ordinary Australian investor to participate once again in the search for oil without in fact providing many other Australian investors with the opportunity simply to seek a tax dodge rather than to benefit the search for this scarce resource. I believe that it is very important to recognise the exact details of this but, first, I stress what the Prime Minister (Mr Malcolm Fraser) had to say in Queensland to a meeting earlier this month of the Australian Petroleum Exploration Association. He pointed out that the level of investment in petroleum exploration had fallen substantially from 1972 to 1975 and said:
This was a direct consequence of the energy and economic policies of the government of the day. They dismantled many of the special incentives for the mining and petroleum industries provided through the taxation system. The whole confidence of the industry was shaken . . .
The last four years have seen a welcome resurgence in investment activity. Expenditure on exploration has gradually risen in response to government incentives and improved economic health. In 1979 it totalled $228m and in the first half of 1 980 is estimated at $ 1 70m.
Further, it is estimated that total expenditure on both exploration and development will exceed $500m in 1980.
The recent announcement by Esso/BHP that development expenditure in the Bass Strait will exceed one billion dollars is a striking illustration of the revived confidence in the industry.
It is the determination of this government that expenditure in the search Tor oil, in and around Australia, should continue its upward momentum.
We have modified our taxation system to assist this objective, and we welcome the key role being played by major international groups in providing much of the enormous capital resources and fast developing technology that is needed.
The Government encourages the partnership between overseas and Australian companies and entrepreneurs in the exploration for, and development of, oil and other energy reserves.
Note the difference between that approach, which the Prime Minister stated so clearly, and the approach of the Labor Party now in Opposition, which was in government at the time. Tonight Opposition supporters have once again been talking about the terrible internationals, about the terrible impact that they have on Australia, about how this Government is allegedly allowing Australia to be taken over. What absolute nonsense. In the absence of those major corporations we would not have the development that we have witnessed in our off-shore oil wells, a development that is absolutely vital to our future, to the future of our balance of payments and to our future supplies of oil. It is extraordinary that Labor, having demonstrated the incompetence of its own policies- as seen by a disastrous drop in oil exploration activity, outlined in the two tables that I have had incorporated in Hansard- having been shown what its policies did to the supply of oil to this nation, although tacitly agreeing with these amendments, still comes out with the sort of nonsense that we have heard tonight.
I emphasise that the costs of drilling off-shore are simply enormous. An article in a magazine demonstrated recently that drilling in Australia is very expensive indeed and that the success rate here is relatively low; one well in 36 drilled has yielded petroleum and one in 12 drilled has yielded gas. In comparison, the figures for the rest of the world are one in 1 1 for petroleum and one in nine for gas. Therefore, it can be seen that the Australian experience has been one of far greater expense and risk, yet the Opposition continues to complain about the magnificent search program that is being carried out by multinational corporations and by Australian corporations, stimulated by our tax concessions. Average drilling costs in 1975, for example, show that the cost in Australia on-shore was $609 a metre compared with $274 a metre in the United
States. For off-shore drilling the figures were $1,015 and $305 respectively. Those costs have since gone up. There is without doubt a desperate need to maintain and increase the momentum of oil exploration, which has once again been restored under this Government, after it had been decimated by the Labor Government. The article continues: what prospects does Australia have of finding much more oil? Obviously, nobody knows for sure. Recently the Commonwealth Government’s National Energy Advisory Committee published a report entitled ‘Exploration for Oil and Gas in Australia’. According to this report, the best estimate available of our crude oil resources suggests that there ‘s a 90 per cent chance that at least another 1,550 million barrels remain to be discovered. There’s a 10 per cent chance that the actual amount will be as high as 6,500 million barrels.
This compares with our identified economic reserves, which currently stand at about 1,870 million barrels. We have a 10 per cent chance of more than trebling our oil reserves, provided the private enterprise sector is stimulated sufficiently to seek it. Without doubt the oil parity pricing policy is the greatest single stimulus. It provides companies with the prospects of reward. That is how we can achieve a massive increase. That is why there is now a massive increase in the activity which was cut during the Labor Government’s term in office. In addition, the specific tax benefits that are included in current legislation enable the existing rebates applying to off-shore oil to be extended to on-shore petroleum exploration development. They are thereby extended to the smaller, Australian-owned companies which are making now a much more meaningful contribution than they were ever allowed to make by the previous Labor Government. These are all vitally important measures and I am glad to say that although Labor withdrew this kind of assistance back in 1973 it is now prepared to change its mind and support the Government when it reintroduces this legislation. I only wish that the Labor Party had had a little more wit and had done similarly back in 1973. 1 commend the Bills to the House.
-That was a little speech from a little man. I would just like to put the record straight. Section 77C and 77D provisions were lifted in 1973-74 because of the rorts taking place within the financial community by speculative companies, of which the honourable gentleman was then aware as a partner in Patrick Partners which defrauded hundreds of thousands of Australians.
Order! The honourable member for Blaxland is reflecting on the honourable member for Macarthur.
- Mr Deputy Speaker, the honourable member has made the charge; let him wear some of it.
-The honourable member for Macarthur will resume his seat. I require the honourable member for Blaxland to withdraw the reflection.
- Mr Deputy Speaker, I referred to the firm, not to the honourable member for Macarthur.
-The honourable member for Blaxland associated the honourable member for Macarthur with the firm.
-I do believe that he was a recipient of those frauds; I do.
-The honourable member for Blaxland must withdraw.
- Mr Speaker, I withdraw in deference to you.
- Mr Deputy Speaker, I rise on a point of order. To what extent must this kind of lie continue to require it to be presented to the Committee of Privileges? It is getting a little bit much. I raise it as a matter of privilege.
– It is a bit much for the shareholders too. They did not get their money back either.
-Order! The remarks of the honourable member for Macarthur are noted and due thought will be given to them. The honourable member for Blaxland has withdrawn. I call on him to proceed.
– As for sections 77c and 77D, when we analysed the figures we found that in respect of the Mineral Securities Australia Ltd empire 50 per cent of the cost to revenue of those sections was channelled into the building of the corporate pack of cards which was described as the Minsec empire and which collapsed when prices were such that it was no longer able to invest in new companies and then claim such deductions. The honourable gentleman knows well why that was lifted
– And if you had been here you would have heard me say so. You were not in the House.
-Order! The honourable member for Macarthur will remain silent.
– You said at the end of your speech -
– It is a pity you didn ‘t hear the rest of it
– You said that it was a pity the Labor Party lifted this provision.
-Order! The honourable member will address the House through the Chair.
– Well, it was not a pity. We said then as we say now and as I have said quite often that if they could show that there was proof of expenditure we were prepared to look at another similar section. But deductions were given for subscriptions to a mining company without proof of expenditure and we regarded that as unacceptable. We supported shareholder rebates for off-shore exploration. More is the pity that the Government did not have the sense to extend the same rebate to on-shore exploration. The reason the Government did not was that most on-shore companies were Australian companies and the Government is not interested in Australian companies, only foreign companies.
– Why have we introduced it now?
– Because the Government has had pressure, and because its exploration effort is so puny, considering the $3,000m transfer of wealth from the motorists’ pockets to the Government and the oil companies. It decided then that it should do something about it. Let me make it quite clear that we on this side of the House support the shareholder rebates for both on-shore and off-shore exploration, regardless of where the money comes from. In the past we have also supported a whole range of policies in respect of exploration, and 1 will go over a couple I mentioned last week at the Australian Petroleum Exploration Association conference. We supported import parity prices for new discoveries- in fact, we introduced the policy in September 1975; escalating the old oil producer price to 50 per cent of import parity; shareholder rebates for off-shore and on-shore petroleum exploration development; allowing petroleum exploration development expenditure to be deductible against income from any source, and accelerated depreciation provisions for development expenditure. In other words, we have played our role in establishing a set of ground rules which should be conducive to an exploration effort in this country.
The honourable member for Macarthur misrepresented the performance in exploration under the former Labor Government, and I think this matter needs to be clarified and cleared up. The honourable member makes the claim that exploration died under Labor. Let me repeat the statistics I gave to that conference early last week, and these are the Government’s own statistics. In the three years of Labor Government, that is, from 1973 to 1975 inclusive, 146 exploration wells were drilled at a cost of $263m, in 1974-75 prices. In the first three years of the Fraser Government, that is, from 1976 to 1978 inclusive, 94 exploration wells were drilled at a cost of $ 193m, in 1974 prices. That is, 52 more wells were drilled during the three years of Labor than during the first three years of the Fraser Government. That may be an unpalatable record for the honourable member for Macarthur, but it is the record and not the distortion in which he trafficked earlier.
It is true that there was a comparative decline in the number of wells drilled through 1975, 1976 and 1977. This was bound up, first of all, with the wrangle over off-shore sovereignty, with the coalition parties ‘ obstructive behaviour in the Senate in not giving passage to the Seas and Submerged Lands Act, which was later validated unanimously by the High Court as a proper exercise of the functions of the Commonwealth Parliament under the Constitution. The coalition parties resisted the passage of that legislation. The decline was bound up also with the fact that between 1970 and 1975 a five-year pricing agreement was entered into by the Gorton Government, a Liberal government, with the oil industry whereby prices of between $2.09 and $2. 1 1 were paid for Australian oil. That agreement was still operating after the 1973 oil crisis. By 1975 import parity was about $8 to $9, and Australian exploration companies and foreign exploration companies operating in Australia decided that they would not explore until that pricing agreement was renegotiated. It was a 10-year agreement, to be renegotiated after five years. Upon renegotiation after five years, the Labor Party in office did the right thing. It distinguished between old and new oil, and created a new policy known as import parity for new discoveries, under which the exploration effort still runs. It then increased the price of old oil. So at the first available opportunity, in September 1975 the Labor Party in government changed the policy away from the restrictive regulated policy which the former Liberal Government had brought in, fixing the price of Australian oil at $2.09.
The honourable member for Macarthur knows quite well that exploration tailed off in 1975 and 1976, simply for that reason. In fact, the Government was dismissed two months after the announcement of the import parity on new discoveries policy, and therefore was not able then to govern the industry and to see the benefits of that policy come to fruition. The honourable member for Macarthur did not have the decency to tell the House or the public that fact, and it has been left to me to explain why we had this malaise in the thinking of the exploration industry at that time. That was the reason. One had to laugh when the Prime Minister (Mr Malcolm Fraser) said in his speech to the APEA conference during the week that the Liberal policy is that prices for oil and conditions governing exploration and everything else should be left to the private industry. No government has been more regulatory of the oil industry than a succession of Liberal governments. What he did not tell the industry was that the Government does not mind letting the industry reign providing it gets 83 per cent of the proceeds. The Commonwealth collects 83 per cent of the total value of Australian-produced oil. That is the kind of regulation and free market in which the Government believes. In addition, it was the Gorton Government, and other governments which were in office well before we started producing oil here, which regulated the price of petroleum products. There has been no more enforced basis of regulation than occurred in that period between 1970 and 1975. So much bunkum is being talked about how free and easy the Government is in terms of market place economies. It is taking 83 per cent of the value of the barrel and it is regulating the industry.
I should deal at this stage with the question of the exploration figures. Last Tuesday, I attended the APEA conference, which is the conference of the Australian Petroleum Exploration Association, with the emphasis on petroleum exploration. I heard discussions about ethanol, methanol and substitutes, but I did not hear any discussion about how the national exploration effort should be lifted. In fact, my own contribution was the only positive one on ways of getting the size of the national exploration effort lifted. APEA estimates that last year 57 wells were drilled in Australia, compared with an average of 60 wells in the 1970s. So this great exploration policy which the Government apparently is managing produced no more wells last year than the average produced in the 1970s. APEA estimates that this year’s drilling figures will be 6 1 wells, which is not a large improvement over 1979. Exploration expenditure in 1979 was $190m. The APEA estimate for this year is $192m. So accounting for inflation, this year there will be a decline in real terms in the level of expenditure committed to exploration in Australia. While three deep water drilling rigs have been brought on to the coast from overseas, one of our four local rigs, the Ocean Endeavour, has been forced to leave Australia due to lack of work. The honourable member for Macarthur did not mention that. A second rig, the Ocean Digger, will be leaving shortly. So two of our four local rigs have been forced off the Australian coast due to lack of work
– Are they going to drill off-shore?
– They are going to drill on-shore.-
– How deep are they going?
-They go to 1,500 feet. The honourable member for Macarthur may not know this but I will tell him. If the deep water program fails, if the program currently going on on the Exmouth plateau with the Sedeo vessels does not produce a discovery of oil within 12 months, they will be off and the exploration budget of Exxon and Shell -
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member for Blaxland will resume his seat. The honourable member for Macarthur has been requested not to interject. He now compounds his offence by interjecting from a place other than the one properly allocated to him. I caution him against his intemperance.
-The exploration budgets of Exxon, Shell, BP and the other large corporations will go off to the coast of Taiwan or China, or Vietnam or Indonesia. They will go away from Australia. If one looks at the size of that exploration effort, in the total expenditure one will find about half of the $190m will vanish if that deep water program is abandoned. We would be back to about $90m to $100m, and probably drilling no more wells than we were drilling in the middle of the 1 970s. For a country in the predicament we are in, where we produce only 67 per cent of our requirements in terms of crude oil, it would be foolish to continue to offer import parity for production, with or without a levy, in our case with a resources tax- a generous offeronly to see a very modest response from the private industry. One may ask: What is our response to that? I made the point recently that a number of difficulties have been holding back the exploration effort. First of all, tenement areas have been too large.
-Order! Before the honourable member for Blaxland proceeds, I invite him to relate his remarks more directly to the Bill.
– My remarks are apolitical and are about exploration. I do not know how I can be more relevant than that.
– I again invite the honourable member to address himself more seriously to the Bill.
-I just want to talk about the size of tenement areas. If that is not an issue in exploration, I do not know what is. I will cite the figures to make a comparison. For instance, in the North Sea off the coast of Britain the welltoarea ratio is one oil well to every 190 square miles. On the North West Shelf of Australia the ratio has been one well to every 4,500 square miles. Even with this program the ratio will be one well to every -
– This is a Bill about on-shore exploration.
-I know it is starting to rankle and worry the Government. It thought it could put across all these distortions and not be exposed.
– This is an amendment for onshore drilling.
– I will come to that in a moment, but it is part of the national exploration effort that we are talking about. Even with the next five-year program, the ratio will be one well to every 2,200 square miles. In addition, not enough tenement areas are being released and there is a shortage of seismic boats. Seismic is not being shot by companies when they require it and they cannot get drilling rigs either on-shore or off-shore. There are not enough rigs either onshore or off-shore to meet the demands of exploration companies when they -
– How come there has been -
- Mr Deputy Speaker, will you give me some protection from these drones on the back bench?
-Order! The honourable member for Barton will remain silent. I remind the honourable member for Blaxland that he is speaking to a Bill which relates in the main to taxation devices.
– It is about on-shore exploration.
– In the field of taxation.
- Mr Deputy Speaker, the rebate is to encourage exploration on-shore. That is part of the national exploration effort; so figures relating to the national exploration effort are relevant.
-There is a relevance but I ask the honourable member not to exceed that relevance.
- Mr Deputy Speaker, may I be bipartisan enough to say that you were not so pointed in your objections to the honourable member for Macarthur when he made his distorted speech a few moments ago. There is obviously a shortage of mature prospects in shallow water. Australia is worrying too much about deep off-shore drilling. It is not worried enough about on-shore exploration or about shallow water prospects. I believe that there needs to be a greater level of activity. I made the point recently that the total exploration effort expenditure, which is about $ 190m, represents only 8 per cent of the Government’s $2,400m crude oil levy, not one dollar of which is spent on the direct search for oil and gas. I also made the point that $ 1 90m of private exploration expenditure represents but 5 per cent of the Commonwealth’s total receipts from petroleum, which this year will be $3,880m if one includes the crude oil levy, the excise on liquefied petroleum gas, off-shore royalties and company tax on oil producers. Expenditure on the private exploration effort in total equals 5 per cent of that $3,880m. If the Commonwealth were to turn 5 per cent of its energy revenue back to energy exploration- I am proposing that it should happen through a government corporation called the Australian hydrocarbon corporation which the Labor Party would establishthat money would duplicate, in financial terms, the private exploration effort which is already going on. I believe that the Government should start to produce some ideas on how to lift the size of the exploration effort rather than just have this very modest effort we have at the moment. Although what we are offering- import parity as a cost of production and modest taxes to follow- is generous, it is nothing like what is on offer in the price and tax regime in Indonesia or other parts of the world. We still have not produced an exploration effort of appropriate magnitude, given Australia’s problems with a deficiency of liquid fuels. We believe that there should be a government corporation based on the models of Petrocanada, the Canadian state corporation, Ente Nazionale IdrocarbureENI in Italy, the National Oil Corporation in Great Britain, Statoil in Norway and Pertomina in Indonesia. Most countries today have a state oil corporation. Australia is in a difficult position and does not have one.
The Commonwealth does not have a window into the industry. Apart from the Bureau of Mineral Resources which has a broad geophysical function, we have no special window into the Australian exploration and production industries, particularly off-shore. We would do very well to build up a competent organisation which could operate with commercial and strategic objectives, which could operate independently or in joint venture with private companies, which could enter into farm-in agreements on areas or which could share the costs of oil and gas exploration, particularly with Australian companies that just do not have the funds, even with these shareholder rebates, to mount an exploration effort to service the areas which they have been given or to service them in the way they would like them to be serviced. There is a role to be played by the Commonwealth in putting some of its energy money- the $2.5 billion which the Fraser Government has sucked from the motorists pockets- back into energy, thus using some of that money intelligently. Instead of that the Government relies on the private exploration effort only. That is not producing the goods. The exploration effort is not large enough. The number of holes drilled is pathetic. This year we will drill 57 holes and the Canadians will drill about 3,000 holes. Whilst those figures are not strictly comparable because of the regional and decentralised nature of Canadian development, nevertheless Canada is comparable with Australia geographically and in population. The comparison is 3,000 wells to our measly 57. The Government could do more than just give shareholder rebates.
– Order! The honourable member’s time has expired.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Staley) read a third time.
Consideration resumed from 20 March, on motion by Mr Howard:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Staley) read a third time.
Debate resumed from 20 March, on motion by Mr Hunt:
That the Bill be now read a second time.
- Mr Deputy Speaker, might I beg your indulgence to suggest that the House has a general debate covering this Bill and the Australian National Railways Amendment Bill, 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 these measures? There being no objection, I will allow that course to be followed.
-The two Bills to be discussed in this cognate debate, the Australian National Railways Amendment Bill and the Australian Shipping Commission Amendment Bill, represent landmark legislation in the methods of financing the development of two key publicly-owned transport undertakings. Both organisations are to be empowered to raise funds publicly by the issue of government guaranteed securities. This will have three effects. The amending legislation will give the authorities greater flexibility to marshal needed capital funds by releasing them from the stranglehold of the Treasury. Secondly, the authorities concerned, in respect of their borrowing programs, will be placed on a par with other statutory authorities such as the Australian Wheat Board and Telecom Australia. Lastly, their borrowing programs, though still coming under the broad public sector borrowing umbrella, will not be part of the national accounts and hence will not add to the Budget deficit. That is a political objective which must be borne in mind when considering the size of Budget deficits before 1975-76 and after 1975-76.
The Opposition does not oppose the Bills. In the case of the Australian National Railways
Commission, the immediate need for public borrowings has arisen from the Government’s decision to complete the Adelaide-Crystal Brook rail standardisation project- a program commenced by the last Labor Government after 23 years of conservative government inactivity and halted in 1976 by this Prime Minister (Mr Malcolm Fraser). Section 57b is being repealed and replaced by new sections 5 7b, 57ba, 57bb and 57bc. The old section 57b read as follows:
The effect of the new sections will be to enable the Commission to issue securities for sale to commercial institutions and to the public. These securities may be government-guaranteed. The sections empower the Minister for Finance, in lieu of the Treasurer, as provided under the old section, to authorise loans to the Commission from the Commonwealth. They also empower the Treasurer to authorise the Commission to raise public borrowings. A further minor and rather petty amendment replaces that fine word ‘Australia’ where it appears in several sections with the long-established socialist term ‘Commonwealth’.
The new role of the Minister for Finance is important because of the new power he acquires under the Australian National Railways Amendment Bill-that is, control over Commonwealth lending to the Commission- particularly in light of his comments on transport, railways in particular, which he covered in his address to the Australian Passenger Transport Conference in Canberra on 27 February this year. In that address, the Minister for Finance (Mr Eric Robinson) claimed that the Government’s antiinflation policy was bearing fruit. I suggest to the House that the abject failure of the Government’s anti-inflation policy is shown by the 28 per cent increase in the rate of inflation in the year ended December 1979. The Government’s enforced inflation policy which masquerades as an anti-inflation policy is hitting hard the transport industries- rail, sea and particularly road and aviation. One-third of last year’s consumer price index increase was due to the Government’s insane fuel pricing policy. Before discussing the criticism by the Minister for Finance of the Australian National Railways
Commission we should restate the objective of the Australian National Railways Commission Act 1917. It is: … to provide to Australia and authorities of Australia for reward, land transport and engineering services and such other services as can be conveniently provided by the use of the resources of the Commission.
The Minister for Finance stated the Government’s concern at what he called the mounting losses being chalked up by the Australian National Railways Commission. That statement is false because the Commission’s deficit is being reduced. Given the polyglot policies, activities, deficits and accounting methods of the various State railway systems, it follows automatically that any move to amalgamate a State rail system like the South Australian system into the Commission’s operations must mean a temporary increase in the level of the Commission’s deficit during restructuring and rationalisation developments. The Minister went on to say at page 6 of his speech:
In rail ansport t the Government is very concerned about the mounting losses being chalked up by the Australian National Railways Commission. We are continually monitoring the position with a view to scaling down these losses.
As I have already pointed out, the fact is that in the current year the cash losses of the Commission, that is, exclusive of depreciation arrangements and so on, are projected to decline, not increase. The Minister went on to say:
Perhaps we ought to be examining ways of improving the running of our railways by injecting them with ‘private enterprise’ performance guildelines.
I ask the Minister for Transport (Mr Hunt), who is at the table, in his reply, to give us a definition of what the Government and what the Minister see as a result of injecting private enterprise performance guidelines into the operations of the Australian National Railways Commission. The Minister for Finance went on to say:
If we could induce private enterprise to become directly involved in the railways, I have little doubt that the resulting financial reward would be very substantial.
That statement indicates a complete lack of knowledge of the importance of the operations of the Commission; a complete lack of knowledge of how the railway system, particularly the Commission’s operations, fit into our total transport system and it indicates a serious division within government ranks- in this case, on the part of a senior Minister- as to the objectives of the Government in respect of our national railways. The Minister for Finance appears to be indicating in those sentences I have just quoted that the public service obligations, for instance, of the Commission should be discontinued because under private enterprise performance guidelines, losses being incurred on services just would not be tolerated. The services would be closed down. It appears also that the Minister means that in respect of country services- this applies with great relevance to South Australiathose which incur a loss should also be closed down immediately. It appears also that the Minister has in mind to sell off the profitable sections, where they exist, of the Australian National Railways Commission.
In all, his comments are of serious concern to anybody with any interest in the transport services of Australia. I submit to the Government that this speech and those statements by the Minister for Finance are matters that should be looked at closely, particularly by the National Country Party because the point is- I will come to this in my later remarks- that the National Country Party and a number of its supporters are major beneficiaries of rates being charged by the Australian National Railways Commission, rates which I am quite sure would not fit within the definition set out by the Minister for Finance, namely, the injection of private enterprise performance guidelines. At the time of the amalgamation of the Commission and its operations with the South Australian and Tasmanian systems, the Commission’s cash deficit, exclusive of depreciation charges, et cetera, was $60m. It was suggested that if the Commission carried on in the way in which it had been operating in the past, that deficit would rise to $ 120m. I think it is to the credit of the Commission and those associated with it that they have, in their rearrangements of the Commission’s activities, come down with a projected deficit for this year on a comparable basis that I have indicated of $58m. I say that instead of condemning the Commission’s financial performance the Minister for Finance ought to be responsibly encouraging the Commission and its 12,000 employees to greater achievement, encouraging the management of the Commission and its employees to greater success and encouraging the Commission to reach its goals of building a modern railway system with better services and greater profitability. Let me make it quite clear that the Australian Labor Party sees our railway systems as being on the threshold of a great rebirth, of now having the opportunity to progress into a more nationally designed system. It is a devastating criticism of successive conservative governments that almost 80 years after Federation we have a hotch-potch of State and Federal rail services, that where some State rail services are concerned, intending consigners are most reluctant to consign their goods through the Australian National Railways Commission if that particular State is concerned in the total journey. They have that view because of the delays, the inefficiencies and the problems that develop within that State system. There is also the problem that ANR has a massive capital investment in rolling stock and the State systems have followed varying programs of capital investment in rolling stock. So when ANR’s trucks or rolling stock are in a particular State- several thousands of them are in New South Wales or in Victoria on any one day- or get into the State system as a result of a longer journey, it often takes some time for that rolling stock to return to the flow into the Commission ‘s fleet of vehicles.
The Australian Labor Party is steadfast in its objective that Australia will be best served by a nationally co-ordinated rail service and on coming to government we will be prepared to negotiate with States the transfer to the Commonwealth of their mainline non-urban rail systems at the initiative of the State concerned. Because of the importance of the role of the Minister for Finance in this legislation I return to the Minister’s speech on 27 February to the Australian Passenger Transport Conference. The Minister for Finance made this statement:
Transport has to meet directly the needs of commerce and industry and of course the private needs of individuals. To fulfil these requirements you must be profitable.
At the risk of repeating myself, that is impossible under the obligations which the Commission presently has. We need to take into account the relationship of road, rail and sea and how those services in a co-ordinated role suffer dramatically from the lack of a national transport strategy from this Government. The present Government has no co-ordinated objective. Each mode is going in a different direction with differing responsibilities and differing objectives. The Government historically is made up of conservatives who have been in control of national affairs for more than 90 per cent of the period since World War II. In the brief life of the two Labor governments between 1 972 and 1 975 an attempt was made to develop a national strategy based upon encouraging the development of increased efficiency in each optimum mode of transport.
– What went wrong?
-I note that the Government has continued all of those initiatives, so I assume that the Minister agrees with them. This Government on occasions uses rail as a social security service. It disavows responsibility for the promotion of a national railway system. It has adopted an irresponsible, laissez-faire approach towards the road and snipping industries. The Minister for Transport pursues a range of unrelated policies in the separate transport modes while the Minister for Finance, as evidenced in the speech to which I referred, would like to sell to private enterprise those sections of the public transport organisation which would attract a buyer.
In particular, I mentioned Trans-Australia Airlines because the Minister made a statement on that last year and then subsequently sought to conceal the fact that a statement had been made. He refused to answer in the Parliament questions relating to his statement that Trans-Australia Airlines should be sold off. In his speech of 27 February he again promoted the same thing- if it makes a buck and if it is owned by the public, sell it- irrespective of the social consequences and the industrial and commercial consequences of the removal of that major service from the area of public management. Based on his known attitudes to the public sector, I have no doubt that what he wants to see is Government undertakings in the transport field operating only those services that are not profitable, irrespective of social or commercial need. I repeat what the Minister said:
Transport has to meet directly the needs of commerce and industry and of course the private needs of individuals. To fulfil these requirements you must be profitable.
Bluntly, he is urging that in some cases freight and passenger rates be substantially increased or the services discontinued. In respect of Tasmania he is suggesting that the interests of the Tasmanian passenger ferry service, which is heavily subsidised by the nation, should be discontinued or the freight rate increased dramatically. He is suggesting that the freight equalisation scheme to Tasmania should be abandoned because it is a charge on the public purse. In respect of the Northern Territory, the Minister for Finance is saying in his speech that freight rates on the Darwin Trader should be increased substantially or the service discontinued. In respect of the South Australian rail services he is suggesting that all non-profitable rail line services should increase charges or the services should be cancelled. His remarks cannot be put aside as a personal view. He has a principal role in both Bills before the Parliament at the moment. He cannot have a personal view as a senior Minister of this Government. He has expressed the views of a senior Minister who has a considerable influence on the level of Government funds made available to the railways or to the Australian National Shipping Line.
– Who is this?
– The Minister for Finance. What he wants to do is to sell off anything that makes a profit, irrespective of its role in our national transport service, and to close down any service that incurs a loss, whether it is in Tasmania, South Australia, the Northern Territory, irrespective of the developmental consequences to those States. His views and aims are in sharp conflict with those of the Minister for Transport, who is a member of the National Country Party of Australia. I think the management of each of those public transport undertakings and the people of Australia are entitled to an explanation from the Minister for Transport as to what are the Government’s real objectives. Does he refute the views expressed by the Minister for Finance, who, after this legislation is passed, will control the level of Commonwealth lending to the transport undertakings, or does he agree with them and are his earlier words only a charade?
Discussions about public transport enterprises inevitably centre upon the expenditure of those operations to the exclusion of the revenue potential. Let us dwell for a few minutes on the rating practices of the Australian National Railways Commission. I adverted to those rating practices a little earlier when I suggested that the rates being charged for some products were not in line with what could be charged and certainly were far below what would be charged if the authorities were operating as private enterprise undertakings. We need to remember that all general rates charged by the Commission must be approved by the Minister for Transport, that special rates for single contract movements must be reported to the Minister, and that the rationale for general rate applications to the Minister is in line with directions to the Australian National Railways Commission to achieve profitability in eight years. But if we look at what has happened in the past we find that the past rate books of State systems reflected State political, industrial and economic priorities and that those rate books were mostly complex and antiquated. For example, when the Australian National Railways took over the South Australian system- this is no credit to the then South Australian Government or its predecessors- it found that rate books from 1918 were still in use.
Therefore, no one Australian National Railways Commission rate book exists, although a simplified unified book is being prepared. Not all the rates quoted yet cover costs, although profitability in rates is the goal of the Commission. On the one hand the Commission claims that it rates on the principle of what the traffic will bear and then admits in later statements that it does not follow the practice for some primary products. If we follow through what the Minister for Finance has said, it is very clear that what he is saying is that the rates charged by the Australian National Railways Commission should be upped to that level which would produce a comfortable profit for the Commission, irrespective of the impact that that may have upon country areas, primary producers and any of the industries that are assisted in one way or another, due to their location, by the rates that are charged by the Commission.
We need to say also that numerous road transport executives have stated explicitly over the past two years that they would transfer up to 50 per cent of their existing road traffic to rail if the service were more accessible, reliable and of better quality and if there was one voice in the Australian rail systems, one person to whom road transport companies could speak and get some understanding, some arrangement, rather than hiving around to each of the individual systems, with all the confusion and delay that that brings about without mentioning the inefficiencies. We need as a parliament to be vigilant about seeing that the Commission is investigating the potential revenue areas. We need to emphasise to the Commission that it needs to explore those areas of activity where it can increase its share of the market. The Commission itself needs to do a lot more to step up its marketing activities. Where politicians, as governments, require the Commission to provide loss incurring services, those losses should be identified publicly and the Commission reimbursed accordingly. I believe that in most cases these hidden subsidies could be well justified in the public’s mind but they should be properly identified and the Commission reimbursed. In that way we can then, as a parliament, have a proper assessment of the financial performance of the Commission. Those remarks apply to all public transport undertakings. They should not be used as a form of commercial welfare or of social welfare without reporting to the Parliament. If they are to be used for that purpose, let it be known and recognised and let the authority receive the proper financial credit. Then the public, through the ballot box, can say whether it thinks those subsidies are justifiable.
I now turn to the other Bill in this cognate debate; that is, the Australian Shipping Commission Amendment Bill 1980. Just to restate the specifics of that legislation, its purpose is to bring the borrowing powers of the Commission into line with those of the other statutory authorities. The Commission over recent years has been expected to fund its capital requirements via internal financing and use of trade credit facilities offered by suppliers. This Bill will permit the Commission to issue securities. Those securities may be government guaranteed. The functions of the Treasurer and the Minister for Finance are, as was the case in the previous Bill, separately stated. The Minister for Finance may authorise loans to the Australian Shipping Commission from the Commonwealth. Again I emphasise that we need to bear in mind the remarks of the Minister for Finance. He is not just a member of the Government. He is the Minister who has a critical role in the provision of public funding through government to these commissions. Similar to the provision in the earlier Bill, the Treasurer may authorise the Commission to borrow from the public. The present requirement that the Minister for Transport be advised of all variations in overseas freight rates is to be relaxed. The Minister may henceforth after the passage of the legislation determine guidelines within which the Commission may fix rates.
The Commission has made no call on the national Budget for capital funds since 1976-77, despite its heavy commitments. By 1979 the Commission’s debt to equity ratio had reached a serious level, forcing the line to sell two vessels to specially formed companies as a device to reduce its debt burden. The Commission ‘s debt capital increased from $44.4m in 1969-70 to $392.6m in 1977- 78. The interest servicing costs relevant to this debt capital rose from $2.6m in 1969 to $30.3m in 1977-78. Significant borrowings overseas have been necessary. The Commission has purchased new vessels and has expanded its participation in the international trades but we should note that at 30 June 1978 $260m of the Commission’s $393m outstanding was in foreign currency. Significant exchange risks have been borne by the Commission. Exchange losses of $20.2m and $3m were incurred in 1977-78 and 1978- 79 respectively. It would appear in respect of the change to the rate fixing arrangements that the easing of ministerial control over rate setting is a realistic proposal so long as the general principle of parliamentary scrutiny of this public enterprise’s charge is maintained.
We on this side of the House believe that there is a role- an important role and a role that we should be expanding- for Australian vessels in the international trades. As a major nation Australia has a meagre participation in the carriage of her imports and exports. If we look at the overseas statistics from the Australian Bureau of Statistics for 1978-79 we find in respect of exports by general cargo or liner traffic that 7.3 per cent was in Australian flag vessels. In relation to tramps, bulk ships and tankers, 2.3 per cent of exports was in Australian vessels. In total terms 2.4 per cent of our exports went out of Australia in Australian flag vessels. If we turn to imports for the same year, 1978-79, we find that liner traffic in Australian flag vessels into Australia carried 12 per cent of total cargo. In relation to tramps, bulk ships and tankers, total imports carried in Australian vessels represented 1.2 per cent of the total load. In gross terms, of all the imports into Australia, 3.9 per cent in both those classes of vessels was carried in Australian flag vessels. Mr Deputy Speaker, I have not had a chance to show this document to the Minister for Transport who is at the table. Through you, I should like to pass it to him and to seek his permission to have it incorporated in Hansard when he has had a chance to look at it. It is from the Australian Bureau of Statistics and in response to a question was furnished as an answer by the Treasurer (Mr Howard) to the Parliament just a few weeks a go.
The document read as follows-
IMPORT AND EXPORT CARGOES BY AUSTRALIAN FLAG VESSELS
(Question No. 5090)
asked the Treasurer, upon notice, on 14 November 1979:
What were the (a) quantities, (b) percentages and (c) value of (i) import cargoes by category and (ii) export cargoes by category lifted by Australian flag vessels in the years 1975-76 to 1978-79 inclusive.
– The answer to the honourable member’s question is as follows:
The Australian Statistician has provided, in Tables 1 and 2 below, the freight quantities and revenue tonnes for overseas cargo loaded and discharged in Australia, by both Australian flag vessels and all vessels for the years 1975-76 to 1978-79 inclusive. The tables also indicate the percentage of revenue tonnes loaded and discharged by Australian flag vessels relative to all flag vessels.
The Australian Bureau of Statistics does not compile statistics on cargoes loaded or discharged by Australian flag vessels by category (commodity) by value.
-In the years since 1975 in which the current conservative Government has been in office its catchcry has been that Australian crewing costs were too high, that Australian vessels should be allowed to participate in the shipping trades only where they could meet the commercial conditions that existed. What we need to show in this discussion is that Australian crewing costs are not too high, that they are comparable and that in fact over recent years there has been a continuing decline in the share of crewing costs as a percentage of total expenditure in the operation of seagoing vessels as compared with the earlier year of 1973-74. At that stage some 21.5 per cent of the Australian National Line’s expenditure on operations went to crewing costs. In the last year reported that percentage had dropped. It has dropped step by step in the intervening years down to 15 per cent. We find now that the major factor in the operation of a vessel in the international trades is debt servicing, not crewing costs. Next to that is interest and depreciation. Let us look at the Australian National Line figures and compare the period 1968-69 with the period 1977-78. We find that interest and appreciation rose from 1 1 per cent of operating costs in 1968-69 to 17 per cent in 1 977-78. That fact is being recognised.
The realities of ship operational costs are being recognised by Australian industry. But Australian industry, if it is to compete on a commercially competitive basis, is entitled to assistance similar to that provided by overseas governments to their shipping lines. There are some 30 maritime nations around the globe. Each and every one of them provides a range of assistance mainly through variations in depreciation allowances to the companies that operate under their flags. On 4 December last year the Australian Labor Party convened a meeting in Sydney of those companies interested in expanding Australia’s role in the international shipping trades, of those companies which are prepared to put their money where their mouth is, which is more than this Government is prepared to do. At that meeting were representatives of each of the maritime unions and members of the transport committee of the Federal Parliamentary Labor Party.
It was a most useful and informative meeting. If one were to form a conclusion from the conduct of that meeting it would be in relation to the quality of information supplied by the unions. There was a very high quality of discussion and rapport between the seagoing unions and the companies interested in backing their opinion with their financial judgment. It went to highlight the inadequacy of this Government’s policy and its refusal to adopt what in effect is a proAustralian policy. It extends all sons of assistance to all types of other Australian industry. But in the seagoing industry, if we can expand our trades- the market is there, particularly as freight rates have risen so dramatically over the last 12 months- we will reduce the imbalance occurring in transport invisibles in our balance of payments and we will create new jobs for Australians.
Let me conclude by mentioning some of the companies that are now moving into the international trades. Many more would move in on a larger scale if there was some sort of encouragement from this Government. The companies include Howard Smith Ltd, Broken Hill Pty Co. Ltd, Ampol Company, H. C. Sleigh Ltd and the Mobil company which are all currently making moves to bring new ships into the overseas trades under the Australian flag with Australian crews. Howard Smith will have a small bulk carrier built in Japan by its associate Ube I Industries, to carry coal from Newcastle to Japan under the Australian flag under a 20-year contract. BHP will have a large bulk carrier employed to take coal from Gladstone to Japan from its Gregory open cut mine in central Queensland. Ampol has entered the Ampol Sarel in the AustralianIndonesian oil trade, under the Australian flag.
Mr DEPUTY SPEAKER (Hon. J. D. M. Dobie)- Order! The honourable member’s time has expired.
-In this cognate debate on the Australian Shipping Commission Amendment Bill and the Australian National Railways Amendment Bill I will direct my remarks to the Australian National Railways Amendment Bill. This piece of legislation is of great importance to South Australia, the State in which my electorate of Kingston is located. Variation of railway gauges has been an historical curiosity of Australia. It was a result of the development of railways in the 19th century by the various Australian colonies before Federation and indeed before any real consideration had been given to national requirements for development. Both before and after Federation, which occurred at the turn of the century, we had costly and time-consuming processes of exchanging passengers and freight when they reached colonial borders which later, of course, became State borders. Because of the different gauges in different States, the train lines could not be joined.
There were several proposals before and after Federation to convert railway lines to standard gauge. The most significant of these was that of the Royal Commission on the Matter of Uniform Railway Gauge which reported in 1921. It recommended conversion of all Australian mainland railways to standard gauge at an estimated cost then of $43.2m. This process of conversion began with agreements between the South Australian and Commonwealth Governments in 1926 and again in 1935 which resulted in the construction by the Commonwealth Government of a standard gauge railway between Port Augusta and Port Pirie. However, no further progress was made. Experience during the Second World War demonstrated the inadequacy of the Australian railway system without standardisation. In 1945 a report by Sir Harold Clapp, the Commonwealth Director-General of Land Transport at the time, reaffirmed the 1921 recommendations of the Royal Commission.
The Government members railway standardisation committee under the chairmanship of Billy Wentworth recommended in 1956 a standard gauge conversion for new construction but recognised that conversion to standard gauge on the scale envisaged by earlier reports and studies was financially impractical. The proposals recommended by the Wentworth plan were, firstly, for a standard gauge link between Wodonga and Melbourne thus establishing a connection between Sydney and Melbourne without the necessity for the transfer of goods or passengers. This would have required the construction of 3 14 kilometres of track at a cost then of $20m. The second Wentworth recommendation related to the construction of a standard gauge rail link between Broken Hill and Adelaide via Port Pirie, a distance of some 640 kilometres at an estimated cost of $27m. The third proposal was for standard gauge to be constructed from Kalgoorlie to Perth and Fremantle, a distance of 631 kilometres at an estimated cost of $36m. These proposals therefore as recommended by the Wentworth committee would link all mainland capital cities at a total estimated cost of $83m.
The first proposal to be adopted was that of the Melbourne to Albury-Wodonga standard gauge line. This was constructed on the basis of the Commonwealth Government providing 70 per cent of the funds and the New South Wales and Victorian governments each providing 15 per cent. As a result of that funding, construction got under way and was completed. The line was officially opened to traffic on 3 January 1962. Since that line has opened there has been an enormous increase in traffic between Sydney and Melbourne. This stands as a recommendation for the conversion of other lines to standard gauge. The second project undertaken was the link between Kalgoorlie, Perth and Kwinana. Standardisation of that link cost $82m and was completed in 1969. Of course, that project was closely associated with the establishment of the large integrated iron and steel complex at Kwinana and the large tonnages of iron ore flowing from the newly developing sources of iron ore. The Port Pirie-Broken Hill section provided a standard gauge link between the New South Wales and the Australian National Railways systems. Work was completed on that link on 29 November 1969.
In addition to these three recommendations of the Wentworth committee, the standard gauge network from Tarcoola to Alice Springs as recommended by Mr Keith Smith who was the then Commonwealth Railways Commissioner -he made that recommendation in 1967- was partially opened by the then Minister for Transport, the honourable Peter Nixon, in November of last year. This section of railway standardisation is expected to reach its conclusion at Alice Springs in November 1980. Therefore, the completion of each of those projects on a progressive basis means that Adelaide is the only mainland capital city not connected to the standard gauge network. Conversion of the Adelaide-Port Pirie broad gauge line to standard gauge was recommended by the South Australian Railways Commissioner, Mr R. J. Fitch, in February 1971. This proposal received strong support initially from the South Australian Government. But the State Government subsequently withdrew its support in favour of the alternative proposal for a new standard gauge line between Adelaide and Crystal Brook. This was in accord with the Maunsell master plan recommended by Maunsell and Partners, the consultants retained by the Commonwealth Government at the time.
An agreement was signed between the Commonwealth and the South Australian governments in 1974 to implement the elaborate and expensive Maunsell plans. Incorporated in Maunsell ‘s recommendations were a new and separate track between Adelaide and Crystal Brook, expensive flyovers to replace level crossings, elaborate signalling, a large amount of new rolling stock and a spur connection to Wallaroo. The agreement between the Commonwealth and the South Australian governments provided that 70 per cent of the funds would be provided by a Commonwealth grant and a further 30 per cent would be provided by a Commonwealth loan which the South Australian Government would be required to repay. Initial expenditure of approximately $7m got the early stages of this project under way. However, when nonmetropolitan South Australian railways were transferred to the Commonwealth in 1975, the Adelaide-Crystal Brook works were excluded because the South Australian Government wanted to negotiate separately with a view to retaining a portion of that line in the metropolitan area.
The wisdom of proceeding further with the standardisation project was questioned towards the end of 1 975 by the Australian National Railways Commission. The Commission decided to prepare a cost minimisation analysis of the Adelaide-Crystal Brook project. Hence at the time of the transfer of South Australia’s country railways to the Commonwealth the project was halted. At the end of 1975, fortunately for the people of Australia, there was a change of government at the Federal level with the return of the Fraser Government after the three disastrous years we all experienced under the Whitlam Labor Government. We all know that the major cause of our economic problems which developed under the Labor Government was profligate government spending. In fact, the level of government expenditure doubled in just three years with the Labor Government in office. To its great credit, immediately the Fraser Government came to office, it instituted tight expenditure constraints. Further to its credit, this policy has been maintained over the last four years and has made a major contribution to the improvement of the Australian economy over that period.
In 1 976, as part of its expenditure review, the Commonwealth asked Dr Stewart Joy to review and report on the Crystal Brook to Adelaide railway standardisation project. At the same time, the Commonwealth suspended funding for the project. The Joy report found no economic justification for the Maunsell master plan which, by 1 976, had reached an estimated cost of $ 1 46m. A more economic alternative was put forward in that report by Dr Joy which involved the upgrading of the broad gauge facilities including the Port Pirie bogie exchange at an estimated cost of $20m. However, Dr Joy also canvassed a low cost standard gauge link should the Commonwealth wish to proceed with standardisation. That alternative was estimated to cost $76m. Last year the Government members housing and transport committee chaired by my colleague, the honourable member for Michell (Mr Cadman), of which I am also a member, studied the Crystal Brook to Adelaide rail standardisation proposal in some detail. We reached the conclusion that is was essential that standardisation proceed. The Committee strongly supported the Australian National Railways submission that a more economic version of the standardisation project be given approval. The Australian National Railways submission that was put to the Government reduced the estimated cost to $62m in 1979 prices by converting the existing line rather than constructing a new one. Costs were also reduced by scaling down the Islington freight facilities that were proposed and also scaling down the Dry Creek and Port Pirie marshalling yards, Adelaide signalling facilities and then excluding the cost of deferred maintenance. To its very great credit, the Commonwealth Government accepted this proposal. The Prime Minister (Mr Malcolm Fraser) announced approval on 4 December 1979.
Despite the need for continued economic stringency the Fraser Government has recognised the great benefit of this project to the South Australian economy. Standardisation is even more essential now that we have had a change of government in South Australia since last September. We know that after the South Australian regional economy has suffered a decade of the dead hand of a socialist State government it now has the prospect of renewed economic growth under the Tonkin Liberal Government.
– You have a sense of humour if nothing else.
-The facts are there for all to see. Already there is significant evidence of renewed confidence in the South Australian economy among businessmen involved in activities there. I am sure that the Federal Government is well aware of this renewed confidence and of the renewed prospects for economic growth in South Australia. It was well aware of that when it gave the nod to this standardisation project. I am sure that the Commonwealth Government is aware also that the Tonkin Government will treat the Federal Government’s generosity in this matter with much more respect than the former Dunstan Labor Government treated the massive injection of funds by the former Whitlam Labor Government to further cynically its centralist philosophy which, of course, remains with the Labor Party of this day, when it took over the South Australian country railways. The fortune which the Whitlam Government paid for that takeover provided a massive injection of funds not the revenue of the State Labor Government. The former Dunstan Government dissipated in three years that generous financial benefit which represented virtually four generations of inheritance of endeavour, much as a young man might lavish an inheritance on his mistress in jewels and furs. The State received no lasting benefit through the expenditure by the Dunstan Government of the money acquired through the transfer of its railways. I am sure that there will be a marked contrast in the result which will be achieved from the generosity of the Fraser Government in proceeding with the AdelaideCrystal Brook standard gauge link now that a Liberal Government is in office in South Australia.
Notwithstanding significant cost savings being achieved through this project as against the original proposal there is still significant construction work involved. The main line works involved are, firstly, a 22 kilometre new single line from Mile End to just north of Salisbury; a new bridge over the River Torrens in Adelaide and construction of a level crossing over existing tracks at North Adelaide; and a 162 kilometre Australian National Railways line from Salisbury to Merriton which will be converted to standard gauge by moving one rail. That project involves also a minor realignment and deviation of 2 kilometres of line at Bowmans. The project involves the construction of 12 kilometres of new single line between Merriton and Crystal Brook. Further work is to be undertaken in the Adelaide metropolitan area. This involves the construction of a new country and interstate passenger terminal and facilities at Keswick. Major standard gauge freight facilities are to be established at Mile End to service existing industry and freight forwarders. Freight facilities are to be established also at Islington capable of ready expansion to meet expected traffic growth.
A standard gauge connection constructed to the Port Adelaide-Gill man area will occur through the conversion of the existing broad gauge track to dual gauge. There will be a new dual guage connection to the stock facilities at Pooraka. A further aspect of the project is the new marshalling yard and bogie exchange depot at Dry Creek which will service South Australian and Melbourne broad gauge traffic. Other works in country areas involve the removal of the existing broad gauge line from Merriton to Port Pirie, the rearrangement of facilities in Port Pirie and the closure of the Bumbunga-Lochiel branch line, a length of 8.5 kilometres. New traffic signalling will be involved in the project with centralised traffic control with electric signalling being installed and with metropolitan signalling to be interlocked with the State Transport Authority signalling for the safe operation of both systems. There will be alterations to existing level crossing facilities in the metropolitan area.
A significant amount of work is to be undertaken both in the laying of track and in the provision of other facilities with the extension of the standard gauge link between Crystal Brook and Adelaide. Of course, the project is already under way in terms of negotiations being undertaken between the South Australian and the Commonwealth governments for its completion and with the commencement of land acquisition and design works. Actual construction is planned to commence in the 1 980-8 1 financial year. The line between Adelaide and Crystal Brook will be completed by 1982. This date will also apply to the standard gauge connections to Dry Creek, Pooraka and Islington. There will be progressive completion of connections to remaining areas with the whole project to be completed by 1 984.
South Australia will gain significant benefits from this project both during the construction period and, more importantly, when the standard gauge link becomes operational. A total of 750 jobs will be created during the four year construction phase, 350 of those jobs within the Australian National Railways and 400 among outside contractors in the private sector. Currently Western Australian and Northern Territory traffic is routed through the Port Pirie bogie exchange, although it is increasingly being diverted through the Peterborough bogie exchange which also serves New South Wales traffic. The Port Pirie yard is particularly badly designed. It takes a wagon an average of 27 hours to pass through. Furthermore, train crews currently break shift at Port Pirie. This contributes to a further delay. This project will eliminate the need for bogie and crew exchanges to take place at Port Pirie and Peterborough.
Australian National Railways anticipate that the reduced transit times will boost traffic in the first year of operation by at least 10 per cent. The project will allow also significant savings in labour costs to the Australian National Railways estimated at about $5m a year. The project has an estimated cost benefit ratio of 2.4 per cent and will make a substantial contribution towards reducing ANR operating losses in future years and, indeed, making ANR a profitable operation by 1988-89. The additional earnings and cost saving to ANR will result in a net revenue gain of $14m in the first year of operation of the line. This, of course, will increase in later years. Reduced transit times will boost traffic substantially. Australian National Railways will be able to load its Adelaide-Perth and Adelaide-Sydney traffic on the standard gauge wagons.
The result is that both the Perth and Sydney bound traffic will arrive a full day earlier. The Northern Territory and northern South Australia livestock industries will benefit from reduced transit times and the elimination of bogie transfers. This will avoid the need for spelling of stock, reduce bruising, increase saleable weight and quality and increase the volume of stock transportable due to increased wagon turnaround. Alice Springs to Adelaide journeys will be reduced from the current five day trip to two days when the Tarcoola-Alice Springs section is completed, and to 30 hours when the Crystal Brook to Adelaide link is finally complete.
The link will make a major contribution to the resources and industrial development of South Australia. This includes the Redcliff petrochemical project which is estimated to employ 2,000 people during its construction and 500 people during the production phase. The copper and uranium projects at Roxby Downs will employ 2,000 people during the construction phase and another 2,000 people during the production phase. The project will have benefits in terms of the conservation of energy with the increased rail traffic expected from the project to assist in maximising fuel economies. It will assist the development of the tourist industry in South Australia. This project makes a major contribution both to the future of Australian National Railways and to the future development of the South Australian economy with development projects just around the corner. It is on that basis, with the prospect of South Australian development surging ahead under the combined administration of the Fraser Government at the federal level and the Tonkin Government in
South Australia, that I support this Bill and commend its passage through the House.
-The speech of the honourable member for Kingston (Mr Chapman) was quite all right except for a little bit of political rhetoric when his hatred of the Labor Government in South Australia was quite apparent. Nevertheless we are debating the Australian Shipping Commission Amendment Bill and the Australian National Railways Amendment Bill. I wish to concentrate on the Australian National Railways Amendment Bill as did the previous speaker. The Bill alters the borrowing regulations concerning the Australian National Railways Commission. The Minister for Transport (Mr Hunt) had this to say in his second reading speech:
The need to do so is occasioned by funding requirements for construction of a standard guage railway between Adelaide and Crystal Brook.
This is a new departure as far as the ANR is concerned. We are not opposing the legislation. We would admit that it certainly gives ANR more flexibility in raising finance for carrying out capital works projects. However, at the back of my mind I feel that the Government is releasing itself from an obligation to provide those funds from a Budget allocation. Now the Government can get out of that by throwing it back on the ANR to raise those funds by public borrowings.
The Adelaide-Crystal Brook railway line has had a chequered career. I note that the honourable member for Kingston mentioned various reports. Perhaps I could go through some of them. In the first place there was the Fitch report. Mr Fitch was a former chief civil engineer of the old Commonwealth Railways and subsequently became Commissioner of the South Australian Railways. He brought down a report in the 1 960s in which his main plan was to shift the rails in. He claimed that this could be done quite cheaply. Following that there was a report by Maunsell and Partners. Of course, the then Minister for Shipping and Transport sent the then Premier of South Australia a telegram advising that the Commonwealth Government had that day decided to accept the recommendation of the consultants- that is, Maunsell and Partners- for the provision of a standard gauge connection between Adelaide and Crystal Brook. The Dunstan Government was elected in 1 970. The Premier then approached Mr Gorton, who was the Prime Minister at the time, and expressed his concern that several key locations, including Mile End, were not to be connected with the standard gauge line and also that a proposal of the then
Commissioner, Mr R. J. Fitch, had apparently not been fully evaluated.
In 1971 the then Prime Minister wrote to the Premier of South Australia advising of the Federal Government’s acceptance of the proposals of Maunsell and Partners. After acceptance by the State Government, Maunsell and Partners were engaged to prepare master plans and specifications and work proceeded on this basis. The agreement for the building of the standard gauge line was signed by the South Australian Premier and Mr Whitlam, the Prime Minister at that time, in May 1974. However, with the change of government there was also a change of attitude. In 1976 the Prime Minister of the new government advised the Premier of South Australia that the Federal Government was applying various economic measures, including a review of the standard gauge proposals. The whole thing then came to a standstill, with the exception that the Commonwealth Government decided to ask an independent committee to inquire into the Adelaide-Crystal Brook railway project and the options available. As the honourable member for Kingston mentioned, the Joy report was tabled in December 1976. That is about where we are at present. At last we may be getting somewhere with this very important connection to the standard gauge railway system. We certainly hope that at last something positive will take place.
The rail connection will have some effect on the people of the area which it will serve. Probably the worst affected place will be Port Pirie. The bogie exchange that is now operating at Port Pirie will be closed and the people working in the exchange will be made redundant. The Minister for Transport has assured us that the people who will be made redundant at Port Pirie will not be dismissed but will be found work in other places. We hope that this will be the case. I do not think that any country town can afford to lose the large number of staff that will be lost to Port Pirie. The number of people displaced will be of the order of 250. Some of these people are now working in the bogie exchange, and others are in the marshalling yards and so on. The Minister has given an assurance that no one will be dismissed and I certainly hope that he sticks to that commitment.
Unfortunate changes are taking place in the railway systems throughout Australia in the name of progress. One of the greatest decentralised industries in Australia was our railway service. With the replacement of steam engines by diesels and now with the standardisation of railway lines many of the railway towns which provided the basis for decentralisation will feel the effect of progress. Port Pirie, Port Augusta and Peterborough are three major railway towns in my electorate that are being affected by the rationalisation that is taking place within the railway services. As I have said, we are making progress in one area but we are certainly not making progress in another in that we are doing away with jobs in a country area.
I understand that the construction gangs that are now working on the Tarcoola-Alice Springs railway line will, on completion of that line, be transferred to the Adelaide-Crystal Brook project. Perhaps I can refer to the Tarcoola-Alice Springs line as we are talking about railways in general. The Tarcoola-Alice Springs line was, of course, started by the Federal Labor Government. The first spike in that line was driven in April 1975 by the then Prime Minister, Gough Whitlam. That line is now well over the South Australian border. As honourable members are no doubt aware, the crossing of the border took place last November at Kulgera on the Northern Territory border. The line is expected to reach Alice Springs by next October. In fact it is about 12 months ahead of schedule. This, of course, is to the great credit of ANR engineers and the construction gangs that have carried out this work. The project has been fairly free of industrial strife. I know some of the engineers personally. They are men of competence. It is certainly to the credit of all concerned that this project is so ahead of time.
I might also mention again that we hope that this gang will be transferred to the AdelaideCrystal Brook project on completion of the line from Tarcoola to Alice Springs. Of course, there is pressure at the moment for the line to be continued to Darwin. I know that a committee is at present examining this proposal. I hope that some serious consideration will be given to the opportunity to continue the line to Darwin while these highly skilled construction gangs and highly skilled engineers are available.
I would now like to talk about railways generally. Railways are becoming increasingly important because of fuel pricing problems. We have seen railways deteriorate over the years. However, I think they will come into their own because of the present fuel pricing policy and the general shortage of fuel that we could face in the future. There is no question that railways have great advantage over road transport on long distance haulage. I am sure that it would be a silly move on our part if we did not pay railways due attention. We should make the greatest use of railways in regard to the carriage of goods over long hauls.
I mentioned earlier the effect of railways on the country towns. I referred to the effect on the three major towns of Port Pirie, Port Augusta and Peterborough of the standard gauge connection. There is concern among many sections of the staff regarding what their future holds. There appear to be plans for rationalisation. There is concern among many senior people in country areas that their future seems to have come to a standstill with the amalgamation. Many of these people could probably be promoted. However, in many cases this would mean leaving the area in which they have built their homes and raised their families. Many of them feel that because they are not prepared to leave their homes at this stage in life they will not be able to go any further in the railway service. It is one of the unfortunate effects of what is going on; nevertheless it is a fact. One complete clerical section of the railways has been moved to Adelaide and no doubt many employees are worried that the same will happen to other sections.
I am informed that the clerical staff in the railway town of Peterborough will be reduced over a period from 33 to 1 1. When people are taken in such numbers from a small country town with about 2,500 inhabitants, it can have an effect throughout. Also, there could be a reduction of activity in the town because of the rationalisation that will take place. I suppose that that is the price that we pay for progress but I hope and trust that the ANR will take full account of the situation facing employees, with the prospect of transfers, and will give them due consideration.
It is clear from an answer that I received from the Minister today that there has been a considerable reduction in the staff of ANR and that this has been proceeding for quite some time. The men in the workshops are concerned that work formerly done in country areas will be transferred to the city. That would mean a reduction in the availability of jobs in those areas. I feel that railways have a future. The completion of the Adelaide-Crystal Brook link will be a big step forward. It will connect every capital city of Australia by a standard gauge system and I hope that the railways will go on from strength to strength. If we ignore the railway systems I am sure that we will pay the price in the future.
There have been proposals to close down two railway lines in my electorate and two reports on them have been submitted. Both have recommended their closure but they have been kept open, mainly because of the good wheat seasons experienced during the last two years. I hope that careful thought will be given before a decision is reached to close down those lines, because to close down railway lines would possibly jeopardise our future.
– The honourable member for Grey (Mr Wallis) because of his background and party affiliations, seems to be saying that railway services and, albeit in the past, aerial services and shipping services, should be held back so that jobs may be provided. Certainly we should provide jobs for Australians if they are prepared to work but I do not think that anyone should deplore the fact that the standard gauge link between Crystal Brook to Adelaide or that between Tarcoola and Alice Springs will cost men jobs. Given the improved efficiency, the improved rail services and the general upgrading of the organisation surely anyone who is really interested in getting employment will find it. One cannot hold such projects back. The honourable member is apparently suggesting that it is a pity it had to happen because the bogie exchange men in Port Pirie will be out of a job. He forgets the people 800 or 900 miles up the track, whose livelihood and existence very often hang on this railway line, which used to stagger up alongside Lake Eyre and men had all these jobs changing bogies and so on.
The honourable member also seems to be saying- although he must know differently in his heart- that in 1974 the Labor Government began the Tarcoola-Alice Springs standard gauge line. I was there, as I am sure he was, when Prime Minister Gough Whitlam hammered in the golden spike at Tarcoola. The honourable member has been in this Parliament for quite a long time. He came to it when a colleague of mine, the then honourable member for Grey, who is now in the Senate- I refer to Senator Jessop- and I were on the Government members committee in 1968. It must have been during that time because the then honourable member for Grey spent only three years in this House. He as the chairman and I as the secretary of that committee convinced some 30 Government members to support Mr Keith Smith’s plan to build a standard gauge line from Tarcoola to Alice Springs. Yet the present honourable member for Grey has the audacity to come here and claim that the Labor Party initiated this project in 1974 and, lo and behold, the great Gough hammered in the spike in 1975.
The honourable member also conveniently forgets that in the 1972 Budget, prior to the defeat of the McMahon Government, an item of $3.2m was allocated for the commencement of construction on this particular railway line. When did it commence? It started, as the honourable member said, three years later when the Prime Minister of that time hammered in the golden spike. So, in actual fact, the Labor Party retarded the construction of that line by three years.
– That is not true.
– Of course it is true. Read the Budget figures and see. The honourable member knows what happened. This Government has brought the completion time ahead by 12 months. It was to have been 12 months from October of this year before the standard gauge line would reach Alice Springs. This Government has made the money available for the standard gauge line to reach Alice Springs in October or November of this year. This Government deserves the credit for that.
As I am speaking about a previous Prime Minister, I seem to remember asking him a question- I had better get the date right because he was not here very long either- some time in 1974 concerning the extension of the standard gauge line from Alice Springs to Darwin. That Prime Minister said then that of course there would be connections to Mount Isa, possibly via Tennant Creek and the Kimberleys also. He also promised us a dual carriageway from Alice Springs to Port Augusta, sealed all the way. I am mentioning all these things as matters of history. We hear again and again these claims that the Labor Party started all this off.
The Australian National Railways Amendment Bill is very welcome because, as it states, the Australian National Railways Commission will be brought into line with other Commonwealth statutory authorities. It will thus be able to seek the required funding for the AdelaideCrystal Brook connection of the standard gauge line, without which the Tarcoola-Alice Springs standard guage line cannot be really efficient. That also brings into effect a standard gauge connection between the other capital cities of Australia, excluding Darwin, which people seem to forget when they talk about capital cities of Australia. The construction of the line from Alice Springs would need the continued consideration of the Government, and I urge the Government to look at it. I know the Government is looking at it because I asked the Minister a question very recently and he informed me that a report along those lines was before the Government.
During our investigations of the standard gauge line from Crystal Brook to Adelaide we travelled on the line. Various Government members- Senator Jessop, myself and othersdiscussed the objects and aims of the Australian National Railways Commission. I am very pleased that the step recommended by this Bill will enable the Commission to raise finance in any place to carry out this project and, I hope, other projects for which it has the expertise. As the honourable member for Grey and various others have seen, it certainly has expertise in constructing railway lines such as the one on which it is now embarked. I hope that the Commission will hold that expertise, not only to complete the Crystal Brook to Adelaide line, or vice versa but also to build other railways in Australia and, importantly, the Alice Springs to Darwin line.
The history of the ANR is interesting and important. Apart from building this railway in Australia and doing that sort of job, it has been involved in the past in projects overseas. The Australian National Railways under the present chairman, and certainly with the support of Mr Keith Smith, who to a great extent is responsible for a lot of the railway construction we have been discussing, was interested in years gone by- from 1 953 to 1 966- in producing railway vehicles and equipment in countries such as Pakistan, India, the Philippines, Cambodia, Malaya, as it was then, Thailand, Vietnam, and Burma. It produced wagons, railway lines, diesel electric engines and so on. This is most important because the ANR has an expertise and will be recognised abroad for the job it has done on the standard gauge line from Tarcoola to Alice Springs. I am sure it will be recognised also for the job it will do on the line from Adelaide to Crystal Brook. In order to hold its engineering staff all the way down through the organisation it would be well for it to continue to carry out the sort of business I have mentioned. I refer particularly to the ANR’s efforts in Indonesia in the rehabilitation of the railways over the period from 1969 to 1979, at a cost of $ 14m.
Through this Bill, the ANR will be able to raise this sort of finance anywhere. It could really make an impact in various places in the world, especially in the Indonesian Archipelago, the Association of South East Asian Nations and in Asia. The Commission is very good. We know it is good, and we admit this on both sides of the House. Once this Bill is passed and ANR can raise finance, I hope that it will be able to do this sort of thing unhindered by any sort of impediment that might be thrown in its way. I know that it would welcome this opportunity to carry on with the sorts of jobs it did in Indonesia and other countries, including supplying the equipment to which I referred.
This project is a very significant one, and I hope that there will be no slowing down of its onward rush of construction. It certainly is rushing towards Alice Springs in its construction of the Tarcoola-Alice Springs railway line. Although the standard gauge line through from Alice Springs to Adelaide is significant, the other part of the connection, that is, the SydneyAdelaidePerth connection, probably produces a far greater income and /or saving for Australia. It is very significant indeed to have a standard gauge line from the north. The advantage to the cattle industry is not insignificant in northern South Australia and certainly in the Northern Territory. If the beasts do not have to be transhipped at Marree or transferred at Port Pirie, this could well result in a saving of $2m to $3m a year on bruising cattle alone, which otherwise is just money down the drain. Presently, everything has to be transferred across the rails at Port Pirie, and the tremendous expense incurred in doing all that will be saved. I urge that this railway line construction go on at the greatest possible speed. I also urge the Government to support the ANR in its efforts to stay in this worldwide field because, like the Snowy Mountains Engineering Corporation, it has special expertise and has proved it. I thoroughly support the Bill. I am afraid that I do not have time to speak about the Australian Shipping Commission Amendment Bill, but I think that other honourable members will refer to it.
-The House is discussing cognately two Bills, the Australian Shipping Commission Amendment Bill and the Australian National Railways Amendment Bill. At the outset, I congratulate the Minister for Transport (Mr Hunt) on presiding over transport Bills in the House for the first time. Certainly these are the first Bills of any significance for which he has been responsible. We hope that he makes a good job of the portfolio. Many will say that he left a little to be desired in the field of health and that he is trying his hand here. The Australian community can benefit a great deal if he gets transport into proper perspective and causes things to happen in relation to it. I doubt whether I will have time to talk about the Australian National Railways Amendment Bill.
The Australian Shipping Commission Amendment Bill enables the Commission, with the approval of the Treasurer, to borrow money by the issue of Commonwealth guaranteed securities. In the course of my short contribution to this debate I want to make some inquiries about the motives associated with that change. In the past, borrowing by the Commission has been undertaken by the Commonwealth. Those borrowings have appeared in the Commonwealth Government’s Budget outlays. The effect of the new borrowing provisions proposed in this Bill will be to enable the Commission, under certain conditions, to borrow in its own right. That arrangement will be similar to those prevailing for the Australian Telecommunications Commission, the Australian Wheat Board and the Australian Capital Territory Electricity Authority. This means that future borrowings for the Commission will no longer appear as part of the Commonwealth Government’s Budget outlays. On page 17 of the National Accounting Estimates of Receipts and Outlays of Commonwealth Government Authorities for August 1979 there is a comment about Commonwealth Government authorities operating outside the Budget. The document states:
The main authorities concerned are the Australian Telecommunications Commission, the Australian Postal Commission, Trans-Australia Airlines, Qantas Airways Limited, the Snowy Mountains Hydro-Electric Authority, the Overseas Telecommunications Commission, the Pipeline Authority, the Australian Wool Corporation, the Australian National Railways Commission, the Australian Shipping Commission and the Defence Service Homes Corporation.
It is very interesting to note the figures on the next page under the heading ‘Receipts and Outlays of Commonwealth Government Authorities Outside the Budget’. The deficit financed by net advances from the Budget in 1974-75 was $ 1,087m. That contrasts with this year’s provision of $ 1 1 7m. It is a very convenient arrangement for any government to minimise its deficit by this process. We can only leave it to people to judge whether there is something surreptitious about this. In other words, the Government has said: ‘We are not going to incur any displeasure on the part of the Australian community by overspending the taxpayers’ money. These figures look bad in budgetary terms. Now we will turn all these authorities onto the open market to compete for securities in the private sector’. Of course, the consequences can be that the cost of these services to the consuming public will rise, no matter what they are consuming under all these various headings. In other words, there will be no advantage to a public authority over private enterprise because it will simply bid for the available money so that it can get on with its public works of various types.
– And pay exorbitant interest rates too.
-The interest rate will certainly rise as a sequel to this Fraser Government initiated budgetary rearrangement. The Opposition does not necessarily concede that this is the best way to go about things. I want to talk quite briefly about the Australian Shipping Commission. I would like to say a lot, but there is not time. The Australian Shipping Commission is just not getting its share of Australian shipping trade. I noticed that in Hansard of 2 1 February 1980 some information given in answer to a question revealed very alarming figures about the percentage of total revenue tonnes carried by Australian flag vessels. I will mention the totals for several years. In 1976-77 we carried 3.7 per cent of all the tonnage carried by liners, tramps, bulkships and tankers. In 1977-78 we carried 3.5 per cent. In 1 978-79 we carried 3.9 per cent. Australians cannot be very proud of that arrangement. I notice that in the Australian Shipping Commission Amendment Bill there are provisions affecting matters such as tariffs and the prerogative of the Minister to influence and to determine issues of that kind. So it is relevant that I should raise these considerations in discussing this Bill.
Preliminary figures indicate that in 1977-78 Australian flag vessels lifted 8.3 per cent of cargoes in all Australia’s liner trades, 9.3 per cent of import cargoes and 7.2 per cent of export cargoes. The Australian National Line’s bulk carriers operate in the ore trade to Japan. In 1977-78 they were expected to transport about 8 per cent of the total ore cargoes from Australia. In total tonnes, that is less than 3 per cent of the Australian bulk cargoes that are transported in Australian flag vessels. No one can be proud of that. It seems to me that the Fraser Government’s policies on shipping and on the part that Australians should play in it are politically motivated and certainly are not based on a hard analysis of the facts. I think that it is influenced very considerably by the prejudice it has towards the maritime unions.
Debt servicing is one of the big problems affecting the Australian shipping industry today. It is the major item in ship operating costs. A short time ago my colleague, the honourable member for Shortland (Mr Morris) who is the shadow Minister for transport organised a conference attended by representatives of the maritime unions and shipping companies. I was privileged to be privy to the discussions that took place. It was revealed and conceded by all the parties concerned that debt servicing was a very great problem for the industry in trying to get a larger pan of Australia’s shipping trade. Crewing costs were a declining proportion. It is not the unions or the wages bill but debt servicing that is sapping the financial vitality out of the shipping industry. We noted that terminal and cargo handling costs were a considerable factor. Interest and depreciation were very significant contributors to the difficulties being experienced, in that over a 10-year period those items rose from 1 1 per cent of operating costs to 1 7 per cent.
I make the point that every other major national overseas flag operator benefits from some form of assistance by its host nation. Australia is missing out in this regard. Its national flag operators are not receiving such assistance. They will continue to be at a competitive disadvantage compared with overseas operators until this Government changes its attitude. There is no free market in international shipping. It is a matter of nations or governments deciding to get their part of the business and of doing whatever is necessary towards that end. I was interested to see an article in the Australian Financial Review of 25 January 1979-1 will admit that that is a little time ago, but the remarks ring as true today as they did when they were written- by Yoko Shibata of the Financial Times. It is headed ‘Japan reintroducing interest subsidies for ships’. I commend the Minister to a study of this article and the background material that contributed to it. The article states:
The Japanese Cabinet has approved the restoration of the interest payments subsidies scheme to help Japanese shipowners buy new ships and provide work for Japan’s shipyards.
To finance the scheme, the Government has appropriated 7 1 billion yen from the fiscal 1 979 national Budget. This will meet the cost of subsidising interest payments on funds raised to pay for new vessels totalling I million gross tons . . .
Under the subsidy scheme . . . the Government will cover 3.5 per cent per annum of the interest payment on loans provided by the Japan Development Bank (set at 6.05 per cent per annum) . . . for construction of LNG carriers and liner vessels under the Government sponsored shipbuilding program.
As a result, the actual interest burden borne by the shipowners will be trimmed to 2.8 per cent, the lowest since the Government-sponsored shipbuilding program was launched in 1947.
Obviously we have some very great lessons to learn in that regard. The Minister for Transport (Mr Hunt) is smiling at the moment. I do not think that smile indicates acquiescence with our current poor performance. I hope that the Minister has a wider vision, a higher aspiration and a greater sense of pride about Australia and our right to get into the action as a great maritime nation. We should always remember that we have enormous dependency on shipping in every respect. Let me just divert for a moment- the Minister has encouraged me to do so by his renewed interest- to a comment made back in 1959 by the Joint Committee on Constitutional Review. I have studied the recommendations of that Committee in recent days. Very eminent parliamentarians comprise that Committee. They had this to say in regard to shipping:
An active and efficient coasting trade is not only important because of its bearing on the national economy; it also is vital because of the value of merchant shipping in times of emergency.
Never let us lose sight of that fact. They continued:
In the second World War, ships engaged in the Australian coasting trade were used as troop transports and for other military purposes. In addition, coastal ships carried essential cargoes between Australian ports at a time when the country was desperately short of adequate transport facilities.
The Committee went on at great length and made very sensible recommendations which regrettably, have not been given effect to in the interim period. I ask the Minister to look at those matters. I will make just two final points. I notice in the 1979 annual report of the Australian Shipping Commission- the Australian National Line- a table which indicates the schedule of vessels operated by the Commission or the ANL. The table indicates the names of ships, when they were built, when they were commissioned, their tonnage and the like. Since this Government took office in 1975, the ANL has put into operation 13 vessels, 12 of which were built overseas. Only the Bass Trader which commenced operations on 26 July 1976 was built in Australia. In fact it was built at the Newcastle State Dockyard. Of the remaining 12, nine are owned by ANL and three are on charter. That is a very sorry and disgraceful record. I see that the honourable member for Denison (Mr Hodgman) is in the chamber- a noteworthy occasion. I say to him, in respect of the Bass Strait sea passenger service, that some ominous signs and noises are coming from the Government and the Tasmanian community ought to have some regard for that fact and the fact that this Bass Strait service could well be under threat. Recently, the Minister for Transport said that the Government’s policy was to encourage the development of Australian shipping on a sound commercial basis. He said that this included seeking solutions to the question of a future sea passenger service across Bass Strait which would allow the elimination of the current subsidy. So the Minister has put a demand study in train. It seems to me that the warnings are there. I would have expected some defence of the Bass Strait sea passenger service in the course of this debate, but regrettably we have not had it. I say to the Minister that the Labor Opposition will not see that service jettisoned without a fight. In any event, that is just one of the aspects of the Government’s shipping policy which leaves a great deal to be desired. 1 hope that the Minister, as new as he is to the job, will set about his work with a renewed sense of enthusiasm and certainly a sense of Australian pride.
-I would just remind the House of what the Bills are supposed to be about. They are meant to be about borrowing and tax liability. I hope that other honourable members who speak in this debate can sometimes refer to those matters.
- Mr Deputy Speaker, I take a point of order. I do not concede your prerogative to rebuke me retrospectively. If you have something to say while I am speaking you should take it up then and not afterwards.
-The honourable member will resume his seat. The Chair is quite entitled to remind honourable members of what they should be debating, according to the Standing Orders and the Bill. It is for the protection of all honourable members on either side of the House. I call the honourable member for Denison.
-Mr Deputy Speaker, I will stick to the Australian Shipping Commission Amendment Bill. I must say from the outset that I was disappointed that the honourable member for Hughes (Mr Les Johnson) endeavoured to raise a bogy and to employ a scaremongering tactic with respect to the continuation of Bass Strait shipping services. I just want to make the comment that in relation to Bass Strait shipping services, no government has looked after the people of Tasmania better than the present Government. I go further, sir, and remind honourable members opposite- I will then get back to the Bill specifically- that it was the Whitlam Government which brought in a half-baked freight equalisation scheme which operated only one way and which operated only from northern ports and which very nearly bankrupted the port of Hobart. So the honourable member for Hughes can rest assured that there are five solid Tasmanian members here who will fight for Tasmanian shipping services but who, in this case, will not have to fight because of the commitment of the Minister for Transport (Mr Hunt).
- Mr Deputy Speaker, I take a point of order. You just asked honourable members to stick to the Bill.
-I did not. I asked them to make passing reference to it. The honourable member for Chifley will resume his seat.
- Mr Deputy Speaker, you asked the House to refer to what the Bill was about.
-Order! I warn the honourable member for Chifley. The honourable member will resume his seat. I call the honourable member for Denison.
-Mr Deputy Speaker, I regret the second interruption. It reminds me, sir, of a former member of this House, Mr Enderby, who once said that Tasmania was an island completely surrounded by water. That is about the attitude of the Australian Labor Party to Tasmanian travel. As we are on the question of shipping, may I take this opportunity to congratulate our new Minister for Transport on introducing his first two Bills in that portfolio. I have already made one representation to the Minister for Transport. He acted expeditiously and in a humane manner and again gave a decision in favour of Tasmania. I want to thank him publicly for that.
On the question of shipping and on the question of connection with Tasmania, the only other comment I want to make- most of my remarks will be related to the Australian National Railways legislation- is to ask honourable members to give the fullest support to two inquiries being initiated by this Government in respect of assistance to persons travelling to and from Tasmania. I refer to the Department of Transport inquiry and the inquiry by the Senate Standing Committee on Finance and Government Operations of which Senator Rae is the Chairman. I hope that both inquiries will produce some means of alleviating the continuing hardship, particularly for pensioners and low income earners, of travel from Tasmania to the mainland and reverse.
Mr Deputy Speaker, it is fortunate that you are in the Chair tonight because you will know that what I say in respect of the Whitlam Government’s agreement with respect to the transfer of railways to South Australia and Tasmania is true and correct. I have to say that the Australian National Railways Amendment Bill will be, very properly, giving to the ANR a capacity which other statutory authorities have had. It will bring the ANR into line with the usual practice for
Commonwealth statutory authorities with respect to borrowing, but one cannot look at a borrowing program for a particular project without seeing what effect it might have on some other programs. Whilst I support to the utmost the legislation, which specifically will enable the funding of the construction of a standard gauge railway link between Adelaide and Crystal Brook, I would be failing in my duty to my home State of Tasmania if I did not alert the Minister and the Parliament to a possible additional program which the ANR might be called upon to implement. The Australian National Railways Commission is responsible for the administration of non-metropolitan railways in South Australia and all railways in Tasmania. The sad fact is that Tasmania is the only State in Australia which does not have a passenger rail service. It is because I foresee that the Australian National Railways Commission might be required at some future time to engage in a funding program for the reintroduction of a Hobart suburban passenger rail service that I submit that I am entitled to make these comments.
– You closed it down.
-The honourable member for Shortland interjects. Let me remind him of the history. Those who come from Tasmania and those who follow Tasmanian politics will know that what I say is true and correct. Prior to the 1972 State election, the question of the future of the Hobart suburban passenger rail service was very much a keen political issue. The then Leader of the Opposition and later again Premier, Mr Eric Reece, gave a clear commitment that if the Australian Labor Party was elected to office in 1972 the Hobart suburban passenger rail service would be maintained. It is a tragic fact of history that within two years of giving that commitment he broke it. In early 1974 the Hobart suburban passenger rail service was terminated. That was done literallly weeks before the railway transfer agreement between the Whitlam Government and the State Labor Government was brought into effect. I have seen-
– I raise a point of order. It relates to the relevance of the debate before the chamber. The Bill being discussed is the Australian National Railways Commission Amendment Bill. The honourable member is discussing the operation of the former Tasmania Government railways. The service to which he is referring was disbanded a long time before the Australian National Railways became responsible for Tasmania. I ask that he remain relevant to the Bill.
-The Chair is in a most difficult position in this matter because as I said a while ago- it was greeted in a hot-headed fashion- the debate really has not been on the Bill. I have to allow passing references to the Bill at this stage rather than the other way around.
– I will not abuse the privilege. If the honourable member for Shortland is genuinely interested in Tasmania he will know that this is a very significant issue. If we are to authorise the Australian National Railways Commission to engage in a borrowing program on the commercial market with respect to the railway line to operate to Crystal Brook, I simply give the Parliament a warning that the Commission might be asked in a very short time to fund a similar program with respect to the reintroduction of the Hobart suburban passenger rail service.
I shall not abuse the privilege. I will conclude by making three quick points. Hobart will strangle itself with road traffic within the next five years. If any honourable member opposite does not believe me he should come and see what is happening with Hobart road traffic. Hobart is the only city of its size in the world which does not have either a railway system or a tramway system. Hobart ‘s development- my colleague the honourable member for Bonython (Dr Blewett) who spent his youth in Tasmania, will confirm- is ribbon development, to use the professional term, along the banks of the River Derwent. It is absolutely imperative that urgent consideration be given to the reintroduction of a Hobart suburban passenger rail service, preferably electrified, operating from Brighton to the city- perhaps not the sort of service which we had before but something in the nature of a light rail service, as was under consideration in South Australia; that is, something which is really a cross between a train and a tram. I have comitted myself to the reintroduction of the Hobart suburban passenger rail service, which was cruelly taken from the people of Tasmania not by any Liberal government but by the State Labor Government, which broke an election pledge and terminated it. I commend the Bill and support the Minister to the utmost in respect of both measures.
– in reply-I want to respond briefly to those honourable members who have participated in this debate. I will take note of the points raised by the honourable member for
Denison (Mr Hodgman) and other speakers. For the benefit of the honourable member for Shortland (Mr Morris) and the Parliament I think I should give to the House the basic financial instruction that was made to the Australian National Railways Commission. The Commission was directed in 1978 to draw up a corporate plan to achieve elimination of the annual deficit within 10 years. The Government has made it clear that it expects the Commission to operate commercially. It is aware of the difficulties of raising revenue due to the commitments to South Australia under the transfer arrangements when the Commonwealth took over the South Australian country rail services. It also needs to agree with the State railways on the intersystem services. The financial provisions of the Australian National Railways Act which were introduced by the Whitlam Government were also designed to place the Commission on a more independent and commercially oriented basis than the former Commonwealth Railways. There was, I think, a consensus in the approach by both governments to trying to make the new ANR, with a much broader based operation, more commercially oriented.
In regard to the Government’s shipping policy and the degree of financial assistance which has been given from the public purse by the Government, it is the desire to ensure that shipping to Australia is available to shippers at the lowest possible freight costs. We are very mindful of the fact that, although Australia is not a major maritime nation, it is a country which is dependent upon the cheapest possible freight rates being available to it because we are so dependent upon overseas markets and competitive rates for our very important export industries. At the same time, we have been attempting to establish the Australian National Line on an economic basis.
The Government’s policy is that the Australian National Line should operate on an equal footing with private ship owners and coastal trades. So far as the services of the overseas lines are concerned, we are also most anxious to ensure that we do have a service. We support the Australian flag’s participation in overseas trading providing there is no additional cost to consumers or Government subsidy. We are a trading nation and we depend upon efficient shipping services. I seek leave to incorporate in Hansard the gentlemen’s agreement of the Australian Loan Council on the borrowing by semigovernment and local authorities. It is the basis upon which the borrowing is undertaken by statutory authorities such as ANL and ANR.
The document read as follows-
AUSTRALIAN LOAN COUNCIL
Borrowing by Semi-Government, and Local Authorities, the ‘Gentlemen’s Agreement’ (As amended to 28-29 June 1979 at 11 3th Meeting of Loan Council)
Members of the Australian Loan Council have agreed that the following conditions will apply to future borrowings of Commonwealth and State semi-government and local authorities. These arrangements consolidate amendments made to the original Gentlemen’s Agreement since 1936 and, where necessary, modify the Agreement (as amended) in the light of Loan Council practices that have developed since then.
In the case of semi-government and local authorities constituted under the laws of the Commonwealth or a State which propose to raise more than $ 1 ,200,000 in any one year, all loans issued either in the form of new money or for the purpose of conversion or redemption of maturing debt are to be subject to the authority of the Treasurer of the Commonwealth or of the Premier or Treasurer of the State concerned as to the amount, terms, time and place of issue.
The Commonwealth and each State agree to submit to the Chairman of the Loan Council, before the close of the preceding financial year, the new money borrowing program for each semi-government and local authority proposing to borrow more than $ 1,200,000 in the form of new money during the forthcoming financial year. After the Loan Council has decided the maximum aggregate amounts to be borrowed by such authorities in the Commonwealth and each State, the Commonwealth and each State agree to submit to the Chairman by 3 1 October each year a program for the financial year for each authority within the overall limits decided by the Loan Council. Unless the Loan Council decides otherwise, these programs will constitute the final borrowing programs for each authority during the year concerned. Transfers of unused borrowing allocations between individual authorities will be allowed subsequently within this financial program subject to the specific approval of the Loan Council in each case
The Commonwealth and each State also agree to submit to the Chairman, before the close of the preceding financial year, a program of borrowing for the purpose of conversion or renewal of maturing loans by the authorities referred to in item (ii), together with programs of borrowings of more than $ 1 ,200,000 during the year for conversion or renewal purposes by other semi-government and local authorities. No additions will subsequently be made to this program without the specific approval of the Loan Council. The Chairman may agree to additions to the program on the recommendation of the State Premier concerned where these have been omitted due to oversight. Details of such approval given by the Chairman will be circulated to the Loan Council each month.
The borrowing programs referred to in items (ii) and (iii) above will be considered by the Loan Council in conjunction with its consideration of the borrowing programs for the Commonwealth and State Governments.
The borrowing programs referred to in items (ii) and (iii) will cover the total proposed borrowing for a complete financial year, and any approvals granted by the Loan Council for those borrowings will, if not availed of, lapse at the close of the financial year concerned, unless otherwise specifically determined by the Loan Council.
The amount, terms, time and place of issue of each loan raised to finance the borrowing programs referred to in items (ii) and (iii) will be fixed by the Premier or Treasurer concerned, in consultation with the Chairman, who will consult the Members of the Loan Council before giving his decision. However, the Premier or Treasurer concerned may give his decision on proposals for private borrowings by semigovernment and local authorities without consultation with other Members of the Loan Council, provided the terms and conditions of proposals comply with the terms and conditions of similar proposals which have previously received unanimous Loan Council approval. Details of such borrowings will be reported to the Chairman each month by each Premier or Treasurer for circulation to the Loan Council.
The Chairman may agree to the transfer of borrowing allocations from one authority to another on the recommendation of the State Premier concerned.
Details of such approvals given by the Chairman will be circulated to the Loan Council each month.
Unless the Loan Council decides otherwise, there will be no overall limit on borrowings by authorities with programs of not more than $1,200,000. The terms of such borrowings will be determined by the Treasurer of the Commonwealth for Commonwealth authorities and by the Premiers or Treasurers of the States for their respective authorities. These terms will be in accordance with those currently being approved by the Loan Council for authorities borrowing more than $ 1 ,200,000 during the year.
) Monthly returns of aggregate new money borrowings by semi-government and local authorities in the Commonwealth and in each State with programs of $ 1 ,200,000 or less in the form of new money are to be furnished each month to the Chairman, who will circulate them to the other Members.
Terms and conditions for individual loans
The maximum margins by which the interest rates offered on semi-government and local authority securities may exceed the current Commonwealth long term bond rate will be fixed by the Loan Council from time to time. For this purpose, the current long term bond rate will be the yield to maturity (rounded where necessary to the next higher multiple of 0.05 per cent) offered on the longest term security issued in the last preceding Commonwealth loan.
Brokerage of up to 0.25 per cent may be allowed on public loans.
Brokerage may be allowed on private loans as follows: up to 0.25 per cent on loans with a currency of 10 years or more; up to 0.125 per cent on loans with a currency of 7-9 years; and on currencies of less than 7 years, brokerage will be allowed only if the interest cost to the borrower (ie allowing for brokerage) does not exceed the maximum interest rate approved by the Loan Council for the proposed term of the loan.
Underwriting charges of up to 1 per cent may be allowed on public loans.
When underwriting of public loans is arranged it is to be for the full amount for which cash subscriptions or conversions are invited.
No underwriting charges will be payable on oversubscriptions if these are allowed.
No underwriting charges are to be allowed for private loans.
Excess subscriptions to public loans are not to be retained unless otherwise specifically determined by the Loan Council.
v) Period for which public loans open for subscription
When the amount of a public loan is $3,000,000 or more, a period of up to three weeks may be allotted for the loan to remain open for public subscription (subject to Loan Council approval of the opening and closing dates). Where the amount is less than $3,000,000, the period allotted is not to exceed two weeks.
No public loan of a semi-government or local authority is to be open for public subscription during a period of 7 days before the next Commonwealth public loan.
Results of public loans
The Commonwealth and each State agree to inform the Chairman of the results of each public loan as soon as practicable after the closing date of the loan. Where subscriptions have been received in excess of the amount offered, the Chairman is to be informed at the same time whether these amounts have been returned to subscribers.
Private borrowings when public loans are open for subscription
Between the opening date of a public loan and seven days after the closing of that loan, the Commonwealth and each State agree that they will not submit to the Chairman details of proposed private borrowings by the same authority unless they are satisfied that the amount of the private offer would not be available for subscription to the public loan.
Counter sales of securities by semi-government and local authorities, when approved by the Loan Council, will be permitted to remain open for a period specifically approved by the Loan Council. Counter sales will not be available for subscription during the period of flotation of a Commonwealth loan. This condition will not apply to counter sales arranged by means of loans made specifically to obtain power or services for the lender.
The interest rates of counter sales will be those appropriate at the time for public loans raised by semi-government and local authorities.
The amount of each approval for counter sales which is debited against borrowing programs for semi-government and local authorities will be limited to the amount actually received as advised to the Chairman at the close of the period approved for the sales.
No public announcement or release of the proposed dates, terms and conditions of public loans of semi-government and local authorities will be made until Loan Council approval of such dates, terms and conditions has been obtained. In the case of opening and closing dates, an announcement may be made, if desired, as soon as a tentative allocation has been made by the Chairman.
Loan Council approval
The Commonwealth and each State agree that, when submitting proposals for private borrowing by semi-government and local authorities for Loan Council consideration, they will inform the Chairman if any of the terms and conditions as submitted are subject to review before the funds are to be received by the borrower. The Chairman is also to be informed if the terms of the transaction are not to be finally settled within one month of the date of the submission.
Unless the Chairman is advised to the contrary, the Loan Council will assume that all proposals for private borrowings by semi-government and local authorities have been firmly taken up and such amounts will be debited against the borrowing program of the authority for that year.
Public borrowing proposals by semi-government and local authorities will only be debited against borrowing programs to the extent that actual offers are made on the market. Proposals for public loans which are withdrawn after Loan Council approval has been obtained will not be debited against programs.
Any variation of the terms on which a loan has been approved is to be submitted for Loan Council consideration.
Timing of borrowings for conversion purposes
Borrowings may be arranged for conversion purposes during a period of three months prior to the maturity date of the securities concerned.
Loans with settlement deferred or by instalments
Borrowings may be made with settlement deferred up to three months from the date of approval provided that the interest rate is firm at the time of approval.
Private loans may be taken up by instalments provided the first instalment is received within three months, that the balance is received within twelve months of the date of approval of the terms, that the interest rate is firm at the time of approval and that the whole of the proceeds are taken up within the financial year to which the borrowing relates.
b ) Pu blic Borrowings
Public loans may be taken up by instalments provided that the whole of the proceeds are taken up within three months of the last day of the loan.
All proposals for overseas borrowings by semigovernment and local authorities will be submitted to the Chairman before any commitment is entered into.
Overseas financing by authorities through buyer credit arrangements entered into by them and through the incurring of any obligations by them to contractors under supplier credit arrangements which involve overseas lenders, if confined to the financing of direct overseas expenditure by the authority or by the contractor or supplier for the acquisition, delivery and services in respect of capital equipment to be provided under the relevant purchase or construction contract, will not be charged against borrowing programs approved by the Loan Council for semi-government and local authorities and are not subject to Loan Council approval.
Except as the Loan Council, by unanimous decision, otherwise decides, all other borrowings under this clause shall be charged against such approved borrowing programs.
Other than for trade credit arrangements to finance direct overseas expenditure referred to in (b) above and such other borrowings as the Loan Council by unanimous decision exempts from this requirement, Loan Council approval will be required:
before any approach is made to obtain overseas borrowings; and
for the terms and conditions of borrowings subsequently arranged.
Where approval to approach overseas sources of funds is given by the Loan Council, there shall be full consultation with the Chairman prior to the submission of any resulting firm borrowing proposal to the Loan Council for approval.
f) Any borrowing under this clause is also subject to any resolutions relevant to that borrowing, which may be made by unanimous decision of the Loan Council from time to time concerning overseas borrowings by semi-government and local authorities.
Deferred payment contracts
Except as provided under clause B (xiii) all proposals by semi-government and local authorities for domestic financing of public works projects or purchasing capital equipment by instalment payments, or by deferred payments, are to be circulated for consideration by the Loan Council where the amount involved is in excess of $ 1 ,000,000 and pay ments are to be made over a period of more than three years from the completion of the project or from the receipt of the equipment being purchased. It is agreed that all such proposals shall be put out to tender and that, when each proposal is submitted for Loan Council consideration, an assurance will be given that this requirement has been satisfied.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Hunt) read a third time.
Consideration resumed from 20 March, on motion by Mr Hunt:
Question resolved in the affirmative. Bill read a second time.
That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Hunt) read a third time.
Exchange Student in India: Family Allowance- Agent Orange- Olympic Games- Qantas Advertisements in Indonesian Newspaper
– Order! It being 10.30 p.m. I propose the question:
That the House do now adjourn.
– Today I received a lovely letter in the post. I thought I would like to share it with my colleagues in the House, particularly members of the Government. It is a letter that really shrieks the joy of a mother of a 17-year-old girl in my electorate. She comes from a battling family. The letter is an epistle of pride from this mother that her 17-year-old daughter, from a very ordinary family, has been accepted as an exchange student with Rotary International and is now living with a family in India. I find uplifting the pride that this mother takes in the fact that her child from a very ordinary home and from a very ordinary school has had the good fortune to be accepted as an exchange student, to travel overseas and to have the experience of living with a family in a foreign country.
Her name is Fiona Hayward. She is a 1 7-year old girl. I am sure she is an exceptional young lady. Her mother writes with considerable pride of the work that this girl is doing in India. She writes that she is a great ambassadress for Australia, that she is appearing at all sorts of civic and local functions, spreading the message to the Indian people about the great life in Australia and she is sending home to her family for Australian recipes, for scripts for Australian plays, and in particular for a play that is to be performed at a local drama festival. All in all I think she is probably doing a very fine job in India. It is no wonder that her family is very proud of her. Her mother is quite happy about the fact that they have had a battle to pay her fare to India, that they are supplying her schooling needs in India- her books and her clothesand that they are also paying extra medical insurance to guard against the prevalence of Indian tummy and the other sorts of exotic diseases that people are likely to pick up in India.
– Doesn ‘t Rotary do that?
-Rotary is contributing. It is contributing $ 10 a month towards the girl’s keep. The mother is very happy that the family is able to scratch and scrape and raise the money to enable this girl to have this experience and for the Indian people to have the joy of having this bright young Australian student there. I would like to pay a tribute at this stage to Rotary. Rotary is a marvellous organisation. It is providing these opportunities for kids to get this experience, to have an opportunity to travel overseas, which opportunity might otherwise not been allowed to them.
Having said all that, I come to the port that this letter has a sting in its tail like the. he :s h - longing to the honourable member for i’t t iv’ r Yates). The sad thing is that although her family is paying so much to keep her in Indi.. w::. < Rotary has done so much to provide the ;>po tunity for her to get there and while the f >. > family is doing so much to make this girl comfortable and happy in an Indian home, v . is this petty, mean, small-minded Government doing to encourage this sort of facility?
– I raise a point of order, ,vs.Deputy Speaker. The Rotary exchange service has been in operation for years, even when Whitlam was in government.
Order! The honourable member for Bendigo has not received the call.
– If I might be allowed to continue, the honourable member is very conscious of the shortcomings of his Government, I am sure. What this Government has done to encourage this sort of procedure is to eliminate the family allowance. That is its contribution to the procedure. Rotary is doing its share, the girl’s family is doing its share and the Indian community is doing its share, but what does this Government do? Because the child is not living with her family in Australia the Government cuts out her lousy $5 a week. That is the sting in the tail of this letter. What the Government is doing really is making this sort of opportunity the preserve only of families who can afford to send their children. Its contribution is to take away the miserly $5 that the girl had received by way of family allowance.
– How mean can you get?
-As the honourable member for Hughes asks, how mean can you get? I thought that I would share this letter with honourable members so that they can understand the pride that I have that some battling woman at Pendle Hill is making an effort to allow Australia to send this girl to India to gain something for herself and to achieve something in the eyes of the Indian community through the decency and intelligence of an Australian schoolgirl. What is the contribution of the Government? It is to take away the family allowance. I hope honourable members opposite are proud of the Government they represent, because I am not.
– I had to rise just to answer that stupid charge made by ‘he honourable member for Parramatta (Mr John Brown) who has just spoken. Let us get our facts rights.
-Order! I ask the honourable member to couch his remarks in parliamentary terms.
-It was a stupid charge, so there is nothing unparliamentary about that description. The honourable member who has just sat down said that this Government is miserable in that it has withdrawn a family allowance. Let me just spell out who introduced the family allowance. Certainly it was not the Whitlam socialist government. It was the Liberal-National Country Party coalition government. Honourable members opposite should put that right where it hurts. Let us also remind honourable members opposite that that allowance is paid for families who are living in this country. Honourable members opposite can stand up and bleat all they like about how great people were to raise the money to send their children overseas. Congratulations to them. We have Rotary exchange students from my electorate and from every electorate.
– They ought to exchange you, Jack.
-I am sorry, but the only place to which the honourable member would get an exchange would be to communist countries like Russia. He would do very well over there. Let me make the facts quite clear. The honourable member for Parramatta does not know what he is talking about. I say that for two reasons. Firstly, there is a quite clear understanding of what the family allowance is all about. He knows it. All he is trying to do is to cast aspersions on the Government which provided a family allowance, while his Government was too miserable to consider the families in this country. Honourable members opposite have never considered the families in this country right from the time when they were first in government.
- Mr Deputy Speaker, I raise a point of order. I think you should spell out to the honourable member for Bendigo -
– The honourable member will quickly take his point of order.
– My point of order is that he is erroneous in the comments that he is making.
-The Chair will be the judge of that. The honourable member will resume his seat. The honourable member for Bendigo may resume.
– Thank you, Mr Deputy Speaker. Members of the Opposition carry on with a lot of nonsense about what this Government is not doing. The Government is providing allowances to more families than the Opposition ever dreamed about. Honourable members opposite are trying to split hairs by talking about what the Liberal-National Country Party coalition has done in not giving this person who is travelling overseas her family allowance. It applies right across the board. The point is that the family allowance is provided for the care of the children who are in this country. Honourable members opposite know the rules. They should not start being funny about them. Why do they not stand up and say what a miserable, mean lot they were when they were in government? They did not bother to look after the families in this country. They have never thought about the working man’s family. All they are interested in is supporting unions which will go on strike and keep people out of work in every part of the country. When they go out on strike where do honourable members opposite stand? I have never heard one word from the other side of the House while I have been in this Parliament, whether they are in government or opposition, about how they detest the way in which the family man is deprived of income, deprived of the right to live when the communist based unions go out on strike. Another commie-type of person is standing up.
– I raise a point of order, Mr Deputy Speaker. I ask for your guidance. Would it be in order for me to give the honourable member the statistics which show that the family is much worse off under the new system of family allowances introduced by this Government?
Order! There is no point of order. The honourable member will resume his seat.
-I do not mind their interjecting. If we were on the air everybody who listened to what the poor honourable member for
Parramatta has said would realise why he is on the other side of the House. The reason honourable members opposite are on that side of the House is that the people of Australia became sick and tired of listening to the ravings that went on when they were in government and sick and tired of the way they pulled the currency down, destroyed the economy, created unemployment and supported the communist-backed unions. The reason honourable members opposite supported those communist-backed unions is now coming out. Everything they do is geared towards such support.
The Opposition is nothing but a socialistbacked group against Australian people. It is about time the people in this country realised with whom they are dealing on that side of the House. Right throughout this country we are finding week after week the swing to the leftwing, to the total socialist philosophy. What about the people on that side who pretend that they are not socialists? What do they do? They stand up and make all sorts of nice statements in the House but when the crunch comes and they have to stand up to a vote, who do the people support? We have only to see who was elected to the Opposition front bench to see the complete swing to the left wing. The unfortunate swing that has been taking place in Victoria is now taking place in the national Parliament. It is happening right throughout the Labor movement. What does the Opposition do in relation to Queensland where there is some vestige of right wing support, with moderate people, good oldtype Labor supporters? It sends up the socialists, the real extreme lefties, to throw out the Queensland members. That is the sort of thing we want honourable members opposite to keep on doing, because as Fred Daly has said, the more they do it the longer we will stay here. They should just keep that in mind and keep up their actions.
– I congratulate the honourable member for Bendigo (Mr Bourchier) on making a speech because we do not often hear him make a speech. We usually hear him just taking points of order. I am bound to say that I sympathise with the honourable gentleman. I had never really understood the sad implications of Portnoy’s Complaint until I heard him tonight. I am bound to say that my concern on the adjournment-
– I raise a point of order, Mr Deputy Speaker. I think an expert on Portnoy’s Complaint should not make remarks about other people.
Mr DEPUTY SPEAKER (Mr Millar)Order! The honourable member for Bendigo might curb his impatience and wait for the call so that the Chair then can properly attend to his point of order.
– Thank you, Mr Deputy Speaker. I will try to take three minutes to make my point of order.
-The honourable member will make his point of order as quickly as possible.
- Mr Deputy Speaker-
– I ask the honourable member for Melbourne Ports to sit down. I know that the honourable member never learnt any decency while he was in Victoria and that he was sent up here by left wing -
-Order! The honourable member will proceed to make his point of order or he will be asked to resume his seat.
– My point of order is that the honourable member for Melbourne Ports, in his usual malicious way, made a rude remark which I ask him to withdraw.
– If the honourable member for Melbourne Ports in fact made a rude remark which escaped the literary capacity of the Chair, I ask him to withdraw.
-If the honourable gentleman believes I made a rude remark, I withdraw it. My concern is about the statement made in the House today by the Minister for Veterans’ Affairs (Mr Adermann) who came into the Parliament and indicated that he was really doing something on behalf of the Government for members of the armed Services who had served in Vietnam. It is not possible in the time available to me to deal with all of the aspects of that statement. However, I want to make a couple of points. The Minister for Defence (Mr Killen), in a statement, invited anyone who had any evidence about the involvement of Australian troops in Vietnam with the use of agent orange to make that evidence available to him. Pursuant to that, the president of the Vietnam Veterans Action Association, its scientific adviser and its legal adviser arranged for an appointment to see not merely the Minister for Defence but also the Minister for Veterans ‘ Affairs. Their purpose was to make available on oath information which members of the Vietnam Veterans Action Association had obtained. Their purpose was also to impress on the Minister for Veterans’ Affairs the overwhelming view of members of that Association that justice could only be done to them if they had a full judicial inquiry. An appointment was made for those representatives to see both Ministers this evening.
As they were going to catch their aeroplane, they called into their solicitor’s office to pick up the relevant affidavits which they were hoping to present to the Minister for Defence and received a phone call from the Minister through their Queensland solicitor saying that the appointment had been cancelled by virtue of the statement that was about to be made by the Minister for Veterans’ Affairs. Indeed, they were told that their air fares to Canberra would not be paid. I find it extraordinary that a government which was prepared to conscript Australian youth and to involve Australian armed Services in Vietnam, which tried to live off that situation politically and which was in a situation where negotiations and discussions were going on, can virtually cancel those discussions. The Minister for Defence indicated that although he was anxious to receive the information from them, the Government had moved to close off even consideration of the arguments of the Vietnam veterans who wanted a judicial inquiry.
– That is nonsense.
– It is the truth and I find the attitude of this Minister and the attitude of the honourable member for Mallee -
– That is quite wrong.
– The honourable member says it is wrong. Let me say that the president of the Vietnam Veterans Action Association has stated tonight in the public media his grave concern at the treatment by this Minister and by the Government of his Association. Everyone knows that most members on this side of the House were deeply opposed to Australia’s involvement in Vietnam. But these ex-servicemen, having been in Vietnam and having served this country at the behest of this Government, their views as to how they are to receive justice for their families ought to be listened to. What we have is a massive cover-up by the Minister for Veterans’ Affairs and the Minister for Defence in order to protect the Prime Minister (Mr Malcolm Fraser) who, on three occasions when asked very simple questions about his own knowledge of the use of agent orange when he was the Minister for Defence, has declined to answer any of those questions.
Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired.
– I wanted to ay a a little tonight on the subject of the Olympic Games. I think that it is worth looking back over the last few months since the Soviet Union decided to invade Afghanistan. It is also worth looking at the kinds of calculations that the Soviet Leaders probably made at the time. I think that they made some grave miscalculations. They probably thought that since Afghanistan was next to Pakistan and Pakistan was pretty unpopular around the world at that time, and because Afghanistan was next to Iran and Iran was in no state to do much about the invasion, they could move into Afghanistan without the world taking much notice. So they moved in and were very surprised indeed, I think, at the outcry that occurred and at the vote in the United Nations against them which included an enourmous number of Third World countries.
Some of us had some expectation at the time that the outrage of the rest of the world about the Soviet actions in Afghanistan would have some effect and that there might be some sensible protest on the part of the West to that action in the hope of averting any additional Soviet incursions elsewhere. In particular, I think, people believed that with the imminent death of President Titowhich is still imminent some months later- the the fears we might have of the Russian incursion into Yugoslavia might be reduced if the world held together in defence of Afghanistan.
Generally speaking, the only proposal which came forward and which seemed to have some real impact on the Soviet Union was the proposal for an Olympic boycott. Various people said that it would be nice to impose some sort of trade boycott. I think it is fair to say that if it were possible to bring about a trade boycott on the Soviet Union which would have a real effect, that would be supported. It was an absurdity for some people to have said that they would support a boycott of the Olympic Games only if there were a total trade boycott because they knew when they said it that organising a trade boycott in effective terms was impossible, but there was certainly a chance of organising an effective Olympic boycott. I believe there is still a very real possibility of an effective Olympic boycott.
We have to realise that we are now in the month of March, almost April, and it is not awfully long before July when the Games are due to be held. The Afghans are holding out pretty substantially against the Soviets, despite the fact that some 600,000 of them have had to flee into neighbouring Pakistan. We know what the Russians are doing there. We hear stories every day of atrocities. There was a dreadful atrocity in the village of Kerala where people were killed in large numbers. We have heard of various other happenings within that very sad country. All I would say is that anybody who thinks that it is going to be comfortable to be in Moscow at the time of the Games, when the Russians are still killing people in Afghanistan, had better have another think about it.
Those of us who are quite serious about this proposed boycott and those of us who believe it is about the only effective way of doing something to stop the Soviet Union in its madness will not forget, when the time comes for everybody to go to Moscow in July, that the Russians will still be killing people in a neighbouring country and that there is a very serious chance that they may well go on to kill people in Yugoslavia. At the very time that this is happening all these people who are organising the Olympic Games, putting advertisements in the newspapers and encouraging the Soviet Union in its Games policy, will have to bear the mark of being in Moscow and encouraging people to be in Moscow while the Russians are still killing people in a neighbouring country. At the time of the killing, those people will be supremely uncomfortable in Moscow, and it will be supremely uncomfortable for the people in this House who are supporting the Olympic Games.
– Like the honourable member for Corio.
-The actions of the honourable member for Corio (Mr Scholes) and his friends will not be forgotten.
-Order! The honourable member’s time has expired.
-Mr Deputy Speaker, before dealing with the same topic that the honourable member for Mackellar (Mr Carlton) dealt with I would like to make one point in reply to the honourable member for Bendigo (Mr Bourchier) when he praised the introduction by this Government of the family allowance scheme. At the time it was introduced it was a progressive move. It is important to remember that family allowances have not been indexed since their introduction, whilst the tax rebate which, admittedly, was not available to a significant number of people in the community, was indexed. Therefore, those families who are taxpayers are now very significantly worse off; approximately $2 a week for each child compared with the system introduced by the Labor Government. I wanted to remark on the question of what should be done about the Soviet Union’s invasion of Afghanistan. To my mind what happens in the Soviet Union is even more important. I would ask for leave of the House to incorporate in Hansard a letter which was sent to the Sydney Morning Herald on 19 March which was not published.
The letter read as follows- 1 9 March 1980 The Editor
Sydney Morning Herald Press Gallery Parliament House CANBERRA ACT 2600
You argue (Editorial 19/3/80) that the proposed Olympic and sporting boycotts will hurt the U.S.S.R. and are therefore “good”, whilst trade boycotts and suspension of academic exchanges will not hurt and are therefore not to be supported.
This is a very simplistic view. For example, sporting and academic boycotts are similar. If effective, and 1 emphasise this, then they will cause U.S.S.R. sportsmen and academics, both part of their elite, to reconsider their support for U.S.S.R. policy both internally and externally. Let us remember that for U.S.S.R. citizens, a trip outside COMECON is like winning the lottery.
As for trade boycotts, one assumes that the U.S.S.R. buys our wool, grain, etc., rather than somebody else ‘s because it is better, cheaper or whatever. The converse must therefore be relevant. Whilst trade boycotts did not overthrow Ian Smith, they certainly made life more expensive for Rhodesia.
Whilst fascist Argentina, appropriately enough, was the first to offer extra grain to the U.S.S.R., I have no doubt that breaking trade boycotts, whilst possible, would be expensive for the U.S.S.R.
Listening to Mr Fraser ‘s lame excuse for selling his wool to the U.S.S.R., reminds me of Lenin’s alleged statement that “the last capitalist will sell us rope to hang the second last one.”
– On the question of the supply of grain to the Union of Soviet Socialist Republics which I mentioned in the fourth paragraph, whether it would have to pay more to other people or whether it would have to buy grain via a third country, either proposition would make it more expensive and more difficult for the Soviet Union. I make one further point on this general issue of boycotts. I support taking measures against the Soviet Union, as I emphasised before, not only because of its action in Afghanistan but also because it is a totalitarian regime and Australia should not be dealing with it. At the same time we have to remember that the main points on which we assert we differ from the Soviet Union is that we are not a totalitarian regime; we are a democratic country. It is important that any measures that we take against the Soviet Union are not totalitarian measures. I oppose the proposition that we do not grant visas to people either coming to Australia or going from Australia to other countries. One of the main distinguishing features between Australia and the Soviet Union is the right of an Australian citizen to free travel, and the rights of other people within very broad designations to come and look at this country as visitors. This is very important.
Whilst I do not particularly support the coming to Australia of three Soviet judges for the opening of the High Court- they were invited by Sir Garfield Barwick- I oppose the proposition that this country should not give them visas. It is important for us to distinguish ourselves from the Soviet Union on that sort of point. Whilst I would not pay their fares to Australia and I would not encourage them to come here, if they do want to come here they ought to be allowed to come here and should not be excluded on the basis of visas. Remember always that, if we start taking totalitarian steps, we are very quickly losing any reason for differentiation between Australia and the Soviet Union.
Order! The honourable member’s time has expired.
– I speak briefly tonight about a matter which was brought to my attention by one of my constituents who recently visited Indonesia. This constituent was, I think, rightfully concerned about an advertisement which appeared on 3 March in the Indonesia Times advertising Australia. It is an advertisement inserted by Qantas Airways Ltd and the headline states: ‘Australia. It has never been better, it has never been cheaper’. The advertisement then goes on to implore people to visit the various parts of Australia. The advertisement reads: ‘Australia is waiting for you. It is a beautiful country, temperate climate, exciting cities’. It then mentions that, through Apex fares, Qantas Airways Ltd can get people from Indonesia to Sydney and Melbourne and return for SUS454. It then advertises various package tours, one to Sydney-Kings Cross for $US656, another to the Gold Coast for SUS677, another to Canberra and the sheep stations around Canberra for SUS656, and then a trip to the Dead Heart of Australia- not Canberra, but Central Australiacosting $US 1068.
-What about Perth?
– The honourable member raises an interesting point. Perth is nowhere mentioned. I think that every member of this House agrees privately that Perth is the most beautiful city in Australia. I think that Qantas Airways
The following answers to questions were circulated:
asked the Minister for Transport, upon notice, on 13 November 1979:
– The answer to the honourable member’s question is as follows:
asked the Minister Assisting the Prime Minister, upon notice, on 22 November 1979:
– The answer to the honourable member’s question is as follows:
asked the Minister for Transport, upon notice, on 22 November 1979:
– The answer to the honourable member’s question is as follows:
asked the Minister for Foreign Affairs, upon notice on 1 9 February 1 980:
– The answer to the honourable member’s question is as follows:
Military Activity in the Indian Ocean (Question No. 5366)
asked the Minister for Foreign Affairs, upon notice, on 20 February 1980:
– The answer to the honourable member’s question is as follows:
asked the Minister for Immigration and Ethnic Affairs, upon notice, on 2 1 February 1980:
– The answer to the honourable member’s question is as follows:
In response to the honourable member’s question of 2 1 February 1980 I am informed by my department that a reference to a grant appeared in the West Australian of 4 October 1979. This followed an announcement by my colleague the Hon. M. J. R. MacKellar, when he was Minister for Immigration and Ethnic Affairs, that the Perth Asian Community Centre had been awarded a grant-in-aid to employ a social welfare worker to assist Christmas and Cocos Islanders living in Western Australia.
My department has been pressing the Centre to take up the grant by employing a person to fill the position made available as a result of the grant. The position was advertised in the press on Saturday 8 March 1980 and should be filled early in April.
When a person is selected and employment arrangements made the department can make its first quarterly advance payment.
asked the Minister for Veterans’ Affairs, upon notice, on 2 1 February 1980:
How many Aboriginal people in the Darwin area have been, (a) at any time since 1945, and (b) at 21 February 1 980, in receipt of pensions as a result of their war service.
– The answer to the honourable member’s question is as follows:
No distinction is made in the Repatriation Act between persons of Aboriginal race or other racial origins who served as members of the Australian forces. Therefore, there are no readily available statistical records as to the number of Aboriginal people in the Darwin area who are receiving pension payments as a result of their war service.
asked the Minister for Immigration and Ethnic Affairs, upon notice, on 26 February 1980:
– The answer to the honourable member’s question is as follows:
I am informed that the reason for my predecessor’s statement is that, as a matter of firm policy, all members of an immediate family group are required to undertake and meet Australian immigration requirements before any member of the group is approved either for migration to Australia or, if he is already here, change of status. This requirement is intended to prevent situations where immediate families are separated due to the belated discovery that one or more members are unable to meet immigration requirements.
Such situations are virtually confined, therefore to cases where parents have concealed the existence of their children when originally seeking permission to enter or remain in Australia.
In some instances, the parents are, by reason of the deception practised, prohibited migrants and, under the Migration Act, are liable to deportation if they do not leave Australia voluntarily. Some of these cases have involved the production of bogus death certificates and other spurious documents aimed at securing entry to Australia for persons otherwise ineligible.
In other cases, particularly where there are good reasons for believing that information was withheld inadvertently, approval is being granted for the entry of the remaining family members.
asked the Minister for Transport, upon notice, on 4 March 1980:
– The answer to the honourable member’s question is as follows:
(a) Yes. (b) No. (i) and (ii) One clerk has been transferred from Peterborough to Port Augusta.
asked the Minister for Transport, upon notice, on 4 March 1 980:
– The answer to the honourable member’s question is as follows:
asked the Minister for Transport, upon notice, on 4 March 1 980:
– The answer to the honourable member’s question is as follows:
1 ) The number of staff employed in each of the branches of the Northern Region of the Australian National Railways is:
The number of staff in each branch of the Northern Region of ANR who are permanent employees contributing to the Commonwealth Superannuation Fund is:
The number of staff in each branch of the Northern Region of ANR who were offered permanent employment and therefore eligible for Superannuation benefits were:
asked the Minister for Transport, upon notice, on 5 March 1980:
– The answer to the honourable member’s question is as follows:
(a) Minor maintenance works.
asked the Minister for Transport, upon notice, on 5 March 1980:
– The answer to the honourable member’s question is as follows:
(a) Minor maintenance works.
asked the Minister for Transport, upon notice, on 5 March 1980:
– The answer to the honourable member’s question is as follows:
asked the Minister for Transport, upon notice, on 5 March 1980:
– The answer to the honourable member’s question is as follows:
Charter of MV ‘Aurora’ (Question No. 5592)
asked the Minister for Transport, upon notice, on 5 March 1980:
– The answer to the honourable member’s question is as follows:
asked the Minister for Transport, upon notice, on 5 March 1980:
– The answer to the honourable member’s question is as follows:
Sea World Aviation, Surfers Paradise, Queensland
1 ) (a) Estimated value $40,000.
To facilitate inspection servicing and performance of maintenance by departmental personnel of Cape Moreton Lightstation, Queensland.
Mount Cootha and Cape Moreton.
Hookway Aviation Pty Ltd, Cambridge, Tasmania
1 ) (a) Estimated value $ 1 82,200.
b) To facilitate inspection, servicing and performance of maintenance by departmental personnel of marine navigational aid stations in Tasmania.
The contractor’s base of operations is Cambridge. Locations to be serviced are:
Maatsuyker Island; Tasman Island; Cape Sorrell; Low Rocky Point; Goose Island; Flinders Island; Three Hummock Island; Hunter Island; Sandy Cape; He Du Nord Chicken Point; Waterhouse Island; Cape Barren; Cat Island and Holloway Point.
Lloyd Aviation Pty Ltd, Unley Park, S.A.
1 ) (a) Estimated value $90,000.
To facilitate inspection servicing and performance by departmental personnel of marine navigational aid stations in South Australia.
The contractor’s base of operations is Adelaide. Locations to be serviced are:
Dangerous Reef: Cape Donnington; Pearson Island; Four Hummocks Island; Williams Island; Winceby Island; Flinders Island; St Francis Island; Evans Island; Cape Baver; Bolingbroke Point; Wedge Island; Wardang Island and Cape Jaffa.
Vowell Air Services (Helicopters) Pty Ltd, Tyabb, Victoria
(a) Estimated value $300,000-Victoria; $437,000- Western Australia.
To facilitate inspection, servicing and performance of maintenance by departmental personnel of marine navigational aid stations in Victoria and Western Australia respectively.
The contractor’s bases of operations are Tyabb, Victoria, and Perth. Locations to be serviced are:
Wilson’s Promontory; Deal Island; Citadel Island; Cliffy Island; Hogan Island and Councillor Island.
Eclipse Island; Breaksea Island; Figure of Eight Island; Gull Island; Lacrosse Island; Lesueur Island; Degenerando Island; Caffareilli Island; Tanner Island: Red Bluff; East Island; Gantheaume Point; Cape Bossut; Jarman Island; Legendre Island; Rosemary Island; North Sandy Island; North West Island; Trimouille Island; Mary Anne Reef; Beagle Island; Airlie Island; Anchor Island; North West Cape; Cape Leveque; Point Cloates; Quobba Point; Cape Ronsard, Cape Saint Cricq; Cape Inscription; Steep Point; North Island; Pelsart Island and Escape Island.
S. and Son Pty Ltd (Trading as Scruse Air Helicopters), Budgewoi, N.S.W.
1 ) (a) Estimated value $108,200.
To facilitate inspection, servicing and performance of maintenance by departmental personnel of marine navigational aid stations in New South Wales.
The contractor’s bases of operations are Doyalson, Gosford and Sydney. Locations to be serviced are:
Brush Island; Smokey Cape; Solitary Island Group; Point Stephens; Sugarloaf Point; Point Perpendicular; Green Cape and Norah Head.
Helitrans Aust. Pty Ltd, Cairns, Queensland ( I ) ( a ) Estimated value $ 1 2 1 ,000.
To facilitate inspection, servicing and performance of maintenance by departmental personnel of marine navigational aid stations in Queensland.
The contractor’s bases of operations are Gladstone and Cairns. Locations to be serviced are:
North Reef; Great Keppel Island; Albino Rock; Spinx Island; Edward Island; shelby Is Island; Bailey Islet and Vernon Rocks and various lights between owns- ville/Cairns and Cairns/Thursday Island.
asked the Minister for Transport, upon notice, on 5 March 1980:
– The answer to the honourable member’s question is as follows:
1 ) The number of visits made by Union of Soviet Socialist Republics mercantile vessels to Australia was:
The tonnage of goods transported by vessels of the USSR mercantile fleet in each of the last S years was:
1974- 75-918, 1975-76-1,951, 1976-77-1,209,
1977- 78-595, 1978-79-694.
1975- 76-226, 1976-77-274, 1977-78-125,
The goods transported under parts (2) (a) and (2) (b) above constituted the following percentages of total exports and imports by sea in each of the last 5 years:
1976- 77-0.72, 1977-78-0.36, 1978-79-0.41.
Imports, 1974-75-0.80, 1975-76-0.84, 1976-77-0.97, 1977-78-0.46, 1978-79-0.71.
asked the Minister for Administrative Services, upon notice, on 6 March 1980:
– The answer to the honourable members question is as follows:
asked the Minister for Administrative Services, upon notice, on 6 March 1980:
– The answer to the honourable member’s question is as follows:
I ) In New South Wales, Victoria, South Australia and Tasmania joint Commonwealth/State electoral rolls are maintained. In the Australian Capital Territory the Commonwealth electoral roll is used for Territory elections. In the Northern Territory the Commonwealth electoral roll is presently available for Territory elections: On the coming into force of the Northern Territory Electoral Act 1979 there will be a separate Northern Territory electoral roll but discussions are proceeding with the Northern Territory Government for this roll to be maintained by the Australian Electoral Office.
In those States (and in the Northern Territory on the coming into force of the Electoral Act 1979) where it is compulsory for Aborigines to enrol enforcement of the compulsory provisions is and will be the responsibility of State and Northern Territory authorities.
Notwithstanding that enrolment for Commonwealth purposes is not compulsory the Australian Electoral Office has recognised the need to acquaint Aborigines of their electoral rights and to this end has commenced a continuing program of electoral education.
This program currently involves two itinerant education teams employed by the Australian Electoral Office which operate in Western Australia, South Australia and the southern extremities of the Northern Territory. It is expected that a third team will commence operation in the remainder of the Northern Territory during 1980.
In order to avoid confusing Aborigines, the program, through the co-operation of the Western Australian, South Australian and Northern Territory Governments, includes information about State and Northern Territory electoral procedures. As the program is extended to encompass other States the Government will be seeking to establish similar co-operative arrangements.
With respect to Western Australia:
With respect to Queensland:
Soviet Fishing Facilities in Tasmania (Question No. 5644)
asked the Minister for Primary Industry, upon notice, on 1 8 March 1 980:
– The answer to the honourable member’s question is as follows:
Thus is it not possible to officially substantiate or confirm any claims of the number of jobs that would have been created if the feasibility fishing operations had been successful and if approval had been subsequently given to commercial operations involving shore based projects.
asked the Minister for Administrative Services, upon notice, on 19 March 1980:
– The answer to the honourable member’s question is as follows:
Drugs: Coastal Surveillance
– On 1 9 March the Leader of the Opposition asked me a question regarding the use of Nomad aircraft for the conduct of coastal surveillance contracts.
As promised, the answer to the honourable member’s question is as follows:
The contracts relate to aircraft charter for the following tasks: three aircraft for use by Bureau of Customs four aircraft for use on littoral (coastal) surveillance tasks on behalf of the Department of Health three aircraft chartered by the Department of Transport two aircraft to be used in ocean surveillance of the Darwin approaches and one aircraft mainly directed at foreign fishing vessel activity in the Great Barrier Reef area.
As regards the three Nomad aircraft for Customs use, I understand that the first aircraft commenced operations in the Townsville area a couple of weeks ago. I also understand that the other two aircraft have yet to be delivered.
In respect of the remaining seven aircraft, contract negotiations are virtually complete with three separate firms, with a view to finalisation in time for them to accept delivery of the aircraft from the distributors following completion by the Government Aircraft Factories.
The firms concerned are:
Connair Pty Ltd (five aircraft), Bush Pilots Airways Ltd (one aircraft), and Reprographics Pty Ltd (one aircraft).
It had been anticipated that the Nomads would all be in service by mid-1980 but, because of the current industrial action by employees of the Government Aircraft Factories, it is not possible to predict accurately the aircraft delivery dates at present.
I would like to emphasise that pending delivery of the Nomad aircraft, the daily littoral search from Geraldton to Cairns is still being carried out. Those sections of the littoral task reserved for Nomads are currently being flown daily under short-term charters.
Cite as: Australia, House of Representatives, Debates, 31 March 1980, viewed 22 October 2017, <http://historichansard.net/hofreps/1980/19800331_reps_31_hor117/>.