House of Representatives
19 August 1980

31st Parliament · 1st Session



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

page 1

DEATH OF SIR SERETSE KHAMA, K.B.E

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– It is with deep regret that I inform the House of the death on 13 July 1980 of the President of Botswana, Sir Seretse Khama. I move:

That this House records its sincere regret at the death of Sir Seretse Khama, President of Botswana, and expresses its deepest sympathy to his family and to the people of Botswana.

The House will wish to be advised formally that the Government extended its deep sympathy to the Government and people of Botswana and that the Minister for Health and Minister Assisting the Prime Minister (Mr MacKellar) represented Australia at Sir Seretse Khama’s memorial service. Sir Seretse Khama was a great statesman. It is not often that the leader of a relatively small country has a large influence in the world. Sir Seretse did. He was very widely respected, initially for the way he led his country to independence in 1966, then for the way he guided his country with wisdom and judgment through many difficulties and not least for his actions and counsels over such large international matters as South Africa and Rhodesia. good humour. Honourable members will probably not be aware that during the latter years of his life he had a continuing struggle with ill health. Africa and Commonwealth councils, as well as his own country, were advantaged by his leadership. He was a fine man and a good man. He was a staunch friend. His death was a great loss not only to Botswana but also to Africa, the Commonwealth and, indeed, the international community. .

Mr HAYDEN:
Leader of the Opposition · Oxley

– I second the motion on behalf of my party and support the remarks of the Prime Minister (Mr Malcolm Fraser). Sir Seretse Khama was revered in his own country and respected far beyond it. Through the British Empire and later the Commonwealth association, Sir Seretse became known to millions around the world. His life was colourful and unusual by any standard. The son of a traditional chief, he was banished in a dispute over that chieftancy but finally achieved the leadership of his country through the democratic process. Botswana, and Bechuanaland before it, is not one of the priorities of Australian foreign policy. That, of course, is obvious. It makes it all the more remarkable that so many people in this country should share such admiration for the man who led Botswana through her preparation for independence and into nationhood.

Sir Seretse’s was always a voice for common sense and moderation. He was a person of great

As a senior Commonwealth statesman, Sir Seretse Khama made a significant contribution beyond the borders of his own country. The most recent, of course, was his contribution to a democratic and peaceful settlement in Zimbabwe. As the leader of one of the so-called front line states, Sir Seretse helped to keep alive the spirit of moderation at times when the odds were heavily against its survival. He was a genuine democrat throughout his political career and the democratic representative government he leaves behind in Botswana is a fitting tribute to his work.

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

page 2

DEATH OF MR MASAYOSHI OHIRA

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– It is with deep regret that I inform the House of the death on 12 June 1980 of the Prime Minister of Japan, Mr Ohira. I move:

That this House records its sincere regret at the death of Mr Masayoshi Ohira, Prime Minister of Japan, and expresses its deepest sympathy to his family and to the people of Japan.

The House will wish to be advised formally that the Government extended its deep sympathy to the Government and people of Japan and that I represented Australia at Mr Ohira’s memorial service. Mr Ohira led the Japanese Government at a time when changing international circumstances presented the Japanese nation with considerable uncertainties. A wisdom born of wide experience, coupled with a deep personal commitment to the shaping of a better world for future generations, earned Mr Ohira great international esteem. His wise advice and considered counsel gained him the respect of leaders around the world.

Mr Ohira recognised the important role which Japan had to play in international affairs and as a member of the Western alliance. He was concerned to enhance Japan’s political and economic contribution to world peace and security. His understanding of the changing circumstances in Asia and the Pacific led him to play an active part in seeking closer ties between the countries of the region and of the Pacific. His promotion of the concept of the Pacific Community is an example of this. In January of this year Mr Ohira visited Australia. He was welcomed both as a representative of one of the countries most important to us and as a national leader who strove to increase understanding and personal contact between the peoples of different countries. I believe that his visit made a lasting contribution to the strengthening of relations between Japan and Australia. We all mourn his death.

Mr HAYDEN:
Leader of the Opposition · Oxley

– I am pleased to support the remarks of the Prime Minister (Mr Malcolm Fraser) and to associate the Australian Labor

Party in this Parliament with the motion. Mr Ohira did more than any other Japanese leader of the post-war era to move his country towards a political role in world affairs commensurate with her vast economic strength. He did it not only as Prime Minister but also in a variety of important posts in a political career spanning nearly 30 years. His period as Prime Minister was a suitable and deserved pinnacle in that career. But possibly his most important contribution to Japan, and the world, has yet to be grasped fully by many people in the West. He was responsible for the normalisation of relations between Japan and South Korea nearly two decades ago and later with North Korea and China - a remarkable feat in the latter case since he also managed to preserve Japan’s relationship with Taiwan.

Mr Ohira also played a critically important role in the preservation of Japan’s close and often difficult relationship with the United States of America. Similarly, he was a most significant influence in the development of the AustraliaJapan relationship. He was a good friend of Australia, with a genuine and obvious liking for this country and its people which was demonstrated as recently as his visit at the beginning of this year. I believe he should also have the greatest share of the credit for transforming the outlook of the Liberal Democratic Party in Japan in the 1960s - a change of profound importance to the Japanese people and the world. It was a change from a tradition of power for its own sake to an appreciation of human and social values in the business of government. The full consequences of that transformation have yet to be worked out within Japan, but if the process had been much delayed Japanese politics today might have been far more turbulent, far less stable and far more isolationist. For all these reasons, and indeed more, Mr Ohira was one of the chief architects of the political miracle that has followed Japan’s far more publicised economic miracle. The entire world can be grateful for his work in that role.

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

– I would like to support the motion of condolence moved by the Prime Minister (Mr Malcolm Fraser) in respect of Mr Ohira, the late Prime Minister of Japan. I would like to express my deep personal sympathy and the sympathy of my party to the Government and people of Japan. Australia and Japan have enjoyed close relations for many years. Our links in the field of trade have been especially important and are of vital interest to both our nations. During my time as Minister for Trade and Resources and over the past nine years I met Mr Ohira on several occasions. He visited Australia as

Foreign Minister in 1972 and again this year as Prime Minister. In the course of both visits he made clear his interest in developing the links between Australia and Japan. I deeply respected him as a leader of long and wide experience, with vision, understanding and a concern for strengthening international relations, especially amongst the nations of the Pacific.

Mr PEACOCK:
Minister for Foreign Affairs · Kooyong · LP

Mr Speaker, I wish to support the motion of condolence moved by the Prime Minister (Mr Malcolm Fraser). The death of Prime Minister Ohira was a sad occasion not only for the Japanese nation but also for those of us who knew him and respected his commitment to promoting peace and understanding among countries, particularly in the Pacific region.

Mr Ohira recognised clearly that the growing economic interdependence in the international community would not result in greater harmony between nations unless it were accompanied by positive efforts to improve mutual understanding and co-operation.

He sought to apply this principle through active diplomacy, notably in promoting the concept of a Pacific Community which he envisaged as providing a framework for the development of cooperation among the countries in the region.

Mr Ohira attached importance to strengthening Japan’s relations with Australia. He was concerned to strengthen exchanges in all fields and to provide greater opportunities for direct contact between Australians and Japanese - in effect, to lay the foundations for what he aptly described as a creative partnership’ between our countries.

These objectives corresponded closely to Australian views and it is a matter for deep sadness that Mr Ohira will not see the flowering in the new decade of the partnership to which he made such a substantial contribution.

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

page 3

DEATHS OF FORMER MEMBERS AND SENATOR

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

Mr Speaker, I inform the House of the deaths since the House last met of Mr Ron Davies, Mr Arthur Greenup, Mr Ted Peters and Mr Len Reynolds, former Australian Labor Party members of this House, and a former Labor senator, Senator Bill Morrow. I move:

That this House expresses its deepest regret at the deaths of Ronald Davies, a member of this House for the electoral division of Braddon from 1 958 to 1 975;. Arthur Edward Greenup, a member of this House for the electoral division of Dalley from 1953 to 19S5; Edward William Peters, a member of this

House for the electoral division of Burke from 1949 to 1955 and the electoral division of Scullin from 1955 to 1969; Leonard James Reynolds, a member of this House for the electoral division of Barton from 1958 to 1966 and from 1969 to 1975; and William Morrow, a senator for the State of Tasmania from 1947 to 1953; places on record its appreciation of their long and meritorious public service; and tenders its sympathy to their families in their bereavement.

I extend my sincere sympathy to the families of these former colleagues of mine and other members of this House. Many people pass through this Parliament and we are now remembering a number of them who served in the Parliament many years ago. Very few current members of the Parliament would have been here through the span of service of all four members. The honourable member for Hindmarsh (Mr Clyde Cameron) might have been and I think I was here during the time of all but one of the honourable niembers who have now died. It is easy to forget the service of people who have been members of the House of Representatives or the Senate in earlier years. At this point it is fitting that we should remember members who have served their parties and their country with distinction according to their own lights and principles. I commend to the House the motion that I have just moved in respect of the former members of this Parliament.

Mr HAYDEN:
Leader of the Opposition · Oxley

– It is a particularly sad day that sees us noting the passing of no fewer than five former members of this Parliament. It happens that all five were members of the Australian Labor Party, with service to the Parliament dating back to 1947. That was the year Bill Morrow took his seat as a senator for Tasmania, a seat he was to hold for nine years. Bill had been a railwayman, and for ten years was the State Secretary and industrial advocate of the Australian Railways Union in Tasmania. He was a staunch Labor man of the old school. Indeed, he was born nearly a decade before the turn of the century. As a unionist and as a parliamentarian, Bill was dedicated to the service of his fellow workers.

Ted Peters entered this House in 1949 - a year not otherwise auspicious for the Labor Party. He represented the Victorian electorate of Burke in three parliaments and then the electorate of Scullin in five more parliaments until his retirement in 1969. Ted had an unusual grounding in the ways of parliaments in that he served as Secretary to the Victorian Parliament’s Works Committee for more than 10 years before his debut in this place. He gave sterling service to this Parliament and to the nation.

Arthur Greenup became a member of this House in 1953 at a by-election in the electorate of Dalley following the death of former Speaker Sol

Rosevear. Previously he had been a member of the New South Wales Legislative Assembly and had had a long record of service in local government. He was a tireless worker for the Labor cause and a member of the Party from the age of fourteen, when he began work.

Len Reynolds and Ron Davies both served more recently and will be remembered by many current members of this House. Both entered the Parliament in 1958 and both served until 1975 - in Len’s case, with one break dictated by the electors of Barton. Len was a quiet but dedicated member of Parliament, and was well liked and respected on all sides. He took a special interest in education matters, reflecting his background as a lecturer in education at Sydney Teachers College. Len had a toughness that belied his gentle character. He was a diligent and effective parliamentarian. Ron Davies was also a teacher before he entered this Parliament, representing the Tasmanian electorate of Braddon. That electorate is one of enormous variety, as its present incumbent no doubt will attest. Ron Davies’s success in seven general elections demonstrates how hard he worked on behalf of his constituents. He represented this Parliament overseas on many occasions and served it well. I knew both men well; they were good personal friends, as they were of many members on both sides of the Parliament. It was a moment of great sadness when I learned of their passing. I offer to the families of all five former members the deep sympathy of the Opposition, and of their former colleagues of the Labor Party and of the Parliament.

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

– I should like the National Country Party to be associated with the motion of condolence moved by the Prime Minister (Mr Malcolm Fraser) and with the sympathy expressed by him and by the Leader of the Opposition (Mr Hayden) concerning the deaths of five former colleagues. As the Prime Minister said, often we tend to forget the tremendous service that has been given by former members. Many members of this chamber would not have known any of these former members. I had the good fortune to be associated with three of them - Ted Peters, Len Reynolds and Ron Davies - and I remember those three well as being vigorous parliamentary debaters who were always prepared to make a contribution to the operations of this Parliament. They were dedicated to their party and were never backward in coming forward with contributions. It is always a sad occasion when former colleagues die, but especially sad when one has known them personally. Therefore, I would like to convey my sympathy and that of my party to the members of their families.

Mr BRYANT:
Wills

– I am gratified that we have this opportunity to pay our tribute to former members of this Parliament. I knew three of them very well, as did the Prime Minister (Mr Malcolm Fraser), and had more than an acquaintance with two of them, although I did not know them so well. In particular I pay a tribute to Ted Peters, a member of this Parliament from 1949 to 1969. 1 draw the attention of the House to the great length of experience he had in the very heart of Australian politics. He became a member of the Victorian Executive of the Labor Party in 1927 when he was 30 years of age. He stayed active in politics until 1969 - a span of four decades or more - during some of the most tumultuous and troublous times, and in a way some of the most creative times, for the Australian Labor Party and Australian politics.

Those of us with some knowledge of the political history of the period will recall, for instance, the 1930s and the problems of the Premiers’ Plan and the great conflicts that occurred throughout Australia in all political parties and which caused a split in the Labor Party. As has been pointed out, during that period Ted Peters was a public servant as well. He was Secretary to the Public Works Committee of the Victorian Parliament for 10 years. He was also a member of the first board of the Victorian Teachers Tribunal which was set up by the Labor Government in Victoria in 1947. He was a government representative when it began to establish the actual basis for the employment of teachers within the Victorian education system.

Ted Peters was a part of the old guard of the Victorian Labor Party before 1955. Those of us who took a part in the tumults of that time could only gather more and more respect for Ted Peters as time went on. I recall that at the Victorian special conference in 1955 he was the only one of the old Executive who chose to stay with the Victorian branch of the Labor Party and to stay with the Federal Party. I recall the rancour of that conference. Ted Peters always showed exceptional personal and moral courage and political strength in standing his ground. He was a person who over the years became more radical than he had been in his youth. He was one of the first people in this place to point out the dangers of overseas investment; he was one of the first people to print a booklet about it. I have just been looking at one of his later speeches, of 1968, in which he referred to the matter. I pay tribute to him for the work that he did.

Len Reynolds was another person for whose parliamentary work, perhaps, there was not enough recognition. I was secretary to the parliamentary party’s education committee at its inception in 1957 or 1958. When Len came here he became an active member of it and for a long period was its deputy chairman and its acting chairman. He was one of the more creative members of that committee during the period in which the Labor Party created the policies which it brought into action in 1972. I think it ought to be placed on record that the community as a whole and this Parliament in particular owe a great debt to him for that.

Ron Davies was an assiduous, hard-working member of this Parliament and a particularly effective electoral member. He won the seat of Braddon in 1958 when nobody gave him a chance to do so. He held it against the odds even in 1966. He was taken, of course, by the flood in 1975. Len Reynolds and Ron Davies were younger than a good number of present members of the House. In their communities, in the Services and in Parliament they both served the country well. I deeply regret their passing.

I knew Bill Morrow. He stood his ground against everybody and everything that came or went in the Party or out of it. Arthur Greenup I knew only as an acquaintance in Parliament. I thank you, Mr Speaker, and the Government for the opportunity to speak about our former members on an occasion such as this.

Mr GROOM:
Minister for Housing and Construction · Braddon · LP

Mr Speaker, I support the condolence motion moved by the Prime Minister (Mr Malcolm Fraser) and pay tribute to Ron Davies for the dedicated service he gave to my electorate of Braddon in that long period between 1958 and 1975. He gave 17 years of service to this Parliament and to the electorate. Ron was my opponent in two elections - in 1974 and 1975. I came to know his qualities well. I admired him. In fact, we became very good friends. He was respected throughout the electorate as a hardworking and decent person whose main concern was not his own self-interest but the interest of those people he represented. I know that he will be sadly missed by his former colleagues in this House and by his many friends throughout Tasmania. I extend my sympathy to his son Glen, who is now the Speaker of the House of Assembly in Tasmania, to his daughter Anne and to other members of his family.

Mr UREN:
Reid

– I join other members in speaking to the motion of condolence on the deaths of members of my party. I had a soft spot for all of them, but I want to say a few words about Bill Morrow. He lived a long life. He was nearly 90 years of age when he died and was very active up to a year or two before his death. He served in this Parliament for only six years- from 1947 to 1953. He was a controversial character. In the early 1950s he felt the strength of conservatism not only within government ranks but also within the ranks of his party. Bill Morrow was too advanced in his thinking for those days and suffered a great deal for the views he expressed. He was one who really thought that it was in the interests of the Australian people to build friendship with the people and Government of the People’s Republic of China. He was one of their early friends and he made lifelong friendships there. I have no doubt that the present people and Government of China know a lot more about Bill Morrow than the people of Australia.

He was one of the people who involved themselves in the peace movement and, of course, incurred the odium of the establishment of the day for that. As I said earlier, Bill Morrow was a controversial person but he was a good Australian. I knew him well for over a quarter of a century and I respected him greatly. I know that the years he spent in the Australian Parliament were in Australia’s interest. He continued to serve this country even after he was defeated as a senator.

Mr BRADFIELD:
Barton

– I also take this opportunity to support this condolence motion. I rise as a relatively new member of the House who did not have personal contact with many of the former members who unfortunately passed away during the winter recess. I wish to speak particularly of the loss of the former honourable member for Barton, Mr Len Reynolds. Even though Len and I came from different political parties, there was always a firm bond of friendship between us, a bond which I highly respected and which I am sure he also respected. As the Leader of the Opposition (Mr Hayden) has stated, in 1958 Len Reynolds followed the late Dr Evatt in the seat of Barton. I think that the most outstanding thing about Len was his humbleness. He was humble in his style of living and promoted humbleness amongst the people to whom he spoke. Out of that humbleness came a great dedication to the ordinary people of the electorate of Barton. He was also a man who based his actions on firm Christian principles.

In 1975, through ill health; he decided to retire from parliament and lead a humble life with his wife, Sylvia. Sylvia unexpectedly passed away before Len and that made the last two years of Len’s life very sad for him. I know that he missed his wife deeply. As has been said, Len’s contribution to the Parliament was particularly great in the education field. He was a former teacher and I know that his contribution to his party in that field was greatly appreciated. His contribution was greater in the manner in which he served the people of Barton. I know that the people of that electorate will miss Len very much. He is survived by three sons. My deep sympathy goes out to those three sons whom I know personally. They are fine examples of Len. They have certainly benefited from the fine upbringing which they received from Len and his wife. On behalf of the people of Barton I feel that I should express this sympathy. I support the motion.

Mr Les Johnson:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Each of the deceased has made a significant contribution to parliamentary and public affairs. The late Ron Davies of course was very well known for his championing of the timber industry of Tasmania. The late Arthur Greenup was a colourful character and a cheerful man whom I last talked to at the June conference of the Australian Labor Party which was held in Sydney. One matter that distinguished Arthur Greenup was that he was redistributed out of a State seat and came to the Federal Parliament as the honourable member for Dalley, and he then suffered the same fate in that a redistribution eliminated his electorate. Then of course we recall very fondly Ted Peters who will be remembered as a pioneer of the widespread concern that is evident today about excessive overseas investment in Australia. He made many speeches about that very important matter. The late Senator Morrow was in the vanguard of many great freedom fighting efforts, especially in respect of banning atomic bombs. He was a leader of the peace movement and was always seen at the head of the procession in the homburg hat and striped suit which he wore in his days of great fame as a distinguished senator of this country.

Len Reynolds is the man about whom I mainly rose to speak today. He represented a neighbouring electorate of mine. The electorate of Barton was well served by Len Reynolds for 14 years from 1958. He won six elections. I know that our departed friend and colleague, the late Leslie Haylen, affectionately referred to Len Reynolds as ‘Lennie the bell ringer’. That was indicative of the fact that he was a great educationalist. He went to Sydney University and gained a Diploma of Education and a Bachelor of Arts degree. He went on to work at the Sydney Teachers College as a lecturer. He came here and participated in the great education debates of the late 1950s and 1960s with Dr Evatt and Sir Robert Menzies. This was the time when education was being put on the Federal parliamentary map. It was the time when we moved that the Estimates be reduced by £. 1 because of the failure of the Government to do anything significant about education. Len Reynolds was the founder of the Parliamentary Labor Party’s education committee. He distinguished himself in that respect.

I suppose, as the honourable member for Barton (Mr Bradfield) has mentioned today, the thing that was most outstanding about Len Reynolds was his humility. Great men have passed through the corridors of power here; but none has earned the warm respect, love and affection of the Parliament and constituents more than Len Reynolds, because he exhibited that quality in such an impressive and outstanding way. He was a very humble man. He devoted much of his effort to making speeches on behalf of and in respect of the welfare of ex-servicemen and pensioners. He actually stood out on the streets Saturday after Saturday with a white apron on, selling the lucky number tickets to raise money for the senior citizen centres in Barton. He did that as the Federal member for Barton. I think all honourable members will agree that that was indeed a very great demonstration in humility. I take this opportunity of saying that at the funeral in St Finbar’s Church at San Souci an enormous crowd paid tribute to him. I believe that this must be of very great solace to his surviving sons, Gary, Brian and Neal, to whom we all convey our sympathy and condolences today.

Mr Leo McLeay:
GRAYNDLER, NEW SOUTH WALES · ALP

– I wish to say a few words about Arthur Greenup, a man whom I never knew as a parliamentarian but whom I knew as a trade union official. I think it is very important that when one talks about Arthur Greenup one remembers that he always began any biography of himself by saying that he was a shop assistant. At the age of 14 Arthur began his working life as a shop assistant and at the age of 78 - at the beginning of this month - he finished his life as an official of the shop assistants union. Arthur had seen many facets of the Labor movement and many facets of public life. He had been an alderman and mayor of Newtown, the member for Newtown-Annandale between 1950 and 1952 in the State Parliament of New South Wales and the Federal member for Dalley between 1953 and 1955.

As the honourable member for Hughes (Mr Les Johnson) has just pointed out to the Parliament, Arthur did not retire from politics when he retired from the Parliament in 1955. Indeed, as late as 1980 he was representing his union, the Shop, Distributive and Allied Employees Association, at the Australian Labor Party conference in June this year. I have seen him over many years, as has the honourable member for Sydney (Mr Les McMahon), at the Labor Party conferences and Labor Council meetings in New South Wales. Arthur never missed a Thursday night meeting of the New South Wales Labor Council and he represented his union at those meetings for about SO years. That is a record that not many people would have in both the industrial and political movements.

I suppose if there was a way to sum up Arthur Greenup it would be to say that he was a gentleman. In the years that I have been in the Labor movement I have not met a man who was more of a gentleman. He took his enemies and his friends at face value. He served his country, his union and his party particularly well. I am very pleased today to say a few words about Arthur Greenup. He was a man who most of us might aspire to be like. He never said ill about anyone. He took adversity in his stride and he never gave up. To die at 78 years of age while still being very active in politics and in a union, and to give one’s life to the things in which one has believed, is a very fine thing. I am very pleased to say that I knew Arthur Greenup in the years after he had served in Parliament and held public office. Even then, people held him in great respect. It could always be said that he stood up for the things in which he believed. As I said earlier, he could only be classified as a gentleman.

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

page 7

PETITIONS

The Clerk:

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

Social Security Payments

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:

  1. Adjust all pensions and benefits quarterly to the Consumer Price Index, including the ‘fixed’ 70’s rate.
  2. Raise all pensions and benefits to at least 30 per cent of the Average Weekly Earnings.
  3. Taxation relief for pensioners and others on low incomes by:

    1. The present static threshold of $75 per week for taxation purposes be increased to $ 1 00 per week.
    2. A substantial reduction in indirect taxation on consumer goods.

And your petitioners in duty bound will ever pray. by Mr Adermann, Mr Aldred, Mr Anthony, Mr Baillieu, Mr Bourchier, Mr John Brown, Mr N. A. Brown, Mr Bryant, Mr Burns, Mr Donald Cameron, Dr Cass, Mr Dobie, Mr Falconer, Mr Fife, Mr Fisher, Mr Malcolm Fraser, Mr Hodgman, Mr Holding, Mr Howard, Mr Howe, Mr Keith Johnson, Mr Les Johnson, Mr Roger Johnston, Mr Barry Jones, Mr Kerin, Mr Leo McLeay, Mr Les McMahon, Mr Macphee, Mr Millar, Mr Morris, Mr Nixon, Mr Ian Robinson, Mr Ruddock, Mr Simon, Mr Street, Mr Thomson and Mr Willis.

Petitions received.

National Women’s Advisory Council

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

That the National Women’s Advisory Council has not been democratically elected by the women of Australia; That the National Women’s Advisory Council is not representative of the women of Australia; That the National Women’s Advisory Council is a discriminatory and sexist imposition on Australian women as Australian men do not have a National Men’s Advisory Council imposed on tham.

Your petitioners therefore pray:

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

And your petitioners, as in duty bound, will ever pray. by Mr Aldred, Mr Baume, Mr Bourchier, Mr Bryant, Mr Burns, Mr Kevin Cairns, Mr Ewen Cameron, Mr Howe, Dr Jenkins, Mr Roger Johnston, Mr Katter, Mr Lusher, Sir William McMahon, Mr Mackenzie, Mr Macphee, Mr Martyr, Mr Moore, Mr Nixon, Mr Peacock, Mr Scholes, Mr Staley and Mr Yates.

Petitions received.

Taxation

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.

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

Your petitioners therefore humbly pray that Parliament will

Reform income tax laws to allow the joint income of husband and wife to be equally divided between them for taxation purposes.

And your petitioners as in duty bound will ever pray. by Mr Anthony, Mr Bourchier, Mr Lionel Bowen, Mr John Brown, Mr N. A. Brown, Dr Edwards, Mr Fife, Mr Giles, Mr Howard, Mr Hunt, Mr Peter Johnson, Mr Roger Johnston, Mr Lloyd, Mr McLean, Mr McVeigh, Mr O’Keefe, Mr Porter, Mr Ruddock, Mr Street, Mr Wallis and Mr Wilson.

Petitions received.

Taxation: Child Care Expenses

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

Taxpayers who incur child-care expenses in order to earn income should be able to have those expenses exempt from income taxation in the same way as other taxpayers can deduct business expenses from their assessable income.

And your petitioners as in duty bound will ever pray. by Mr Baume, Mr Calder, Dr Cass, Mr Ellicott, Mr Fisher, Mr Fry, Mr Garland, Mr Gillard, Mr Haslem, Mr Holding, Mr McLean, Mr Les McMahon, Sir William McMahon, Mr Morris, Mr Thomson and Mr West.

Petitions received.

Taxation: Superannuation Contributions

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

Employees and Self-Employed Contributions to approved Superannuation Fund.

Your petitioners humbly pray that:

  1. Contributions paid each year to Superannuation Funds should be removed from the Rebate System and made a separate deduction from Assessable Income.
  2. The amount allowed as a deduction to be at least that required to provide a retirement benefit of SI 55,400.

And your petitioners as in duty bound will ever pray. by Mr Adermann, Mr Ellicott, Mr Fife, Mr Hodgman, Mr Howard, Mr MacKellar, Sir William McMahon, Mr Martyr, Mr Moore, Mr Newman, Mr O’Keefe, Mr Eric Robinson and Mr Simon.

Petitions received.

Chiropractic Program

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:

Whereas a fully-accredited degree course in chiropractic has been established at Preston Institute of Technology, and

Whereas three hundred students who pay their own fees are in all five years of the program, and

Whereas students and the profession can no longer carry the financial burden amounting to over $1,000,000 per year, and

Whereas a debt of $240,000 is being incurred in 1 980, and Whereas if funding is not approved by August the course will close and students’ careers placed in grave jeopardy,

Your Petitioners most humbly pray that the House of Representatives in Parliament assembled should ensure that funding of the Preston Institute of Technology Chiropractic Program by the Tertiary Education Commission be no longer delayed, and your Petitioners as in duty bound will ever pray. by Mr Anthony, Dr Blewett, Mr Burns, Mr Fisher, Mr Giles, Mr Hodges, Mr Jacobi, Mr Les Johnson, Mr McVeigh, Mr Ruddock, Mr Scholes and Mr Shipton.

Petitions received.

Anti-discrimination Legislation

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

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

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

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

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

And your petitioners as in duty bound will ever pray. by Mr Carlton, Mr Ellicott, Mr Holding and Sir William McMahon.

Petitions received.

Anti-discrimination Legislation

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

That currently discrimination in the provision of work, in appointment to jobs and in promotion exists in Australia on particular grounds including, inter alia, grounds of race, ethnic origin, marital status, pregnancy, sex and/or sexual preference; and

That currently discrimination in the provision of unemployment benefits is exercised against particular groups of individual - in particular, against married women.

Your petitioners therefore humbly pray;

That appropriate laws be formulated and passed to outlaw discrimination in Commonwealth employment, in employment of individuals under federal awards, in employment of persons by statutory bodies and quasi-governmental organisations, and in employment of all persons in areas over which Commonwealth and Australian Capital Territory equal opportunity legislation should have jurisdiction; and _ That appropriate laws be formulated and passed to outlaw discrimination in the provision of unemployment benefits to all persons without regard to sex and/or marital status.

And your petitioners as in duty bound will every pray. by Mr Aldred, Mr Dobie, Mr Fry and Mr Graham.

Petitions received.

Roads: Funding

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

That local authorities throughout Australia are appalled at the recently announced Commonwealth Government allocation of a mere $628m for roads in 1 980-8 1 . There is extreme disappointment at both the level of total Commonwealth funding for all road categories and at the specific allocation for the local roads category.

Your petitioners therefore humbly pray:

  1. That road funding arrangements for 1980-81 to 1982-83 reach at least a total of $2,200m over the triennium.
  2. That the Commonwealth maintain an active financial interest in the funding of all categories of roads.
  3. That the Commonwealth ensure that a proportion of the funds flows through the States earmarked for Local Government purposes.

And your petitioners as in duty bound will ever pray. by Mr Braithwaite, Mr Donald Cameron, Mr Gillard, Mr Hodges, Mr Katter and Mr Thomson.

Petitions received.

Metric System

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

And your petitioners as in duty bound will ever pray. by Mr Aldred, Mr Kevin Cairns, Mr Calder, Mr Millar and Mr Thomson. ^Petitions received.

Plant Breeders’ Rights

To the Honourable Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned showeth that your petitioners are gravely concerned at the prospect of the proposed Plant Breeder’s Rights Legislation. The reasons are as follows:

  1. We believe it will restrict free growing and exchange or sale of non-chemically treated seeds.
  2. We believe it will cause a decline in the genetic diversity of plants as evidenced in Europe following implementation of similar legislation there.
  3. We believe that prolonged public debate is necessary as is a referendum before a final decision is made.
  4. We believe that implementation of this Legislation could lead to the control of growing and distribution of food and, through this, the control of the peoples by a few Corporations.

Your petitioners, therefore, humbly request that Parliament take positive action as soon as possible to arrest the implementation of such legislation.

And your petitioners as in duty bound will every pray, etc. by Mr Anthony. Petition received.

Plant Breeders’ Rights

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

  1. Note that legislation establishing plant breeders’ rights in other countries has had serious adverse effects, namely:

    1. Virtual monopoly control of seed production has passed into the hands of a few large international corporations seeking to profit from the exclusive rights over plant genetic materials created by such legislation.
    2. The varieties of seeds available have been restricted mainly to hybrids which will not reproduce truly and will not grow without the aid of artificial fertilizers and pesticides, thus maximising corporate profits without regard for the interests of growers and consumers.
    3. The genetic diversity of crops has been eroded, rendering them vulnerable to disease and other environmental threats.
  2. Recognize that maintenance of the genetic diversity of plant varieties is crucial to the continued well-being of the Australian nation, and take all necessary steps to preserve and promote such genetic diversity as a public resource and to prevent exclusive control over plant genetic materials from falling into private hands.
  3. Defend the vital interests of Australian farmers and gardeners, independent Australian seed companies and their employees, and consumers of Australian farm and garden produce, by rejecting any proposal to legislate for the establishment of plant breeders’ rights in Australia. .

And your petitioners, as in duty bound, will ever pray. by Mr John Brown, Dr Edwards and Mr Roger Johnston.

Petitions received.

Aboriginal Rights

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

That the humble petitioners respectfully believe that the Federal Government has the power conferred on it by the 1967 Referendum to intervene on behalf of Aboriginal people in any conflict with any State or Territory Government.

Your petitioners therefore pray:

That the Federal Government will assume its full responsibility for Aboriginal Affairs, and use the powers conferred on it by the people of Australia in the 1967 Referendum to intervene on behalf of Aboriginals in any conflict with any State or Territory Government;

That the Government respond to the report of the Senate Standing Committee on Constitutional legal affairs on Aboriginal and Torres Strait Islanders on Queensland reserves which sets out precisely the Commonwealth Constitutional and legal position under Section SI;

That in addition the Government fulfil its stated policy of self-determination and self-management for Aboriginal people, by funding all housing, health, education, legal, employment strategy and welfare matters concerning Aboriginal people directly through Aboriginal Community based Community controlled organisations.

And your petitioners as in duty bound will ever pray. by Mr Adermann, Mr Falconer, Mr Ruddock and Mr Scholes.

Petitions received.

Textile, Clothing and Footwear Industries

To the Honourable the Speaker and Members of the House of Representatives assembled. The Petition of the undersigned citizens of Australia, being employees of The Australian Textile, Clothing and Footwear Industries, respectfully showeth:

  1. That Australian Textile, Clothing and Footwear Industries are vital to the livelihood and well being of many thousands of Australian workers and their families;
  2. That if imports of textiles, clothing and footwear products are allowed to flood the Australian market it will deprive 120,000 workers in these industries of their work opportunities;
  3. That the rights of textile, clothing and footwear workers in other developed countries have been recognised by their respective Governments and are protected by comprehensive restraints on imports from low-wage countries.

Your petitioners therefore pray that the Parliament recognise the rights of Australian workers in these industries and that tariff experiments of the kind proposed by the IAC in 1977 and 1979 be rejected.

And your petitioners as in duty bound will ever pray. by Mr Lionel Bowen, Mr Kevin Cairns, Dr Klugman and Mr Martin.

Petitions received.

Taxation

To the Right Honourable the Speaker and Members of the House of Representatives in the 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 65 years old will rise from approximately 8.5 per cent of the population as it was in 1970 to over 10 per cent 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:

  1. Remove contributions paid by the taxpayer to superannuation funds from the rebate system and make them a separate deduction from assessable income.
  2. Allow as such deduction amounts necessary to provide the individual with a reasonable retirement benefit as defined from time to time by the Commissioner of Taxation.
  3. Remove Life Insurance premiums paid from the rebate system and make them a separate deduction from assessable income also.
  4. Allow such a deduction to take the form of a flat rebate of 20 per cent of Life Insurance premiums up to a limit of $2,500.

And your petitioners as in duty bound will ever pray. by Mr Donald Cameron, Mr Dobie, Mr Hayden and Mr Hyde.

Petitions received.

Taxation: Foster Parents Plan

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 many Australians are concerned with the inadequacy of Overseas Aid tax deductibility for citizens in this country.

Foster Parents Plan of Australia is contributing $3,000,000 in Asia, Africa, Central and South America to give relief in terms of Medical, Health, Clean Water, Education, Community Development, and new hope to help people to help themselves.

More than 11,000 families are being supported by Australians, and we therefore, respectfully request that the Commonwealth Government provide some incentive to encourage the people in our country, in making contributions to Foster Parents Plan for tax concessions for overseas funds, as are already provided for charities working within this country of Australia.

And your petitioners as in duty bound will ever pray, by Mr Hunt, Mr Porter and Mr Viner. Petitions received.

Religious Organisations

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

That the anti-social activities of certain organisations, in the main purporting to be religious and under foreign control, are causing increasing mental, physical and/or social distress to citizens throughout the Commonwealth of Australia.

Such adverse affects include drastic personality changes, alienation and severance from persons’ families and normal society, dispossession under undue influence of persons’ worldly assets, abandonment of socially useful occupations or career education, mental disorientation, and a common requirement to surrender their labour with little or no pay, working unduly long hours fund-raising for the exclusive benefit of the organisations’ leaderships.

Furthermore, a disturbing number of our country’s youth have died prematurely in unsatisfactorily explained circumstances or have become so mentally or physically debilitated as to require hospitalisation or treatment following their involvement with the subject organisations commonly, but erroneously, described as ‘religious cults’.

All evidence points to the fact that the subject organisations are commercial enterprises which, for the purpose of evading tax and other business obligations, have falsely assumed the status of ‘religions’ in order to take advantage of the blanket protection provided by Section 116 of the Australian Constitution.

It is your petitioners’ sincere belief that proliferation of such organisations unchecked with their personality- disorientating and family-divisive practices and effects, represents a serious threat to the health, welfare, and peace of the whole community.

Notwithstanding the decision of the combined Australian Attorneys-General at their October 1979 meeting, that no special action should be taken by Government /s to curb undesirable activities of religious cults and that these should be dealt with under existing laws, such laws as would provide protection against the aforementioned malpractices do not appear to exist.

For this reason the Government should proceed with all haste to investigate the widely-alleged malpractices of the subject organisations which include Hare Krishnas, the Unification Church (Moonies) and such other groups as are subject of complaints, preparatory to introducing appropriate legislations to curtail the said malpractices to ensure citizens’ continuing enjoyment of peace and harmony.

And your petitioners as in duty bound will ever pray, by Mr Morris, Mr Sainsbury and Mr Willis. Petitions received.

Labelling of Cosmetics

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

That continued use of animal ingredients in cosmetic products, and the inhumane use of animals in scientific research for cosmetic products is abhorrent and barbaric.

That the Industries Assistance Commission, because of the Commission’s terms of reference, seems unable to impose any regulation or recommend any regulation which might restrict the activities of Cosmetic Companies which produce cosmetics in which animal ingredients have been used, or for which animals were subjected to research.

Your petitioners therefore humbly pray that the House of Representatives will: Legislate to require comprehensive labelling of perfumes, cosmetics and toilet preparations to indicate:

  1. whether a product contains any animal derivative. If so, the ingredient and source should be indicated.
  2. Whether the research and development of that product or any of its ingredients involved experimentation on animals.

And your petitioners as in duty bound will ever pray, by Mr Humphreys and Mr Roger Johnston. Petitions received.

Labelling of Cosmetics

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

That continued use of animal ingredients in cosmetic products, and the inhumane use of animals in scientific research for cosmetic products is abhorrent and barbaric.

That the Industries Assistance Commission, because of the Commission’s terms of reference, seems unable to impose any regulation or recommend any regulation which might restrict the activities of Cosmetic Companies which produce cosmetics in which animal ingredients have been used, or for which animals were subjected to research.

Your petitioners therefore humbly pray that the House of Representatives will: Legislate to require comprehensive labelling of perfumes, cosmetics and toilet preparations to indicate:

  1. whether a product contains any animal derivative. If so, the ingredient and source should be indicated.
  2. Whether the research and development of that product or any of its ingredients involved experimentation on animals.

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

Pornographic Publications

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

The humble petition of the undersigned citizens of Australia resepctfully showeth: That we the undersigned, having great concern at the way in which children are now being used in the production of pornography CALL UPON THE GOVERNMENT to introduce immediate legislation:

  1. . To prevent the sexual exploitation of children by way of photography for commercial purposes;
  2. To penalise parents/guardians who knowingly allow their children to be used in the production of such pornographic or obscene material depicting children;
  3. To make specifically illegal the importation, publication, distribution and sale of such pornographic childabuse material in any form whatsoever such as magazines, novels, papers or films;
  4. To take immediate police action to confiscate and destroy all child pornography in Australia and urge appropriate legal action against all those involved or profiting from this sordid exploitation of children.

Your petitioners therefore humbly pray that your honourable House will protect all children and immediately prohibit pornographic child-abuse materials, publications or films.

And your petitioners as in duty bound will ever pray, by Mr Ewen Cameron and Mr Fife. Petitions received.

Copyright Tribunal

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

We, the undersigned are disturbed by the Copyright Tribunal report tabled in Parliament last week. We do not want the Australian consumer to have to pay more for records. Nor do we want anyone connected with the Australian record industry to suffer by loss of jobs caused by drop in production, created by decreased sales, due to increased sale costs. If production is down then material purchases will also drop and many supporting industries to the record industry will also suffer. We rely on you to ensure that the Government rejects this report.

And your petitioners as in duty bound will ever pray, by Mr Les Johnson and Mr Roger Johnston. Petitions received.

National Women’s Advisory Council

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 Les McMahon and Mr West. Petitions received.

Rosemount Repatriation Hospital

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

The humble petition of undersigned citizens of Australia respectfully showeth:

Rosemount Repatriation Hospital (Queensland) has been of inestimable value to eligible repatriation beneficiaries for many years, and the closure and dispersal of the facilities available at the hospital would be a retrograde step.

The proposed decision to close Rosemount Repatriation Hospital follows a sustained campaign by the Minister and the Department of Veterans’ Affairs to run-down operations at the hospital through active discouragement by Departmental administrative officers of any further referrals by medical officers of patients for medically prescribed occupational therapy.

Your petitioners therefore humbly pray that the Government will reverse its announced decision to close the Rosemount Repatriation Hospital.

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

Aboriginal Voting Rights

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

The petition of the undersigned citizens of Australia respectfully showeth that Amendments to the Electoral Act passed in 1979 by the West Australian Government make it more difficult for many people to enrol to vote - particularly Aborigines and itinerants, but also migrants and youth.

Your petitioners note that because Western Australia has a dual roll system, some people may find themselves enrolled at a Federal level but not at a State level.

Your petitioners further note that the Federal Government committed itself to equal voting rights for Aborigines at State and Federal level following an urgency motion in Federal Parliament in 1979.

Your petitioners therefore humbly pray:

That the Federal Government will use the powers granted it by the 1967 referendum to ensure that Aboriginal voters are not disadvantaged in Western Australia.

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

Royal Commission on Human Relationships

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

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

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

  1. Have been widely condemned for its support of unAustralian, anti-family, anti-child behaviour and morals such as incest, promiscuity, abortion, pornography, homosexuality, prostitution and brothels, etc.
  2. Have been strongly criticised by the medical profession for the absence of any medical practitioner on the Commission or on its staff of 31 persons, and for the Commissioners action in rejecting or ignoring relevant medical evidence.
  3. Have been discredited as irresponsible in adopting a new definition of the family, i.e., ‘a varying range of people living together in relationships of commitment’, which has effectively confused the real meaning and intentions of the Report where it refers to the ‘family’.

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

Your petitioners therefore humbly pray:

That the Australian Parliament will:

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

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

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

Olympic Games

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

We, the undersigned, believe that Australian sportsmen and women should take part in the Olympic Games in Moscow this year.

The Olympic Games aims to promote friendly competition and understanding between the athletes and people of different nations. Participation in them does not signify support for particular policies or actions of the host country or any other country taking part.

In particular, we do not believe that Olympic athletes who have trained for years for their event should be pressured by governments to bear the sole burden of giving effect to their policies at a given time.

In fact, the Olympic Charter states that National Olympic Committees must be autonomous and must resist all pressures of any kind whatsoever whether of a political, religious or economic nature. (Section 111, Rule 24, Paragraph C.)

We call on all Maritime Workers to support Australian participation in the 1980 Olympic Games and to express that support financially.

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

Metric System

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

The Petition of the undersigned citizens of Australia respectfully showeth -

That the plan to obliterate the traditional weights and measures of this country does not have the support of the people;

That the change is causing and will continue to cause, widespread, serious and costly problems;

That the compulsory tactics being used to force the change are a violation of all democratic principles.

Your petitioners therefore pray:

That the Metric Conversion Act be repealed to ensure that the people are free to utilize whichever system they prefer and so enable the return to imperial weights and measures wherever the people so desire;

That weather reporting be as it was prior to the passing of the Metric Conversion Act;

That the Australian Government take urgent steps to cause the traditional mile units to be restored to our highways;

That the Australian Government request the State Governments to procure that the imperial and metric systems be taught together in schools.

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

Unemployment Benefit

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 procedures used to determine eligibility for unemployment benefit (Work Test) are considered inappropriate in times of high unemployment.

Your Petitioners therefore humbly pray that Parliament take note of the Norgard Review of the Commonwealth Employment Service and the Myer Inquiry into the Administration of Unemployment Benefit and make the necessary legislative changes to repeal the amended ‘Work Test’ procedures.

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

Taxation

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 animal welfare organisations play a vital role in the community in caring for animals and lessening the burden on governments and government authorities charged with the task of dealing with neglected or unwanted animals.

Your petitioners therefore humbly pray that donations made to animal welfare charities be allowed as tax deductions to remove the unjust tax anomaly which discriminates against charitable animal welfare organisations.

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

Export of Live Animals

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

That the Australian Government promotes carcass trade and that all future shipments of live animals overseas for slaughter be banned, and thereby stop a repetition of the shocking loss of life through burns or drowning as occurred with the incineration or drowning of 40,000 sheep on a ship to abattoirs in the Middle East, or the more recent cruelty to horses being exported for slaughter in Japan.

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

Guaranteed Minimum Income Scheme

To the Honourable the Speaker and Members of Parliament assembled in the House of Representatives Canberra, the humble petition of the undersigned citizens of Australia respectfully showeth that through thorough investigation there is an increasing number of people in Australia living in extreme poverty.

We believe that there is a need for a Guaranteed Minimum Income Scheme throughout Australia.

Your petitioners, therefore, humbly pray that the Parliament will implement a Guaranteed Minimum Income Scheme as soon as possible and your petitioners as in duty bound will ever pray. by Mr Roger Johnston.

Petition received.

National Women’s Advisory Council

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

That the National Women’s Advisory Council is not representative of the women of Austarlia.

Your petitioners therefore humbly pray that the Federal House of Representatives will:

Effect changes to the present system of appointments to the National Women’s Advisory Council to allow more democratic selection of members and a wider representation of Australian women and their opinions on that council. by Mr Katter.

Petition received.

Taxation: Overseas Aid

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

The humble petition of the undersigned citizens of Australia showeth that despite repeated calls for taxation relief, charities which give expressly foreign aid are still not tax deductible, while donations to the National Party in Queensland through advertising in its magazine ‘Outlook’ are an allowable tax deduction.

Your petitioners therefore humbly pray that this house will see fit to amend the income tax assessment act by extending the number of charities, donations to which are allowable tax deductions, to include World Vision, UNICEF, Save The Children, Austcare, Foster Parents Plan of Australia, and other foreign aid charities in order to achieve taxation justice for these charities and assist them in their fund raising campaigns.

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

Sydney (Kingsford-Smith) Airport

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

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

  1. We call upon the Commonwealth and State Governments to select a site for Sydney’s second Airport now and to protect it by immediate development.
  2. We do not agree to the expansion of the Sydney (Kingsford-Smith) Airport.
  3. We support the Marrickville Municipal Council’s opposition to the Airport extension proposals.
  4. We do not agree that nuisances from aircraft noises are reducing.
  5. We oppose any shorter evening ‘curfew’ hours.

Your petitioners therefore humbly pray that there be no extension of Kingsford-Smith Airport, Sydney.

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

Community Health Centres

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

The Petition of the undersigned citizens of Australia respectfully sheweth:

That the proposed cutback and/or closure of our local community health centre will lead to a decline in the health status of our community. We appreciate their varied services, which include: baby health services, counselling, chiropody, physiotherapy, community nurses, preventative services etc.

We believe that the community health program will cut rising health costs by supporting people in their own homes. Therefore, we support the basic health care and prevention carried out by our health centre.

We request that adequate funding is provided for the continuation of and expansion of these valuable services to our community.

Your Petitioners there, humbly pray that your Honourable House consider this petition.

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

Sexual Offences Against Women

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 current laws relating to sexual offences against women are discriminatory against all women, and in particular against married women; and that current laws relating to sexual offences are ineffective and inadequate to protect married and unmarried women; and that we believe that both married and unmarried women should be effectively and adequately protected by law against sexual abuse.

Your petitioners therefore humbly pray:

That laws relating to sexual offences against women must be redefined to include all forms of sexual abuse against married and unmarried women, including all forms of coercion - physical, psychological, exploitative, extortionary and authority-based, and including sexual harrassment in any form, particularly at work and in educational institutions.

That evidence laws applicable generally to assault crimes must be acknowledged as applicable to sexual offences and the rules relating to corroboration in assault crimes must be made applicable to sexual offences.

That laws must be reformed so that accused persons are not entitled to abuse the criminal justice system; and furthermore laws must be revised to give greater protection to the victim and to minimise her distress.

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

Uranium

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 sheweth:

That the products of nuclear fission create risks unlike those of any other single technology and, furthermore, it is uncertain whether or not nuclear fission technology, taking all inputs into account, is a net producer of energy.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to bring about the wishes expressed in our petition that: by reason of the hazards associated with the use of uranium in nuclear power plants, mining of uranium in Australia be restricted to that needed for physical and biomedical research and medical diagnosis.

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

Social Security Benefits

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

The petition of the undersigned respectfully showeth that lone parents receiving Social Security benefits ate being further disadvantaged by the fact that their benefits are only partially adjusted to the Consumer Price Index.

Your petitioners most humbly pray that the Members of the House of Representatives in Parliament assembled, should ensure that the necessary legislation be enacted to raise the dependents allowance for pensioners and the level of permissible income for pensioners and that both these factors be indexed in future.

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

Petition received.

Mr Jiri Lederer

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

The petition of the undersigned citizens of Australia respectfully showeth:

A Czech citizen, Mr Jiri Lederer, a well-known journalist, was sentenced to three years jail in January 1977 under Article 98 of the Czech Penal Code.

Mr Lederer was convicted in closed court of trying to subvert the socialist system by attempting to publish in Western Europe works by Czech writers which were not allowed to be published at home. By preventing the publishing of those literary works at home and by prosecuting him for sending them abroad, the Czech authorities have broken doubly the Helsinki Human Rights Declaration, which Czechoslovakia signed in 197S.

Because of this and in view of Mr Lederer’s rapidly deteriorating health your petitioners humbly request that the Government exert diplomatic pressure on the Czechoslovakian Government to secure Mr Lederer’s release from detention.

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

Petition received.

Refugees

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

The petition of the undersigned citizens of Australia respectfully showeth:

That a grave threat to the life of refugees from the various States of Indo-China arises from the policies of the Government of Vietnam.

That, as a result of these policies, many thousands of refugees are fleeing their homes and risking starvation and drowning. Because of the failure of the rich nations of the world to provide more than token assistance, the resources of the nations of first refuge, especially Malaysia and Thailand, are being stretched beyond reasonable limits.

As a wealthy nation within the region most affected, Australia is able to play a major part in the rescue as well as resettlement of these refugees.

It should be possible for Australia to: establish and maintain on the Australian mainland basic transit camps for the housing and processing of 200,000 refugees each year; mobilise the Defence Force to search for, rescue and transport to Australia those refugees who have been able to leave the Indo-China States; accept the offer of those church groups which propose to resettle some thousands of refugees in Australia.

The adoption of such a humane policy would have a marked effect on Australia’s standing within the region.

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

Petition received.

Taxation

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

That contributions to Health Insurance Funds should be tax deductible as it is inequitable for some members of the community to be able to claim taxation relief for health care costs, whereas other taxpayers are denied the right to claim relief for the expenditure of income in the provision of insurance against similar costs. It is contended that it is imperative for incentive to be given by way of taxation deductibility to encourage membership of Health Insurance Funds on a long term basis or both they and the Public Health Sector will become subject to abuses which could seriously affect their ability to provide an economic and efficient service to the community.

We, as members of the Queensland Teachers’ Union Heaitn Society, therefore seek early action by the Government to restore income tax deductions for contributions by taxpayers to health insurance funds.

And your Petitioners, as in duty bound, will ever pray, by Mr Thomson.

Petition received.

Retailing of Petroleum Products

To the Right Honourable Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned petrol retailers, as the people most concerned, strongly urge the Federal Government to enact into legislation the Fife Package of proposals in the Spring 1 980 session of Parliament.

And your petitioners as in duty bound will every pray, by Mr Ewen Cameron, Mr Lloyd and Mr Simon.

Petitions received.

Education

To the Honourable, the Speaker and Members of the House of Representatives, of the Australian Parliament assembled. The petition of certain citizens of New South Wales respectfully showeth that the Federal Government did not make increased funding available for government school programs such as:

  1. General recurrent
  2. Migrant education
  3. Disadvantaged schools
  4. Special education
  5. Capital grants
  6. Multicultural education
  7. Disadvantaged country areas
  8. Children in institutions
  9. Services and Development
  10. Education Centres
  11. Special projects but increased the money available to the non-government school sector by S.9 per cent.

Your petitioners therefore humble pray that your honourable House will restore and increase substantially, in real terms, the allocation of funds for Government school programs.

And your Petitioners as in duty bound will ever pray, by Mr Graham, Mr Howard and Mr MacKenzie.

Petitions received.

Aid to Kampuchea

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

We the undersigned being electors in the State of Victoria, and Commonwealth of Australia, and members and associates of the Baptist Union of Churches of Victoria, do hereby petition The Honourable Prime Minister, Malcolm Fraser, to send immediate and continuing food and medical supplies to the people of Kampuchea, sufficient to alleviate their present and terrible plight.

We acknowledge that some action has already been taken, but urge that The Australian Government’s Aid be increased until it is commensurate with the enormity of this people’s need.

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

Television Reception in the Ovens Valley .

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

The humble petition of the undersigned electors of the Division of Indi, in the State of Victoria, respectfully showeth:

That the Honourable the Minister for Post and Telecommunications arrange for the provision and installation of television translators in the Ovens Valley section of the electorate of Indi, in order to provide proper television reception for the townships of Porepunkah, Bright, Wandiligong and Harrietville, n the said electorate.

Your petitioners .therefore humbly pray that the Honourable the Minister for Post and Telecommunications will act to provide and instal the required television translators, and your petitioners, as in duty bound, will ever pray. by Mr Ewen Cameron.

Petition received.

Public Telephone in Smith’s Lake Area

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

The humble petition of certain residents of Smith’s Lake, New South Wales, respectfully showeth:

That the Minister for Post and Telecommunications consider and act upon our urgent appeal for the erection of a public telephone call box in the Smith’s Lake area to service the needs of the public.

Your petitioners therefore humbly pray that steps be taken to ensure the erection of a public telephone box in Smith’s Lake, New South Wales. by Mr Lucock.

Petition received.

page 16

NATIONAL COUNTRY PARTY OF AUSTRALIA

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

– I inform the House that at the meeting this morning of members of my party, my colleague Mr Nixon, who has been acting deputy leader of the party, moved that a telegram of resignation from the party’s deputy leadership received from my colleague Mr Sinclair be not accepted and that Mr Sinclair be requested to resume his position as deputy leader. This request was unanimously put to Mr Sinclair and I am pleased to tell the House that it was agreed to.

page 16

MINISTERIAL ARRANGEMENTS

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– I inform the House that His Excellency the Governor-General has accepted the resignation of the Minister for Special Trade Representations (Senator Scott). I have particular pleasure in saying that the right honourable member for New England (Mr Sinclair) has been appointed to that portfolio. The Minister for Special Trade Representations has been appointed Leader of the House. I hope the Opposition enjoys it.

page 16

AUSTRALIAN LABOR PARTY’S OIL PRICING POLICIES

Notice of Motion

Mr HODGMAN:
Denison

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

That, in the opinion of this House, the Australian Labor Party’s disastrous oil-pricing policies would inevitably lead to widespread rationing, a nationalised oil exploration industry and Australia being held hostage to foreign oil producing nations and organisations such as the PLO.

page 16

RIGHT HONOURABLE MEMBER FOR NEW ENGLAND

Notice of Motion

Mr CONNOLLY:
Bradfield

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

That this House-

notes with pleasure the return of the right honourable member for New England as Leader of the House;

deplores the vindictive and unjustified attempt to destroy the high public standing of the right honourable member for New England by means of an inquiry conducted by a lawyer active at the highest levels of the New South Wales Labor Party, Mr Michael Finnane;

condemns the misuse in this matter of the office of Attorney-General of New South Wales for party political purposes by its present Labor Party incumbent, Mr Frank Walker; and

censures the Opposition in this Parliament for its misuse of the Parliament to denigrate a member whilst an inquiry was being conducted elsewhere and for its collusion with the New South Wales Attorney-General in forcing a debate on the Finnane report when this report was not available to members of this House nor to the right honourable member for New England.

page 16

NEW SOUTH WALES LABOR GOVERNMENT

Notice of Motion

Mr RUDDOCK:
Dundas

– I give notice that ‘ on General Business Thursday No. 18 I shall move:

That this House notes the unwillingness of the New South Wales State Labor Government to accept responsibility for its own decisions, particularly in the sensitive areas of education, hospitals, roads and public transport, and rejects that Government’s hamfisted attempts to blame the Federal Government for its own shortcomings.

page 17

DISALLOWED NOTICE OF MOTION

Mr Ruddock proceeding to give a notice of motion -

Mr SPEAKER:

-The honourable gentleman will resume his seat.

page 17

DISALLOWED NOTICE OF MOTION

Mr Hodgman proceeding to give a notice of motion -

Mr SPEAKER:

-Order! The honourable gentleman will resume his seat. I am not prepared to accept a notice that is not in a proposition form.

page 17

AUSTRALIAN OLYMPIC TEAM

Notice of Motion

Mr COHEN:
Robertson

– I give notice that, on the next day of sitting, I shall move: -That this House congratulates the Australian Olympic team for its magnificent performance in Moscow.

page 17

AUSTRALIAN LABOR PARTY PROGRAMS

Notice of Motion

Mr RUDDOCK:
Dundas

– I give notice that, on General Business Thursday No. 19, I shall move:

That this House is alarmed at the extravagant costed and uncosted programs announced by the Labor Party to date and its failure to explain adequately how it would raise the necessary funds to pay for such programs without resorting to significant increases in taxation.

page 17

LEADER OF THE OPPOSITION: PROMISES

Notice of Motion

Mr HODGMAN:
Denison

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

That this House expresses its grave concern that even though the date for the Federal election has not yet been officially announced, the Leader of the Opposition has made promises all around Australia relating to five Federal departments and involving a total additional cost to the taxpayers of Australia of $2,000m a year.

page 17

PROPOSED HYDROCARBON CORPORATION

Notice of Motion

Mr KEVIN CAIRNS:
Lilley

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

That this House, in acknowledging that Australia’s greatest energy need is to find adequate supplies of oil-

1 ) therefore asserts that proposals to form a national hydrocarbon corporation on the British, Norwegian, Canadian and Italian models will not succeed in the task, and will represent wasteful expenditure of between $A900m and S A 1 500m;

requests that further proposals be withdrawn immediately in the national interest.

page 17

QUESTION

QUESTIONS WITHOUT NOTICE

page 17

QUESTION

TELEVISION STATIONS: OWNERSHIP

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

– I refer the Minister for Post and Telecommunications to a series of questions asked of him between IS May and 22 May this year seeking information on what action the Minister took following a written complaint by Sir Reginald Ansett of alleged breaches of the Broadcasting and Television Act. Does the Minister recall saying in this House on 20 May that an answer to these questions was being prepared and nothing will be held back’? Having given this House an assurance that nothing would be held back, why did the Minister in his subsequent series of written answers on 22 May omit all reference to a departmental minute dated 13 December 1979 which advised him that News Ltd’s takeover of Ansett Transport Industries ‘was in clear breach of the ownership and control provisions of the Broadcasting and Television Act’?

Mr STALEY:
Minister for Post and Telecommunications · CHISHOLM, VICTORIA · LP

– The simple situation is that nothing that should have been revealed was in any way concealed. I tabled in the House a letter to my Department from the Secretary of the Australian Broadcasting Tribunal which made it quite clear that the company concerned had acknowledged the contravention of the Act to the Broadcasting Tribunal. That is in the letter which I tabled in this House at that stage. It is also the case that it was a matter of public note in newspapers at the time that the trading in shares had led to contraventions of the Act which meant, of course, that certain broadcasters had to divest themselves of interests which were in excess of those allowed under the Act. For instance, the Sydney Morning Herald on 14 December, referring to market activity by both the Murdoch and Fairfax groups, stated:

Both the Murdoch and Fairfax groups have to divest themselves of shareholdings in other cities as a result of these acquisitions.

I point out also that the way in which I referred the matter to the Tribunal was entirely in accord with past practice. Indeed, on a quick look, the Broadcasting Tribunal has found 41 cases between 1967 and 1980–

Mr Hayden:

– Not bad, seeing that it was formed in 1977. It was a board before that. Stop falsifying your evidence. There was no Tribunal before 1977.

Mr STALEY:
CHISHOLM, VICTORIA · LP

– I did not say there was.

Mr Hayden:

– It was a totally different procedure before 1977. Stop trying to falsify the evidence.

Mr SPEAKER:

-Order! The Minister will resume his seat. I ask the Leader of the Opposition to cease interjecting while the Minister is answering a question put by a member of the Opposition.

Mr Hayden:

– He should be accurate in his facts.

Mr SPEAKER:

-I ask the Leader of the Opposition to cease interjecting, and especially to cease interjecting on me. I call the Minister.

Mr STALEY:

- Mr Speaker, the Leader of the Opposition simply does not know what he is talking about because the same section of the Act applied through all those years. As I said, I referred the matter to the Australian Broadcasting Tribunal for advice and it advised that between 1967 and 1980 there were 41 cases where apparent contraventions of the Act were remedied by voluntary agreement of the broadcasters concerned. Included among those cases were a number of cases which arose during Labor’s years in power. Moreover, the fact is that in 1973 a Minister of the Labor Government actually renewed a licence while a breach of the Act existed, on condition that the breach be remedied. I feel I need say little more, but for the information of honourable members I table a summary of apparent contraventions of the ownership and control provisions of the Broadcasting and Television Act provided by the Australian Broadcasting Tribunal.

page 18

QUESTION

REGULARISATION OF STATUS PROGRAM

Mr DOBIE:
COOK, NEW SOUTH WALES

– I ask the Minister for Immigration and Ethnic Affairs whether his attention has been drawn to recent Press reports which state that some illegal immigrants coming forward to claim amnesty believe they will be deported at the expiry of their newly gained residence permits which have been given to legalise their status and allow them to work while their applications are being checked. Can the Minister assure the House that details of the Regularisation of Status Program are now being fully explained by officers of his Department to all such residents who are coming forward for interview? Can he advise the House how many illegal immigrants have come forward as a result of the ROSP policy, how many six-monthly temporary entry permits have been issued and, finally, how many applications for permanent residence have been approved and granted since the Minister’s policy statement about the Regularisation of Status Program?

Mr MACPHEE:
Minister Assisting the Treasurer · BALACLAVA, VICTORIA · LP

– The Regularisation of Status Program has been well and truly explained through all ethnic media. Every few weeks I make a recording which is broadcast throughout Australia on all ethnic radio programs. It is translated into 42 or 43 languages. Not only are we getting coverage in the ethnic Press but also we are advertising to explain the program far and wide. The response has been excellent so far. As at 1 5 August, there were 1 3,244 inquiries. Pursuant to those inquiries, 9,324 applications have been given out and over 7,000 of those are currently being processed. In respect of the advice given to persons when they go for interview, they are assured that they will be allowed to stay beyond the period of that temporary permit. It is unfortunate that some people - I am not accusing anyone associated with the Opposition - have still sought to create some mischief and to sow some misapprehension in the minds of persons who can benefit from the program. I expressly not only exempt members of the Opposition from that statement but also I wish to thank members of the Opposition, in particular the Shadow Minister for Immigration and Ethnic Affairs, for their cooperation and support in promoting this program. I hope that all members of this House and of this Parliament will encourage anyone who can benefit from the program to come forward and undergo interviews with departmental officers.

page 18

QUESTION

TELEVISION STATIONS: OWNERSHIP

Mr HAYDEN:

– My question, which is directed to the Minister for Post and Telecommunications, follows upon the answer he has just given. The Minister will recall that in his answer he referred to the renewal of a licence in 1973-74 while a breach existed. Is is a fact that he was referring to the renewal of the licence of MTN Mumimbidgee? If so, are the facts associated with that matter that the two companies involved in that review were the National Mutual insurance company and Henry Jones Ltd? Is it a fact that National Mutual had its limit of prescribed interest and was coincidentally a shareholder in Henry Jones, which bought into MTN? Is it a fact, therefore, that National Mutual indirectly achieved excess prescribed interest? Is it a fact that, under section 92K of the Act, it was recognised that National Mutual was brought into this situation by circumstances beyond its control, that at that time the then existing Australian

Broadcasting Control Board operated as an advisory body, that the Minister had a discretionary power in this matter, and that in all the circumstances proper procedures and legal obligations were followed? Is it a fact that since 1977 the Australian Broadcasting Tribunal has replaced the Board, the distinction between the Board and the Tribunal being that the Tribunal is quasi-judicial, with no discretionary authority available to the Minister? Finally, is it a fact that the circumstances related to the endeavour of News Ltd to acquire more than a prescribed interest were the product of a predetermined course of action, which was undertaken with determination and persistence and was designed to circumvent the effect of the Act?

Mr STALEY:
LP

– The fact is that in a number of the 41 cases contained in the list - is is not a complete list - from the Broadcasting Tribunal the matter was accidental and in other cases the matter was deliberate. There is no question but that in many cases it was the result of quite deliberate ownership changes by broadcasters. I could seek some more information from the Broadcasting Tribunal in response to the question asked by the Leader of the Opposition. However, let me again make it clear that, as the Leader of the Opposition pointed out, in those days the Minister had the power to propose and dispose in the licence area, and in those terms. Today, I as Minister do not have that power.

Mr Hayden:

– But you ignored your responsibilities.

Mr STALEY:

– I did not ignore my responsibilities. I sent the matter to the Broadcasting Tribunal, which, according to the Opposition’s Senator Ryan, is the proper body to initiate these things. Senator Ryan was reported in the Australian of 16 August as saying that Labor’s view is that the Tribunal has the responsibility to initiate its own investigations over alleged breaches. She said she was confident that that would happen under the new chairman, Mr Jones. The fact is that the examination of those matters is for the Tribunal. In the long run, of course, as I pointed out quite clearly in the information I gave in the last session, if the Tribunal feels it necessary, if a breach is not remedied by agreement, then it can contact me and I can raise the matter with the Attorney-General, who ultimately has the responsibility for any prosecutions.

page 19

QUESTION

DISALLOWED QUESTION

Mr Roger Johnston proceeding to address a question to the Minister for Employment and

Mr SPEAKER:

-The honourable member for Adelaide is half right in that the question is out of order, but for a different reason. It is out of order because the Minister for Employment and Youth Affairs has no responsibility of an official nature for Lewis Kent.

page 19

QUESTION

TELEVISION STATIONS: OWNERSHIP

Mr HAYDEN:

– My question is directed to the Minister for Post and Telecommunications and follows from his answer to my previous question. I ask whether the minute paper dated 1 3 December 1979 from Mr Payne, the Deputy Secretary of his Department, advised him inter aiia:

The Attorney-General’s Department says that ‘News Limited’ is in clear breach of the ownership and control provisions of the B&T Act, which carry a penalty of $2,000 per day for each day of breach.

I ask him to tell us also whether the minute went on to state:

I bring this to your notice as the Attorney may seek to raise the matter with you. There is also the question of your portfolio responsibility in respect of breaches of the B&T Act. This is not a matter for the Tribunal.

I repeat: The advising says that, on the basis of the Attorney-General’s Department’s advice: ‘This is not a matter for the Tribunal.’ On what basis did the Minister decide that in fact it was a matter for the Tribunal, in flagrant disregard of the advice of the legal office of the Government?

Mr SPEAKER:

-I ask the Leader of the Opposition to ask his question and not add to it a tail that indicates his attitude to the matter. He is entitled to ask for information but not to make a comment of the kind with which he concluded.

Mr STALEY:
LP

– As I pointed out earlier to the House, News Ltd itself said that there was a breach. That information was contained in the documents I tabled at the end of the last session.

Mr Bourchier:

– Say it slowly.

Mr STALEY:

– I will say it again for the simpler people in this place. News Ltd itself said that there was a breach. It was admitted. It was a matter of public note for anyone who knew anything about this matter.

Mr Innes:

– Father Christmas may have told him.

Mr STALEY:

– The fact is that I acted on this matter. I raised it, as the Leader of the Opposition’s colleagues–

Opposition members interjecting -

Mr SPEAKER:

-Order! The Minister will resume his seat. I ask members of the Opposition to cease interjecting while the Minister is answering the question. I especially request the honourable member for Melbourne to cease interjecting. I call the Minister.

Mr STALEY:

– The fact is that my advisers and the Broadcasting Tribunal have rightly said that any prosecution is not a matter for the Tribunal but for the Government. That has always been agreed. I acted in a proper fashion to establish the circumstances which could lead ultimately to a judgment by the Attorney-General as to whether grounds for prosecution existed. We acted in the normal and proper way. From the way the Leader of the Opposition is carrying on about this matter, I can only assume that he wants, for the grossest political reasons, to see Mr Murdoch prosecuted. I can only assume, having read the letter written by the Leader of the Opposition to the editor of the Australian, that he has been so hurt by Pickering’s cartoons that he wants Murdoch prosecuted.

page 20

QUESTION

AIR FARES

Mr MILLAR:
WIDE BAY, QUEENSLAND

– I direct my question to the Minister for Transport and draw his attention to an article that appeared in the Age on 16 August 1980 entitled ‘Government gets tough on air fares’. Can the Minister confirm whether summonses have been issued against Sydney travel agents for alleged breaches of the air navigation regulations? Can he inform the House whether his Department intends to take any further action against travel agents, individuals or airlines involved in the air fare malpractice?

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

– I am aware of the article referred to by the honourable member. On 14 August summonses were issued against two travel agencies and three individuals involved in the marketing or selling of overseas travel. I do not wish to comment any further on these cases because undoubtedly the prosecutions will be proceeded with in the normal manner. I made it clear in a statement in this place on 23 April that, in the interests of equity for air travellers and in order to avoid discrimination against those law abiding airlines and travel agencies, illegal discounting of air travel would not be tolerated by this Government. I issue a further warning: My Department is actively investigating other possible breaches of the air navigation regulations. If any further cases come to the notice of those undertaking the investigations, further proceedings will be taken. I make it very clear to this House that those who are engaging in illegal discounting of overseas fares should cease doing so because they are putting themselves and their agencies at risk.

page 20

QUESTION

TELEVISION STATIONS: OWNERSHIP

Mr KERIN:
WERRIWA, NEW SOUTH WALES

– I refer the Minister for Post and Telecommunications to the departmental minute of 13 December 1979 sent to the Minister by Mr Payne as the acting head of his Department. I ask the Minister whether he wrote on the minute these words:

It is my understanding that Mr Murdoch has assured the Australian Broadcasting Tribunal that action is in hand to ensure compliance with the Act.

How did the Minister obtain this understanding? Did the Minister have any direct or indirect contact with Mr Murdoch regarding this matter in October, November or December last year?

Mr STALEY:
LP

– I have been reading the newspapers. I noticed that Mr Murdoch had said that he had been intending to do certain things and that certain other things followed. It was a matter, as I have already said, of public debate and public comment that Mr Murdoch would be seeking to divest himself of certain shareholdings in order to seek certain others.

Mr Young:

– Did you speak to him? Mr STALEY- I did not speak to Mr Murdoch.

page 20

QUESTION

ST MARYS MUNITION FILLING FACTORY

Mr GILLARD:
MACQUARIE, NEW SOUTH WALES

– I refer the Minister for Productivity to recent statements by two unknown doctors alleging that health risks were associated with employment at the Munition Filling Factory at St Marys. When will the committee of inquiry, which he so speedily appointed, be in a position to report to him? Is the identity of the two doctors who made statements known to the committee of inquiry? If so, have they yet been interviewed?

Mr NEWMAN:
Minister Assisting the Prime Minister in Federal Affairs · BASS, TASMANIA · LP

– I thank the honourable member for Macquarie for his question and for his very deep interest and concern in this matter. Other members, on the Opposition side, have also expressed an interest. The allegations of safety breaches and health problems at St Marys were brought to my notice, I think first, when a reporter from the Sydney Morning Herald contacted my office. More specific allegations were made on 6 August in the Sydney Morning Herald. After seeing those specific allegations and noting that they had been backed up with the honourable member’s concern, it became apparent that the matter should be investigated speedily.

On 7 August I appointed a committee of inquiry to look into these matters. The committee of inquiry is a good one. It is comprehensive. It consists of a senior officer of my Department - who is also chairman of the Department’s operational safety committee - two eminent members of the medical profession, the National President of the Federated Ironworkers Association and a representative from the factory. The committee met on 12 August and has already interviewed some present employees and former employees. It has also looked at areas of work in the factory.

The two doctors - I read in the news reports that they had in one way begun this inquiry by the Sydney Morning Herald - have in fact been interviewed by the committee and have given evidence. I am glad that they have. The committee will probably finish its inquiry in three to four weeks, but I have not set a date for completion. I think it is important that it has complete freedom, under the terms of reference which are very comprehensive, to do everything that has to be done in this matter to ensure that no stone is unturned and that the allegations are proven one way or the other. Once again, I thank the honourable member for his interest in the matter.

page 21

QUESTION

MINISTER FOR POST AND TELECOMMUNICATIONS

Mr HUMPHREYS:
GRIFFITH, QUEENSLAND

– I ask the Prime Minister whether he recalls saying in this House in July 1975 the following:

Ten per cent or even SO per cent of the truth is as good a way of misleading this Parliament and the Australian people as a downright lie. The half-truth, the partial answer and the slipping over of the full facts are misleading of this Parliament.

If so, will the Prime Minister apply these standards to the Minister for Post and Telecommunications and ask the Minister to resign?

Mr MALCOLM FRASER:
LP

-The honourable gentleman seems to fail to be able to grasp that over a large number of years this particular section, whether under the present Act or under the earlier Act with the old arrangements, has applied. He seems to fail to understand, as the Leader of the Opposition patently fails to understand, that it has been normal practice for the authorities under the older circumstances and under the present ones to give a company in breach time to get back within the law. The Minister has indicated this has happened in forty or more cases. The Minister has drawn attention to the fact that during the Labor years one particular licence was re-issued while a company was in breach.

One might have throught, if one wanted to be pedantic about it - the Opposition is now showing great concern about this provision- that at least the re-issuing of the licence would have been held up on a temporary basis pending the company getting back within the law. But the licence was re-issued. It was re-issued because it was normal practice for a licence to be issued and for companies to be given time to get back within the provisions of the Act.

Mr Hayden:

– The circumstances are totally different and you know it. You are trying to protect a wealthy patron.

Mr SPEAKER:

-Order! The Leader of the Opposition will remain silent.

Mr MALCOLM FRASER:

-The Leader of the Opposition chatters away, interjecting all the time, because he knows we are on the air.

Mr Dawkins:

– While you mislead this House.

Mr MALCOLM FRASER:

-The House has been misled only by the Leader of the Opposition.

Mr SPEAKER:

-Order! The Prime Minister will resume his seat. The honourable member for Fremantle will withdraw.

Mr Dawkins:

– I withdraw.

Mr MALCOLM FRASER:

-The only misleading of the House has come from the Opposition which has tried to pretend, for patently political purposes, that this one case in which the company concerned made it plain that it would get back within the law is different from the other dozens of cases of breach that have occurred. I would like to read part of a letter from Mr Connolly of the Australian Broadcasting Tribunal. I think it explains the present philosophy and the previous philosophy in relation to how these affairs have been conducted. Mr Connolly says:

However, it has been the practice over the years for such contraventions to be corrected either through negotiation with the parties concerned or voluntarily by such parties as soon as they realised the situation in which they were placed. There is no record of any prosecutions having been launched in connection with contraventions which have occurred from time to time.

It is the opinion of the Tribunal that continuation of the previous attitude to contraventions is desirable where it is clear, as is the case in regard to the News Group purchase of the Ansett shares, that every attempt is being made to remedy the contravention as soon as possible. On the general question of the institution of court proceedings regarding contraventions, the Tribunal believes that the powers and functions conferred upon it by the Act do not impose any responsibility for it to initiate prosecutions in relation to contravention of the ownership and control provisions. However, the Tribunal accepts that where a contravention exists and the offending party refuses to take corrective action, the Tribunal should hold a public inquiry and, if appropriate, direct the divestment of the excess interests. If such a direction were to be ignored, the Tribunal would report the matter to the Minister with a view to the Commonwealth instituting legal proceedings.

That shows clearly the Tribunal’s understanding of the precedents that have been set over the years. It represents a fair and reasonable way of conducting the business in relation to contraventions of this Act. The Minister has applied those provisions and the Tribunal is seeking to apply those provisions. The only people trying to do something new, something out of order, in relation to this matter are members of the Australian Labor Party. They are doing so for the basic political reasons which have been indicated. They are still pursuing the old vendetta of 1975.

page 22

QUESTION

AUSTRALIAN WHEAT BOARD

Mr FISHER:
MALLEE, VICTORIA

– The Minister for Primary Industry will recall that on 21 May this year he tabled the 1976-77 annual report of the Australian Wheat Board. There have been adverse reports on the Australian Wheat Board by both the Senate Standing Committee on Finance and Government Operations and the AuditorGeneral. As this issue is of concern to those involved in the Australian wheat industry, can the Minister inform the House of the steps being taken to deal with the matters raised in these reports?

Mr NIXON:
Minister for Primary Industry · GIPPSLAND, VICTORIA · NCP/NP

– I am able to inform the honourable member that action is in progress for dealing with the matters highlighted by the reports of the Senate Committee and the Auditor-General concerning the Board’s accountability and responsibilities to Parliament and the deficiencies in the Board’s accounting operations. A commercial accounting organisation has been engaged to review the Board’s accounting system and procedures, taking account of the reports of the AuditorGeneral and the Senate Committee. The work of that organisation is being oversighted by a steering committee under the chairmanship of the Chairman of the Australian Wheat Board and comprising representatives of the Departments of Finance and Primary Industry, with observers from the Auditor-General’s Office and the Public Service Board. The consultant’s engagement is scheduled for completion on 8 September. When the report of the consultant has been made to the Australian Wheat Board, the Board will consider it and advise me of the action intended to be taken to deal with the matters raised by the AuditorGeneral and the Senate Committee. After I have considered the Australian Wheat Board’s advice, I will be in a position to make a full statement to the Parliament on the Board.

page 22

QUESTION

SUPPLY OF URANIUM TO FINLAND

Mr UREN:

-I direct my question to . the Deputy Prime Minister. Is it a fact that Australia has entered into a contract to supply uranium to Finland and that that uranium will be enriched in the Soviet Union? Is it also a fact that the Soviet installations at which the Australian uranium would be enriched are used for the production of highly enriched uranium for military purposes? What guarantee can the Minister or the Government give that Australia’s uranium will in no way be used to contribute to the production of Soviet nuclear weapons? How does the Government reconcile allowing Australia’s uranium to pass to the Soviet Union with the Prime Minister’s view that the Soviet Union’s actions in Afghanistan represent the greatest threat to world peace since the Second World War?

Mr ANTHONY:
NCP/NP

– It is true that a contract has been entered into with Finland for the supply of uranium. I believe that it is possible that it will be enriched in the Soviet Union. The concern of the Australian Government is to see that our uranium contracts conform with our international safeguard arrangements and that non-proliferation arrangements are entered into to ensure that the uranium is not used for other than peaceful purposes. If the uranium goes to the Soviet Union it will do so on an all-in all-out basis. I think that it has to be understood that the Soviet Union is a member of the non-proliferation treaty and is a depository state under the treaty. The Union of Soviet Socialist Republics also accepts the guidelines of the nuclear supplier groups on the export of nuclear material, equipment or technology.

I think it would be of interest to members of this House to know that information provided to me shows that approximately 50 per cent of the enriched uranium used in western Europe in 1980 will have been treated in the Soviet Union - 50 per cent for West Germany, 50 per cent for Spain, 40 per cent for Italy, 1 00 per cent for Finland and approximately 20 per cent for Belgium and the United Kingdom. It is also of interest to note that nuclear material of Canadian origin which has been contracted for sale to Finland over the past three or four years has also been enriched in the Soviet Union. We believe that, provided it conforms with the international safeguard arrangements and the non-proliferation features are honoured, it is in conformity with our international safeguard obligations.

page 22

QUESTION

VIP AIRCRAFT

Mr YOUNG:

– Will the Prime Minister give the House an assurance that he will no longer permit the use of VIP aircraft for some Ministers to travel to the trials of other Ministers, as we believe that this practice could send Australia bankrupt?

Mr MALCOLM FRASER:
LP

– My colleague’s use of the aircraft was a perfectly appropriate one because of all the circumstances in which he was placed. I do not think it would be wise for the honourable gentleman to encourage the Government to look at the use to which the Labor Government put VIP aircraft.

page 23

QUESTION

AIRBUS AIRCRAFT

Mr MORRIS:
SHORTLAND, NEW SOUTH WALES

– I direct a question to the Minister for Transport. Does the Government propose to reimburse Trans-Australia Airlines for the massive losses it will incur as a result of the Government’s withholding of approval to obtain the three Airbus aircraft for which TAA has contracted? Why has similar action not been taken in respect of the two F28 jetliners being purchased by East West Airlines from the European Economic Community and the five Boeing 747 aircraft of Qantas Airways Ltd being equipped with EEC engines? Are TAA’s five million passengers and the Australian tourist industry to be denied the improved services of the Airbus so that the Government can give TAA’s competitor a substantial financial advantage?

Mr HUNT:
NCP/NP

– No final decision has been taken by the Government in respect of retaliatory measures by the Government against imports from the European Economic Community. Needless to say, the EEC agricultural protective arrangements, including the sheep meat regime, are so serious that the Government has been forced to consider a range of retaliatory measures. A considerable number of items is under review by the Government. The matter is still under active consideration. No decision has been taken by the Government; so I am afraid that the question is not relevant to fact.

page 23

QUESTION

SUBSIDY TO AIR TRAVELLERS

Mr BURR:
WILMOT, TASMANIA

– Can the Prime Minister advise the House whether it is feasible for the Federal Government to offer a subsidy to air travellers resident in particular States only? Has the Government looked at such a proposition?

Mr MALCOLM FRASER:
LP

– There are many remote parts of Australia. The honourable gentleman will know that we have established an air fares committee of inquiry. It will look, in particular, at air fares between Western Australia and the eastern States. It will also look at air fares between Tasmania and the mainland and give us a general report on the structure of air fares, the way the charging mechanisms have operated and the equity of that matter. But it does seem rather strange to offer a particular subsidy to a particular State and at the same time to ignore other areas. I understand that the proponent of that sort of policy was not particularly well received in north Queensland, where the people regard themselves as having to travel long distances, as do the people of the Northern Territory, of the Kimberleys in Western Australia and of Western Australia itself, which is somewhat remote from the eastern States. This leads to a degree of difficulty.

Mr Morris:

– Why do you hate Tasmanians?

Mr MALCOLM FRASER:

– Of course, we know a little about Tasmania and we have done a great deal to assist Tasmania. I think this shows the ad hoc manner in which the Australian Labor Party is now going about policy-making. We have not only its $2,000m worth of expenditure over about five areas of government but also more than 100 other promises which would cost money. We have commitments which could not be met in any reasonable way without sending the taxpayers broke. Members of the Labor Party are now going around different parts of the country saying: What would they like here?. What would they like somewhere else?’ Various promises are being made, no matter what the cost might be. I think one could judge the Labor Party’s concern for Tasmania and indeed its knowledge of Tasmania by a recent report in one of the more notable Tasmanian journals, the Hobart Mercury.

Mr Charles Jones:
NEWCASTLE, VICTORIA · ALP

– Why don’t you tell the truth?

Mr SPEAKER:

-Order! The honourable member for Newcastle will withdraw.

Mr Charles Jones:
NEWCASTLE, VICTORIA · ALP

– I withdraw.

Mr MALCOLM FRASER:

– That report stated:

At Peter Hudson’s Granada, for the ALP’s campaign launching, Mr Hayden was finding the Tasmanian scene confusing. He announced to the 4S0 dinner guests that Neil Batt would have the responsibility for reintroducing Medibank . . .

Well, Neil Batt is an endangered species and has gone overseas. So it shows what hope the Australian Labor Party has - absolutely none. The report continues that earlier, at a Journalists Club lunch, the Leader of the Opposition introduced our candidate for Denison’ as Lance Free.

page 23

QUESTION

FEDERAL ELECTION

Mr LIONEL BOWEN:
KINGSFORD-SMITH, NEW SOUTH WALES

-I direct my question to the Prime Minister. I refer the right honourable gentleman to his request to the Governor-General for an early dissolution in 1977 when he used the words that an early dissolution was necessary to end election speculation and the resulting uncertainty. In view of the uncertainty and the speculation surrounding the date for the 1980 election, will the Prime Minister confirm that he has already chosen 25 October as the date for the election for the House of Representatives? Will he confirm or deny that this date was chosen at the request of the Queensland Premier? Finally, is he satisfied that the advice offered to the Governor of Queensland by the Queensland Government in relation to section 12 of the Constitution will be for an election of senators in Queensland on the same date as the election for the House of Representatives and will not be on the same date as the election for the Legislative Assembly of Queensland?

Mr MALCOLM FRASER:
LP

– There is a strange species of animal, the lemming, which at certain times of the year and in certain seasons follows the leader, rushes headlong over a cliff and commits suicide. If the honourable gentleman wants the Australian Labor Party to survive a little longer he should advise the Government to have the election as late as possible.

page 24

QUESTION

PLANT VARIETY RIGHTS

Mr BAUME:
MACARTHUR, NEW SOUTH WALES

– Is the Minister for Primary Industry aware of some public concern about the question of plant variety rights in Australia? What action does he intend to take on this matter?

Mr NIXON:
NCP/NP

– The proposal for a plant variety rights scheme first came forward as a result of representations from the seed and plant breeders associations around Australia some years ago, and has been considered over the years by the Australian Agricultural Council. It was decided that legislation ought to be enacted. As a result of the differences of views between the seed industries I told them that they would have to come to a consensus on what form the legislation ought to take before I was prepared to move forward with the proposed legislation. In the event, they have since agreed but the time had passed for the introduction of legislation into the Parliament this session. I informed them then that I would be prepared to introduce the legislation in the autumn session of Parliament next year.

Mr Young:

– You will not be able to.

Mr NIXON:

– I have every confidence that I will be able to. In addition to that, at the Agricultural Council meeting in Brisbane a couple of weeks ago, I gave the State Ministers an opportunity to reconsider their previous advice to the former Minister for Primary Industry that they wanted such legislation. But I also told them that the proposed legislation which would be in the House could lie over the winter recess next year and would be debated during the following Budget session. This means that the legislation will be available for public comment and consideration for some months. I think that is a pretty fair way of dealing with a piece of prospectively contentious legislation about which a lot of wrong things have been said.

page 24

QUESTION

BUREAU OF CUSTOMS

Mr HURFORD:

– The Minister for Business and Consumer Affairs will be aware of grave allegations made by undercover agents and other members of the New South Wales branch of the Customs Officers Association of Australia of corruption and deliberate incompetence at more senior levels of the Bureau of Customs, with the. life of one informant apparently being threatened since the allegations were made. I ask the Minister: Is it a fact that these allegations include claims that heroin, which was worth as much as a billion dollars at street value, was smuggled into the country despite the foreknowledge of the Bureau of Customs? Is it also a fact that another claim is that senior Customs officials have instructed their juniors to turn a blind eye to other breaches of Customs regulations, for instance those relating to pornography ? When did the Minister first learn of these allegations? What action has the Minister taken or what action does he propose to take as a result of these allegations?

Mr GARLAND:
Minister Assisting the Minister for Industry and Commerce · CURTIN, WESTERN AUSTRALIA · LP

– Some representatives of the Customs Officers Association made a number of general allegations of the kind referred to by the honourable member. These allegations were first made about 18 months ago, so I am informed, and certainly were made earlier this year as well, about the administration of that part of the Department of Business and Consumer Affairs known as the Bureau of Customs. Some of the allegations occurred during the industrial disputes in January and February of this year. In August last year, following very similar claims about corruption in the Bureau of Customs, the then New South Wales branch secretary of the COA reported in writing to the Department that he had been misrepresented. The COA representatives had the opportunity of giving evidence about these matters to two royal commissions of which the honourable member will be aware. But from the reports of the commissions there is nothing to suggest that there is any substance in the allegations or claims, as far as I can see.

No details of the alleged corruption have been furnished to the Department in spite of a number of written requests being made to the COA and officials to give particulars in support. I am advised that the present secretary of the COA has declined to respond to requests from the senior officer in New South Wales, the New South Wales Collector of Customs. There has been a lot of contact between those officials and the Department. Mr Speaker, I seek permission to table some correspondence between officials and Mr Spanswick of the COA. Before I do so I refer, Mr Speaker, with your permission to a sentence in one of the letters which is dated August of last year. It states:

In closing I would like to say that you should rest assured that if I was aware of any so called corruption in the Bureau of Customs I would comply with Departmental requirements and inform the Chief Officer of same.

I have asked the head of the internal affairs unit of the Department of Business and Consumer Affairs, Mr R. A. Wilson, who is a former Commissioner of the Australian Capital Territory Police, to go to Sydney and seek to interview these officials and to report to me on these latest allegations. I believe it is the duty and responsibility of those officials to co-operate with Mr Wilson after these even greater allegations have been made, though they would not do so with the New South Wales Collector of Customs. In conclusion, I say that the Government is determined to have the Customs section of the Department of Business and Consumer Affairs effective. No government, I believe, has done more to endeavour to prevent illicit imports, including drugs. All the information before me indicates that Customs works well and towards longstanding objectives of successive governments. If anyone really has any information he or she should come forward and advise either Customs or the Federal Police of precise details.

page 25

QUESTION

CHIROPRACTIC COURSE: COMMONWEALTH ASSISTANCE FOR STUDENTS

Mr N A Brown:
DIAMOND VALLEY, VICTORIA · LP

– Is the Minister for Education aware of the very great concern among students and teachers of the chiropractic department at the Preston Institute of Technology about the continued lack of Commonwealth Government funds for that course and, in particular, about the lack of eligibility of students of that course for allowances under the Tertiary Education Assistance Scheme? Why is it taking such an unconscionably long period for the Tertiary Education Commission to resolve what is basically a simple matter about this course? Why is it taking so long to recognise the course? Will the Minister do his best to cut through the red tape as quickly as possible and obtain the proper entitlements for these students and proper Commonwealth Government support for this very important course?

Mr FIFE:
Minister for Education · FARRER, NEW SOUTH WALES · LP

– I have been trying to crack an answer to this question for some time. In view of the way the honourable member has presented his question this afternoon, let me say to him and to the House that the matter has not been before me for an inordinate period. The matter was raised with me only recently. I immediately took it up with the Tertiary Education Commission. This chiropractic course was started some years ago and has not been funded by the Commonwealth. The application for Commonwealth funding has been lodged only recently. The matter is being dealt with today by the Advanced Education Council, which is part of the Tertiary Education Commission. I understand that the matter will go to a meeting of the Tertiary Education Commission within the next few weeks. I hope then to be in a position to announce a decision.

page 25

ADMINISTRATION OF PARLIAMENTARY DEPARTMENTS

Mr SPEAKER:

-I understand that the honourable member for Lalor intended to lodge a request for detailed information relating to the administration of the parliamentary departments.

Mr Barry Jones:
LALOR, VICTORIA · ALP

– Yes, Mr Speaker, I seek information relating to the operation of the Parliamentary Library and other departments.

Mr SPEAKER:

-The honourable gentleman should put his request for information in writing and hand it to the Clerk. If it is in order, it will appear in today’s Hansard. In due course I will answer the question and that answer will appear in Hansard.

Mr Barry Jones:
LALOR, VICTORIA · ALP

– It shall be done.

page 25

COMMITTEE OF INQUIRY INTO TECHNOLOGICAL CHANGE IN AUSTRALIA

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– For the information of honourable members I present a copy of the report of the Committee of Inquiry into Technological Change in Australia. The report’s detailed recommendations are currently under study by the Government. I expect to be in a position to announce the Government’s considered response early in this sitting of the Parliament.

page 25

PARLIAMENT HOUSE

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

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

House Construction Authority on the winner’s design, Parliament House design competition.

page 26

PARLIAMENTARY APPROVAL OF WORK

Mr MacKELLAR:
Minister for Health · Warringah · LP

– Pursuant to section 5 of the Parliament Act 1974 1 present.proposals for alterations to the Administrative Building and to improve the external lighting at the National Library. The views of the Joint Committee on the New and Permanent Parliament House are also being sought. When those views are available I shall be in a position to take further action under the Parliament Act to seek the approval of the work by the House.

page 26

REMUNERATION TRIBUNAL 1980 REVIEW

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

– Pursuant to sections 6 and 7 of the Remuneration Tribunal Act 1973 I present the Remuneration Tribunal 1980 Review which was presented to me on 4 June 1980. Copies of the review were distributed to honourable members at that time.

page 26

NATIONAL ESTATE

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

– Pursuant to section 8 of the Urban and Regional Development (Financial Assistance) Act 1974 I present an agreement between the Commonwealth and the Northern Territory relating to the National Estate.

page 26

KAKADU NATIONAL PARK PLAN OF MANAGEMENT

Mr THOMSON:
Minister for Science and the Environment · Leichhardt · NCP/NP

– Pursuant to section 12 of the National Parks and Wildlife Conservation Act 1975 1 present the Kakadu National Park plan of management together with representations received on the plan and a report on the representations by the Director of the Australian National Parks and Wildlife Service.

page 26

OFFICE OF NATIONAL ASSESSMENTS

Ministerial Statement

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– by leave- In relation to allegations of security breaches in the Office of National Assessments, the Director-General of ONA, Mr Furlonger, asked the Director-General of Security, Mr Justice Woodward, to review security practices in ONA and to report. Subsequently there were further allegations of deliberate security breaches and the Director-General of Security was asked to investigate these also. Mr Justice

Woodward has now reported on these matters and I have examined his findings. The report, as would be expected, deals with a number of matters of high security content and, in accordance with normal practice in the Parliament and elsewhere, I do not propose to make the report public. I shall make it available to the Leader of the Opposition (Mr Hayden) if he so wishes. However, in view of the public and parliamentary interest the matter has attracted, I think I should indicate now in general terms what have been Mr Justice Woodward’s findings.

Mr Justice Woodward’s report finds that there is no credible evidence of any ONA document having got into the wrong hands, nor of the improper use of classified information by any ONA officer, nor of any serious breach of security by any ONA officer. And therefore no reason, arising from the Australian Security and Intelligence Organisation inquiry, to conclude that ONA is not a basically secure organisation. On the particular question, which attracted much public attention, of a missing security document, Mr Justice Woodward has reported that his investigation has established beyond reasonable doubt that the missing document was destroyed in ONA by an officer whose duty it was to dispose of unwanted papers and who in this instance had no reason to doubt that he was doing so legitimately. Before that happened, however, there was mishandling of the paper, about which the ASIO report is properly critical. The report nevertheless makes a number of recommendations for improvements in security procedures in ONA, and confirms other security measures already taken by the Director-General of ONA. It observes that its recommendations should not be regarded as implying any culpable weakness in ONA’s former practices. As I have said, Mr Justice Woodward’s report is available to the Leader of the Opposition if he so wishes.

The Director-General of ONA, Mr Furlonger, has reported to me that he has taken, and is taking, action to implement the recommendations made in the ASIO report. It is of course essential that this be done. The Government attaches the highest significance to the work of ONA, and obviously its security is an essential part of its continuing overall effectiveness in contributing to the bases on which Australia’s external policies in the political, strategic and economic fields are formulated. The ASIO report also provides the occasion to express and underline the Government’s concern that there should be strict application of security procedures and practices in all Commonwealth organistions. Steps are being taken, as it is deemed appropriate, to improve such procedures and practices and to ensure that the requirements are strictly observed.

More recently there have been assertions in the media that in some way the Director-General of Security was pressed to change some of the ASIO findings about ONA practices, and in some way to water down the strength of his conclusions. I am informed by Mr Justice Woodward, in respect of this report, that it is false in every specific point made and in its implications. Mr Justice Woodward has written to me stating that he took all the significant decisions about the two parts of the report himself; that at no time did he decide that any of the contents were too damning to be given to me, as alleged - or even consider such a question. His only concern was that the report should be absolutely accurate and as fair as his judgment could make it. Mr Justice Woodward rejects utterly the implication that in some way his report was watered down deliberately to meet some accommodation of ONA. May I say that I accept Mr Justice Woodward’s assurance absolutely - as I am sure the House does also. Mr Justice Woodward’s letter to me on this issue also is available to the Leader of the Opposition to peruse.

Mr Speaker, not everything has been right in ONA’s procedures. Actions of some officers gave ground for criticism. But things are being put right- have largely been put right - and there is no ground for any public apprehension about the basic security and continued value of ONA. Genuine debate and responsible and balanced criticism in respect of ONA or ASIO, or indeed any areas of Government administration, are to be expected and not shied away from. The criticisms of ONA and ASIO have tended to have the effect of undermining public faith in these two organisations. The Government for its part will continue to support and encourage ONA and ASIO in the proper discharge of their important responsibilities. I urge all others to do likewise.

Mr HAYDEN:
Leader of the Opposition · Oxley

– by leave - The key paragraphs in the statement by the Prime Minister (Mr Malcolm Fraser) are paragraphs 4 and 5, and I repeat them because of their importance. Paragraph 4 states:

Mr Justice Woodward’s report finds that there is no credible evidence of any ONA document having got into the wrong hands, nor of the improper use of classified information by any ONA officer, nor of any serious breach of security by any ONA officer. And therefore no reason, arising from the ASIO inquiry, to conclude that ONA is not a basically secure organisation.

That is a reassuring finding from a man whose prestige and standing as far as this Parliament is concerned, and certainly as far as the Opposition is concerned, is such as to leave us with every conviction that the job has been done properly and that the finding is one that can be accepted completely. In paragraph 5 the Prime Minister said:

On the particular question, which attracted much public attention, of a missing security document Mr Justice Woodward has reported that his investigation has established beyond reasonable doubt that the missing document was destroyed in ONA by an officer whose duty it was to dispose of unwanted papers and who in this instance had no reason to doubt that he was doing so legitimately.

So there are no grounds for the development of a conspiracy theory about subversion within the Office of National Assessments. Mr Justice Woodward, a trained judicial analyst, analysed all the evidence before him. He had the resources of trained investigators backing him and he came to that conclusion. That, too, is reassuring. He is candid in acknowledging that there have been defects internally, and they are being remedied. With Mr Furlonger in charge of the organisation one would anticipate that the defects, to the extent that they exist, will be quickly repaired. Mr Furlonger has an impressive record as an administrator and as a fair and impartial servant of the public and the Parliament.

In view of the rather sensational, if not extravagant, statements that have been made in some quarters, I want to put on record the reasons why I feel relieved to discover that ONA has been given what is effectively a clean bill of health in this matter. I have had the benefit of drawing on ONA on several occasions for briefing on important and often sensitive matters relating to international affairs. I have been impressed enormously by the common sense of the officers of ONA and the way in which they have analysed the issues and arrived at what appeared to me to be quite sound, thoroughly sensible conclusions. I have been reassured to find a coincidence of views in the conclusions and understandings reached by ONA and myself. It has been a matter of some unease to find on so many important issues such a great gulf between the Government’s understandings and the conclusions and those of the accredited objective body charged with the duty of making sensible assessments on matters of international affairs.

page 27

PARLIAMENT HOUSE CONSTRUCTION AUTHORITY

Mr MALCOLM FRASER:
WannonPrime Minister · LP

– by leave - I move:

  1. That, in accordance with the provisions of Section 8 of the Parliament House Construction Authority Act 1979, the House of Representatives -

    1. declares the preparation of a detailed design of Parliament House (including specifications and tender documents) to be a declared stage in the design of Parliament House for the purposes of that Section; and
    2. declares the preparation and excavation of the site of Parliament House to be a declared stage in the construction of Parliament House for the purposes of that Section.
  2. That a message be sent to the Senate acquainting it of the resolution agreed to by the House of Representatives.

As the House now knows, the Government has received the report of the Parliament House Construction Authority on the winning design for the new Parliament House. It must be pleasing to all members of the House to hear the almost universal acclaim that that design has received throughout the Australian community. It is an imaginative design. It fits into the general landscaping of Capital Hill and the Parliamentary Triangle. When completed, it will serve the needs of Australia for as long as Australia survives. The Joint Standing Committee on the New and Permanent Parliament House is expected to report shortly to the Parliament on the Construction Authority report. At the appropriate time, when the Joint Standing Committee’s report has been received and examined, the Government will move substantive motions, as foreshadowed by this motion. Honourable members obviously will have an opportunity to debate the matter at that time. In the meantime, they are encouraged to study the report of the Construction Authority, and the report of the Joint Standing Committee when it is available, and to make use of the display that has been mounted and is available, which I am sure most honourable members will have examined. It think it is appropriate to note that the matters are going forward in a way which must give encouragement to all members of the House, and I thank those who are directly responsible for that.

Mr HURFORD:
Adelaide

– I move: That the debate be now adjourned.

Mr SPEAKER:

-I apologise for intervening in this way, but I indicate to the honourable member for Adelaide that, as I understand it, it would be desirable for the Prime Minister’s motion to be passed and for debate to occur subsequently on the motion to be moved on Thursday. That is an indication only. I am in the hands of the House.

Mr HURFORD:

– With your indulgence, Mr Speaker, I might explain that, as I have been briefed on this matter, the procedures I expected were not followed. Leave was to be granted to move this motion, there were not to be any speeches on it, the matter was to go forward, and this House would have the opportunity very shortly to debate the whole issue of the new Parliament House. If the Leader of the House (Mr Sinclair) can give me the assurance that there will be that opportunity very shortly, to debate these matters, then I am prepared to withdraw my motion and let the other motion go ahead.

Mr SINCLAIR:
Leader of the House · New England · NCP/NP

- Mr Speaker, I can give the Manager of Opposition Business that assurance. It is the intention of the Government to bring on the other motion as soon as it is submitted to the House. I hope that that will be on Thursday, when honourable members will have an adequate opportunity to debate the whole question.

Motion (Mr Hurford’s) - by leavewithdrawn.

Original question resolved in the affirmative.

page 28

ASIA DAIRY INDUSTRIES (HONG KONG) LIMITED

Ministerial Statement

Mr NIXON:
Minister for Primary Industry · Gippsland · NCP/NP

– by leave - Honourable members will recall that on 17 April 1980 1 undertook to make a statement once all investigations into the operations of Asia Dairy Industries (Hong Kong) Limited had been completed. Regrettably, all investigations into this matter have not yet been completed, but I believe it is appropriate for me to advise the House as to the latest position.

As a result of a request by my predecessor in March last year, the accounts and records of ADI, which is a wholly-owned subsidiary of the Australian Dairy Corporation have been examined by the Commonwealth Auditor-General. The purpose of seeking the audit inspection was to assist the Government in its consideration of the future role and operations of ADI. The reports of the Auditor-General revealed certain deficiencies in the financial and managerial control of the company, and questioned the appropriateness of certain past expenditure. I have previously stated that the deficiencies in the financial and managerial control were examined by a committee established by the Australian Dairy Corporation. Action has been taken, or is being taken, to rectify the deficiencies and ensure that the company operates in a normal commercial fashion.

The only matter now outstanding in respect of the audit of ADI relates to the appropriateness of certain past expenditure by the former chairman of the company. This matter has been the subject of detailed examination by officials. I have received legal advice from the Commonwealth

Crown Solicitor and the Attorney-General (Senator Durack) to the effect that certain matters arising out of this detailed examination should be reported to the police for further investigation. Upon receipt of that advice, and at my request, my Department has reported the matters in question to the Australian Federal Police for detailed investigation. In light of this, it would be improper to consider either tabling the AuditorGeneral’s reports, or comment further on the matter. As I have said in the past, I will make a statement on all aspects of the audit inspection when all investigations are completed.

Mr KERIN:
Werriwa

– by leave- I must say, in speaking on behalf of the Opposition on this matter, that the Opposition is disappointed. The Government has now given a statement which indicates that the matter is quite serious, but we are concerned that it has taken so long to do so. In terms of the length of this inquiry, we must say that it is a feeble response, if not a pathetic one, to a serious matter. This should not be a partisan matter. One has only to look at the work of a Senate committee regarding statutory authorities to realise that there is a widespread concern for the proper administration and accounting of statutory authorities. The honourable member for Mallee (Mr Fisher) today asked a question about some complaints from that Senate committee and the Auditor-General regarding the Australian Wheat Board.

This matter has been transformed into a partisan issue because the Government seems very reluctant to expose fully all the facts of a serious but seemingly straightforward misdemeanour. It has become partisan because of the length of time this matter has taken. Really, how much longer do we have to wait for a full and public explanation? Australia’s international reputation is involved, yet this matter has dragged on literally for years. The Opposition and its spokesman on rural matters, Senator Peter Walsh, have never regarded this as a witch hunt. Recognition by the AuditorGeneral of the whole matter shows how legitimate the Opposition has been in pursuing it. Senator Peter Walsh has been attacked by his political opponents and by the rural media because basically one of the principals in this long-running inquiry is a very popular person. The Opposition regrets the actions of some rural leaders in trying to transform this matter into an attack on Senator Peter Walsh. It is not a matter for sentiment just because personalities are involved.

I draw the attention of the House to the statement today by the Minister for Primary Industry (Mr Nixon) in which there is reference to the police. Leaked copies of the Auditor-General’s report have been widely published and most of us know what is in it - this is a very leaky Government. The Minister has had the report since May 1980. How much longer does the Minister need before he tables that report from the AuditorGeneral? We know that Asia Dairy Industries (Hong Kong) Ltd was operating what has been described elsewhere as a private slush fund for some directors and their families. These are serious charges. We need these sorts of statements laid to rest. The Opposition believes that the Minister has known basically the facts of this question for over a year. In fact two Ministers have had the information before them. Quite plainly and simply, the Opposition finds it hard to believe that this matter could not have been resolved by now.

page 29

GREAT BARRIER REEF MAKINE PARK: CAPRICORNIA SECTION ZONING PLAN

Ministerial Statement

Mr THOMSON:
Minister for Science and the Environment · Leichhardt · NCP/NP

– Pursuant to section 33 of the Great Barrier Reef Marine Park Act 1975, I present the zoning plan for the Capricornia section of the Great Barrier Reef Marine Park together with a communique from the Great Barrier Reef Ministerial Council meeting of 1 August 1980. 1 seek leave to make a statement relating to the plan.

Leave granted.

Mr THOMSON:

– The Government’s policies and initiatives concerning the Great Barrier Reef are based on the need to conserve this outstanding natural asset for all people, while allowing reasonable multiple uses to continue in a manner which is compatible with reef conservation. Finalisation of the Capricornia zoning plan is significant. It reflects a most intensive research and consultation program and demonstrates the Government’s commitment to the careful planning of environmental protection to ensure that whatever is done is done effectively and efficiently.

The Prime Minister (Mr Malcolm Fraser) and the Premier of Queensland agreed to establish the Ministerial Council, which comprises two Ministers from each Government. It is a focal point for co-operative effort between the Commonwealth and Queensland in the proper management and protection of the reef. The Great Barrier Reef Marine Park Act specifically states that the Authority can perform any of its functions in cooperation with Queensland. It also provides that the Commonwealth Government may make arrangements with the Queensland Government for the performance of functions by Queensland officers. The establishment of the Ministerial Council to enable both governments to coordinate policy in relation to the reef has reinforced these provisions. The result is that the Commonwealth Government has been able to move rapidly towards the establishment of the marine park. The tabling of the Capricornia zoning plan and our moves towards declaration of a section of the marine park off Cairns provide solid evidence of the soundness of the Government’s approach to the administration of the Act and the progressive establishment of the marine park as provided for by the Act.

The Authority is required by the Act to invite interested persons to make representations in connection with the development of zoning plans for declared sections of the park. Representations made in relation to the Capricornia zoning plan were submitted to me together with comments from the Authority. The Act also provides for individuals or groups to channel their views to either myself or the Authority through the Great Barrier Reef Consultative Committee. By taking this co-operative approach and deliberately involving the public in the management process, the reef will be protected and conflicts between various activities will be minimised.

The Capricornia section was chosen as the first section of the marine park as it is the most accessible part of the reef for tourists. Tourist and local use has increased significantly and management is necessary to provide for the protection of the area. Under the plan, the section is divided into six zones which provide a range of uses consistent with the conservation of the reef. There are two general use zones with very few restrictions, one providing for movement of shipping and trawl fishing and the other excluding these activities; two marine national park zones providing unrestricted public access for recreational activities, with certain conditions relating to recreational fishing and collecting; a scientific research zone; and a preservation zone providing areas protected in their natural state undisturbed by man except for approved scientific research purposes. Within certain zones, areas of periodic restricted activity are proposed for management and conservation purposes as described in the zoning plan.

To ensure the most effective and efficient implementation of the zoning plan, the Commonwealth and Queensland governments are developing a set of management principles and guidelines. The relevant Queensland agencies will have the responsibility for undertaking day-to-day management of the marine park. The aim is to rely as much as possible on education and the cooperation of the public in order to achieve the objects of the marine park. However, as with any land park, regulations are required to confer functions and powers, and impose duties upon inspectors. Similarly, regulations proposed will provide for the imposition of penalties for infringements. When the regulations come into effect, probably later this year, an explanatory booklet will be made available to promote understanding of both the zoning plan and regulations.

Considerable progress has also been made on a proposed section of the marine park off Cairns. The Great Barrier Reef Marine Park Authority has assembled biological, physical and economic information and has evaluated public comment on this section. The Ministerial Council has invited the Marine Park Authority to examine and bring forward to the November meeting of the Council proposals for boundaries for the proposed Cairns section, and the full implication of these boundaries. It is anticipated that this section will be declared before the end of this year. Honourable members may have seen a recent statement claiming that the Marine Park Authority had completed the zoning work on the Cairns section in January. This is simply not true. No zoning plan for the Cairns section, in draft or any other form, has ever been prepared by or for the Authority. The Authority has insufficient information at this time to enable it to prepare a zoning plan. Before a plan can be prepared, the boundaries of the section must be defined, the section declared and public comment obtained on a proposal to prepare a zoning plan. These are the steps required by the Act. They were followed precisely in establishing the Capricornia section and its zoning plan. Experience in the preparation of the zoning plan for the Capricornia section has confirmed the wisdom of the Parliament in making provision for an effective public participation process under the Marine Park Act.

I have previously expressed concern at statements claiming that the reef was not adequately protected. Some people still continue to call on the Government to proclaim without delay the entire remaining reef region a marine park. The procedure now being followed is precisely what was proposed by the then Labor Government and adopted by Parliament in terms of the Great Barrier Reef Marine Park Act 1975.

The Act specifically states that the GovernorGeneral shall not proclaim an area to be part of the marine park except after consideration by the Executive Council of a Teport by the Great Barrier Reef Marine Park Authority. To undertake a thorough investigation and to prepare a comprehensive report covering the entire region would take the Authority a considerable period of time even if its resources were unlimited. A policy of progressive declaration allows each section of the reef to be thoroughly investigated prior to recommending declaration and for the views of persons interested in the Reef to be taken into account. Whilst such consultation takes time, the Government believes it to be an essential part of the preparation for declarations of sections of the marine park and to the development of zoning plans for those sections.

Zoning of the reef in accordance with the Government’s objectives is not simply a matter of drawing lines on a map and promulgating a few rules. The zoning plan identifies many of the issues which require careful and detailed consideration. The plan comprises six separate zones and two areas of periodic restricted use. These were determined after a comprehensive program of research and investigation. From those studies, boundaries, objectives and use and entry provisions were prepared. The zoning plan deals in detail with recreation, commercial and other fishing, the navigation and operation of vessels, the operation of aircraft, collecting, research, construction of facilities and visitor aids. Proposals for the regulation of various activities will obviously extend to matters such as the discharge of waste, dumping of materials, littering and the like. In developing the plan, the basic aim has been to minimise regulations but, where regulation is necessary, to make it as simple as possible.

Nevertheless, the zoning plan and regulations will provide a comprehensive basis for effective reef management and conservation in the area. While this process of progressive declaration is proceeding the entire Great Barrier Reef region is safeguarded from damage as a result of the package of policies and measures agreed between the Premier of Queensland and the Prime Minister.

I have emphasised on several occasions and I repeat that these policies are designed specifically to ensure the protection of the reef from drilling and mining and . to formalise arrangements to ensure that the provisions of the Great Barrier Reef Marine Park Act are fully and efficiently implemented through co-operation between the two governments. The Government has been accused of avoiding questions relating to the reef. The opposite is true. The Government has issued frequent bulletins on its policies and initiatives. The most recent example are publications entitled The Reef, the Commonwealth Government and You’ and ‘The Great Barrier Reef- The Commonwealth Government Role’ which I have just released. I commend the pamphlet and booklet for the information of honourable members.

Implementation of the Government’s policies and initiatives will ensure that the Great Barrier Reef and surrounding region remains a spectacular natural phenomenon to be used by people from Australia and the rest of the world. The reef is an essential feature of the world heritage, an area of wilderness which must be protected at all costs. The zoning plan now before Parliament is evidence of that concern and of the Government’s commitment to the conservation of our environment.

Mr COHEN:
Robertson

– by leave- The ministerial statement read by the Minister for Science and the Environment (Mr Thomson) is more interesting for what it does not say than for what it says. For the last two years or more I have been trying to get some answers from the Government to the key questions. These are the questions that the people of Australia are asking. They want to know the answers before they make a judgment on the Government’s policy with regard to the Great Barrier Reef. I gave the Minister a number of questions when I challenged him to debate this matter publicly. The first question is: Does the Government intend to permit drilling in the Great Barrier Reef region? I think that is a fairly clear, fairly concise and easily understood question. It is not obscure. I will repeat it: Does the Government intend to permit drilling in the Great Barrier Reef region? It is a question that the Government refuses to answer.

The second question is: If so - that is, if it intends to permit drilling- what new scientific method has it discovered which will ensure that there will never be a blowout in the reef region? The third question is: If it is not aware of any new fail-safe methods of preventing blowouts, how can it give an assurance that ‘it will permit only drilling that will not damage the reef? The fourth question is: Is the Government aware of the recent blowout at Ixtoc 1 in the Gulf of Mexico which spewed 140 million gallons of light crude oil, of the most toxic type, into the ocean and which affected the fishing, prawning and tourist industries 800 kilometres away on the Texas coast not to mention the damage to the area around Ixtoc 1?

The fifth question is: What is there to prevent a similar blowout on the Great Barrier Reef or in the Great Barrier Reef region? One has to be very careful with the use of words when one is dealing with the Prime Minister (Mr Malcolm Fraser) and the Minister. When one asks one question one is given an answer to another question. They never answer the question that is asked. What is there to prevent a similar blowout on the Great Barrier Reef or in the region which would result in damage being caused to the fishing and tourist industries on the Queensland coast? The sixth question is: What guarantees can the Government give that a blowout will not permanently damage the world’s greatest coral ecosystem? The seventh question is: If the Government does not intend to permit drilling, why does it not say so and why does it not declare the Great Barrier Reef Marine Park? The eighth question is: Why does the Government continue to assert that it does not have the staff to do the zoning of the various sections of the reef when it is common knowledge that the Great Barrier Reef Marine Park Authority had completed the preparatory work on the Cairns section in January? It is only the recalcitrance of the Queensland Government that has prevented a declaration of the Cairns section. The ninth question is: Why does the Government not proceed to declare the whole of the Great Barrier Reef Marine Park thus preventing oil drilling or mining on the reef, ensure the protection of the reef and proceed with zoning over the next four or five years? Those are the questions that have to be answered.

It is always very interesting to hear the Minister use words such as ‘zoning’. But such words are irrelevant to the prime question. I have asked the Minister to answer these questions. I have asked the Prime Minister to answer them. I invited the honourable member for Herbert (Mr Dean) and the Minister, who represents the electorate of Leichhardt which is a key area along the Queensland coast - your electorate, Mr Deputy Speaker, is also a Barrier Reef seat - to debate this matter with me. I received the following reply to the letter I wrote to the Minister:

Dear Barry,

Thank you for your letter of 3 July concerning the debate on the Great Barrier Reef. I regret that I am unable to accept your invitation.

Yours sincerely, DAVID THOMSON

That is a very nice letter from the Minister. It is a very courteous letter as the Minister’s letters always are. But it really does not explain why the Minister is not prepared to meet me out in the public arena. The Minister has said before that he is prepared to debate this matter with me in this place. Unfortunately there is no way of resolving an issue in this place. I can say something and the Minister can say something which is quite wrong or quite different from what I said. However, there is no way in which the people of Queensland or the people of Australia can cross examine either of us. This is not the case when a matter is debated on television or in a public forum. The only question is: Will the Government assure the people of Australia that no oil drilling will be permitted in the Great Barrier Reef region. Any other answer, any other qualification or any equivocation can only be interpreted as meaning that the Government will permit drilling on the reef. That is the only interpretation that can be placed on this - I have used the word ‘slick’; perhaps I should not use the words ‘slick and oily’ - obscure, glib answer by the Prime Minister and the Minister for Science and the Environment when questioned on drilling in the reef region.

Let me distinguish between the Great Barrier Reef and the Great Barrier Reef region. The headlines in the newspapers say ‘ “No drilling on the Great Barrier Reef, says the Prime Minister’. That is terrific; everyone relaxes. But, that does not deal with the key question of the region. The reef constitutes only a small fragment of that whole area from the Torres Strait right down to near Fraser Island and the Capricornia section of the coast. It extends about 200 miles from the coast. It takes in all those waters and all that coastline. That is the Great Barrier Reef region. It does not matter very much whether one drills on the reef or near it. In fact, if there were a choice I would rather drill on the reef because at least on some of the islands there is solidity and stability. It is in the waters off the reef that the real damage can be done. If a blow-out occurs at an oil well on the mainland, the oil can be contained. However, these oil blow-outs cannot be contained in water, unless one happens to be King Canute. I do not believe that the Minister is King Canute. That is the difficulty, and that is where the obfuscation arises. The Government talks about the reef, but not about the reef region.

The Government claims it has control of the region under the Great Barrier Reef Marine Park Act. That is not true. The Government will have the power only when the Act is declared. Queensland has the power, and who would trust Queensland with anything to do with mining? In Queensland they would drill the gold out of their grandmothers’ teeth if there were a quid in it. The Government does not have the power. It has the power if it wished to use it, but it has shown no signs of willingness to use it to protect the whole of the region. The Government now has power over the Capricornia section, for which the Minister has just provided the zoning details. We may assume that soon the Government will have power over the Cairns section. Power over these regions is irrelevant in terms of the total protection of the reef. If oil drilling is permitted in any other part of the reef, the same amount of damage can occur. It could be the case that 99 per cent of the reef is declared as a national park and one per cent is undeclared, but if there is drilling in that small area and a blow-out occurs, the whole area will be ruined. The Minister says that that would not happen and that the Government would not draw little circles around the oil rigs and drill only in those areas.

Why would it not do that? It did it in Kakadu National Park. That was the most cynical exercise of all time. The Government declared one of the great eco-systems in Australia, and the world as a national park and then put little squares around Jabiru, Jabiluka, Nabarlek and Koongarra. It said that those places were not in the park. The Government was able to tell the conservationists that it did not permit mining in national parks. It is unbelievable. That is what can happen in the Great Barrier Reef region. The Government can draw little circles around all the oil wells and say, We are drilling in only a fraction of one per cent of the Great Barrier Reef region’. That is enough. It is like me saying I will cut out one per cent of the Minister, but unfortunately for him it will be his heart.

It has been said that this Government is following an Act introduced by a Labor government. With all due respect, Mr Deputy Speaker, it is a quite different situation. It really is amusing to hear the Government say that the Labor Government did this and that it must follow suit. Since when has anything done by the Labor Party become holy writ for the Liberal-National Country Party Coalition? Usually if it is something we have done members of the Government run around and change it. That used to be the golden rule - ‘The Labor Government did it so we will do the opposite’. Suddenly, the Government is quoting what we did. There was one difference. When we were in government there was not even a skerrick of a suggestion that we would permit drilling on the reef. There is nothing to stop the Government from changing the Act. The Opposition would support that; the procedures can be changed so that the Park can be declared and the zoning can be done afterwards. In fact, I believe that that can be done now. The Government can make the declaration to protect the reef and then it can go ahead with the procedures afterwards.

I want to know why the Minister for Science and the Environment is so scared to debate this matter publicly. Is it because he knows that what I have said is correct? He knows that he has a brief that is impossible to defend in public. The stock answer is that there will be no harm to the reef. I know that the Minister is not a bad bloke but he does not have supernatural powers. If drilling is permitted there is a risk, and if there is a risk, this country, to its everlasting shame, will place the greatest coral eco-system in the world at risk and future generations will spit on our graves for having done that. Once it is ruined it cannot be brought back. The Minister’s statement is interesting. It is an academic exercise. I think the people of the Great Barrier Reef Marine Park Authority have done a good job, but the real job will be done when this Government declares the whole of the Great Barrier Reef Marine Park. If this Government does not do it, I promise that one of the first acts of a Labor government, in about 10 weeks time, will be to do just that.

page 33

BILLS RETURNED FROM THE SENATE

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

Conciliation and Arbitration (Boycotts) Amendment Bill 1980.

Whale Protection Bill 1980. Fisheries Amendment (Whale Protection) Bill 1980. Continental Shelf (Living Natural Resources) Amendment Bill 1980.

Northern Territory (Commonwealth Lands) Bill 1980.

States Grants (Schools Assistance) Amendment Bill 1980.

States Grants (Tertiary Education Assistance) Amendment Bill 1980.

Tasmanian Native Forestry Agreement Bill 1980.

Tasmania Agreement (Launceston Precision Tool Annexe) Bill 1980.

Western Australia Agreement (Ord River Irrigation) Bill 1980.

Antarctic Treaty (Environment Protection) Bill 1980.

War Graves Bill 1980.

Australian War Memorial Bill 1980.

Customs Tariff Validation Bill 1980.

Customs Tariff Amendment Bill 1980.

Commonwealth Electoral Amendment Bill 1980.

Road Grants Bill 1980.

Supply Bill (No. 1) 1980-81.

Supply Bill (No. 2) 1980-81.

page 33

ASSENT TO BILLS

Assent to the following Bills reported:

Liquefied Petroleum Gas (Grants) Bill 1980. Australian National Railways Amendment Bill 1980. Australian Shipping Commission Amendment Bill 1980. Ship Construction Bounty Amendment Bill 1980. Diplomatic Privileges and Immunities Amendment Bill 1980.

Excise Amendment Bill 1980.

Excise Tariff Amendment Bill 1980.

Excise Tariff Amendment Bill (No. 2) 1 980.

Excise Tariff Amendment Bill (No. 3) 1980.

Bounty (Refined Tin) Bill 1980.

Bounty (Penicillin) Bill 1980.

Bounty (Ships) Bill 1980.

Australian Bicentennial Authority Bill 1980.

Wool Industry Amendment Bill 1 980.

Wool Tax (Nos. I to S) Amendment Bills 1980.

Distillation Amendment Bill 1980.

Income Tax Assessment Amendment Bill (No.2) 1980.

Income Tax Assessment Amendment Bill (No. 3) 1980.

Income Tax (Rates) Amendment Bill (No. 2) 1980.

Liquefied Gas (Road Vehicle Use) Tax (Repeal) Bill 1980.

Appropriation Bill (No. 3) 1979-80.

Appropriation Bill (No. 4) 1979-80.

Diesel Fuel Taxation (Administration) Amendment Bill 1980.

Companies (Acquisition of Shares) Bill 1980.

Companies (Acquisition of Shares- Fees) Bill 1980.

Securities Industry Bill 1980.

Securities Industry (Fees) Bill 1980.

Companies and Securities (Interpretation and Miscellaneous Provisions) Bill 1980.

Australian Federal Police Amendment Bill 1980.

Australian Federal Police (Consequential Amendments) Bill 1980.

Australian Film Commission Amendment Bill 1980. Aboriginal Land Rights (Northern Territory) Amendment Bill 1980.

Trade Practices (Boycotts) Amendment Bill 1980. Northern Territory (Commonwealth Lands) Bill 1980. Coastal Waters (State Powers) Bill 1980. Coastal Waters (Northern Territory Powers) Bill 1980. Coastal Waters (State Title) Bill 1980. Coastal Waters (Northern Territory Title) Bill 1980. Seas and Submerged Lands Amendment Bill 1980. Petroleum (Submerged Lands) Amendment Bill 1980. Petroleum (Submerged Lands) (Royalty) Amendment Bill 1980.

Petroleum (Submerged Lands) (Registration Fees) Amendment Bill 1980.

Petroleum (Submerged Lands) (Exploration Permit Fees) Amendment Bill 1980.

Petroleum (Submerged Lands) (Pipeline Licence Fees) Amendment Bill 1980.

Petroleum (Submerged Lands) (Production Licence Fees) Amendment Bill 1980.

Fisheries Amendment Bill 1980.

Navigation Amendment Bill 1980.

Historic Shipwrecks Amendment Bill 1980.

Migration Amendment Bill 1980.

Conciliation and Arbitration (Boycotts) Amendment Bill 1980.

Wireless Telegraphy Amendment Bill 1980. Whale Protection Bill 1980. Fisheries Amendment (Whale Protection) Bill 1980. Continental Shelf (Living Natural Resources) Amendment BiU 1980.

States Grants (Schools Assistance) Amendment Bill 1980.

States Grants (Tertiary Education Assistance) Amendment Bill 1980.

Tasmanian Native Forestry Agreement Bill 1980.

Tasmania Agreement (Launceston Precision Tool Annexe) Bill 1980.

Western Australia Agreement (Ord River Irrigation) Bill 1980.

War Graves Bill 1980.

Customs Tariff Validation Bill 1980.

Commonwealth Electoral Amendment Bill 1980.

Antarctic Treaty (Environment Protection) Bill 1980.

Australian War Memorial Bill 1980.

Customs Tariff Amendment Bill 1980.

Roads Grants Bill 1 980.

Supply Bill (No. 1) 1980-81.

Supply Bill (No. 2) 1980-81.

Pipeline Authority Amendment Bill 1980.

Customs Amendment Bill (No. 3) 1980.

page 34

OIL DRILLING AT NOONKANBAH

Discussion of Matter of Public Importance

Mr SPEAKER:

-I have received a letter from the honourable member for Cunningham (Mr West) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The increasing racial conflict in Western Australia as a result of the Western Australian Premier’s insistence on oil drilling at Noonkanbah, W.A.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the Standing Orders having risen in their places -

Mr WEST:
Cunningham

– It is ironic that Noonkanbah, the Aboriginal-owned pastoral lease which has been the site of so much confrontation this year, should have begun as a Federal Government project to restore a dignified lifestyle to the Yungngora community. Yet, when the lifestyle of these people was directly and savagely threatened, the Federal Government turned a blind eye to its responsibilities. In 1971 this community, then made up of pastoral workers on the white-managed pastoral lease, went on strike because of maltreatment. They were reduced to living in appalling and degrading conditions around Fitzroy Crossing, some 60 miles away. But, in 1976 the Aboriginal Land Fund Commission acquired the pastoral lease for the Yungngora community. The station, which is one million acres in size, was in ruin. The people have successfully restored Noonkanbah station to pastoral viability and have re-established their traditional way of life within a white community.

Sacred sites have a special and particular significance to Aborigines. They believe that sacred sites are those places where the heroic ancestors travelled, forming the world, the people and the whole blueprint for life. These sites are the subject of religious celebrations by which Aboriginal people protect the sites and renew their religion and associations with the land. Wherever Aboriginal people have been able to continue their culture, these sites have been an integral part of it. They form the nuclei of particular Aboriginal people’s association with their land, passed on to them by their ancestors, and are thus central to the Aborigines’ very existence. In Western Australia sacred sites should be protected under the State Aboriginal Heritage Act 1972 which empowers the Western Australian Museum to investigate, recommend and declare sacred sites. However, the Minister for Cultural Affairs, at present Mr Grayden, has the power to override the Museum recommendations.

In June 1979, after an extensive survey of Noonkanbah, the Museum compiled a report on the sacred sites. It recommended that, amongst others, the areas bounded by No. 1 and No. 2 drill sites chosen by Amax Exploration (Australia) Inc. should be protected. But, Western Australia’s unsavoury and arrogant Minister for Cultural

Affairs, Mr Grayden, very swiftly used his veto powers and overrode the Museum. Amax gained authority to drill for oil at Noonkanbah in early 1979. In addition, 30 different mining companies and prospectors have pegged out 600 separate exploration tenements on Noonkanbah. It is little wonder that the people are worried for their future on that station.

Let me briefly run through the appalling events of the last five months. On 2 April the Noonkanbah community forced off the site the water drilling company contracted by Amax. In July the State Government foreshadowed amendments to restrict even further the Aboriginal Heritage Act, although the Minister still has power to override the recommendations of the Museum. On 24 July the Western Australian Government declared the road through the station a public road and excised the drilling site from the pastoral lease. The community had proposed a compromise to the State Government, including a re-mapping of the area by the Museum and the State Government’s acceptance of any recommendations. The Government rejected the community’s proposal and then launched the infamous ‘operation convoy’. I seek leave to incorporate in Hansard a letter from the Noonkanbah community, signed by Joe Wunmah, Mick Michael, George Bell and Bob Mululby, to the Premier of Western Australia, Sir Charles Court, which adequately sets out the terms of the proposed compromise agreement.

Leave granted.

The document read as follows -

Yungngora Community, Noonkanbah Station, 18 July 1980

To: Sir Charles Court,

We have asked Mr Ernie Bridge to deliver this letter to you for your consideration.

We want to put these proposals to you as a way of reaching agreement on the question of mining on Noonkanbah. We hope you will accept this as being made in good faith in a real effort to resolve these difficult questions.

The main thing is we must know that all our sacred places will be safe from mining and that you will believe our word about these places.

We have asked Ernie Bridge to take this word to you and now we wait for your answer.

page 35

PROPOSED AGREEMENT BETWEEN STATE GOVERNMENT AND YUNGNGORA COMMUNITY

Signed by:

Joe Wunmah Mick Michael George Bell Bob Mululby

Mr WEST:

– This secretly contrived 53-vehicle convoy was resisted by Aboriginal communities, clergymen and unionists on the way to Noonkanbah. More than 50 people were arrested. Some 32 trucks were used in the convoy, more than 30 police were present, and 20 police wagons were used. The cost to the Western Australian Government for the police and the officers of the State Emergency Service, and for organising the use of Main Roads Department bulldozers, graders and two trucks to clear the road of vehicles in the convoy’s path was $500,000. It should be pointed out that the Commonwealth shares part of that cost through its tax-sharing arrangements with the States.

I visited the area on Sunday, 10 August, and I was revolted by the scene at the drilling site. The entire area was surrounded by a fence of cyclone wire topped with razor wire 10 feet high. The perimeter was guarded by large numbers of State police. Here, in Western Australia, was a scene straight from racist South Africa set up by the Western Australian Government and condoned by this Federal Government through its inertia and inadequacy. The most disgraceful expedition any Australian government has ever launched, was the description used by Professor Charles Rowley, the former Chairman of the Aboriginal Land Fund Commission, which bought Noonkanbah for the Yungngora community in 1976. This disgusting power nexus between the State and

Federal governments was broken by the announcement of the President of the Australian Council of Trade Unions on 12 August that no union labour would be used on the site until an appropriate agreement was reached between the community and the company. The members of the Australian Workers Union, to their everlasting credit, have refused to work this scab rig, and Richter Drilling, the contractor to Amax, has stated that it is not prepared to use non-union labour.

The Court Government in Western Australia - I say this advisedly - is determined to crush the Noonkanbah community. It is deliberately sacrificing Aboriginal people to its gung ho mining and development policy. Premier Court’s attitude towards Aboriginal people has been clear throughout this whole miserable exercise. He has threatened, insulted and savagely attacked them with the full power of the State police, and has made outrageous media statements. He has said that it will be impossible to approve a pastoral station for another Aboriginal group. He has said that taxpayers will be bitter because public funds have been given to the Aborigines. He has further stated that the Aborigines, Professor Berndt, and other leading anthropologists were lying about the religious nature of Aboriginal relationship to land. He said: ‘We now find that the true objectives of the people attacking the Government are land rights and royalties’. The Noonkanbah people have denied repeatedly that they want royalties. They want their land. The issue is one of land rights because of the religious nature of land and the implications of sacred sites.

The Premier has attacked the Minister for Aboriginal Affairs (Senator Chaney). On 8 August in the West Australian he ridiculed Senator Chaney’s pathetic plea for compensation for the Yungngora community. Court said:

If the drilling program ends with this year’s activity the Yungngora community will have nothing but an additional water source and improved roads to remind them of it.

He is denying Aborigines their religious feelings. No white Australian would tolerate such callous disregard for their religion or their culture. Even more racist and disgusting have been the responses of Court’s Minister for Cultural Affairs, the abysmal Mr Grayden. He has said that cultural freedom and land rights for Aborigines in Western Australia should be kept out of his State like a noxious weed, and that the Noonkanbah sacred sites are not genuine. In one sentence he dismissed completely the whole body of anthropological knowledge and the Museum’s work. Grayden said in the Western Australian Parliament on S August that Aborigines sit around drinking alcohol and playing cards and two-up. He called Aboriginal communities junk-yards. He has hidden in a cowardly way behind his parliamentary privilege to slander Aboriginal people. When the Western Australian Aboriginal Legal Service had the audacity to announce that it would take action on his racist attacks he called for the abolition of the Aboriginal Legal Service across the nation. Senator Chaney has been written off by Aboriginal Australia. He has engaged in hypocrisy, double-speak and duplicity by pathetically attacking Court on the one hand and by complying with the Prime Minister on the other. On 1 1 March - this is the best comment honourable members will have ever heard - Senator Chaney said:

The rumour that the company would enter the property without notice and with police protection- caused great consternation. It is good that the Premier has put that rumour to rest.

Yet in July Senator Chaney was at Noonkanbah standing over the Aboriginal people. He told them that it was inevitable that drilling would take place and that they should try to make the best of the situation. On 4 August he and his predecessor, the present Minister for Employment and Youth Affairs (Mr Viner), who is sitting opposite, said in the West Australian that a mediating structure should be provided to work out the best solution and to provide for compensation. They showed that they understood the Aboriginal association with the land in that West Australian article. They made an emotional but pathetic plea for a reasonable approach to Noonkanbah. They said: Quite simply, the Aborigines believe that if their land is destroyed, then they too are destroyed.’ They criticised Court’s insensitivity and lauded the Aboriginal Land Rights (Northern Territory) Act which I remind honourable members was introduced in this Parliament by a Labor Government in 1975. They stated that justice for Aborigines, as provided by that Act, could be given only by politicians, not by police, courts or trade unionists, and they called for an accommodation of interests at Noonkanbah. But what attempt was made to create an accommodation of interests? Their own Prime Minister had already rebutted their remarks. On 2 July the Prime Minister told the Aboriginal people at Broome in the Kimberleys that ‘Australia needed to build up its oil reserves and this could not happen if drilling was stopped or delayed’. The Prime Minister said that oil drilling must proceed at Noonkanbah.

Mr Cotter:

– He didn’t say that at Broome at all.

Mr WEST:

– The Prime Minister said that oil drilling must proceed at Noonkanbah. How much longer will the national government tamely accept, in this servile way, being stood over by this arrogant, dictatorial and awful old man, the Premier of Western Australia? How much more ahuse of Aboriginals will it tolerate from this bigoted State Government? The truth is that, despite all the rhetoric about Aboriginal selfdetermination, this Government has been shown clearly to be repressive and anti-Aboriginal by simple virtue of its refusal to act and to use its Federal powers. Why is Court so insistent on drilling? Does he really expect Amax to find oil? The answer is no. I contacted the General Manager of the Amax operation and was told that the chances of striking hydrocarbons at Noonkanbah are no better than 50 to one. The Western Australian Government knows that popular opinion on land rights is moving the Aborigines way. But, that Government’s view is quite simple: It wants no land rights; no recognition of sacred sites; no recognition of Aboriginal culture; no right to negotiate the right to mine on Aboriginal land. In short, it seeks to crush the Aboriginal’s morale at Noonkanbah, once and for all.

Quite clearly, unless the Prime Minister withdraws support for Charles Court’s actions and policies, the Federal Minister for Aboriginal Affairs, Senator Chaney, ought clearly to resign. He supports land rights in the States; he understands the Aborigines unique relationship with their land; he knows the significance of the sites; he espouses self-determination for all Aboriginal organisations. With all these fundamental Aboriginal causes, I agree. Labor agrees; the trade unions agree; the majority of the Australian people agree; but the Prime Minister does not agree with the Minister for Aboriginal Affairs. The Prime Minister supports black rights in Africa, but says that drilling must proceed at Noonkanbah. That is another example of his duplicity.

Mr Giles:

– What rot!

Mr WEST:

– Why does he not do something about it? Why does he not stop this monster in WA? The Federal Government has the power and the responsibility. In the show-down between mining companies and Aboriginals, with this Government the Aborigines will come last every time. Senator Chaney is jammed between Court and the Prime Minister. He is a prisoner of his belligerent State colleagues. He has been sold out by his own Prime Minister.

I congratulate the Australian Council of Trade Unions, the clergy and all those who supported these people. I hope they will continue that support. It should not be a trade union function to protect the Australian Aboriginals; it is the responsibility of the Federal Parliament. The Prime Minister must withdraw his support for Court and resolve the immediate problem of Noonkanbah by acquiring under section 51 of the Australian Constitution the sacred sites and areas at Noonkanbah. Failing that, if the Government is not willing to stop Court, Senator Chaney, as an honourable man - and I believe he is underneath - and as a result of his expressed criticism of the Western Australian Government, must resign.

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

Mr VINER:
Minister for Employment and Youth Affairs · Stirling · LP

– Listening to the honourable member for Cunningham (Mr West) it seems to me that the mark of the success of a Minister for Aboriginal Affairs is to have someone call for his resignation. I think the Premier of Queensland called for my resignation three times. I think even the Premier of Western Australia called for my resignation at one time.

Mr West:

– I do not want to see him resign; I want to see him act.

Mr VINER:

– I can assure the honourable gentleman that Senator Chaney’s administration of Aboriginal affairs holds the greatest respect amongst Aborigines and within this Government.

Mr West:

– I will be happy if you act.

Mr DEPUTY SPEAKER (Mr Millar)Order! The Minister will resume his seat. I remind the House that the honourable member for Cunningham was listened to in silence.

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

Mr Deputy Speaker–

Mr DEPUTY SPEAKER:

-If the honourable member for Parramatta continues to interject while I am addressing the House I will be required to deal with him. Every honourable member has the right to be heard in silence. I request that that course be followed.

Mr VINER:

– The honourable member for Cunningham also made some most disparaging remarks about the Premier of Western Australia. They are quite unbecoming in this House, and advance his argument in no way at all. Let me just remind him that the Premier is regarded as one of the most dynamic premiers ever of Western Australia and one of the most dynamic premiers in Australia. He has brought more advancement, both social and economic, to the people of Western Australia than any Labor premier before him. So, let not those sort of things be said of Sir Charles Court.

I have lived through a number of situations where the Commonwealth has had to come into conflict with the States in Aboriginal affairs. Members such as the former member for Fremantle, the honourable member for Wills (Mr Bryant) and the former member for MacKellar, Mr Wentworth- a very highly respected Minister for Aboriginal Affairs - have had to fight for Aboriginal interests right throughout Australia. It seems to be the lot of any Commonwealth Minister that he must do so. I have admired the way in which Senator Chaney has fought for Aboriginal interests at Noonkanbah and other places around Australia.

Let me state clearly the Commonwealth’s position: The Commonwealth has consistently expressed its view to all parties that conflict should be settled by negotiation, not by confrontation. Yet, the call of the Opposition in this matter of public importance is for confrontation. If there is one lesson that has been learned over many years of Aboriginal affairs, it is that confrontation does not succeed. It is easy to advocate development projects proceeding regardless of all other consequences. I know there are people in this community who hold that view. It is also easy to argue for the protection of Aboriginal interests at all costs. I know there are people in this community who argue that point of view. But the real challenge is to allow development of Australia’s natural resources - so essential for the benefit of all Australians - to proceed and, at the same time, to provide properly for accommodation of Aboriginal interests.

The essence of the article which Senator Chaney and I wrote and which was published in the West Australian was that there needed to be an accommodation of interests. That was precisely the task which the Federal Government set itself with regard to the development of the great uranium deposits in Arnhem Land; an accommodation of interests which beforehand people considered were irreconcilable. These included accommodation of mining interests, accommodation of conservation interests and accommodation of Aboriginal interests. The resolution of those interests in the Northern Territory, I think, will stand the test of time.

The Commonwealth has consistently recognised the responsibility of the States for land tenure and granting of mining rights and has accepted that mining cannot be prevented on pastoral leases. As I have said, the Noonkanbah dispute cannot be settled by confrontation; it can be settled only by compromise on both sides. Unless there is a willingness to come to terms with the reality of the need for accommodation there will be nothing but bitter resentment and a deeper widening of the gulf that separates the black and white people of Western Australia.

The Commonwealth has a clear direct interest in this matter on three bases: Firstly, on the basis of the 1967 referendum which gave to the Commonwealth power to make laws with Tegard to the Aboriginal people; secondly, in the national interest to bring about a reconciliation and a harmony between all the races which populate Australia; and thirdly, a clear international interest to have regard to the way in which the rest of the world looks upon what we do within our own continent. At the heart of this dispute is, as Senator Chaney and I said, the question of land. Our article states:

At the heart of the Act–

That is, the Western Australian Aboriginal Heritage Act- is the special relationship that Aborigines have with their land. This is at the heart of Noonkanbah. It is what sacred sites are all about.

Unless and until that is recognised there cannot be a reconciliation of interests. Therefore, I regret that so many people in Western Australia speak of the Noonkanbah people, the Yungngora community of Aboriginal people, as detribalised; in other words, devoid of any traditional interest with respect to the land which makes up the Noonkanbah pastoral lease. That proposition is wrong, and unless that is recognised, as I say the necessary reconciliation, the necessary accommodation, cannot be achieved.

The dispute centres upon the question of what protection should be accorded not to specific sacred sites but to what have been described as areas of influence surrounding such sites and in particular, whether such areas lying between major sites should be closed to mineral exploration and development. As we know, the Noonkanbah dispute derives from the desire of Amax Exploration (Australia) Inc. to drill in an area of influence rather than on any specific sacred sites, the closest of which is 1.25 kilometres from the drilling rig. The Western Australian Aboriginal Heritage Act provides for the protection of places including any sacred ritual and or ceremonial site which is of importance or of special significance to persons of Aboriginal descent.

Mr West:

– What did the Museum say about that?

Mr VINER:

– The interpretation of the Western Australian Museum is that areas of influence come within that definition, either as an area of sacred ritual or a ceremonial site or as an area of special significance to persons of Aboriginal descent. Therefore, the essence of the question is: How does one protect the Aboriginal interests while allowing development of the prospective natural resources on the Noonkanbah property?’ The Western Australian Government proposes to amend its Act. I hope and I know that Senator Chaney hopes that the amendment will not simply clarify - whatever that might mean - the provisions of the Western Australian Act but give adequate machinery for protection by Aboriginals of their traditional interests.

The honourable gentleman has sought to criticise the Prime Minister and to assert that in his statements he has shown no interest in Aboriginals. I wish to put the record straight because it is important to do so. The Prime Minister met an Aboriginal delegation at Derby on Tuesday, 1 July 1980. In answering a question from Jimmy Beiundurry, the local National Aboriginal Conference member, the Prime Minister said:

On the question of sacred sites, as I understand it, I do not know of any difference between the Aboriginal people, the people of Noonkanbah, the Western Australian Government or the Commonwealth Government. There has been an absolute commitment on the part of the Premier, Sir Charles Court, that sacred sites will be protected and that of course is the view of the Commonwealth and the view I am quite certain that you want us to adopt . . . sacred sites must also be protected, and there must also be rules that protect a particular community - in this case, the Noonkanbah community rule for access and I know that there is no disagreement between governments on that point.

Later, answering another question from Jimmy Beiundurry, the Prime Minister said:

Having in mind that sacred sites are to be protected and must be protected, it is my firm belief that drilling for oil must not be impeded. This is a pastoral lease and it is in conformity with pastoral leases in Western Australia to enable mining or drilling for oil to take place. And therefore I think it ought to be allowed to do so.

In order that the record remains straight, I ask for the whole of the passages from which I have quoted to be incorporated in Hansard.

Leave granted.

Jimmy Bieundurry

Again, I would like to ask Mr Fraser about - in Western Australia as you know, and everyone else knows, and just cross the border, which has been introduced by the Federal Government in Northern Territory we have land rights and haven’t got any ownership we are missing some of these and haven’t got any ownership we are leasing some of these places and our own name and our Aboriginal name or whatever the organisation, so we can really say, this is where we belong to and this is what we want to own. Your policies are quite simple and have recognised the land rights in the Northern Territory and the only difficult land rights situation in Western Australia and the States where Aboriginal people would have, or buy land, or to have business enterprise of any sort of development then is set up rather than just in communities and you know, all sitting together- 300, 400 people sitting in one place just getting social security service, but we want to spread out and set up our own thing and this is the kind of thing, one or two families, three families, wanted to get at, and are looking at on the issue regarding to, in relation to, land rights. So, I think that in some cases we want, we would urge to ask and taken you aside and ask some ways of assistance.

Prime Minister

The Commonwealth policy in the Northern Territory has been operating for some time and I think it has worked quite well. Senator Chaney and Ian Viner before him have expressed the policy of the Commonwealth in relation to these matters. We believe in the principle behind the policy, the principle in relation to land rights. But at the same time, it is a matter in which we believe that the States themselves should make a decision in relation to the States, and that of course, is important in relation to Western Australia. There are leases here which are the same as the kind of possession that can be available to other people but part of what your question was about as I understand it, was not just sitting down in a community and receiving social service payments but being able to get up and do things and being responsible for themselves. I think that is an admirable and a proper objective. There are two things I would say about that.

The Development Commission itself would have a role in assisting aboriginals to do things to establish enterprises on their account, and so, we as a Government, look to it as a significant one of the initiatives, and I hope it is looked at in the same way by the aboriginal people. I think that that is the important thing. I do not know at this point that there is much more that I can say about it because there are some things which do need to be determined within a State and by a State. The policies in relation to those matters need to be determined. If they are not, I think that no matter what the Commonwealth might do, the policy will not work harmoniously and well ‘to the advantage of aboriginals themselves. So, I would hope over time the policies that have worked in the Northern Territory can become an example . . . (inaud) . . . to the wider sphere in Australia.

Jimmy Bieundurry (reading a letter from the Noonkanbah Community handed up by George Bell) ‘Canberra Government has the power from the 1968 Referendum to make laws and help Aboriginal people. We want them to use this power to stop Charlie Court making the road public and taking the drilling area away from the Noonkanbah lease and also to stop any drilling on sacred land’. The problems I would like to stress on that one is about the Federal Government. In the 1967 Referendum when the Government refused to take to . . . (inaud) overrun it and whatever the development is. That is the State Government has more power and also the Federal Government has more power to overrun us on this because of the 1967 Federal Referendum. I would like to hand that over to you to think about it and take it up in your Parliament time on behalf of the Noonkanbah Community.

Prime Minister

Thank you very much. There are just one or two things I would like to say about this problem which I know is a matter which has concerned a number of people. It is not a matter which can be resolved today. But I would like to say one or two things which are I think important - to state the principles which I think guide this particular matter. On the question of sacred sites, as I understand it, I do not know of any difference between the Aboriginal people, the people of Noonkanbah, the Western Australian Government or the Commonwealth Government. There has been an absolute commitment on the part of the Premier, Sir Charles Court, that sacred sites will be protected and that of course is the view of the Commonwealth end the view, I am quite certain, that you would want us to adopt. There is also agreement, as I understand it, on the need for proper rules for access so that the community would not be disturbed by other activities, so that the community would be properly protected by it. But I do want to put it to you that Australia is short of oil, that the drilling that is intended to take place at Noonkanbah is drilling for oil, and this is an important national objective, an important objective for all Australians, including of course, the Aboriginal people. Many of you drove long distances to come here today, and a good deal of the oil we have to use comes from overseas. It is important that we try and build up our own reserve and make Australia as a nation more independent, more self sufficient from suppliers overseas.

That cannot happen if drilling for oil all around Australia is to be stopped or is to be held up. Having in mind that sacred sites are to be protected and must be protected, it is my firm belief that drilling for oil must not be impeded. This is a pastoral lease and it is in conformity with pastoral leases in Western Australia to enable mining or drilling for oil to take place. And therefore I think it ought to be allowed to do so. Having in mind again what I said, sacred sites must also be protected, and there must also be rules that protect a particular community- in this case, the Noonkanbah community rule for access and I know that there is no disagreement between governments on that particular point.

There has been a good deal of publicity about matters at Noonkanbah and at this point there is only one other thing that I would urge on all the people at Noonkanbah, indeed on any community - whether it is an Aboriginal community or any other. But, especially perhaps in matters of this kind. I think in matters of this kind where there are strong views, and sometimes, sharply held views, it is very important for a community to look to its elders; to look to those in the community with great experience and with wisdom in guarding that community’s affairs.

I think if that happens in the Noonkanbah community, it will assist in making the resolution of this matter more easy. I know there are matters in which members of the Noonkanbah community feel strongly. But, where there is a need for consultation, discussion and negotiation, I believe that that is something that should occur with the traditional elders and seniors of the Noonkanbah people. I do not think there is very much else that I can add to this problem at the moment, except to remind you that there are national objectives and there are important Aboriginal objectives which are not in dispute. Perhaps the only other thing which I feel I should say is that the problems to which we all seek to address ourselves, one of the reasons why I am here today to listen to you to hear your views, one of the reasons why we have the National Aboriginal Conference, why we have the Development Commission and (it is going to be run by Aboriginals for and on behalf of the Aboriginal people) is because we believe that these matters need to be determined sensibly, having in mind all the interests that must be taken into account in Australia, and that there needs to be consultation, as there has been, there needs to be understanding, as I believe there has been, but there is a need for national objectives also to be pursued.

Everything that I have said is against the background that it is a firm commitment of the West Australian Government which has obviously the strong support of the Federal Government to see that sacred sites of Aboriginal people are properly defined and properly protected. That is a firm, and total commitment of the Premiers and of the Western Australian Government. Against that commitment, I would have thought it should be possible for the matters which stirred some people in relation to Noonkanbah to be solved and settled without difficulty. But I again would urge that the people of Noonkanbah should listen to their elders in relation to these particular matters, and turn aside from any path of confrontation or something that might lead to difficulty in that way. (general clapping of approval).

Peter Yu

I don’t really think your answer on Noonkanbah is satisfactory. If the State Government had kept its word about protecting sacred sites, there would have been a resolution by now. They have completely ignored the views of the Noonkanbah people which are that the elders are the ones who are making the decisions. You are implying that it is somebody else giving advice to the community. You are not recognising the intelligence of the people and the level of intelligence of the elders at Noonkanbah to be able to make their own decisions. What has also happened in another incident at Argyle was that the Western Australian Museum, an official body recognised by the State, carried out a site survey on the C.R.A. mining tenement who were not supposed to work within one kilometre of a particular site. We go there and at that site, find there was a big hole in it.

Prime Minister

I am glad to hear you say that the problem is one that involves sacred sites only, because on some of the reports, there had been other issues put as being matters that had been raised in relation to Noonkanbah and to have you confirm that it is a question of the sacred sites, and only a question of the sacred sites, is, I think, a very useful thing. I am also glad to hear you say that it is indeed the elders who are governing this matter for the people of Noonkanbah because, against the commitment that Sir Charles Court has made, that sacred sites will be protected and I do not believe that there is anyone in the whole of Western Australia who would ever say that Sir Charles, if he gives his word on a matter, then that’s it, and that it is kept, and kept absolutely.

The State Government is totally committed to the preservation of the sites. The Commonwealth Government has total commitment and support of the State Government in that, and Noonkanbah people want the sacred sites protected. Now, against that background, I would believe that it ought to be possible to resolve this particular matter, and I am glad to have you say that there are not other issues which, could or had in fact, been raised in the past in relation to it.

Mr VINER:
LP

– A few days later- on 6 July- at the State Conference of the Western Australian Liberal Party in Perth the Prime Minister, in addressing that conference, said:

It is important that matters of principle be preserved; and for the aborigines - the important matter of principle of their sacred sites and the protections of their own community. For Australia and Australia’s national interests the important principle is being able to drill for oil where that is necessary and it is important that that be preserved. But it is important for all of us- aboriginal and for all other Australians that we have a capacity to resolve these matters by consultation and negotiation.

Again, for the correctness of the record, I seek leave to incorporate in Hansard the total passage from which that quotation is taken.

Leave granted.

page 40

PRESS OFFICE TRANSCRIPT OF INTRODUCTION TO SPEECH AT THE STATE COUNCIL PERTH

Sunday 6 July 1980

Prime Minister

Sir Charles had made sure that I was accompanied by various State Ministers for different parts of the visit and I appreciate that. The Acting Premier was with me at Derby. I would just like to mention there that there was, as I believe, a constructive, useful and friendly meeting with a number of people from the aboriginal community who had come from many different places- some of them 700 or 800 kilometres from Derby. Noonkanbah, obviously was raised and I made it plain at that particular meeting that on the Commonwealth’s part, we stood as one with the State, in firmly believing and supporting the State in a State commitment to preserve sacred sites. Also I indicated that the support of the State and its determination in the national interest, that drilling must, at the appropriate time proceed; but went on to say that those at Noonkanbah should listen to their elders and that ‘it was my firm belief, and it remains my firm belief, that it is a matter that can be resolved by negotiation and consultation. As a result of discussions that I have had with Senator Chaney and which the Acting Premier has also had with Senator Chaney - those consultations with the elders at Noonkanbah are likely to take place. It is important that matters of principle be preserved; and for the aborigines- the important matter of principle of their sacred sites and the protections of their own community. For Australia and Australia’s national interests the important principle is being able to drill for oil where that is necessary and it is important that that be preserved. But it is important for all of us- aboriginal and for all other Australians that we have a capacity to resolve these matters by consultation and negotiation. I was encouraged and I think the Acting Premier was also encouraged by the tenour and the tone of the meeting and the discussion at Derby that it was capable of being achieved and concluded in that way. And the Commonwealth will certainly co-operate with all its resources in helping to achieve that objective.

Mr VINER:
LP

– That principle which the Prime Minister enunciated was precisely the principle which the Commonwealth and the Aboriginals of Arnhem Land had to face with regard to the Ranger project. It was resolved there by long, patient negotiation and consultation, but that consultation and negotiation required one thing to succeed. It required the participation of all parties, and I emphasise that. I shall nominate the parties which must be involved. Firstly, the company concerned must be involved. Here, of course, it is Amax. It must be directly involved in the negotiations. It cannot be involved through an intermediary. It cannot be vicariously involved; it must be directly involved.

Secondly, the Aboriginal people themselves must be involved on a basis of integrity and trust so that they are met on common ground, not denying to them the intelligence to be concerned about and to look after their own interests, nor denying to them the capacity to make their own judgments, quite apart from those who are described as outsiders, stirrers and the like. I met those kind of people over Ranger, Aurukun and Mornington Island. Thirdly, the state Government must be involved. Fourthly, the Commonwealth must be involved. Only when those four parties get around a table together is there any hope of resolution on the basis that I have suggested.

Above all, it must be acknowledged by both sides of the House that solutions imposed upon Aboriginal communities are not acceptable to them and can rarely be acceptable to the community as a whole. The Commonwealth does not believe that in situations such as Noonkanbah solutions imposed on the State Government would be lasting. Clearly the most effective solution is one in which, as I have said, all parties are involved and which all parties accept and are prepared to work together towards achieving and one in which the interests of all parties are respected. That is what Senator Chaney has sought to achieve. He has worked diligently and very hard. In many places he has received a good deal of criticism for his efforts. Much of that criticism was made not to his face but behind his back.

Again, if there is one thing that we learnt from Aurukun, Mornington Island and Ranger and from introducing land rights into the Northern Territory, it was that where Aboriginal affairs are concerned no side wins from an act of political warfare. Within the Australian Federal political structure we do have States and we do have a Commonwealth. Each has its own responsibilities and its own jurisdiction. Whatever the solution at Noonkanbah, the people of Noonkanbah must live with it because they live in Western Australia and within the social, economic and political life of Western Australia. Therefore a solution must be found which gives them an equal place in the social, political and economic life of that State, one which as I have said and as the Prime Minister has said, protects the Aboriginal interests.

Mr DEPUTY SPEAKER:

-Order! The Minister’s time has expired.

Mr DAWKINS:
Fremantle

– Again we have seen a treacherous sell-out of the interests of Aboriginal people throughout this country and it comes from the grand master of treachery, the Minister for Employment and Youth Affairs (Mr Viner). He is the Minister who took up the cudgels on behalf of the people of Aurukun and Mornington Island and sold them down the drain. Just as Aurukun and Mornington Island destroyed him as Minister for Aboriginal Affairs; so too will Noonkanbah destroy the current Minister for Aboriginal Affairs (Senator Chaney).

Mr Viner:

Mr Deputy Speaker, I draw your attention to the language used by the honourable member. I believe it to be unparliamentary.

Mr DEPUTY SPEAKER (Mr Millar)Order! The Chair was in some doubt at the time the remarks were made about to whom they were directed. Criticism of that nature made earlier in the debate went in another direction. If the honourable member for Fremantle was addressing them to the Minister, I would ask him to withdraw the expression he used as it was unparliamentary.

Mr DAWKINS:

– Which expression? The fact that he is the grand master of treachery?

Mr DEPUTY SPEAKER:

– That is the expression to which the Chair refers.

Mr DAWKINS:

– Despite the accuracy of the statement, I will withdraw it if you insist.

Mr DEPUTY SPEAKER:

-Order! The honourable member is not entitled to qualify it.

Mr DAWKINS:

– I will withdraw it, if you insist. The treachery is in the form not of the action which the Government has taken on this occasion but the fact that it has taken no action when it can take action. There is absolutely no excuse remaining for its not acting in relation to Noonkanbah. The Government knows that the authority exists under the Constitution for it to act. Indeed, it took action under that constitutional authority when it purported to provide self-management for the people at Aurukun and Mornington Island. Even though the law which it passed through this Parliament was in the end ineffective, it was based fairly and squarely on that power. The Senate committee which investigated that Act endorsed the Commonwealth’s authority to move in to acquire land for the interests of the Aboriginal people. Indeed, the treachery is extended because we find in an article of 4 August 1980, Mr Viner and the Minister for Aboriginal Affairs eloquently–

Mr DEPUTY SPEAKER (Mr Millar)Order! The honourable member is required to refer to the Minister by his correct title. The honourable member continues to use the term that the Chair required him to withdraw. Whilst he does not attach that term to any particular member, as a result of his earlier remarks there can be no doubt as to the allusion.

Mr DAWKINS:

– I am referring to the treachery of the Government. The treachery of the Government has been extended because of the way in which the Minister for Employment and Youth Affairs and the Minister for Aboriginal Affairs co-authored an article which appeared in the West Australian newspaper on 4 August. In that article they eloquently made out a case for a new legal framework to protect the interests of Aborigines in Western Australia. In their article they made a plea for a negotiated settlement which recognised the prior Aboriginal ownership of the land and the central importance of land to Aboriginal spirituality. That is the case which they have made out; that is the case which they say they support. But they will take no action.

Today the Minister has said that it is necessary to avoid confrontation. I do not know where the

Minister has been for the last two weeks. Confrontation has arrived. The Western Australian Government organised a paramilitary operation involving 57 trucks, supported by 40 policemen. It involved the arrest of 20 people at Noonkanbah. What on earth is that if it is not confrontation? Is that confrontation? That is the confrontation which we said months ago that the Government could avoid. The shadow Minister for Aboriginal Affairs and I awaited the Minister for Aboriginal Affairs and told him what was necessary and what action he could take in order to avoid the confrontation that has now taken place at Noonkanbah and every mile from Eneabba to Noonkanbah up the length of Western Australia. That is the confrontation we were trying to avoid. That is the confrontation which this Government, through its inaction, in fact precipitated. What could be confrontationist about this Government simply with the stroke of a pen acquiring the land at Noonkanbah and acquiring the minerals that are in that land? That is not confrontationist. That is simply a responsible exercise of its constitutional power.

If some dispute develops as a result of this action with the Western Australian Government there are plenty of processes to which it can appeal. The High Court of Australia exists to sort out any dispute which might arise between the State Government and the Federal Government as a result of that action. That is not confrontationist. What it would do overnight with a stroke of pen would be to take this whole issue out of the area of police activities and out of the area of something akin to warfare. That is what it would do. It would remove it from the confrontation which the Western Australian Government has been absolutely determined to pursue over the last few weeks. It is the fact that this Government, this Minister and his colleague in the Senate, have refused to do it which is the crime. That is their guilt. Their failure to act leaves them just as culpable as the Western Australian Government in its horrendous, brutal and authoritarian activities over the last couple of weeks. That was the action of a megalomaniac determined to get his way. Yet this Government, through its inaction, has simply ‘ condoned it. If the Government of Western Australia does get its way it will be this Minister, the Minister for Aboriginal Affairs and the Prime Minister (Mr Malcolm Fraser) who will have blood on their hands. Let them remember this and let no one ever forget it. They will be participating–

Mr Martyr:

– You do not like Charlie, do you?

Mr DAWKINS:

– Leave Charlie out of it. Charlie has got nothing to do with it. The fact is that it is the grinning Minister for Employment and Youth Affairs, who was the former Minister for Aboriginal Affairs, the grinning Minister who has put his name to an article which has supported the spirituality of the Aboriginal people who is the one who will have blood on his hands as a result of the activities of the Premier of Western Australia. He has the Premier of Western Australia acting for him. He does not have to take responsibility directly, he thinks. But I say that if the Western Australian Government does get its way this Minister and the Minister in the other place will be just as much participants in a further destruction of one fragile part of Aboriginal society. If he has an ounce of decency in his soul the consequences of that participation will haunt him, will haunt Chaney and will haunt Fraser for the rest of their days. What they are participating in is the further destruction–

Mr DEPUTY SPEAKER:

-Order! The honourable member must not refer to honourable members of this House or of the other place other than by the seat they represent or by the office which they hold.

Mr DAWKINS:

– I think everybody knows who I am talking about. They will be haunted for the rest of their days because what they are doing is something which is irreparable; it is something we cannot correct. I ask honourable members to imagine what would have happened if, when the convoy arrived, the rig had been assembled. I ask them to imagine what, would have happened if the workers had decided to work that rig. If that had occurred then this very week would be the week when a sacred site - an area essential to the spirituality of the people at Noonkanbah - would have been totally and irrevocably destroyed. Any form of compensation would not have meant anything to those people. That essential sacred area would have been destroyed for all times. What has been delivered to this Minister and what is being delivered to this Government because of the action of the Australian Workers Union in deciding to withdraw their labour, is an opportunity for the Western Australian Government to arrive at a negotiated settlement.

The Minister says that he has great faith in the possibility of arriving at a negotiated settlement. He draws upon the experience of what happened in the Northern Territory. What he fails to explain is that in the Northern Territory, the Aboriginal people have statutory rights, as small as they may be. Their consent is required before certain things can happen on their land. The Minister knows that that is not the case in Western Australia. Under no circumstances is Aboriginal consent required for anything. A minister in

Western Australia can override Aboriginal interests in relation to entry on to reserve lands. The Aboriginals cannot hold up mining applications. Their consent is not required before mining leases are given out over their land or areas of interest to them. They have absolutely no rights. What we have been saying is that under those circumstances there can be no sensible negotiations when one of the essential parties to those negotiations is totally powerless. What we simply say to the Minister and what he has failed to answer today as he and his colleague have failed to answer time and time again is: Why will they not act to give the Aboriginal people at Noonkanbah some real negotiating position in any discussions aimed at settling this dispute? That is all that we are asking for. The Aborigines have not opposed mining everywhere on Noonkanbah. They are prepared to approve of it if they are given an opportunity to properly discuss the matter.

Mr DEPUTY SPEAKER:

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

Mr COTTER:
Kalgoorlie

– Today we are talking about a very emotional subject which has great and deep meaning to a lot of people throughout Australia. I believe that the way in which this matter has been approached by the Opposition with mounting passions, in advocating confrontation and in talking of acquisition will do nothing at all to solve this problem. There will be nothing–

Mr West:

– I raise a point of order, Mr Deputy Speaker. I ask you to ask the honourable member to withdraw that statement which he just made that we are advocating and engendering confrontation.

Mr DEPUTY SPEAKER:

– There is no point of order.

Mr West:

– The fact is that it is these people and the Western Australian Government who are causing the confrontation.

Mr DEPUTY SPEAKER:

– There is no point of order. The honourable member will resume his seat.

Mr COTTER:

– It is quite clear, as today’s Hansard will disclose, that the honourable member for Cunningham (Mr West) in fact quite clearly advocated acquisition of land in Western Australia as a means of solving this conflict. Now he is trying to deny that he said that. The truth of the matter will be shown in the copies of Hansard tomorrow. The honourable member for Cunningham and the honourable member for Fremantle (Mr Dawkins) have been mounting passions on this matter. They have been advocating acquisition. They have been advocating confrontation in order to solve the problem. I believe that this will not solve the problem at all. A few things have to be made quite clear on this matter. There was talk by the honourable member for Cunningham and by the honourable member for Fremantle that a sacred site is about to be drilled or is being destroyed in Western Australia. It is clear from all the anthropological evidence, from other expert evidence and from evidence from the Aborigines themselves that the sacred sites are not about to be drilled or destroyed. The drilling and other activities in that area are taking place about 1 .25 kilometres from the nearest sacred site. They are approximately 3.5 kilometres from Pea Hill which a lot of people have been saying is the site about to be destroyed. There is no question that a lot of mythology surrounds these sacred sites. It is very interesting to note that the honourable member for Cunningham and the -honourable member for Fremantle are talking clearly of land rights.

In all the negotiations between the Aboriginals of Noonkanbah and the State and Federal governments, the Aboriginal people have been talking of sacred sites. To expand this talk to embrace land rights is completely wrong and is a complete myth. The honourable member for Cunningham has moved his position from the destruction of a sacred site to a land rights claim embracing a much greater area. It is that very point which was made clear by the Prime Minister when he spoke to the Aboriginals in Derby. For the information of the honourable member for Cunningham, I inform him that it was not at Broome! would like to correct that myth held by him. The Aboriginal people of Noonkanbah said in the clearest terms that their concern was for their sacred sites and for the deep effect that those sacred sites would have upon their lives. Only one man who was not a Kimberley Aboriginal - a Mr Yu - expanded that concern immediately to embrace a land rights claim. The Prime Minister took him up on it and made that difference very clear at the meeting with the Aboriginals.

Let us be quite firm on what we are talking about. Are we talking about the protection of sacred sites? Are we talking about drilling in an area which might have some deep religious significance to these people or are we talking about the much broader land rights claim of Aboriginals in Western Australia? There are two distinct areas and both areas must be negotiated. We cannot turn our backs on those areas or walk away from them. We must negotiate with the Aboriginals on them and talk about them. But let us not confuse the separate issues; let us not confuse the drilling of a hole at Noonkanbah with a much broader land rights claim. There are reasons why we should be talking about land rights and sacred sites. In this case, when one mentions Noonkanbah, the Noonkanbah people are concerned that their sacred sites will be destroyed or drilled.

From time to time the Federal Government has made its position quite clear. Very recently it has reaffirmed its position. The Commonwealth Government has put to the State the view that procedures must be developed to resolve conflicts between mining interests and Aboriginals and has proposed discussions to this end. A conflict situation cannot solve these conflicts. It will only make matters a lot worse. The people who will suffer in a conflict situation are the Aboriginal people of Australia. Members of the Opposition are losing sight of the fact that it is the Aboriginal people who will suffer. The honourable member for Cunningham and the honourable member for Fremantle will not suffer this great damage or personal hurt. They will not suffer from this tremendous traumatic situation confronting the Aboriginals. It will be the Aboriginal people who will suffer.

Mr West:

– Of course they will.

Mr COTTER:

– The honourable member for Cunningham says: ‘Of course they will. Let us have this conflict.’ Those are his sentiments. He says: ‘Let us have a conflict and damage the Aboriginal people’. A conflict will not solve this problem in any way. It is interesting to note that the Australian Labor Party - if it is talking of land rights - had its chance to grant land rights, to acquire land and to carry out all of these actions that it says we should be carrying out at present, when it was in power between 1972 and 1975. The Australian Labor Party failed to do anything. When it had power to acquire the land and to carry out these actions about which it is talking, it failed the Aboriginal people miserably. It will fail the Aboriginal people again and again.

The Australian Labor Party is talking of conflict. It is promoting a conflict. It has talked about mounting a union picket on the road to Noonkanbah. In the heart land of unionism in Western Australia, the Australian Labor Party was able to get 1 5 miserly union conveners on the road. That was the sort of picket and support that the Australian Labor Party was prepared to give to the Aboriginal people. It disregarded them. It has no deep feelings for the Aboriginals of Australia. It has done nothing for the Aboriginal people and will continue to do nothing. The conflict and the confrontation that have been promoted by the Australian Labor Party will not solve this problem. They will only hurt the Aboriginal people of Australia. I sincerely believe that we must set guidelines and find a place for negotiation so that we will not have this horrible conflict that will destroy the people we are trying to help.

We have been talking about people’s emotions. The emotions that have been aroused by the honourable member for Fremantle and the honourable member for Cunningham are beyond description. Mention has been made of another confrontation that took place at Noonkanbah. I want to make it quite clear that that confrontation also was arranged and orchestrated to a large extent by outside forces. Mr Don McLeod, who is a well known activist and confrontationist, claims that he speaks for every Aboriginal in Western Australia. He claims that in 1941 he was given power to disown any government in Australia and to speak for every Aboriginal. Today there is hardly an Aboriginal alive in Western Australia who recognises the authority of Donald McLeod. The Aboriginal elders of Noonkanbah have expressed very serious and sensible approaches to this problem. They have told me and the Prime Minister–

Mr Howe:

– When did you go there?

Mr COTTER:

– I have been there. It is a lot more than the honourable member for Batman has done. I have been there and have spoken to the Aboriginal elders on several occasions. They have said to me quite clearly: ‘We recognise that drilling should take place. We are concerned that our sacred sites must be protected. We think we can find a way to do both these things’. I believe that is the answer. Drilling should proceed. The sacred sites must be protected. The Commonwealth and State governments have given very clear undertakings that the sacred sites will be protected. If we are talking of land rights, then we are talking of another subject and should sit down and talk very seriously of land rights as a separate issue.

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

page 45

NATIONAL HEALTH AMENDMENT BILL 1980

Second Reading

Debate resumed from 15 May, on motion by Mr MacKellar:

That the Bill be now read a second time.

Mr VINER:
Minister for Employment and Youth Affairs · Stirling · LP

- Mr Deputy Speaker, may I have your indulgence to suggest that the House has a general debate covering this Bill and the Nursing Homes Assistance 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.

Mr DEPUTY SPEAKER (Mr Millar:
WIDE BAY, QUEENSLAND

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

Dr BLEWETT:
Bonython

– The National Health Amendment Bill 1980 and the Nursing Homes Assistance Amendment Bill 1980 are two small Bills in the health field. Although they are minor Bills Opposition members are rather thankful that we get any health Bills to debate at all. It is interesting to note that these are the first two Bills introduced by the Minister for Health (Mr MacKellar) in the nine months during which he has been Minister for Health. One could accuse the previous Minister for Health (Mr Hunt) of being hyperactive. He produced a new national health scheme every year. One year he produced three national health schemes. He was often charged with being too active. That is certainly a charge one cannot bring against the present Minister for Health. His inactivity suggests, of course, that he is in charge of a functioning and efficient health care system, when instead he presides over one of the most inefficient, one of the least equitable and certainly one of the most confusingly complicated health care systems in the Western world.

Running the foreign affairs of this country no doubt minimises the attention that the Minister for Health can give to health issues. I suppose we should be grateful to the Minister for the little segments of attention that he gives to health, given his visits to France, to West Germany, to Britain, to the United States of America, to Fiji, to Botswana and to Zimbabwe, all in his brief nine month tenure as Minister for Health in this country. It was the Prime Minister (Mr Malcolm Fraser) of this country who promised us in 1975 that he would not give us tourist Ministers. In Mr MacKellar he has given us a part-time locum as Minister for Health.

The two Bills now under discussion are the National Health Amendment Bill and the Nursing Homes Assistance Amendment Bill. The first objective of these Bills is to broaden the range of information that can be required from proprietors of approved non-government nursing homes. The

Department of Health can now require the furnishing of audited accounts from approved nongovernment nursing homes and the keeping of further records over and above those at present required under the National Health Act. The second objective is to introduce penalties for failure to provide the required information. The Bill increases the penalties relating to the provision of other information. Furthermore, penalties for nursing home proprietors deliberately providing false or misleading information have been increased from $200 or imprisonment for six months, to $10,000 or imprisonment for five years. Thirdly, the Bills introduce an alternative power - the power to suspend a nursing home approval as an alternative to the power of revocation. Revocation was a rather drastic and therefore rarely used sanction; and it seems to the Opposition that the power of suspension is a much more realistic option to be used for breaches of the National Health Act in relation to nursing homes. In introducing the power to suspend the approval of a nursing home the Government has rightly protected- the patients concerned. The Commonwealth benefit or the nursing home fund benefit will not be payable during the period of suspension, but the proprietor will be required to deduct those amounts from the fee to be charged. Thus the proprietor, not the patient, will bear the financial penalties of suspension.

The Nursing Homes Assistance Amendment Bill simply applies the penalties for deliberately providing false or misleading information to the deficit-funded nursing homes, mainly nursing homes run by non-profit, religious and charitable organisations. These organisations are already required to provide an annual budget and other detailed information. Unfortunately, there have been no previous penalty provisions for false and misleading information, and these have now been included in the amending Bill.

The Australian Labor Party does not oppose these two minor Bills. Indeed, we are gladdened by the sight of Liberals extending control and regulations over what they call private enterprise. We in the Labor Party believe that there is an inherent conflict between the provision of humane services in nursing homes and private profit from nursing homes. Because of this inherent conflict there is a need for tight public monitoring of profit-based nursing homes in this country. Again, the taxpayers subsidise nursing home benefits to the tune of something like $200m a year, and the Government, as guardian of the taxpayers’ interests, needs to have effective public controls. Therefore we welcome the legislation that has been introduced.

However, there are two general comments we would make. Firstly, these measures fiddle at the edge of what is becoming a set of accumulating problems in the nursing home sector. Secondly, there is no sign in the Minister’s speech of any vision of appropriate health care structures for the aged, no overall view of how private nursing homes should be fitted into a total and appropriate infrastructure for the elderly. I want to give four instances of the kinds of problems that are appearing in the nursing home sectors and which I think require immediate attention.

The first arises from a comment by the Minister for Health in his second reading speech, when he said:

Benefit levels are reviewed annually and are set at levels in each State which, with the rninimum statutory patient contribution, wholly cover the fees being charged for 70 per cent of beds in non-government nursing homes - excluding deficit financed homes- at the time of the review.

Of course, that 70 per cent cover occurs at only one brief point in the year and is very quickly eroded. I have a recent survey from the National Standing Committee of Nursing Homes. I realise that some qualifications have to be entered about it. It is a partial survey and is not totally comparable. Nevertheless, the figures reveal that, as at mid-1980, in Queensland only 37.7 per cent of beds are now covered, in New South Wales 38.8 per cent, in Victoria 42.3 per cent, in Tasmania 21 per cent, in South Australia 58 per cent, and in Western Australia 53 per cent. That is, the 70 per cent cover of beds is eroded rapidly as a result of increases in costs, which are then approved in the nursing homes. It is misleading of the Minister to proclaim that benefit levels wholly cover the fees being charged for 70 per cent of beds in nongovernment nursing homes without acknowledging at the same time the significant drift that occurs through the year.

I recognise that it is not an easy problem to solve. Certainly the Labor Party has no desire to swell the profits of private nursing homes on the ostensible grounds that it is benefiting the patients. If honourable members look at the Australian Financial Review they will regularly find advertisements listing nursing homes as worth while’ or ‘valuable’ form of investment. In New South Wales recently a private nursing home of 845 beds was up for sale for $ 11.5m, or some $13,600 per bed. Those bed costs are ultimately to be met through Commonwealth nursing home benefits, Commonwealth funded pensions, Commonwealth subsidies, from health fund contributions, and from the patient moiety. Clearly, many of these nursing homes are highly profitable organisations. Nevertheless, while being aware of the profit issue, the significant annual drift from the 70 per cent of beds fully covered does need governmental attention. Yet the Minister’s speech suggests that he is unaware of this drift. We ask him tonight: What is he going to do about this growing problem of drift in the cover in nongovernment private profit-making nursing homes in this country?

The second instance we present is the problem of the very different daily rates of benefit between the States. They vary amazingly, and seem to have been the result simply of accidental and fortuitous events. I look forward to seeing justification of the very big difference in the nursing home benefits paid in the various States. It is certainly one aspect of the problem that needs to be looked at today. The third instance is a need for more governmental action in exercising control over the level of training of staff provided in nursing homes. In Queensland the private hospital and nursing home associations are attempting to introduce a third tier of nursing in nursing homes, beneath the trained nurses and the nursing aides. The aim of this proposal undoubtedly is to reduce labour costs and therefore to increase pro- fitablility. Given this Government’s track record on nurses’ education, it will probably welcome this attack on nurses’ professionalism and the diminution of nurses’ status.

The fourth instance relates very much to the Labor Party’s philosophy in the matter of nursing homes. We believe that there is a fundamental difference between public and non-profit-making nursing homes and private profit-making nursing homes. One aspect of this difference is that public and non-profit-making nursing homes are likely to give much greater emphasis to rehabilitation. On the other hand, if honourable members look at private profit-making nursing homes they will see that there is a clear financial incentive for them to secure as many extensive care patients as possible because they attract the greater benefit. We as a party favour the development of the public and non-profit-making home wherever that is practicable. I do not believe the same to be true of the present Government, and I want to exemplify the difference and raise the issue in relation to the difference of emphasis on nursing home applications in the mid-Gippsland region, where it is a matter of some controversy.

In mid-1979 a Commonwealth public servant from the Melbourne office of the Department of Housing and Construction received approval from the Victorian Health Commission and the Commonwealth Department of Social Security to build a nursing home at Wonthaggi. It is not clear how this Melbourne-based civil servant knew of the appropriateness of applying to build in the Wonthaggi area. Certainly, information about distribution of nursing home beds was not publicly available. However, his information was certainly sound because central Gippsland had a general shortage of nursing home beds. This proposal was opposed by the Wonthaggi hospital, which also sought to develop a nursing home. The hospital favoured a community-based nursing home linked to the hospital for paramedical services and day hospital care with an emphasis on rehabilitation and the return home of the patients. That seemed much more appropriate than a profit-making home which would have to charge higher fees to regain its return on capital investment.

The Commonwealth public servant, having lost that battle and acting on information not publicly available, next turned his attention to Traralgon, which was again below the accepted bedpopulation ratio. He received approval for a 30-bed nursing home at Traralgon. At the same time as this decision was made approval was given for a 20-bed hospital-based nursing home in Traralgon and a 50-bed hospital-based nursing home in Moe. But the Victorian Health Commission and the Department refused a nursing home application by the Morwell community hospital. The reason apparently was that there was a sufficient number of beds in the central Gippsland region. But one should note about this decision that none of these beds was in Morwell. The Morwell application was based on the same sound community rehabilitation principles as the one at Wonthaggi. The Morwell people argue that if the application of the particularly wellinformed public servant for a private nursing home is rejected, Morwell would be able to have a nursing home provision attached to its hospital. Thus, Traralgon would still have its beds because they are provided for at the hospital there, Moe would have its beds and Morwell would also secure some beds. All of these would be communitybased with patients near to their relatives and all would have a clear rehabilitation emphasis. This is the solution that the Commonwealth Government should be supporting in the towns of central Gippsland. I urge the Minister to follow up this issue which, I believe, is still a matter of considerable controversy in the region.

Now I turn to the other weakness which we see in the Minister’s second reading speech; that is, there is no sign anywhere in it of the long run goals, the long run vision and the ultimate aim of the Liberal Government in health care for the elderly. In the remainder of my speech I wish to suggest what would be the major long run objectives of the Labor Party in the provision of appropriate health care services for the aged. We see three major goals. Firstly, we would reverse the priorities of the past and increase the public commitment to health care provision for the elderly. Secondly, we would endeavour to create in every community an infrastructure of services and institutions for the elderly so that they might choose the one most appropriate to them socially and medically. Thirdly, and at the same time, we would wish to reduce the emphasis on institutional solutions to the problems of the elderly.

Let me try to explain each of those proposals. First of all, public provision for the health care needs of the elderly has been much neglected in Australian society. There has been a tendency to leave it to the private sector and to the charitable sector. It is an issue which over the years has tended to be much more neglected than other health care concerns as a problem that could be left to the private sector. That tendency will have to be reversed in the remaining decades of this century. Greater public responsibilities will have to be accepted, not least because of the growth of the numbers of the old in our society for the rest of this century. Indeed, at present great opportunities are being provided because some of the aspects of hospital rationalisation - at another time I will devote more energy and effort to the hospital rationalisation proposals - and of public hospital provision permit and encourage opportunities to adapt and redevelop those facilities in order to serve the health needs of the elderly. So we have an immediate opportunity to move in the direction which I see in the long term as desirable.

Secondly, we need to create as far as possible - it will take time and effort - a total health care infrastructure for the elderly in every community. Too often the only choice for the old is between living at home, often with inadequate support services, and going into a nursing home. This limited choice is often both socially and medically inappropriate. As a humane society we need to provide a total range of choice for the old. I suggest that some of the main elements- I do not pretend that I can be completely comprehensive- of that range of choice are, firstly, the choice of remaining in the private home but with adequate domiciliary care and backup services; and the backup services are as important as the domiciliary care. I was most impressed with some of the developments in Western Australia where, particularly in the city of Perth, there are very good backup services, for example, help around the house to do odd jobs such as the changing of light globes for old people.

That is something we might not think about but. of course, old people living at home find it a very risky operation in many cases to change those light globes. We need these home help backup services as well as the immediate domiciliary care provision much more closely tied to health needs. So the first choice is the private home with adequate domiciliary care and backup services. The second choice is independent dwelling units; that is, people remaining in an independent situationbut with some medical support readily available. That can be organised in many different ways.

Mr MacKellar:

– With public funding?

Dr BLEWETT:

– In part. In the next 20 years there will have to be a bigger public commitment in these fields because public resources will have to help to build this infrastructure. The third choice is hostel accommodation, the fourth is daycare centres and the final choice, of course, is nursing homes. I may not have included all the possibilities but we need to create this kind of infrastructure. I am not pretending that there has not been a start to such provision or that particularly some of the church and charitable organisations, with governmental support, have not already begun to make major contributions in this field. We need to begin looking at every community to begin to see whether that kind of range of choice for the old can be provided rather than, as in far too many communities in this country, the choice being often between living in a private home without adequate support services or in a nursing home. Sometimes, of course, there is not even that choice.

Thirdly, while concerning ourselves with making adequate provision in the ways I have suggested, we need at the same time to deinstitutionalise health care provision for the old and, indeed, for most other segments of this society. There is, in fact, a considerable misdirection of public resources by government into health care structures which are often inappropriate emotionally, socially and medically and which at the same time are often more expensive than more appropriate structures. For instance, two years ago there was a very interesting report, published under the aegis of this Government, on relative costs of home care and nursing home and hospital care. I compared the costs of home care provision with the costs of nursing home and hospital care. The costs of home care health services are always much less than the costs of hospital care, as that report quite clearly shows. The costs of home care health services are less than the costs of nursing home care except for patients requiring intensive levels of service. Of course, that does not mean that it is appropriate that all our hospital care should be home care. We must then look at the medical appropriateness of each case.

The report estimates that something like 25 per cent of patients in nursing homes would in many ways be much better suited by adequate home care and that between 10 per cent and 30 per cent of hospital patients would be much more satisfactorily treated through a home care system. Indeed, if the appropriate home care services were available, a possible saving in the health bill would be of the order of $1 00m. This concerns not just a saving in the health care bill but also the fact that those home care services are probably in many cases more medically, socially and emotionally appropriate, particularly to old people.

But what we have seen, particularly in the last two years, is in many ways a decline in the home care services provided. If one looks, for instance, at the overall funding of home care services, at least in real terms there have been significant cuts. There has, for instance, been a no-growth policy - I quote a bureaucrat - applied to the home nursing service. This has meant that the number of nurses eligible for the subsidy has effectively been limited. The Meals on Wheels service, which again is a part of the whole home care service operation, is struggling partly, of course, because of this Government’s policies on petrol. All are aware of the importance of the petrol bill to the whole Meals on Wheels operation.

Personal care subsidies for the frail aged have been cut. The destruction of the Australian Assistance Plan has meant that many worthwhile community projects - and the Minister can find out the details of the AAP projects that were under way - which were aimed at helping the elderly to keep out of institutions have collapsed.

We need to reverse these policies because they are basically false economies. All of these miniscule cuts - in many cases they were not so much cuts but rather increases were not made to match the inflation rate - are false economies. On the grounds of both health and expenditure savings we need to develop home care services, not cut them back. Of course, the results of these false economies and the health insurance mess are that many of the most vulnerable patients in our society are left confused. One only need talk to the old about the confusions of health insurance and about some of the blatant and appalling publicity that has been directed at them in relation to health insurance. We know that they are left confused, are often out of pocket and often find themselves in institutions which, if they had their choice, they would rather not be in.

In conclusion, I repeat the long run objects of my party when returned to power at the end of this year in relation to the provision of health care for the aged. Firstly, we will increase the public commitment in this field. We accept the expenses that will be involved in the long run in pursuit of this commitment. Secondly, there will be a comprehensive provision of health care services for the old in the community. Thirdly, we will try to de-institutionalise the health care segment for the old which, of course, will involve not only providing more appropriate health care but also, in the long run, will reduce the cost of that health care.

Debate (on motion by Mr Lloyd) adjourned.

page 49

NEW AND PERMANENT PARLIAMENT HOUSE

Mr SPEAKER:

-I present the fifth report of the Joint Standing Committee on the New and Permanent Parliament House.

Sitting suspended from 5.58 to 8 p.m.

page 49

APPROPRIATION BILL (No. 1) 1980-81

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

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

Second Reading (Budget Speech)

Mr HOWARD:
Treasurer · Bennelong · LP

– I move:

That the Bill be now read a second time.

In doing so, I present the Budget for 1980-81.

This is the fifth Budget of the Fraser Government.

It is the first Budget of a new decade - a decade in which all Australians can expect to share the benefits of exceptional growth and national development.

However, this will only be so if there is continued application of the right economic policies.

It will only be so if we continue those policies which in five years have brought Australia from a country clearly living beyond its means to where, this year- for the first time for seven years- we can achieve a domestic Budget surplus.

The dominant feature of those policies has been our relentless effort to control inflation.

There must be no relaxation of that effort.

Unless we persist in our fight against inflation, our full economic potential will not be realised.

Any other course would condemn the Australian economy to second-best status in the years ahead.

We owe our present strength, international standing and optimism to the persistent application of disciplined anti-inflationary policies.

Without them, we could not have hoped for the greater economic growth and development which are now in prospect.

As foreshadowed in last year’s Budget, 1979-80 proved difficult for the world economy.

That Budget was designed to equip Australia to succeed in a world environment of rising inflation and intensifying competition.

That objective was achieved.

Over the year to June 1980, Australia’s inflation rate as measured by the Consumer Price Index was 10.7 per cent - about three percentage points below the average of OECD countries.

Last year, exports grew by almost 1 5 per cent in real terms. .

For the first time since 1972-73 private external transactions produced a substantial surplus.

Overall, growth was 2.2 per cent reflecting stronger non-farm growth of 3.1 per cent partly offset by some fall in farm product from the very high level of the previous year.

Whilst business fixed investment declined with the phasing down of the investment allowance, it rose in the second half of the year.

Business profits increased strongly last year, but there is a need for further improvement to support increased investment and employment.

Private dwelling investment was strong throughout the year and recorded a real increase of over 10 per cent.

Although personal consumption expenditure was relatively subdued there was an encouraging lift in the second half of the year.

Greater non-farm growth was reflected in a strong rise in total employment of 2.4 per cent in 1979-80- the largest since 1973-74.

Unfortunately this was not enough to reduce unemployment, which in June 1980 was roughly the same as a year earlier.

Unless there is a moderation in wage demands and fewer industrial disputes it will be difficult to achieve a sustained reduction in unemployment.

The spread of work value claims and settlements - many on quite spurious grounds - together with other excuses for higher wages, such as the campaign for a 35 hour week, are utterly inconsistent with achieving a lasting reduction in unemployment.

The resultant growth in average weekly earnings over the course of 1979-80, of almost 12 per cent, is a clear indication that the task of restoring wage and price stability is far from over.

page 50

OIL PRICING AND THE CRUDE OIL LEVY

One of the most important economic decisions taken by this Government has been the move in 1978 to import parity pricing for our crude oil.

The objectives of that decision are being achieved.

Reflecting the need to pay market prices for a scarce resource, this policy has greatly strengthened Australia’s capacity to withstand world energy problems.

Consumption of major petroleum products fell by 1 i per cent last year.

Energy exploration has accelerated.

Alternative energy sources have become more economic.

Projects like Rundle Shale Oil, which might involve the largest resource investment in Australia’s history, could not have been realistically contemplated without our crude oil pricing policy.

The crude oil levy enables the Government to distribute to the community generally a share of the proceeds of crude oil price rises.

The levy revenue has been used sensibly and to the benefit of the whole community.

Without it the deficit would not have been reduced so quickly nor, for example, would the personal income tax cuts which took effect on 1 July last have been possible.

It is also assisting us to provide additional funds for defence.

page 50

THE BUDGET OUTCOME

The Budget outcome for 1979-80 was very close to projections.

Outlays were virtually the same as budgeted and reflected a slight reduction in real terms.

Overall receipts were largely as predicted except for the additional crude oil levy revenue which amounted to $204m.

The additional revenue was used to reduce the Budget deficit further.

Thus the deficit was ultimately $106m lower than originally estimated and $ 1,444m less than in the previous year - the largest ever reduction in a single year.

This greatly eased pressures which would otherwise have been reflected in higher interest rates.

page 51

THE SHAPE OF THE BUDGET

This year’s Budget again places prime importance on the fight against inflation.

Lower inflation remains fundamental to greater private sector growth and to international competitiveness. -

Therefore, there will be a further sizable reduction in the Budget deficit.

This will be achieved despite the need for a faster rate of increase in outlays this year.

page 51

OUTLAYS

In 1980-81 outlays are projected to be $36,037m, an increase of 13.7 per cent on 1979-80. This represents a growth of just under three per cent in real terms in 1980-81 , and an average annual growth of about one per cent in real terms over the five years to 1980-81.

As a proportion of Gross Domestic Product outlays this year are expected to be 27.9 per cent compared to 30.1 per cent in 1975-76.

In summary, the Government’s decisions on outlays provide for much greater spending on defence, higher levels of support to areas of particular social need, increased payments to local government, and growing expenditures in areas of assistance to industry.

At the same time we have observed the continuing need to contain spending within a responsible overall economic package.

I now turn to the main expenditure provisions of the Budget.

More details are provided in accompanying Budget documents, particularly Statement No. 3.

page 51

DEFENCE

This Budget gives a high priority to the strengthening of our national security.

The $3,541m which we are providing for defence is $533m more than last year. This is an increase of 17.7 per cent in current prices, no less than 7 per cent in real terms.

The changed strategic circumstances in which Australia now finds herself require a much greater commitment to defence spending.

This is a priority which the Government believes commands the support of the vast majority of Australians.

Further large increases in later Budgets will be necessary, up to an expected 3 per cent of Gross Domestic Product for defence spending by 1984-85, to accomplish the improvements to defence capabilities announced by the Prime Minister earlier this year.

page 51

SOCIAL WELFARE

Total spending on social security and welfare in 1980-81 is estimated to be S9,890m, a rise of 12.4 per cent over 1979-80.

It will account for over 27 per cent of all Commonwealth Budget outlays in 1980-81.

The size of present social welfare programs, their momentum and the need to achieve a responsible overall Budget outcome mean that little room exists for new initiatives or increases in those benefits which are not the subject of automatic adjustment.

The Government has decided that such additional funds as can be made available for social welfare without prejudicing the overall Budget outcome should be directed to those who need assistance most.

Indexation of Pensions and Benefits

The rates of relevant pensions and benefits will continue to be adjusted each November and May in accordance with the relevant movements in the Consumer Price Index.

In November, for example, the standard or single rate of social service pensions will rise by $3.05 to $64. 10 a week, and the combined married rate will increase by $5.10 to $106.80 a week.

Children with Special Needs

The Budget increases rates of assistance for children in situations of special need from the first relevant payday in November.

The handicapped child’s allowance will be increased by $8 to $73 a month, providing improved assistance in respect of an average of 26,000 handicapped children in 1980-81. The double orphan’s pension will also be increased by $8, bringing it to $55.70 a month. This will provide additional assistance to families caring for orphans.

Additional pension or benefit payable to eligible persons with dependent children will be increased by $2.50 to $10 a week for each child; on average 560,000 children are involved. Single pensioners with children and supporting parent beneficiaries will receive further increases in rates of assistance- the mother’s/guardian’s allowance will be increased by $2 a week. The new rate will be $8 a week where one child is aged under 6 or invalid and $6 a week in other cases. On average, 190,000 single parent families will benefit.

The cost of these measures is estimated at about $63m in the current year and $97m in a full year.

Sickness Beneficiaries

We have decided that fringe benefits will be extended to sickness beneficiaries in appropriate cases. Details will be announced by the Minister for Social Security.

This is in recognition of the additional costs faced by many people who are temporarily unable to work because of sickness.

Assistance to Supporting Parents

The Government has decided to remove the six-month waiting period for supporting parent’s benefit. This means that Commonwealth assistance will be available at uniform rates to all sole parents who meet the income test and other eligibility conditions. The States Grants (Deserted Wives) Act will be repealed.

Unemployment and Sickness Benefits

The Government has decided to relax the income test on eligibility for unemployment and sickness benefits.

This has been done to give greater encouragement to those out of work to undertake temporary part-time or casual work.

At present, people who receive more than small amounts of private income have their unemployment or sickness benefits reduced dollar for dollar.

Such a situation provides no real incentive for those receiving these benefits to seek temporary part-time or casual work.

In its concern to remove this disincentive, the Government considered a number of options, including a simple increase in the allowable income threshold.

It rejected this course in favour of one permitting recipients to undertake a more substantial amount of temporary part-time or casual work without losing the whole of each dollar earned.

We have accordingly decided that from the first benefit payday in November 1980 the benefits will be withdrawn only on a 50 per cent basis for private income within the following ranges. $3 to $40 a week for single persons aged 16 and 17 years with a parent living in Australia; and $6 to $50 a week in all other cases.

An unemployment benefit recipient over 21 years of age who earns $50 a week from casual work would currently have the benefit reduced by $44 a week.

Under the new proposal the benefit would be reduced by only half this amount providing an extra $22 a week. .

Benefits will continue to be withdrawn on a dollar for dollar basis for all private income in excess of the upper limits of $40 and $50 a week respectively.

It has also been decided to increase by $2 a week from the first benefit payday in November the non-indexed rate of unemployment benefit payable to beneficiaries who are 18 years and over and who have no dependants.

Assistance to the Handicapped

Over the past five years, this Government has provided generous support for programs to assist the mentally and physically handicapped.

Again, in 1980-81, in addition to increasing the Handicapped Child’s Allowance we have - provided Slim in the first year of a three year program for the establishment of new services for handicapped children and adults; provided $300,000 to upgrade the quality and effectiveness of existing services for the handicapped; and decided to establish additional facilities within the Commonwealth Rehabilitation Service network.

Funds will be provided for administration and planning for the International Year of Disabled Persons and for a number of other new programs for the handicapped and disabled.

Full details will be announced bj the Minister for Social Security.

Assistance to Veterans

The Budget provides for two measures of particular importance to veterans as well as increases in a range of supplementary repatriation benefits, and for certain extensions of eligibility for free repatriation medical treatment, with effect from November.

The Minister for Veterans’ Affairs will be announcing details in a separate statement.

The Government has decided that, from 1 January 1981, only half of any disability pension will be taken into account in determining eligibility for a Pensioner Health Benefits Card.

The Government has also decided that the maximum loan available through the Defence Service Homes Scheme will be increased from the present $15,000 to $25,000.

The additional $10,000 will carry a concessional interest rate of 10 per cent.

The estimated cost of this measure is $25m in 1980-81 rising to $59m in 1981-82.

The waiting period for a loan under the scheme will be reduced to 10 months, at an additional estimated cost of $19m in 1980-81.

The cost of all the other measures is estimated to be $3.9m in 1980-81 and $6.3m in a full year.

Other Welfare Measures

Further welfare measures in the Budget include: an increase in the rate of accommodation subsidy paid to services assisting the homeless, by 45 cents to $1 .20 per person a day; an increase of 15 cents in the rate of meal subsidy for non-resident homeless persons and in the rate of delivered meals subsidy; and the provision of the same pensions and benefits to inmates of mental hospitals as are already provided to inmates of other institutions.

page 53

HEALTH

Total expenditure on health services in 1980-81 is estimated to be $3,644m which is $475m more than last year.

Hospitals

For States and Territories hospitals, provision is made for Commonwealth expenditure of an estimated $l,316m in 1980-81, to allow services to be maintained at their existing levels.

Pharmaceutical Benefits

Pending final decisions on the Ralph Inquiry into the Pharmaceutical Manufacturing Industry, the Government has decided to grant pharmaceutical manufacturers an across-the-board increase in Pharmaceutical Benefits Scheme drug prices of 20 cents per prescribed item, at price to chemist level, effective from 1 November 1980.

This increase in drug prices under the Scheme will not result in a rise in the cost of pharmaceutical benefits to patients.

The estimated additional cost is $9. 5m in 1980-81 and $19m in a full year.

Domiciliary Nursing Care Benefits

The domiciliary nursing care benefit, provided to assist with the cost of home nursing care for relatives who are 16 years or over, will be increased from $2 a day to $3 a day with effect from 4 September 1980, at an additional cost of $4.7m in 1980-81 and $5. 5m in a full year.

page 53

EDUCATION

Details of funding of the Tertiary Education and Schools Commissions programs in 1981 have already been announced.

In recent years there have been real increases in funding for schools in Australia.

All Government school systems have now reached, or passed, the resource use targets set by the Karmel Committee.

There is increased questioning and indeed concern about the extent to which many young people leaving school are equipped to enter the workforce.

For its part the Government has undertaken an imaginative program to facilitate the transition from school to work.

The Government will continue the higher priority given in recent years to technical and further education programs.

To cater for expected growth in enrolments in 1981 general recurrent grants to thir sector are to rise by 4 per cent in real terms and the momentum of last year’s substantial increase in capital work will be maintained.

The Schools Commission programs will also provide added support to migrant education and to the least well endowed non-Government schools.

Student Assistance

Eligibility for student assistance benefits is to be expanded, and the rates of benefits are to be increased.

There will be a 10 per cent increase in tertiary education allowances and adult secondary education allowances.

To provide further help on a needs basis to students wishing to remain longer at school, there will be a 20 per cent increase in both the allowances and the means test limits under the Secondary Allowances Scheme.

Assistance under the Isolated Children Scheme will be extended and the level of allowances increased.

In all, these changes are estimated to cost $ 19m in 1980-81 and $38m in a full year.

Full details will be announced by the Minister for Education.

page 53

MANPOWER TRAINING

Effective manpower training is crucial to the employment prospects of the workforce.

More than 430,000 Australians have been assisted by our training programs over the last four years, including some 170,000 in 1979-80.

The Government will provide $126m in 1980-81 for training programs, $23m more than was spent in 1979-80.

The provision for the CRAFT Scheme totals $56m and the National Employment and Training System and other forms of training and retraining assistance are expected to cost $68m this year.

The funds provided in this Budget are expected to cover all those eligible for training in 1980-8 1 .

The Government has also committed up to $150m for school to work transition programs over the five years starting in 1980.

This Budget provides $34m in 1980-81 for this purpose, with the States being asked to contribute matching amounts up to $9.9m for the 1981 calendar year.

page 54

ABORIGINAL ASSISTANCE

The Budget provides $138m for special assistance to Aboriginals, $15m more than in 1979-80.

The establishment of the Aboriginal Development Commission, which is to be provided with $23. 8m in 1980-81, is a major initiative.

Of the total provision for the Commission, $10m will form an accumulating capital investment fund.

page 54

HOUSING

As announced previously, the Commonwealth will provide $285m to the States and the Northern Territory for welfare housing in 1 980-8 1 .

The Commonwealth has also offered to guarantee to provide a base level of $ 1 ,000m over the five years from July 1981 to assist the States and the Northern Territory in the provision of welfare housing.

Under this proposed arrangement, additional funds would be allocated each year as part of the normal budgetary process.

The value limits for the Homes Savings Grants Scheme will be increased substantially. At present, a full grant is paid on house and land valued at up to $35,000 with pro-rata grants then paid on house and land valued to $40,000. The value limits will be increased to $45,000 for a full grant, phasing out to a nil grant for house and land exceeding $55,000, to persons who enter into contracts to buy or build homes on or after today.

Private sector housing activity strengthened during 1979-80, aided by record lending by major housing lenders.

The Government again desires a high priority for housing finance to be maintained consistent with overall monetary policy.

page 54

CULTURE AND RECREATION

The Budget provides some $383m for cultural and recreational activities in 1980-81, an increase of over 19 per cent on last year.

This includes $2 16m for the Australian Broadcasting Commission and associated activities, $28m more than in 1979-80.

The Budget provides also for the first stage of the rehabilitation of the Radio Australia transmitter at Darwin and for broadcasting equipment for the 1982 Commonwealth Games in Brisbane.

The Australia Council is to be provided with over $29m for assistance to the arts, and the National Gallery with $23m.

An amount of $21m is provided in 1980-81 for the new Multicultural Television Service, which is planned to commence in October, and for ethnic radio services.

page 54

IMMIGRATION

The migrant intake is expected to rise to 95,000 in 1980-81 compared with 82,000 last year.

Provision is made for the entry of 30,000 people under the Assisted Migration Program, an increase of nearly 8,000 on the 1 979-80 numbers.

A total of $28m is allocated to continue the Adult Migrant Education Program.

Altogether more than $25m is being provided for programs and services for migrants under the recommendations of the Galbally Report.

page 54

FOREIGN AID

The Budget contains a large provision for aid to developing countries.

A total of $547m will be provided for foreign aid in 1980-81 which is $49m more than last year.

Earlier this year, Australia assumed an increased commitment for the small countries of the South Pacific region and a new three year program of support commencing in 1980-81 was announced.

We are continuing to provide generous support for the training of overseas students. Over 3,000 a year are directly assisted to study in Australia under the Aid Program, and some 8,000 more who study privately receive tuition either free or at less than a third of the estimated cost to the Government.

page 55

INDUSTRY PROGRAMS

Export Incentives

The importance attached by the Government to encouraging exports, particularly manufactured exports, is demonstrated by the provision in this Budget of $260m for export expansion and market development grants - a rise of $45m or 21 per cent over 1979-80.

This will substantially reduce the carry-over of claims.

These programs have greatly helped Australian manufacturers in securing and developing markets abroad.

Rural Assistance

Existing measures supporting rural industry will continue.

In particular, we will increase the Commonwealth contribution to wool promotion by $6m to $20m for 1980-81.

The Nitrogenous Fertilizer Subsidy will be extended for a further year to the end of 1981 at a total cost of $5. 5m.

Petroleum Products Freight Subsidy Scheme

Rural industry and country consumers generally will continue to benefit from the Petroleum Products Freight Subsidy Scheme on which there will be a total expenditure of approximately $123m in 1980-81.

This is some $52m greater than last year; the increase results largely from the extension of the scheme last April which had the effect of halving the maximum freight differential between metropolitan and country areas.

Research and Development

Expenditure on research and development is of long term significance to industry.

Funding under the Industrial Research and Development Scheme will rise by $19m or over 55 per cent in 1980-81.

page 55

TRANSPORT

Roads

The Commonwealth has undertaken to provide the States and the Northern Territory with $3,650m in grants for roads over the next five years; $628m will be provided in 1980-81 which maintains the real level of our spending in this area.

Air Transport

The Budget provides $64m in 1980-81 for buildings, works and equipment at airports, $41m more than expenditure last year.

This includes work in line with our commitment to redevelop Brisbane airport by 1986 at a total cost of over S200m and to upgrade facilities at a number of other airports.

High on the list of priorities are a new international terminal at Perth, planning for new civil aviation facilities at Darwin, the development of Norfolk Island airport to medium jet standard, airport facilities for the operation of wide-bodied domestic jets, upgrading of Townsville airport for international services, and new terminal buildings at Canberra and Coolangatta.

The expected cost of all these additional facilities is some $ 145m.

The Government has decided that international sector air navigation charges will remain unchanged in 1980-81.

The Government has also decided that the target of full cost recovery in the domestic trunk airline sector should be achieved in 1980-81, a year earlier than previously announced.

Despite this, it will now be necessary to seek an increase of only 15 per cent in air navigation charges for that sector in 1980-81 compared with the 25 per cent increase previously announced.

The increase proposed will yield an additional S3m in 1980-81.

page 55

ENERGY

Budget- funding for energy research is to rise by almost 50 per cent to SI 3.5m in 1980-8 1 .

A further $2.5m will be provided for energy information and energy conservation programs.

These expenditures supplement the very significant taxation incentives which have already been provided to encourage greater energy exploration and development and the use of energy sources other than oil.

The total cost to revenue of those incentives in 1979-80 was at least $50m and this figure is expected to rise as industry takes increasing advantage of them.

This year the Pipeline Authority will be starting construction of natural gas pipelines from Young to Wagga Wagga and from Dalton to Canberra.

Studies will be undertaken on extending the natural gas pipeline from Wagga Wagga to Albury and on possible lines to Lithgow, Bathurst, Orange and Oberon.

The expected cost of construction and studies in 1980-81 is $26m.

The Pipeline Authority will fund such activities by borrowing from the private sector; interest on borrowings will be met from the Authority’s revenue and from the Budget.

page 56

MEDICAL AND SCIENTIFIC RESEARCH

This Budget provides a total of $1 8m for medical research which will be made available through the National Health and Medical Research Council.

This represents an increase of approximately 30 per cent and demonstrates the desire of the Government to provide substantial and ongoing support for medical research.

The Government recognises the high quality of medical research in Australia and wishes to build upon the past contributions of our researchers.

Significantly more support will be given to marine science this year. Specific funding for this research will rise from $650,000 to $3.5m and further resources will be provided for research activities in the Great Barrier Reef area.

In the next few years, up to $80m will be spent on the rebuilding and upgrading of Australia’s Antarctic bases, the transfer of the CSIRO Division of Fisheries and Oceanography to Tasmania, and the acquisition of a $9m oceanographic ship for CSIRO and other national uses.

In the field of conservation, the Australian National Parks and Wildlife Service is to receive $6.6m and funding for the Biological Resources Survey will more than double. -

page 56

GOVERNMENT ADMINISTRATION

The Government will maintain strict restraint on its own administrative costs.

For 1980-81, provisional public service staff ceilings have been set to increase by less than 1 per cent and departments and authorities will again be required to live within the Budget allocation provided to them.

page 56

PAYMENTS TO THE STATES, NORTHERN TERRITORY AND LOCAL GOVERNMENT

Major decisions in this area have already been announced.

Payments to the States, the Northern Territory and local government are budgeted to increase by $ 1,263m or 1 1 per cent.

Growth in State and Northern Territory taxsharing entitlements accounts for $665m, or more than half of this increase.

In accordance with out 1977 election promise, local governments’ tax-sharing entitlements are now two per cent of personal income tax collections.

They will be $302m in 1980-81, an increase of 36 per cent.

page 56

RECEIPTS

I now turn to the Government’s revenue measures.

Additional details are provided in Statement No. 4.

page 56

PERSONAL INCOME TAX

The Government has already announced major changes in personal income tax which took effect from 1 July.

The standard rate for 1980-81 is reduced to 32 per cent and the income ranges in the scale have been indexed by 3.8 per cent so that the tax-free threshold is now $4,041.

Dependant rebates have been increased by 34 per cent, with the rebate for a dependent spouse rising to $800 and that for a sole parent to $559.

These changes have an estimated revenue cost of $636 million in 1980-81.

In recent years a loading has been added to normal rates in calculating the provisional tax payment of taxpayers who do not self-assess, in order to achieve reasonable comparability in the treatment of PA YE and all provisional taxpayers.

In 1980-81 this objective is to be achieved by applying the 1980-81 rate scale to 1979-80 incomes increase by a factor of 71 per cent and allowing dependant rebates at 1980-81 values.

Provisional taxpayers will of course continue to have the option to self-assess and provide an estimate of their 1980-81 incomes.

Where this option is exercised the new rates and rebates will apply to estimated 1980-81 incomes.

Superannuation Arrangements for Self-employed Persons and Unsupported Employees

The Government has decided to provide a significant new incentive through the taxation system to encourage self-employed persons and employees not covered by employer-sponsored arrangements to make greater provision for their retirement.

At present contributions by an individual for superannuation purposes are included in rebatable expenditure, within a limit of $1,200 for the sum of life insurance premiums and superannuation contributions.

This limit applies whether the contribution is by an employee contributing to an employersupported fund, an employee who is not supported by an employer-sponsored scheme but makes his own arrangements to contribute to a public superannuation fund, or a self-employed person.

However, whereas employee members of an employer-supported fund also have the advantage of employer contributions on their behalf, and are not taxed on those amounts, there is no corresponding benefit for self-employed persons or employees who are not supported by an employersponsored scheme.

The Government has therefore decided to extend to such people, where no other contributions are made on their behalf, a taxation benefit broadly comparable to the ‘matching employer’ contribution of supported employees.

We have decided that contributions - up to a limit of $1,200 per annum - made by selfemployed persons and employees after today to a qualifying fund to provide retirement benefits for themselves and their dependants will be deductible from their assessable income if the person is not covered by employer-sponsored arrangements.

Contributions in excess of $1,200 will remain rebatable expenditure, up to the present limit of $1,200 for life insurance premiums and superannuation contributions applicable to all taxpayers.

At the same time, 5 per cent of lump sums received by self-employed persons and unsupported employees after today from qualifying superannuation funds will count as assessable income, to the extent that those sums are derived from contributions made after today and from earnings of the fund from the investment of those contributions.

This will result in that part of the lump sums being taxed to the same extent as lump sums received on retirement by supported employees.

That part of the lump sums derived from earlier contributions, and the earnings on their investment, will remain tax free.

On the basis of assumptions about the likely response rate to such a measure, the full year cost is estimated at about $100m.

Taxation of Australians Working Overseas

We have decided to amend the law to provide some relief from Australian tax on certain foreign source income which Australian residents earn from their personal services overseas where that income is not taxed in the source country. Details are provided in Statement No. 4.

This measure is intended to enhance the ability of Australian consultants to obtain a greater share of the growing overseas consultancy services market. It will apply to income from services performed overseas on projects approved and entered into after today and is estimated to cost about $2m in a full year.

Deductibility of Gifts

We have decided to permit tax deductibility of gifts made to certain educational institutions and voluntary overseas aid organisations.

Gifts made after tonight to certified technical and further education institutions will be tax deductible where those gifts are for approved purposes.

In addition to the substantial outlays made direct from the Budget for overseas aid purposes, the Government permitted tax deductions in respect of donations made in 1979-80 to the Kampuchea and East Timor appeals.

In recognition of the work performed by many of the voluntary bodies involved in the provision of overseas aid the Government has decided in principle to allow taxation deductions for gifts made to eligible non-government organisations extending assistance to approved programs and organisations in developing countries.

Eligible organisations will be determined by the Treasurer after consultation with the Minister for Foreign Affairs, who will be consulting relevant bodies including the Australian Council for Overseas Aid.

Inquiry into Zone Allowances

Income tax zone allowances for taxpayers living in remote localities were introduced in 1945.

While the supplementary component of those allowances has since been adjusted to reflect increases in dependants’ allowances, the basic allowance has remained largely unchanged since 1958.

In the meanwhile, of course, circumstances have changed.

Against this background we have decided to establish a public inquiry to examine in detail the cost and other disabilities of living in remote areas and to make recommendations on possible changes to the present system of zone allowances.

I shall announce the terms of reference and composition of the inquiry as soon as practicable with a view to it reporting prior to next year’s Budget.

page 58

BRUCELLOSIS AND TUBERCULOSIS IN CATTLE

We shall amend the income tax law in certain respects to encourage further progress in eradicating brucellosis and tuberculosis in cattle.

In particular, for cattle properties certified as subject to those diseases and where herd control is difficult, expenditure by 30 June 1984 on internal fences and stockyards contracted for while a certificate is in force will be deductible in full in the year in which the expenditure is incurred.

page 58

ACCELERATED DEPRECIATION OF PLANT AND EQUIPMENT

There have been many suggestions in recent years that the present depreciation provisions do not provide a sufficiently fast rate of write-off for new plant during periods of rapid technological change.

We have therefore decided to apply a 20 per cent loading to existing depreciation rates; for example, an existing rate of 15 per cent will become 1 8 per cent and so on.

These new arrangements will apply to new and second-hand plant ordered after today, with the exceptions of motor vehicles of the type now excluded from the investment allowance and plant for which statutory concessional rates are already available.

There is, by definition, no objective way of adjusting depreciation rates for obsolescence occasioned by unpredictable technological change.

The proposed loading does, however, represent a significant aid to businesses confronted with that problem and will encourage updating of plant and equipment.

The cost of this measure will rise over a transitional period, from an estimated $60m in 1981-82 to more than $250m per annum in the mid-1980s.

page 58

DIVESTMENT OF ASSETS

The sale of the Commonwealth interest in the Ranger joint venture is expected to be finalised this year, yielding $147m.

Negotiations are proceeding for the disposal of the Government’s interest in the Ngalia Basin exploration venture and the Fawnmac group of pharmaceutical companies.

page 58

RECEIPTS IN SUMMARY

This year taxation receipts will rise by 16.4 per cent.

In particular, company tax receipts and crude oil levy collections will rise at a relatively high rate.

The increase in company tax receipts reflects greater company profitability, the phasing down of the investment allowance in 1979 and last year’s decision to withdraw the trading stock valuation adjustment.

Crude oil levy collections will be higher mainly on account of the full year effects of the rises in the price of oil which occurred last year.

Personal taxation reductions for the year have been in place since 1 July. The Budget provides some tax relief for businesses. There are also some particular areas where taxation incentives have been provided.

Given the expenditure priorities I described earlier, further general taxation concessions could only have been given at the cost of forgoing the major reduction in the Budget deficit.

In our view the anti-inflationary objectives of this Budget, and therefore the long term economic interests of Australia, will best be served by the reduction we have achieved in the Budget deficit.

page 58

BUDGET OVERVIEW

Total outlays in 1980-81 are estimated to increase by 1 3.7 per cent to $36,037m.

Total receipts, allowing for the cost of the measures I have outlined and of those previously announced, are estimated to increase by 16.2 per cent to $34,47 lm.

The overall Budget deficit is therefore estimated at $ 1,566m, a reduction of $468 million on the outcome for 1979-80.

When allowance is made for transactions abroad, there will be an estimated Budget domestic surplus of $39m- the first such surplus since 1973-74.

Such an outcome will represent further substantial progress along the road to fiscal responsibility and monetary stability.

page 58

ECONOMIC OUTLOOK

The aim of this Budget is to maintain and develop a climate in which Australia’s high potential for growth in the 1 980s can be realised.

We also wish to see that development proceeds at a pace which is sustainable and that it provides benefits for all Australians.

Inflation and other economic difficulties which developed some years ago, though now reduced, threaten our growth potential.

For example, if the recent pattern of wage determinations continues in 1980-81, average weekly earnings would be likely to rise by around 12 per cent compared with 9* per cent in 1979-80.

Particularly at a time when overseas rates of inflation are showing signs of moderating, there is a real danger in this acceleration.

On the basis of the fiscal and monetary policies set forth in the Budget the rate of increase in the CPI over the year to June 1981 is likely to be around 10 per cent.

For 1980-81 the present outlook for the nonfarm sector of the Australian economy is for a somewhat faster rate of expansion than last year - 3i per cent or more compared with a little over 3 per cent last year.

After allowance for the likely small reduction in farm product, overall growth could be 3 per cent or more, compared with the estimated 2.2 per cent last year.

This compares with the most recent OECD Outlook forecast of no real growth in aggregate in member countries.

Although the Australian economy and in particular our exports will be affected by slower economic growth overseas, the impact will be lessened by our better inflation performance and the nature and destination of our exports.

For example, over 50 per cent of our exports go to Asian and Middle Eastern countries which are among those less affected by the slowdown in world economic growth.

The current account deficit will nevertheless be considerably higher in 1980-81, perhaps about double last year’s abnormally low outcome of about $ 1,200m.

Against this, a much larger inflow of private capital is likely, leaving the overall balance of payments satisfactory, and a surplus on private external transactions of up to S 1 ,500m.

Internally generated demand is expected to more than offset adverse international developments.

In particular, business fixed investment is set to show a real increase in 1980-81 of over 10 per cent.

The extent of the increase will be critically influenced by the availability of adequate supplies of labour and materials.

Dwelling investment should remain high in 1980-81, although growth is likely to be slower than last year.

The strengthening in private consumption expenditure during the course of last year should continue in 1980-81, reflecting further steady growth in employment of about H per cent and stronger growth in real disposable income.

Overall, the outlook for 1980-81 is for strong expansion in activity led by private sector demand.

The Government believes this stronger outlook for activity can be achieved with slower growth in the monetary aggregates than last year.

The further reduction in the Budget deficit is seen as essential to achieving the Government’s monetary goals.

It will help to make room for financing the significant increase in corporate borrowing likely in 1980-81 as private investment expenditure rises.

The Government will again seek to have the large wheat harvest in prospect financed in a manner which will minimise its impact on the monetary aggregates.

Predicting the monetary outcome is always difficult because of the number and nature of the variables which underlie particular monetary aggregates, such as M3.

Despite ^e much reduced Budget deficit in 1979-80, the growth in the money supply (M3) was 12.9 per cent against the projection of about 10 per cent.

That outcome again illustrates the wide margins of error inherent in such projections.

In any case, M3 is not a totally definitive measure of monetary growth.

For example, building society deposits, which have experienced greater growth than bank deposits in recent years, are not included in the M3 measurement.

For its part, the Government will continue to monitor a whole range of monetary aggregates.

We nevertheless see merit in continuing the practice of recent years of specifying a range for M3.

We shall be aiming for a lower growth in M3 this year than the outcome last year.

On present economic assessments, an outcome for M3 of about 9-1 1 per cent over the year to June 1981 would be consistent with the requirements of the Government’s economic policy and would in particular exert appropriate downward pressure on inflation.

page 60

CONCLUSION

This Budget consolidates the economic gains of recent years.

It strengthens our attack upon inflation through a major reduction in the deficit.

It maximises our potential for economic growth and development.

Within responsible expenditure limits, the Budget provides more for defence, areas of need and excellence and assistance to industry.

It is a Budget which will further enhance the strength and competitiveness of the Australian economy.

I commend the Budget to Honourable Members.

Debate (on motion by Mr Young) adjourned.

page 61

STATEMENTS ATTACHED TO THE BUDGET SPEECH

Statement Title page 1 Summary of the 1980-81 Budget......... 62 Appendix to the Budget Statements........ 325 {:#subdebate-82-0} #### Notes: {: type="a" start="a"} 0. Discrepancies in tables between totals and sums of components are due to rounding. 1. In the tables showing receipts and outlays, the sign in front of the 'change' reflects the impact of the change on the aggregate concerned. In outlay tables, for example, this means that a reduction in a credit from one year to the next will be prefixed by a ( + ) sign while an increase in a credit will be prefixed by a negative (-) sign. 2. The following notations are used: NEC/nec not elsewhere classified amounts of ness than S50 000 - nil {: .page-start } page 62 {:#debate-83} ### STATEMENT No. 1 - SUMMARY OF THE 1980-81 BUDGET {: .page-start } page 62 {:#debate-84} ### BUDGET AGGREGATES The key Budget aggregates for 1980-81 are summarised in the following table, together with comparable data for 1979-80. 1979-80 1980-81 Actual Change on 1978-79 Estimate Change on 1979-80 S million S million per cent S million $ million per cent {:#subdebate-84-0} #### Outlays 31 694 2 649 9.1 36 037 4 342 13.7 {:#subdebate-84-1} #### Receipts 29 661 4 094 16.0 34 471 4 810 16.2 {:#subdebate-84-2} #### Deficit (-) . -2 034 +1 444 -1 566 + 468 {:#subdebate-84-3} #### Overseas Deficit (-) -1 467 - 247 -1 605 -138 {:#subdebate-84-4} #### Domestic Deficit (-) Surplus (+) - 567 +1 691 + 39 + 606 The Budget provides for an increase of 13.7 per cent in total *outlays* in 1980-81 compared with an increase of 9.1 per cent last year. The 1980-81 increase is estimated to represent real growth in outlays of about 3 per cent. As a proportion of GDP, Budget outlays are estimated to be about the same as in 1979-80. Total *receipts* are estimated to increase by 16.2 per cent in 1980-81, which compares with an increase of 16.0 per cent in 1979-80. Total receipts increased by 8.9 per cent in 1978-79 and 9.7 per cent in 1977-78. The continued strong growth estimated for total receipts in 1980-81, notwithstanding the slower estimated growth in personal income tax receipts, reflects mainly the further substantial increase in estimated receipts from the excise on crude oil and LPG and strong growth in company tax receipts. The Budget *deficit* for 1980-81 is estimated at $1566 million, a reduction of $468 million on the deficit recorded in 1979-80. The deficit on overseas transactions is estimated to increase by $138 million to $1605 million mainly because of increased outlays for defence equipment. Domestic budget transactions are thus estimated to move from a deficit of $567 million in 1979-80 to a surplus of $39 million in 1980-81. A domestic budget surplus was last recorded in 1973-74. {: .page-start } page 63 {:#debate-85} ### OUTLAYS The following table shows outlays in 1979-80 and 1980-81 classified according to broad economic types of expenditure. {:#subdebate-85-0} #### Budget Outlays - By Economic Type {: type="a" start="a"} 0. Includes unfunded employee retirement benefits. *(Jb)* Includes net advances to Commonwealth authorities, the public and overseas. 1. Consists of subsidies, grants for private capital purposes and purchases of existing assets. The table shows that cash benefits to persons and transfers and net advances to the States, the Northern Territory and local government authorities together contribute over 65 per cent of the projected increase in 1980-81 outlays. Other prominent features are: o rapid growth in other net advances, reflecting the fact that estimated repay ments of advances by the Australian Postal Commission, the Australian Industry Development Corporation and government airlines are some $109 million less in 1980-81 than in 1979-80; *o* strong growth in 'Other' transfers arising particularly from increased grants to industry for export expansion and market development; and o a turnaround from decline to strong growth in Commonwealth direct capital expenditure, with planned outlays on airport facilities being a major contributing factor. Estimates of outlays in 1980-81, classified by major functions, are set out and explained in detail in Statement No. 3. The table below summarises the figures for 1979-80 and estimates for 1980-81 in the functional format: {:#subdebate-85-1} #### Budget Outlays - By Function 1979-80 1980-81 {:#subdebate-85-2} #### Proportion Change on of Total Points which might be noted include the following: ° Continued growth in outlays under the Health and Social Security and Welfare functions, which reflects growth in beneficiary numbers, indexation arrangements for many benefits, and effects of budget measures, is estimated to account for over 36 per cent of the total increase projected for 1980-81. ° The above-average increase projected for 1980-81 Defence outlays (17.7 per cent) derives from the increased priority being accorded by the Government to these outlays. ° The estimated rapid growth in outlays on Economic Services arises from a number of factors, including additional assistance to industry for export expansion, export market development and industrial research and development, increased outlays on the petroleum products freight subsidy scheme and airport facilities, and reduced repayments of advances from Commonwealth authorities such as the government airlines and the Australian Industry Development Corporation. ° The increase of $1117 million in expenditure Not Allocated to Function largely reflects growth in tax-sharing entitlements of States, the Northern Territory and local government (up an estimated S744 million), larger public debt interest payments (up S186 million), and the bulk provision of SI 25 million included for prospective increases in wage and salary payments for public servants other than those paid from votes within the defence function. {: .page-start } page 1 {:#debate-86} ### RECEIPTS Total receipts in 1980-81 are estimated at $34 471 million, an increase of 16.2 per cent. In addition to the measures announced in the Budget Speech, decisions affecting taxation revenue in 1980-81 were announced in the Treasurer's statement to the Parliament on 6 March 1980 and in the statement by the Minister for National Development and Energy on 8 April 1980. In the absence of the tax measures announced during 1979-80 and in the Budget, receipts would, have grown by an estimated 18.2 per cent in 1980-81. The various taxation measures bearing on estimated receipts for 1980-81 are described in detail in the 'Measures' section of Statement No. 4. The table below shows Budget receipts in 1979-80 and estimated receipts in 1980-81 in summary form; details are provided in the 'Estimates' section of Statement No. 4. {:#subdebate-86-0} #### Budget Receipts - Summary 1979-80 1980-81 {:#subdebate-86-1} #### Proportion Some 41 per cent of the estimated increase in receipts in 1980-81 derives from strong increases in receipts from the excise on crude oil and LPG and from company income tax. The further substantial increase in receipts from the excise on crude oil mainly reflects past increases in the import parity price. (It is assumed that the import parity price applicable since 1 July 1980 will not change in 1980-81). Revenue from the excise on LPG is also expected to increase sharply as a result of the full year effects of the new pricing and levy arrangements announced on 8 April 1980. The strong growth in company tax reflects estimated faster growth during 1979-80 in company incomes subject to tax as well as the abolition of the trading stock valuation adjustment with effect from 1 July 1979 and the phasing down of the investment allowance to 20 per cent for eligible plant first used or installed ready for use after 30 June 1979. Collections of individual, income tax are estimated to increase by 13.5 per cent Jul 1980-81, compared with 17.5 per cent in 1979-80. It is estimated that, in the absence of the measures announced in the Treasurer's statement of 6 March 1980 and in the Budget, individual income tax receipts would have increased by 17.9 per cent in 1980-81. {: .page-start } page 66 {:#debate-87} ### ECONOMIC CONTEXT An account of the economic context of the Budget, and of the post-Budget outlook for the economy in 1980-81, is presented in Statement No. 2. {: .page-start } page 66 {:#debate-88} ### HISTORICAL DATA Historical data on Budget transactions are presented in Statements Nos 5 and 6. Statement No. 5 provides a detailed account of the Budget outcome for 1979-80 and Statement No. 6 presents Budget and some broader public sector data for the period from 1970-71. {: .page-start } page 66 {:#debate-89} ### CLASSIFICATION OF BUDGET DATA An Appendix to the Budget Statements describes the basis of classification of information used throughout the Statements. Additional information relevant to the Budget is contained in a number of supplementary documents. The main, documents are listed on the front cover to this publication and are mentioned in the Appendix. {: .page-start } page 67 {:#debate-90} ### STATEMENT No. 2- THE BUDGET AND THE ECONOMY {: .page-start } page 67 {:#debate-91} ### TABLE OF CONTENTS {:#subdebate-91-0} #### Page Part I Review of Economic Developments in 1 979-80 - {:#subdebate-91-1} #### Introduction................... 68 {:#subdebate-91-2} #### Demand and Output................ 69 {:#subdebate-91-3} #### Labour Market.................. 77 {:#subdebate-91-4} #### Prices..................... 81 {:#subdebate-91-5} #### Incomes.................... 83 {:#subdebate-91-6} #### Fiscal Conditions................. 89 {:#subdebate-91-7} #### Monetary Conditions................. 91 {:#subdebate-91-8} #### Balance of Payments................ 100 {:#subdebate-91-9} #### World Economic Developments............. 104 Part II Policy Options and the Budget StrategyBackground................... 10^ {:#subdebate-91-10} #### The Task Ahead.................. 110 Part III The Economic Outlook, 1 980-8 1 - {:#subdebate-91-11} #### Budget Parameters................. 113 {:#subdebate-91-12} #### Forecasting Assumptions............... 114 {:#subdebate-91-13} #### Expenditures................... 115 {:#subdebate-91-14} #### Balance of Payments................ 120 {:#subdebate-91-15} #### Monetary Conditions................ 121 {:#subdebate-91-16} #### Product..................... 122 {:#subdebate-91-17} #### Labour Market.................. 122 {:#subdebate-91-18} #### Incomes and Prices................. 123 {:#subdebate-91-19} #### Overview.................... 1 24 {: .page-start } page 68 {:#debate-92} ### STATEMENT No. 2- THE BUDGET AND THE ECONOMY This Statement outlines recent and prospective trends in the Australian economy and the international scene. Part I examines developments in 1979-80. Part II considers available policy options and discusses the Budget strategy. Economic prospects for 1980-81 as they now appear are assessed in Part III. Part I Review df Economic Developments in 1979-80 {:#subdebate-92-0} #### Introduction Any broad assessment of economic developments needs to pay attention to a wide range of information. While the national accounts estimates are based on a large amount of source data and are presented within a coherent framework, the estimates have exhibited considerable variability due to revisions and, on occasions, movements in individual items have appeared inconsistent with each other or with other sources of information. This places limits on their usefulness and means that judgment and other available information must be used when arriving at an overall view on how economic developments are unfolding. Last year's Statement No. 2 highlighted some of these difficulties and the latest national accounts estimates suggest that the estimates continue to be surrounded by uncertainty. One indicator of the internal consistency of the national accounts estimates is the behaviour of the 'statistical discrepancy'. Product can be estimated either from expenditure data or income data; the difference between the two estimates is the statistical discrepancy. In Australia, the income-based estimate of GDP has traditionally been used as the basic measure of product growth, with the statistical discrepancy being assigned to the expenditure side of the accounts. A large statistical discrepancy indicates that the measurement of either the expenditure or income estimates is inadequate. Similarly, a significant trend in the discrepancy suggests that the estimates of the growth of individual items are out of line with actual developments; this could of course be associated with improved accuracy in the measurement of the level of individual aggregates. Table 1 sets out the recent history of the statistical discrepancy and the two measures of product growth. Since 1973-74 the statistical discrepancy has been on a general downward trend and in 1978-79 it became negative for the first time since 1970-71. In 1979-80 it became even more negative. In short, product as measured by the expenditure estimates has been increasing at a faster rate than the published income-based estimates. A variety of possible reasons can be brought forward to explain this difference in growth. For example, income estimates in the early to mid 1970s could have been inflated because of rising capital gains, fed by accelerating inflation, being classified as income. More recently, a growing cash economy might be better reflected in the expenditure estimates than in the income estimates. On the other hand, the Statistician has referred to the illegal economy as a source of understatement of expenditure. The divergence between the civilian employees series and the labour force employment estimates (which have grown the faster over the past year - see page 18) and the subsequent withdrawal from publication of the civilian employees series has introduced a new element of uncertainty into the accounts. The Statistician has revised upwards his estimates of wages, salaries and supplements. These estimates have traditionally been based on the civilian employees series. The Statistician is reviewing the employment statistics and the outcome may have implications for the product estimates and for the pattern in the statistical discrepancy. While further revisions to employment may bring the movements in the expenditure and income side of the accounts closer together for 1979-80, they would not remove the general pattern in the statistical discrepancy over the longer run of years and they would introduce a sharper movement in the discrepancy between 1977-78 and 1978-79. Notwithstanding the difficulties in compiling national accounts, which are not unique to Australia, these estimates continue to be a useful tool and are given due regard in what follows. Table 1 - Expenditure and Income Based Estimates of GBP (Constant 1974-75 prices) Statistical discrepancy {:#subdebate-92-1} #### Demand and Output Domestic economic activity and employment strengthened significantly over the course of 1979-80. The main contributions in the first half of the year came from very strong export growth and a sizeable build-up in non-farm stocks; private final domestic demand was subdued in this period, with strong growth in private dwelling investment and moderate growth in private consumption being largely offset by a decline in business fixed investment. The second half of the year brought an acceleration in private consumption expenditure and a recovery in business fixed investment, accompanied by a run-down in stocks and some easing in export growth. Growth in non-farm domestic product for the year as a whole was more than 3 per cent - about what was expected at Budget-time last year. As had also been expected, farm product declined from the peak recorded in 1978-79 but was still high. Employment expanded more rapidly than in any year since 1973-74. All in all, 1979-80 saw significant gains in the recovery process. Despite these gains, the factors that have been constricting the economy's growth potential in recent years still remain. Some new problems also are emerging; these problems are addressed in Part II. The following paragraphs describe major developments in the past year or so. National accounts estimates provide the framework for the discussion but where appropriate they are supplemented by other information. The commentary, including the accompanying charts, refers to annual and half-yearly movements. Unless otherwise noted, all figures mentioned are in constant price ('real') terms and (apart from full-year changes) are seasonally adjusted. Since the 'rear and money' economies are part and parcel of each other, the use of developments in 'real' expenditures as the starting-point for discussion is, though conventional, to some extent arbitrary. *Private final consumption expenditure* (Chart 1, panel a) increased by 2.3 per cent in 1979-80, much as expected at this time last year and not significantly different from the average growth rate over the previous three years. Growth increased in the second half of the year to an annual rate of 2.9 per cent. The removal of the income tax surcharge from 1 December 1979 doubtless contributed to this increase; so too did the significant lift in employment growth that occurred towards the end of 1979. Chart 1 - Growth in Components of Expenditure on Gross Domestic Product (S million, constant 1974-75 prices, seasonally adjusted) 400 200 1977-78 1978-79 I II I II {: type="a" start="a"} 0. Private consumption 1979-80 I II -I00J 200 -100 100 {: type="a" start="b"} 0. Private Investment in Dwellings -100 -> {: type="a" start="c"} 0. Private Investment in Other Building and Construction 200 -200 {: type="a" start="d"} 0. Private Investment in Plant and {:#subdebate-92-2} #### Equipment *Wl_* 800 : 600 : 400 : 200 {: type="a" start="e"} 0. Total Private Final Demand -100 400 200 (/) Government 100 600 400 200 *A* {: type="a" start="g"} 0. Exports -200 -400 : {: .page-start } page 1 {:#debate-93} ### BP 11 1979-80 {:#subdebate-93-0} #### I If {: type="A" start="J"} 0. Imports *M* {: type="a" start="k"} 0. Gross Domestic Product {: type="A" start="A"} 0. Two estimates are shown for the growth of GDP. The shaded bar is the published (income-based) estimate. The unshaded bar is an expenditure-based estimate (equal to *(k)* in the above identity which excludes the change in the statistical discrepancy). (/) The gross non-farm product estimate is income-based (includes discrepancy). {:#subdebate-93-1} #### Legend I Positive contribution to product growth j Negative contribution Ito product growth Estimated developments in disposable income, consumption and the saving ratio in recent years are set out in Table 2. Real household disposable income rose marginally in 1979-80 and the saving ratio resumed a downward movement after rising in 1978-79 as a result of the surge in farm incomes in that year. There was also a further decline in the 'non-farm' saving ratio in 1979-80. The falls in 1979-80 notwithstanding, both the total and 'non-farm' saving ratios remain above their levels of earlier years and there is still scope for consumption to grow more strongly than real disposable income. Table 2 - Earnings, Income andj Consumption (Per cent) {: type="a" start="a"} 0. National accounts basis. Non-farm wages, salaries and supplements per unit of non-farm wage and salary earner employment (6) Deflated by implicit price deflator of private final consumption expenditure. 1. Ratio of household saving to household disposable income. (The latter is defined in the national accounts on a tax-paid basis.) Seasonally adjusted quarterly estimates of the saving ratio are included regularly in the Treasury publication *Round-up of Economic Statistics.* 2. Derived from the ratio of private consumption to household disposable income *less* income of farm unincorporated - enterprises *plus* income tax paid by other individuals. While providing only an approximation to the 'non-farm' saving ratio, these derived figures should be a reasonable indication of movsments in the saving ratio abstracting from the farm sector. 3. Seasonally adjusted and at annual rate. *Private dwelling investment* (Chart 1, panel b), which had begun to rise in the second half of 1978-79 following two years of steady decline, increased strongly in 1979-80 to record a rise of 10.5 per cent for the year as a whole. The improved level of activity in the dwelling sector was assisted by a return to more normal levels of stocks of unsold new dwellings and the improved price competitiveness of new dwellings relative to established ones. An upsurge in building in Sydney and in Queensland resort areas appears to have reflected some speculative elements. Although the rate of increase of housing finance approvals for owner occupation eased considerably in the first half of 1979-80, activity continued to respond to the rapid increase in loan approvals in 1978-79 and the growing interest of developers and investors in providing townhouses and flats in some areas. For example, while commencements of houses were 9.2 per cent higher in the first three quarters of 1979-80 than for the same period a year earlier, commencements of dwellings other than houses (home units, etc) rose by no less than 32.1 per cent between the same two periods. *Private business gross fixed capital expenditure* (Chart 1, panels c and d) declined by 5.2 per cent in 1979-80 after increasing by 9.3 per cent in 1978-79. *Non-residential building and construction* and *private investment in plant and equipment* both declined in the first half but non-residential building and construction rebounded strongly in the second half; there was a small further decline in investment in plant and equipment in the second half. The completion of the phasing down of the investment allowance from 40 per cent to 20 per cent at the end of 1978-79 was no doubt the major influence on the decline in the first six months and in the year as a whole. The strong second half increase for nonresidential building and construction - at a seasonally adjusted annual rate of 23 per cent - is compatible with earlier information from the Statistician's investment expectations survey. The small fall for plant and equipment investment, however, implies that the strong growth in that area expected for the June quarter did not materialise. Unexpected delays, possibly associated with industrial disputation, skilled labour shortages, or the temporary deferment of some investment pending greater clarification of the overseas outlook, may have been responsible for that lower than expected outcome. While there are reasons to be cautious, the strong growth in non-residential building and construction in the second half of 1979-80, together with the very strong growth in 1980-81 for private business fixed investment foreshadowed by the Statistician's investment expectations survey (see page 56), point to the basic strength of the investment recovery now under way. As Table 3 shows, however, investment as a proportion of GDP still remains below past averages. Table 3 - Private Business Gross Fixed Capital Expenditure as a Percentage of GBP {:#subdebate-93-2} #### Year- {:#subdebate-93-3} #### Average 1960-61 to 1972-73 . 12.2 1973- 74...... 10.1 1974- 75...... 9.9 1975- 76...... 9.7 1976- 77...... 9.3 1977- 78...... 9.7 1978- 79...... 10.3 1979- 80...... 9.7 Half-year(a)- 1979-80 I...... 9.7 {: .page-start } page 73 {:#debate-94} ### II...... 9.8 The expenditure categories discussed so far - private final consumption and private gross fixed capital expenditure - make up *private domestic final expenditure* (Chart 1, panel e). As shown in Table 4, private domestic final expenditure made a smaller percentage points contribution to GDP growth in 1979-80 than in the previous year, largely because of the decline in business investment in the first half of the year. Table *4* - Contributions to Change in Gross Domestic Product (Constant 1974-75 prices) Total public Private sector domestic final final Statistical Non- expen- expen- *Net* dis- farm Farm diture diture Stocks Exports Imports *exports* crepancy GDP GDP GDP Percentage change on Percentage points contribution to change in GDP previous period Year- *Government final expenditure* (national accounts basis, all governments - Chart 1, panel f), is estimated to have increased by 0.8 per cent in 1979-80, the growth accruing principally in the second half of the year. As was the case in 1978-79, this growth was more than accounted for by an increase in current expenditure (2.5 per cent); capital expenditure fell by 2.9 per cent. The direct contribution of government final expenditure to product growth in 1979-80, at 0.2 percentage points, was one of the smallest in the post-war period. There was a further small fall in the ratio of public sector spending on goods and services to GDP although it remained considerably above pre 1974-75 levels (see Chart 2). As was indicated in last year's Statement, that higher level of the ratio is wholly attributable to expenditure by the State and local government sectors. The figures illustrated in Chart 2 do not, of course, tell the whole budgetary story; in particular, transfer payments - which loom very large in Commonwealth outlays - are not included. (For further discussion of the public sector, see pages 29 and 30 below and Statement No. 6.) Growth in *export* volume (Chart 1, panel g), although decelerating during the year, was very strong in both halves of 1979-80, making a substantial contribution to the increase in *total final expenditure* (Chart 1, panel h) and product growth (Table 3). The continuing strength of export volume was largely attributable to increased rural shipments, including a doubling in wheat exports. Nonferrous metal and other manufactured exports also increased significantly. For 1979-80 as a whole, exports of goods and services are estimated to have risen by 14.6 per cent. *Import* volume (Chart 1, panel j) fell slightly (by 1.1 per cent) in 1979-80 reflecting a reduction in deliveries of defence equipment and capital goods. Imports of goods and services fell at an annual rate of 6.2 per cent in the first half of the year but then increased at an annual rate of 6.6 per cent in the second half. Chart 2 - Share of Public Expenditure in Gross Domestic Product(o) Total State and Local Government Commonwealth Government Average ] 972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1966-67 to 1972-73 With imports easing slightly and exports expanding strongly, *net exports* made a significant contribution to product growth in 1979-80 (Table 4), mainly in the first half of the year. Export and import performances in 1979-80 are discussed further in the section on the balance of payments. *Stock* movements in recent years are shown in Chart 1 (panel i). In the first half of 1979-80 a run-down in farm stocks associated with the shipment of 1978-79's record rural output was more than offset by an accumulation of nonfarm stocks. Part of the build-up in non-farm stocks (in particular the build-up of motor vehicle stocks) would have been unintended, but there also appears to have been a precautionary accumulation of petroleum-related stocks. In the second half of the year non-farm stocks were run down as the unintended stock rises of the previous half-year were worked off. The effect of industrial disputes on output, particularly in the coal industry, also contributed to stock decumulation. Farm stocks continued to fall in the second half of the year. For the year as a whole, non-farm stocks increased but, because of the fall in farm stocks, overall stock movements detracted importantly from product growth (Table 4). *Farm product* declined by 9.0 per cent in 1979-80 but was still seme 17.9 per cent above the average level for the three years to 1977-78. Increased plantings, together with generally favourable seasonal conditions, led to above-average cereal crops, notably of wheat (where output was the second highest on record) and barley. There was a sizeable fall in meat production. Wool production was 2 per cent higher than in the previous year. Growth in *non-farm product* in 1979-80, at 3.1 per cent, was above the rates recorded in the previous two years. With the sizeable fall in farm product, growth in *total domestic product* in 1979-80 is estimated to have been 2.2 per cent. {:#subdebate-94-0} #### Labour Market There was a clear improvement in labour market conditions in 1979-80. According to labour force survey estimates, average total *employment* increased by about 144 000 or 2.4 per cent in 1979-80, a faster growth rate than in any year since 1973-74. Between the June quarters of 1979 and 1980 - that is, over the course of 1979-80 - total employment grew even faster, by 2.8 per cent. Even with a growing labour force, including a small increase in the workforce *partici pation rate,* there was a small decline in the average level of *unemployment* in 1979-80, the first such decline for six years. Table 5 shows the major labour market indicators for recent years. {:#subdebate-94-1} #### Employment^) Unemployment^) {: type="a" start="a"} 0. Labour force survey basis. Total employment also includes some other minor categories. 1. Differences between the ABS and CES series are discussed in the October 1976 issue of the Treasury publication *Round-up of Economic Statistics.* 2. Annual data are based on February, May, August and November observations. 3. Not applicable. 4. Prior to 1976-77 relevant figures are not available. The labour force survey indicates that the increase in employment in 1979-80 was fairly evenly spread between the 'employers and self-employed' category, which rose by 2.6 per cent, and wage and salary earner employment, which rose by 2.4 per cent. Employment derived from the payroll tax based civilian employees series recorded a rise of only 1.0 per cent over the course of the year to April 1980 (after which publication of this series was withheld). This stands in marked contrast to the estimated growth in wage and salary earner employment according to the survey. While there are reasons to question the reliability of both series - the survey because of inherent problems of sampling variability and the civilian employees statistics because the payroll tax data on which the private sector estimates are based provide only a partial coverage of civilian employment - the survey based employment series appears to provide a better guide to recent employment trends than the payroll tax based estimates. In making such a judgment, it is important to note that the labour force survey estimates suggest growth over the previous twelve-month period of 2.0 per cent or more for each of the last ten months of the year - which reduces the chance that this faster rate of increase was due solely to sampling errors. Because of the widening divergence in the growth rates of the two employment series, the Statistician is investigating the payroll tax based series and has withheld publication of the series until revised figures are available. He is also investigating the methods and procedures of the monthly labour force survey. The labour force *participation rate,* which had been falling persistently for some years, recorded a small increase in 1979-80 (Table 5). The rise was more pronounced over the course of the year, from 60.7 per cent in the June quarter of 1979 to 61.3 per cent in the recent June quarter. The fact that the strong growth in employment over 1979-80 was accomplished by attracting more people into the workforce rather than by reducing the number unemployed is further evidence of the basic adaptability and flexibility of the workforce as a whole, and perhaps also of the rigidities among some of those remaining unemployed. In 1979, of the people employed at some stage during the year, 23 per cent left a job. This dynamic aspect of the employed labour force is also evident in monthly flows. It would appear that each month around 4 per cent of those employed in the previous month leave employment while around 41 per cent of those who were previously not in the labour force enter employment; of those previously unemployed, around 20 per cent find employment each month. According to the labour force survey, *unemployment* for both the full-time and total labour forces was below the levels of a year earlier for much of 1979-80 (Chart 3). For the year as a whole total unemployment was about 6000 persons lower on average than in the previous year, declining from 6.3 per cent of the total labour force in 1978-79 to 6.1 per cent in 1979-80 (Table 5); however, an apparent easing in the labour market towards the end of the year meant that, by the June quarter, unemployment was higher by some 7200 persons than a year earlier. With strong growth in the labour force over the year, the unemployment *rate* in the June quarter 1980 - 6.1 per cent of the labour force - remained slightly below the rate of a year earlier. The number of registrants with the CES also rose slightly between the June quarters of 1979 and 1980 and increased on a year-on-year basis. Other labour market developments of interest in 1979-80 included a continued firm rise in part-time employment, a much stronger rise in female than in male employment and a pick-up in employment of juniors. Chart 3- Total Unemployment: 1978-79 and 1979-80 (Monthly) (per cent of labour force) 50 i i i i i i i i i i i i JASONDJ FMAMJ {:#subdebate-94-2} #### Prices The downward trend in the rate of inflation that had been established from 1975-76 was interrupted in 1978-79, initially because of factors originating outside Australia. In 1979-80 most of these exogenous factors continued to put pressure on domestic price levels and, together with the indirect and flow-on effects of what had occurred in 1978-79, contributed to a further rise in the rate of inflation. There were further large increases in the international price of oil and world commodity prices generally continued to rise rapidly until around February 1980. Table 6 gives some indication of the direct effects of these exogenous factors on the *consumer price index* in recent years. It shows movements in the CPI, together with movements in the CPI adjusted to exclude food and petrol prices, health service costs and the direct effects of the indirect tax changes made in the 1978-79 Budget. The acceleration in the adjusted index in 1979-80 would reflect to some extent the indirect and flow-on effects referred to above. Much of the latter would have come from wages via the indexation process, although flow-on effects from earlier petrol price rises would also have been an influence. Table 6 - Consumer Price Index Movements: Original and AdjustedfaJ (Six capital cities, percentage change on previous period) {: type="a" start="a"} 0. Consumer price index adjusted to exclude food and petrol prices, health care costs and the direct effects of the indirect tax changes made in the 1978-79 Budget. 1. Seasonally unadjusted annual rates. Movements in the main price indexes in recent years and in the latest three half-years are set out in Table 7. There was some easing in most of the monthly price indexes in the latter months of 1979-80, primarily reflecting an easing in overseas commodity prices. Year 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 Half-year(a) 1978-79 II 1979-80 Consumer price index - All groups..... Excluding food .... Excluding hospital and medical services Implicit deflators(o) - Private final consumption **Major GNE** components Gross non-farm product Sectoral indexes - Manufacturing industry - Foreign trade - Implicit deflators(6) - Exports of goods and services . Imports of goods and services . Export price index(e) .... Imported materials used in manufacturing 19.8 11.5 19.4 20.8 16.7 28.3 13.1 42.8 7.5 11.1 9.0 11.8 11.3 15.8 11.9 14.9 4.2 13.3 4.9 10.2 15.5 9.5 12.5 7.3 14.2 18.1 (c)22.2 (c)32.2 18.2 12.7 25.8 18.3 13.1 22.2 20.4 40.5 13.4 15.1 (rf)20.4 (a")34.5 {: type="a" start="a"} 0. Annual rate. (Z>) Half-yearly data are seasonally adjusted, (c) Increase in twelve months to May. (</) Increase in six months to May. 1. Percentage changes for 1975-76 and later years are based on the revised Export Price Index (reference base 1974-75=100) released by the Statistician on 12 October 1979 and are not strictly comparable with those appearing for earlier years. The revised index differs from the earlier index (reference base 1959-60= 100) in respect of its weighting pattern and coverage of exports. {:#subdebate-94-3} #### Incomes Wages and earnings accelerated in 1979-80 (see Table 8). *Average weekly earnings* (male unit basis) increased by 9.6 per cent for the year as a whole, compared with 7.7 per cent in 1978-79; the increase over the course of the year was considerably larger at 11.8 per cent. Table 8- Elements in Earnings Growth Average {: type="a" start="a"} 0. The difference between the increases in awards and earnings over any period is commonly used as a measure of earnings drift. However, different rates of increase can also reflect timing and coverage discrepancies between the two series. {: type="A" start="A"} 0. Quarterly figures are from seasonally adjusted data. 1. The difference between the increase in total (i.e. per employed male unit) and ordinary time average weekly earnings over any period reflects differences in the coverage of the two series as well as variations in average overtime hours. *(d)* Includes about 0.5 percentage points for incorporation of some over-award payments into the Metal Industry Award as supplementary payments, (e) Annual increase from year to May 1979 to year to May 1980. (/) Three months to May 1980. The recent rise in the absolute contribution of national wage case decisions to the rate of increase in awards is the result of applying a high degree of indexation to an accelerating CPI. The most recent decision (14 July) has continued this trend; the latest two national wage increases compound to 8.9 per cent, the largest increase for any twelve-month period since 1977. 1979-80 also saw the most significant movement for some years in awards outside national wage cases. In particular, a substantial proportion of wage and salary earners received work value' and other non-national wage case increases during the year. As a result of both these influences, the rate of increase in average awards rose in 1979-80. As in 1978-79, *average weekly earnings* increased significantly faster than *average minimum male awards.* This would suggest that earnings drift and/or increased overtime have been of some significance, although conclusions can be no more than tentative at this stage because of the timing problems and limitations of the data. In particular, the award wage rate indexes do not cover a significant proportion of employees covered by the earnings series. Also those award rates of pay which are included in the indexes are, at present, weighted according to the pattern of employment prevailing in 1954. Moreover, the indexes are sometimes slow to reflect changes in award wages and latest observations are therefore subject to substantial revision. Nevertheless, it is clear that there has been substantial drift of wages and earnings outside national wage cases since 1978. This has coincided with a steep increase in industrial disputes over wages and hours of work. In 1979, 2.2 million working days were lost directly through such disputes, compared with 1.1 million in 1978 and 0.9 million in 1977. The timing of this development in relation to labour market trends suggests that the increased demand for labour has played some causal role. Table 9 sets out information on real award wages and earnings. The acceleration in inflation in 1979-80, as measured by the private consumption deflator, was enough to offset the acceleration in award wages and average weekly earnings (male unit basis). As a result, male award wages deflated by the private consumption deflator declined by 1.2 per cent in 1979-80 after decreasing by 2.4 per cent in the previous year. The corresponding figures for average weekly earnings were declines of 0.1 per cent and 1.2 per cent. To an extent this fall in real award wages and real average weekly earnings in 1979-80 was a reflection of the initial lags in the adjustment of wages to prices in a period of accelerating inflation. In 1979-80 the private consumption deflator rose somewhat more quickly (by 9.7 per cent) than the non-farm product deflator (9.2 per cent), largely because of the effect of a faster rise in rural prices and a decline in the terms of trade. Adjusted by the non-farm product deflator, the fall in real awards in 1979-80 reduces to 0.8 per cent and real earnings show a slight rise. Movements in average weekly earnings and in the consumer price index in recent years are shown in Chart 4. Table 9- Real Wages and Earnings ($, at 1974-75 prices) Average weekly earnings Average minimum male awards (male unit basis) {: type="a" start="a"} 0. Deflated by implicit price deflator of private final consumption expenditure. 1. Deflated by implicit price deflator of gross non-farm product. 2. June figure estimated. Chart 5 - Employment, Productivity and Product (percentage change on previous period) 4n 3 2 1 *(a)* Employment *A-* *2-* -1- -2- Productivity 4 3 2 Average 1966-67 to 1972-73 1978- 1979- 79 80 -l-» (A) Average 1966-67 to 1972-73 1974- 75 1976- 77 1978- 79 1979- 80 W Product {:#subdebate-94-4} #### El Average 1966-67 to 1972-73 1974- 75 1976- 77 1978- 1979- 79 80 {: type="a" start="a"} 0. Treasury estimate of total non-farm employment consistent with National Accounts income aggregates. (A) Treasury estimate of total non-farm employment consistent with National Accounts income aggregates, adjusted for changes in average hours worked by total employed persons. 1. Gross non-farm product at constant (1974-75) prices per unit of non-farm employment as defined in *(a).* 2. Gross non-farm product at constant (1974-75) prices per unit of non-farm employment as defined in (a), adjusted for average hours worked. Table 10 shows indexes of average real labour costs, average labour productivity and real unit labour costs estimated for the non-farm sector of the economy. 1979-80 saw some further correction of the imbalances between real labour costs and productivity. The real unit labour cost index, which had reached a peak level of 110 in 1974-75 (average 1966-67 to 1972-73=100), fell to an estimated level of 105 in 1979-80. Over the period since 1976-77 there has been a relatively small increase in average real labour costs. This development has coincided with an apparent easing in labour productivity growth and, as a consequence, there has been only a gradual reduction in real unit labour costs. Taking the national accounts statistics at face value, recorded labour productivity growth has slowed down considerably from 3.8 per cent per annum over the period 1974-75 to 1976-77, to only 1.1 per cent per annum over the period since 1976-77. Chart 5 depicts recent movements in product, employment and productivity; the productivity and employment measures are shown on both an 'hours worked' and an 'employed worker' basis. Table 10 - Real Unit Labour Costs Estimates for the Non-farm Sector (Average 1966-67 to 1972-73 = 100) {:#subdebate-94-5} #### Year- 1972- 73 1973- 74 1974- 75 1975- 76 1976- 77 1977- 78 1978- 79 1979- 80 Half-year(c) - 1979-80 I II Average real Average labour Real unit labour cost productivity labour cost index(a) index(6) index {: type="1" start="1"} 0. (2) (3 = 1 -r 2) 112 110 102 116 111 105 126 114 110 126 118 107 131 123 107 132 122 108 131 124 106 133 127 105 133 126 105 133 127 105 {: type="a" start="a"} 0. Non-farm wages, salaries and supplements plus total payroll tax, deflated by the implicit price deflator of gross non-farm product, per hour worked by non-farm wage and salary earners. 1. Gross non-farm product at average 1974-75 prices per hour worked by persons employed in the nonfarm sector. 2. Seasonally adjusted. The *gross operating surplus of trading enterprise companies* (i.e. the operating surplus before allowance is made for depreciation) is estimated to have increased by 16.2 per cent in 1979-80 following the small rise of 6.9 per cent recorded in 1978-79. There was thus a small increase in the gross profit share in 1979-80 (Chart 6). The *gross operating surplus of unincorporated enterprises* is estimated to have increased by 10.5 per cent in 1979-80 compared with 27.8 per cent in 1978-79. The lower increase in 1979-80 reflected a much slower increase in the gross {:#subdebate-94-6} #### Chart 6- Wage and Profit Shares 70-, 68 66 - 64- 62- 20- 18- 16 14 12 {: type="a" start="a"} 0. Wage Share 1. Profit Share Average 1972-73 1973-74 1966-67 to 1972-73 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 {: type="a" start="a"} 0. The ratio of non-farm wages, salaries and supplements to gross non-farm product at factor cost. Seasonally adjusted quarterly estimates of the wage share are published in the Treasury publication *Round-up of Economic Statistics.* 1. The ratio of the gross operating surplus of trading enterprise companies and financial enterprises (less imputed bank service charge) to gross non-farm product at factor cost. operating surplus of *farm* unincorporated enterprises, in contrast to the very large rise in 1978-79. {:#subdebate-94-7} #### Fiscal Conditions Public sector final expenditure contributed around 0.2 percentage points to product growth in 1979-80, the smallest such figure for many years. This, together with the significant reduction in the Commonwealth sector borrowing requirement, contributed importantly to the improved performance of the economy in 1979-80. The continued policy of Commonwealth expenditure restraint was reflected in the slight reduction, in real terms, in Commonwealth Budget outlays in 1979-80. Over the previous three years, outlays grew in real terms at an average rate of about one per cent per annum. While this has resulted in a gradual reduction in the size of the Commonwealth Budget sector relative to GDP, much of the reduction in the Budget deficit has reflected increased receipts which, over the four years to 1979-80, rose slightly relative to GDP. The 16.0 per cent increase in Commonwealth Budget receipts in 1979-80 was somewhat faster than in recent years, mainly reflecting the strong growth in personal income tax and a further large increase in revenue from the crude oil levy. The latter included the additional revenue resulting from the Government's decision to retain the crude oil levy proceeds associated with the increased import parity price following the December 1979 OPEC oil price rises. Mainly as a result of this decision, the Budget deficit of $2034 million was some ^ $160 million lower than the Budget estimate. The very large reduction in the' deficit in 1979-80 ($1444 million) was important in containing additions, to the money supply and pressures on interest rates and in enhancing investor confidence. The slight fall in real terms in Commonwealth Budget outlays in 1979-80 was not matched in the State and local government sector, where outlays are estimated to have shown real growth of over 2 per cent. This did, however, represent some deceleration: State and local government outlays rose at an average annual rate of 3.0 per cent over the three years to 1978-79. Growth in the outlays of the State and local government sector has not resulted from expanded *direct* assistance from the Commonwealth Budget, which declined in real terms over the four years ending in 1979-80. Rather, it has reflected faster growth in funds available to State governments and authorities from their own sources and from increased borrowing programs. Notwithstanding the continued real growth in outlays by the State and local government sector in 1979-80, the reduction in Commonwealth Budget outlays permitted a further slight fall in the size of the public sector as a whole relative to GDP, as shown in Table 11. Table 11 - Public Sector Outlays as a Percentage of *GDV(a)* {: type="a" start="a"} 0. Quarterly information on Commonwealth and State government finance is published in the quarterly Public Finance supplements to the Treasury publication *Round-up of Economic Statistics. (Jb)* Direct assistance from Commonwealth Budget, including State government Loan Council programs. {: type="a" start="c"} 0. Net of all transfers between Commonwealth and Stateandlocalgovernmentsectors. However, because interest payments on past advances from the Commonwealth are included in State and local government sector outlays, columns 1 and 3 do not add to column 5. 1. Preliminary. The large reduction in the Commonwealth Budget deficit in 1979-80 resulted in a similar reduction in the total public sector borrowing requirement. Figures for recent years and an estimated level for 1980-81 are given in Table 12. Table 12 - Public Sector Borrowing Requirement(a) {: type="a" start="a"} 0. Public sector borrowing requirement as here denned includes Commonwealth Budget deficit and net borrowings by Commonwealth authorities as well as net borrowings by State and local semi-government authorities. This is one of several possible definitions of the public sector borrowing requirement: further information is provided in Statement No. 6. 1. Estimated. {:#subdebate-94-8} #### Monetary Conditions Monetary conditions and instrument settings in 1979-80 resulted in a faster growth in the money supply (M3) than the conditional projection in the 1979-80 Budget Speech that growth in M3 'of about 10 per cent over the course of the year would be compatible with policy'. The broadly defined volume of money (M3) grew by 12.9 per cent during 1979-80, compared with the 11.8 per cent increase recorded during 1978-79. After allowance for the statistical aberration relating to State government holdings of banks' certificates of deposit referred to below (see page 37), the increase in M3 during 1979-80 was 12.3 per cent. The major factors in the formation of movements in the volume of money (M3) are set out in Table 13 and illustrated in Chart 7. There were important differences between 1979-80 and earlier years. In the first place, there was a sizeable surplus (for the first time since 1972-73) on private sector foreign exchange transactions of $974 million, compared with deficits of $1202 million in 1977-78 and $254 million in 1978-79. Secondly, there was the much lower contribution from the domestic Budget deficit ($567 million) than in 1978-79 ($2258 million). (Details on how the Budget deficit was financed are given in Table 14.) Thirdly, Rural Credits advances made a negative contribution to monetary growth instead of the small positive contribution in 1978-79. Rural Credits advances from the Reserve Bank to the Australian Wheat Board in respect of the 1979-80 crop were limited to $800 million and, principally because of an exceptionally high rate of wheat shipments, the Australian Wheat Board was able to repay within the year a large part of those advances together with the amounts outstanding in respect of advances on previous years' crops. Largely as a result, Rural Credits advances outstanding in June 1980 were $285 million lower than a year earlier. The net result of these three factors was an increase in private sector holdings " of liquid assets and government securities (LGS) in 1979-80 of $1200 million, the smallest increase for any year since 1973-74. The main factor in the monetary overrun in 1979-80 was the much faster expansion in trading bank advances than had been expected. This very largely reflected the fact that, following the rapid rise in interest rates in some overseas countries early in the year and increases in interest rates on loans by other domestic financial institutions, demand for lower cost trading bank loans increased sharply. Chart 7- **Major Factors** in the Formation of Movements in the Volume of Money S million Budget Contribution to Private Sector LGS Assets 3 000 2 000 I 000 0 {: .page-start } page 92 {:#debate-95} ### I 000 0 {:#subdebate-95-0} #### Private Sector Foreign Exchange Transactions {: .page-start } page 92 {:#debate-96} ### ET -1 000- -2 000- 3 000' 2 000 I 000' 0 Private Sector LGS Assets !!J*fcli*fcl 2 000-1 1 000- Private Non-bank Take-up of Commonwealth Government Securities 3 000 2 000' 1 000' 0 {:#subdebate-96-0} #### Loans and Advances -All Trading Banks 2 000- 1 000- 0 {:#subdebate-96-1} #### Loans and Advances- Savings Banks {:#subdebate-96-2} #### Hi 6 000 5 000- 4 000- 3 000 2 000 1 000' 0 Volume of Money r./"-"">r *> - 1* 1974-75 1975-76 1976-77 1977-78 Positive contribution to money formation 1978-79 iiSa Negative contribution to money formation 1979-80 1978-79 1979-80 VO CO 70 {:#subdebate-96-3} #### Torn *VI* m Z H > H < ffl *VI* Average weekly figures basis except for private sector foreign exchange transactions. Budget deficit, Budget overseas deficit. Budget contribution to private sector LGS assets, and noldings *of* the public of Commonwealth Government securities which are on a last day basis, and private sector LGS assets which is partly last day. Figures represent movements except r nratthree items. Not seasonally adjusted. Quarterly money formation figures are published in the quarterly Public Finance supplement to the Treasury publication *Round-up of Economic* Equals Budget domestic deficit. Defined as the movement in Reserve Bank holdings of gold and foreign exchange adjusted to exclude Government budgetary and financing transactions overseas, other non-monetary movements and valuation effects arising from changes in the foreign currency value of these assets and from exchange rate variations. Includes Reserve Bank transactions in commercial bills, other loans and advances, and miscellaneous accounts and the balancing item (largely due to the difTerent timing bases used), uehned as banking sector LGS assets (the sum of its holdings of notes, coin, cash with Reserve Bank, Treasury bills. Treasury notes and other Commonwealth Government securities) plus noldings of the public of notes and coin and Commonwealth Government securities. *if)* Defined as holdings of the public of notes and coin plus deposits of the public with banks (including deposits with the Reserve Bank), (p) Preliminary. (» (c) VO Year 1978-79 1979-80 {: type="a" start="a"} 0. Quarterly information on government financing transactions is published in the quarterly Public Finance supplement to the Treasury publication *Round-up of Economic Statistics.* 1. Other financing transactions include funds obtained from coinage and bullion transactions, amounts borrowed by Commonwealth Government trust accounts, net amounts available from Commonwealth Government trust account transactions in government securities, amounts available from moneys held in trust, etc. 2. An explanation of this concept is given in 1980-81 Budget Statement No. S. *id)* All figures shown for the sectoral composition of domestic borrowings are on a last day basis. 3. Includes movements in holdings of Treasury bonds. Australian savings bonds, special bonds, income equalisation deposits, drought bonds, etc., and associated inscribed stock. *If)* Includes movements in the holdings of governmenl securities of Commonwealth Government and State Governments, and State Government and non-financial Commonwealth semi-government authorities (but excluding special loans, changes in holdings of internal Treasury bills and cancellations of sonic securities). For given *domestic borrowings,* increases in such holdings reduce private sector and Reserve Bank portfolios of net government debt. If changes in government sector holdings are subtracted from *domestic borrowings* this gives a concept which the Reserve Bank terms *net domestic borrowing requirement,* data for which are published quarterly in the Bank's *Statistical Bulletin.* Subject to a few minor qualifications, this shows the change in indebtedness of the Budget sector to the private sector and Reserve Bank. Or) Includes take-up of Treasury bills. Treasury notes and other government securities, as well as (he Commonwealth Government's use of cash balances (such cash balances are an *asset* of the Commonwealth so Chat their use increases the net indebtedness of the Budget sector). {: type="a" start="p"} 0. Preliminary. *73* W TJ *73* PO t/J m Z H > C/5 c era c VO CO © ef In fact, advances outstanding of the major trading banks rose strongly in 1979-80 and, over the course of the year, increased by 16.7 per cent. Although for the year as a whole the increase in net new overdraft limits was within the Reserve Bank lending guidance of not more than $30 million per week, during the first five months such limits increased, on average, by more than $40 million per week (on a seasonally adjusted basis). This not only contributed to the growth in advances outstanding but, by adding to the stock of unused overdraft limits, supplemented the potential for further growth in advances through increases in the usage ratio later in the year. Following the US monetary measures of 6 October 1979, the rate of overdraft usage rose quickly to a level some 2 to 3 percentage points higher than a year earlier. The overdraft usage ratio remained at this level for some months before jumping again - to some 4 to 5 percentage points higher than a year earlier - late in the financial year. The interest rate charged to prime borrowers on bank loans in excess of $100 000 increased by around 1.5 percentage points to about 12.5 per cent during the year. The interest rates charged on smaller overdrafts generally rose by 0.5 percentage points to the maximum permitted rate of 10.5 per cent. As part of the policy to restrain bank lending, the Statutory Reserve Deposit (SRD) ratio of the major trading banks was raised from 5.5 per cent to 6.0 per cent on 6 December 1979. Non-bank take-up of Commonwealth Government securities during the year may be usefully considered in four distinct stages: the pre-Budget period; from the Budget to 6 October; from 6 October to 30 April when the tap system for marketing Commonwealth bonds was introduced; and the period after 30 April. Prior to the Budget, securities markets were unsettled. This probably reflected, in the main, concern about the implications for inflation of the high rate of monetary growth during 1978-79. The large sales of Australian Savings Bonds (ASBs) during this period were mainly due to a temporary lack of confidence in some financial intermediaries. Investors' confidence in the bond market appeared to be restored by the announcement of a substantial reduction in the estimated Budget deficit and, hence, in the Commonwealth sector borrowing requirement for 1979-80. The pace of bond sales picked up and there was some, albeit tentative, demand for longer bonds. Following the US monetary measures on 6 October, the bond market weakened. There were steady sales of ASBs and non-bank holdings of Treasury Notes increased quite rapidly, but non-bank holdings of bonds fell progressively. Notwithstanding this deterioration in the bond market and its implications for short-run monetary control, policy was concerned with the need not to overreact to what appeared likely to be a temporary rise in overseas interest rates. As was pointed out in this Statement last year, large and erratic variations in policy settings are likely in themselves to impair economic performance. Overseas rates, notably in the United States, did fall back sharply later in 1979-80; however, the intervening period proved a difficult one in which to restore more favourable conditions for selling government bonds. During January the Reserve Bank increased the yields on its 'de facto' tap stocks by 0.4 percentage points. In February two bond tenders were conducted and in view of the results the Reserve Bank again increased the yields on its 'de facto' tap stocks. However, on each occasion market yields moved away as overseas interest rates continued to rise, and non-bank holdings of bonds continued to fall. ASB Series 16 was introduced on 3 March, at an interest rate of 9.75 per cent, 0.5 percentage points higher than on the previous series, but net subscriptions were negative from early April. As noted, the tap system was introduced on 30 April. In line with market yields, the initial yield on the two-year tap stock was about 0.5 percentage points, and that on the five-year tap stock 0.6 percentage points, above the 'de facto' tap stock yields established in February. This ensured a successful debut, particularly as interest rates in the United States were beginning to fall by this time and a number of institutional buyers appeared to have been awaiting the commencement of the tap system before purchasing bonds. From the new system's introduction to 30 June, sales of the tap stocks aggregated S874 million; over the same period net non-bank take-up was $437 million. Non-bank take-up of all forms of government securities totalled S777 million in 1979-80. While this was slightly higher than the take-up in 1978-79, it was insufficient to prevent the overrun in monetary growth resulting mainly from the rapid growth in bank advances. In particular, insufficient sales of securities were recorded in the December and March quarters, when the strong seasonal addition to liquidity through the Budget deficit and Rural Credits advances as well as surplus private sector foreign exchange transactions resulted in a rapid increase in the banking sector's liquidity base and thus facilitated the rapid growth in advances. Although non-bank take-up was higher in the June quarter following the successful introduction of the tap system, it was by then too late to affect significantly the growth in the money supply over 1979-80. The tendency, referred to in last year's Statement, for outstanding public sector debt to be concentrated at the shorter end of the maturity spectrum continued into 1979-80. For most of the year sales of Commonwealth securities were largely restricted to ASBs and Treasury Notes, while local and semigovernment borrowing was primarily by way of sales of four-year securities. Following the implementation of the tap system, however, some lengthening in the maturity structure of outstanding debt began to be achieved. As indicated in Table 15, private sector interest rates increased during the second half of 1979-80 and, by the end of April, most administered bank rates were at the prescribed maxima. Most significant among these interest rate maxima were the limit of 10.5 per cent on loans of less than $100 000 and, within this, the operational limit of 10.0 per cent on housing loans. Table 15 - Interest Rates (Per cent per annum, at or near end of month) {:#subdebate-96-4} #### Finance **Major trading** cornbanks Savings banks panies {: type="a" start="a"} 0. Issue yields until September 1979, weighted average yield of notes alloted at tender thereafter. to Theoretical yields on a no brokerage basis for non-rebate bonds, based on average for week centred on last Wednesday of month, (c) As at last Wednesday of month. If redeemed before first interest payment date, a lower rate applies. (</) Bottom of range of rates current at end of month for fixed deposits of less than $50 000 for 3 months to less than 6 months. O) Most common rate for loans drawn under limits below $100 000. (/) Subject to special notice and minimum balance requirements. Rates shown are the most common rate on offer. 1. Most common rate charged on new housing loans to individuals. 2. Bottom of range of rates current at end of month, offered on issue of first ranking debentures (i.e. those debentures which are secured by a first charge over assets) of finance companies associated with major trading banks. Trading bank overdraft rates for much of the year were considerably below both those prevailing overseas and those charged by competing domestic financial intermediaries. The trading banks met the resultant increased demand by bidding for funds through the issue of negotiable certificates of deposit (CDs) at yields which averaged 13.2 per cent during June. In June 1980 these CDs represented about 13.1 per cent of total trading bank deposits compared with 2.8 per cent a year earlier. This resulted in the banking sector drawing in funds from the nonbank and external sectors, thus adding to the growth in the money supply- as measured by M3. The interest rate differential between CDs and other trading bank deposits also led State governments to switch some of their funds with banks into CDs. As CDs issued to State governments are included in the money supply while State government holdings of other bank deposits are not, this switching added to the statistically measured growth in the money supply during 1979-80, accounting for about 0.6 percentage points of the growth in M3. As usual, there was a large seasonal reflux of funds to the Commonwealth in the June quarter. The banks had been advised that the liquidity run-down was expected to be steeper than in preceding years (see Chart 8), reflecting increased provisional tax payments as a result of the lift in rural incomes in 1978-79 and higher company tax payments due to increased corporate profitability in 1978-79. Chart 8 - Budget Contributions to Private Sector LGS Assets by Quarter S million 3 000i -3 000 Although conditions were in fact appreciably tighter than in recent years, the run-down was handled without ameliorating SRD action, the Reserve Bank providing assistance to the market on particularly tight days so as to avoid undue disruption. In June 1980 the LGS ratio of the major trading banks was 18.9 per cent, compared with 21.4 per cent in June 1979. Firmer liquidity conditions resulted in a smaller spread between the individual banks' LGS ratios in June 1980 than in June 1979. In contrast to the trading banks, savings banks experienced a more than seasonal outflow of funds, excluding interest credited, during the the latter months of the year as their deposit rates became uncompetitive and, over the year as a whole, savings bank deposits rose by only 7.2 per cent. Housing loans outstanding of savings banks grew by 13.2 per cent during 1979-80, despite the much slower growth in their deposits. As a result, savings banks' holdings of LGS assets fell to 17.5 per cent of deposits in June 1980, 2.5 percentage points lower than a year earlier. There was a marked decline in the growth of trading bank housing loans as trading banks understandably concentrated lending in other, presumably more profitable, areas. Finance approvals by major mortgage lenders grew in value by 8.3 per cent in 1979-80, following the rapid growth of 20.6 per cent in the previous year. The number of finance approvals increased by 2.0 per cent, implying an increase in average loan size of 6.1 per cent. The upsurge in investment, particularly in townhouses and flats in some areas, meant that sources of finance outside the major mortgage lenders became more significant in the financing of dwelling activity in 1979-80. This factor, along with the lagged effects of the earlier sharp lift in finance from the major lenders, underwrote the rapid growth in dwelling activity in 1979-80. As in other recent years, wider measures of the volume of money showed faster growth than M3. The declining relative importance of savings bank deposits referred to above is in part responsible for this development. Over the twelve months to May 1980, M3 rose by 11.9 per cent. Over the same period M4 (M3 plus permanent building society deposits) rose by 12.9 per cent, a broader measure including finance company deposits rose by 12.4 per cent, while a still broader measure including finance company and money market corporation deposits rose by 12.9 per cent. Although net lending by the household sector (which includes unincorporated enterprises) appears to have fallen in 1979-80, that sector continued to have a large financial surplus. Despite this, net sales of ASBs (the government debt instrument especially directed to the household sector) made a relatively minor contribution of $174 million to net sales of government securities to the non-bank private sector. The corporate sector's borrowing requirement probably remained unchanged in 1979-80. A strong increase in gross operating surplus was offset in part by an increase in tax payments and increased financing of stocks. {:#subdebate-96-5} #### Balance of Payments The balance on Australia's private sector external transactions strengthened considerably in 1979-80. A large fall in the current account deficit more than offset a reduction in net apparent private capital inflow; the resulting surplus of $974 million on private sector external transactions compares with a deficit of $254 million in 1978-79. As a consequence of these developments, the expanded official overseas borrowing program that had been embarked upon in 1977 to support Australia's international reserves was substantially reduced. The recovery in private external transactions was accompanied by a small net upward movement in the trade-weighted value of the Australian dollar; at the end of June 1980 the trade-weighted index stood at 85.0 compared with 83.1 a year earlier. The surplus on private external transactions was not sufficient to offset fully the deficit on government external transactions so that, overall, the balance of payments was in deficit by $296 million compared with $124 million in 1978-79 (see Table 16). Table 16 - Balance of Payments: Main Aggregates ($ million, seasonally unadjusted) A strengthening in the balance of payments was expected at the time of last year's Budget. The basic pre-conditions for an improvement had been established by the sustained application of domestic and external policies designed to restore the competitiveness and profitability of Australian industry. Moreover, it was clear that special factors (including, in particular, the excellent rural seasonal conditions in 1978-79) would assist the external account in 1979-80. Nevertheless export growth exceeded even these expectations, with wheat shipments running well ahead of previous levels and with a commodity price boom, albeit short-lived, developing in late 1979. The private capital account, however, weakened substantially during the first half of the year in the face of action by overseas monetary authorities (particularly in the United States) to tighten their monetary policies. Overall, private external transactions moved into deficit in the September quarter and a surplus did not reappear until the March quarter when the relative attractiveness of Australia's natural resources, in an increasingly uncertain world climate, contributed to the resumption of net private capital inflow, particularly in the form of portfolio investment. Private external transactions remained in surplus in the June quarter, strengthening markedly in May and June as private capital inflow reacted to a seasonal tightening in domestic liquidity and an easing of interest rates overseas. After the deficit on private external transactions appeared in August, measures were taken to supplement reserves. These included official loan raisings in Japan yielding $264 million in the December quarter and the arrangement in December of a $US100 million placement with the Reserve Bank by the Bank for International Settlements (BIS). Reserves were also bolstered by a Special Drawing Rights allocation from the International Monetary Fund amounting to $98 million in January. A further official loan raising of $208 million was made in the Federal Republic of Germany in February. For the year as a whole, gross overseas borrowings by the Government amounted to $471 million compared to $1557 million in 1978-79. Late in the year, the Reserve Bank repaid the $US100 million BIS placement which fell due at the end of June. The Government made two scheduled partial repurchases ($143 million) of the 1976 drawing from the IMF Compensatory Financing Facility during the year. At the end of June 1980 Australia's international reserves were $5681 million, $1796 million higher than a year earlier. This rise was entirely attributable to increases in the market value of Australia's official gold holdings and to other valuation effects, which more than offset the reduction in reserves due to balance of payments transactions. The current account strengthening was concentrated in the first half of the year when a sharp rise in net export volume more than offset a deterioration in the terms of trade. The current account deficit widened somewhat in the second half of the year as the volume of net exports diminished. For the year as a whole there was a fourfold increase in net exports and the terms of trade fell by about 3 per cent (Chart 9). Current Account Deficit/Gross Domestic Product (Current Prices)(6) -4.0 J-l- 1- :- 1- 1- 1- 1- 1- 1- 1- {:#subdebate-96-6} #### Average 1972-3 1973-4 1974-5 1975-6 1976-7 1977-8 1978-9 1979-80 1959-60 to 1971-72 (/>) The negative ratio indicates a current account surplus. Seasonally adjusted quarterly information on this ratio is published in the Treasury publication *Round-up of Economic Slaiixiics.* The value of rural exports rose by over 40 per cent in 1979-80. The increase was concentrated in the first half of the year as shipments of the record 1978-79 wheat crop gained momentum. For the year as a whole, wheat shipments more than doubled to a record IS. 2 million tonnes while shipments of sugar, mutton and lamb also grew strongly. The volume of wool and beef exports fell in the second half of the year. Rural export prices began the year at relatively high levels and rose somewhat further during the commodity boom in the middle of the year. Prices of wheat, meat and wool eased towards the end of the year but sugar prices rose strongly. Non-rural export proceeds also grew strongly in 1979-80, by 25 per cent. The pick-up in non-rural export volume that began in 1978-79 continued during the first three quarters of 1979-80 despite the impact on iron ore shipments in the September quarter of industrial disputes in the Pilbara. Domestic capacity constraints and industrial disputes led to reduced iron and steel exports but other manufactured exports increased substantially (see Table 17). Non-rural export prices rose steadily until the June quarter when non-ferrous metal and some other prices fell. Table 17- Manufactured Exports at Current and Constant (1974-75) Prices ($ million)(a) {: type="a" start="a"} 0. Manufactured exports are defined as comprising Section 1, Divisions 53 to 59, Sections 6, 7 and 8 of. the Australian Export Commodity Classification (AECC). Because of changes made to the AECC at the beginning of 1978-79, the figures for 1978-79 and 1979-80 are not strictly comparable with those of earlier years. It appears that the 1978-79 figures are about 2 percent below what they would have been if the AECC classification had not been changed. {: type="1" start="6"} 0. June quarter estimated. The 17 per cent growth in Australia's import bill in 1979-80 resulted entirely from import price increases (particularly for oil), which accelerated strongly in the first half of the year before slowing in the later months. The volume of imports fell in the September quarter as capital goods imports reacted to the bunching which had taken place in the latter part of 1978-79 prior to the phasing down of the investment allowance. Import volume rebounded strongly in the December quarter but then levelled off in the second half of the year, apparently in response to large stock-building in the pre-Christmas period. For the year as a whole the volume of imports was lower than in 1978-79. The trade surplus of $2820 million was distributed fairly evenly between the two halves of the year. However, after allowance for the usual pick-up over the course of the year in the net invisibles deficit (with freight and property income payments overseas again showing the most rapid increases), the current account deficit rose to $749 million in the second half of the year from the very low level of $440 million in the first half. The current account deficit for the year as a whole ($1188 million) represented only one per cent of GDP, the lowest such ratio since the surplus on current account recorded in 1972-73. Net apparent private capital inflow amounted to $956 million in 1979-80 compared with $1734 million in the previous year. This outcome appears to have reflected a particular conjunction of shorter-term influences rather than any weakening of the upward trend in longer-term overseas investment in Australian enterprises. Indeed identified foreign investment in Australian enterprises (which excludes certain large short-term trade credit flows) increased by 29 per cent in 1979-80. Shorter-term factors affecting the capital account included large net credit sales of wheat, which contributed to a turnaround in marketing authority transactions from an inflow of $34 million in 1978-79 to an outflow of $556 million in 1979-80. The net apparent outflow of private capital 'across the exchanges' (i.e. excluding undistributed income and marketing authorities) of $508 million in the first six months was associated with the emergence of a sizeable interest rate differential between domestic and overseas capital markets, and the ready availability of domestic credit, both favouring financing in Australia. The outflow was reversed in the second half of the year. The initial turnaround occurred in January with a surge in portfolio investment in Australian resource stocks in a period of booming commodity prices. The subsequent strengthening in net private capital inflow across the exchanges in the latter months of the year largely reflected a combination of falling overseas interest rates, particularly in the United States, the seasonal tightening in domestic liquidity conditions and the lift in certain domestic interest rates. Private capital inflow across the exchanges in 1979-80 amounted to $612 million and included $200 million borrowed by State semi-government authorities for infrastructure financing purposes, all received in the last four months of the year. WoirM Economic Bevdopraents The world economic situation deteriorated markedly over the course of 1979-80. Price pressures resulting from overly accommodating (in some cases stimulatory) policies in 1978 and from rapidly rising non-oil commodity prices (themselves in part a product of those policies) were already evident before the series of crude oil price rises in 1979. The increases in oil prices also resulted in the re-emergence of large OPEC current account surpluses. The acceleration of inflation in the OECD area was quite rapid. In the twelve months to May 1980, OECD consumer prices increased by 13.8 per cent compared with 9.1 per cent in the twelve months to May 1979; the OECD estimates that the energy components of member nations' consumer price indexes have directly contributed about half of that observed acceleration. More broadly-based private consumption deflators (which apart from covering a wider range of goods and services also reflect reductions in the amount of energy consumed as a result of the substantial oil price rises) have been less volatile than consumer price indexes. But these deflators have also accelerated quite strongly during the past year. The world-wide acceleration of inflation resulted in the major industrial nations adopting progressively tighter economic policies. At recent international meetings, including the OECD Ministerial Council Meeting in June and the Economic Summit in Venice later that month, the major industrial nations have reaffirmed that their first economic priority is the reduction of inflation and inflationary expectations through the application of determined fiscal and monetary restraint. Governments recognised, belatedly in some important cases, that firm anti-inflationary action was essential if the conditions which are fundamental to the re-establishment of sustained economic growth were to be met. Monetary policy has borne the major burden of this move towards more restrictive policies but there has also been movement to more restrained fiscal policies in some major industrial countries. The acceleration of inflation and the subsequent policy response were reflected in sharp increases in world interest rates. These increases occurred first in the United States, where the deterioration in inflation was particularly marked; but they quickly spread world-wide as other countries raised interest rates to produce monetary growth rates less accommodative to inflationary pressures and, in some cases, to minimise downward pressure on exchange rates resulting from heavy capital outflows induced by the increased interest rates elsewhere. In terms of economic growth, 1979-80 presented one unexpected result. Although the somewhat slower growth outside the United States was as anticipated, the continued strength of activity in the United States during the first half of the year was not generally forecast. In the June quarter of 1979, real GNP fell in the United States and, at the time, many commentators believed that this marked the commencement of a much-needed 'cooling off' period for an economy which had clearly been operating at an unsustainable level of activity and where a reduction in inflation was highly desirable. However, the June quarter movement proved to be something of an aberration, apparently largely reflecting the temporary effects of rises in petrol prices and some shortages of petrol supplies. Expenditure continued to expand strongly in the second half of 1979 despite some tightening in economic policies, particularly monetary policy. Much of this growth was attributable to private consumption expenditure. In the face of continued declines in real disposable income, consumers borrowed heavily and the saving ratio fell to record low levels. This situation of excess demand exacerbated the inflationary situation in the United States and in October 1979, and again in March 1980, further measures were taken to tighten economic policy. At about the latter time, and not solely as a result of the then measures, economic activity began to fall away. Preliminary estimates suggest that in the June quarter 1980 real GNP may have declined at an annual rate of around 9 per cent, primarily because of very weak private consumption expenditure. Not surprisingly, given the increases in interest rates and petroleum prices, the home building and automobile industries were hit particularly hard. The rate of unemployment rose rapidly from 6.0 per cent (seasonally adjusted) in February to 7.7 per cent in June. While some recent data have been a little stronger than those for the June quarter, the likely length and depth of the US recession remain highly uncertain. Some recovery in activity might be hoped for by the first half of 1981. In Japan and West Germany, where the deterioration in price performance has been least despite their relatively heavy dependence on imported crude oil, economic activity continued to expand steadily throughout 1979-80; private business investment and exports were important elements of strength. Particularly given the subdued US economic situation expected in 1980-81, slower (but continued) growth in these two economies seems probable. At this stage it seems unlikely that there will be much, if any, real growth in the major industrial countries taken as a whole in 1980-81, although continuing growth is expected in the developing and oil-exporting countries, many of which provide important markets for Australia. The rate of increase in consumer price indexes is likely to ease somewhat during the course of the year (assuming there are no further large oil price increases) but deceleration in the more broadly based national accounts deflators is expected to be fairly modest. As noted earlier, the oil price increases of the last year have resulted in a significant increase in the OPEC current account surplus (which could total around SUS110 billion in 1980) and in the counterpart current account deficits of the oil-importing nations. In the final analysis, all oil-importing countries (both developed and developing) must pay for the increased cost of oil imports by increasing their net exports of goods and services. In the short term, however, it is inevitable that oil-importing nations in general will face greatly increased current account deficits that will have to be financed by re-cycling of funds from OPEC. That process of re-cycling is expected to be carried out very largely by private financial institutions as was the case in the period following the oil crisis of 1973-74. As in that earlier period international financial institutions such as the IMF are also expected to play a role - on this occasion probably a larger one in view of the more extended external debt positions of many countries and the more pressing need for internal adjustment to the deterioration in their external circumstances. The task of financing current account deficits should be manageable, particularly for the industrial and stronger developing countries, but some of the poorer developing nations are likely to face increased difficulties. Australia has not, of course, been insulated from the developments in the international economy over the past year. An acceleration in world inflation inevitably affects the cost of Australian imports (and the prices of some exports), albeit with a lag. The increase in international oil prices has also been reflected in higher prices for both imported and domestically produced oil under the Government's oil pricing policy. However, in contrast to a number of other industrial countries, Australia has maintained firm anti-inflationary policies for some years now; the deterioration in Australia's rate of inflation has consequently been markedly less than in most other countries. Australia's recent favourable trade performance is in no small measure attributable to improved international competitiveness, achieved by persistent antiinflationary policies and supportive external policies. However, particularly given the very moderate wage settlements now evident in the United States, Japan and West Germany, these hard-won gains in competitiveness could be quickly eroded unless the recent acceleration in wages in Australia can be contained. Australia's ability to 'ride out' the expected global slowdown will depend importantly on the success of policies in maintaining international competitiveness. Part II Policy Options and the Budget Strategy {:#subdebate-96-7} #### Background As is now well documented, Australia suffered a series of major shocks in the earlier years of the 1970s which fundamentally distorted the workings of the economy. While much has happened since, the developments of that period continue to affect the performance of the economy and therefore have relevance both for an understanding of the present situation and for the design of appropriate policies for the future. The shocks of the 1970s can be traced to a number of factors. Important among them were an inadequate domestic response to the boom in the world economy and consequent developments in the balance of payments and the money supply and, later on, a rapid expansion of the public sector following a downturn in the economy, together with an inflationary wages policy. The expansion in overseas demand in the early 1970s in conjunction with these domestic developments created intense pressure on resources, particularly labour supplies. This followed an earlier cut-back in immigration which reduced traditional supplies of skilled and unskilled labour and heightened wage pressures, particularly in a number of lower-skilled occupations dependent on migrant labour. In the consequent scramble for available labour, wage rates were bid up in an explosive manner and, for a time, large numbers of people were enticed into the workforce. Abnormally pronounced shortages of less skilled workers contributed to a squeeze on wage relativities which further aggravated overall wage pressures. Although prices also soared, profits dropped sharply. The consequence was a general collapse in business confidence, leading to a major fall in private investment and a precipitous rise in unemployment as product growth fell away and as the jump in real wages caused labour to be priced out of jobs. High real wages also encouraged marginal members of the workforce to go on searching for employment and this, combined with high welfare benefits, further swelled the unemployment statistics. Australia's international competitiveness foundered and the balance of payments deteriorated. The attempt to revive the economy by boosting public expenditure in 1974-75 did nothing to restore the private sector and left a gaping Commonwealth deficit, higher interest rates and pressures on financial markets. To the extent that it offset lower private sector economic activity it diminished the forces which, normally in such circumstances, would have helped reduce the distortions that had been created. As a result the economy was left saddled with excessive real wages, dangerously low profitability, high inflation and poor international competitiveness, a large public sector deficit, excessive growth in the money supply and a financial market unreceptive to the raising of capital. It was thus ill-placed to generate the growth necessary even to absorb an increasing labour force, let alone to reduce unemployment. Thereafter there commenced a slow haul back which has involved a policy of fiscal and monetary restraint directed at reducing the rate of inflation and correcting the fundamental distortions inhibiting private sector performance. As a result, there has been a gradual strengthening in private sector activity over recent years, demonstrating (if that needed to be demonstrated) that the economy can expand without significant stimulus from public sector expenditure. The strengthening in non-farm product growth in 1978-79 and particularly 1979-80 was associated with very low contributions from the public sector (see Table 4). The basis of this economic strategy was set out in some detail in last year's Statement. A number of the main economic policy indicators for recent years is presented in Table 18. {:#subdebate-96-8} #### Table 18- Policy Indicators Total public Commonwealth Budget Real growth sector Volume Degree {: type="a" start="a"} 0. Direct expenditure on goods and services by the public sector; this differs from total outlays in that transfer payments to the private sector are excluded. 1. Percentage increase, June-on-June. 2. Weighted average level of indexation of award wages to the CPI in the national wage case decisions handed down in each year. (The decision handed down on 14 July 1980 is included in 1979-80.) 3. Trade-weighted index of value of Australian dollar; May 1970 = 100; end-period. 4. Treasury estimate. Though progress in the strengthening of economic activity has been fairly slow in the years since 1975-76, the Government's strategy has achieved considerable success in reducing distortions, and thus in restoring the *pre-conditions* needed to allow stronger growth in private sector activity on a sustained basis. Foremost has been the progress against inflation. However, as a result initially of external influences, including particularly higher oil and meat prices, price inflation in Australia has again crept upwards over the past two years. Now, with the high degree of wage indexation and the overly rapid growth in monetary aggregates, higher prices are being reflected in higher wages. As the lift in the rate of price inflation in Australia has been well below that occurring in many overseas countries there has, nevertheless, been a continued improvement in Australia's international competitive position. This has been reflected in the strong growth in Australia's exports, particularly manufactured exports, but it has also resulted in strengthened output and investment in many traditional import-competing industries. The potentially massive growth in natural resource based investment, which is already under way and which, given appropriate economic policies, can be expected to continue throughout the 1980s, is also related to Australia's new-found competitive position. At one level Australia's attractiveness to foreign investors and our ability to compete strongly on export markets can be explained in terms of the leap in the international price of energy (a resource which, oil apart, Australia possesses in abundance). However, while this is undoubtedly an important consideration, such an explanation fails to give due weight to the fact that Australia has been one of the few countries that have been able to sustain over an extended period an improvement in their overall competitive position through an exchange rate adjustment made effective by firm domestic fiscal and monetary policies. In short, while the existence of abundant natural resources is an important element in the strengthening recovery, the improvement in underlying economic conditions has been even more important. Additionally, the extended period of comparative stability in public policy has reduced the uncertainty attached to private decision-making. Whereas Australia has had in place for a number of years a policy strategy which holds out the prospect of a return to a lower rate of inflation, the same can be said of few overseas countries, including those which may enjoy a similar endowment of energy resources. Important progress has also been made in reducing, though still not rectifying, the factor price imbalance - that is, the imbalance between the return to labour and the return to capital - resulting from the sharp jump in real wages in 1974. The past year saw a further reduction in real unit labour costs; as in previous years the reduction was effected through productivity growth rather than through real labour cost adjustment. The strengthening in the demand for labour and employment growth in 1979-80 suggests that, *in aggregate,* real wages are now less of a constraint on employment growth than they were some years ago. However, the *structure* of wage rates remains a major hindrance to a more complete utilisation of available labour resources and, hence, to the capacity of the economy to grow without inducing inflationary pressures. The high wage rates required to be paid (by law) to the young and the unskilled continue to make it difficult for the unemployed among these groups to find work - although it is of interest to note that, indicative of the general strength of labour demand, the 1979 school-leavers appear to have fared better in finding work than the school-leavers of other recent years. At the other end of the labour market, margins for skill appear to be insufficient to call forth enough skilled labour to meet demand, resulting in mounting shortages of such labour in a time of expanding activity. Corporate profitability also appears to have made some progress back towards earlier levels, although the uncertain nature of relevant national accounts estimates for recent years makes it difficult to draw precise conclusions in this area. Following the surprisingly modest increase in 1978-79 the gross operating surplus of companies rose strongly last year. The very strong growth expected in private business investment in 1980-81 - which, though centred on resource projects, is broadly based - is consistent with a private sector that expects reasonable profitability in the future. While the factor price imbalance has been slowly reduced, any renewed upward movement in real wages now could only increase the difficulty of employing the large numbers of people who seek jobs, including those who are not registered as unemployed. In addition, while the growth in product in recent years appears largely to reflect the growth in labour inputs rather than a growth in productivity, and while the expected strengthening in product growth in 1980- 81 is likely to be associated with continued growth in employment, businesses are still undertaking 'labour saving' investments whenever possible. Anything more than very modest growth in real wages could thus undo a large part of the progress made to date and put at risk the prospects of further expansion in employment. There has been some, though as yet clearly insufficient, progress in reducing the public sector's call on both real and financial resources. Both the direct call of the public sector on real resources (expenditure on goods and services) and the total of public sector outlays (which include transfer payments) have fallen moderately as proportions of GDP since the peak in 1977-78. There was in 1979-80 the first reduction in the public sector's borrowing requirement since 1976-77, due entirely to the marked decline in the Commonwealth Budget deficit. During the intervening years the public sector's continued heavy borrowing, together with the need to roll over the increasing level of past borrowings, has been an important underlying influence on the continued high level of interest rates. {:#subdebate-96-9} #### The Task Ahead Given the progress of the strategy in gradually reducing various imbalances, it might be argued that there would now be scope to pursue a somewhat more relaxed' approach. However, it is clear not only that there is a need to make further progress in reducing imbalances but also that new problems are emerging which suggest that the capacity of the economy to grow without inducing inflationary pressures may still be more limited than it was in earlier years. Foremost among these is the danger that the prospective surge in private business investment and the (in some cases associated) increase in public sector infrastructure investment could result in straining the existing capacity of the economy, leading to an upsurge of wage increases and an acceleration in cost and price inflation. Skilled labour is already in short supply in many areas; and while immigration and increased training will add to available supplies, there will be pressures for higher wages to attract additional labour to expanding areas. Under Australia's centralised wage determination processes, there is a very real danger that such wage increases, however desirable they may be in themselves, could flow on into a general lift in wages. The current so-called 'work value' round - which, notwithstanding what it purports to be, is in the process of spreading a wage increase of a fairly uniform magnitude through most of the workforce - is an indication not only of the momentum that this flow-on process can gather but also of its basic economic irrationality. That wage pressures have continued to mount is not open to doubt. These pressures stem both from indexation decisions which have built into the ongoing rate of wage increase the effect of the lift in prices since 1978, and from movements outside indexation, particularly in the form of 'work value' increases which are, for the most part, nothing of the kind. These influences alone make it inevitable that the increase in wages in 1980-81 will be higher than last year. A wage system which continued to award a high degree of indexation, and to allow additional across-the-board increases on top of that, would pose significant problems during the period ahead. In several major overseas countries the acceleration in the rate of inflation has been accompanied by a more subdued rate of increase in wages, and the prospect of a downturn in the rate of inflation overseas could threaten Australia's international competitive position unless inflationary pressures in the domestic economy can be contained. This is of particular concern given that non-national wage case settlements appear to be an increasing force in the determination of overall wage levels. Some such development is not surprising; with the somewhat improved outlook for profitability, firms would naturally tend to be rather more amenable to granting wage increases. In these circumstances, macro-economic policies - and particularly monetary policy - will need to play an even more important role in maintaining an economic environment which asserts an adequate degree of discipline upon the parties involved. As the Commonwealth pointed out in its submission in the latest national wage case, the higher the increase in wages that is awarded by the Conciliation and Arbitration Commission the firmer the settings of other policy instruments have to be for the consequential inflationary pressures to be contained. The prospective surge in private business investment will also add to calls on capital markets as firms seek finance for new projects. This will be occurring at a time when the public sector will continue to have a large demand for finance, with the 1980-81 public sector borrowing requirement expected to be broadly similar to that of last year. The net result is likely to be continued pressure on domestic interest rates and increased resort to overseas sources of finance by the private sector. The slowdown in the world economy and expected large imports of capital equipment mean that the current account deficit is likely to widen appreciably in 1980-81; such a result is, indeed, necessary if the prospective excess of domestic investment over domestic savings is to be validated. But the prospect of a significant increase in private capital inflow (including infrastructure borrowings overseas by State authorities) means that, overall, the balance of payments is likely to contribute appreciably more to domestic liquidity than it did last year. Economic prospects for the year ahead are discussed in some detail in Part III of this Statement. Without going into detail here, it is clear that we are facing potential growth prospects which, in the next few years at least, are different in kind and in magnitude from the experience of much of the 1970s. The mainspring of that potential growth is, of course, resource-based investment. But both private consumption expenditure and government expenditure also seem set to increase more strongly in 1980-81 than in recent years, indicating that total domestic final demand should also increase more strongly. These improved growth prospects come at a time when, notwithstanding that the grosser distortions besetting the economy throughout the 1970s have been ameliorated, important imbalances remain. In these circumstances, policy must continue to be directed towards the correction of those imbalances as well as to containing and beginning to turn back the increased inflationary pressures which have emerged during the last two years. In this regard, monetary policy will need to play an enhanced role. The present Budget has been framed against the background of these developments and prospects. The further reduction in the Budget deficit (including for this purpose the domestic deficit) will, of itself, make an important contribution to moderating the growth in monetary aggregates. Even so, monetary policy will be operating in a more difficult environment, given that likely faster real growth in public sector outlays will be occurring at a time of faster real growth in private sector outlays; and that, in these circumstances, pressures for wage increases will be the more difficult to contain. The expected larger surplus on private sector foreign exchange transactions will place upward pressure on money supply growth, but will also provide a further opportunity for external policy to assist in containing inflationary pressures. With its abundant natural resources Australia has frequently been characterised as 'the lucky country*. But the realisation of our good fortune in those natural resource endowments will be dependent not on luck but on the intelligence with which policy is conducted. In particular, it will depend on ensuring that the settings of policy instruments are conducive to an economic environment in which downward pressure on inflation is restored and maintained and the continuing distortions which are still retarding growth are progressively removed. Part III The Economic Outlook, 1980-81 {:#subdebate-96-10} #### Budget Parameters A further reduction in the Budget deficit has been a central objective in the framing of this year's Budget. Although outlays are budgeted to increase by 13.7 per cent compared with 9.1 per cent last year, it has been possible to reduce the deficit because of the estimated large growth in Budget revenue of 16.2 per cent, about the same as in 1979-80. The reduction of $606 million in the domestic balance - from the deficit of $567 million in 1979-80 to a small domestic surplus - is slightly larger than the reduction of $468 million in the overall deficit. The faster increase in budgeted outlays is reflected in both expenditures on goods and services and transfer payments, including cash benefits to persons. *Current budget expenditure* on goods and services on a national accounts basis are estimated to increase in 1980-81 by around 19 per cent,(1) equivalent to a rise of around 6 per cent in constant price terms, following a fall of just over 3 per cent in 1979-80. *Gross fixed capital expenditure* of the Budget sector is estimated to increase by around 23 per cent or some $73 million in 1980-81 on a national accounts basis, while such expenditure of the Commonwealth Government sector as a whole is estimated to increase by about 24 per cent.(2) The latter would represent real growth of about 11 per cent following a real fall of around 3 per cent in 1979-80. However, calls on resources implied by the prospective rapid growth in private sector investment activity may influence to some degree the achievement of that result. The Budget estimates imply a boost to household disposable incomes in 1980-81. *Cash benefit payments* are budgeted to increase by 13.5 per cent following a rise of 8.8 per cent in 1979-80. On the other side of the ledger, the Budget estimates imply a slower rise in *household income tax payments* - 13.6 per cent following a rise of 17.5 per cent in 1979-80. This reflects the benefits, as from 1 July 1980, of half tax indexation and increased dependant rebates, the full year effects of the removal of the tax surcharge from 1 December last, and the delayed response in tax payments of the rural sector to the levelling out in farm incomes in 1979-80. {: type="1" start="1"} 0. The increase of 17.9 per cent shown for current expenditures in Table 5 of Statement No. 6 reflects a difference in treatment of certain items. In particular, National Accounts figures show defence expenditures on a deliveries rather than a payments basis. 1. These estimates for gross fixed capital expenditures differ from the estimates of total capital expenditures in Tables S and 8 of Statement No. 6 by the exclusion of changes in stocks and the inclusion of gross fixed capital expenditures by Government financial enterprises. *Commonwealth indirect taxesi3)* are estimated to increase by 15.7 per cent in 1980-81 following a rise of 18.9 per cent in 1979-80. Excluding the rise in excise duty on crude oil and LPG, indirect taxes are estimated to rise by only 7.2 per cent. The much faster estimated increase in *company tax payments -* 32.1 per cent - in 1980-81 (see Statement No. 4), together with the increased requirement to finance business capital expenditures, will add to corporate borrowing requirements and perhaps have implications for corporate pricing policies. The estimated faster growth in outlays on both goods and services and on cash benefits payments in 1980-81, combined with a growth in receipts at much the same rate as last year, suggests that the Budget will be making a somewhat greater direct contribution to income and expenditure growth than was the case in 1979-80. At the same time, the reduction in the Budget deficit to the point where a small domestic surplus is estimated to emerge will mean that the Budget itself makes no direct contribution to domestic monetary growth in 1980-81. {:#subdebate-96-11} #### Forecasting Assumptions The following assumptions and expectations, in addition to those embodied in the Budget estimates, are involved in the assessment of the outlook for the economy: o For 1980-81 as a whole, the OECD area is assumed to experience little, if any, growth in real gross domestic product, with a small fall in real product in the second half of 1980 and some sluggish recovery in the first half of 1981. (Growth in real gross domestic product for the total OECD area is estimated to have been about *2i* per cent in 1979-80, but with a significant slowing to an annual rate of about *H* per cent in the first half of 1980.) Growth is expected to continue in Japan, albeit at a somewhat slower rate than in 1979-80, while growth rates are expected to be broadly maintained in those developing and oil-exporting countries which also provide important markets for Australian exports. o It is assumed that anti-inflationary policies are maintained by the major overseas governments, leading to a gradual deceleration in the rate of price inflation in the OECD area during 1980-81. The inflation rate appears to have peaked in the middle of 1980 at close to 14 per cent per annum; and with little or no growth expected in OECD countries in 1980-81 there is likely to be downward pressure on prices (including oil prices) for much of the year. o Monetary policy in 1980-81 will be directed to reducing the growth in monetary aggregates while ensuring a supply of funds adequate for sustaining growth in activity and employment. Consistent with that objective and having in mind the Budget deficit and other formation factors, the following forecasts assume that policy instruments will be set accordingly. o In the light of statements by the Conciliation and Arbitration Commission and recent wage case experience, the forecasts assume that wages will continue to be adjusted in half-yearly wage indexation decisions after discounting for the direct CPI effects of policy-induced oil price rises. Increases on 'work value' grounds have now spread through a large proportion of the workforce and further spreading is assumed to occur in 1980-81. However, it is assumed that the claim foreshadowed by the ACTU for later in 1980 on 'productivity' grounds will not lead to any further increase in wage rates in 1980-81; clearly, the economy possesses no capacity to pay any such increase at this time. For similar reasons it is assumed that any other extra-indexation wage increases will be minimal in 1980-81 and that, in particular, the metal industries campaign for a 35-hour week will not result in any significant reduction of average working hours. o While at this stage of the year forecasts of farm production must be hazardous, the overall volume of farm production seems likely to be down a little on its level in 1979-80. Average prices may show some gains on their 1979-80 levels but, with rising production costs and a lower volume of production, it is likely that farm incomes this year will be lower than in 1979-80. Listing the assumptions underlying the forecasts underscores the uncertainties in the following assessment. Any attempt to assess the future trend in the economy must recognise a fairly wide range of alternative possibilities. Assessing the likely response of the economy to changing circumstances necessarily involves a considerable measure of broad judgment. Moreover, it is as well to keep in mind that currently available statistical information is susceptible to considerable revision and in due course may prove to have provided a doubtful basis for the forecasts. Less attention should be paid to particular figures than to the broad thrust of the assessment. {:#subdebate-96-12} #### Expenditures *Private consumption expenditure* is expected to record stronger growth in 1980-81 than in 1979-80. Data on retail sales and motor vehicle registrations suggest that consumption weakened in the June quarter following the significant gains in the preceding December and March quarters. However, there has so far in 1980 been a definite strengthening in demand from the relatively flat position that pertained over most of 1979. The general strengthening in consumption expenditure during 1979-80 occurred in the face of only a modest rise in real household disposable income of £ per cent following a rise of 3i per cent in the previous year. As a result, the saving ratio fell quite sharply following the rise in 1978-79. This difference between the two years reflected, in part at least, the different movements in each year in farm income, which take longer to be reflected in expenditure. In making judgments about the propensity for consumption expenditure to be bolstered by a declining saving ratio it is useful to abstract from movements in farm income. Over the past two years, real 'non-farm' household disposable income has risen on average by around *i* per cent per annum while private consumption expenditure has risen by around *2i* per cent per annum. As real 'nonfarm' income is expected to show more marked growth in 1980-81 there is a prima facie basis for also expecting a faster growth in private consumption expenditure, if not commensurately faster. Continued firm growth in employment could also be expected to underpin faster growth in expenditure, as should the effects of personal income tax concessions, including the full-year effects of the removal of the tax surcharge from last December and the half indexation of the tax schedule (and increases in spouse and other rebates) from the beginning of the current financial year. Overall, growth in private consumption expenditure approaching 3 per cent would seem likely to be broadly consistent with little or no change in the 'non-farm' saving ratio. *Private dwelling investment* rose rapidly over the course of 1979-80, lifting activity for the year as a whole by 10i per cent above that in 1978-79. Further, the 14 per cent increase in private dwelling approvals in 1979-80 will flow through into activity in 1980-81. Thus, even after allowance for a slower increase in mortgage finance approvals for new dwellings in 1980-81, activity should at least be maintained for the year as a whole. The available expectations data point to a buoyant outlook for *business fixed investment* in 1980-81. Chart 10 shows details of medium-term investment expectations by private enterprises derived from the survey conducted by the Statistician in April-May of each year, together with actual outcomes. If, in 1980-81, expectations were to be realised to the same extent as in 1979-80, real growth would be of the order of 20 per cent after allowance for the difference in scope between the business survey expectations data and the national accounts estimates (the survey data do not cover investment expenditures by the rural sector, which a ;e not expected to rise much in 1980-81). The expectations data point to equally strong growth in plant and equipment expenditures, on the one hand, and other building and construction activity on the other, and also suggest that while strongest in basic metal products (which includes aluminium smelting), the expected growth is also substantial in other industries (see Table 19). Chart 10 - New Fixed Capital Expenditure by Private Enterprise in Selected Industries S million 12000n {: type="a" start="a"} 0. Expectations as at April-May of the previous year. These figures are not published by the Statistician but are available on request. They are published in the Treasury publication *Roundup of Economic Statistics.* 1. The 1979-80 figure comprises the actual figure for the first three quarters of 1979-80 plus the expected figure for the June quarter. Table 19- New Fixed Capital Expenditure by Selected Industries {:#subdebate-96-13} #### Manufacturing Basic Other Total Other metal manufac- manufac- selected Year Mining products turing turing Financed) industries Total (Percentage of total) {: type="a" start="a"} 0. Finance, insurance, real estate and business services. {: type="1" start="6"} 0. Includes estimates for the June quarter 1980. 1. Estimates of expected expenditure as of April-May 1980. *(ft)* Increase in expected expenditure in 1980-81 on expected expenditure in 1979-80. In interpreting the strength in the expected growth in investment expenditure in 1980-81 care needs to be taken to allow for the effects of the completion of the phasing down of the investment allowance from 40 per cent to 20 per cent. This contributed to the *5i* per cent fall in real business fixed investment in 1979-80 following a *9i* per cent rise in 1978-79. This means that real growth in fixed investment in 1980-81 of the order indicated by the Statistician's survey would represent an average growth over the two years 1979-80 and 1980-81 of only around 6i per cent per annum - strong growth, but much less so than the 1980-81 figure taken in isolation would suggest. Even that rate of growth would still leave business fixed investment lower, as a proportion of GDP, than in the late 1960s and early 1970s (see Table 3). There is undoubtedly reason to be cautious in projecting the likely level of investment spending in 1980-81. The apparent weakness of plant and equipment investment in the June quarter may indicate the influence of strike activity and associated cash flow constraints and, to that extent, there could be some catch-up over the course of 1980-81. On the other hand, some of the expected spending for 1980-81 relates to major new export-oriented projects where the timing of commencement and other stages of progress can be uncertain, particularly in the present world environment. Sharply increased investment demand is also likely to lead to increased difficulties in obtaining skilled labour and materials, as well as finance. In these circumstances it is unlikely that real growth will reach the 20 per cent figure referred to earlier. The forecasts assume real growth in business fixed investment of something over 10 per cent. As already indicated, the 1980-81 Budget and public borrowing programs imply faster real growth in *expenditure on goods and services by the Commonwealth Government and its enterprises* in 1980-81. The Government's decision to increase real defence budget outlays by 7 per cent this year will take several years to reflect fully in the national accounts estimates of expenditures, which are recorded (as public consumption) on a deliveries basis. However, deliveries of defence material and equipment already on order will boost the rate of growth in recorded public consumption expenditures in 1980-81. The concurrence of a rise in investment spending by the Budget sector and by several government enterprises is also expected to lead to significant real growth in the capital expenditures of the Commonwealth sector following a real decline of more than 20 per cent over the past two years. The level of payments to the States and local governments, together with their approved Loan Council programs and the loan programs approved for the State authorities, should support continued real growth in *expenditure by the State and local government sector* in 1980-81. The disposition of the total funds available to the States and local governments is substantially at their discretion and the mix of their expenditures between current and capital can vary appreciably from year to year. Real current expenditure in 1980-81 may rise a little more slowly than in 1979-80 when it is estimated to have risen by around 4i per cent following real growth of less than 3 per cent in 1978-79 (abstracting in both years from expenditure by the Northern Territory). Slower growth in current expenditure could permit modest real growth in capital expenditures following their *2i* per cent fall in 1979-80. Overall, *public current expenditure* is expected to rise a little faster than in 1979-80 while *public capital expenditure* may show some real growth following a real fall of *2i* per cent in 1979-80. On the basis of these forecasts, total public sector expenditure would rise by about 3 per cent which would be somewhat slower than the projected rise in real non-farm product and would compare with growth of 0.8 per cent in public expenditure in 1979-80. However, because of the more rapid increase in public sector wage costs (see incomes and prices section below) the ratio of total public sector expenditure on goods and services to GDP at current prices is projected to rise slightly on its 1979-80 level of 24i per cent which compares with 24f per cent in 1978-79. It is assumed that *non-farm stocks* are still somewhat above their desired levels, notwithstanding the slight decumulation in the second half of 1979-80, and that there will therefore be some further modest decumulation early in 1980-81 before stocks then rise broadly in line with sales. On this basis, non-farm stock movements are expected to make a small negative contribution to growth in product in 1980-81. *Farm stocks* were run down over the course of 1 979-80 as exports of farm origin ran ahead of farm product after the record season in 1978-79; that pattern is expected to be broadly repeated in 1980-81. {:#subdebate-96-14} #### Balance of Payments Little growth in real *exports of goods and services* is projected this year after the near-record *I4i* per cent increase in 1979-80. While the recession in the US economy will result in lower demand for the products of some export industries, continued growth in other major markets combined with normal lags should help reduce the overall impact on demand for our exports in 1980-81. It might be noted, for example, that over 50 per cent of our exports go to Asian and Middle Eastern countries which are among those less affected by the slowdown in world economic growth. In any event, a major constraint to export growth now appears to lie on the supply side. Many export industries operated at close to capacity in 1979-80 and further increases in export shipments may be difficult in the short run, especially as domestic demand picks up. Supply constraints are evident in rural exports where wheat shipments have been running at record levels, cattle and sheep herds have been depleted, and wool stocks are now relatively low. Supply difficulties similarly affect some non-rural exports (e.g. alumina and iron and steel) but there seems scope for growth in iron ore and coal exports if further major industrial disputes can be avoided. While manufactured exports should continue to benefit from the gains in international competitiveness that have been achieved over recent years, it seems unlikely that the strong increases of the last two years could be maintained, particularly in view of slower growth in overseas markets. *Imports of goods and services* are expected to grow quite strongly in real terms in 1980-81 after a fall of 1 per cent in 1979-80. Domestic demand for importintensive plant and equipment was subdued for much of last year. Demand should grow more strongly in 1980-81 given the expected pick-up in expenditure on major resource development projects and plant and equipment investment in particular. Large deliveries in defence equipment ordered in earlier years will add to the growth in imports. The combination of slowing overseas demand and a strengthening domestic economy suggests that *net exports* will detract from GDP growth in 1980-81 in contrast to the large contribution which they provided last year. Meanwhile, the terms of trade are expected to move adversely again in 1980-81 as export prices decelerate more rapidly than import prices. These expected developments suggest a lower trade surplus and, after allowance for continued growth in the net invisibles deficit, a larger - though still relatively moderate - current account deficit. This larger deficit will not, as in earlier years, reflect a loss of competitiveness but rather will provide a needed supplement to the supplies available to a strengthening domestic economy. As noted earlier this is essential if the prospective excess of domestic investment over domestic savings is to be validated. The fall in *net apparent private capital inflow* in 1979-80 reflected the effects of interest differentials favouring, for much of the year, borrowing in Australia. There were also large net trade credit outflows associated with the record trade surplus. These factors tended to disguise a gathering strengthening in longer-run overseas investment in Australia, particularly in resource projects and related manufacturing industries. This trend is expected to accelerate in 1980-81 as the plans for several major projects begin to come to fruition. The overall corporate sector borrowing requirement is also expected to rise substantially. A sizeable proportion of the required funds is likely to be sought overseas - the precise amount depending *inter alia* on the relative attractiveness of overseas interest rates. Overseas borrowings by State semi-government authorities, which in line with their domestic money formation effects are regarded for balance of payments purposes as private capital inflows, are also expected to be greater than in 1979-80. While as always there are considerable uncertainties, the forecast increase in the current account deficit seems likely to be largely offset by higher private capital inflow this year. {:#subdebate-96-15} #### Monetary Conditions The Government's aim in 1980-81 will be to secure a smaller increase in the growth of monetary aggregates than in 1979-80 and it has indicated that an outcome for growth in M3 of about 9 to 11 per cent over the course of 1980-81 would be consistent with that. M3 is not, of course, the only available measure of the money supply and cannot alone provide a comprehensive indication of monetary developments. As noted in Part I of this Statement, more broadly defined measures of the volume of money have shown faster growth than M3 in recent years. For policy purposes it will remain necessary to monitor the whole range of monetary aggregates and indicators. The further reduction in the *Budget domestic deficit* from $567 million in 1979-80 to an estimated *surplus* of $39 million this year, together with a minimal liquidity impact from Rural Credits advances for wheat during 1980-81, will assist in achieving the monetary objective. At the same time, however, the balance of payments outlook implies a surplus on *private external account* that would add appreciably more to domestic liquidity in 1980-81 than last year. While the outcome there will depend importantly on conditions in overseas and domestic financial markets and on inflation trends, prospective developments in net borrowing and lending by the major sectors in the economy give weight to assessments that overseas borrowings by the private sector will be considerably higher in 1980-81. The approved Loan Council programs for Commonwealth and State authorities, including the approved infrastructure borrowing program, together with the estimated borrowings by 'smaller' authorities are expected to total around $2800 million this year compared with actual borrowings of $2481 million in 1979-80. Having in mind the Government's own reduced Budget deficit and other relevant considerations, a *public sector borrowing requirement* broadly similar to that in 1979-80 seems likely. At the same time, the *corporate sector borrowing requirement* is expected to rise significantly in 1980-81; the need for increased funds will come primarily from the expected strong rise in investment spending at a time when the large increase in company tax payments is holding down corporate sector cash flow. Households provide the major source of domestic net lending and, with the growth in disposable incomes rising, 1980-81 could see an increase in the net supply of funds from that sector. So far as can be seen, however, that would be unlikely to match the net increase in the combined borrowing requirements of the public and corporate sectors, thus implying a requirement for increased capital inflow from abroad. Under these circumstances, there will be less scope for growth in other elements of the money supply if the overall growth in M3 is to be appropriate. This, in turn, will require that settings of policy instruments are related to such an outcome. Depending on the outcome of other elements in monetary growth, there could again be a requirement for a sizeable net non-bank take-up of government securities in 1980-81. In addition there will also be a need to roll over the large volume of Commonwealth debt maturing this year; the $2554 million of Treasury bonds maturing in 1980-81 compares with $1073 million in 1979-80. {:#subdebate-96-16} #### Product In 1980-81 the main source of growth is expected to be from final domestic demand; indeed, as noted above, it is likely that net exports and changes in nonfarm stocks will detract from growth in product this year. This contrasts with last year's experience, when the external sector, along with net non-farm stock accumulation, provided the major stimulus to domestic economic activity during the first half of the year and, to a lesser degree, for the year as a whole. Overall, the outlook for the expenditure components implies growth in *non- farm product* of *3i* per cent or more in 1980-81 following the recorded growth of 3 per cent in 1979-80. Because of the projected decline in *farm product,* the *gross domestic product* is forecast to rise by 3 per cent or more this financial year following recorded growth of 2i per cent last year. {:#subdebate-96-17} #### Labour Market The forecasts imply a rate of growth in non-farm product over the course of 1980-81 similar to that for last year. There thus seems no reason to expect employment growth to slacken in the year ahead. The Budget estimates for PA YE tax collections assume that wage and salary earner employment will rise at about the same rate as last year, that is by If per cent. The evidence of the past year suggests that increasing demand for labour is, in current circumstances, most likely to be met from the on-going growth in the labour force, including some rise in the participation rate, with little if any decline in overall unemployment. The Budget estimates allow for an average number of unemployment benefit recipients in 1980-81 slightly smaller than in 1979-80. This would be consistent with the experience in 1979-80, when the strong rise in employment was associated with only a modest decline in the average level of unemployment for the year as a whole and an end-year level of unemployment little changed from that of a year earlier. As noted in Part I, the prospect of worthwhile early reductions from present levels of unemployment, particularly for the unskilled, remains inextricably bound up with the present inappropriate structure of wage rates which has been brought about by the workings of our machinery of wage determination. {:#subdebate-96-18} #### Incomes and Prices Under the policy, including wage determination, assumptions already outlined, *award wages* are projected to rise by Hi per cent in 1980-81 following estimated increases of *St* per cent in 1979-80 and 64 per cent in 1978-79. This acceleration in wage rates is substantially a reflection of larger national wage increases and the assumed spread of 'work value' increases. The corresponding forecasts for *average weekly earnings* on a male unit basis, which underlie the Budget estimates for PAYE tax collections, are for a rise of 12 per cent in 1980-81 following rises of 9i per cent in 1979-80 and 71 per cent in 1978-79. While this projected acceleration in wages must be viewed with concern, a lower forecast could only be derived from an assumption that the Conciliation and Arbitration Commission will bring down more economically rational awards than it has in the past. Experience suggests that such an assumption would be unrealistic. This is not, of course, to overlook the important role that fiscal and monetary policy settings play in determining whether or not the economic environment is conducive to wage restraint. The *consumer price index* is projected to rise in 1980-81 as a whole at about the same rate as or slightly faster than the increase of 10 per cent in 1979-80. The assumption that, in contrast to the experience of the past two years, pressures for further OPEC oil price rises are likely to be constrained by the slowdown in economic activity in OECD countries should, if fulfilled, help to moderate the rate of increase in the CPI. Similarly, food prices, which contributed 2.6 percentage points to the rise in the CPI in 1979-80, are assumed to rise more in line with other consumer prices in 1980-81. However, pressures for sharper increases in prices during 1980 will arise from the acceleration in wage costs in 1979-80 and the direct and indirect effects of oil price rises already implemented by OPEC. The containment of such pressures will depend importantly on the thrust of monetary policy. Even with lower monetary growth, in the absence of an early moderation in wage awards, it will take time to return the rate of inflation to a firm downward path. With the acceleration in wage costs that is projected for 1980-81, it is likely that the *implicit deflator for public consumption expenditures,* which has a high wage content and which makes little allowance for productivity growth, will accelerate in 1980-81. On the other hand, the *public* and *private business fixed investment* deflators are expected to rise at much the same rate as in 1979-80. Higher materials and transport costs, and an apparent move towards restoration of profit margins, led to a noticeable acceleration in building and construction costs over the past year. The rise in costs of materials, particularly oil, is expected to moderate a little but an acceleration in wage costs and rising activity levels will continue to exert upward price pressures in the coming year. Overall, the acceleration in the public and private consumption deflators and the projected shift in the composition of domestic demand (with stronger growth in private consumption and business fixed investment) are expected to lead to a somewhat faster rise in the *non-farm product deflator* in 1980-81 of around 10± per cent compared with 9i per cent in 1979-80. Because of the expected deceleration in the rate of increase in farm prices, the *gross domestic product deflator* could rise at much the same rate as in 1979-80. The forecasts imply a faster rise in wages than in prices. Containment of the rate of increase in prices will thus depend importantly on the extent to which the growth in monetary aggregates is lowered and on the scope available to businesses to absorb higher wage costs. The overall forecasts for wages, prices, activity and employment imply little change in the share of (bef ore-tax) profits in non-farm product at factor cost from their present still inappropriate levels. However, given the expected faster increase in company tax payments in 1980-81, there could be a fall in the after-tax profit share. {:#subdebate-96-19} #### Overview The year ahead holds considerable promise for the Australian economy, notwithstanding the uncertain world outlook. That promise is importantly based on the improved medium-term demand for many of our exports arising from the improvement in our international competitive position, including that stemming from the increase in the relative price of energy. Improved competitiveness is also benefiting import-competing industries. A deeper, more generalised and more prolonged world recession than presently seems in prospect would, of course, have a greater impact on our economy beyond 1980-81 and uncertainties in that regard may postpone or slow down the rate of implementation of some of the major resource development projects already in prospect. Some degree of delay, which is implicit in the discounting of the investment expectations noted above, may not be altogether a bad thing; too rapid a rise in domestic economic activity could quite quickly run up against sectoral capacity constraints and thus generate increased inflationary pressures. The greatest danger for 1980-81 is, indeed, that the acceleration in wages now in progress will generate a new momentum in domestic wage and price inflation that would undermine the prospective strong growth in activity. Any acceleration in inflation coming at a time when overseas inflation is decelerating would weaken our international competitive position and, in due course, depress the rate of growth of domestic economic activity. Wage increases below those being projected would, of course, enable a more rapid deceleration in the rate of inflation to the benefit of the whole community. What is required is a continued policy thrust designed to restore a downward trend to the rate of inflation and, by so doing, consolidate and build upon the hard won progress made over the past several years in restoring the productive capacity of the economy. {: .page-start } page 126 {:#debate-97} ### STATEMENT No. 3- ESTIMATES OF OUTLAYS, 1980-81 {: .page-start } page 126 {:#debate-98} ### INDEX {:#subdebate-98-0} #### Page {:#subdebate-98-1} #### Summary......................... 128 {: type="1" start="1"} 0. Defence........................ 130 1. Education....................... 137 2. Health........................ 149 3. Social Security and Welfare................. 164 4. Housing........................ 187 5. Urban and Regional Development nec and the Environment....... 194 6. Culture and Recreation................... 198 7. Economic Services - {: type="A" start="A"} 0. Transport and Communication.............. 204 1. Water Supply, Electricity and Gas............. 214 2. Industry Assistance and Development............ 216 3. Labour and Employment................ 239 4. Other Economic Services................ 247 8. General Public Services - {: type="A" start="A"} 0. Legislative Services.................. 248 1. Law, Order and Public Safety............... 250 2. Foreign Affairs, Overseas Aid and External Territory....... 253 3. General and Scientific Research nec............ 260 4. Administrative Services................ 263 9. Not Allocated to Function - {: type="A" start="A"} 0. Payments to or for the States, the Northern Territory and Local Govern ment Authorities nec................. 268 1. Public Debt Interest.................. 276 {: .page-start } page 127 {:#debate-99} ### STATEMENT No. 3- ESTIMATES OF OUTLAYS, 1980-81 This Statement presents detailed estimates of Budget outlays in 1980-81, classified according to their primary purpose or function. Comparable figures are also shown for 1978-79 and 1979-80; data for the period since 1970-71 are presented in Statement No. 6. {: .page-start } page 127 {:#debate-100} ### SUMMARY The following table shows, in summary form, total outlays classified by major functional and sub-functional headings: functional blocks of outlays and recent and projected movements in those proportions. It is emphasised that changes in the size of these functional blocks from one year to another are affected by a number of special factors, major examples of which are large loan repayments by Qantas Airways Ltd in 1978-79 and by the Australian National Airlines Commission and the Australian Industry Development Corporation in 1979-80, the payment of an advance to Queensland in connection with the International Sugar Agreement in 1979-80 and the expected repayment of this advance in 1980-81, and changes in administrative arrangements, most notably those relating to the progressive transfer of functions in recent years to the Northern Territory as part of arrangements for self-government. {:#subdebate-100-0} #### Major Functional Blocks- Proportion of Total Budget Outlays {:#subdebate-100-1} #### Defence {:#subdebate-100-2} #### Education {:#subdebate-100-3} #### Health {:#subdebate-100-4} #### Social Security and Welfare Community Development(n) 1978-79 1979-80 1980-81 0 percent percent percent 1 9.0 9.5 10 20 30 8.7 10.0 27.9 1.7 8.2 10.0 27.8 1.5 1978- 79 1979- 80 1980- 81 est. 27.4 1.5 {:#subdebate-100-5} #### Culture and Recreation {:#subdebate-100-6} #### Transport and Communication 1.0 2.5 {:#subdebate-100-7} #### Industry Assistance 1 . 7 and Development 1.0 2.5 2.0 1.1 2.8 2.3 {:#subdebate-100-8} #### Labour and Employment {:#subdebate-100-9} #### Other Economic Services {:#subdebate-100-10} #### Total General Public Services 0.3 6.6 1.0 0.4 6.8 1.0 0.3 6.8 Payments to or for 22 . 6 the States, the Northern Territory and Local Government Authorities^) {:#subdebate-100-11} #### Public Debt Interest 6.8 22.4 7.0 21.9 6.7 100.0 100.0 99.7 («) Includes expenditure for Housing, Water Supply, Electricity and Gas Urban and Regional Development nec and the Environment. (/>) Includes Payments for Natural Disasters. {: type="a" start="r"} 0. The allowances for Wage and Salary Increase (Non-Defence), accounting for 0.3 per cent, cannot be allocated at this stage. {: type="1" start="1"} 0. DEFENCE Earlier this year the Prime Minister and the Minister for Defence announced decisions taken by the Government on measures to significantly increase Australia's defence preparedness in the light of changing strategic prospects. In keeping with the Government's policy, the outlays on Defence of $3541.4 million provided for in this Budget represent a real increase of at least 7 per cent over defence outlays in 1979-80 compared with last year's actual real increase of about 3 per cent. The financial guidance for Defence planning purposes provides for an average annual increase in defence outlays of about 7 per cent in real terms during the current five-year program, 1980-81 to 1984-85, estimated to bring them to around 3 per cent of Gross Domestic Product compared with a figure of around 2.6 per cent for 1979-80. The estimate of $3541.4 million for Defence outlays is generally in April 1980 prices but it does allow for the effects of the July National Wage Decision and also includes a bulk provision of $110 million for prospective increases in wages and salaries of service and civilian defence personnel during 1980-81; provision for other price increases in 1980-81 will, as appropriate, be made in Additional Estimates later in the year. The current estimate of Defence outlays represents 9.8 per cent of estimated total Budget outlays in 1980-81. Outstanding commitments on orders placed, mainly capital items, to be carried over to 1981-82 and later years are estimated to be $2288.2 million compared with $1731.1 million carried into 1980-81. {:#subdebate-100-12} #### Manpower Costs This category provides for the bulk of service and civilian manpower costs of the Department of Defence. The costs of the remaining elements of defence manpower are recorded under the categories Defence Science and Technology, Natural Disasters Organisation, Defence Co-operation and Naval Construction. Net manpower costs associated with the defence-related activities of the Department of Productivity are recorded in the category 'Maintenance of Production Capacity'. The net increase of $141.8 million in 1980-81 mainly reflects the effects of the December 1979 and July 1980 National Wage Case decisions ($74.0 million), increases in manpower ($14.1 million) and increased provision for defence force retirement and death benefits ($27.5 million). Increases in allowances, particularly overseas allowances, which occurred in 1979-80 have also had an effect. The estimates provide for service manpower increases of 1580 over the 30 June 1980 target, which will raise the permanent force strength at 30 June 1981 to 72 591. These increases are primarily intended to enable new equipment coming into service to be adequately manned, to support increased activities such as base porting at HMAS Stirling and an increased P3C aircraft surveillance effort, and to bring the Army Operational Deployment Force at Townsville close to full strength. Provision has also been made for the estimated $8.4 million cost of bringing the effective strength of the Army Reserve from about 22 500 at 1 July 1980 to 30 000 by 30 June 1981. A target of an additional 1000 regular servicemen per year over the period 1981-82 to 1984-85 has been set to meet the need to man additional equipment and to intensify training. Increased civilian manpower is also proposed, both to support the Services directly and in munitions factories and dockyards. The total civilian staff ceiling for the Department of Defence has been set at 30 990 at 30 June 1981, an increase of 450 on the 30 June 1980 ceiling. The increase is, in the main, related to tasks arising from the Government's initiatives to enhance defence preparedness, e.g. project activities, technical services, repairs and maintenance and support for the Reserves. The main factors in the increase of $27.5 million in the provision for defence force retirement and death benefits are the annual update in pension rates in July 1980 (estimated to cost $13.7 million) in line with the increase in the Consumer Price Index of 10.5 per cent over the year to the March Quarter 1980 and a projected net increase of 1427 in the pensioner population. {:#subdebate-100-13} #### Defence Equipment and Stores Outlays on defence equipment and stores are intended to ensure that operational equipment (ships, aircraft, armour, artillery, etc.) is adequate to support the selective increase in operational activity and enhance the capacity for expansion. Outlays on 'capital' type equipment in 1980-81 are estimated at $611.3 million or $120.8 million more than in 1979-80; outstanding commitments on capital items to be carried over to 1981-82 and later years are estimated to be $1324.0 million compared with $985.9 million carried into 1980-81. Outlays on capital equipment are planned to rise to over 25 per cent of total Defence outlays in 1984-85. The Government's decision to accelerate its program to upgrade and enhance Australia's defence capability will not significantly change the course of development of the force structure which had been planned for later in the decade. Rather it will bring forward items previously scheduled for later acquisition and result, in some cases, in increasing the numbers of items proposed for acquisition within a given time. Action is already under way to acquire two additional Sea King Helicopters to replace recent losses, to order further Mark 48 submarinelaunched torpedoes and to fit a close-in weapon system to the third patrol frigate. Other decisions on capabilities and equipments for procurement which are provided for in this Budget include a second fleet underway replenishment ship, additional patrol craft, medium general service trucks for the Army, medium range artillery, and the design and construction in Australia of prototype minehunter catamarans. The existing vessels are planned for retirement in 1983. A decision is expected to be made this year on what capability might replace the aircraft carrier HMAS Melbourne and on the design and development in Australia of a new basic training aircraft. Early consideration will also be given to the replacement for the River Class destroyer escorts which it is assessed will be approaching the end of their cost-effective life by the end of the decade. Amongst the further capabilities and equipments which are now included in the program for decision in the five year period are a new tactical fighter on which a decision will be made shortly and which will involve the purchase of 75 aircraft, an aerial refuelling capability for the tactical fighter aircraft, enhanced capabilities of air defence systems, and an additional hydrographic ship. Significant components of the estimated outlays in 1980-81 for previously approved equipments are $165 million in progress payments for the four FFG-7 patrol frigates, two of which are scheduled for delivery by the end of 1981; $27 million for fast patrol craft; $18 million for the first fleet underway replenishment ship (AOR1); and $23 million for torpedoes. In addition, $25 million is provided for refurbishment of Mirage and Macchi aircraft. The reduction in expenditure on armoured and combat vehicles and artillery mainly reflects substantial completion of the Leopard tank project. Expenditure on supporting equipment and stores such as fuel, ammunition, rations, clothing, etc. for the maintenance of the. Defence Force is estimated to increase by $47.4 million. This mainly reflects changed prices and exchange rates (costing $11 million for fuel alone), increased patrol activity by the Navy and Air Force in the Indian Ocean, manpower growth, and a continuing build-up in stockholdings, including $11 million for increased fuel stockholdings. Outlays on repairs and maintenance of ships, aircraft, vehicles, weapons and equipment are estimated to increase by $17.1 million in 1980-81. This increase is due to higher costs and increased repair activities generally, including the cost of maintaining the sophisticated equipments that have come into service in recent years. {:#subdebate-100-14} #### Defence Facilities Expenditure under this heading is to provide and maintain facilities, including living and working accommodation, for the Defence Force and Department of Defence (other than for Industrial Capacity and Defence Science and Technology). No provision is made for advances to the States for the construction of houses for servicemen pending the final determination of future arrangements for Service housing. The 1980-81 allocation of $1.8 million is for upgrading of older dwellings to contemporary standards. Provision is made, however, in 'Other Buildings, Works, Furniture and Fittings' for the construction of some 250 houses at Service establishments and in areas where rental accommodation is not readily obtainable, and in 'Acquisition of Sites and Buildings' for the acquisition of some 200 houses from private sources. Outlays on 'Other Buildings, Works, Furniture and Fittings' are estimated to increase by about 50 per cent in 1980-81. The major part ($91.0 million) of the provision is to meet progress payments on projects committed in earlier years. These include provision for modernisation of facilities at Garden Island Dockyard (NSW), construction of naval patrol boat bases at Cairns (Queensland) and Darwin (NT), the Army schools complex at Bonegilla (Victoria), further work on development of Enoggera Army base (Queensland) and the Pearce Air Force base (WA), and further progress towards the completion of the redevelopment of facilities at Edinburgh (SA) for operation of long range maritime patrol aircraft. Expenditure on new defence works projects in 1980-81 is estimated at $17.7 million or 15.4 per cent of the provision; significant new commencements include provision of additional fuel storage capacity at Navy and Air Force bases, the first stage of the modernisation of Garden Island Dockyard (NSW), further stages in the development of Williamstown Naval Dockyard (Victoria), Army establishments at Randwick (NSW) and Holsworthy (NSW) and RAAF Operational Command Headquarters at Glenbrook (NSW), and the construction of the Australian Defence Force Academy in Canberra. The estimated 13.7 per cent increase in 1980-81 expenditure on repairs and maintenance of facilities reflects increased costs and an additional provision to further reduce a backlog of essential repairs and maintenance tasks. Among the major proposals for development of defence facilities over the period to 1984-85 are continued development of HMAS Stirling (WA) and other defence bases, further stages in the modernisation of Garden Island Dockyard (NSW), provision of facilities for the new tactical fighter force, development of Learmonth and Derby airfields (WA), and the redevelopment of the Armoured Centre at Puckapunyal (Victoria) for the Army. Outstanding commitments to be carried over to 1981-82 and later years are estimated to be 1258.6 million compared with $154.4 million carried into 1980-81. {:#subdebate-100-15} #### Industrial Capacity Expenditure under this heading primarily concerns the retention and continuing use, in Government aircraft and munitions factories and related private sector industries, of production capabilities and skills which are regarded as essential for the manufacture or support of defence materiel and equipment but which cannot be fully used in peace-time, the subsidisation of continuing production of Nomad aircraft (of which 109 aircraft of the approved production run of 145 aircraft had been completed at 30 June 1980), the procurement of plant and machinery to maintain or upgrade industry capabilities, and the construction, modernisation and repair of buildings and works. This item also provides for the purchase or manufacture of items of essential defence materiel for reserve stock holding, the development of production techniques and new production items in Government factories and in industry, and special projects such as rationalisation of the defence aircraft industry at Fishermens Bend (Victoria) and Bankstown (NSW) and upgrading facilities to allow Australian participation in manufacture of parts for the Boeing 757 aircraft. The provision of additional capacity and modernisation of existing defence production facilities in the Government Munitions and Aircraft Factories and in industry will require generally higher expenditure over the period to 1984-85. {:#subdebate-100-16} #### Defence Science and Technology Expenditure on defence science and technology has as its objective assisting the Services to keep abreast of advances in defence technology and developing weapons and weapon systems suited to Australia's defence needs. The estimated expenditure of $110.3 million in 1980-81 covers salaries, other administrative and operating expenses, machinery, plant, stores and works services of the defence science establishments and laboratories. Considerable effort is being devoted to activities such as the Jindalee over-the-horizon radar, underwater detection techniques, electronic warfare techniques, and modernisation of the Ikara antisubmarine guidance weapons system. A considerable increase is proposed in the number of research and development projects to be contracted to Australian industry and universities. The net increase of $11.5 million reflects effects of price and wage increases and increased activity- on a wide range of projects. Defence Co-operation Through defence co-operation the Government seeks to help friendly countries in the region to strengthen their own and therefore the region's defence capacity. Estimated expenditure of $38.7 million in 1980-81 includes an increase to $15.4 million in the provision for defence co-operation activities with Papua New Guinea in 1980-81, which provides for new equipment and increased training and study visits. At the same time the provision for manpower and support costs of Australian servicemen in Papua New Guinea has been reduced in line with the continuing localisation of the Papua New Guinea Defence Force. Current equipment projects include provision of Nomad aircraft, communications equipment and other miscellaneous equipments. Provision is made for Indonesia to receive $11.9 million in assistance. This will be used for such purposes as survey and mapping work in Maluku Province (the Moluccas), provision of Nomad aircraft, maintenance of C130 aircraft, and training in support, maintenance and communication skills. Continuing assistance is provided for Malaysia ($4.7 million) and Singapore ($1.0 million). Bilateral programs with these two countries place emphasis on training assistance and combined exercises rather than materiel assistance. A large part of the allocation for 'Other' is devoted to the development of a co-operative relationship in defence matters with countries of the South West Pacific. Increased provision is also made for military assistance, primarily visits, training and occasional exercises to the Philippines and Thailand.. A gradual increase in expenditure on defence co-operation is planned to continue over the program period, and will mainly take the form of increasing the amount of specialised training of servicemen from other countries in Australia. {:#subdebate-100-17} #### Storage and Transport Services The item provides for general storage and shipping services for defence and for removals and storage of furniture for servicemen and civilians, and their families, on reposting or transfer. The increase of $1.0 million reflects price and wage increases, and an increase in the estimated number of removals. {:#subdebate-100-18} #### General Administrative Expenditure This category covers a range of items relating to service and general defence civilian functions, and includes rent, travel, office requisites, postage and telephones, fuel, light, power and water, freight, compensation payments and medical and dental services. The proposed increase of $30.1 million to $271.0 million in 1980-81 reflects increases in costs and an increased level of activity, particularly in the areas of training and exercises, computer support and advertising. {:#subdebate-100-19} #### Natural Disasters, Civil Defence and Other Expenditure under this heading covers expenses of the Natural Disasters and Civil Defence Organisation ($4.5 million), including salaries and administrative expenses, reimbursement of the States for some salaries paid to State civil defence personnel, and Commonwealth assistance by way of equipment and stores to State and Territory Emergency Services. Other significant items are outlays on maintenance of war graves ($2.2 million) and variations in Trust Fund Balances (nil for 1980-81, but $5.0 million in 1979-80). The closure in 1979-80 of the ANZUK Support Trust Account, which involved the distribution, after settlement of all financial transactions, of the balance of $6.1 million to the Commonwealth, UK and New Zealand Governments, is the main reason for the reduced provision under this heading. {:#subdebate-100-20} #### Recoveries and Repayments The principal items provided for under this heading are payments made by service personnel under the Defence Force Group Rental Scheme as rents for houses provided for their use ($38.7 million), charges made for meals and accommodation provided at Defence establishments ($24.9 million), returns from disposals, and recoverable services for research and development. The reduction in revenue of $2.2 million reflects the net effect of a number of offsetting factors, the main ones being the closure of the ANZUK Support Trust Account in 1979-80 involving the credit in that year of Australia's share of the outstanding balance ($5.3 million), and an increase in estimated disposals revenue, which mainly reflects the inability to complete the sale of obsolete CI 30 aircraft in 1979-80. {:#subdebate-100-21} #### Allowance for Prospective Wage and Salary Increases The amount required to meet prospective increases in wage and salary rates of civilian and service personnel flowing from the next National Wage Case and other wage adjustments including possible work value increases during 1980-81 will depend on actual increases in wages and salaries. An allowance of $110 million has been included in the Budget estimates; the actual additional provision to be made will be reflected in additional appropriations later in the year. {: type="1" start="2"} 0. EDUCATION Total outlays on education are estimated to increase by 10.0 per cent in 1980-81 to $2866.9 million, which is equivalent to 8.0 per cent of Budget outlays. Assistance is also given to education through income tax rebates available in certain circumstances in respect of education expenses of dependent children, self-education expenses, and some gifts to educational institutions; the cost of revenue so forgone is not included in the figures given here. It should be noted that comparisons of total outlays on education (and some components) between 1978-79 and subsequent years are affected by changes in financial arrangements with the Northern Territory. Whereas *total* expenditures on TAFE institutions and schools in the Northern Territory in 1978-79 (and earlier years) were recorded under Education, only the specific purpose payment components are so recorded in 1979-80 and 1980-81; the basic 'State-type' components will be determined by the Northern Territory Government (and allocated largely from the general purpose funds made available by the Commonwealth - see Section 10a below). Further details of grants to the States and the Northern Territory for education are provided in Chapters IV and V of *Payments to or for the States, the Northern Territory and Local Government Authorities* 1980-81. 1978-79 1979-80 1980-81 {:#subdebate-100-22} #### Actual Actual Estimate Change S million $ million 8 million S million {:#subdebate-100-23} #### Tertiary- Universities - {:#subdebate-100-24} #### Tertiary Education The estimates under this head for 1980-81, except for further education in the Australian Capital Territory and some other minor exceptions, comprise the second half of the 1980 and the first half of the 1981 *calendar year* programs of the Tertiary Education Commission through which the Commonwealth provides full financial support for all universities and colleges of advanced education (CAEs) and assists the State (and now the Northern Territory) systems of technical and further education (TAFE). The estimates for *financial year* 1980-81 given in the preceding Table for recurrent components of the Tertiary Education Commission's programs are in estimated *June 1980 prices.* The wage and salary components of recurrent grants to universities, CAEs and TAFE institutions - which constitute the bulk of total grants to these bodies - are subject to cost supplementation in line with increases in wages and salaries. The bulk provision of $80 million is the present estimate of the amount that will be required to supplement these grants during 1980-81. Total expenditure is estimated at $1617.8 million, compared with $1492.0 million in 1979-80. Details of the *calendar* 1981 program, as shown below, were announced by the Minister for Education on 22 May 1980. The figures are in estimated *December 1979 prices,* with estimates shown here also for amounts required to bring the grants to an estimated outturn basis. Because payments are not spread evenly through the year, the Commission's calendar year programs cannot directly be related to the financial year estimates. {: type="a" start="a"} 0. Includes evaluative studies. {:#subdebate-100-25} #### Universities and Colleges of Advanced Education For 1981, the third year of the present triennium, recurrent expenditures will continue at the same real level as has been maintained in 1979 and 1980, and should enable existing levels of student intake to continue. The 1981 provision for capital and equipment is 9.2 per cent lower than in 1980, and is estimated to be 18 per cent less in real terms. Overall, the 1981 programs for these sectors are to decrease by 1.4 per cent in real terms. The Tertiary Education Commission has been asked to continue to monitor carefully the use and allocation of resources, and to provide ongoing advice on the relationship of manpower supply to demand in areas which are critical for education planning. Student load in universities and colleges of advanced education built up rapidly in the decade to the mid-1970s, but has since tended to remain stable; this relative stability is seen as continuing in the medium term. Current trends are for a higher proportion of students to study part-time and for more mature age students to enrol. *Student Load in Universities and CAEs (a)* {: type="a" start="u"} 0. Expressed as 'equivalent full-time students', as defined by the Tertiary Education Commission. *lb)* Preliminary, (c) Projected. *(Source:* Department of Education) This slowing in increases in enrolments is reflected in the building and equipment provision, for which funds are determined annually as part of the capital and equipment program. Building activity will continue at a lower level, with actual expenditure in 1981 on major works expected to be $21.3 million ($38.2 million in 1980) on a total program of $42 million extending from 1981 into 1984. {:#subdebate-100-26} #### Other Advanced Education The Commonwealth also funds the operations of the Australian Film and Television School which undertakes national training at an advanced level in film, television, radio and audio-visual communications. In 1980-81 a provision of $4.5 million has been made for the operational and capital expenses of the School, an increase of 11.2 per cent on 1979-80. Also included within this category is $130 000 for the establishment of sportsoriented courses at the Canberra College of Advanced Education, to operate in conjunction with an Australian sports institute (see Youth, Sport and Recreation under the functional heading 'Culture and Recreation'). {:#subdebate-100-27} #### Technical and Further Education The States and the Northern Territory are responsible for technical and further education. Commonwealth grants, constituting about one-quarter of total outlays for such education, are provided on the understanding that the States and the NT will at least maintain fully their own efforts in this area. General recurrent grants are provided by the Commonwealth to compensate the States and the Northern Territory for not levying fees for courses at technical and further education institutions. These grants are expected to rise in 1981 by 4 per cent in real terms, in response to growth in enrolments. The specific recurrent grants are for purposes designed to improve the quality and effectiveness of technical and further education, and will be maintained at the same real level as in 1980. The TAFE sector is also benefiting substantially (approximately $11 million in 1980 and up to about $12.5 million in 1981) from the Commonwealth's school-to-work transition program (see below). On the capital side, where Commonwealth grants now make up two-thirds of total TAFE outlays, estimated expenditure in 1981 is to maintain the substantial real level which has now been built up in line with the high priority attached by the Government to this form of education. Building works commitments to be met after 1981 amount to $70 million. The Commonwealth will also contribute its $0.2 million share of the cost in 1981 of the national TAFE research and development centre to be based in Adelaide. *Further Education in the ACT* There will be substantial additions to further education facilities in the ACT in 1981, with a third TAFE College (at Woden) to commence operations from the beginning of 1981 and round out a network of regional TAFE services for the ACTj completion of Stage 4 of Bruce TAFE College, and a new building for the Canberra School of Art which will take diploma students in a range of new craft courses from the first semester of 1981. Course enrolments in Canberra's five further education institutions are estimated to reach 19 800 in 1981, 3.3 per cent higher than in 1980. The 1980-81 estimates provide $24.1 million altogether for these bodies, of which $14.4 million is for current and $9.7 million for capital expenditure (compared with $12.1 million and $12.7 million, respectively, in 1979-80). {:#subdebate-100-28} #### Overseas Student Charge From the commencement of the 1 980 academic year, private overseas students enrolling for the first time (or changing to a new course of study) at Australian universities and colleges of advanced education have been required to help defray the cost of their tuition. The charges range from $1500 to $2500 a year depending on the course of study. The estimated number of students liable for the charge was 1600 in 1980, this is expected to rise to about 3200 in 1981 (as further new enrolments occur) and yield revenue of $5.3 million in 1980-81. On the basis of present estimates, upwards of 6000 students will be contributing once those enrolled before the charges took effect have completed their courses. *Schools in the States, and the Northern Territory* The Commonwealth provides grants to the States and the Northern Territory through programs of the Schools Commission for recurrent and capital costs of government schools. Payments for recurrent and capital purposes are also made to the States and the Northern Territory for on-passing to non-government schools. In addition, Commonwealth assistance is provided to both government and nongovernment schools systems for disadvantaged schools, migrant and multicultural projects, schools for handicapped children, teacher development and innovatory projects. Commonwealth grants represent about 12 per cent of total spending on government schools and about 35 per cent of total spending on non-government schools. The estimates under this head, similarly to those under the tertiary grants program, are made up of the second half of the 1980 and the first half of the 1981 *calendar year* programs of the Schools Commission. The estimates for *financial year* 1980-81 given in the Table for these programs are at estimated *June 1980 price levels* and will be supplemented for wage and salary increases affecting recurrent components; $30 million is the present estimate of the supplementation required during 1980-81. Total expenditure by way of Schools Commission grants in 1980-81 is estimated at $781.4 million, compared with $702.4 million in 1979-80. The *calendar* 1981 program, summarised below, was announced by the Minister for Education on 22 May 1980. Following usual practice, the figures are in *December 1979 prices,* but estimates are shown here also for the adjustment required to bring the grants to an estimated outturn basis. (As with the tertiary grants, payments arrangements prevent direct comparison with the financial year estimates). {:#subdebate-100-29} #### Schools 1980 1981 % million $ million Government schools Non-government schools Joint programs Adjustment to outturn basis 367.5 294.8 25.1 30.0 369.7 312.1 26.8 85.0 {:#subdebate-100-30} #### Total 717.4 793.6 Total grants to the States and the Northern Territory in 1981 are estimated to increase by about 10.6 per cent, or 3.1 per cent in real terms. In the government schools sector, although Australia-wide enrolments are projected to continue their present annual decline of about one per cent, all categories of assistance will be maintained at the present real levels of support, and in addition migrant education will receive a further real increase under the third year of the three-year program recommended by the Review of Post-Arrival Programs and Services for Migrants (Galbally Report). For non-government schools, where the tendency is for enrolments to show an increase, recurrent grants per pupil will continue to be adjusted for changes in standard government school running costs; this is expected to provide real increases in funding in this area. Additional assistance will be provided to schools in the most needy category and increased funds will be available for migrant education. Arrangements for advance approvals (up to two years ahead) to building projects are also to be liberalised. Looking further ahead, enrolments in primary schools (government and nongovernment) appear set to decline, by over 4 per cent, over the next three years. Secondary school enrolments, on the other hand, seem likely to increase by about 5 per cent over the same period, which is not enough to stem the projected decline in total enrolments of about one per cent. Policies like school-to-work transition intended to encourage more young people to remain in education will have a bearing on the outcome. {:#subdebate-100-31} #### School Enrolments {: type="a" start="a"} 0. Preliminary estimates (Australian Bureau of Statistics). (6) Projected (Department of Education). *Pre-schools in the States and the Northern Territory* Under the Children's Services Program the Commonwealth makes a block grant to the States and the Northern Territory as a contribution towards the costs of pre-school education. The Government has decided that $33.1 million will be provided in 1980-81 for this purpose. (In Budget documents issued in the years 1977-78 to 1979-80 these outlays were included under the functional heading Social Security and Welfare'.) *Government Schools and Pre-Schools in the ACT* Outlays for government schools and pre-schools in the ACT are estimated at $78.8 million in 1980-81, an increase of 2.2 per cent compared with 1979-80. Current expenditure is estimated to rise by 7.1 per cent to $74.8 million, but capital expenditure is expected to fall from $7.3 million in 1979-80 to $4.0 million as reduced building activity reflects the declining rate of growth in need for classroom space. Total government school enrolments for 1981 are estimated at 38 170 compared with 38 303 in 1980 (primary down 1.0 per cent, high schools up 1.0 per cent and secondary colleges down 0.1 per cent), and current Department of Education projections show relatively stable enrolments continuing in the medium term. At the same time there will be substantial additions to government school capacity in 1981, growth in student numbers in particular areas of Canberra now being sufficient to permit opening of already-completed high schools at Wanniassa and Charnwood, building of a new primary school at Monash, and opening of the secondary college section of the Erindale Centre (Tuggeranong). The Erindale Centre has been built with expanded recreational facilities that are intended to serve community as well as school purposes. *Non-Government Schools in the ACT* The Commonwealth provides grants per pupil to non-government schools in the ACT equivalent to those paid by the Schools Commission and State Governments to non-government schools in the States. These grants are the major component of recurrent assistance and are estimated at $11.6 million in 1980-81, compared with $10.4 million in 1979-80; the increase reflects both higher grant rates and a 6.6 per cent increase in enrolments (to 16 600 students) in 1980; a further increase in enrolments of 4.8 per cent (to about 17 400) is projected for 19.81. Department of Education projections suggest some slackening in the pace of growth in non-government enrolments in the three years beyond 1981. Capital grants are provided to non-government schools in the ACT under arrangements similar to the Schools Commission program of capital assistance for non-government schools in the States. Assistance is also available under an interest subsidy scheme, similar to schemes operating in the States, which enables non-government schools to borrow from lending institutions for approved building projects with the Commonwealth reimbursing interest charges up to 10 per cent a year for up to 20 years. For 1980-81, total capital assistance is estimated at $2.6 million, compared with $2.7 million in 1979-80. The main new projects assisted will be Catholic system primary schools at Kaleen and Wanniassa. *School Transport in the ACT* The cost of subsidising bus services for children travelling to and from schools is estimated at $2.4 million in 1980-81, a 14.0 per cent increase over 1979.-80. {:#subdebate-100-32} #### Curriculum Development Centre The Curriculum Development Centre is a statutory body which produces and markets teaching materials for use in Australian schools and which advises on and evaluates curriculum and materials development. The Centre operates in consultation and co-operation with other education authorities, public and private, at both federal and State level. The Budget provision of $2.5 million in 1980-81 ($2.4 million in 1979-80) together with increased income from sales of materials and publications (estimated at $500 000 in 1980-81 compared with $340 000 in 1979-80) will allow further progress in a number of priority areas including mathematics education and language teaching. school-to-work transition The Government decided in 1979 to provide up to $150 million in real terms during the five years from the beginning of 1980 for a range of education, training and counselling activities in schools and TAFE institutions. These activities are directed particularly to young people who have left or are likely to leave school early, and are intended to equip them better to move into the work force. In the initial year (1980), the Commonwealth is meeting the full cost ($24 million) of the programs that have been agreed with the States and Territories and with non-government school authorities, and the cost ($1 million) of developing an expanded range of occupational information. In 1981, amounts available will be $2.2 million to non-government schools, and up to $25.2 million to the States and Territories for government school and TAFE institutions (provided matching amounts totalling $9.9 million are contributed), including $456 000 for schools and TAFE institutions in the ACT. From 1982 onwards, the allocations for the States and the Northern Territory will be on a $1 for $1 matching basis. Expenditure on these activities in 1980-81 is estimated at $33.9 million. {:#subdebate-100-33} #### Student Assistance The main schemes of community-wide student assistance are the Secondary Allowances Scheme (SAS), the Tertiary Education Assistance Scheme (TEAS), the Adult Secondary Education Assistance Scheme (ASEAS), and postgraduate awards. (Schemes that assist a number of special groups are dealt with separately below.) These provide support for families of children who are in the final two years of schooling (SAS), for adults studying full-time at matriculation level or the equivalent (ASEAS), for full-time students undertaking TAFE courses (TEAS), and for full-time undergraduate and postgraduate students at universities and colleges of advanced education (TEAS and postgraduate awards). The postgraduate awards are free of means test but taxable, and are made on the basis of academic merit. The other awards are open to all, subject to means tests on family and student income and to academic admission requirements, and are free of tax. A number of changes to these schemes are to take effect from the beginning of 1981. Living allowances for these schemes are to rise by 10 per cent, except for Secondary Allowances where the increase will be 20 per cent. Allowances are reduced where family income or (for TEAS and ASEAS) student income exceeds certain levels in a year; family income levels in these means tests will be increased by 9.7 per cent for TEAS and ASEAS, reflecting increases in average weekly earnings during 1979, and by 20 per cent for SAS. The amount of student income above which TEAS and ASEAS allowances are reduced will be lifted from $1500 to $2000 a year and the amount allowed from another award raised from $150 to $500 a year. Allowances for a dependent spouse will also be increased by $11.30 a week. Means test levels and maximum rates of living allowance applicable in 1980 and those to apply from 1981, and numbers of students expected to receive assistance in those two years, are as follows: >Maximum entitlement Number of students Other forms of assistance for students are available to certain special groups, namely Aboriginals, soldiers' children, and isolated children; these are dealt with in the separate section 'Special Groups', but certain information on them is included in the table below. Taken together, all forms of assistance for students (including those for special groups) are estimated to require $232.9 million in 1980-81, an increase of $14.7 million (7 per cent) over 1979-80. The increased benefit rates and liberalised means tests described above for TEAS, ASEAS and SAS are estimated to cost $15 million in 1980-81 and $30 million in a full year. Details of estimated expenditure according to scheme and the main institutions of study are shown in the following summary table: 1979-80 1980-81 Change S million S million S million Student assistance schemes- Tertiary education assistance - Total student assistance schemes . 182.0 191.0 +9.0 Assistance provided under programs for special groups - Aboriginals - {:#subdebate-100-34} #### Special Groups The Budget estimates include $84.1 million toward the education of special groups in 1980-81, an increase of $11.9 million (16.5 per cent) over 1979-80, reflecting increases in student allowances for these groups and expanded services for refugees and migrants. {:#subdebate-100-35} #### Aboriginals The Aboriginal Secondary Grants and Aboriginal Study Grants schemes provide living allowances and other forms of benefits, free of means test, to Aboriginals attending approved secondary schools or classes, or undertaking approved full-time or part-time courses of education and training at universities, colleges of advanced education, TAFE colleges and other institutions. From the beginning of 1981, living allowances under these schemes will be increased by 10 per cent. These schemes constitute the bulk of the Commonwealth educational assistance available to Aboriginals. In addition, $9.6 million is to be available as grants-in-aid and grants to the States through the Department of Aboriginal Affairs for the implementation of programs that address the special educational disadvantages of Aboriginals. {:#subdebate-100-36} #### Migrant Education The provisions for migrant and refugee education under this heading do not include expenditure for those purposes under the Schools Commission program (see 'Schools' section), estimated to be $39.5 million in 1980-81, for special instruction which is provided for migrant and refugee children experiencing English language difficulties in order to facilitate their participation in normal classes. This heading covers additional and separate support for 'on-arrivaF language and orientation classes for refugee children which are given before the children move into ordinary schooling. An amount of $3.2 million is being provided in 1980-81 ($2.7 million in 1979-80) to government and non-government school authorities for emergency classroom accommodation and to meet salary and language teaching materials and equipment costs for an expected intake of 5500 refugee children (4700 in 1979-80). Also included here is the Adult Migrant and Refugee Education Program, under which $28.0 million will be available in 1980-81 for initial settlement orientation and for 'on-arrival' and on-going English language training needs of adult migrants and refugees. This provision covers the salaries of English language instructors as well as living allowances for adults attending full-time courses. The increase of $4.7 million (20 per cent) reflects the higher provision for enrolments (120 000 in 1980-81 compared with 115 000 in 1979-80) as the three-year program of upgrading and expanding English language instruction courses for migrants, recommended by the Review of Post-Arrival Programs and Services for Migrants (Galbally Report), progresses into its third year. {:#subdebate-100-37} #### Soldiers' Children Education Scheme Under this scheme assistance is provided by way of living allowances and other benefits for the schooling, tertiary education and training of children of veterans who died as a result of war service or who are either blind or totally and permanently incapacitated. Benefits are generally free of nieans test although a student's own earnings may be taken into account. The cost of the scheme in 1980-81 is estimated at $2.5 million, compared to $2.6 million in 1979-80; the number of beneficiaries is projected to decline slightly (to 2045). The Government has decided to increase allowances for secondary students from the beginning of 1981. Living allowances for tertiary students are generally increased in line with movements in allowances under TEAS. {:#subdebate-100-38} #### Assistance for Isolated Children This scheme assists families whose homes are remote from normal daily access to government schools by providing basic boarding or correspondence school allowances free of means test, together with additional means-tested benefits that include allowances to cover establishment of a second home near to school and to cover cases of special financial hardship. From the beginning of 1981, most allowances will increase by 20 per cent; the new basic, special supplementary and additional boarding allowances will be $600, $660 and $600 respectively; the new single basic correspondence allowance will be $500 with the existing reimburseable component being absorbed in that increased amount; the second home allowance will be from $600 to $1530. From the beginning of 1981, the scheme will also be extended to cover children regarded as isolated for reasons of medical and social disability. It is estimated that the scheme will cost $14.3 million in 1980-81 ($12.2 million in 1979-80) and that assistance will be provided in respect of 20 500 children (19 000 at present). General administrative and other expenditure of the Department of Education and the Commonwealth Teaching Service is estimated at $25.0 million in 1980-81, of which $19.1 million is for wages and salaries. Also included under this heading is $1.6 million in support of research in education through the Education Research and Development Committee and the Australian Council for Education Research, and for evaluative studies (mainly of student assistance schemes) being undertaken by the Department itself. Total Commonwealth outlays on health are estimated at $3643.9 million in 1980-81. This is an increase of 15.0 per cent on 1979-80 and is equivalent to 10.1 per cent of total estimated Budget outlays in 1980-81. In addition, some assistance in the health area is given through the taxation system: for example, net expenditure in respect of doctors, hospitals, chemists, dentists, opticians and optometrists is in certain circumstances allowable for income tax rebate purposes; gifts of $2 or more to eligible organisations (eg medical research organisations) are tax deductible; and a wide range of health and medical related goods are exempt from sales tax. The cost figures used in this Section do not include the cost to revenue of these measures. Outlays recorded in the following table for periods up to 1 January 1979 include the full cost of Northern Territory health services. Outlays for periods beyond 1 January 1979 include, in respect of the Northern Territory, only the Commonwealth's share of approved operating costs of recognised hospitals in the Territory and other specific purpose payments of the kinds made to the States under national programs. {:#subdebate-100-39} #### General Administrative and Other Expenditure {: type="1" start="3"} 0. HEALTH 1978-79 {:#subdebate-100-40} #### Actual 1979-80 {:#subdebate-100-41} #### Actual 1980-81 {:#subdebate-100-42} #### Estimate {:#subdebate-100-43} #### Change S million $ million $ million S million {:#subdebate-100-44} #### Medical Services and Benefits - Medical Benefits . Diagnostic Services Veterans and Dependants 528.9 18.4 57.8 621.0 20.4 71.5 681.0 22.5 80.6 + 60.0 + 2.2 + 9.1 {:#subdebate-100-45} #### Total 605.1 712.9 784.1 + 71.2 Eligibility for Pensioner Health Benefit (PHB) Cards Subject to an income test limit of $40 a week for a single person or $68 a week for a married couple (the limits are higher where there are children), a person in receipt of one of the following pensions, benefits or allowances is eligible to receive a PHB Card: age, invalid, widow's and service pensions, supporting parent's benefit, and sheltered employment and rehabilitation training allowances. Tuberculosis allowees are also eligible for PHB Cards. Holders of PHB Cards and their dependants are entitled to the following Commonwealth 'health' benefits without charge: the provision, with the agreement of doctors, of Schedule medical services (see under "Medical Benefits"), Schedule optometrical services, pharmaceutical benefits, and hearing aids and batteries (provided by the National Acoustic Laboratories). Currently, a disability pension paid to a veteran is regarded as income for the purposes of the PHB income test. The Government has decided that, from 1 January 1981, 50 per cent of any disability pension- received by a service pensioner will be excluded from the PHB income test. This extension of eligibility is estimated to add $0.4 million to outlays by the Department of Health in 1980-81 and $1.0 million in a full year and $2.5 million to outlays by the Department of Veterans' Affairs in 1980-81 and $3.8 million in a full year. The Government has decided also that from November 1980 eligibility for PHB Cards will be extended in appropriate cases to sickness beneficiaries who meet the income test limit. The extension of supporting parent's benefit to cover the first six months of sole parenthood is estimated to add $3.1 million in 1980-81 and $4.9 million in a full year to outlays on Health. (See 'Social Security and Welfare' for details.) The cost of the three decisions on eligibility for PHB Cards will be reflected mainly in increased outlays on medical benefits and pharmaceutical benefits. The estimated number of eligible pensioners and their dependants at 31 December 1979 was 2.02 million. These numbers are expected to increase by about 9 per cent during the year to 31 December 1980. about half of the increase being attributable to the above mentioned decisions. {:#subdebate-100-46} #### Medical Services and Benefits {:#subdebate-100-47} #### Medical Benefits In 1980-81 the Commonwealth's contribution towards the costs of medical benefits will continue to be as follows: pensioners (and their dependants) covered by Pensioner Health Benefit entitlements: 85 per cent of Schedule fees, subject to the gap between the benefit and Schedule fee for a service not exceeding $5; disadvantaged patients, as classified by their doctors: 75 per cent of Schedule fees for all services regardless of cost; and the rest of the population: that part, if any, of the Schedule fee in excess of $20 for each service. Commonwealth medical benefits for some 85 per cent of services rendered to eligible pensioners and all services rendered to disadvantaged persons are paid directly by the Commonwealth under bulk-billing arrangements. In respect of the rest of the population (including the balance of eligible pensioners and dependants), registered medical benefits organisations act as agents for the Commonwealth and pay Commonwealth medical benefits. Outlays on Commonwealth medical benefits are estimated to increase by $60.0 million in 1980-81 to $681.0 million. The increase comprises: a part year increase of $43 million ($85 million for a full year) resulting from an average increase in Schedule fees of 9.7 per cent from 1 November 1980; $9 million reflecting the net effect of changes in the level of medical benefits from 1 September 1979, the increase in Commonwealth medical benefits arising from the Schedule fee increases applying from 1 November 1979 and 1 January 1980 for medical and optometrical services respectively and the 1 November 1979 extension of eligibility for Pensioner Health Benefit entitlements; $7 million ($11 million for a full year) resulting from decisions, as announced in the Budget Speech, to extend eligibility for PHB Cards from November 1980 to eligible sickness beneficiaries and to eligible supporting parents during the first six months of sole parenthood, and from 1 January 1981 to veterans in receipt of disability pensions who qualify under a liberalised income test; and $1 million ($3 million for a full year) for the estimated cost of extending the Medical Benefits Schedule from 1 January 1981 to include items associated with orthodontic treatment required by children with cleft lip and cleft palate conditions. {:#subdebate-100-48} #### Diagnostic Services This item relates to the running of health laboratories operated by the Commonwealth, including pathology laboratories, which provide services to hospitals and medical practitioners. The $2.2 million increase in 1980-81 reflects the fullyear effects of administrative cost increases. {:#subdebate-100-49} #### Treatment and Allowances for Veterans and Dependants The Commonwealth meets the costs for eligible persons of specialist, local medical officer, paramedical and dental services, the provision and maintenance of surgical aids and travelling expenses incurred in obtaining medical treatment. The increase of $9.1 million arises from increased fees for professional services, an increase in demand for treatment, and the Government's decision to extend eligibility for free treatment of disabilities not related to service to Australian mariners who were prisoners of war and to all veterans who have suffered servicerelated amputations or loss of vision. {:#subdebate-100-50} #### Hospital Services and Benefits {:#subdebate-100-51} #### Hospital Payments Under the *Health Insurance Act* 1973 the Commonwealth: meets half the approved net operating costs of State and Northern Territory public hospitals 'recognised' under the Hospital Cost-Sharing Agreements. Payments in 1980-81 are estimated to increase by $152.8 million to $1291.9 million; meets half the approved net operating costs of 'recognised' hospitals in the Australian Capital Territory under arrangements similar to the Agreements with the States. Payments in 1980-81 are estimated to increase by $2.3 million to $24.2 million. (The other half of approved net operating costs is met from the provision under the appropriation for the Capital Territory Health Commission); and makes payments to private hospitals of $16 a day for each occupied bed. Payments in 1980-81 are estimated to increase by $1.3 million to $71.0 million. Hospital net operating costs represent the aggregate residual operating deficits of 'recognised' hospitals after patient fees and other hospital revenues have been taken into account. Commonwealth payments in 1979-80 were on the basis of maintaining the overall level of hospital services at their 30 June 1979 level. Estimated payments in 1980-81 are again designed to maintain the same overall level of services as in 1979-80. Charges for insured inpatients are to remain at $50 a day for shared-room accommodation, and $75 a day for single-room accommodation. Eligible residents without hospital insurance will continue to be entitled to free hospital-provided treatment and services without means test in public hospitals. The Budget estimates provide for escalation due to price and wage increases, including prospective increases to 30 June 1981, except for the ACT for which the provision is based on current prices. The estimates also provide for some increase in the proportion of uninsured inpatients following the trend perceived by hospitals in 1979-80. The estimates include an amount of $7.5 million related to previous years' hospital expenditures. After adjustment for this amount, Commonwealth expenditure for 'recognised' hospitals will increase by an estimated 12.0 per cent in 1980-81. The Hospital Agreements with the States and the Northern Territory are to be varied to allow charges to be levied in respect of nursing-home type patients in 'recognised' hospitals as provided in the *Health Insurance Act* 1973 - as follows : where the patient is not a hospital insured person, the charge will be the patient contribution being paid by nursing-home patients in State Government homes in the relevant State; or where the patient is a hospital insured person and/or private patient, the charge will be the total of the patient contribution and the Commonwealth nursing-home benefit payable in the relevant State. Concurrent with the introduction of the above arrangements, insured nursinghome type patients in private hospitals will be required to pay, as part of their fees, an amount equal to the statutory nursing-home patient contribution, which will be uninsurable. Hospital benefits will be payable, but the benefit level could be reduced if the fee payable by the patient is less than the benefit plus the patient contribution. Hospital Agreements with four States (New South Wales, Victoria, Queensland and Western Australia) and the Northern Territory are presently on the basis of annual extension until the Commission of Inquiry into Hospital Efficiency and Administration has reported and decisions have been taken on its report. Agreements with South Australia and Tasmania run until 30 June 1985. The Commission of Inquiry has among its terms of reference the question of existing and possible Commonwealth-State arrangements for meeting hospital operating costs. The Inquiry, which brought down an interim report in early July 1980, is expected to submit its final report by 31 December 1980. {:#subdebate-100-52} #### Hospital Benefits Reinsurance Trust Fund Under the provisions of the *National Health Act* 1973, the Commonwealth subsidises private health funds by sharing deficits that arise in reinsurance accounts required to be maintained by registered hospital insurance organisations. The deficits occur from paying benefits to high risk and chronically ill members. Reflecting the Government's earlier announced decision to increase its contribution to the Fund by $75 million a year from 1 August 1980, the Commonwealth's contribution to the Fund in 1980-81 will be $117 million, $67 million higher than in 1979-80. The amount for 1980-81 makes provision for advance payments of 50 per cent of the Commonwealth contribution each quarter. Unspent balances of $2.4 million at 30 June 1979 were applied during 1979-80. {:#subdebate-100-53} #### Other Hospital Benefits Expenditure on other hospital benefits is estimated at $0.6 million compared with $2.6 million in 1979-80 and $6.8 million in 1978-79. The decrease is mainly attributable to the abolition on 1 November 1978 of the subsidy payable to registered health insurance organisations in respect of the contribution rates for basic 'hospital only' insurance. Almost the whole of the estimated expenditure in 1980-81 represents residual hospital insurance subsidy payments. {:#subdebate-100-54} #### Repatriation Hospitals Hospitals and clinics are maintained in each State for the treatment of eligible veterans and their dependants; to a limited extent repatriation hospitals also treat non-repatriation patients, while some use is made of private and State public hospitals for repatriation patients where this is appropriate. The estimated increase of $6.5 million in 1980-81 reflects higher wages and salaries and operational costs associated with the running of repatriation institutions. {:#subdebate-100-55} #### Mental Health Facilities and Services Expenditure on mental health facilities and services is estimated at $10.4 million in 1980-81. Of this amount, $9.8 million relates to medical care and treatment for eligible veterans and their dependants in State mental hospitals. Assistance for non-residential mental health facilities is provided under the Community Health Program. {:#subdebate-100-56} #### Launceston General Hospital The Commonwealth is meeting 50 per cent of the approved cost of Stage I of the re-development of the Launceston General Hospital, including the fittingout of a pathology laboratory. The Commonwealth's share of the total estimated cost is $22 million of which $14.5 million has been paid, leaving $3.7 million to be paid in 1980-81 and $3.8 million in 1981-82. {:#subdebate-100-57} #### Health Program Grants Health Program Grants, authorised under the *Health Insurance Act* 1973, are payable to eligible organisations to meet the cost, or such proportion of the cost as the Minister may determine, of approved health services, including contract medical services, provided outside of hospitals by medical practitioners employed on a salaried or sessional basis. Eligible organisations impose charges, where appropriate, for services. Health Program Grants are also available for projects that develop and test new forms of health care delivery systems (eg health maintenance organisations) . The increase of $1.4 million reflects, particularly, increased provision for Aboriginal medical services. {:#subdebate-100-58} #### Pharmaceutical Services and Benefits {:#subdebate-100-59} #### Pharmaceutical Benefits - General and Pensioners Except for a flat charge of $2.75 per prescription payable by persons other than Pensioner Health Benefit (PHB) Card holders and their dependants, the Commonwealth meets the cost of a wide range of drugs supplied on doctors' and dentists' prescriptions. PHB Card holders and their dependants are eligible for benefits without charge. Outlays on pharmaceutical benefits (general and pensioners) are estimated to increase by a net $49.4 million in 1980-81 to $324 million. The net increase comprises: a part year increase of $9.5 million ($19 million for a full year) resulting from the across-the-board increase announced in the Budget Speech of 20 cents in drug prices per benefit item; the full year effect ($16 million) of the decision in 1979-80 to extend eligibility for PHB Cards to supporting parents and their dependants and to increase the basic income test limit; $3.9 million ($6.7 million for a full year) resulting from decisions announced in the Budget Speech to extend eligibility for PHB Cards from November 1980 to eligible sickness beneficiaries and to eligible supporting parents in the first six months of sole parenthood; and from 1 January 1981, to veterans in receipt of disability pensions who qualify under a liberalised income test; expected increases in the volume of prescriptions dispensed and an increase in the average benefit prescription price ($24.8 million); and reductions of $1 million ($2 million for a full year) resulting from the Government's decision to remove certain low priority items from the list of pharmaceutical benefits and of $3.8 million from a decrease of 4 cents per prescription from 1 May 1980 in the dispensing fee paid to chemistSr'- {:#subdebate-100-60} #### Pharmaceutical Benefits - Veterans and Dependants The Commonwealth meets the full cost of drug and medicinal prescriptions supplied on doctors' prescriptions for eligible veterans and their dependants. The increase of $3.7 million to $42.7 million in 1980-81 reflects the expected full-year effect of increased costs and increased demand for pharmaceuticals. {:#subdebate-100-61} #### Nursing Home and Domiciliary Nursing Care Services and Benefits {:#subdebate-100-62} #### Nursing Home Benefits and Payments Under the *National Health Act* 1973, benefits are paid by the Commonwealth for all patients in approved nursing homes who are not insured with a registered hospital benefits fund. Current benefits are: >Ordinary Extensive care care patients patients > >S a day $ a day > >15.30 21.30 > >22.70 28.70 > >13.85 19.85 > >20.55 26.55 > >13.85 19.85 > >15.85 21.85 {:#subdebate-100-63} #### New South Wales and Australian Capital Territory {:#subdebate-100-64} #### Victoria {:#subdebate-100-65} #### Queensland {:#subdebate-100-66} #### South Australia and Northern Territory Western Australia ..... Tasmania The benefits are reviewed annually and were last adjusted on 8 November 1979. Benefits are set so that together with the statutory minimum patient contribution (currently $8.25 a day) they cover fees charged to 70 per cent of patients in non-government nursing homes approved in each State under the *National Health Act* 1973 at the time of the review. The patient contribution is set at 87.5 per cent of the single pension plus supplementary assistance. The levels of benefit are to be reviewed during 1980-81 after a survey of nursing home fees, with new benefit levels to apply from the first pension pay day in November. Under the *Nursing Homes Assistance Act* 1974 the Government meets approved operating deficits (after receipt of patient contributions and of benefits for patients insured with a hospital benefits fund) of eligible private non-profit nursing homes that participate in arrangements authorised by the Act. Expenditure on nursing home benefits is estimated to increase by $50.6 million in 1980-81 to $278.0 million, while expenditure on the financing of deficits of eligible nursing homes is estimated to increase by $35.0 million to $120.0 million. These increases reflect a 10 per cent increase in bed days for which benefits are paid and a 20 per cent increase in bed days in those nursing homes whose deficits are met, the effects of higher benefits, and an allowance for cost increases. There are indications that the supply of nursing home beds will further increase substantially in 1981-82, mainly as a result of the greater availability of funds provided under the *Aged or Disabled Persons Homes Act* 1954, but that the rate of increase will slow in 1982-83. {:#subdebate-100-67} #### Domiciliary Nursing Care Benefits The Commonwealth currently pays a benefit of $2 a day to approved persons who provide adequate nursing care for approved patients at home as an alternative to institutional care. The approved patients must be aged 16 or over and require professional nursing care to an extent that would otherwise justify admission to an approved nursing home. As announced in the Budget Speech, legislation will be introduced to increase the benefit to $3 a day with effect from 4 September 1980. The cost of the benefit increase is estimated to be $4.7 million in 1980-81 and $5.5 million in a full year. Reflecting the benefit increase and the full-year effect of reducing the age eligibility to 16 years from 1 November 1979, which partly explains an estimated increase in patient numbers of 1350 to 15 100, estimated expenditure in 1980-81 is $15.7 million, $5.9 million higher than in 1979-80. {:#subdebate-100-68} #### Nursing Care for Veterans and Dependants The Commonwealth meets the full cost of nursing home accommodation required by veterans for service-related disabilities. For certain categories of veterans and war widows, it also meets the cost of nursing home care for disabilities not related to service, subject to payment by the patient of the patient contribution prescribed for other nursing home patients in the community. Free domiciliary care services are provided to these groups as required. {:#subdebate-100-69} #### Home Nursing Services The Commonwealth /-extends subsidies, estimated to cost $13.5 million in 1980-81, to approved non-profit organisations providing home nursing services. The Commonwealth subsidy to any organisation may not exceed that paid to the organisation by the relevant State or local government organisations. The rate of subsidy was increased with effect from 1 July 1980. For organisations established before 30 September 1956, the annual Commonwealth payment for each nurse who attracts a subsidy was increased from $10 800 to $11 680. For organisations established after that date, the annual subsidy for each nurse employed was increased from $5400 to $5840. These increases are estimated to cost $1.07 million in 1980-81. {:#subdebate-100-70} #### Community Health Facilities and Services Commonwealth assistance is provided to the States, Northern Territory, local government authorities and other eligible organisations for the provision of community-based health services. In 1980-81 an estimated $67.5 million will be provided as follows: up to $55.0 million in block grants for capital and operating costs of community health services in the States and the NT on a $ for $ basis. In 1979-80 funds were provided for 721 projects including community health centres, day hospitals, rehabilitation and counselling services and health education projects; $3.8 million for capital ($ for $ basis) and operating ($3 for $1 basis) costs of women's refuges; currently 96 refuges are approved for receiving assistance; $1.3 million for the cost of programs based on the recommendations of the Review of Post-Arrival Programs and Services for Migrants (Galbally Report) concerning ethnic health workers and interpreters and translators in health services; in 1979-80 the Commonwealth met the full costs of these programs and in 1980-81 the cost will be shared with the States on a $3 for $1 basis. $6.45 million for 'national' projects that have an Australia-wide application and are fully funded by the Commonwealth (e.g. the Family Medicine Program, a vocational training program, which has 1650 trainees, for medical graduates wishing to enter general practice; and the secretariats of national non-government health organisations); and $0.9 million for health care planning and research in the form of grants to the States and the NT (on a $ for $ basis) and to institutions and persons. {:#subdebate-100-71} #### Treatment of Tuberculosis The provision of $1.5 million in 1980-81 is for the payment of allowances to persons (and their dependants) suffering from tuberculosis. The increase of $0.3 million reflects mainly the intake of refugees from South East Asia. {:#subdebate-100-72} #### Dental Services for School Children In co-operation with the States and the NT, assistance is provided for an Australia-wide school dental scheme to provide a free dental service to all primary school children. The children receive comprehensive dental care at local school clinics at regular intervals by either a dentist or dental therapist, and the scheme emphasises prevention and dental health education. At 30 June 1980, 9 training schools for dental therapists were operating and 573 school clinics (static and mobile) had been provided under the scheme. This represents a substantial addition to the 183 clinics operating in the States and the NT before the commencement of the scheme. Personnel employed under the scheme numbered 2618 at 30 June 1980. At that date a further 72 clinics were being developed. The Commonwealth will provide amounts up to a ceiling of $23.3 million, the same amount as in 1979-80, to the States and Northern Territory in 1980-81 as its 50 per cent share of approved operating and capital costs of the scheme. Health Services in the Territories, nec Since 31 December 1978, outlays under this heading relate only to the Australian Capital Territory. The Commonwealth provides or subsidises health services in the ACT of the type provided elsewhere by State and local government authorities. These include three hospitals (expected to have 909 operative beds and 44 nursing home beds in 1980-81), public health activities, ambulance services, school health services, 9 community health centres, 2 nursing homes (260 beds), 5 residential care hostels for the mentally ill and the handicapped (90 beds) and a centralised health services supply centre. During 1980-81 a new central health laboratory will be occupied, Stage I of a new radiotherapy facility will be provided and the construction of an additional health centre and a hostel for the handicapped (40 beds) will be commenced. Approval has also been given for the provision of 20 beds within the hospitals for the profoundly intellectually handicapped and of a short-term accommodation service for intellectually handicapped young adults. Net expenditure by the Commonwealth under this heading in 1980-81 on recurrent and capital costs of health services in the ACT is estimated at $48.3 million, $1.7 million more than expenditure in 1979-80. (A further $24.2 million - half the net operating costs of recognised hospitals in the ACT - is included under the heading 'Hospital Payments'.) {:#subdebate-100-73} #### Health Services for Aboriginals This item relates to outlays by the Department of Aboriginal Affairs under its grants-in-aid program ($5.96 million in 1980-81) and its State grants program ($13.58 million) to improve the standard of Aboriginal health. Under these programs, funds are provided for the prevention and control of alcohol abuse; to develop Aboriginals' responsibility for, and involvement in, the improvement of their own health through participation in the delivery of medical/health services; and for the development, through training, of Aboriginal expertise in all aspects of health care and administration. A program effectiveness review of Aboriginal health was completed in 1979-80. The review is under consideration in the light of the Parliamentary Standing Committee's Reports on Aboriginal Health and Alcohol Problems of Aboriginals and the Report of the National Trachoma and Eye Health Program. {:#subdebate-100-74} #### Other Health Services {:#subdebate-100-75} #### Medical Research Grants The Commonwealth provides financial assistance for medical research through the Medical Research Endowment Fund. Disbursement of the funds is made by the Minister for Health on the advice of the National Health and Medical Research Council, acting, where necessary, in accordance with the conditions of gifts or bequests made to the Fund. Assistance is provided to universities and other institutions such as the Howard Florey Institute of Experimental Physiology and Medicine and the Walter and Eliza Hall Institute of Medical Research, and to individual research workers or trainees, and may also be provided to Commonwealth and State Government departments. Reflecting mainly the Government's decision to increase funding of medical research in real terms in 1980-81, the provision for medical research programs in 1980-81 is $18.0 million, an increase of $4.4 million over 1979-80 expenditure. {:#subdebate-100-76} #### Commonwealth Serum Laboratories The Commonwealth Serum Laboratories Commission produces and sells pharmaceutical products as approved by the Minister for Health. Under amendments to the *Commonwealth Serum Laboratories Act* 1961 operative from 1 July 1980 the Commonwealth meets the full cost of those activities undertaken in the national interest at the request of the Minister for Health, whereas previously the Commonwealth, in the event of an overall net loss, met the costs or the net loss of CSL operations, whichever was the less. The national interest activities include research, the maintenance of production facilities and the holding of stocks of pharmaceutical products. The estimated cost of these activities in 1980-81 is $3.6 million. In addition, a further $6.1 million is being made available for capital works that commenced in 1978. The total estimated cost of these works is $12.3 million, $2.1 million of which is estimated to remain to be met in 1981-82. {:#subdebate-100-77} #### Commonwealth Institute of Health This facility, formerly the School of Public Health and Tropical Medicine, was renamed the Commonwealth Institute of Health on 3 March 1980 in recognition of the greater emphasis to be placed on health services research, preventive medicine and health surveillance, and occupational and environmental health. The Institute continues the School's basic functions of teaching, medical research and consultation. The amount of $3.9 million to be provided to the Institute for 1980-81 includes its recurrent and capital costs ($3.1 million, or S0.7 million higher than in 1979-80), an amount of $0.75 million for the commencement of a special epidemiological study into the effect of herbicides and other chemicals on Vietnam veterans, and $0.05 million towards the establishment of a malaria and other insectborne diseases monitoring station in Torres Strait. The station will be built in 1981-82 at an estimated cost of $1.0 million. {:#subdebate-100-78} #### Aids and Appliances The Commonwealth meets the cost of supplying and maintaining hearing aids (and batteries) for children, eligible pensioners and supporting parents in receipt of an allowance from the Department of Social Security. It also meets the cost of supplying artificial limbs and stoma appliances to those civilians who require them. The provision of $10.3 million in 1980-81 represents an increase of $3.0 million on the previous year, and includes the following: the supply and maintenance of hearing aids and batteries ($6.55 million); the supply of stoma appliances ($2.05 million); the supply of artificial limbs ($0.95 million); and 0 the provision, from April 1981, on specialist medical prescription, of essential aids to disabled persons who are not eligible for assistance under current arrangements so as to reduce their dependency on others in the home or in the place of employment. Included among the aids will be the widening of doorways, provision of access ramps for wheelchairs, grip rails, home aids, wheelchairs (on loan), and orthoses (including surgical footwear and walking aids) etc. The scheme is estimated to cost $0.7 million in 1980-81. {:#subdebate-100-79} #### Blood Transfusion Service and Products The annual operating costs of the Red Cross Society's Blood Transfusion Service in the States are shared by the States (60 per cent), the Society (the lower of 5 per cent of operating costs or 10 per cent of its previous year's income from donations) and the Commonwealth (the balance). In the Northern Territory the Commonwealth provides similar assistance. Approved capital costs are shared between the Commonwealth and the States and the Northern Territory on a $ for $ basis. Blood collected by the Transfusion Service is processed by the Commonwealth Serum Laboratories Commission and blood products are supplied, free of charge, to hospitals and approved pathologists for use in medical treatment and analysis. The Commonwealth reimburses the Commission for the cost of processing the blood. The Commonwealth contributions are estimated to increase by $1.7 million in 1980-81 to $13.6 million. {:#subdebate-100-80} #### Isolated Patients Travel and Accommodation Assistance Scheme Under arrangements introduced with effect from 1 October 1978, and liberalised in June 1979, the Commonwealth provides financial assistance to persons (and, if necessary, escorts/attendants) who live in country areas and are referred for specialist medical treatment not available locally. To be eligible for assistance a patient must reside outside the metropolitan areas of Sydney, Melbourne, Brisbane, Adelaide and Perth and reside more than 200 kilometres from the nearest place of specialist medical treatment; persons residing on certain specified offshore islands are exempt from this requirement. From 1 October 1980, the Commonwealth will meet the approved travel costs per return journey of all eligible patients, escorts and/or attendants less a total contribution of $20 regardless of whether the patient is escorted or not. Present arrangements provide for a $20 contribution by both patients and escorts or attendants. The rates used to determine the cost of journeys for which private motor vehicles are used will be reduced from 1 October to ensure that any reimbursement will be more closely related to private vehicle operating costs. An accommodation benefit of up to $20 per night ($15 at present) per person in respect of each approved overnight stay will also be payable. Largely because of greater use, the cost of the scheme is expected to increase by $1.9 million in 1980-81 to $4.2 million. {:#subdebate-100-81} #### Educational Campaigns Assistance is provided through the National Drug Education Program to support State, Northern Territory and national programs of education against the abuse of narcotics and other drugs of addiction. Arising from the emphasis given to the importance of such programs by the Australian Royal Commission of Inquiry into Drugs and the Senate Standing Committee on Social Welfare, the 1980-81 allocation for the Program has been increased by $0.6 million to $1.8 million. {:#subdebate-100-82} #### Quarantine Services Human, plant and animal quarantine measures are enforced to prevent the introduction of exotic diseases into Australia. By arrangement, the States and the Northern Territory administer animal, plant and certain human quarantine operations in their respective areas and the costs they incur on the Commonwealth's behalf are reimbursed. Human quarantine control measures at ports of entry are administered by the Commonwealth. The provision of $27.4 million for net outlays for quarantine services in 1980-81 (an increase of $2.1 million) reflects, in addition to general cost increases, the following factors: payments of $3.0 million to the States and the Northern Territory for animal, plant and human quarantine operations, including $1.6 million for new arrangements for seaport waste disposal; the quarantine component of coastal surveillance in Northern Australia ($0.3 million); costs associated- with the opening of the Cocos Island animal quarantine station ($0.5 million) ; a national quarantine publicity campaign designed to increase public awareness of the economic and social importance of keeping Australia free from exotic diseases and pests ($0.8 million); and a net reduction of $2.5 million in respect of capital expenditure on animal quarantine stations; the reduction mainly reflects the completion in 1979-80 of the station at Wallgrove (NSW) at a total cost of $4.2 million and reduced expenditure on extensions to the Fairfield Infectious Diseases Hospital which are due for completion in 1980-81 at a total cost of $2.1 million. The off-shore animal quarantine station on Cocos Island will be virtually completed by 30 June 1981, at a total estimated cost of $6.4 million. A start is to be made in 1980-81 on a new animal quarantine station at Guildford, Perth, $0.9 million being the total estimated cost, to replace the present station at Bicton. {:#subdebate-100-83} #### Medibank Private - Payment The outlay of $11 million in 1978-79 represented a 'once-only' grant to Medibank Private to enable it to undertake its future operations on a sound actuarial basis. {:#subdebate-100-84} #### Other This category includes the Commonwealth subsidy of $3.5 million to the Royal Flying Doctor Service, grants to the States and the Northern Territory for the Australian Encephalitis Eradication Campaign, and expenditure related to the administration of public health and the *Therapeutic Goods Act* 1966. Expenditure in 1979-80 reflected a test program costing $0.5 million designed to persuade people to adopt healthier lifestyles. The results of the program are being evaluated. Also included in 1979-80 was a grant of $0.1 million to the Walter and Eliza Hall Institute of Medical Research towards the cost, to be shared equally by the Commonwealth and Victorian Governments, of a feasibility study of a new building program. {:#subdebate-100-85} #### General Administrative Expenditure Expenditure under this heading comprises the general administrative and capital expenses of the bulk of the Department of Health. Included for 1980-81 is §3 million which represents final payments in respect of the winding up of the former general function of the Health Insurance Commission. The estimated cost in 1980-81 of the service fee payable to registered medical benefit funds for the cost of registering uninsured persons and paying Commonwealth medical benefits to them is $3.5 million, $0.9 million less than in *1979-80;* this reduction mainly reflects the full year effects of the 1 November 1979 revised health insurance arrangements. Provision of $92.5 million is made for expenditure on capital works (nec) including the National Acoustics Laboratory, Chatswood, and the National Biological Standards Laboratory, Canberra, the estimated total costs of which are $12 million and $27.6 million respectively. {:#subdebate-100-86} #### Recoveries Recoveries shown under this heading are in respect of charges met by certain countries for treatment given to their veterans through Repatriation facilities, charges made on departments and authorities for the use of the Department of Health's computer facilities, and other miscellaneous receipts. {: type="1" start="4"} 0. SOCIAL SECURITY AND WELFARE The Australian social security system is intended to protect people from economic hardship caused by events such as loss of earnings through age, invalidity, sickness, unemployment or the loss or absence of a supporting spouse as a result of death, desertion or long-term separation. It is designed also to compensate veterans for service-related disabilities and the dependants of those whose deaths are service-related and to assist parents with the expenses associated with raising children. Much of this assistance is provided by way of cash benefits. There are selective, or income tested, benefits such as invalid and widow's pensions and unemployment benefits, as well as universal benefits such as family allowances and handicapped child's allowance. In addition, assistance is provided, either directly or through State and local government authorities and voluntary agencies, for a wide range of welfare services for people with special needs. The aged, for example, may be assisted with their accommodation needs and the disabled may be trained so that they can re-enter paid employment. Assistance is provided in a variety of forms for the advancement of Aboriginals. Total direct outlays on social security and welfare are estimated to increase in 1980-81 by $1093.0 million to $9889.7 million which is equivalent to 27.4 per cent of estimated total Budget outlays. In addition to these direct outlays on social security and welfare, indirect assistance is provided through the personal income tax system. The dependent spouse and sole parent rebates assist single income families, and the deductions allowed for gifts to certain welfare bodies provide indirect assistance to the organisations concerned. Some further details on assistance provided through the taxation system are included in Appendix II to Statement No. 4. 1978-79 1979-80 1980-81 {:#subdebate-100-87} #### Actual Actual Estimate Change S million $ million $ million $ million Assistance to the Aged - {:#subdebate-100-88} #### Age Pensions and Allowances 3 229.0 3 508.8 3 967.0 + 458.2 {:#subdebate-100-89} #### Aged Persons Homes and Hostels 52.7 51.1 52.5 + 1.4 {:#subdebate-100-90} #### Home Care Services .... 15.6 18.0 22.3 + 4.2 {:#subdebate-100-91} #### Personal Care Subsidy . 13.4 14.5 16.0 + 1.5 {:#subdebate-100-92} #### Other....... 0.2 0.2 0.2 - {:#subdebate-100-93} #### Total...... 3 310.8 3 592.6 4 057.9 +465.4 Assistance to Veterans and their DependantsDisability Pensions and Allowances 417.8 434.6 494.7 +60.1 {:#subdebate-100-94} #### Service Pensions..... 436.2 525.2 680.5 +155.4 {:#subdebate-100-95} #### Other....... 0.7 0.6 0.6 {: type="a" start="a"} 0. Excludes block grants paid to the States and the Northern Territory for pre-school education Those amounts are recorded under the function 'Education'. Assistance to the Aged {:#subdebate-100-96} #### Pensions and Allowances Age pensions are payable, subject to an income test, to residentially qualified women aged 60 to 69 years and to residentially qualified men aged 65 to 69 years. Residentially qualified men and women aged 70 years and over receive a lower, fixed base rate of pension free of income test but they may qualify for the higher rates of income tested pensions if they meet the requirements of the income test. To be residentially qualified for age pension, a period of 10 years continuous residence in Australia at any time is usually necessary. Wife's pension is payable to an age pensioner's wife who does not qualify for an age, invalid or repatriation service pension in her own right. The pension is subject to an income test. Additional payments of $7.50 a week for each child are available to pensioners with children. A single pensioner with a child may also qualify for a guardian's allowance of $4 or $6 a week. The Government has decided to raise from November 1980 the additional payment for each child to $10 a week and the guardian's allowance to $6 or $8 a week. These payments are subject to an income test. Supplementary assistance of up to $5 a week is payable, subject to a special income test, to pensioners who pay rent or lodging charges. Upon the death of one of a married pensioner couple, the surviving member may receive, for up to six fortnightly instalments, the equivalent of the two pensions that would have been paid had the spouse not died. Age pension (including wife's pension paid to the wife of an age pensioner) is subject to personal income tax, but no tax is payable by those having little or no income apart from their pension. The additional payments for children and supplementary assistance are not subject to tax. At present, age pensions are not payable to persons in wards for the mentally ill that are declared as mental hospitals under the *Social Services Act.* Wives of patients in these 'declared' wards are, similarly, not paid wife's pension but may qualify for a widow's pension. The Government has decided that, from November 1980, age pensions may be paid to inmates of mental hospitals on the same basis as they are paid to inmates of other institutions and that wives of mental hospital inmates will be entitled to receive a wife's, pension rather than a widow's pension. Provision will be made to continue the existing entitlements of those persons currently in receipt of a widow's pension. The basic rates of pensions are adjusted automatically each six months for movements in the Consumer Price Index (CPI). The rates will be adjusted in November 1980 by the percentage increase in the CPI between the December quarter 1979 and the June quarter 1980, and in May 1981 by the percentage increase in the CPI between the June and December quarters 1980. The existing maximum rates of age pensions and additional payments, and the rates to apply from November 1980, are set out below: {:#subdebate-100-97} #### From November Pension or additional payment Existing 1980 $ a week S a week {:#subdebate-100-98} #### Pensions Standard (or single) rate of pension...... 61 .05 64. 10 Married rate of pension (each person)...... 50.85 53.40 Wife's pension......... 50.85 53.40 Free of income test pension - age pensioners aged 70 years and over - Standard rate......... 51.45 51.45 Married rate (each person)....... 42.90 42.90 {:#subdebate-100-99} #### Additional Payments Additional pension for each child (including a student child) . 7.50 10.00 Guardian's allowance - No child under 6 or invalid....... 4.00 6.00 At least one child under 6 or invalid..... 6.00 8.00 Supplementary assistance........ 5.00 5.00 The above rates also apply to invalid and widow's pensions, supporting parent's benefit and sheltered employment allowance. Widows and supporting parents may receive mother's allowance in lieu of guardian's allowance and sheltered employment allowees receive the income-test-free incentive allowance in lieu of supplementary assistance. The cost of the automatic increases in the rates of age pensions in November 1980 and May 1981 is estimated to be $140.6 million in 1980-81 and $362.8 million in a full year. The increases in the additional payments for children are estimated to cost $1.1 million in 1980-81 and $1.6 million in a full year. The average amount of age pension (including additions for children and supplementary assistance) is estimated to rise from about $50.50 a week in 1979-80 to about $55.65 a week in 1980-81, an increase of 10.2 per cent. The main reasons for this rise are increases in pension rates in line with the CPI, the fullyear effects of increased rates of pension introduced in November 1979 and May 1980 and increases to additional payments for children. The following table sets out the actual number of age pensioners at 30 June 1980 together with estimates of the number at the end of each of the next three years. These estimates are based on population projections provided by the Australian Bureau of Statistics and assume no changes to existing policy. {:#subdebate-100-100} #### Aged Persons' Homes and Hostels Under the *Aged or Disabled Persons Homes Act* 1954, organisations are assisted to provide suitable homes in which aged people may live in conditions approaching ordinary domestic life. Grants on a $2 for $1 basis may be made to religious and charitable organisations and local government bodies to meet the cost of erection, extension or purchase of homes for the aged. The maximum subsidy limits under the Act are $12 100 for a single unit and $14 035 for a double unit, plus a maximum of $1920 a unit for land. Totally and permanently incapacitated adults may also be accommodated in subsidised homes. Expenditure on the provision of homes is estimated at $29.9 million in 1980-81. The *Aged Persons Hostels Act* 1972 is designed to encourage the provision of hostel accommodation for the aged. Subject to certain conditions, the Commonwealth meets the cost of additional hostel accommodation provided by eligible organisations up to a maximum of $18 150 a person. The Commonwealth also pays an additional grant of up to $2400 a person for the purchase of land; a further $250 a person is available for furnishings. Accommodation provided under the Act must be allocated strictly on the basis of need and without any contribution from the prospective resident. Expenditure under the Act is estimated at $22.6 million in 1980-81. In December 1979 the Government decided to allocate a further sum of $225 million to projects under both Acts. Of this, $52.5 million will be spent in 1980-81. Grants for pensioner accommodation under Housing Agreements with the States and the Northern Territory are included under the functional heading Housing'. {:#subdebate-100-101} #### Home Care Services Under the *States Grants (Home Care) Act* 1969 and the *States Grants (Paramedical Services) Act* 1969, the Commonwealth provides funds in association with the States for the provision of a range of home care services, mainly for aged persons, and for the provision of senior citizens' centres. Under the *States Grants (Home Care) Act* 1969, the Commonwealth shares on a $1 for $1 basis with the States the cost of approved housekeeping or other domestic assistance provided wholly or mainly for aged persons in their homes. The Commonwealth also shares with the States, on a $2 for $1 basis, the approved capital cost of senior citizens' centres and, on a $1 for $1 basis, the cost of the salary of a welfare officer employed in conjunction with such a centre. Grants towards the cost of approved housekeeping and other domestic assistance for aged persons in their homes are estimated to rise from $10.4 million in 1979-80 to $12.1 million in 1980-81 because of the expansion of existing approved services. Grants towards the cost of the salary of a welfare officer employed in conjunction with a senior citizens' centre are estimated to rise from $1.1 million in 1979-80 to $1.2 million in 1980-81 because of the effect of salary increases awarded in 1979-80 and the higher use of approved positions. In December 1979, the Government announced its decision to allocate $12 million to the construction of senior citizens' centres in the three years 1980-81 to 1982-83. Of this, $4 million has been provided in 1980-81. Under the *States Grants (Paramedical Services) Act* 1969, the Commonwealth shares on a $1 for $1 basis with the States the cost of approved paramedical services provided wholly or mainly for aged persons in their homes. Victoria, South Australia and Tasmania are participating in the program. Grants in 1980-81 are estimated to be $0.9 million. The *Delivered Meals Subsidy Act* 1970 is designed to assist the establishment, expansion, improvement or maintenance of approved meals on wheels services. In 1979-80 the basic rate of subsidy was 25 cents a meal with an additional subsidy of 5 cents a meal payable for each meal with an approved Vitamin 'C supplement included. The Government has decided to increase the basic rate of subsidy to 40 cents a meal at an additional cost of $1.3 million in 1980-81. Expenditure under the Act in 1980-81 is estimated to be $3.9 million, compared with $2.5 million in 1979-80. {:#subdebate-100-102} #### Personal Care Subsidy Under the *Aged or Disabled Persons Homes Act* 1954, the Commonwealth pays a personal care subsidy of $15 a week to eligible organisations for persons aged 80 years or over and other residents of such homes who require, and are receiving, approved personal care while living in hostel-type accommodation provided by those organisations. The number of persons who qualify for the subsidy is estimated to increase from 19 630 at 30 June 1980 to 21 400 at 30 June 1981. As a result of the increase in numbers, expenditure on the subsidy is estimated to rise from $14.5 million in 1979-80 to $16 million in 1980-81. Assistance to Veterans and their Dependants {:#subdebate-100-103} #### Disability Pensions and Allowances Disability pensions and allowances (and certain other benefits including medical treatment) are available to certain veterans and their dependants. The term 'veteran' includes any man or woman eligible for consideration under the *Repatriation Act* 1920 or associated Acts by virtue of service in the Australian armed forces. The term 'service' includes service in the 1914-18 War, the 1939-45 War, the Korea and Malaya Operations, the Far East Strategic Reserve, special service in South East Asia (including Vietnam), and service with the Defence Force on or after 7 December 1972. Basic eligibility varies according to the nature of service. Broadly, for those with 'active service', incapacity or death resulting from 'any occurrence' during service may be accepted. For those with 'home service', however, the criterion is narrower, in that incapacity or death must have arisen out of, or be attributable to, that service. Incapacity or death arising from a condition existing prior to enlistment may be accepted if aggravated or contributed to by the conditions of service. Disability pension is not subject to personal income tax. {:#subdebate-100-104} #### Classes of Disability Pensions Pensions are paid to eligible veterans in three main categories: The Special Rate (known as the T & PI) Pension, payable to a veteran who, as a result of service, is blinded, or is totally and permanently incapacitated so that he is unable to earn more than a negligible percentage of a living wage; The Intermediate Rate, payable to a veteran who, because of the severity of his incapacity accepted as related to service, can work only part-time or intermittently and in consequence is unable to earn a living wage; and The General Rate, payable to a veteran who has an incapacity accepted as related to service but who is still able to work full-time. The amounts payable range from 10 per cent to 100 per cent of the maximum General Rate, according to the assessed degree of incapacity. Pensions are also paid to the wives of incapacitated veterans and to their children. Such pensions are paid at rates varying with the assessed degree of the particular veteran's incapacity. When the death of a veteran has been accepted as related to his service, his widow qualifies for the war widow's rate of pension and for associated benefits, while his children each receive pensions at 'orphan' rates and other benefits. If a veteran's death has not been accepted as related to service but at the time of death he was receiving, or is later adjudged to have been eligible to receive, a pension at the Special Rate or as a double amputee, his dependants qualify for pensions as if his death had been accepted as related to service. Other dependants of deceased veterans may qualify for pensions in certain circumstances. {:#subdebate-100-105} #### Allowances Various allowances are provided to supplement disability pensions. These allowances vary according to the type or severity of disablement and the special needs of the pensioners. {:#subdebate-100-106} #### Rates of Pensions and Allowances The Special, Intermediate and General Rate disability pensions and the war and defence widow pensions are automatically adjusted each May and each November in line with movements in the Consumer Price Index. The Government has decided that the rates of war orphans' pensions and a number of minor benefits including attendants' allowances and allowances under Schedule 5 to the *Repatriation Act* 1920 should be increased; details are set out below. The existing and proposed rates of the main disability pensions and allowances are shown in the following table: >Proposed from November A Temporary Totally Incapacitated (TTI) pension is an additional rate of pension paid to a veteran who has been classified as temporarily totally incapacitated by service-related incapacity and unable to earn other than a negligible percentage of a living wage. Currently a veteran may only be considered temporarily totally incapacitated if he has been hospitalised or receiving treatment for three months or is likely to be incapacitated for three months. The Government has decided that a Temporary Incapacity Allowance should be introduced to compensate veterans who undergo hospitalisation and are totally incapacitated by that hospitalisation and consequential convalescence or treatment for a continuous period of more than 4 weeks. A Loss of Earnings Allowance is paid to veterans who have suffered loss of earnings during the investigation of a claim or while receiving medical treatment for a service-related disability. In certain circumstances it may also be paid in respect of loss of earnings caused by any illness or incapacity. The allowance is paid at a rate not exceeding the Special Rate pension less any pension payment at the time, or actual loss of earnings, whichever is lower. The increases in the rates of disability pensions in November 1980 and May 1981 are estimated to cost $16.49 million in 1980-81 and $41.35 million in a full year. The other increases in benefits and allowances included above are estimated to cost $0.38 million in 1980-81 and $0.54 million in a full year. At 30 June 1980, there were 434 770 veterans and their dependants in receipt of disability pensions and during 1980-81 the number is estimated to decrease by 12 820 to 421 950. The effect on expenditure of this estimated decline in numbers is more than offset by the full year effects of increased rates of benefits introduced in 1979-80 and the increase in benefit rates in November 1980 and the expected increase in May 1981 in line with movements in the Consumer Price Index. It is expected that the number of veterans receiving disability pensions will continue to decline. This trend would be consistent with the expected reduction in the number of ex-servicemen and women in Australia over the next three years. The following table provides an estimate of the number of ex-servicemen and women at 30 June in the years 1980 to 1983. *Source:* Department of Veterans' Affairs. These projections are based on ABS 'Survey of Ex-Service Personnel, Widows and Children' 1971 and are currently beinp revised in the light of new estimates from a similar survey carried out in 1979. Figures exclude peace time ex-service personnel, currently 40 900, who did not serve during war time or in a special area. {:#subdebate-100-107} #### Service Pensions Service pensions may be payable to: a male veteran who served in a theatre of war and who has attained the age of 60 years or is permanently unemployable; a female veteran who served in a : theatre of war or embarked for service abroad and has attained the age of 55 years or is permanently unemployable; ex-members of the Defence Forces of British Commonwealth countries who satisfy the above criteria and have at least ten years residence in Australia; ex-members of formally raised Armed Forces of Allied countries who meet the same criteria which apply to members of the forces of a Commonwealth country, providing they have not served at any time in the forces of a country which was at the time at war with Australia. Service in a 'theatre of war' means, in respect of the 1914-18 War or 1939-45 War, service 'at sea, in the field or in the air in naval, military or aerial operations against the enemy in an area, or on an aircraft or ship of war, at a time when danger from hostile forces of the enemy was incurred in that area or on that aircraft or ship of war . . . ' In respect of certain later service, 'service in an operational area' and 'special service' as defined are the qualifications equivalent to service in a 'theatre of war'. A service pension is the broad equivalent of an age or invalid pension. The advantages to the veteran are availability of the service pension five years earlier and, in certain circumstances, eligibility for a wide range of repatriation medical treatment services. Service pensioners are eligible for the same range of pensions and allowances as age pensioners and the rates of benefits are the same. Like age pensions, service pensions will be increased in November 1980 and in May 1981 in line with movements in the CPI. Service pension is paid, subject to income test, to eligible veterans under the age of 70 years. A basic rate (that payable as at 1 November 1978) of service pension, not subject to automatic indexation, is paid, free of income test, to eligible veterans aged 70 years and over. Increases in the rate of service pension as a result of automatic indexation are paid to such veterans in the form of an income-tested supplement. For eligible veterans under 70 years of age and in the assessment of the income-tested supplement for veterans aged 70 years and over, 50 per cent of any disability pension received is disregarded as income for service pension income test purposes. With this exception, service pensions are subject to the same income test arrangements as social security pensions. Service pensions are subject to income tax. At 30 June 1980, there were 239 960 service pensioners (including wives) and in 1980-81 the number is estimated to increase by 24 440 to 264 400. The increase in estimated expenditure in 1980-81 reflects this estimated increase in numbers, the full-year effect of pension increases granted in 1979-80 and the increased rates to apply in 1980-81. The increases in rates of service pensions in November 1980 and May 1981 are estimated to cost $28.12 million in 1980-81 and $78.75 million in a full year. It is expected that the number of veterans receiving service pensions will continue to grow in the short term. This would be consistent with the age profile of ex-servicemen as illustrated in the following table. Age Profile of Iix-servicemen at 30 June 1980 Ex-servicemen as per cent of Total male total male Percentage of population population at Number of total (age 25 corresponding *Source:* Department of Veterans' Affairs. Estimates of ex-servicemen are based on ABS 'Survey of Ex-Service Personnel, Widows and Children', 1971 and are presently being revised in the light of new estimates from a similar survey conducted in 1979. The remaining estimates were provided by the ABS. Assistance to the Handicapped {:#subdebate-100-108} #### Invalid Pensions and Allowances Invalid pensions are payable to people aged 16 years or more who are permanently incapacitated for work to the extent of not less than 85 per cent or are permanently blind. Pensions are subject to the income test except in the case of people who are permanently blind. No period of residence is necessary if the permanent incapacity or blindness occurred in Australia. If the permanent incapacity or blindness occurred outside Australia, the residence qualification is the same as for an age pension. Invalid pensioners are eligible for the same additional payments as are age pensioners and the rates of payment are the same. Wife's pension is payable, subject to an income test, to the wife of an invalid pensioner if she is not eligible for an age, invalid or service pension in her own right. Invalid pension paid to a person of age pension age and wife's pension paid to the wife of such an invalid pensioner are subject to personal income tax. Pensions payable to an invalid pensioner below age pension age are not subject to tax. Additional payments are not subject to tax. As in the case of age pensions, the Government has decided to pay invalid pensions to inmates of certain wards of mental hospitals on the same basis as they are paid to inmates of other institutions. Wives of mental hospital inmates will be entitled to receive a wife's pension rather than a widow's pension. Provision will be made to continue the existing entitlements of those persons currently in receipt of a widow's pension. At 30 June 1980 there were 289 300 invalid pensioners (including wives of invalid pensioners in receipt of wife's pension) and during 1980-81 the number is estimated to increase by 13 500 to- 302 800. The average amount of invalid pension (including additions for children and supplementary assistance) is estimated to rise from about $52.35 a week in 1979-80 to about $58.90 a week in 1980-81, an increase of 12.5 per cent. The main reasons for this rise are the estimated increases in pension rates in November 1980 and May 1981 in line with movements in the CPI, the full year effects of increased rates of pension introduced during 1979-80, and increases to the additional payments for children. The estimated cost of the automatic increases in the rates of invalid pensions is $35.6 million in 1980-81 and $91.9 million in a full year. The estimated cost of the increase in the additional payments for children is estimated to be $6.8 million in 1980-81 and $10.4 million in a full year. {:#subdebate-100-109} #### Sheltered Employment Allowances Sheltered employment allowances are payable to disabled people engaged in approved sheltered employment who are qualified to receive an invalid pension or who would become so qualified if they ceased to be provided with sheltered employment. The allowance is subject to the same income test as is applied to the invalid pension and the rates of payment are the same. In lieu of supplementary assistance, an incentive allowance of $5 a week is paid (free of income test) to the recipients of sheltered employment allowance. Neither sheltered employment allowance nor incentive allowance is subject to tax. {:#subdebate-100-110} #### Handicapped Children's Benefits and Allowances A handicapped child's allowance of $65 a month is payable to parents or guardians in respect of a child under the age of 1 6 years who is cared for at home and who, because of the severity of the handicap, is in need of constant care and attention. It is also payable in respect of full-time student children aged 16 and under 25 years except where the student is in receipt of an invalid pension. Subject to the discretion of the Director-General, a handicapped child's allowance is also payable, wholly or in part, where a person has the custody, care and control of a substantially handicapped child and, as a consequence of continuing substantive expenditure associated with the child's disability, the person suffers financial hardship. A handicapped child's allowance is not subject to tax. The Government has decided to raise the handicapped child's allowance to $73 a month from November 1980 at an estimated cost of $1.7 million in 1980-81 and $2.5 million in a full year. The number of recipients of handicapped child's allowance at 30 June 1980 was 25 400 and this number is estimated to increase to 27 000 by 30 June 1981. Expenditure is estimated to rise from $19.1 million in 1979-80 to $20.3 million in i980-81 as a result of the increased numbers expected to qualify for the allowance and the increase in the rate of payment. The Commonwealth pays a handicapped children's benefit to non-profit organisations and local government bodies conducting approved homes providing accommodation and care for intellectually and physically handicapped children. The rate of benefit is $5 a day for each child under 16 years of age. The benefit continues to be paid to an eligible organisation when a child is absent from the institution for a short period only, such as a week-end home visit. Expenditure is estimated to increase from $1.7 million in 1979-80 to $1.8 million in 1980-81 in line with an expected increase in the number of organisations, and thus the number of children, becoming eligible for subsidy. {:#subdebate-100-111} #### Handicapped Persons' Facilities Under the *Handicapped Persons Assistance Act* 1974, the Commonwealth provides subsidies on a $4 for $1 basis to non-profit organisations and local government bodies for the purchase, construction, extension, alteration, rental and maintenance of premises that cater for physically or intellectually handicapped people. Services qualifying for subsidy comprise day training centres for handicapped children, activity therapy centres, training centres and sheltered workshops for handicapped adults and residential facilities for people who use these services. Residential facilities for people who, because of a disability, need special accommodation to allow them to engage in normal outside employment, also qualify for subsidy. Subsidies on a $4 for $1 basis are available also for the cost of furnishing and equipping the various types of centres, while assistance with operating costs may be provided by means of staff salary subsidies. The latter are usually on a $ for $ basis although a higher proportion, up to 100 per cent, may be paid for the first two years of operation of some new projects. A training fee of $500 is paid to eligible sheltered workshops for each former employee who, after completing more than six months sheltered employment, graduates to and retains employment for 12 months or more. In December 1979, the Government announced its decision to further expand the number of services subsidised under the Act by allocating $33 million over the three years 1980-81 to 1982-83 for the establishment of new services. $11 million has been provided in 1980-81 towards the establishment of new services. In addition, $0.3 million has been made available in 1980-81 to upgrade the effectiveness and quality of services for the handicapped. {:#subdebate-100-112} #### Rehabilitation Services The Commonwealth Rehabilitation Service (CRS) attempts to restore disabled persons to their fullest physical, mental, social and vocational usefulness. Treatment and training are provided free to persons if there is a reasonable prospect of their being able to undertake full-time, part-time or sheltered employment or household duties or of their becoming capable of leading an independent or semiindependent life at home. The following broad categories are accepted for rehabilitation: pensioners and claimants for pension who would be likely to derive substantial benefit from that treatment and training; beneficiaries and claimants for benefit who, without that treatment and training, would be likely to become unemployable; persons being paid allowances under section 9 of the *Tuberculosis Act* 1948 and who would be likely to derive substantial benefit from that treatment and training; persons of 14 or 15 years who, without treatment and training, would be likely to become qualified to receive invalid pension on attaining the age of 16 years; and any men aged from 16 to 65 or women aged from 16 to 60 who would be likely to derive substantial benefit from that treatment and training. Persons who do not fall within these eligibility criteria may be accepted for rehabilitation on a paying basis. Expenditure is estimated to rise from $21.1 million in 1979-80 to $25.0 million in 1980-81 as a result of an expected increase in the numbers to be accepted for treatment and training and the full year effect of price and salary increases during 1979-80. The number of persons undergoing rehabilitation and training is estimated to increase from 2746 at 30 June 1980 to 2910 at 30 June 1981. Provision is also made for the Commonwealth's share of the costs of establishing and operating a rehabilitation centre in Hobart jointly with the Tasmanian Government. The Centre is expected to be completed and commence operations during the financial year. The Government has decided to establish a permanent rehabilitation facility in Newcasde in conjunction with facilities operated by the State Health Authority. The Government has also decided that planning is to proceed for the provision of a multi-purpose rehabilitation facility in the western suburbs of Melbourne. In addition to its multi-purpose centres, the CRS presently operates two Work Preparation Centres that aim to prepare mildly intellectually handicapped young people for open employment. The Government has reviewed the operations of these centres and has decided to establish a further two centres during 1980-81 - one in Sydney and one in Melbourne. When in full operation, the new centres will train up to 200 people a year for suitable employment. {:#subdebate-100-113} #### Other The Government has announced its intention to support the observance of the international Year of Disabled Persons (IYDP), 1981, and has provided $0.9 million in 1980-81 to undertake a national publicity and information program, to assist the development of activity in the non-government sector through a National Committee of Non-Government Organisations and to support certain key national initiatives. In addition, the Government has decided to implement a number of measures to assist disabled persons. **Major measures** are dealt with under relevant functional headings. One example of Government support for IYDP is the provision of up to $500 000 to the Australian Council for Rehabilitation of Disabled towards the cost of a national headquarters building to be constructed in Canberra. Of this, $30 500 was paid in 1979-80; the balance of $469 500 has been provided for in 1980-81. In 1980-81 $150 000 has been provided for interim assistance for the production of Braille books pending a review of arrangements for longer term assistance. {:#subdebate-100-114} #### Assistance to Widows and Single Parents {:#subdebate-100-115} #### Widow's Pension and Allowances Pensions are payable to widows, subject to an income test. No period of residence is necessary if a woman and her husband were residing permanently in Australia when she became a widow. In other cases, there is a residence qualification of either 5 years continuous residence in Australia immediately prior to claiming a pension or 10 years continuous residence in Australia at any time. There are three classes of widows who receive pension: Class A widow - a widow with one or more qualifying children in her care; Class B widow - a widow without qualifying children who is at least 50 years of age or at least 45 years of age if her Class A pension ceased after she reached that age because she no longer had a qualifying child in her care; and Class C widow - a widow without qualifying children who is in necessitous circumstances within 26 weeks of her husband's death. For all classes, the term 'widow' includes a woman who was the common-law wife of a man for at least three years immediately before his death. For Class A and B, it also includes a wife who has been deserted for six months, a divorced woman and a woman whose husband has been imprisoned for six months. Widow pensioners are eligible for the same additional payments as are age pensioners (except that mother's allowance is paid in lieu of guardian's allowance) and the rates of payment are the same. These payments are subject to an income test. Widows' pensions are subject to personal income tax, although no tax is payable by those having little or no income apart from their pension. The additional payments are not subject to tax. At 30 June 1980 there were 91 100 Class A widows, 74 900 Class B widows and 100 Class C widows in receipt of pensions. It is estimated that the number of Class A widow pensioners will increase by 3000 to 94 100 during 1980-81 and the number of Class B and Class C widow pensioners will increase by 3300 to 78 300. The average rate of pension for Class A widow pensioners is estimated to rise from $73.00 a week in 1979-80 to $84.25 a week in 1980-81, an increase of 15.4 per cent. The average rate for Class B and Class C widows' pensions is estimated to rise from $55.25 a week in 1979-80 to $61.95 a week in 1980-81, an increase of 12.1 per cent. The main reasons for these increases are the automatic increases in pension rates in November 1980 and May 1981 in line with movements in the CPI, the full year effect of increased rates of pension introduced during 1979-80 and increases in additional payments for children. The estimated cost of the increase in the rates of widows' pensions in November 1980 and May 1981 is $22.3 million in 1980-81 and $57.4 million in a full year. The cost of the increases in the additional payments for children is estimated to be $21.8 million in 1980-81 and $33.4 million in a full year. {:#subdebate-100-116} #### Supporting Parents' Benefits and Allowances A supporting parent's benefit is paid to certain sole mothers ineligible for a Class A widow's pension. In the case of unmarried mothers, benefit becomes payable six months after the child's birth. In other cases, benefit becomes payable six months after the event which gives rise to eligibility (eg separation) provided a child is six months old. Supporting parent's benefit is payable immediately to a widowed father, an unmarried father, a father whose de facto wife dies or a divorced father, provided a child is six months old. It is payable to separated husbands and de facto husbands and to husbands and de facto husbands of prisoners after six months from the date of the event which gives rise to eligibility provided a child is six months old. The benefit is payable at the same rate as the Class A widow's pension and subject to similar conditions. Supporting parents may also be eligible for supplementary assistance, additional benefit for children and mother's or guardian's allowance. From November 1980, supporting parent's benefit will be extended to cover the first six months of sole parenthood. As a result of the removal of the six months waiting period, it is estimated that an average of about 15 900 additional supporting parents will qualify for a supporting parent's benefit. The number of supporting parent beneficiaries at 30 June 1981 is estimated to be about 93 400 - some 19 500 higher than the number of supporting parents assisted at 30 June 1980. The average rate of benefit (including additions for children and supplementary assistance) in 1980-81 is estimated to be $80.20 a week, $5.60 a week more than in 1979-80. The estimated cost of indexation of supporting parent's benefit in November 1980 and in May 1981 is about $11.9 million in 1980-81 and about $30.8 million in a full year. The increases in the additional payments for children are estimated to cost $19.3 million in 1980-81 and $29.6 million in a full year. The removal of the six months waiting period is estimated to cost $43.2 million in 1980-81 and $63.1 million in a full year. These costs include the cost the Commonwealth would otherwise have borne under the *States Grants (Deserted* *Wives) Act* and by way of special benefit. {:#subdebate-100-117} #### Other Under the *States Grants (Deserted Wives) Act* 1968 the Commonwealth shares, up to certain limits, on a $1 for $1 basis with the States the cost of helping sole mothers ineligible for Commonwealth assistance. Assistance is usually provided during the first six months after the date of the event which gives rise to eligibility (eg the birth of a child or separation). The main groups of mothers assisted are separated wives, wives of prisoners and unmarried mothers. After the first six months, these groups of mothers may qualify for either a Class A widow's pension or a supporting parent's benefit. Under separate arrangements, the Commonwealth now shares these costs with the Northern Territory on a similar basis. Victoria withdrew from these arrangements from 1 January 1980 in respect of all those becoming eligible after that date. South Australia withdrew, on the same basis as Victoria, from 1 July 1980 and Western Australia has indicated that it will withdraw from 26 August 1980. Sole mothers affected in these States are being considered for grant of Commonwealth special benefit. As explained in the preceding section, the Government has decided that the six months waiting period for supporting parent's benefit is to be removed from November 1980. As a consequence, expenditure under the *States Grants (Deserted* *Wives) Act* is estimated to fall from $24.7 million in 1979-80 to $13.8 million in 1980-81. The *States Grants (Deserted Wives) Act* will be repealed. {:#subdebate-100-118} #### Assistance to Families {:#subdebate-100-119} #### Family Allowances Family allowances are payable to people with children under 16 years of age or dependent children aged 16 years but under 25 years and receiving full-time education at a school, college or university and not in employment. Allowances are usually paid to the mother. Family allowance, orphan's pension and handicapped child's allowance are not payable outside Australia except where the child is: temporarily abroad; or living abroad pending migration to Australia (within 4 years). Parents of children receiving student allowances under the Tertiary Education Assistance Scheme and other related scholarship schemes are not eligible for family allowances, but appropriate adjustments have been made to the rates of student allowances so that families of tertiary students receive broadly the same minimum payments. Students receiving invalid pension are not eligible for family allowances. Family allowances are not subject to income tax. The rates of family allowance are: $ a month First child Second child Third child Fourth child Fifth and later children Child in an institution 15.20 21.70 26.00 26.00 30.35 21.70 The following table sets out the actual number of children in respect of whom family allowances were paid at 30 June 1980 together with estimates of the number at the end of the next three years. These estimates are based on population projections provided by the Australian Bureau of Statistics and assume no changes to existing eligibility criteria. Children in Families Total Full-time Per cent students change aged 16 Children over Under to 24 in Insti- previous 30 June 16 years years Total tutions Number year 1980 1981 (estimate) . 1982 (estimate) . 1983 (estimate) . {:#subdebate-100-120} #### Source: Department of Social Security Outlays are estimated to decrease from $1012.7 million in 1979-80 to $953.0 million in 1980-81 because of one additional payday charged to 1979-80. {:#subdebate-100-121} #### Children's Services The Commonwealth provides capital and recurrent assistance for services for children and their families - for example, day care, vacation care and after school care projects. Expenditure on children's services (excluding a block grant to the States and the Northern Territory to assist in meeting the costs of pre-school education) is estimated to be $36.13 million in 1980-81, about the same amount as was provided in 1979-80. The block grants for pre-schools are recorded under the functional heading Education'. {:#subdebate-100-122} #### Orphan's Pension An orphan's pension of $47.70 a month is payable, free of income test, to the guardian of a child under 16 years of age or of a full-time student aged 16 but under 25 years of age. The Government has decided that orphan's pension should be increased to $55.70 a month from November 1980 at an estimated cost of $0.3 million in 1980-81 and. $0.4 million in a full year. The number of recipients of orphan's pension at 30 June 1981 is estimated to be about 4000 - approximately the same as at 30 June 1980. It is paid in respect of a child both of whose parents are dead, or if the whereabouts of a sole surviving parent is unknown, or if its sole surviving parent or adoptive parent is in prison or in a mental hospital. Orphan's pension is not payable in respect of a person who is receiving an invalid pension. lt is not subject to income tax. Expenditure is estimated to be $2.25 million in 1980-81 compared with $2.05 million in 1979-80, the increase mainly reflecting the increase in rates of orphan's pensions. {:#subdebate-100-123} #### Other It is estimated that $5000 will be spent on maternity allowance in 1980-81 on outstanding claims for eligible births. Maternity allowance was payable, as a lump sum, to mothers in respect of children born on or before 31 October 1978. The Government has provided $2.75 million in 1980-81 for grants to approved marriage guidance organisations and pre-marital education organisations. To maintain the level of educational activity in family planning, $0.78 million will be provided in 1980-81. Grants to family planning associations for clinical services in 1980-81, estimated at $2.2 million, are provided under Health Program Grants *(see* Section 3 - Health). In addition, $0.93 million has been provided for the first full-year's operation of the Institute of Family Studies established under the *Family Law Act* 1975. Assistance to the Unemployed and Sick {:#subdebate-100-124} #### Unemployment Benefits Sickness and Special Benefits Unemployment benefit is available, subject to an income test, to persons without employment yet willing and able to undertake suitable work. Sickness benefit, also subject to an income test, is available for persons who lose income when they are temporarily incapacitated for work. A special benefit may be paid to persons ineligible for pension or for unemployment or sickness benefit if they are unable to earn a sufficient livelihood for themselves and their dependants. To be eligible for unemployment or sickness benefit, a person must be at least 16 years of age and under 60 (females) or under 65 years (males). The person must also have lived in Australia for at least a year immediately prior to claiming benefit or intend to remain permanently. The basic rates of benefit are generally the same as for age and invalid pensions except for single people under 18 years of age and older unemployed people without dependants. Single people under 18 years of age are eligible for a maximum payment of $36 a week, while unemployed people aged 18 years and over without dependants are eligible for a maximum payment of $51.45 a week. In both cases the benefit is not subject to the automatic indexation provisions for increases in the CPI. The Government has decided that, from November 1980, the maximum rate of unemployment benefit for unemployed people aged 18 years and over without dependants should be raised to $53.45 a week. All unemployment and sickness beneficiaries with children are eligible for an additional allowance for each dependant child at the same rate as for children of pensioners. Unemployment and sickness beneficiaries are not eligible for mother's or guardian's allowance. After receiving benefits for six consecutive weeks, sickness beneficiaries become eligible, subject to a special income test, to receive supplementary allowance of up to $5 a week if they pay rent. This allowance is not payable to beneficiaries in hospital who have no dependants. Unemployment and sickness benefits are currently withdrawn on a dollar for dollar basis for private income received above free areas of: $3 a week for a single person aged under 21 years with a parent living in Australia; and $6 a week for all other cases. The Government has decided that the income test for unemployment and sickness benefits should be liberalised. From November 1980, benefit will be withdrawn on a 50 per cent basis for private income within the ranges: $3 to $40 a week for single persons aged 16 and 17 years with a parent living in Australia; and $6 to $50 a week for all other cases. Benefits will be withdrawn on a dollar for dollar basis for all private income in excess of these upper limits. Unemployment and sickness benefits, including additional payments for children and supplementary allowance, are subject to personal income tax. The cost of the automatic increase in the rates of unemployment, sickness and special benefits in November 1980 and May 1981 is estimated to be $14.5 million for unemployment benefit, $6.2 million for sickness benefit and $1.0 million for special benefits in 1980-81, and to be $37.3 million, $15.7 million and $2.4 million for these benefits respectively in a full year. The increase in additional payments for children is estimated to cost SI 1.5 million in 1980-81 and §17.5 million in a full year. The cost of increasing the maximum rate of unemployment benefit for persons aged 18 years and over without dependants is estimated to be $13 million in 1980-81 and $19.5 million in a full year. The average number of unemployment beneficiaries underlying the 1980-81 estimate is 300 000 compared with the average number of beneficiaries in 1979-80 of 306 300. The average number of sickness beneficiaries is estimated to rise from 36 100 in 1979-80 to 39 000 in 1980-81 and the average number of special beneficiaries is estimated to remain steady at about 16 400. {:#subdebate-100-125} #### Unemployment Relief {:#subdebate-100-126} #### Community Youth Support Scheme The Community Youth Support Scheme (CYSS) was introduced in 1976 to provide a supportive environment within which unemployed young people are assisted to develop and maintain skills and job-orientation while unemployed. To this end CYSS provides financial support to community committees and local government authorities to conduct projects which involve young people in a range of employment-orientation and skill development programs, recreational activities and community service work. In addition to normal entitlement to unemployment benefit, participants in CYSS projects may be paid an allowance of up to $6 a week for fares and incidental expenses incurred. In 1979-80 expenditure of $11.6 million enabled about 50 000 young people to participate in 274 projects. Provision of $11.6 million is again made for a similar number of participants in 1980-81 althougli some increase in the number of projects by June 1981 is anticipated. {:#subdebate-100-127} #### Fraser Island Following its decision to cease granting export licences for minerals from sand mining on Fraser Island, the Commonwealth agreed to provide $10 million to Queensland for allocation by that State to create employment opportunities in the Maryborough region. The Commonwealth recently agreed to extend this assistance by an additional $450 000 in 1979-80. Payments therefore totalled $10.45 million comprising $1 million in 1976-77, $3 million in 1977-78 and in 1978-79 and $3.45 million in 1979-80. {:#subdebate-100-128} #### Relocation Assistance Scheme The Relocation Assistance Scheme, which has operated since 1976, helps overcome the difficulties of unemployed persons who are unable to secure continuing employment in their present locality and are without prospects of doing so, even with re-training. Assistance is made available to enable eligible persons to move to another locality to take up either employment or training under the NEAT scheme leading to employment. Assistance is provided for fares and for other costs incurred by unemployed workers and their families changing their place of permanent residence, including removal expenses of up to $750, re-establishment costs (related to family size), legal and agents' fees of up to $1000 or rental allowances of up to $500. During 1979-80 approximately 1500 applicants were assisted under this scheme at a cost of $1 million. Provision has been made for expenditure of $1.1 million in 1980-81; this estimate assumes a similar number of applicants will be assisted. {:#subdebate-100-129} #### Other Welfare Programs {:#subdebate-100-130} #### Funeral Benefits A funeral benefit of up to $20 is payable to any person liable for the funeral costs of an age or invalid pensioner. A higher benefit of up to $40 is payable to an age, invalid or widow pensioner (including a person in receipt of supporting parent's benefit) liable for the funeral costs of a spouse, a child or another such pensioner. For these benefits, 'pensioner' means a person who satisfies, or had satisfied, the Commonwealth pensioner 'fringe' benefits income test. Expenditure is expected to remain steady at $1.45 million in 1980-81. {:#subdebate-100-131} #### Telephone Rental and Postal Concessions Pensioners, supporting parent beneficiaries and recipients of some other benefits who meet certain requirements, including, in most cases, a special income test, may be eligible for mail redirection concessions and a reduction of onethird in the basic annual rental for a telephone. Outlays on these concessions to social security and repatriation pensioners are expected to be $19.1 million in 1980-81. {:#subdebate-100-132} #### Assistance to Homeless Men and Women The *Homeless Persons Assistance Act* 1974 provides for the payment of capital grants to voluntary agencies and to local authorities for approved projects (such as night shelters, reception centres and hostels) in order to upgrade and replace inadequate existing accommodation and to build new facilities for homeless persons. It also provides payment of a salary subsidy of 50 per cent of the salary of approved staff, an accommodation subsidy of 75 cents a person a day and a basic rate of meal subsidy of 25 cents a meal in respect of non-resident homeless persons. The Government has decided to increase the accommodation subsidy to $1.20 a person a day and the basic rate of meal subsidy to 40 cents a meal. Outlays in 1980-81 are estimated to be $5.0 million of which $2.3 million is for the funding of two major capital projects presently under construction. {:#subdebate-100-133} #### Assistance for Migrants Additional funds have again been provided in line with the triennium funding recommendations in the Review of Post-Arrival Programs and Services for Migrants (Galbally Report). With one exception, the programs listed below are now into their third year of operation. Grants to enable agencies serving ethnic communities to employ social workers will increase from $1.5 million to $1.67 million in 1980-81; some 100 continuing or new grants are expected to be made to these agencies. These include grants under special programs for the aged, to meet information needs on welfare rights under an ongoing program, and under block funding schemes applying to larger agencies. Subsidies for self-help activities in ethnic communities have again been funded at the continuing level of $150 000 recommended in the Report; 47 subsidies for self-help activities were approved in 1979-80. An amount of $1.19 million has been provided for translating and interpreting services, which includes the additional funds proposed in the Report. A further $0.24 million has been provided for the second year of a program under which similar services are provided by some States under cost-sharing arrangements. A provision of $1.28 million has been made in 1980-81 for the estimated 23 migrant resource and information centres that will be operating throughout Australia in 1980-81. An allocation of $0.28 million has also been made for the continuing program for reimbursing voluntary agencies providing material assistance to migrants arriving in necessitous circumstances; 15 326 migrants received assistance under this program in 1979-80. Overall provision for these activities has increased from $4.78 million in _ 1979- 80 to $4.90 million in 1980-81. *Welfare Programs in the Australian Capital Territory* The Commonwealth provides welfare benefits and subsidies to ACT residents on a similar basis to those paid by State governments. It is estimated that $7.6 million will be provided for those purposes in 1980-81. The provision for 1980- 81 includes payment of benefits to sole parents by the Department of the Capital Territory for part of the year only, owing to the extension of the supporting parent's benefit from November 1980. In addition, commencing in 1980-81, grants and subsidies to certain ACT community and welfare organisations which were previously included under this item will be funded from the recently established ACT Community Development Fund. {:#subdebate-100-134} #### Other The Commonwealth reimburses the Australian National Railways Commission for part of the cost of providing non-commercial concessional fares and freight rates, mainly to pensioners; the cost to the Commonwealth of these concessions in 1980-81 is estimated at $1.5 million, the same as expenditure in 1979-80. The Australian Institute of Multicultural Affairs was established in 1979 to develop social awareness and tolerance of diverse cultures by commissioning studies, disseminating information and other educational activities. An amount of $1.45 million is provided for this activity in 1980-81, as recommended in the Review of Post Arrival Programs and Services for Migrants (Galbally Report). In 1980-81 $0.5 million has been provided for grants to community welfare agencies in financial difficulties or in need of support in providing emergency relief. Aboriginal Advancement Programs nec The Government's major new initiative in Aboriginal affairs in 1980-81 arises from the establishment of the Aboriginal Development Commission (ADC). The ADC commenced operations on 1 July 1980 and has assumed responsibility for the activities of the Aboriginal Land Fund Commission, the Aboriginal Loans Commission and the Department of Aboriginal Affairs' grants-in-aid enterprises programs. In addition, the Commission will advise and make recommendations to the Minister for Aboriginal Affairs on the economic and social development of Aboriginals. Of the $23.8 million provided to support the ADCs operations in 1980-81, $10.0 million will establish the Capital Fund of the Aboriginal Entitlement Capital Account, an accumulating investment fund. Income from the capital fund will be available to further support the ADC's programs. The long-term goal of the capital fund is that it should lead to the Commission's ultimate financial independence. In 1980-81 a further $35.1 million is to be provided for special assistance to Aboriginals including grants-in-aid in the fields of employment, general welfare, training and community services. These programs include support for Community Development Employment Projects; these projects provide payment for work done, and are intended to reduce the socially deleterious effects of unemployment benefits on Aboriginals, particularly in remote communities. Assistance is also provided to Aboriginal communities for the improvement and maintenance of community amenities. Expenditure by the National Aboriginal Conference (NAC) is included under this heading. The NAC's role is to provide a forum for the expression of Aboriginal views, particularly on the long term goals and objectives of government in Aboriginal affairs. The Government has agreed that the NAC should host the Third General Assembly of the World Council of Indigenous Peoples in 1981; $90 000 is included in this item for this purpose. {:#subdebate-100-135} #### General Administrative and Other Expenditure This expenditure comprises the general running and capital expenses of the Departments of Social Security ($197.9 million in 1980-81), Veterans' Affairs ($53.7 million) excluding expenses relating to repatriation institutions, which are recorded under 'Health', Aboriginal Affairs ($17.0 million) and the Social Welfare Policy Secretariat ($0.6 million). {: type="1" start="5"} 0. HOUSING The Commonwealth funds a range of programs to provide housing and to assist persons to attain home ownership. Some of this assistance takes the form of recycled funds, interest subsidies and tax concessions that are not reflected in Budget outlays. The total Budget provision for housing programs in 1980-81 is $365.5 million, an increase of 6.7 per cent compared with 1979-80. Welfare Housing Assistance to the States and the Northern Territory *Advances to the States and the Northern Territory for Housing* Advances are being made to the States for welfare housing purposes in 1980-81 in accordance with the terms of the three-year Commonwealth/State Housing Agreements executed under the authority of the *Housing Assistance Act* 1978. The Act and the Agreements will expire on 30 June 1981. Under the Commonwealth/Northern Territory Housing Agreement signed in March 1980 financial assistance for housing is provided to the Northern Territory under the same terms and conditions as with the States. This Agreement will also expire on 30 June 1981. An amount of up to $175.5 million has been provided for advances to the States and the Northern Territory in 1980-81. This compares with $168.7 million advanced in 1979-80. The advances, which are repayable over a 53 year period and carry interest rates of *4i* per cent for home purchase assistance and 5 per cent for rental housing assistance, assist the States and the Northern Territory to provide concessional rental assistance for low income earners and to provide concessional loans to assist low income earners into home ownership. The allocation of advances in 1980-81 between rental housing programs and home ownership assistance programs remains to be determined. However, under the terms of the Agreements at least 40 per cent of the total advances in 1980-81 are to be allocated to home ownership programs. As in 1979-80, all welfare housing advances to the States and the Northern Territory are to be provided on a $1 for $1 matching basis. State and Territory expenditures on welfare housing under the Agreements and surpluses arising from the operation of the rental housing and home purchase assistance programs under the Agreements are eligible for matching. Advances for rental housing programs are applied to the construction or acquisition of public housing for rental or sale and for innovative purposes covered by the Agreements, such as the leasing of dwellings from the private sector and private/public housing ventures. The States and the Northern Territory have the responsibility for the design and conduct of their programs and are free to determine eligibility criteria, provided that assistance is directed to those in need. Emphasis continues to be placed on moving rental ceilings towards market rents. Rebates are provided to allow those unable to meet the ceiling rent to pay a rent geared to their income and their family circumstances. This system aims to ensure that assistance is geared to need. The Agreements do not impose a limit on the number of dwellings that may be sold, but all sales by the housing authorities are to be at market value or replacement cost, and on the basis of cash transactions. Home purchase assistance is directed to those who are unable to obtain mortgage finance in the private market. The Agreements do not impose specific means tests or prescribe how assistance is to be provided; instead, each State and the Northern Territory is able to determine for itself the conditions of eligibility for home purchase assistance and to apply its funds to schemes of its own choosing. Assistance is provided on flexible terms so as to limit concessions, as far as practicable, to the period of real need. Purchasers of public housing also have access to loans from the home purchase assistance program if they are unable to obtain finance in the private market. Details of the State by State and Northern Territory allocation of the $175.5 million advances in 1980-81 are shown in Budget Paper No. 7, *Payments to or for the States, the Northern Territory and Local Government Authorities, 1980-81.* *Grants for Rental Housing in the States and the Northern Territory* An amount of $109.5 million will be provided to the States and the Northern Territory for rental housing assistance in 1980-81 as compared with $105.3 million in 1979-80. Of the 1980-81 amount $104.0 million is to be provided to the States under Section 11 of the *Housing Assistance Act* 1978, which provides for assistance to specified categories of pensioners and to any other class of persons declared by the Minister for Housing and Construction to be in need of rental housing assistance. The remaining $5.5 million will be provided to the Northern Territory under the Commonwealth/Northern Territory Housing Agreement for the same purposes. These grants complement advances provided for rental housing assistance under the Commonwealth/State Housing Agreements and the Commonwealth/ Northern Territory Housing Agreement. In 1980-81 grants will be provided for three broad categories - pensioners, Aboriginals and other persons in need. Eligible persons under the pensioners category include those in receipt of an age, invalid or widow's pension, a supporting parent's benefit, a special benefit, a sheltered employment allowance, a training allowance in certain circumstances and some classes of service pension. Grants totalling $32.65 million are to be provided for the pensioner category, $22.1 million is earmarked for Aboriginals in need of rental housing assistance and $54.75 million is provided for other persons eligible for or receiving rental housing assistance under the Housing Agreements. Details of the State by State and Northern Territory allocation of the $109.5 million are shown in Budget Paper No. 7, *Payments to or for the States, the Northern Territory and Local Government Authorities 1980-81.* {:#subdebate-100-136} #### Renegotiation of Current Housing Agreements The current Housing Agreements expire on 30 June 1981. The arrangements to apply after that date are being negotiated between the Commonwealth and the States and the Northern Territory. However, the Minister for Housing and Construction has announced broad details of the Commonwealth's proposals for new arrangements to apply for five years commencing 1 July 1981. The main feature of the Commonwealth's offer to the States is to provide a guaranteed base level of funding of $200 million a year for each of the five years for welfare housing, including $20 million in grants for home purchase initiatives such as interest subsidy schemes and temporary assistance with private mortgage repayments and $30 million in grants for rental housing assistance including leasing, subsidies to tenants renting privately and private/public housing ventures. Total Commonwealth assistance would continue to be decided each year in the Budget context. Similar arrangements are proposed for the Northern Territory. {:#subdebate-100-137} #### Other Grants to States for Housing The *States Grants (Housing) Act* 1971 provides for housing assistance to the States by way of basic grants of $2.75 million a year, payable for a period of 30 years, in respect of the States' housing operations in each of the years 1971- 72 and 1972-73. An amount of $5.5 million is provided in 1980-81 for this purpose. The payments are in lieu of an interest concession on funds used by the States for welfare housing in those years. {:#subdebate-100-138} #### Homes Savings Grants Homes Savings Grants are payable to eligible persons to assist with the purchase or construction of a first home contracted for on or after 1 January 1977, on the basis of $1 for each $3 of savings held in an acceptable form. A maximum grant of $2000 is payable in respect of savings over three years ending on the contract date, while grants of up to $1333 and $667 are payable in respect of savings over two years and one year respectively. ^ A house value limit applies for homes contracted for after 24 May 1979. For homes contracted for between 24 May 1979 and 18 August 1980 an applicant is eligible for the full grant if the value of the home is less than $35 000; the grant reduces progressively as the value of the home increases and cuts out completely when the value of the home exceeds $40 000. An increase in the value limit in respect of homes contracted for on and after 19 August 1980 has been announced in the Budget Speech. Persons buying homes contracted for on and after 19 August 1980 are eligible for the full grant if the value of the home is less than $45 000; the grant reduces progressively as the value of the home increases, cutting out completely when the value of the home exceeds $55 000. An amount of $52.1 million has been provided for Homes Savings Grants in 1980-81, compared with $71.6 million in 1979-80. The current nine months waiting period between receipt of application and payment of a grant is expected to remain in 1980-81. {:#subdebate-100-139} #### Housing Loans to Savings Banks - Repayments Under the *Banks (Housing Loans) Act* 1974 loans of $150 million were made to savings banks and certain other banks to provide a short-term stimulus to activity and employment in the home building industry. Balances outstanding at 30 June 1980 amounted to $23.6 million. In response to a request in 1979 from the Government, certain of the banks concerned made early repayments in 1979-80 of all or part of their loans outstanding, while further prepayments are expected iri 1980-81. As a consequence, repayments to the Commonwealth were $40.8 million in 1979-80, compared with $10.7 million in 1978-79. Repayments for 1980-81 are estimated at $14.0 million. The $9.6 million expected to remain outstanding at 30 June 1981 is currently scheduled for repayment over the period to 1984-85. {:#subdebate-100-140} #### Defence Service Homes The Defence Service Homes Scheme assists former and serving members of the Defence Force and certain other persons who meet the eligibility requirements to acquire a home by providing low-interest loans. As announced in the Budget Speech the maximum Defence Service Homes loan is to be increased from $15 000 to $25 000. The first $12 000 will be available to borrowers at an annual interest rate of 3.75 per cent, the next $3000 at 7.25 per cent, and the additional $10 000 at 10 per cent. The Government has also announced its intention to reduce the waiting period for loans from 14 months to 10 months during the current financial year. Total expenditure on Defence Service Homes loans is estimated at $111.5 million in 1980-81. This comprises an amount of $67.5 million estimated as necessary to maintain the previous loan conditions and waiting period and $44 million for the estimated cost of the two new measures - $25 million for the increase in the maximum loan and $19 million for the reduction in the waiting period. The expenditure of $111.5 million in 1980-81 is expected to be financed as follows : $74.6 million from repayments of principal retained in the Defence Service Homes Trust Account for re-lending; $14.0 million from surpluses in respect of previous years' operations retained in the Trust Account; $10.9 million in respect of excess payments by borrowers available to the Trust Account by way of the Special Appropriation under Section 39c of the *Defence Service Homes Act* 1918; and $12.0 million by way of a new capital appropriation from the Budget. Expenditure on Defence Service Homes loans in 1979-80 was $75.4 million; no capital appropriation (other than the Special Appropriation under Section 39c) was required. In 1980-81 $12.5 million is being provided for the Defence Service Homes Corporation's administrative expenses, including salaries but excluding rent. As from 1 July 1980 administrative expenses, including salaries, in relation to the Defence Service Homes Insurance Scheme are funded directly from the Defence Service Homes Insurance Trust Account. The previous arrangement whereby expenses are initially funded from the Corporation's administrative appropriations and an equivalent amount is paid as an administrative recovery from the Insurance Trust Account to the Consolidated Revenue Fund still applies for some indirect expenses. Provision is made for a capital repayment of $14.0 million to be made from the Defence Service Homes Trust Account to the Consolidated Revenue Fund in 1980-81 to reflect the proceeds of projected sales of surplus land holdings. Receipts in 1979-80 amounted to $1.6 million. The Corporation has surplus land holdings as a result of the phasing out of the Corporation's estate development and construction activities. Receipts from the Corporation in 1980-81 in respect of administrative fees and recoveries are estimated at $2.0 million and receipts in respect of excess payments to the Corporation by borrowers are estimated at $12.2 million. In 1980-81 $12.1 million of these excess payments is expected to be drawn; $10.9 million for payment to the Defence Service Homes Trust Account and $1.2 million for other purposes specified in the *Defence Service Homes Act.* {:#subdebate-100-141} #### Other General Housing Expenditure Expenditure under the Commonwealth Hostels heading in 1980-81 is mainly for completion of buildings and works projects commenced in 1979-80 and earlier years for the Commonwealth Accommodation and Catering Service. New projects planned for commencement in 1980-81 include works at the Wacol Migrant Hostel in Queensland at an estimated total cost of $0.9 million, with little expenditure in 1980-81. Other expenditure included under this item provides mainly for caretaking and repairs and maintenance of rental dwellings in the Australian Capital Territory. Housing in the Australian Capital Territory {:#subdebate-100-142} #### Dwellings Built for Sale or Rental The provision of $2.6 million in 1980-81 relates mainly to the continuing program of upgrading of older government dwellings in the ACT. {:#subdebate-100-143} #### Other Gross Advances for Housing This item provides for loans by the ACT Commissioner for Housing to means-tested welfare applicants in the ACT and public servants compulsorily transferred to the ACT and Queanbeyan (NSW). A total of $18.0 million is expected to be available for loans in 1980-81 - $8.6 million from Budget appropriations and $9.4 million from funds recycled through the ACT Housing Trust Account - compared with total expenditure of $17.5 million in 1979-80. Of this amount $3.1 million is to be applied to loans for public servants compulsorily transferred and $14.9 million is to be available for funding approximately 650 concessional loans for means-tested welfare applicants, the same number as in 1979-80. It is expected that at 30 June 1981 the waiting period for welfare loans will be about 8 months. {:#subdebate-100-144} #### Repayment of Principal This item comprises repayments of principal in respect of loans provided for the purchase of private dwellings and of Commonwealth mortgages provided for the purchase of Government dwellings by tenants. {:#subdebate-100-145} #### Accommodation for Migrants This heading covers expenditure on minor works, new and replacement plant, and major items of equipment required in the operation of migrant centres and migrant transitory flats.. The increase of $0.8 million relates to the need to outfit additional hostel-type accommodation for use as migrant centres in view of the expected increase in the level of migrant intake in 1980-81. Housing for Aboriginals nec Expenditure in 1979-80 included payments of $5.5 million to the Aboriginal Housing and Personal Loans Fund of the Aboriginal Loans Commission (ALC). This amount was used for housing loans and, together with $1 million of recirculated loan funds, provided for 205 housing loans in 1979-80. On 1 July 1980 the Aboriginal Development Commission (ADC) assumed responsibility for the activities of the ALC. (The ADC is included under the Social Security and Welfare function.) In 1980-81 $33.0 million will be provided for other special assistance for Aboriginal housing through the Department of Aboriginal Affairs' States grants program ($10.9 million) and grants-in-aid to Aboriginal Housing Associations ($22.1 million) for the construction and purchase of homes for Aboriginal families. Under these programs some 900 houses are to be purchased or constructed in 1980-81. In addition a subsidy of $7.4 million will be provided to Aboriginal Hostels Ltd for the provision of hostel accommodation for Aboriginals. Aboriginal Hostels Ltd now funds the operation of 103 hostels comprising 2411 beds. Earmarking arrangements under the Welfare Housing program will make a further $22.1 million available to meet the housing needs of Aboriginals in 1980- 81 (see Grants for Rental Housing in the States and Northern Territory above). {:#subdebate-100-146} #### General Administration Outlays of $4.4 million under this heading provide for the administrative costs of the housing function of the Department of Housing and Construction. {:#subdebate-100-147} #### Other Recoveries and Repayments Revenue in 1980-81 under this item is derived principally from rental of government dwellings in the Australian Capital Territory. Revenue is estimated to fall by $1.1 million in 1980-81 due to a reduction in the stock of rental housing and increased vacancies resulting from higher tenancy turnovers. {:#subdebate-100-148} #### Housing Loans Insurance Corporation As noted in Statement No. 3 attached to the 1979-80 Budget Speech, the Government has announced its intention to sell the assets and business of the Housing Loans Insurance Corporation. Issues relating to this matter are under consideration. No allowance is made in the 1980-81 estimates for the proceeds which may be received from the sale. {: type="1" start="6"} 0. URBAN AND REGIONAL DEVELOPMENT NEC AND THE {: .page-start } page 193 {:#debate-101} ### ENVIRONMENT The Budget provides $ 104.6 million for activities covered by this heading in 1980-81-, an. increase of $5.9 million or 6.0 per cent on 1979-80. Urban and Regional Development nec This heading covers outlays related to urban and regional development which are not classified to other functions. It includes assistance for the AlburyWodonga growth centre, general decentralisation, urban rehabilitation, urban flood mitigation and direct expenditure on development in the Australian Capital Territory. {:#subdebate-101-0} #### Growth Centres Of the gross provision of $28.8 million for growth centres, approximately $23.8 million represents capitalised interest on advances to the States for Albury-Wodonga in 1980-81 and earlier years, and on earlier advances for the Bathurst-Orange and Macarthur growth centres. (These - and other capitalised interest provisions - represent, in effect, notional advances to the States which are offset by equivalent notional receipts from the States. The notional advances indicate the extent of the concession actually afforded to the States by the deferment and capitalisation of interest payments.) An advance of $5.0 million - the same as in 1979-80 - is provided for the Albury-Wodonga growth centre in 1980-81 and a further $5.0 million is to be advanced in 1981-82. An additional $0.3 million - recorded as part of the General Administrative Expenditure item - is also provided in 1980-81, to meet the Commonwealth's one-third contribution to the estimated administrative expenses of the Albury-Wodonga Development Corporation in 1980-81. Provision is also made for a repayment in 1980-81 of $5.1 million by South Australia in settlement of loans provided by the Commonwealth in earlier years for the Monarto growth centre. {:#subdebate-101-1} #### Decentralisation Assistance A gross amount of $10.5 million is provided in 1980-81 to support general decentralisation initiatives under the Commonwealth's Regional Development Program. It has also been agreed to provide up to $6 million in 1981-82 to meet the carryover of commitments under the Program into that year. This Program was introduced in 1977-78 to provide assistance of a capital nature to State, local government and community bodies, and private firms pursuing manufacturing and tertiary activities, in selected non-metropolitan centres.. The Minister for National Development and Energy approves the provision of assistance to projects under the Program following consideration of recommendations made by the Decentralisation Advisory Board on applications for assistance. Financial assistance of $11.2 million was allocated for 23 projects during 1979-80, bringing the total amount of assistance allocated under the Program to 30 June 1980 to $27.1 million for 62 projects. Gross expenditure in 1979-80 amounted to $10.5 million. There will also be some repayments on earlier loans during 1980-81; these are estimated at $0.9 million and reduce the net outlay to $9.6 million. In addition, interest payments on loans are estimated at about $2.2 million in 1980-81 (these are recorded with other interest as 'Receipts'). {:#subdebate-101-2} #### Urban Rehabilitation In 1974-75 the Commonwealth acquired, at a cost of $17.5 million, 700 dwellings and about 30 commercial properties on 19 hectares of land at Glebe, Sydney, from the Anglican Church with a view to rehabilitating the Estate and preserving accommodation for low income families. Expenditure in 1979-80 on rehabilitation amounted to $1.1 million and $0.8 million was spent on maintenance and administration; the 1980-81 estimates include $0.9 million for the continuation of rehabilitation work and $0.9 million for maintenance and administration costs. Income from rents is estimated at $0.9 million in 1980-81, compared with $0.8 million in 1979-80; after allowance is made for maintenance and administration costs this indicates net revenue of less than $0.1 million in 1980-81, as in 1979-80. An amount of $5.2 million is provided to meet estimated expenditure in 1980-81 on further acquisition and site development - mainly for residential purposes - of land in the Woolloomooloo Basin of Sydney. Under a 1974-75 agreement, the Commonwealth undertook to provide grants of up to $17 million to New South Wales for the acquisition of 3.2 hectares of land and for planning and site development. Total payments to the State amounted to $11 million at the end of 1979-80. The agreement also provides for the State to make payments to the Commonwealth in respect of each unit of public housing produced and for the payment of receipts from any part of the property that is not retained for public housing. Such payments had amounted to $1.9 million by the end of 1979-80 and further receipts of $0.9 million have been allowed for in 1980-81; these estimated receipts have been offset against estimated outlays. In 1974 the Commonwealth advanced $3.5 million to Victoria to acquire, for rehabilitation, the Emerald Hill estate in South Melbourne. Repayments commenced in 1978-79 and are estimated to amount to $0.2 million in 1980-81. {:#subdebate-101-3} #### Urban Flood Mitigation Under the *Urban and Regional Development (Financial Assistance) Act* 1974, $62 000 was provided to Queensland in 1979-80 to assist with the construction of flood mitigation works on creeks in the Brisbane metropolitan area. A further $126 000 is to be made available in 1980-81 for this purpose. The Commonwealth also contributed $700 000 in 1979-80 under the *National Water Resources (Financial Assistance) Act* 1978 towards the cost of construction of flood mitigation works on Kedron Brook. The amount of any additional funds for urban flood mitigation works in 1980-81 will depend on the allocation of the $29.4 million to be provided in 1980-81 under the National Water Resources Program. These funds are classified under Irrigation and Other Pastoral Water Projects in the function 'Industry Assistance and Development'. {:#subdebate-101-4} #### Land Commissions/ Urban Land Councils Under a program commenced in 1973-74, Commonwealth assistance was provided for land acquisition, servicing the land acquired (where costs were not met from normal government subventions) and urban renewal and redevelopment. This program was terminated in 1977-78. The figure of $17.5 million included in the estimates for 1980-81, as well as the $15.7 million shown for 1979-80, represents estimated capitalised interest on the loans provided to the States in 1977-78 and earlier years. Repayments on the first of these loans are due to commence in 1983-84. {:#subdebate-101-5} #### Other Urban Development and Amenities The bulk ($7.9 million) of the proposed expenditure is for the acquisition and development of land in the ACT for residential, commercial and industrial purposes; the 1980-81 provision for this purpose represents a decrease of $0.9 million on that for 1979-80. Assistance to Tasmania of $0.2 million for development of an industrial estate at Legana in the Launceston area is also included. An amount of $0.8 million is to be provided to the States for the provision and maintenance of essential services and basic community amenities such as water, sewerage and electricity to remote Aboriginal communities. Expenditure in 1979-80 included $0.8 million for the provision of services to, and purchase of land by, the Aboriginal Land Fund Commission. Responsibility for this program was transferred on 1 July 1980 to the Aboriginal Development Commission, which has wider responsibilities in the field of Aboriginal advancement. Estimates of the latter Commission's expenditure are included under Aboriginal Advancement Programs nec in 'Social Security and Welfare'. Protection of the Environment An amount of $8.9 million is being provided in 1980-81 for purposes related to protection of the environment, an increase of $2.9 million On the 1979-80 amount. Most of this expenditure is for the environmental protection measures associated with uranium mining operations in the Alligator Rivers Region of the Northern Territory. An amount of $3.3 million is provided to reimburse the Northern Territory Government for its environmental regulatory services. The activities of the Supervising Scientist and the Alligator Rivers Region Research Institute are estimated to cost $3.6 million ($1.7 million in 1979-80), including an initial outlay for housing and laboratory facilities at Jabiru. Future development of environment protection arrangements in the Region is being examined. Rehabilitation of abandoned uranium mines at Rum Jungle (NT) is also to begin in 1980-81 with expenditure in the year estimated at $0.2 million. The total cost is estimated at $12.1 million. Other outlays in 1980-81 under this heading are for air quality assessment ($140 000), investigations into marine pollution ($110 000), matching grants to assist conservation organisations ($350 000), and the construction and operation of a Baseline Air Monitoring Station in Tasmania ($936 000). {:#subdebate-101-6} #### Sewerage and Garbage A net amount of $4.9 million is included in 1980-81 for the provision of sewerage, garbage and drainage facilities in the Australian Capital Territory. The reduction of $2.3 million compared with 1979-80 reflects the reduced demand for new facilities. Repayments of $0.8 million in respect of loans provided to the States in earlier years under a former program of assistance for sewerage works are offset against outlays under this heading. {:#subdebate-101-7} #### General Administrative Expenditure The major components under this heading are the administrative expenditure of the National Capital Development Commission ($8.5 million) and consultancy fees payable by the Commission for investigation, design and construction purposes ($15.2 million). The increase of $5.0 million in outlays for these purposes by the NCDC reflects increased activity on planning and development of approved projects. Also included is that component of the administrative expenditure of the Department of Science and the Environment which can be identified as relating to the environment ($1.6 million) and the Commonwealth's contribution to the running costs of the Albury-Wodonga Development Corporation mentioned earlier. {: type="1" start="7"} 0. CULTURE AND RECREATION Budget provisions for the support of cultural and recreational activities total $383.1 million in 1980-81, an increase of 19.5 per cent on 1979-80. {:#subdebate-101-8} #### National Broadcasting and Television Service The radio and television programs of the National Broadcasting and Television Service (NBTS) are presented by the Australian Broadcasting Commission (ABC) and are broadcast through transmitters constructed and operated on behalf of the Commonwealth by the Australian Telecommunications Commission. The Government intends that, in the period to 1981-82, subject to review as necessary, the annual provision to be made for the ABC should not be less than the initial appropriation for 1979-80, after due allowance has been made for appropriate cost increases. Increases in revenue derived from the ABC's entrepreneurial activities over estimated revenues from this source in 1979-80, up to a maximum of $7 million in any one year, will also be available to the Commission for expenditure on other activities. The allocations for 1980-81 include $194.8 million for the ongoing operational activities of the NBTS and provide, after allowance for cost increases, for the continuation of those activities at about the same level as at present. Capital expenditures on the NBTS are estimated to total $18 million in 1980-81, compared with $11.8 million in 1979-80. Of an approved three-year program costing $16.5 million, for the upgrading of the NBTS transmitter network, and for its extension in country areas, $5.5 million is provided in 1980-81. A further amount of $2.2 million is provided for the rehabilitation of the Radio Australia transmitting station in Darwin, the total cost of which is estimated at $10 million over the period to 1982-83. In 1979 the Government agreed that additional funds, up to a limit of $15 million, should be provided to the ABC over the period 1979 to 1983 to enable it to carry out the functions of Host Broadcaster for the 1982 Commonwealth Games in Brisbane. An amount of $3.9 million has been provided for that purpose in 1980-81, compared with expenditure of $0.2 million in 1979-80. *Planning oj Broadcasting* The Postal and Telecommunications Department is responsible for overall planning of radio and television broadcasting services in Australia, including the examination of technical matters relating to the adequacy and location of national, commercial and public stations. Outlays by the Department on these functions are estimated at $3.1 million in 1980-81, which is about the same level in real terms as last year. {:#subdebate-101-9} #### Regulation of Broadcasting Industry The Budget provides $3.2 million for the Australian Broadcasting Tribunal to enable it to conduct public inquiries before the granting or renewal of commercial and public station licences, and to carry out other functions under the *Broadcasting and Television Act* 1942 for regulating the radio and television industry. In particular, the Tribunal is to conduct a public inquiry in relation to the proposal to introduce cable-television into Australia. {:#subdebate-101-10} #### Multicultural Broadcasting Services The Government intends that ethnic radio services and multicultural television services should be expanded further during 1980-81. For this purpose, the Government has proposed the creation of the Independent and Multicultural Broadcasting Corporation to replace the Special Broadcasting Service; a Bill for that purpose is presently before the Parliament. The Budget provides $16.8 million for the introduction of permanent multicultural television services in Sydney and Melbourne. Programs are to be transmitted from late 1980 in both cities on new UHF channels and also VHF channels. An amount of $4.4 million is included in the Budget for the provision of ethnic radio services and administrative expenses in 1980-81. That provision covers final payments for the upgrading of the radio stations 2EA and 3EA in Sydney and Melbourne respectively, and allows for direct assistance of up to $250 000 to certain public broadcasters who transmit ethnic radio programs in other centres. {:#subdebate-101-11} #### Libraries An amount of $17.2 million is provided for the expenses of the National Library of Australia and the Canberra Public Library Service. It includes $10.3 million for salaries and related costs and $3.4 million for the purchase of library materials. The materials planned for purchase by the National Library as part of its on-going program include a wide range of books and periodicals, a number of films, pictorial material, maps, sound recordings, music scores and manuscripts. These acquisitions are over and above additions to the general collection through the requirement under the *Copyright Act* 1968 that copies of Australian publications be deposited with the Library. The Government has agreed that in 1980-81 the National Library should also develop the mutually beneficial exchange of library materials and services between national libraries in the Asian and Oceania regions. An amount of $0.1 million is included for this purpose. In 1980-81, $0.5 million is being provided for partitioning and the provision of a computer suite in the National Library. A significant new project to be commenced late in 1980-81 is extensions to the National Library at an estimated cost of $7.9 million. No payments are expected to be made in 1980-81. {:#subdebate-101-12} #### Australian National Gallery and Collection The Government's objective is that the Gallery should open in early 1983. The Gallery's allocation for 1980-81 recognises this objective in a provision of $10.9 million compared with expenditure in 1979-80 of $7.5 million. $7.1 million is provided for acquisitions of works of art to supplement the growing National Collection and $0.6 million is provided for display fitout and loose furniture for the Gallery building as part of a $6.8 million program to be completed in time for the Gallery's opening. Provision is also made for the costs associated with an increase in the full-time staff ceiling of the Gallery from 80 to 100. Expenditure on the Gallery building in 1980-81 is expected to increase from $9.1 million to $12.2 million. The total cost of the building is estimated to be $49.5 million. {:#subdebate-101-13} #### Film Industry Development The Australian Film Commission assists the industry by means of equity capital and loans for the production, promotion and distribution of Australian film, radio and television programs. In addition, grants are provided to encourage creative development in those media. The provision of $6.2 million in 1980-81 will allow the Commission to maintain its activities at about the same level as last year. *Assistance to the Arts* The Australia Council administers the Commonwealth's major programs of assistance to the Arts through Boards responsible for theatre, community arts, music, literature, Aboriginal arts, crafts and visual arts. The total allocation for the Council in 1980-81 is to increase by $3.1 million to $29.4 million and consists of the following components: $ million {:#subdebate-101-14} #### Australian Opera 3.034 {:#subdebate-101-15} #### Australian Ballet Foundation 1.456 {:#subdebate-101-16} #### Australian Elizabethan Theatre Trust Orchestras 2.492 General Support for the Arts 17.197 {:#subdebate-101-17} #### Administration 3.950 {:#subdebate-101-18} #### Public Lending Right Scheme 1.250 29.379 Included in the Council's General Support for the Arts program is an amount of $84,000 to assist in the Commonwealth Arts Festival planned to coincide with the 1982 Commonwealth Games in Brisbane. The Government has approved increases in the rates payable to authors and publishers under the Public Lending Right (PLR) scheme. Authors will now receive 60 cents and publishers 15 cents per copy of an eligible book, an increase of 20 per cent on former rates. Administration of the PLR scheme is expected to be transferred from the Australia Council to the Department of Home Affairs during 1980-81. Artbank, which was established in 1979-80 to co-ordinate all lending programs of Commonwealth-owned art works and to acquire works of art from Australian artists so that those works can be brought to public notice by placing them on hire in public places, is to be provided with $425 000 for its operation in 1980-81. The International Cultural Corporation of Australia Ltd, also established in 1979-80 to manage international art exhibitions touring Australia, will receive $250 000 in 1980-81. The. first major exhibition, in March 1981, will feature Chinese classical paintings. {:#subdebate-101-19} #### War Memorials An amount of $2.5 million is provided for operating costs and capital works for the Australian War Memorial in 1980-81, compared with $2.4 million in 1979-80. Increased costs resulting from the full year effect of operating and staffing the new repository at Mitchell (ACT) have been largely offset by nonrecurring construction costs for the repository in 1979-80. Under the *Australian* *War Memorial Act* 1980, the Memorial has acquired additional functions for assisting in the creation and maintenance of museums in military establishments and an educative role in relation to Australia's military history. {:#subdebate-101-20} #### Archives In 1980-81 an amount of $10.5 million is provided for the preservation and maintenance of archival resources of national significance or public interest. The $11.1 million spent in 1979-80 included capital costs of establishing new repositories at Mitchell (ACT), Townsville (Qld) and Collinswood (SA) and extensions to the Cannon Hill (Qld) repository. Some of these works have been completed. Reflecting this, the works component for 1980-81 ($3.3 million) is $2.2 million lower than in 1979-80. However, it includes a provision of $0.6 million for construction of a new repository at Bellerive (Tas.) - estimated to cost $1.9 million in total. The reduction will be partly offset by the costs of fitting out the new buildings and by increased operating costs associated with them. {:#subdebate-101-21} #### Youth, Sport and Recreation Provisions for assistance to sport in 1980-81 include the following: $2,885 million for the Sports Development Program under which national sporting bodies are assisted for administration, coaching and other activities such as participation in international competition; special provision of $115 000 for pre-event training of the Australian team for the 1982 Commonwealth Games in Brisbane; $2.5 million as the third instalment of a $10 million grant to the Queensland Government for capital costs involved with the 1982 Commonwealth Games; $0.5 million as a special grant to assist the national sporting bodies and individuals who chose to withdraw from the Moscow Olympic Games to participate in alternative high level international sporting events in 1980- 81; and $0.9 million for the operating expenses of an Australian sports institute which is to be established in Canberra to give potential top class Australian sportsmen and sportswomen access to specialised coaching programs while allowing them to pursue their studies and careers. The institute will open in January 1981. The Minister for Home Affairs has announced that the institute's initial operation is seen as a pilot program which will be reviewed after four years. Other provisions in 1980-81 under this item include $700 000 for the 'Life. Be In It' campaign, $500 000 for grants-in-aid to youth organisations, $440 000 for grants-in-aid to life saving bodies, $248 000 for the National Aboriginal Sports Foundation and $734 000 for grants-in-aid to Aboriginal communities and groups for cultural, recreational and sporting activities. The overall decrease of $2.6 million in outlays in 1980-81 is the net effect of a number of increases and decreases in particular provisions. The most significant factor is that a payment of $3.9 million was made in 1979-80 to the **Sir Robert** Menzies Memorial Trust but no corresponding provision is being made in 1980-81. {:#subdebate-101-22} #### Other Cultural Organisations This item includes $1.5 million for the operating expenses of the Australian Bicentennial Authority which has been established as a company under the ACT Companies Ordinance and which operates under the provisions of the *Australian Bicentennial Authority Act* 1980 to prepare for the Australian Bicentenary celebrations in 1988. Grants totalling $260 000 have been provided for the National Trusts and $278 000 is included for the National Women's Advisory Council. Also included are provisions for the observance of Australia Day, the commissioning and acquisition of portraits by the Historic Memorials Committee, restoration work for the National Historical Collection and administration of the *Historic Shipwrecks Act* 1976. Funds are provided under this Act for rewards as and when approved. An amount of S3 83 700 has been provided for the issue of national flags and royal portraits, recordings of the national anthem and reproductions of the coat of arms. {:#subdebate-101-23} #### Wildlife and National Parks Under this heading, $9.1 million is provided in 1980-81 (compared with expenditure of $6.1 million in 1979-80) for wildlife conservation (including protection of whales) and management and development of national parks, mainly through the activities of the Australian National Parks and Wildlife Service and the Great Barrier Reef Marine Park Authority. Of the total allocation to the Service of $6.6 million, $4.6 million is for the development and operation of the Uluru and Kakadu Parks in the Northern Territory. Plans of management, on which the long term park development is to be based, are now nearing completion. The Authority is responsible for the recently declared marine park in the Capricornia Section of the Reef and is sharing the cost of day-to-day operations in that area with Queensland. An area off Cairns is now under study. The provision for the Authority in 1980-81 is $1.9 million. Expenditure by the Department of the Capital Territory on nature reserves in the ACT is estimated to be $0.6 million. {:#subdebate-101-24} #### National Estate An amount of $2.2 million is provided in 1980-81 to finance programs of assistance for the restoration, preservation and improvement of buildings and areas of special significance. In addition, $0.8 million is to be provided to the Tasmanian Government on a $2 for $1 basis for the second year of a seven-year program to restore and develop the Port Arthur region. This program is currently estimated to require Commonwealth assistance of the order of $6 million over the seven-year period. {:#subdebate-101-25} #### Australian Heritage Commission The Australian Heritage Commission is responsible for the identification of places of National Estate significance and for the development of measures for their protection. The running costs of the Commission are estimated at $0.6 million in 1980-81. *Cultural and Recreational Activities in the ACT* This heading covers the net cost of construction and maintenance of parks, gardens and reserves, and the provision of assistance for cultural, recreational and community activities in the ACT (including Jervis Bay). The estimated increase in expenditure of $5.9 million in 1980-81 mainly reflects expenditure on construction of the National Indoor Sports Centre (Stage 1), discharge of the Canberra Showground Trust's loan liabilities and the rising cost (mainly wages) of maintaining parks and gardens in the Australian Capital Territory. Commencing in 1980-81, certain grants and subsidies to community organisations previously included under this item will be funded from the recently established ACT Community Development Fund. {: type="1" start="8"} 0. ECONOMIC SERVICES This heading brings together the various economic services and categories of economic assistance provided by the Commonwealth to industry and the community generally. It covers the provision of economic infrastructure, the regulation of private sector economic activity and more direct forms of Government participation in economic activity. {: type="A" start="A"} 0. TRANSPORT AND COMMUNICATION The following table shows the Commonwealth's expenditure for transport and communication purposes in 1978-79 and 1979-80, and the estimates for 1980-81. In aggregate these outlays are expected to increase by 23.8 per cent and to represent 2.8 per cent of total outlays in 1980-81. A number of the Commonwealth authorities which carry out activities that fall within this function now borrow on their own behalf. Transactions between these authorities and the Budget have in recent years been largely confined to the repayment of earlier loans from the Budget, together with interest and dividend payments to the Budget recorded in Statement No. 4 under 'Interest, Rent and Dividends'. Figures for the Commonwealth sector as a whole, which take account of the activities of these authorities, are published in Budget Paper No. 10 - *'National* {:#subdebate-101-26} #### Accounting Estimates of Receipts and Outlays of Commonwealth Government Authorities 1978-79 1979-80 1980-81 {:#subdebate-101-27} #### Actual Actual Estimate Change {:#subdebate-101-28} #### Communication {:#subdebate-101-29} #### Authorities Providing Communications Services {:#subdebate-101-30} #### Australian Telecommunications Commission (Telecom) The Australian Telecommunications Commission is required to operate on a commercial basis with the financial objective of generating, by way of charges for services, such amounts as will enable it to cover its operating costs and to meet at least half of its capital expenditures. Since 1977-78 there have been no transactions between Telecom and the Budget which affect Budget outlays. Receipts of interest on past advances to Telecom are recorded in Statement No. 4 under the heading 'Interest, Rent and Dividends'. The capital equipment and facilities program for Telecom is estimated at about $1134 million in 1980-81 compared with $975 million in 1979-80. This program includes expenditures to accelerate the conversion of rural manual exchanges to automatic operation, which will be partly financed under infrastructure borrowing arrangements approved by the Loan Council. To finance its capital program, Telecom will again be a significant borrower on the domestic capital market in 1980-81, although the bulk of the funds required for such expenditures will come from Telecom's internal sources. {:#subdebate-101-31} #### Australian Postal Commission (Australia Post) Australia Post also is required to operate on a commercial basis with the financial objective of raising, by way of charges, such amounts as will enable it to cover operating costs and to meet at least half of its capital expenditure. Australia Post has drawn upon its operating surpluses in the four years 1975-76 to 1978-79 to repay, and thereby reduce by a total of $64 million, its capital indebtedness to the Commonwealth ($14.0 million was repaid in 1979-80 and $23.3 million in 1978-79). Application of the surplus earned by Australia Post in 1979-80 has not yet been decided. *Overseas Telecommunications Commission (OTC)* This Commission, which provides telecommunications services between Australia and other countries, is required to operate on a commercial basis. In 1980-81, the OTC is to pay dividends totalling $25 million to the Commonwealth, compared with $20 million in 1979-80. (These dividends are recorded as receipts in Statement No. 4 under the heading 'Interest, Rent and Dividends'.) The Government has agreed to the Commission's involvement in a new Pacific submarine cable project - which will replace the existing COMPAC cable linking Australia, Norfolk Island, New Zealand, Fiji, Hawaii and Canada - up to a total capital cost to the Commission of $200 million. It is expected that the Commission will be able to finance its share of the cost of this project from internal sources and trade credits. The new cable system is planned to come into operation in 1983. {:#subdebate-101-32} #### Radio Frequency Management Administration of the *Wireless Telegraphy Act* 1911 includes regulation of the operations of many radiocommunication licensees (including 'Citizen Band' licensees). The provision of $7.1 million in 1980-81 allows for a small increase in direct expenditures on this activity, compared with those in 1979-80. *Planning for a National Satellite Communications System* The provision of $1.0 million in 1980-81 is to finance ongoing planning activities in relation to the proposed domestic communications satellite, on which $0.7 million was spent in 1979-80. {:#subdebate-101-33} #### Administrative and Other Expenditure This item consists largely of salary and administrative expenses ($4.6 million) of the Postal and Telecommunications Department, and also includes $0.7 million for salaries and other expenses of the Committee of Inquiry into the Australian Broadcasting Commission, on which $0.2 million was spent in 1979-80. The Committee is expected to complete its report to the Government in 1981. {:#subdebate-101-34} #### Air Transport *Repayments by Qantas Airways Ltd and Australian National Airlines Commission* Past advances to these bodies comprised mainly the proceeds of loans raised by the Commonwealth on behalf of the airlines to assist in the financing of aircraft purchases. Amounts repaid by the airlines to the Commonwealth in respect of past loans are estimated at $31.1 million in 1980-81 and are in turn repaid to the lenders. The forecast reduction in repayments (from $95.6 million in 1979- 80) reflects both the timing of repayments and a decision by Qantas to make an advance repayment of $25.1 million in 1979-80. The balance outstanding in respect of these loans as at 30 June 1980 was about $86.4 million, which is expected to be repaid over the next six years. These bodies now raise loans on their own behalf and have not borrowed from the Budget since 1976-:77. {:#subdebate-101-35} #### Civil Aviation Services - Administrative and Operational Expenditure The Department of Transport provides many services to the air transport industry, including the provision and operation of over 80 aerodromes and a network of air navigation facilities. These activities account for the major portion of administrative and operational expenditures and for the outlays on buildings, works and equipment. Administrative and operational expenditure on air transport activities in 1980-81 is estimated at $227.5 million. Salaries account for $160.6 million. The total increase of $24.9 million over 1979-80 provides for the forecast growth in air traffic - estimated at an average of 6.5 per cent for 1980-81 - and caters for the introduction of new aircraft types, while preserving standards of safety. {:#subdebate-101-36} #### Civil Aviation Services - Buildings, Works and Equipment Provision for outlays on buildings, works, acquisitions and furniture and fittings totals $50.0 million in 1980-81, an increase of $39.5 million. As announced in the Budget Speech, the Government is planning substantial development of airports. This will meet needs arising from increased passenger and freight demands as well as the introduction of new aircraft types. It is expected that considerable expenditure on airports will continue for a number of years. The 1980-81 estimates include the following amounts for outlays on major projects currently in progress. $27.0 million on redevelopment of Brisbane airport (scheduled for completion in 1986, at a total project cost of $225 million); $4.2 million on a new terminal complex at Coolangatta; and $2.3 million on a new operations centre at Adelaide airport. In addition, planning of several new major developments has been approved for 1980-81. These include a new international terminal at Perth airport, new rivil aviation facilities at Darwin, the upgrading to medium jet standard of the Norfolk Island airport, a new terminal at Canberra airport, upgrading of Townsville airport for international services, and modifications at Perth, Melbourne, Adelaide, Sydney and Brisbane airports to cater for the introduction of wide-bodied domestic jet services. The total estimated cost of these developments is $140 million, with expenditures in 1980-81 estimated at about $8 million. An amount of $14.0 million is to be provided in 1980-81 for purchases of navigational aids and other technical equipment. This is part of a $36.3 million program of equipment expenditures planned for the next 4 years. The program includes upgrading of radar installations at major airports and the continuing program to provide replacement vehicles for the rescue and fire fighting services. {:#subdebate-101-37} #### Air Service Subsidies The Budget provides for a subsidy of $232 000 for the continuation of existing essential air services in remote areas of Western Australia, Queensland and the Northern Territory. A review of additional services is currently being undertaken. {:#subdebate-101-38} #### Other Expenditure Included under this heading is estimated expenditure of $4.6 million in 1980-81 (14 per cent more than in 1979-80) to meet the Commonwealth's share of a program of approved maintenance and development projects proposed by local government authorities and other bodies under the Aerodrome Local Ownership Plan. The Commonwealth commitment under the program currently totals $6.0 million. Of the 1980-81 allocation, $0.6 million is for approved 'pretransfer' development works at Commonwealth-owned aerodromes which are to be taken over by local government authorities and $1.6 million is mainly for other development work at aerodromes already owned by local governments. The estimates include $476 000 for a number of research projects, including continuation of the Department's microwave landing systems program and support for the Navigational Aids Research Group at the University of Sydney. The estimates also include contributions of $350 000 to the International Civil Aviation Organization (ICAO) and $66 000 to Australian aviation organisations. {:#subdebate-101-39} #### Civil Aviation Services - Recoveries *Air Navigation Charges.* The forecast increase of $18.0 million reflects expected average growth of 6.5 per cent in air traffic in 1980-81, the full year effect of increases in air navigation charges in 1979-80, the expected receipt in 1980-81 of some arrears in collections from 1979-80 and the Government's intention to achieve full recovery in the domestic trunk sector in 1980-81 through a 15 per cent increase in charges in December 1980. This increase is estimated to yield additional revenue of $2.8 million in 1980-81 and $5.9 million in 1981- 82. Air navigation charges for the international sector are to remain unchanged in 1980-81. The Government has decided that over-recovery in this area should be credited to the cost recovery program and applied to the development of aviation infrastructure. The charges for the regional and general aviation sectors are to be reviewed in the light of a study of the general aviation sector which is soon to be completed. *Other Recoveries.* Revenue from airport rentals is estimated to decrease by $7.0 million in 1980-81 to $15.0 million. The decrease is due to the abnormally high level of receipts in 1979-80 which included approximately $9.0 million relating to earlier years' operations. This amount had been held in trust pending resolution of a request by the International Air Transport Association for the repayment of certain rental payments, in the light of a decision by the NSW Supreme Court. Revenue from business concessions at airports in 1980-81 is estimated at $17.0 million, an increase of $1.9 million over 1979-80. An additional $0.4 million is expected to be raised in 1980-81 from charges to be levied on a range of regulatory services provided by the Department of Transport, bringing total receipts to $0.5 million. {:#subdebate-101-40} #### Road Transport *Road Grants to States and NT* The Commonwealth is to provide $3650 million to the States and the Northern Territory for expenditure on tfpgrading the Australian road system over the five year period 1980-81 to 1984-85. Of this amount, $628 million is to be made available in 1980-81 under the *Roads Grants Act* 1980. This represents an increase of 11.2 per cent over the amount provided in 1979-80 and is .expected at least to maintain road grants at their 1979-80 level in real terms. Amounts to be made available in later years are $685 million in 1981-82, $734 million in 1982-83, $778 million in 1983-84 and $825 million in 1984-85. It is expected that this major five-year funding guarantee will facilitate forward planning of roads programs by State roads authorities. *Road and Related Works in the ACT* This heading covers outlays on the construction, improvement and maintenance of urban, arterial, and rural roads, highways and bridges in the ACT. Outlays on construction of new roads and improvements to existing roads are estimated to decline by SI 0.1 million reflecting progress towards completion of major arterial road networks. Outlays on maintenance and improved street lighting are estimated at $7.6 million, an increase of SO. 3 million. {:#subdebate-101-41} #### Road and Related Works - Other The Commonwealth is funding (by way of special grants) the full cost of providing a second bridge across the Derwent River at Hobart. The total cost of the bridge and its immediate approaches is estimated to be about $35 million, of which $10 million is expected to be made available in 1980-81. The bridge is expected to be completed in 1984. Expenditures shown under this heading are net of annual repayments of $0.6 million from Queensland in respect of advances provided over the period 1963-64 to 1966-67 for the construction of beef cattle roads. *Public Transport Equipment in the ACT* Estimated expenditure in 1980-81 reflects the maintenance of the 1979-80 level of vehicle and equipment purchases. However, due to increasing operational pressures arising from fleet age and capacity, orders for buses are to be placed in 1980-81 for delivery in 1981-82 which will require expenditure of at least $4.0 million in 1981-82. {:#subdebate-101-42} #### Road Research and Investigations The outlay under this heading represents the Commonwealth's financial contribution to the Australian Road Research Board. {:#subdebate-101-43} #### Rail Transport *Australian National Railways Commission (ANR)* The allocation to ANR consists of a subsidy to meet operating losses and advances for capital works. The Government is looking to ANR to continue efforts begun in 1978-79 to eliminate operating losses within 10 years. Based on estimated expenditure of $223.2 million and revenue of $170.2 million, a provision of $53 million has been made for operating losses in 1980-81, $5.1 million less than that in 1979-80. The estimated total cost of ANR's capital works program is $79 million, with expenditure of $56.0 million in 1980-81 to be financed by outlays under this item ($20.0 million), borrowings from the domestic capital market ($22.0 million), and internally generated funds ($14.0 million) which are provided through the subsidy to meet operating losses. Estimated expenditure by ANR on major projects in 1980-81 includes $18 million on the construction of a standard gauge railway between Tarcoola and Alice Springs which is expected to be opened in 1980-81. The total cost of the project is expected to be about $145 million which is the statutory limit. The expenditure also includes $2.0 million on a ten year program, begun in 1976-77, for the rehabilitation of the railway lines in Tasmania. Both projects are to be financed by outlays under this item. In addition, $22.0 million for construction of a standard gauge railway between Adelaide and Crystal Brook will be financed by borrowings from the domestic capital market. Work on the Adelaide to Crystal Brook railway is expected to begin in 1980-81 at an estimated cost of $68 million in present prices and to be completed in 1984. *Mainline Upgrading* - Under the *National Railway Network (Financial Assistance) Act* 1979, those States which operate their own non-metropolitan railway systems are to be provided with loans totalling $70 million over the period to 1982-83 to finance strategic, high benefit projects designed to improve the efficiency of the national mainline railway network. Under agreements negotiated with Queensland and Victoria, loans totalling $1.9 million and $3.2 million respectively were made in 1979-80. An amount of $19.7 million has been provided for loans in 1980-81, leaving $45.2 million to be advanced under the program. The agreements with Queensland and Victoria provide for the loans to be repaid over fifteen years and to attract the rate of interest approved by the Loan Council for the longest term private semi-government borrowings. Provision of assistance to New South Wales and Western Australia is subject to the finalisation of agreements with those States. {:#subdebate-101-44} #### Other Rail Transport As indicated under the section headed Australian National Railways Commission (ANR), that Commission is to become responsible for the construction of the Adelaide to Crystal Brook railway. The arrangements are to provide also for termination of the existing Adelaide to Crystal Brook Railway Agreement, and for the Commonwealth to refund payments of interest and repayments of principal made by the State under the existing agreement. A provision of $863 000 in 1980-81 is included for that purpose. {:#subdebate-101-45} #### Repayments Repayments of past advances from the Commonwealth for State rail projects (mainly standardisation) are estimated to amount to $5.6 million in 1980-81, leaving a balance of $58.0 million repayable over the next 47 years. {:#subdebate-101-46} #### Urban Public Transport The *States Grants (Urban Public Transport) Act* 1978 provided for grants totalling up to $300 million to the States for urban public transport projects over the five years 1978-79 to 1982-83. The Act initially made available for payment to the States a total of $60 million a year, of which $40 million was to be allocated in fixed basic amounts, with the remaining $20 million available for allocation on the basis of needs and priorities assessed in the light of proposals submitted by the States. The *States Grants (Urban Public Transport) Amendment Act* 1979 varied the basic amounts to $45 million in 1980-81 and $50 million in each of 1981-82 and 1982-83, by, in effect, absorbing into those amounts the 1978-79 needs component and part of the needs component for the following year. In 1980-81, the Government has decided to limit the current year's payments to the basic amount as in previous years. The 1980-81 provision of $45.6 million includes $571 000 in respect of commitments entered into in 1979-80 but not paid in that year, and brings the total allocations in the first three years of the program to $125 million. In 1979-80, $2.5 million was paid to the States to finalise outstanding commitments under the previous Urban Public Transport Agreement. {:#subdebate-101-47} #### Transport Planning and Research The Commonwealth is to provide $6.25 million in 1980-81, under a $ for $ cost sharing arrangement with the States, for an approved program of land transport planning and research projects. Part of the funds provided under this program are used by the States to finance up to one half of their contributions towards the costs of projects undertaken by the Australian Road Research Board and the Australian Railway Research and Development Organisation. (These organisations are also supported by the Commonwealth directly or through its instrumentalities.) Apart from departmental research projects, $2.8 million is provided in 1980-81 to finance the Bureau of Transport Economics, which conducts research into. the economics and operations of all modes of transport. {:#subdebate-101-48} #### Shipping and Harbours {:#subdebate-101-49} #### Australian Shipping Commission Past advances to the Commission comprise borrowings by the Commission from the Budget and the proceeds of loans raised by the Commonwealth on the Commission's behalf to assist in the financing of capital expenditure, mainly ship purchases. An amount of about $12.5 million will be repaid by the Commission in 1980-81 in respect of past loans raised by the Commonwealth on its behalf. This will leave loans outstanding totalling about $150 million which are repayable over the next 6 years. The Commission now raises loans on its own behalf and has not borrowed from the Budget since 1976-77. {:#subdebate-101-50} #### Shipping Subsidies An amount of $30.3 million is provided in 1980-81 for the Tasmanian Freight Equalisation Scheme. The Scheme aims to bring the door-to-door freight costs of eligible cargoes shipped by sea between Tasmania and the mainland into approximate equality with the door-to-door costs of moving similar goods by road or rail over comparable interstate routes on the mainland. Also included in the 1980-81 estimates is an amount of $1.9 million to subsidise the operations of the Australian Shipping Commission's 'Empress of Australia' passenger service between Tasmania and the mainland for the period to 31 March 1981. An amount of up to $1.5 million is provided in the 1980-81 estimates to subsidise the Australian Shipping Commission's 'Darwin Trader' service between the east coast and Darwin. This subsidy, which is for one year only, will enable the service to be continued while the Northern Territory Government and the Commission consider proposals for the provision of an alternative shipping service to Darwin. {:#subdebate-101-51} #### Shipping and Harbours - Other Included under this heading is an allocation of $4.9 million in 1980-81 for capital expenditure on equipment and facilities, mainly in respect of marine navigational aids. The capital expenditure in relation to the provision of marine navigational aids is connected with the second year of a five year plan to modernise and extend Australia's network of some 340 marine navigational aids to improve the safety and efficiency of commercial shipping. A major project involves the replacement of two light vessels at a cost of $1.7 million over two years. Also included is an estimated payment of $3.7 million to the Overseas Telecommunications Commission in 1980-81 for the provision of maritime safety communications services. {:#subdebate-101-52} #### Pipelines Interest-bearing loans of $28.5 million, to be made to the Pipeline Authority in 1980-81, are to meet the estimated shortfall between the Authority's revenue, derived primarily from the carriage of natural gas from Moomba to Sydney, and its expenditure, including interest ($28.8 million) and loan repayments ($16.1 million) to the Commonwealth. In 1980-81 the Authority is for the first time to borrow from the private sector; the amount to be borrowed will be up to $26 million, which is to be used mainly for the construction of natural gas pipelines from Dalton to Canberra, and from Young to Wagga Wagga. Studies of an extension from Wagga Wagga to Albury and possible lines to Lithgow, Bathurst, Orange and Oberon are being made. If construction of these lines is commenced in 1980-81, it is expected that they would be financed by additional private sector borrowings by the Pipeline Authority. Interest on private sector borrowings will be met from the Authority's revenue and from the Budget. In 1980-81, an additional $100 000 is to be provided to the Pipeline Authority for expenditure on new pipeline investigations. {:#subdebate-101-53} #### General Administrative and Other Expenditure The 1980-81 provision of $46.0 million for running expenses of the Department of Transport (other than those related to the provision of air transport services ($227.5 million) and the functions of the Bureau of Transport Economics ($2.8 million) which are included elsewhere) includes $31.6 million for salaries and payments in the nature of salaries. A major component of this item is the recurrent expenditure on the provision of marine navigational aids; this is fully recoverable (see below). Also included in the 1980-81 estimates is an amount of $2 million for the charter of Nomad Searchmaster aircraft over a two year period to evaluate their suitability for coastal surveillance purposes. Expenditure foreshadowed in 1979 for this purpose was not incurred in 1979-80 because of delays in finalisation of the charter contracts and delivery of the aircraft. {:#subdebate-101-54} #### Other Recoveries Most of . the recoveries under this heading come from light dues levied on commercial shipping for the use of marine navigational aids provided by the Commonwealth. Based on an estimated decline in tonnage of 3 per cent compared with 1979-80, the present charge of 41 cents per net registered ton per quarter is expected to provide revenue of $23.1 million in 1980-81 and to fully recover the costs incurred by the Commonwealth in the provision of these navigational aids. The costs of services provided to the maritime transport industry by the Department of Transport under the *Navigation Act* 1912 are partly recovered by a system of fees and charges levied under that Act. In 1980-81 these fees and charges are expected to yield revenue of $1.9 million compared with $1.6 million in the previous year. The increase is due to the full year effect of the higher fees and charges introduced in 1979-80. The system of fees and charges is to be reviewed by the Government no later than December 1980. The Office of Road Safety provides technical and administrative support to the Australian Design Rule Certification system for new motor vehicles. The charges .levied by the Office on vehicle compliance plates are estimated to raise revenue of $1.1 million in 1980-81, and to offset the full costs of operating this system. {: type="A" start="B"} 0. WATER SUPPLY, ELECTRICITY AND GAS Outlays on this function are currently estimated to be $60.4 million in 1980- 81, an increase of 145 per cent over 1979-80. The major components of the increase relate to the new subsidy on liquefied petroleum gas and a payment to the Northern Territory to subsidise the costs of electricity supply. It is not yet possible to include here any funds that might be provided for urban water supply projects in 1980-81 under the National Water Resources Program *(see* next section - Industry Assistance and Development: Irrigation and Other Pastoral Water Projects). {:#subdebate-101-55} #### Urban Water Supply An amount of $1.0 million is being provided in 1980-81 for water storage and reticulation work in the ACT. This is $0.6 million less than in 1979-80 and reflects lower growth of demand for new facilities. The Commonwealth provided a grant of $250 000 to Queensland in 1979- 80 for payment to the Mount Isa City Council as the final portion of the Commonwealth's assistance towards the Council's share of the debt burden associated with the now-completed Julius Dam. As noted above, assistance for other urban water supply projects may result from allocation of the $29.4 million to be provided in 1980-81 under the National Water Resources Program. In 1979-^80, $2.6 million was provided under this Program to assist with the construction of water treatment plants in the Adelaide metropolitan area, $0.5 million for additional water supply facilities for the West Pilbara region and $0.7 million for the construction of supplementary water supply facilities for Port Hedland. *Electricity Supply in the Northern Territory* The 1980-81 estimate of $48 million is for a subsidy payment to the Northern Territory Government for the operations of its Electricity Commission. It represents an increase of $18 million on the 1979-80 provision, due mainly to increased oil costs. Under the Memorandum of Understanding between the Commonwealth and the Northern Territory, the Commonwealth is to provide a subsidy for the operations of the Commission up to 1981-82 based on the difference between estimated operating costs and the revenues the Commission would receive if it had applied average North Queensland tariffs. The payment is subject to subsequent variation depending on the actual outcome of operations. The Commonwealth and Northern Territory Governments have agreed to a re-examination of the subsidy arrangements during 1980-81. *Subsidy on Liquefied Petroleum Gas* The Government has introduced a scheme, effective from 28 March 1980 for 3 years, to subsidise, at the rate of $80 per tonne, certain non-commercial use of liquefied petroleum gas. Estimated expenditure from the Budget in 1980-81 of $25 million includes subsidy payments in respect of the period 28 March to 30 June 1980. {:#subdebate-101-56} #### Other Payments An amount of $280 000 is being provided in 1980-81 for the costs of the Committee of Inquiry into Electricity Generation and the Sharing of Power Resources in South-Eastern Australia which commenced in April 1980. The figure of $0.1 million under this heading in 1978-79 represents net expenditure by the Snowy Mountains Hydro-electric Authority on capital account. As in 1979-80, no appropriation is provided in 1980-81 for the Snowy Mountains Hydro-electric Authority. The Authority continues to fund capital expenditure for the operations and maintenance of the scheme primarily using loans from the private capital market, but using also receipts from the sale of surplus assets. In 1979-80 the borrowing program amounted to $1.0 million, and a program amounting to $1.2 million is expected for 1980-81. The principal project in 1980-81, requiring about half the total funds, is the completion of construction of the new workshop and stores complex at Talbingo. Capital expenditure financed from sale of assets is expected to amount to about $580 000 in 1980-81 compared with about $430 000 in 1979-80. {:#subdebate-101-57} #### Repayments Estimated repayments in 1980-81 include $7.1 million from the Snowy Mountains Hydro-electric Authority, $3.0 million in respect of earlier loans for hydro-electric schemes in Tasmania and $2.2 million in respect of assistance provided to Queensland for the Gladstone Power Station. {: type="A" start="C"} 0. INDUSTRY ASSISTANCE AND DEVELOPMENT The Commonwealth assists industry through a variety of measures including direct financial assistance, taxation concessions, guaranteed domestic price arrangements, financial guarantees and the customs tariff. Direct financial assistance from the Budget is provided in the form of bounties and subsidies, price support and reconstruction or adjustment schemes, development projects primarily in support of industry, disease eradication schemes, contributions to research and promotion, and other payments to or for the benefit of industry. It includes outlays of some departments and instrumentalities which service industry (e.g.. the Departments of Industry and Commerce, Primary Industry and the Australian Tourist Commission). These departments and instrumentalities provide many services either free of charge or for charges which do not recover fully the costs involved. Outlays recorded in some other functional headings also are of assistance to industry. Examples are the provision of airports and airway services, roads and shipping subsidies, expenditure to maintain or improve the defence capacity of industry and certain expenditures by the CSIRO. Apart from these direct outlays from the Budget, considerable assistance is provided from the Budget to industry through special provisions in the taxation system which, as they result in reduction of Government revenues, are as much a call on the Budget as are direct outlays. Some such provisions (e.g. those for investment allowances) have been of wide application; others affect only particular industries (e.g. the exemption from income tax of incomes from gold mining; the averaging provisions for income arising from primary production) or specific activities of particular industries (e.g. the immediate write-offs available to primary producers for water conservation measures). In many years, the revenue forgone under such provisions has been estimated to be at least of the same order of magnitude as direct outlays for industry assistance and development. Further information concerning such 'tax expenditures' is provided in Appendix II to Budget Statement No. 4 'Estimates of Receipts 1980-81'. Net direct assistance from the Budget (i.e. after deducting amounts collected by way of industry levies and charges such as the wool tax and livestock slaughter levies) is estimated at $824.6 million in 1980-81, an increase of $194.4 million or 30.8 per cent on 1979-80. Outlays on direct assistance to major industry categories are summarised in the following table. Detailed information on each of these industry categories is set out below. Forestry and Fishing Industries 1978-79 1979-80 1980-81 {:#subdebate-101-58} #### Actual Actual Estimate Change S million $ million S million $ million Softwood Forestry Development (net) 7.5 4.8 4.4 -0.4 {:#subdebate-101-59} #### Other Forestry..... 0.2 0.3 0.5 +0.2 {:#subdebate-101-60} #### Fisheries Research, Promotion and {:#subdebate-101-61} #### Development..... 2.3 3.1 4.1 +1.0 Fisheries Charges..... 0.3O 2.90 3.0O- -0.1 {: .page-start } page 1 {:#debate-102} ### TOTAL FORESTRY AND FISHING INDUSTRIES 9.7 5.4 6.1 +0.7 {:#subdebate-102-0} #### Softwood Forestry Development The Commonwealth provides loans to the States for the maintenance of softwood forests. Net Budget outlays totalled $4.8 million in 1979-80 and are estimated at $4.4 million for 1980-81. Under the *Softwood Forestry Agreements Act* 1978 the Commonwealth is assisting the States, during the five-year period commencing 1977-78, to cover the cost of maintaining softwood forestry plantations established under the *Softwood Forestry Agreements Acts* 1967, 1972 and 1976. That assistance is provided by way of loans repayable over 20 years, with repayments commencing 15 years after the date of each advance. Depending on State preferences, interest is either capitalised over the deferment period or paid as it falls due. {:#subdebate-102-1} #### Other Forestry Arising out of the report by **Sir Bede** Callaghan into the structure of industry and the employment situation in Tasmania, the Commonwealth agreed to provide loan assistance to Tasmania of $136 000 per annum towards the cost of certain silviculture projects to be undertaken during the five-year period commencing 1978-79. Over the four years 1979-80 to 1982-83, that assistance is being supplemented by the provision of further loan funds of $100 000 per annum to assist the establishment of eucalypt plantations on marginal farmland and for the purchase of such farm land. The loans are repayable over 40 years commencing 20 years after each advance is made. Interest is being capitalised during the 20 years in which repayments are deferred. Tasmania received $272 000 in 1979-80, including assistance (after delayed execution of the initial agreement) in respect of 1978-79. Due to similar delays in executing the supplementary agreement, the estimated payments in 1980-81 are $336 000. {:#subdebate-102-2} #### Fisheries Research, Promotion and Development An amount of $2.1 million is provided in 1980-81 to reimburse the States and the Northern Territory for costs of increased observer, administration and patrolling activities carried out on behalf of the Commonwealth following the proclamation of the Australian Fishing Zone during 1979-80. Also included are grants to match industry contributions for fisheries research ($820 000) and fisheries development ($465 000), $175 000 for Torres Strait fisheries research, $65 000 for management of the Northern Prawn Fishery, $230 000 for the publication of 'Australian Fisheries' and $250 000 for the apprehension of foreign fishing vessels. {:#subdebate-102-3} #### Fisheries Charges The 1980-81 estimate of $3.0 million includes Commonwealth fisheries licence fees, and payments for access to the Australian Fishing Zone negotiated with foreign Governments and foreign fishermen. {:#subdebate-102-4} #### Agricultural and Pastoral Industries Outlays on direct assistance to agricultural and pastoral industries are estimated to decrease by $27.4 million in 1980-81. This decline is more than fully accounted for by the advance in 1979-80 and proposed repayment in 1980-81 of moneys to Queensland to meet reserve stock holding obligations under the International Sugar Agreement. Excluding these transactions, other ' outlays to assist agricultural and pastoral industries are estimated to increase by $27.9 million or 16.7 per cent in 1980-81. 1978-79 1979-80 1980-81 Actual Actual Estimate Change $ million S million $ million S million {:#subdebate-102-5} #### Specific Industries - Wool Industry - {: type="1" start="1"} 0. The 1980-81 estimates include the total provision under the National Water Resources Program. Part of these funds may be allocated to urban water projects, past expenditures on which are recorded under the function 'Water Supply, Electricity and Gas'. {:#subdebate-102-6} #### Wool Industry {:#subdebate-102-7} #### Wool Marketing Assistance The Government has authorised the Australian Wool Corporation to operate a minimum reserve price of 365 cents per kilo clean on a whole clip average basis for the 1980-81 wool selling season, and a floor price of at least 365 cents for the 1981-82 season, compared with a minimum reserve price of 318 cents per kilo for the 1979-80 season. The Corporation will continue to regulate the flow of wool on to the auction market to improve the balance between quantities of wool supplied and demanded, and will purchase above the floor price where necessary to reduce random movements in prices. The Wool Tax (8 per cent on the gross returns from wool sold) is estimated to yield $113.4 million in 1980-81. This tax includes a special levy of 5 per cent on the gross returns from wool sold to offset any losses which may arise from the operation of the reserve price scheme. It is estimated that the special levy will result in an amount of $70.9 million being collected and paid to the Corporation's Market Support Fund in 1980-81. {:#subdebate-102-8} #### Research, Promotion and Other Expenditures The 1980-81 estimates provide for Commonwealth contributions of $20 million towards wool promotion and $7.1 million towards wool research. While support for promotion is determined annually, research (as is the case for other rural industries) is a continuing program. An estimated $42.9 million, being $42.5 million estimated receipts from an industry levy of 3 per cent on gross returns from wool sold, and other income, will be available to supplement the Commonwealth contribution towards research and promotion. {:#subdebate-102-9} #### Wheat Industry The current Wheat Marketing Plan covers the five crop seasons 1979-80 to 1983-84 and involves a number of revisions to the successive Wheat Industry Stabilization Schemes that have operated since 1948. Under the new Plan, the Commonwealth guarantees a minimum pool return equal to 95 per cent of the average of estimated returns from the subject pool and the two previous pools. Growers receive a first advance payment on delivery of their wheat to the Australian Wheat Board equal to the new guaranteed minimum price. Those first advance payments are financed by funds provided by the Reserve Bank, under Commonwealth guarantee, and/or by borrowings from commercial sources. The $80 million standing to the credit of the Wheat Stabilization Fund established under the previous Stabilization Scheme has been paid into a new Industry Finance Fund, which receives also the proceeds of a special $2.50 per tonne levy on wheat deliveries to the Board. When this new Fund reaches the prescribed maximum balance of $100 million, further levy receipts and interest earnings lead to returns to growers on a first-in-first-out basis. Total fund receipts in 1980-81 are estimated at $76.7 million, comprising $38.5 million from the financing levy on the 1979-80 pool, $30 million from the stabilization levy on the 1978-79 pool, and $8.2 million in interest earnings. This would top the Fund up to the $100 . million maximum, and leave $56.7 million available for distribution to growers. Moneys in the Fund are available, together with commerical borrowings as necessary, to refinance Reserve Bank borrowings at the time such borrowings are due for repayment. The Commonwealth reimburses the Wheat Board for the additional borrowing costs associated with commercial borrowings substituted for Reserve Bank advances. The 1980-81 estimate of $28.7 million could vary substantially, depending upon movements in commercial borrowing rates, the level of Reserve Bank finance which can be accommodated in the light of general monetary conditions, and 1980-81 production. The charges and repayments estimate comprises the $68.5 million from the financing and stabilization levies and $2.84 million proceeds from wheat tax levied to provide an industry contribution to research. {:#subdebate-102-10} #### Sugar Industry {:#subdebate-102-11} #### Loans to Queensland and Repayments Funds equivalent to a $27.8 million .drawing from the Buffer Stock Financing Facility of the International Monetary Fund (IMF) were advanced to Queensland in 1979-80 for on-lending to the local sugar industry for the purpose of meeting Australia's special reserve stockholding obligations under the terms of the International Sugar Agreement (ISA). Following the sharp increase in world sugar market prices in early 1980, Australian holdings of special ISA stocks were released for sale, and the IMF required repurchase on 21 May 1980 of the Commonwealth drawing. Due to changes in the exchange rate for the $A, the repurchase obligation is $27.4 million. Since it will take some months for the local industry to finalise receipts from the sale of its special stocks, the Commonwealth has agreed to defer for six months the reimbursement due from Queensland. In 1979-80 repayment was completed of the market support loans extended to Queensland in 1967. {:#subdebate-102-12} #### Dairy Industry {:#subdebate-102-13} #### Dairy Industry Stabilization Marketing arrangements for dairy products, introduced by the Government on 1 July 1977 provide for an equalisation levy (equal to the difference between the domestic price and the assessed average export price) on the production of certain prescribed dairy products. The proceeds are redistributed among manufacturers with a view to protecting the domestic price structure and are designed to ensure that manufacturers receive the same return from total domestic and export sales. The increase in levy collections and payments to manufacturers, which are estimated at $95.7 million in 1980-81, reflects increases in levy rates. {:#subdebate-102-14} #### Price Support for Dairy Products In addition to the marketing arrangements referred to in the previous paragraph, the Commonwealth has agreed to continue to underwrite equalisation values for certain dairy products (ie guarantee floor prices for them) for the 1980-81 season. A provision of $4 million is included in 1980-81 to cover the Commonwealth's liability for the 1979-80 season. This is a reduction of $13.7 million on 1979-80 expenditures and mainly reflects improved returns, especially on the domestic market, and some reduction in exports to lower price markets. As in the 1979-80 season, underwriting in the 1980-81 season will apply to total production of the relevant products. The underwritten return has been increased from $1.75 to $2.10 per kilogram butterfat on a farm gate basis. Consideration is being given to what underwriting arrangements might operate after the 1980-81 season. {:#subdebate-102-15} #### Repayments This heading covers the levy referred to under 'Dairy Industry Stabilization' ($95.7 million), repayments by the States in respect of dairy industry adjustment programs ($2.4 million) and industry contributions to research and promotion ($5.5 million). {:#subdebate-102-16} #### Fruit Industry {:#subdebate-102-17} #### Stabilization, Research and Promotion It is estimated that total stabilization and supplementary assistance expenditure in 1980-81 will amount to $3.4 million for apple exports and $0.4 million for pear exports. The question of future assistance to the apple and pear industries was the subject of a recent Industries Assistance Commission report. The results of the Government's consideration of the report were announced on 4 June 1980 by the Ministers for Primary Industry and Business and Consumer Affairs. Under the new arrangements, proposed to apply for the 1981-85 export seasons, the Commonwealth will underwrite apple and pear export returns in each season at 95 per cent of the weighted average return for the four immediately preceding seasons. The current stabilization arrangements are to terminate at the end of 1980 for pears, and are to be phased out over four years for apples, with stabilization payments being reduced by amounts due under the new underwriting scheme. The Commonwealth has agreed to continue supplementary assistance arrangements for apples and pears for the four seasons 1981 to 1984 on a $ for $ basis with participating States. An amount of $2.0 million, financed largely from special industry levies, is provided to meet the operating costs of various fruit industry marketing authorities, promotion activities and research. *Charges and Repayments* ,In addition to the special levy receipts noted above, provision is made for a grower pay-in of $2.2 million under the Dried Vine Fruits Stabilization Scheme. The continued high export returns which will require this pay-in will render the provisions pf the Dried Vine Fruits Equalisation Scheme inoperative in 1980-81. The estimate also includes $0.7 million for repayments of loans provided in earlier years to assist co-operative fruit canneries. {:#subdebate-102-18} #### Poultry Industry Outlays on stabilization (estimated at $18.8 million in 1980-81) are financed from industry levies which flow back to the industry through State egg marketing authorities in accordance with the terms of the Egg Industry Stabilization Scheme. The Budget also provides for Commonwealth contributions towards agreed research programs ($150 000 in respect of poultry and $225 000 in respect of chicken meat) to match expenditure for those purposes from industry levy receipts. {:#subdebate-102-19} #### Cattle, Sheep and Pig Meat Industry *Eradication of Cattle Diseases and Compensation (net)* Disease eradication and compensation payments are estimated at a net $3.4 million in 1980-81. In 1980-81 $24 million is estimated to be payable to the States and the Northern Territory for the bovine brucellosis and tuberculosis eradication campaign. This comprises $20 million for eradication operations and $4 million in grants towards slaughter compensation payments. Recoveries from the $3 per head disease eradication component of the Livestock Slaughter Levy are estimated at $20.6 million in 1980-81; these are offset against the Commonwealth's expenditure for disease eradication operations. The achievement of provisional freedom from bovine brucellosis by 1984 is estimated to involve grants for compensation totalling about $10 million for the remainder of the current campaign. Outlays for operational purposes are recoverable from the disease eradication component of the Livestock Slaughter Levy. *Inspection Services (net)* Meat export inspection and animal health services undertaken by the Bureau of Animal Health are estimated to cost $41.3 million in 1980-81, an increase of $3.5 million over 1979-80. Offset against this are estimated revenues of $19.6 million, comprising $15.2 million from charges designed to recover 50 per cent of export inspection costs for meat, $3.2 million from charges to exporters for meat inspection outside prescribed hours, and other recoveries of $1.2 million. {:#subdebate-102-20} #### Beef Industry Assistance As part of the Commonwealth's commitment to provide up to $6 million towards the cost of implementing a beef cattle carcase classification system an amount of $796 000 is to be provided in 1980-81. Assistance provided for this scheme to 30 June 1980 totalled $1.5 million. {:#subdebate-102-21} #### Research, Promotion and Other Expenditures The Commonwealth matches expenditure on approved research projects for the meat and pig industries where such expenditure is funded from industry levies and makes payments, which are fully recovered from industry levies, to the Australian Meat and Livestock Corporation and for pig promotion. Estimated outlays in 1980-81, including industry contributions, comprise $8.0 million for research and promotion and $7.8 million for payments to the Australian Meat and Livestock Corporation. {:#subdebate-102-22} #### Recoveries and Repayments Included here are the industry levies in respect of the Australian Meat and Livestock Corporation and meat and pig research and promotion and repayments of advances ($4.1 million in 1980-81) which were provided mainly in 1975-76 and 1976-77 under a scheme of beef industry assistance. {:#subdebate-102-23} #### Other Agricultural and Pastoral Industries Included here are outlays in respect of the honey, oilseed, tobacco, wine and barley industries; these are mainly for promotion and research. Industry payments to the Commonwealth in respect of these activities are included in 'Charges and Repayments'. Outlays not Allocated to Specific Agricultural and Pastoral Industries {:#subdebate-102-24} #### Primary Industry Bank of Australia The Primary Industry Bank of Australia Limited was established in 1978 to increase the availability of longer-term loans to primary producers (including fishermen). The Bank operates as a re-financing institution, borrowing funds for on-lending to other financial institutions which in turn lend to individual primary producers. The Commonwealth subscribed $625 000 in equity capital to the Bank in 1978-79 and will subscribe a further $78 000 in 1980-81 following the reallocation among the remaining share-holders of the shares held by the Bank of Adelaide. The Commonwealth has also deposited a total of $75 million - $30 million in 1978-79 and $45 million in 1979-80- with the Bank from the Income Equalisation Deposits Trust Account at a concessional interest rate. (The latter assistance is recorded in financing transactions rather than in outlays). {:#subdebate-102-25} #### Rural Reconstruction/ Adjustment The Rural Adjustment Scheme, established under the *States and Northern Territory Grants (Rural Adjustment) Act* 1976, provides assistance, the amount of which is determined annually, to the States and the Northern Territory for purposes of farm debt reconstruction, farm build-up, farm improvement and rehabilitation, carry-on finance and household support. Assistance for debt reconstruction, farm build-up, farm improvement and rehabilitation is made available by the Commonwealth, 85 per cent of assistance being by loan and 15 per cent by grant. The Commonwealth also contributes a further amount to assist in defraying administrative expenses. For the household support component, the Commonwealth finances all assistance and contributes towards administrative expenses; the States and the Territory repay to the Commonwealth any principal and interest recouped by them. For carry-on finance, the States and the Territory share equally with the Commonwealth both the financing of loans (and administrative costs) and all principal and interest payments received from producers. For 1980-81, carry-on finance will be available to winegrape growers only. Outlays under the Scheme are estimated at $17.7 million (which includes $0.6 million for the Northern Territory) in 1980-81 compared with $15.6 million in 1979- 80. An amount of $10 million will be required in 1981-82 to fund approvals made but not financed in 1980-81. {:#subdebate-102-26} #### Fertilizer Bounties Legislation was enacted in 1977 to continue the phosphate fertilizer bounty at the rate of $12 per tonne over the five year period ending 30 June 1982. Bounty payments are estimated at $46 million for 1980-81, reflecting a forecast decline in fertilizer sales from the abnormally high level experienced in 1979-80. The Government has decided that the nitrogenous fertilizer subsidy, which was due to expire on 31 December 1980, will be extended for a further year. The estimated costs in 1980-81 and calendar year 1981 are $5 million and $5.5 million respectively. *Inspection Services nec* In addition to meat export inspection services, the Commonwealth provides for export inspections in respect of grains, fruits and other exports requiring quality certification. The net cost of these services is estimated at $6.7 million in 1980- 81, after allowing for estimated revenue of $1.3 million flowing from the Government's decision to recover, with effect from 1 July 1979, 50 per cent of all export inspection costs for grains and wool. {:#subdebate-102-27} #### Agricultural Extension and Research Grants to the States (and the Northern Territory) for the development of their agricultural advisory services are estimated at $4 756 000 in 1980-81. The Commonwealth proposes also to spend $244 000 directly on projects which are of common interest to several States. For 1980-81 this item also includes $200 000 for Australian Agricultural Council sponsored projects, and $253 000 for other agricultural research activities. {:#subdebate-102-28} #### Irrigation and Other Pastoral Water Projects Expenditure under this heading comprises Commonwealth assistance for rural water conservation, irrigation and flood mitigation. In November 1977 the Government announced that it would contribute $200 million, as grants and/or loans, for water related purposes in the States over the five years to 1982-83 under the National Water Resources Program (NWRP). A total of $45.3 million was spent in the first two years of the program, including $24.6 million in 1979-80 (this does not include $1.9 million paid to the Northern Territory in 1979-80 for water resources assessment). An amount of $29.4 million is being provided in 1980-81 for the NWRP, which will include for the first time assistance for the Northern Territory under this program. Of the 1980-81 total, $25.6 million has not yet been allocated to specific projects, and is (pending allocation) shown under the item 'Irrigation, Investigation and Other Water Projects'. Further details on the NWRP are contained in Budget Paper No. 7, *Payments to or for the States, the Northern Territory and Local Government Authorities, 1980-81.* {:#subdebate-102-29} #### Irrigation, Investigation and Other Water Projects Final allocations for irrigation projects in 1980-81 have still to be settled. The Commonwealth's contribution to the cost of works authorised under the River Murray Waters Agreement is estimated at $647 000. This is $2.3 million less than the amount paid in 1979-80, which included a special payment of $1.5 million to the River Murray Commission in respect of the Commonwealth's share of the cost of an out-of-court settlement with the contractor for construction of the Dartmouth Dam. An estimated $387 000 will be made available in 1980-81 in respect of loan assistance being provided to Western Australia for investigations and the construction of rice storage facilities associated with the Ord Irrigation Scheme; $14 000 was provided for the rice storage facilities in 1979- 80. An amount of $475 000 will be provided for water resources research in 1980- 81, but allocations for water resources assessment and related studies in the States are still to be determined. The Northern Territory is expected to receive $1.94 million for water resources assessment projects in 1980-81. {:#subdebate-102-30} #### Salinity Mitigation and Drainage The Commonwealth provided $4.4 million in 1979-80 as further assistance for a co-ordinated program designed to alleviate salinity and drainage problems in the Murray Valley. An amount of $0.7 million was also provided in 1979-80 for salinity control in the Collie River area of Western Australia. Assistance in 1980-81 under this heading will depend on the allocation of the NWRP provision. {:#subdebate-102-31} #### Flood Mitigation Assistance to the States for flood mitigation totalled $1.7 million in 1979-80, comprising $1 million for works on the NSW coastal rivers, $0.6 million for flood plain management and works on Victoria's inland rivers, and $0.1 million for Proserpine flood mitigation works. Possible assistance under the NWRP for flood mitigation projects in 1980-81 is still to be determined. {:#subdebate-102-32} #### Recoveries and Repayments Repayments are estimated at $2.8 million in 1980-81 and include $2 million from New South Wales in respect of earlier advances for the construction of the Blowering Reservoir. {:#subdebate-102-33} #### Land Development Projects {:#subdebate-102-34} #### War Service Land Settlement The provision of $1.8 million in 1980-81 includes $1.0 million towards the operation and maintenance of the Loxton irrigation project in South Australia and $0.75 million for agent States to make credit facilities available to eligible settlers. {:#subdebate-102-35} #### Repayments Of the $3.5 million repayments estimated for 1980-81, $2.3 million relates to War Service Land Settlement. {:#subdebate-102-36} #### General Administrative and Other Expenditure This item includes the salaries and administrative costs of the Department of Primary Industry ($16.1 million), the Bureau of Agricultural Economics ($5.8 million) and the Commonwealth's contribution to the Australian Plague Locust Commission ($890 000). {:#subdebate-102-37} #### Mining and Manufacturing Industries {:#subdebate-102-38} #### Mining Industry - {:#subdebate-102-39} #### Uranium - Exploration and Development Return of Uranium Concentrates {:#subdebate-102-40} #### Bureau of Mineral Resources Other Mining (net) {:#subdebate-102-41} #### Total 1978-79 1979-80 1980-81 Actual Actual Estimate Change s million $ million $ million $ million 1978-79 1979-80 1980-81 {:#subdebate-102-42} #### Actual Actual Estimate Change {:#subdebate-102-43} #### Mining Industry In addition to the direct assistance outlined below the Commonwealth assists the development of the mining industry through the taxation system by way of various special provisions applying to mining companies, or to their shareholders. Examples of such special provisions, which constitute a call on the Budget as much as do direct expenditures, are: - special deductions for capital expenditure on mining and exploration activities and transport of certain minerals; - rebates to shareholders in respect of capital subscribed for both on-shore and off-shore petroleum exploration and development (conditional on the company forgoing certain deductions); and - exemption from tax of income from gold mining. The mining industry also benefits from the general investment allowance and from depreciation rates allowed for eligible plant and equipment. Further details on assistance provided through the taxation system are included in Appendix LT to Statement No. 4. {:#subdebate-102-44} #### Uranium - Exploration and Development On 9 January 1979 the Commonwealth entered into an agreement with Peko Wallsend Operations Ltd, the Electrolytic Zinc Company of Australasia Ltd and the Australian Atomic Energy Commission (AAEC) relating to the Ranger Project in the Northern Territory. Since 1978-79, when $17 million was provided from the Budget for this purpose, the AAEC's participation in the project has been funded from 'off-Budget' borrowings. For details concerning the proposed sale of the Commonwealth and AAEC interests in the project to Energy Resources of Australia Ltd (ERA), *see* 'Sale of Existing Assets' - Statement No. 4. An amount of $35 000 has been included in this item to meet the expenses of the Ranger Assessor who will periodically estimate the cost of rehabilitation of the Ranger Project Area. In addition, approximately $650 000 is to be paid to the Northern Land Council in 1980-81 in relation to the Ranger Project, in accordance with the Agreement entered into under Section 44 of the *Aboriginal Land Rights (Northern Territory) Act* 1976. Both of these payments will be recouped from the present Ranger Joint Venturers or from ERA. These payments and the associated revenues will continue after the proposed disposal of the Commonwealth's interest in the project. The Memorandum of Understanding between the Commonwealth and the Northern Territory provides that the Commonwealth will reimburse the Northern Territory Government for the additional capital or other expenditures incurred as a result of uranium developments, to the extent that such expenditures are incurred by the Northern Territory Government in accordance with prior specific arrangements agreed between the two Governments. An amount of $10 million is provided in 1980-81 for the contribution towards approved State-type social infrastructure at Jabiru Township under that arrangement (compared with $948 000 in 1979-80). A further amount of $347 000 is included to reimburse the Northern Territory Government for the cost of non-environmental uranium mining regulatory services which it provides on behalf of the Commonwealth. The comparable outlay in 1979-80 was $250000. The primary reason for the increase is the need for increased regulatory services resulting from the continuing construction of uranium projects and the commencement of mining and processing operations. This amount is additional to the $3.3 million to be provided to the Northern Territory for environmental services connected with uranium development *(see* 'Urban and Regional Development and the Environment'). An amount of $156 000 is provided in 1980-81 for the direct administrative costs of the Uranium Advisory Council, which was established in 1978 to provide independent advice to the Government, the Parliament and the public on all matters relating to the exploration, development and export of Australian uranium (1979-80 outlays $107 000). An amount of $412 000 is provided for the Australian Uranium Export Office, which was established in 1978 to provide advice to the Commonwealth in relation to uranium export policies. That amount compares with expenditure of $354 000 in 1979-80, and allows for an increase in staff employed by the Office. During 1980-81 Mary Kathleen Uranium Limited is expected to commence half-yearly repayments of a loan of $9 million to the company by the Commonwealth in 1977. Repayments are due to continue until 1984, with $1.1 million to be repaid in 1980-81. {:#subdebate-102-45} #### Return of Uranium Concentrates In 1977, the Commonwealth entered into agreements to provide access to the Commonwealth's uranium stockpile by certain Australian companies to enable them to meet initial delivery obligations under approved contracts entered into prior to December 1972. The agreements provide for amounts " equivalent to the net proceeds from the sale of these borrowed uranium concentrates to be paid to and held by the Commonwealth, pending the return of such concentrates to the Commonwealth. The return of borrowed uranium is expected to commence in 1980-81. Accordingly, provision has been made for an estimated $13.5 million to be repaid from such funds by the Commonwealth this year under these stockpile borrowing arrangements. (Details of receipts under the stockpile borrowing arrangements are shown in 'Sale of Existing Assets' in Statement No. 4.) {:#subdebate-102-46} #### Bureau of Mineral Resources The amount of $14.9 million provided in 1980-81 for the continuing activities of the Bureau of Mineral Resources, Geology and Geophysics ($13.3 million outlay in 1979-80) allows for a small increase in the Bureau's average employment in 1980-81, the first phase of the establishment of a national geoscience data base for coal in Australia, and an acceleration in the program of airborne reconnaissance geophysical mapping. *Other Mining (net)* Coal research expenditure, estimated at $5.1 million in 1980-81, is funded by an excise set at 5 cents per tonne of coal production and by contributions on an equivalent basis received from Victorian and South Australian authorities in respect of their coal production. The Government proposes to continue the levy at the current rate for a five year period from 1980-81. Expenditure of these funds forms part of the National Energy Research, Development and Demonstration Program. Other provisions include $4.0 million payable by the Commonwealth in respect of royalty payments for minerals (including, for the first time, uranium) mined on Aboriginal land in the Northern Territory in accordance with Section 63 of the *Aboriginal Land Rights (Northern Territory) Act* 1976 (the equivalent payment in 1979-80 was $2.1 million), $1.1 million for the Commonwealth's contribution towards the administrative costs of the Joint Coal Board, $897 000 for contributions to several international commodity organisations in respect of Australia's continuing memberships, a net $339 000 towards the cost of a joint study (due to be completed this year) with West Germany of the feasibility of establishing a coal liquefaction plant in Australia, and $222 000 for payment to the New South Wales Government to support the operations of the Chrysotile Corporation of Australia Ltd (representing the balance of the $1.4 million assistance to which the Commonwealth agreed in 1978). In addition, the Government intends to introduce legislation enabling the provision, subject to the successful restructuring of the Chrysotile Corporation, of further assistance to New South Wales in the form of an interest-bearing advance of up to $1 million to support the Corporation's operations for 12 months from the effective restructuring date. The expenditure under this heading will be partly offset by expected repayments to the Commonwealth in 1980-81 of $316000 lent to Mareeba Mining NL in 1974, 1976 and 1977. {:#subdebate-102-47} #### Manufacturing Industry {:#subdebate-102-48} #### Shipbuilding Assistance After a review of this industry by the Industries Assistance Commission, a new and simplified bounty scheme for shipbuilding assistance commenced on 1 July 1980. Under the *Bounty (Ships) Act* 1980, bounty is assessed as a percentage of the cost of construction of vessels. The current rate of bounty of 27± per cent applies until 30 June 1984. Thereafter, the rate phases down to a long term rate of 20 per cent to apply from 1 July 1986. Outlays in 1980-81 are estimated at $17 million and represent subsidies towards the cost of 63 vessels. Bounty for vessels for which tenders closed before 1 July 1980 will continue to be provided under the *Ship Construction Bounty Act* 1975. Payments in 1980-81 under that Act are estimated at $14.3 million, being applied towards the cost of 81 ships. An amount of $0.9 million is provided for the expenses of the Australian Shipbuilding Board, which administers this Act. The $31.8 million provision for shipbuilding assistance in 1980-81, compared with $14.4 million in 1979-80, is attributable to a higher level of shipbuilding activity. {:#subdebate-102-49} #### Industrial Research and Development Under the *Industrial Research and Development Incentives Act* 1976, financial assistance is provided for the research and development activities of industry. Companies can apply for commencement grants (intended to encourage the build-up of research and development) and for project grants in respect of specific research projects. The maximum rate for commencement and project grants is generally 50 per cent, while the usual maximum annual grant payable to an individual company or group is $25 000 for commencement grants and $500 000 for project grants. Assistance is also provided to support major industrial research projects which are considered to be in the public interest. A review of those arrangements, and of a number of pilot programs related to technology transfer and innovation, is being undertaken in the light of the recommendations of the Committee of Inquiry into Technological Change in Australia. Outlays for the above programs are expected to increase by 55.2 per cent, from $34.6 million in 1979-80 to $53.7 million in 1980-81. This includes $10.6 million for commencement grants, $37.4 million for project grants and $5.0 million for public interest projects. Commitments for future years include an estimated $40 million for contracted payments of project grants. In addition to the above direct incentives for research and - development, expenditure on 'scientific research', including expenditure on certain plant, equipment and buildings, is an allowable deduction under the *Income Tax Assessment Act* 1936. {:#subdebate-102-50} #### Agricultural Tractors Bounty Under the *Bounty (Agricultural Tractors) Act* 1966, assistance is payable to eligible producers of certain agricultural tractors until 31 December 1984 or such later date as is fixed by proclamation. To be eligible for bounty, tractors must meet a minimum local content provision of 55 per cent. The bounty rates are indexed quarterly to reflect import price movements and currently range from $772 to $5876 per tractor, depending on the power of the tractor. Assistance to smaller tractors is being phased down to a long term rate of assistance - equivalent to a protective tariff rate of 25 per cent - effective from 1 January 1982. Payments in 1980-81 are estimated at $7.0 million, compared with $8.3 million in 1979-80. {:#subdebate-102-51} #### Machine Tools Bounty Under the *Bounty (Metal-working Machine Tools) Act* 1978, bounty assistance is to be provided until 30 June 1984 to Australian manufacturers of nonportable power operated metal working machine tools, at a rate of 33) per cent of factory cost, subject to certain local content requirements. In addition a bounty, at the rate of 25 per cent of design costs incurred in Australia, is payable to machine tool manufacturers for the Australian design cost component of machines covered by the Act. Bounty payments are estimated to increase from $12.7 million in 1979-80 to $15.0 million in 1980-81; the increase represents rising labour and materials costs and growth in re-tooling of the automotive industry. {:#subdebate-102-52} #### Book Bounty Under the *Bounty (Books) Act* 1969, a bounty is paid at the rate of 33^ per cent of the cost of production of eligible books manufactured in Australia. Following a review by the Industries Assistance Commission, the bounty assistance was extended until 31 December 1986, with the rate of bounty gradually phasing down to 25 per cent by 1 January 1984. Payments in 1979-80 were $13.7 million; $16.0 million is being provided for 1980-81. The increase reflects higher production costs and use by industry of more expensive paper. {:#subdebate-102-53} #### Heavy Commercial Vehicles Bounty The *Bounty (Commercial Motor Vehicles) Act* 1978 provides for bounty payments on assembly of certain general purpose vehicles, including buses, which incorporate prescribed components used as original equipment. Bounty assistance will be provided until 31 December 1984 at the rate of 20 per cent of the intostore value of eligible local components. Bounty payments are estimated at $6.6 million in 1980-81, compared with $6.2 million in 1979-80. {:#subdebate-102-54} #### Other Bounty Payments Under the *Automatic Data Processing Equipment Bounty Act* 1977, bounty is payable until 28 March 1984 on eligible equipment, with the bounty being phased down from the current rate of 15 per cent to 7i per cent on 28 March 1982. Payments in 1980-81 are estimated at $1.0 million, compared with $0.7 million for 1979-80. The *Bounty (Bed Sheeting) Act* 1977 provides for a maximum payment of $0.6 million per bounty year on the production of bed sheeting made up into bed linen. The terms and conditions of the bounty will be reviewed following consideration of the Industries Assistance Commission's final report on *Textiles, Clothing and Footwear.* Payments in 1980-81 are estimated at $0.6 million. The *Bounty (Polyester-Cotton Yarn) Act* 1978 provides for the payment of bounty on the production of yarn, up to a maximum of $0.6 million per annum. In accord with advice from the Industries Assistance Commission, the bounty was extended for 12 months and is due to expire on 31 August 1981. An amount of $0.6 million is being provided for payments in 1980-81. The *Bounty (Rotary Cultivators) Act* 1979 provides for the payment of bounty on the production of self-propelled pedestrian-operated rotary cultivators, hoes and tillers. Following the Industries Assistance Commission's final report on this matter, the Act was amended and bounty assistance was extended until 7 May 1981. The amended Act reduces the rate of bounty from $40 to $20 per kilowatt of the power output of the prime mover's engine and removes the upper limit on bounty payments. Provision is made for payments of $30 000 in 1980-81. Under the *Bounty (Paper) Act* 1979, bounty is payable (at the rate of $90 per tonne on specified coated paper and $70 per tonne on specified uncoated paper) up to a maximum of $2.5 million per year until 5 February 1987. Payments in 1980-81 are estimated at $2.5 million. The *Bounty (Injection-moulding Equipment) Act* 1979 provides for the payment of a bounty on the value added by Australian manufacturers of eligible equipment. The bounty rate is currently 35 per cent and this rate will be reduced by 10 percentage points each year for the remaining 3 years for which the Act applies. Payments in 1980-81 are estimated at $2 million. The *Bounty (Drilling Bits) Act* 1980 provides for the payment of bounty on the production and sale in Australia of down-the-hole hammer button bits exceeding 105 millimetres in diameter. The rates of bounty depend on bit size and range from $40 to $160 per bit, and are subject to local content provisions. The scheme commenced on 1 October 1979 and is to continue pending a decision on the Industries Assistance Commission's foreshadowed report on Cutlery, Industrial Knives and Hand Tools. Payments in 1980-81 are estimated at $50 000. As a result of the Government's consideration of a recent report by the Industries Assistance Commission, export controls on tin ores and concentrates are to be removed, in phased steps, and bounty assistance is to be provided to the tin smelter industry to assist it to adjust to the new arrangements. The *Bounty (Refined Tin) Act* 1980 provides for the payment of bounty on the production of primary refined tin until 31 December 1982. Under the scheme, established miners must supply a specific proportion of concentrates to an established smelter. Concentrates supplied in excess of that minimum attract a subsidy at the rate of $50 per tonne of refined tin. Payments in 1980-81 are estimated at $65 000. As the specified minimum supply of concentrates reduces in each year of the scheme, payments for 1981-82 are. expected to increase. After a review by the Industries Assistance Commission, tariffs on bulk and compound penicillin were reduced to minimum rates and subsidy assistance under the *Bounty (Penicillin) Act* 1980 is to be provided for five years to local manufacturers producing certain penicillin for the further manufacture of antibiotics in Australia. For 1980-81, a maximum payment of $0.9 million has been established. (That limit, and the bounty rates, may later be altered.) {:#subdebate-102-55} #### Export Expansion Grants The Export Expansion Grants Scheme aims to encourage increased exports of Australian goods and services, industrial property rights and know-how. In general, a grant is based on the increase in the value of exports of eligible goods and services in the grant year over the average value for the previous three years. The enabling legislation for the scheme expires on 30 June 1982. The 1980-81 Budget provision of $200 million is estimated to reduce the carryover of outstanding claims from an estimated $104 million at 30 June 1980 to an estimated $62 million at 30 June 1981. {:#subdebate-102-56} #### Export Market Development Grants The Export Market Development Grants Scheme is designed to encourage exporters and prospective exporters to seek out and develop overseas markets. Payments under the Scheme in 1980-81 are estimated at $60 million, compared with outlays of $45 million in 1979-80. The 1980-81 allocation is estimated to reduce the carryover of outstanding claims from $25 million at 30 June 1980 to $19 million at 30 June 1981. {:#subdebate-102-57} #### Development of Microwave Landing System An amount of $3.2 million is provided in 1980-81 for the third year of a joint Commonwealth/industry program for the design and engineering of the INTERSCAN microwave landing system: $5.9 million was provided for the first two years of the program. The Australian Industry Development Corporation has formed a company (InterScan Australia Pty Ltd) to provide an opportunity for a consortium of Australian firms to participate in the production/development phase (which is to be funded entirely by industry) and subsequent production and marketing phases. {:#subdebate-102-58} #### Other Assistance An amount of $2 million is being provided as a further Commonwealth contribution towards the 'Project Australia' campaign. The campaign seeks to increase community awareness of Australian skills and potential, and encourage improvements in product quality, design and marketing. The Commonwealth has provided $2.2 million in the first two years of the campaign (1978-79 and 1979-80). In 1978, the Commonwealth undertook to underwrite the campaign for three years, ending in 1980-81. The $0.3 million offered to the Tasmanian Government in 1979-80 to facilitate the re-establishment of the Launceston Precision Tool Annexe is to be paid in 1980-81. The amount is to be repayable over 10 years. Other industry support in 1980-81 includes $1.15 million for Productivity Improvement Programs, $0.21 million in support of the Productivity Action Program, and a grant of $0.45 million to the Industrial Design Council of Australia. *General Administration (net)* This heading covers administrative costs of the Export Market Development Grants Board ($1.9 million) and of the Department of Industry and Commerce ($8.7 million). {:#subdebate-102-59} #### Tourist Industry The allocation of $8.9 million to the Australian Tourist Commission will enable it to maintain its activities in real terms. Following the substantial real increase in 1979-80, its extended promotional campaign and research into overseas markets are being continued. The provision of $0.2 million for 'other assistance' covers general operational expenses of the ACT Tourist Bureau, and Australia's contribution to the World Tourism Organisation. Beginning in 1980-81, tourist promotion and publicity expenditure of the ACT Tourist Bureau previously included under this item will be funded from the recently established ACT Community Development Fund. {:#subdebate-102-60} #### Petroleum Products Freight Subsidy Scheme The scheme, which has been operational in country areas since 1 July 1978, provides for the payment of a freight subsidy on the cost of distributing motor spirit, power kerosene, aviation fuels and automotive distillate. On 1 April 1980 the Government extended the scheme so that country consumers of these products pay a price which includes not more than 0.44 cents per litre of freight differential costs. The subsidy margin was previously 0.88 cents per litre. An amount of $123 million is being provided for 1980-81, compared with expenditure of $70.8 million in 1979-80. The increase of $52.2 million in 1980-81 reflects the change to the subsidy margin, forecast levels of consumption, estimated increases in freight differentials for eligible products, and some extension of the area covered by the scheme as the real value of the freight differential declines. {:#subdebate-102-61} #### Energy Research and Conservation Funds for energy research, development and demonstration purposes are approved by the Minister for National Development and Energy in the light of advice from the National Energy Research, Development and Demonstration Council. The Budget provision for these purposes has been increased by about 50 per cent to $13.5 million in 1980-81. Budget provisions will be required in future years for existing commitments of $3 million, and for new commitments which may be undertaken in 1980-81. The Commonwealth is again to contribute $1 million to the National Energy Conservation Publicity Campaign in 1980-81. (In addition, some State Governments have agreed to contribute toward the cost of the program.) A provision of $0.5 million is included in this year's Budget for a National Industrial Energy Management and Audit Scheme to cover a conference, seminars, publications, reimbursement of consultancy costs for small and medium-sized firms, and the like, in order to encourage industry to reduce energy consumption, particularly of liquid fuels, through more efficient energy use and fuel-switching. An amount of $1 million is provided for a new energy policy information program to explain the government's policies on, and increase community understanding of, the use and pricing of energy resources. Under this heading there is also to be, in 1981-82, a contribution of $150 000 towards the cost of an ABC series of programs on several energy issues. {:#subdebate-102-62} #### Australian Industry Development Corporation The Australian Industry Development Corporation (AIDC) provides finance for industries concerned with the manufacture, processing, treatment, transportation and distribution of goods, and with the development and use of natural resources and technology. The AIDCs paid up capital at 30 June 1980 was $62.5 million. No additional capital is planned to be provided in 1980-81, but legislation will be introduced in the Budget sittings to increase the Corporation's gearing ratio from 1:5 to 1:8 to enable necessary borrowings to be undertaken to meet its finance requirements. Under the *Loans (Australian Industry Development Corporation) Act* 1974, funds were borrowed overseas on behalf of the AIDC in 1975-76. Repayments from the Corporation in respect of these loans in 1979-80 were $30.4 million, which was in turn repaid by the Commonwealth to the lenders. No further repayments are expected before 1983. {:#subdebate-102-63} #### Export and Trade Promotion Export and trade promotion outlays in 1980-81 are estimated at $26.2 million. This includes expenditure on the Trade Commissioner Service ($18.5 million), matching promotional grants to primary product marketing boards ($1.1 million), and general export promotion, trade publicity fairs, trade displays and trade promotion visits ($6.5 million). Included in the $6.5 million is a special provision of $0.2 million for Australian wine export promotion. {:#subdebate-102-64} #### Compensation Payments A provision of $6 million is made in the Budget for payment of compensation or other assistance in connection with claims arising out of the Government's actions in respect of the situation in Afghanistan and Iran. {:#subdebate-102-65} #### Export Finance and Insurance Corporation The Export Finance and Insurance Corporation (EFIC) provides export credit insurance and guarantee facilities, insurance cover for direct investment overseas against non-commercial risks and, where necessary, export finance for medium and long-term credit sales of capital goods. EFIC's export finance facility is financed by trading bank loans at commercial rates of interest. The Corporation lends these funds to foreign buyers at concessional interest rates. The difference between the commercial rates at which EFIC borrows and the rates at which it lends is met from the Budget by way of an interest rate subsidy payment to EFIC each year. The subsidy payment was $2.6 million in 1979-80 and is estimated to increase to $4.0 million in 1980-81. The 'subsidy commitment authority', the mechanism to control future commitments on the Budget, has been increased from $36 million to $50 million. This amount represents the cost of subsidy payments that will fall on future Budgets if the authority is fully used. At 30 June 1980, the Corporation had entered into loans in support of capital goods exports amounting to $195 million, involving use of the subsidy commitment authority to the extent of about $24 million. In addition, the Corporation had made advance commitments to enter into loans of $54 million, involving use of a further $16 million of the subsidy commitment authority. On the basis of existing contracts already entered into by EFIC as at 30 June 1980, it is estimated that the minimum costs to the Budget will be $3.9 million for 1981-82, $3.6 million for 1982-83 and $2.9 million for 1983-84. To these amounts will be added interest subsidies payable in respect of contracts entered into after 30 June 1980. {:#subdebate-102-66} #### Other Assistance This item includes $375 000 for the promotion of Australian consultancy services in developing countries and $500 000 for the establishment of a new facility for the provision of Australian experts to advise on and formulate development projects for countries of the Middle East. Similar amounts will be provided in each of the following two financial years, with a review at the end of that period. Also included is $325 000 to meet the costs of the Canberra Development Board. {: type="A" start="D"} 0. LABOUR AND EMPLOYMENT Outlays under this heading provide for programs relating to the prevention and settlement of industrial disputes, the enforcement of industrial awards and agreements, manpower and training schemes, employment services and immigration. These outlays are estimated to total $349.5 million in 1980-81, an increase of 14.4 per cent compared with 1979-80. {:#subdebate-102-67} #### Industrial Relations {:#subdebate-102-68} #### Conciliation and Arbitration In 1980-81, $8.1 million is provided for the operations of the Conciliation and Arbitration Commission, the Public Service Arbitrator and the Remuneration Tribunal, whose main functions are to settle disputes and determine wage claims; 1979-80 expenditure for these purposes was $7.0 million. Of the 1980-81 provision $7.2 million is for the operation of the Conciliation and Arbitration Commission, $0.5 million for the Public Service Arbitrator and $0.3 million for the Remuneration Tribunal. Expenditure in 1980-81 reflects increases in costs and the full year effect of relocating the central administration of the Conciliation and Arbitration Commission and the Public Service Arbitrator in Nauru House, Melbourne. {:#subdebate-102-69} #### Industrial Relations Bureau The Industrial Relations Bureau was established in 1978 under the *Conciliation and Arbitration Act* 1904 to facilitate the general supervision and observance of federal industrial law. Its main activities are examination of employing establishments and observance of regulations and awards, together wim review of and research into industrial relations matters. In the twelve months ended 31 December 1979 more than 100 000 enquiries and complaints were received by the Bureau concerning federal awards and the rules of registered organisations. During that period the Bureau conducted 16 791 inspections, visited 11 S04 work places and detected 10 463 breaches of awards. An amount of $4.6 million is being provided in 1980-81 for administrative and operational expenses of the Bureau. {:#subdebate-102-70} #### Payment to Stevedoring Industry This provision represents payment to the Stevedoring Industry Finance Committee of receipts from a levy imposed on stevedoring employers under the *Stevedoring Industry Levy Act* 1977. The funds are used by the Committee mainly to reimburse employers for payments to waterside workers to satisfy award obligations. The Committee is also responsible for payments to employers in respect of their contributions to the Stevedoring Employees' Retirement Fund, the provision of services and amenities for waterside workers and certain administrative costs. The 1980-81 estimate is $0.2 million less than 1979-80 expenditure; improved cargo handling methods having led to an estimated decrease in manhours to be worked. {:#subdebate-102-71} #### Coal Mining Industry Long Service Leave A Trust Fund was established in 1949 to finance long service leave payments for miners engaged in black coal production. The States reimburse employers for long service leave payments to miners and recoup from the Trust Fund the cost of these payments and administrative expenses. The Trust Fund's income is derived from payments made by the Commonwealth (estimated to be $8.2 million in 1980-81) equivalent to a two-thirds share of its receipts from a 15 cents per tonne levy imposed on black coal production. {:#subdebate-102-72} #### Trade Union Training The *Trade Union Training Authority Act* 1975 provides for training services for unionists and for operation of State training centres and a national training college at Albury-Wodonga. The estimate of $3.4 million in 1980-81- provides for 23 000 student training days to be offered by the Authority at its State Centres and the Clyde Cameron College at Albury-Wodonga - the same level as in 1979-80. {:#subdebate-102-73} #### Administration This item provides for the administration of the Department of Industrial Relations which was established in December 1978. The increase in general administrative expenditure of $1.5 million to $7.4 million in 1980-81 reflects the full year effect of salary and other cost increases and higher staff levels. {:#subdebate-102-74} #### Employment {:#subdebate-102-75} #### Apprenticeship Training Assistance for apprenticeship training is provided by the Commonwealth under a number of Schemes. These seek to promote apprenticeship opportunities, to improve the standard of apprenticeship training in industry and to increase the future supply of skilled tradesmen. Proposed expenditure on the main schemes in 1980-81 is summarised in the following table: The Commonwealth Rebate for Apprentice Full-time Training (CRAFT), introduced in January 1977, compensates employers through tax-exempt rebates for the costs of releasing apprentices to attend (or to study for) basic trade courses provided by technical education institutions in any year of apprenticeship, or to attend full-time, off-the-job training courses in their first year of apprenticeship. Rebates are set according to the trade and range between $14 and $24 a day. Employers can also qualify for a 40 per cent premium on the first year Technical Education Rebate by engaging an apprentice who has completed an approved pre-employment training course which results in a minimum reduction of 6 months in the normal period of apprenticeship. Full-time off-the-job training rebates are payable to employers at first year Technical Education Rebate rates for the release of apprentices to attend approved full-time instruction at their own or other training centres. Assistance is also available toward group apprenticeships, which are funded under NEAT and are estimated to cost $0.5 million in 1980-81. About 25 per cent of first year apprentices are receiving off-the-job training. Rebates are indexed to annual movements in wages with effect from 1 January each year. Weekly living-away-from-home allowances of $22 for first year apprentices and $9 for persons in the second year of their apprenticeship are also provided in certain circumstances. These allowances are taxable. A CRAFT $1000 rebate per apprentice is payable to employers who engaged more first year apprentices during the period 1 December 1979 to 30 June 1980 than in the corresponding period of 1978-79. This rebate, which is tax-exempt, is conditional upon the employer not reducing the number of later year apprentices in his employment except through the normal completion of their indentures. Payments under this scheme can be expected to be made in 1980-81. The $13.8 million increase in the 1980-81 provision for CRAFT reflects an expected increase in the number of apprentice days funded under the Technical Education Rebate and payments in 1980-81 of the CRAFT $1000 rebate together with the full year effect of 1979-80 increases in rebates and allowances. In 1980-81 technical education rebate claims, the major component of expenditure under the scheme, are expected to be paid for about 80 000 apprentices - the same number as in 1979-80. The table below shows the number of apprentice days which have been funded, together with an estimate for 1980. *Number of Apprentice-days* ('000) *Funded under CRAFT Technical Education* {:#subdebate-102-76} #### Rebate Calendar year in which technical education undertaken Under the Group One Year Training Scheme, apprentices sponsored by private employers receive full-time training in Commonwealth and State Government Departments for the whole of their first year of apprenticeship. The costs (including wages) of this training are met in full by the Commonwealth. At the end of the first year the apprentices commence work with their employers. The number of apprentices trained by the Commonwealth and States under the scheme is expected to increase to about 350 in 1981 from the 1980 level of 272. In addition, a number of jointly funded Commonwealth/State Special Trade Training Schemes to train skilled labour for areas of specific current shortage and for identified future industrial development were initiated in 1979-80. In Western Australia a scheme has commenced to cope with a shortage of skilled workers expected when the North-West Shelf project comes on stream. Schemes have also been developed to overcome chronic shortages in particular skills where these have aiisen, such as shortages for welders, boiler makers, electrical tradesmen and fitters. The costs associated with adult trade training encompassed within these schemes, estimated at $1.5 million in 1980-81, are met from the NEAT allocation. {:#subdebate-102-77} #### Employment Training Schemes Estimated expenditure on the main schemes in 1980-81 is shown below, together with 1979-80 expenditures: {: type="a" start="a"} 0. Excluding allowances for trainees paid under NEAT. *National Employment and Training System (NEAT) (including SYETP)* NEAT is a system of programs aimed at providing1 opportunities for individuals to gain work skills and at overcoming specific skill shortages in industry. In more detail the objectives of NEAT are: to provide assistance to individuals to enable them to undertake training towards employment in occupations which are in demand; to offset employment problems being experienced by groups of. persons by providing specifically designed training programs; and to contribute to the supply of skills identified as being in short supply by the provision of specialised training programs. Under NEAT, assistance is provided to eligible trainees undertaking (and employers and training organisations providing) on-the-job, full-time or parttime training for skills in demand in the labour market such as those of computer programmers, textile machinists and plasterglass ceiling fixers. It is estimated that 100 000 trainees will participate in NEAT during 1980-81, compared with about 90 000 in 1979-80. Employers providing on-the-job training currently receive subsidies of $62.25 a week for adults and $45.65 a week for juniors (other than for SYETP trainees - see below). These rates are adjusted in January each year in line with movements in the Male Adult Average Award Wage (MAAAW). The rate of payment is set at 37.5 per cent of the MAAAW for adults and 27.5 per cent of the MAAAW for juniors. Allowances paid to NEAT trainees undertaking full-time study comprise an income tested component equivalent to the unemployment benefit and a training component of $33.20 a week for adults and $15.30 a week for juniors. The training component is paid only where the combined weekly income of the trainee and spouse is less than 1.5 times Average Weekly Earnings (male adult unit). Part-time trainees who are not in full-time employment receive an allowance equal to the training component of the full-time allowance. In addition the costs of essential books and equipment (up to $220 a year) and fees are reimbursed to both part-time and full-time trainees. Special provisions are available for on-the-job training which allow a higher level of subsidy (up to 85 per cent of the MAAAW) and a longer period of training for persons particularly disadvantaged in the labour market (Aboriginals, persons with physical or intellectual handicaps, ex-prisoners and wards of the State). The 1980-81 provision for employment training programs under NEAT for the disabled is to be doubled to $2 million as part of the Government's participation in the UN International Year of Disabled Persons, 1981. At the same time, an intensive promotional campaign is to be undertaken to increase employment vacancies for, and placement of, disabled persons. SYETP provides employment training for the young unemployed who have been out of employment or full-time education for four of the previous twelve months, by subsidising the wage costs to employers providing on-the-job training. The period of training under SYETP is 17 weeks and the wage subsidy payable to employers is $50 a week, or the award wage if less. Of the estimated total throughput of about 100 000 trainees under NEAT in 1980-81 about 60 000 are expected to receive training under SYETP. During 1979-80 the Government expanded its program of work experience opportunities for young people in Commonwealth Government Departments and instrumentalities. Some 2300 young people participated in 1979-80 and a provision of $7.4 million in 1980-81 will enable a further 3600 to take part thi? financial year. {:#subdebate-102-78} #### Education Program for Unemployed Youth The Commonwealth provides funds to the States under this program to conduct courses to improve the skills and motivation of the young unemployed, particularly those with low or inadequate educational qualifications. Funds totalling $3.8 million will be provided to the States and the Northern Territory in 1980-81, together with $160 000 for the Australian Capital Territory. In addition, S4.2 million will be provided by way of allowances to participants in the courses; these allowances, which are provided under NEAT, are equivalent to unemployment benefits plus an incidentals and fares allowance of $6 a week. *Training in Industry and Commerce Program* The Training in Industry and Commerce Program is designed to aid and stimulate the systematic development of training programs through all sectors of industry and commerce, including small businesses. Expenditure on this program is estimated at $3 million in 1980-81, an increase of $1 million on 1979-80. The program funds the operation of the National Training Council and 80 tripartite Industry Training Committees in 20 industries throughout Australia. The aim is to use training to promote efficiency, productivity and safety as well as industry's capacity to cope with new equipment, new techniques and changes in processing and market requirements. Funds are also provided for the employment of manpower development executives and industrial training officers by industry training committees and industry associations, the development of new training programs, research into training needs, the production of basic training manuals (sales of which to date exceed 300 000 copies) and group training schemes to allow groups of small firms to employ a training specialist. {:#subdebate-102-79} #### Volunteer Youth Program During 1979-80, $109 000 was spent to assist community groups to undertake pilot projects designed to involve young unemployed people in voluntary community service and to retain work orientation while registered for employment with the CES. Participants in projects under the program may be paid, an allowance of up to $6 a week to reimburse fares and incidental expenses in addition to any entitlement to unemployment benefit. $160 000 has been provided in 1980- 81 to allow completion of the pilot phase and evaluation of the program. *A dministration* The Department of Employment and Youth Affairs was created in December 1978 and is responsible for the formulation and implementation of national manpower policies including the operation of the Commonwealth Employment Service (CES), the Office of Youth Affairs and the Bureau of Labour Market Research. The functions of the Bureau, which was established in December 1979, are to sponsor research, co-ordinate existing research and provide a focal point for expertise, information and analysis on labour market matters. A total of $110.4 million is being provided in 1980-81 for the Department's administrative costs - an increase of $7.6 million - and reflects full year effects of staff growth and cost increases. Expenditure on the CES is estimated at $82.2 million. 28 additional CES offices were opened in 1979-80 and a further 23 are planned for 1980-81 bringing the total number of CES offices to 306 by 30 June 1981. {:#subdebate-102-80} #### Immigration Program The objective of the first triennial immigration program covering the period 1978- 79 to 1980-81 was a net population gain of 210 000 persons. The net population gain from overseas migration was about 60 000 in 1978-79 and 77 000 in 1979- 80; the expected gross intake of migrants in 1980-81 is 95 000, and is estimated to lead to a net population gain of over 80 000 and to bring the total net population gain over the triennium 1978-1979 to 1980-81 to about 220 000 persons. Pending a review during 1980-81 of migration requirements, the target for the triennium 1980-81 to 1982-83 has been set at a net population gain of 250 000. A significant element of the 1980-81 gross intake is the expected acceptance during the year of 21 500 persons under the refugee and special humanitarian programs, a small increase on last year, to meet commitments to programs within South East Asia and elsewhere. Eligibility for migration to Australia (other than under the refugee and special humanitarian programs) is based on the Numerical Multi-factor Assessment System (NUMAS) which gives weight to such factors as family ties, occupational skills in demand, literacy in the mother tongue and knowledge of English. Recent amendments to NUMAS are expected to lead to. some increase in the intake of relatives and friends of established migrants. {:#subdebate-102-81} #### Assisted Migration The estimate provides for 30 000 assisted passages in 1980-81 compared with about 22 000 taken up in 1979-80. Increased intakes are expected in 1980-81 in the independent category (mainly professionals, skilled workers and their dependants) and under the refugee and special humanitarian programs. Estimated expenditure on assisted passages in 1980-81, which provides for substantial increases in the cost of air fares, is $13.2 million compared with $7.5 million in 1979-80. Contributions made to the operating expenses of migrant centres met by Commonwealth Accommodation and Catering Services Ltd are being increased by an amount of $0.9 million to $11.1 million to allow for the operating costs of new migrant centres established to meet the projected increased migrant intake. Other elements in the program are migrant publicity ($1.0 million) and $0.3 million for the movement of migrants on disembarkation. {:#subdebate-102-82} #### Administration Capital and recurrent administrative expenditures of the Department of Immigration and Ethnic Affairs in 1980-81 are estimated to total $41.5 million, an increase of $4.6 million on 1979-80 expenditures. The increase is due mainly to increased salary and equipment costs and additional expenditures on several programs and services as recommended by the Review of Post-Arrival Programs and Services for Migrants (Galbally Report). {:#subdebate-102-83} #### Recoveries Recoveries from contributions by assisted migrants toward passage costs are estimated to increase to $0.8 million as a result of an increase in assisted passage numbers. Recoveries from charges introduced in 1979-80 for services to the public provided by the Department of Immigration and Ethnic Affairs are estimated at $4.0 million in 1980-81. {: type="A" start="E"} 0. OTHER ECONOMIC SERVICES This grouping takes in those economic services provided by the Commonwealth that are not readily categorised elsewhere. It includes outlays for certain forms of economic and trade regulation and for specialised activities and administrative expenses not directly identifiable with specific industries or groups of industries. These outlays consist largely of wage, salary and administrative costs; the main factor contributing to the increase of $9.2 million in outlays for the function in 1980-81 is increases in these costs. {:#subdebate-102-84} #### Economic and Trade Regulation The bulk of outlays for the various regulatory bodies listed under this heading is in respect of salaries and administrative expenditure. The National Companies and Securities Commission, established to administer a uniform scheme on companies and securities matters, commenced operations in March 1980. It is financed on a joint Commonwealth/State basis with the Commonwealth contributing half of the funds required for the establishment and functioning of the Commission, and the States providing the balance in proportion to their respective population sizes. In 1979-80, the Commonwealth contributed $185 000 towards an establishment cost of $370 000. The Budget provides $950 000 of the forecast $1.9 million total costs of the Commission in 1980-81. A grant of $100 000 is provided in the 1980-81 estimates for the Australian Federation of Consumer Organisations. Included in the 'Other' category are the Metric Conversion Board and the National Standards Commission. Recoveries mainly comprise Patent Office fees. {:#subdebate-102-85} #### Specialised Activities *Meteorological services* encompass the activities of the Commonwealth Bureau of Meteorology and Ionospheric Prediction Service. Estimated expenditure in 1980-81 of $46.8 million is mainly for salaries and administrative expenditure. An amount of $122 000 is provided for initial expenditure on new computers expected to be installed in 1982 at a total cost of $5 million. Costs attributable to some uses of meteorological services (mainly civil aviation and defence services) are recoverable, with receipts being estimated at $13.4 million in 1980- 81. Taking into account other minor revenues the net outlay from the Budget on meterological services in 1980-81 is estimated at $33.4 million (compared with $31.9 million in 1979-80). {:#subdebate-102-86} #### General Administrative and Other Expenditure These outlays relate to the operating and capital costs (other than those allocated to specific industry or regulatory functions) of the Departments of Trade and Resources ($22.9 million), National Development and Energy ($10.9 million), Business and Consumer Affairs ($17.6 million), Productivity ($17.2 million) and the Special Trade Representative ($0.4 million). {: type="1" start="9"} 0. GENERAL PUBLIC SERVICES This heading covers a broad range of general public services and activities relating to the organisation and operation of the Commonwealth Government, including legislative services, administrative services, administration of the courts and law enforcement, and foreign affairs, overseas aid and administration of external territories. {: type="A" start="A"} 0. LEGISLATIVE SERVICES **Major factors** contributing to the expected 39 per cent increase to $109.6 million in 1980-81 for outlays on legislative services are expenses associated with the forthcoming Federal elections and with the design and construction of the new Parliament House. {:#subdebate-102-87} #### Parliamentary Expenditure The increase in the provision for salaries and allowances of Senators and Members reflects recommendations of the Remuneration Tribunal's 1980 Review ($1.0 million). There is also provision for an expected increase of $3.0 million in the cost of benefits paid under the *Parliamentary Contributory Superannuation* *Act* 1948, of which $0.3 million reflects the indexation of pensions and $2.7 million is the amount estimated to be paid by way of lump sums and pensions to Members who retire from the Parliament during 1980-81. Outlays under 'Other', which include salaries, administrative costs and capital works associated with the functioning of Parliament and administrative costs of electorate offices of Senators and Members, are estimated to increase by $5.8 million in 1980-81. Of this increase, $2.9 million relates to increased salary and allowance payments (including $1.1 million for Parliamentary and Ministerial staff) resulting primarily from National Wage Case decisions, and an increase of $0.9 million in the cost of special flights undertaken by RAAF No. 34 Squadron is mainly due to an expected increase in hours charged ($0.3 million) and a higher rate per hour charged by the Department of Defence ($0.5 million). {:#subdebate-102-88} #### Parliament House Construction Authority The $8.1 million included in 1980-81 for the Parliament House Construction Authority will provide for the administration costs of the Authority, for architectural and professional fees and preliminary site works for the new Parliament House. The estimates include $3.2 million for on-site excavation work to begin early in 1981. *ACT House of Assembly* This item provides for salaries and administrative costs of the Australian Capital Territory House of Assembly. {:#subdebate-102-89} #### Australian Electoral Office Provision is made under this heading for outlays by the Australian Electoral Office for the administration of the *Commonwealth Electoral Act* 1918, the conduct of Commonwealth elections and referenda and industrial elections. Of the increase of $13.2 million, $1.1 million relates to administration of the Act and $10.8 million to the conduct of elections, including, in particular, the forthcoming Federal elections. {: type="A" start="B"} 0. LAW, ORDER AND PUBLIC SAFETY Commonwealth outlays on law, order and public safety are estimated to total $214.9 million in 1980-81, an increase of 7.6 per cent over 1979-80. {:#subdebate-102-90} #### Courts and Legal Services {:#subdebate-102-91} #### High Court The *High Court of Australia Act* 1979 established a separate Statutory body to administer the operations of the High Court. The new administration came into operation in April 1980 to coincide with the move of the Court to its permanent seat in Canberra and the opening of the new High Court building in May 1980. An amount of $8.5 million is being provided in 1980-81 for the High Court, $12.6 million less than in 1979-80. Construction and fitting out costs of the new High Court building totalled $18.5 million in 1979-80 and a further $4.8 million is estimated to be required in 1980-81 for associated purposes, mainly for fmalisation of contracts. {:#subdebate-102-92} #### Federal Court The Federal Court of Australia has powers to exercise original and appellate jurisdictions in the Federal area. $3.7 million is being provided in 1980-81 for the operating costs of the Court. {:#subdebate-102-93} #### Crown Solicitor The increase of $0.6 million under this heading reflects increases in wage and salary costs. {:#subdebate-102-94} #### Legal Aid Provision is made for the continuation of legal aid in the Federal area in 1980-81. In 1976 the Government announced that it would be seeking new arrangements for dispensing legal aid (other than Aboriginal Legal aid which is administered by the Department of Aboriginal Affairs) in the Federal area. Both State and Federal legal aid would, under co-operative arrangements, be administered by Commissions established under State or Territory legislation. The Commonwealth Legal Aid Commission was established by legislation in 1977 to advise the Government and State and Territory Commissions on Federal legal aid matters. Commissions have been established in three States (Western Australia, South Australia and Queensland) and in the Australian Capital Territory. Negotiations are proceeding in the other States. The estimated increase of $3.6 million is mainly in respect of additional costs of providing legal aid in the Federal area (primarily by referrals to private legal practitioners) through the Australian Legal Aid Office and Legal Aid Commissions ($3.0 million) and the provision of grants to voluntary legal aid bodies ($0.1 million). The balance of the increase mainly reflects higher salary costs and the Commonwealth's share of establishment costs of legal aid commissions which are expected to come into operation during 1980-81. {:#subdebate-102-95} #### Family Law The provision for the Family Court of Australia in 1980-81 is $13.9 million, an increase of $2.4 million on 1979-80. This increase reflects higher reimbursements to the States (including Western Australia which has established its own Family Court) for services provided ($1.0 million), the appointment of two new Family Court Judges in December 1979 and increases in staff salaries ($1.1 million). {:#subdebate-102-96} #### Protection of Human Rights The estimate of $0.4 million provides for the continuation of the Commonwealth's activities in the community relations area. {:#subdebate-102-97} #### Police, Security and Detention {:#subdebate-102-98} #### Security Services and Organisations This provision is for expenditure by the Australian Security Intelligence Organization ($17.0 million), and the Australian Secret Intelligence Service ($8.4 million). A headquarters building for ASIO at Russell (ACT) is planned for commencement in 1980-81 at a total estimated cost of $11.6 million. While it is expected that a contract will be let in 1980-81, little construction progress is expected until 1981-82. {:#subdebate-102-99} #### Police and Prison Services The estimate of $78.1 million provides for the operations of the Australian Federal Police Force, which was established on 19 October 1979 by the amalgamation of the former ACT and Commonwealth Police Forces. The increase of $14.7 million reflects increases in wage and salary rates, the transfer of the narcotics function from the Department of Business and Consumer Affairs in December 1979, the introduction of ADP equipment and services and costs associated with the establishment of the Force. An amount of $2.3 million has also been included for anti-terrorist equipment and training for Australian police forces. {:#subdebate-102-100} #### Other This provision is for the operation of the Institute of Criminology ($1.2 million), the Office of National Assessments ($1.6 million), the Commonwealth's contribution towards administrative expenses of the Central Fingerprint Bureau, and contributions to international criminology organisations and police scientific research. {:#subdebate-102-101} #### Attorney-General's Department {:#subdebate-102-102} #### General Administrative and Other Expenditure The increase of $1.3 million in 1980-81 mainly reflects salary and administrative cost increases, together with the establishment of the Security Appeals Tribunal and a Public Trustee for the ACT. {:#subdebate-102-103} #### Public Safety and Protection {:#subdebate-102-104} #### Road Safety and Other The estimates for 1980-81 provide $780 000 for Commonwealth payments for road safety promotion and research, through the Office of Road Safety, and $153 000 for grants to the States and the Northern Territory for the promotion of road safety practices. The 'Other' heading includes the operating expenses of the ACT Fire Brigade ($3.9 million), fire protection services for Commonwealth property ($2.1 million), provision for fire control on rural lands in the ACT ($0.5 million), and a grant of $160 000 to the National Safety Council. {:#subdebate-102-105} #### Building, Works and Equipment Nec Outlays under this heading for 1980-81 relate mainly to construction of the ACT Family and Juvenile Courts, construction of the ACT Police College and Services Centre, and refurbishing of the Conciliation and Arbitration Building, Melbourne. A significant new project planned for commencement in 1980-81 is the Commonwealth Law Courts, Hobart. The estimated total cost of this project is $8.4 million, with $0.1 million expected to be incurred in 1980-81. {:#subdebate-102-106} #### Recoveries Included under this heading are court fees of the Family Court, High Court and Federal Court ($3.2 million), and various miscellaneous fees. {: type="A" start="C"} 0. FOREIGN AFFAIRS, OVERSEAS AID AND EXTERNAL {: .page-start } page 1 {:#debate-103} ### TERRITORIES Total outlays on foreign affairs, overseas aid and external territories are estimated to increase by 11.4 per cent to $739.8 million in 1980-81. This total includes most of the Commonwealth's expenditures under policies designed to promote relations with overseas countries and to assist in the economic and social development of developing countries; net expenditure on external territories is small. (About three-quarters of all expenditure under this heading relates to various overseas economic aid programs to assist developing countries, including Papua New Guinea; a more detailed account of Australia's aid programs is provided in Budget Paper No. 8 - *Australia's Overseas Development Assistance* {:#subdebate-103-0} #### Program 1980-81.) 1978-79 1979-80 1980-81 {:#subdebate-103-1} #### Actual Actual Estimate Change S million $ million $ million $ million {:#subdebate-103-2} #### Aid Payments - Bilateral Aid- {: type="a" start="a"} 0. Some figures in the table differ slightly from those shown in Budget Paper No. 8 because of the use of different concepts for recording Australia's overseas aid performance. 1. Referred to elsewhere in Budget documentation as 'Foreign Affairs and Overseas Aid'. {:#subdebate-103-3} #### Aid Payments An amount of $547.0 million is provided for expenditure on overseas aid in 1980-81, an increase of $48.6 million or 9.8 per cent over expenditure in 1979-80. Taking into account 'Assistance Additional to Aid Payments' (see below) assistance to developing countries in 1980-81 is estimated to amount to about $595.1 million. This figure excludes the significant amounts spent by the Commonwealth and State Governments on the education and training of several thousand students from developing countries who are attending various tertiary and other training institutions in Australia. The cost to the Australian taxpayer of providing assistance of this kind, which is not brought to account directly under the overseas aid program, is estimated at about $39 million in 1980; this is about the same amount as in 1979 even after allowance for the effects of the introduction of tertiary education fees for overseas students. Australia also provides other indirect forms of economic aid through its contributions to the regular budgets of a number of international organisations (eg the United Nations Organisation, the Food and Agriculture Organisation and the World Health Organisation) that assist in the financing of aid projects in developing countries. The aid component of Australia's contributions to these organisations in 1980-81 is estimated at about $3 million. Other indirect economic assistance is provided by the Export Finance and Insurance Corporation through the financing, in certain circumstances, of exports of capital goods on concessional terms. {:#subdebate-103-4} #### Bilateral Aid {:#subdebate-103-5} #### Papua New Guinea An amount of $245.8 million is provided for expenditure on aid to or on behalf of the Papua New Guinea Government in 1980-81. This is $8.1 million more than in 1979-80. Under the terms of an aid agreement negotiated in 1976, Australia undertook to provide Papua New Guinea with annual payments of $180 million (plus annual supplements to take account of inflation and other factors) for general budgetary assistance over a five-year period commencing 1976-77. The supplement for 1980-81, set in December 1978, is $52 million, an increase of $9 million over the 1979-80 supplement. When the five-year agreement expires at the end of 1980-81, Australia will have provided a total of $1060 million in budget support grants to Papua New Guinea. The question of subsequent arrangements is expected to be considered by the Government shortly. Outlays on the provision of education and technical assistance under the Australia-Papua New Guinea Education and Technical Assistance Scheme are estimated at $2.0 million in 1980-81, an increase of 52 per cent over 1979-80. Payments in respect of termination and retirement benefits and other pensions to expatriate officers of former Papua New Guinea Administrations and the Australian Staffing Assistance Group are estimated at $11.7 million in 1980-81, $1.4 million less than in 1979-80. These payments are made under the *Papua New Guinea (Staffing Assistance) Act* 1973. Although the Government has recently agreed to make minor amendments to the regulations under this Act to provide higher rates and wider eligibility for certain pensions, payments under the Act are expected to continue to decline over the next few years as the Commonwealth discharges its responsibilities under the Act. {:#subdebate-103-6} #### Projects and Disaster Relief Expenditure under this heading is estimated to increase by $19.0 million in 1980-81 to $123.2 million. This aid is directed towards a range of activities including projects, equipment and expert advice aimed at increasing agricultural productivity, providing general infrastructure and improving transport and communication facilities; contributions to developing countries for disaster relief are also included here. Project assistance has expanded rapidly in recent years; this mainly reflects a substantial increase in aid commitments to South Pacific countries and to members of the Association of South-East Asian Nations (ASEAN). In 1979 the Government renewed its 1977 forward aid commitment of $250 million for ASEAN country programs. The Government has also recently increased to $34.5 million the total commitment for assistance of a regional nature under the ASEAN-Australia Economic Co-operation Program. These commitments for ASEAN countries do not set specific year-by-year allocations, but permit increased forward planning of aid activities. The Government has also announced a forward aid commitment for South Pacific countries of $120 million for the three years commencing 1980-81, which represents an increase of 47 per cent over the level of assistance in the previous three years. A recent initiative under the bilateral aid program is the commitment to provide $10 million in aid for reconstruction and rehabilitation purposes to the newly independent Zimbabwe over a period of about two years. Of this amount, over $4 million is expected to be provided in 1980-81. Bilateral contributions to developing countries for disaster relief amounted to $0.5 million in 1979-80. {:#subdebate-103-7} #### Training Expenditure in 1980-81 on training programs (excluding training provided under the Australia-Papua New Guinea Education and Technical Assistance Scheme) is estimated at $16.9 million, an increase of $2.8 million on 1979-80. This expenditure covers the direct costs (including student fees) of officially sponsored students from developing countries who undertake studies in Australia, together with support for training institutions in some AJSEAN and Pacific countries. {:#subdebate-103-8} #### Food Aid Outlays on bilateral food aid are estimated to increase by $10.9 million to $56.6 million in 1980-81. This increase partly reflects higher average prices expected to be paid for wheat and flour purchases in 1980-81, but is mainly accounted for by the Government's decision in February of this year to increase Australia's commitment under the new Food Aid Convention of the International Wheat Agreement so as to provide a minimum of 400 000 tonnes of food grain annually, 81 300 tonnes more than the 1979-80 provision. It is envisaged that 320 000 tonnes of the new commitment will be provided under the bilateral food aid program (an increase of 56 700 tonnes over 1979-80) and 80 000 tonnes under the World Food Program (see heading 'United Nations Programs'). The bilateral food allocation also covers freight costs on food aid provided for emergency purposes ($3.2 million), gifts of some non-grain foods to developing countries ($2.5 million) and the provision of $0.8 million in respect of a concessionary wheat sale to Bangladesh in 1979-80. {:#subdebate-103-9} #### Other Bilateral Aid Included under this heading is emergency humanitarian assistance; assistance in 1979-80 included emergency humanitarian relief of $8.3 million for Kampuchea, $3.0 million for East Timor, and $2.0 million for refugee assistance in respect of Zimbabwe and Afghanistan. These amounts are indicative of the strong support Australia has given to various emergency relief programs undertaken in different parts of the world. Provision has been made in 1980-81 for $3.0 million for emergency humanitarian assistance for Kampuchea. Also included is $1.6 million for two new aid initiatives for ASEAN countries: a Development Import Finance Facility involving the use of aid funds in conjunction with finance from the Export Finance and Insurance Corporation to increase the concessional element in credit terms that Australian firms can offer when tendering for the supply of certain goods and services to those countries, and a Joint Venture Scheme to assist ASEAN Governments to purchase equity in joint ventures with Australian firms and for partial funding of feasibility studies and training costs for joint ventures. Support for voluntary aid organisations is estimated at $3.0 million in 1980-81, $0.7 million more than in 1979-80. This expenditure includes grants for the Overseas Service Bureau and the Australian Council for Overseas Aid, as well as direct financial support for small-scale development assistance *projects* carried out by voluntary aid organisations in developing countries. Australia's contributions to a number of international voluntary aid organisations, also recorded under this heading, include contributions of $0.25 million to the International Planned Parenthood Federation and $0.15 million to the International Committee of the Red Cross. An amount of $0.15 million is included for expenditure on the preservation and development of South Pacific cultures. {:#subdebate-103-10} #### Multilateral Aid The Commonwealth supports a wide range of international organisations, including development finance institutions, United Nations agencies and various regional organisations. Payments to these in 1980-81 are estimated at $96.8 million, an increase of $18.6 million on 1979-80. {:#subdebate-103-11} #### International Development Finance Institutions This heading covers payments by Australia to the Asian Development Bank (ADB), the World Bank Group, the International Fund for Agricultural Development (IFAD) and the International Monetary Fund's Oil Facility Interest Subsidy Account. Expenditure in 1980-81 is estimated at $49.7 million, compared with $38.5 million in 1979-80. The increase mainly reflects an estimated higher rate of cash disbursement in respect of Australia's contributions to the International Development Association (IDA), the concessional lending agency of the World Bank Group. Financial support for these institutions is provided under specific legislation, and mainly takes the form of promissory notes which are drawn down by the institutions either as required to meet their commitments or on the basis of previously agreed schedules. After allowing for payment of the 1980-81 provisions, total outstanding commitments to these organisations will amount to some $450.5 million. The amounts included will be drawn down over a number of years and comprise $138.8 million for the ADB (including $120.6 million for its concessional lending facility, the Asian Development Fund), $302.5 million for the IDA, $2.8 million for the International Bank for Reconstruction and Development (IBRD, part of the World Bank Group) and $6.4 million for the IFAD. The $49.7 million provided in 1980-81 comprises capital subscriptions to the IBRD ($1.8 million) and the ADB ($6.1 million) and contributions to the IDA ($31.0 million), the Asian Development Fund ($7.2 million), and the IFAD ($0.8 million), together with $2.8 million payable to the IDA in respect of the multilateral component of Australia's contribution of $US18 million to the Conference on International Economic Co-operation's Special Action Program. {:#subdebate-103-12} #### United Nations Programs, Regional and Other International Organisations Total payments under this heading are estimated to amount to $47.1 million in 1980-81, an increase of $7.4 million over 1979-80. Australia's contributions to various United Nations aid organisations are estimated at $14.2 million in 1980-81. This is only slightly above 1979-80 expenditure ($14.1 million) due to revised payment arrangements for 1981 contributions to these organisations (and the South Pacific Commission) ; the net effect of these arrangements on 1980-81 outlays is to reduce them by about $0.8 million. The major recipient organisations are the United Nations Development Program ($3.6 million, being effectively one half-yearly payment), the United Nations High Commissioner for Refugees ($5.0 million, being effectively three half-yearly payments) and the United Nations Children's Fund ($3.4 million, being effectively three half-yearly payments). Further details of these payments and the revised payment arrangements are contained in Budget Paper No. 8. Assistance to regional and other international programs is estimated at $11.1 million in 1980-81. **Major regional** organisations receiving support include the Economic and Social Commission for Asia and the Pacific, the South Pacific Commission, and the South Pacific Bureau for Economic Co-operation; support is also given to a number of international and regional research and training centres. Provision is also made here for the Commonwealth Fund for Technical Co-operation and South Pacific regional programs. Expenditure under the World Food Program is estimated to increase by 42 per cent to $21.9 million in 1980-81. The increase mainly reflects an increased allocation of 80 000 tonnes for the World Food Program from Australia's increased annual commitment of a minimum 400 000 tonnes under the Food Aid Convention, but also partly reflects higher average prices expected to be paid for wheat and flour purchases in 1980-81. Provision is also made for Australia's minimum biennial pledge of cash and commodities (other than wheat) of $10.5 million for the calendar years 1981 and 1982, and for freight costs on the food aid to be disbursed through the World Food Program. {:#subdebate-103-13} #### Assistance Additional to Aid Payments Although Australia's Defence Co-operation Program (estimated to cost $38.7 million in 1980-81) represents an extension of our own defence effort, it also supplements the overseas economic aid program to the extent that it releases for development purposes resources that recipient governments might otherwise have set aside for defence purposes. Australia's assistance in this respect is described in the section on Defence Co-operation under the Defence function. In addition, the Administrative expenses of the Australian Development Assistance Bureau estimated at $9.4 million in 1980-81 and recorded under General Administrative Expenditure, represent an integral part of total expenditure on Australia's aid effort. Membership of International Organisations and other Non-aid {:#subdebate-103-14} #### Expenditure These outlays arise mainly from Australia's membership of a large number of international and regional organisations. Participation in these organisations entails contributions to their administrative expenses and, in some cases, their functional activities. Total expenditure for these purposes in 1980-81 is estimated at $31.8 million, including $8.1 million for the United Nations Organisation, $3.1 million for the World Health Organisation, $2.6 million for the United Nations Food and Agriculture Organisation, $1.9 million for the United Nations Educational, Scientific and Cultural Organisation, $1.8 million for the International Labour Organisation, $1.9 million for the Organisation for Economic Co-operation and Development and $2.4 million towards the cost of the United Nations Interim Force in Lebanon. This heading also includes provision for cultural relations overseas and exchange visits, together with expenditures by the Australia-Japan Foundation, the Australia-China Council and the Australia-New Zealand Foundation. {:#subdebate-103-15} #### External Territory This item reflects the costs (net of revenue) of administering the three external territories of Cocos (Keeling), Christmas and Norfolk Islands. Expenditure in respect of the Australian Antarctic Territory is primarily for scientific purposes, and is shown under 'General and Scientific Research nec'. Expenditure in respect of other external territories is negligible, and has not been separated from the expenditure items within which it falls. The net outlay in respect of each of the three territories is shown below. Net expenditure on the Cocos (Keeling) Islands in 1980-81 is estimated to increase by $2.0 million, reflecting the Government's policy of progressively upgrading the social infrastructure on the Islands. The gross costs of administering Christmas Island in 1980-81 are estimated at $3.6 million. These costs are recovered from Island revenue and from the Christmas Island Phosphate Commission, except for an estimated amount of $0.2 million associated with the cost of the Administrator and his immediate staff, which cost the Government has accepted as a Commonwealth responsibility from 1980-81. Estimated net expenditure on Norfolk Island includes an amount of $0.3 million for the restoration and maintenance of historic structures. {:#subdebate-103-16} #### General Administrative Expenditure Outlays on administrative costs of the Department of Foreign Affairs, the Australian Development Assistance Bureau and the Overseas Operations Branch of the Department of Administrative Services are estimated to increase by $19.4 million in 1980-81 to $162.6 million. {:#subdebate-103-17} #### Recoveries and Repayments Recoveries and repayments are estimated at S6.6 million in 1980-81, a decrease of $2.3 million on 1979-80. The main amounts included are repayments in respect of loans provided to the Papua New Guinea and Fiji Governments on concessional terms under the overseas aid program. {: type="A" start="D"} 0. GENERAL AND SCIENTIFIC RESEARCH NEC Substantial elements of Commonwealth support for scientific, industrial and general research are directed to specific fields such as defence technology, medicine, education, and industry research and development and are accounted for elsewhere in this Statement under the appropriate functional headings. This heading covers the activities of the Commonwealth Scientific and Industrial Research Organization (CSIRO), the Australian Atomic Energy Commission, general research grant schemes and a variety of other research programs and supporting services undertaken by Commonwealth departments and instrumentalities, all of which involve several functions and disciplines. {:#subdebate-103-18} #### Australian Atomic Energy Commission The Commission's functions include research and investigations into matters associated with uranium and atomic energy and the production and sale of radio-isotopes. The $28 million provision in the Budget ($1.8 million higher than outlays in 1979-80, mainly because of cost increases, including salary and wage rises) is intended to enable the Commission to maintain generally the same level of activity as in 1979-80. That amount includes an additional $140 000 for the first year of a program (estimated to cost $4.7 million over five years) for the refurbishing of the HIFAR reactor. The Budget provision will allow commencement of installation of a new computer-based site surveillance monitoring system, a building to centralise safety management, a new incinerator, and conversion of the Commission's oil-fired boiler to electricity. (These projects are expected to be completed during either 1981-82 or 1982-83.) Additional requirements in 1980-81 have been partially offset by the reduced need to import radioisotopes for sale (the HIFAR reactor which produces such radio-isotopes having recommenced operating in June 1980 after a nine month shutdown for inspection and maintenance). The Commission also receives funds under the National Energy Research, Development and Demonstration Program administered by the Department of National Development and Energy. These outlays and the Commission's interest in the Ranger Joint Venture are referred to under the function 'Industry Assistance and Development'. {:#subdebate-103-19} #### Commonwealth Scientific and Industrial Research Organization The CSIRO is the largest research organisation in Australia, employing over 6800 staff. Its main role is to carry out a program of predominantly strategic applied scientific research, which includes collaborative, commissioned and other forms of joint projects with Government bodies and with industry. CSIRO is organised into five Institutes (Animal and Food Sciences, Biological Resources, Earth Resources, Industrial Technology, Physical Sciences) together with a Bureau of Scientific Services, whose titles show their areas of concern and the range of the Organization's interests. Direct appropriations for and on behalf of CSIRO in 1980-81 are $219.2 million (an increase of 12.4 per cent on 1979-80), of which $166.3 million is for operations, $44.0 million for major capital projects (which comprise a total program of $129,1 million over the next five to seven years), $4.0 million for large equipment items, $4.7 million for repairs and maintenance to the Organization's buildings and the balance of $0.3 million for property acquisition. Expenditure on the Australian National Animal Health Laboratory, which is being constructed at Geelong (Vic.) at a total estimated cost of $106 million, is estimated to be $35 million in 1980-81 and accounts for the bulk of the capital component. Also included are initial expenditures on a materials science laboratory at Clayton (Vic.) ($8.9 million) and on an oceanographic research ship, buildings and other activities associated with the transfer of the Division of Fisheries and Oceanography to Tasmania (overall cost about $25 million). Details of expenditure from direct appropriations for operations and equipment, and from expected revenues of $6 million in 1980-81, are provided in Table 14 of Budget Paper No. 4. The Organization also expects to receive approximately $24.0 million in 1980-81 (compared with $25.4 million in 1979-80) as industry contributions and other forms of private and government support for specific research projects, to bring its total estimated expenditure in 1980-81 to $249.2 million ($221.4 million in 1979-80). {:#subdebate-103-20} #### Antarctic Division The Antarctic Division of the Department of Science and the Environment carries out research programs in the Antarctic and organises and provides administrative and logistic support in that region both for its own scientists and for those from other institutions. The Australian National Antarctic Research Expeditions (involving each year about 140 expeditioners) operate from three stations on the Antarctic continent and one on Macquarie Island. The research programs focus mainly on the fields of atmospheric physics, cosmic ray physics, glaciology, biology, medical science, geology and geophysics; special attention is now being given to marine research in the Antarctic and the Southern Ocean. Expenditure in 1980-81 is estimated at $24.5 million ($3.6 million more than in 1979-80). This reflects the build-up in marine science ($1.2 million), further costs of transferring the Division to its nearly completed new headquarters outside Hobart ($4.0 million) and continued rebuilding of the Antarctic stations ($3.1 million). Approval has been given to a ten-year $52 million rebuilding program in Antarctica and this, together with continued study and design work on transport facilities to support Antarctic activities, represents a major long-term financial commitment to this field of scientific effort. {:#subdebate-103-21} #### Research Grants Total assistance for research grant schemes and fellowships is estimated to be $18.3 million in 1980-81, a 32 per cent increase on the $13.9 million provided in 1979-80. This includes support for the Australian Research Grants Scheme and Queen Elizabeth II Fellowships ($16 million in 1980-81) which support research projects by teams and individuals in the physical, chemical, biological and earth sciences, in engineering and applied sciences and in the humanities and social sciences. In the field of marine science, work in Antarctica is separately provided for, with other support of $2.3 million being provided through the Funding Advisory Panel of the Australian Marine Sciences and Technologies Advisory Committee (whose main emphasis is presently on research related to the Great Barrier Reef) and the Queen's Fellowships Scheme. {:#subdebate-103-22} #### Australian Institute of Marine Science The Australian Institute of Marine Science was established to carry out research in marine science, both directly and in co-operation with other institutions. The Institute has a laboratory near Townsville and is directing its research mainly to tropical waters, particularly coral reefs. The Institute collaborates with other institutions including the CSIRO and the Great Barrier Reef Marine Park Authority. Expenditure of the Institute in 1980-81 is estimated at $5.5 million, an increase of $1.9 million, allowing for a build-up of scientific and support staff and an expanded research effort. {:#subdebate-103-23} #### Anglo-Australian Telescope Board This item provides for the Australian Government's contribution to the cost of operations and instrument development of the Anglo- Australian 3.9 metre optical telescope at Siding Spring (NSW) and its associated research facilities. The total cost of operations in 1980-81 (to be shared equally with the UK Government) is estimated at $3.1 million. {:#subdebate-103-24} #### Australian Institute of Aboriginal Studies The Australian Institute of Aboriginal Studies was established in 1964 to promote, encourage and assist studies and research in relation to the Aboriginal people. The Institute also has a responsibility to monitor the social impact of uranium mining on Aboriginal communities in the Northern Territory. The provision for the Institute in 1980-81 is $2.4 million. {:#subdebate-103-25} #### Other Research and Science The estimated expenditure in 1980-81 of $7.6 million under this heading covers several smaller activities associated with the support of scientific research and development in Australia. The largest single item is a grant to the Standards Association of Australia ($2.5 million) with other grants being made to Learned Academies ($509 700) and the National Association of Testing Authorities ($767 000). Scientific and technical co-operation with other countries (mainly by way of exchange visits and seminars) accounts for $470 000 of the estimate. Scientific service facilities provided for include the Australian LANDSAT station ($1.7 million *less* estimated recoveries of $0.5 million compared with a net $2.3 million in 1979-80) and the National Nuclear Magnetic Resonance Spectrometer Centre ($129 000). The Australian Balloon Launching Station is to be closed down during 1980-81. The remaining substantial item is the administrative expenditure of the Australian Science and Technology Council (ASTEC) which provides advice to the Government on the development of science and technology policy, expenditure in 1980-81 is expected to be $551 500. {: type="A" start="E"} 0. ADMINISTRATIVE SERVICES This heading covers general administrative services not allocated to specific functions, and various common services provided for the general operations of Government. These outlays are estimated to total $1070.7 million in 1980-81, an increase of 14.9 per cent. {:#subdebate-103-26} #### Financial Affairs and Fiscal Administration {:#subdebate-103-27} #### Customs and Excise Administration The increase of $11.0 million in the 1980-81 provision reflects in part the Government's acceptance of the recommendations of the Royal Commission of Inquiry into Drugs for the upgrading of Customs resources to enable officers to combat drug smuggling more effectively at the Customs barrier; an offset to the effects of the upgrading on outlays under this heading is the Government's acceptance of the recommendation, implemented in December 1979, to transfer responsibility for the Narcotics Bureau from the Department of Business and Consumer Affairs to the Australian Federal Police. (Outlays on Police are recorded under the function 'Law, Order and Public Safety'.) Features of the upgrading include an internal re-organisation to enable more efficient use of staff resources, an increase in manpower, a phased program to re-equip the Customs launch fleet, increased surveillance of ports and estuaries and the increased use of drug detection dogs. The estimates include provision for the use of three Nomad surveillance aircraft in 1980-81 to be based at Townsville, Darwin and Port Hedland ($2.1 million), a significant enhancement of the Customs launch fleet ($1.2 million), the continued upgrading of Customs communications systems ($1.0 million) and increases in respect of ADP equipment ($1.2 million). {:#subdebate-103-28} #### Taxation Administration An additional $17.9 million is provided in 1980-81. The increase reflects, inter alia, the continuing effort on the part of the Taxation Office to combat tax avoidance and evasion, and in particular reflects the costs of increased staff resources devoted to enforcement activity and intensification of assessing and income tax review activities. The estimate also provides for the second year of a three-year program to introduce a national word processing system ($0.6 million) and an enhancement of the ADP facility ($1.1 million). {:#subdebate-103-29} #### Other This heading includes outlays of the Departments of Finance and Treasury, the Auditor-General's Office and the Grants Commission. The decrease in estimated outlays in 1980-Sl is largely attributable to an estimated reduction of $3.3 million on amounts provided in 1979-80 for the acquisition of computer equipment and the provision of ancillary computer services for the Department of Finance. In addition, loan flotation expenses associated with the raising of loans overseas are estimated to be $3.1 million lower than in 1979-80 resulting from a smaller overseas loan program expected in 1980-81. On the other hand, salaries and allowances are estimated to increase by $4 million. Expenditure in respect of the Grants *Commission* ($1.1 million) includes provision for the completion of its review of State relativities under the *States (Personal Income Tax Sharing) Act* 1976. {:#subdebate-103-30} #### Statistical Services This provision comprises outlays of the Australian Bureau of Statistics. The estimated increase of $20.3 million mainly reflects higher expenditures on a computer re-equipment program ($11.0 million in 1980-81 compared with $527 000 in 1979-80) and higher salary and allowance costs ($6.6 million). The Bureau's computer re-equipment program began in 1979-80 and is expected to be completed in 1983-84 at a total estimated cost of $20.5 million. The estimates incorporate $4.2 million, $2.7 million more than in 1979-80, for the 1981 Population Census. The commitment to the Census comprehends further expenditure by the Bureau of $22.9 million in 1981-82 and $0.2 million in 1982- 83 (estimated at present prices), making a total estimated cost of $28.8 million. General Administration of the ACT Outlays under this heading are for works and services of a general nature in the Australian Capital Territory undertaken by the Department of the Capital Territory and the National Capital Development Commission which are not readily classifiable to other functions. Expenditure in 1980-81 includes salaries ($22.9 million), administrative expenses ($4.2 million), plant and equipment ($4.0 million) and works projects undertaken by the National Capital Development Commission ($4.9 million). Also included under this heading in 1980-81 is expenditure from the ACT Community Development Fund. Other Administrative Services, nec Included here are the administrative expenses of the Department of the Prime Minister and Cabinet, the Central Office (excluding environmental activities) and the Australian Government Analytical Laboratories of the Department of Science and the Environment, and certain administrative expenditures of the Department of Administrative Services and the Department of Home Affairs. Also included are expenditures related to the running costs of the Administrative Appeals Tribunal and the Office of the Commonwealth Ombudsman. Expenditure is expected to increase by $13.5 million in 1980-81. Higher salary and allowance costs account for $5.9 million, including $0.9 million for a Task Force established to plan and organise the 1981 Commonwealth Heads of Government meeting in Melbourne. New analytical laboratories are being constructed at Pymble NSW for the Department of Science and the Environment; expenditure in 1980-81 is estimated at $4.8 million, $3.0 million more than in 1979-80. These increases are partially offset by the winding up of the operations of the National Royal Commission into Drugs; expenditure for that purpose was $0.7 million in 1979-80. {:#subdebate-103-31} #### Common Services *Construction Services (net)* Outlays under this heading provide for the running costs of the Department of Housing and Construction, and include wages and salaries, administrative expenses, the purchase of computer equipment, and construction and improvements relating to the Department's works depots and testing and research laboratories. The estimated increase of $19.5 million mainly reflects increases in salaries and wages costs of $5.5 million, an additional $4.5 million in consultancy services associated with additional Defence and civil projects approved for design and construction and $7.9 million for the provision of new computer equipment. {:#subdebate-103-32} #### Commonwealth Offices The major components of the 1980-81 estimate are $20.7 million for the construction and $6.9 million for the maintenance of Commonwealth offices. Significant construction projects include Commonwealth offices at Orange and Wagga Wagga in NSW, and, in the ACT, the McLachlan offices at Barton, the Benjamin offices at Belconnen, and the refurbishment of the West Block and Administration Building offices. In addition, a major project to be commenced in the ACT in 1980-81 is the refurbishing of the old Patents Office at an estimated cost of $7.9 million. Little expenditure is expected on this project in 1980-81. {:#subdebate-103-33} #### Printing and Publishing This heading covers the salaries, administrative and plant and equipment expenses of the Commonwealth's printing and publishing activities. The estimated increase of $1.5 million in 1980-81 reflects salaries increases and increased expenditure on plant and equipment. {:#subdebate-103-34} #### Property Management and Services Costs associated with the maintenance and security of Commonwealth office accommodation and the property survey program for Commonwealth departments and authorities are included here. **Major components** of the estimate are salaries ($20.5 million), contract cleaning ($6.5 million), office services ($11.4 million) and partitioning and associated work in leased office premises ($6.7 million). {:#subdebate-103-35} #### Government Purchasing The salaries cost of staff of the Purchasing Division of the Department of Administrative Services accounts for $8.4 million of the estimated expenditure of $9.1 million in 1980-81. {:#subdebate-103-36} #### Rent This item provides for rental costs for office and other accommodation leased for civil departments. The increase of $7.2 million in 1980-81 reflects the full year costs of leases taken up in 1979-80, increased rentals on existing leases and proposed expenditure on new leases in 1980-81. {:#subdebate-103-37} #### Publicity Services The 1980-81 estimate for these outlays includes provisions for the publicity programs undertaken by the Australian Information Service ($5.7 million) and support for Film Australia ($4.5 million). {:#subdebate-103-38} #### Storage and Transport Services The operation of the Department of Administrative Services vehicle fleet, removal and storage costs associated with the transfer of civilian employees, and the provision of bulk storage facilities for civilian departments are provided for in this item. The estimate for 1980-81 includes $15.1 million for vehicle purchases (mainly replacement vehicles), which represents an increase of $0.8 million on 1979-80. The overall reduction in this item results largely from an increase of $2.8 million in the proceeds of vehicle sales which are an offset to outlays. 3 *Other* Included here are the cost of printing Australian Government Gazettes, payments to Commonwealth Accommodation and Catering Services Ltd, and expenditure for the construction of staff housing for Commonwealth public servants in the Northern Territory. Net Superannuation Payments nec This item covers the cost of superannuation benefits payable under the *Superannuation Act* 1922 and the *Superannuation Act* 1976 to or in respect of former employees of the Commonwealth (excluding defence personnel and employees covered by arrangements with the Australian Postal and Telecommunications Commissions). In addition, it reflects the cost of benefits paid under the South Australian and Tasmanian superannuation schemes to or in respect of former employees of the South Australian and Tasmanian Railways: this liability was assumed by the Commonwealth under the arrangements for the takeover of railways in those States in 1974-75. The figures shown are net of estimated offsetting receipts from Commonwealth authorities as contributions towards the accruing employer superannuation liability for existing employees or as reimbursement of the employer share of benefits paid to former employees or their dependants. For 1980-81 net superannuation payments are estimated to increase by $39.7 million reflecting the estimated cost of new benefit grants to be made during the year and the cost of pension increases that were payable from July 1980. These payments include payments for former railway workers in South Australia and Tasmania, which are estimated to increase by $1.8 million. Recoveries nec This heading records various miscellaneous receipts, including administrative charges for work undertaken by the Department of Housing and Construction, rent from Commonwealth property, charges for the hire of computers, audit fees and other minor charges. Mainly as a result of the purchase of new computer facilities by the Department of Finance, computer hire receipts of the Australian Bureau of Statistics are expected to be $0.9 million lower in 1980-81. {: type="1" start="1"} 0. NOT ALLOCATED TO FUNCTION Outlays not allocated to specific functions comprise those payments to the States, the Northern Territory and local government authorities which are not elsewhere classified, natural disaster relief, public debt interest payments, and a bulk allowance for prospective increases in wages and salaries of Commonwealth Government employees, other than Defence Service personnel and employees paid from votes included in the Defence function. {: type="A" start="A"} 0. PAYMENTS TO OR FOR THE STATES, THE NORTHERN TERRITORY AND LOCAL GOVERNMENT AUTHORITIES, NEC Outlays under this heading comprise general revenue funds for the States, State Government Loan Council programs, assistance related to State debt, assistance for local government and outlays for natural disaster relief. Similar forms of assistance in respect of the Northern Territory are also included. These payments, which mainly constitute general purpose Commonwealth financial assistance, amount to 61.1 per cent of total Budget funds to be made available to the States in 1980-81 and 75.1 per cent of those to be made available to the Northern Territory. Most specific purpose payments to the States and the Northern Territory are not included under this heading, being classified elsewhere in this statement under the relevant functional headings. Details of total payments to the States and the Northern Territory are provided at the end of this section. {:#subdebate-103-39} #### States' General Revenue Funds General revenue funds are provided by the Commonwealth to the States for purposes determined by them. A total of $6026.9 million, representing an increase of $601.1 million, or 11.1 per cent compared with 1979-80, is expected to be provided to the States in 1980-81 in this form. {:#subdebate-103-40} #### Tax Sharing Entitlements Tax sharing entitlements make up the bulk of general revenue assistance to the States. Arrangements based on a Commonwealth undertaking to provide the States with a fixed percentage of personal income tax collections commenced in 1976-77. These arrangements replaced financial assistance grants which were determined under a formula which took into account increases in States' population and in average wages in the economy as a whole, and a further 'betterment' factor. Under 'Stage 1' of the tax sharing arrangements, the States became entitled to receive: in 1976-77, 33.6 per cent of Commonwealth net personal income tax collections (excluding the revenue effects of any special surcharges or rebates applied by the Commonwealth) in that year; in 1977-78, a fixed amount of $4336.1 million; and, in each subsequent year, 39.87 per cent of collections in the preceding year. The 'Stage 1' arrangements included a 'guarantee' provision to ensure that each State's entitlement in any year would not be less in absolute terms than in the previous year. In the four years 1976-77 to 1979-80, there was a supplementary undertaking (the 'formula guarantee') which ensured that the entitlements in those years would not be less than the amount which would have been yielded by the financial assistance grants formula which applied before 1976-77. In anticipation of the expiry of the formula guarantee' on 30 June 1980, the Premiers' Conference of December 1979 adopted interim arrangements for the determination of entitlements pending the outcome of a comprehensive review of the tax sharing agreement. These arrangements provide for the States to receive in 1980-81 39.87 per cent of net personal income tax collected in 1979-80, distributed according to existing tax sharing relativities, with the guarantee that each State will receive no less in real terms than the amount it received in 1979-80. The comparison of these amounts in real terms is made using the ratio of the Consumer Price Index for the four quarters ending March 1981 to that for the four quarters ending March 1980, the index being that for the capital city of the State in question. The present estimates provide for the States' entitlements in 1980-81 to be $6020.2 million or 11.2 per cent higher than in 1979-80. In addition to the review of the tax sharing arrangements, a special division of the Commonwealth Grants Commission is currently reassessing the State relativities which are the basis for allocating entitlements among the States. Both review processes are expected to be completed by the end of 1980-81. {:#subdebate-103-41} #### Special Grants Each of the four less populous States is entitled to apply for special grants which are paid on the recommendations of the Commonwealth Grants Commission. In recent years Queensland has been the only claimant State; an amount of $6.7 million is included as the payment in 1980-81 to that State. {:#subdebate-103-42} #### Repayments The repayments shown under this heading are in respect of special repayable interest bearing advances which were made to New South Wales in 1971-72 and 1972-73 in the context of arrangements to assist that State to cope with its prospective budget deficit at that time. {:#subdebate-103-43} #### State Government Loan Council Programs State Government Loan Council borrowing programs are underwritten by the Commonwealth, loans being raised by the Commonwealth and the proceeds being paid to the States from the Commonwealth Budget. At its June 1980 meeting, the Loan Council approved a total State Government program of $1307.2 million for 1980-81, an increase of $62.2 million or 5.0 per cent. As in recent years, twothirds of this program ($871.5 million) will comprise interest-bearing advances and one-third ($435.8 million) will be by way of interest-free capital grants. At its June 1980 meeting the Loan Council also approved a borrowing program for larger State semi-government authorities (which is not reflected in the Budget) of $1929.6 million for 1980-81 - $239.6 million, or 14.2 per cent, greater than in 1979-80. This includes an amount of $1225 million for the basic program of the States' larger semi-government authorities, special non-infrastructure additions of $72.3 million, and $632.3 million for the semi-government infrastructure financing program. The infrastructure program was introduced in 1978-79 with the purpose of facilitating borrowings for economically viable projects that have a special significance for national development, and are for the provision of services of kinds normally provided by government or public utility enterprises which cannot be reasonably accommodated within the resources made available under 'normal' Loan Council programs and which require outlays within a relatively short period of time. These borrowings, and those expected to be undertaken in 1980-81 by smaller' State authorities (which are not subject to Loan Council approval), are summarised in the following table: >1978-79 1979-80 1980-81 {:#subdebate-103-44} #### Actual Actual Estimate Change S million $ million $ million S million Per cent {:#subdebate-103-45} #### Borrowing Program for State Semi-Government Authorities - {:#subdebate-103-46} #### Larger Authorities . 1 295.6 1 290.6 1 297.3 + 6.7 + 0.5 {:#subdebate-103-47} #### Smaller Authorities 419.5 472.3 522.2 4- 49.9 + 10.6 Taking Budget and off-Budget sources together, gross capital funds provided for the States and their semi-government and local authorities are estimated to be $3759.1 million in 1980-81, an increase of $351.8 million, or 10.3 per cent, on 1979-80. {:#subdebate-103-48} #### Assistance Related to State Debt Under the Financial Agreement the Commonwealth is to pay $15.17 million to the States each year until 1985 as a contribution towards interest payable on their debt. The Commonwealth also makes sinking fund contributions under the Agreement in respect of State debt; these payments are estimated at $39.9 million in 1980-81. {:#subdebate-103-49} #### Assistance for Local Government Under the tax sharing arrangements introduced in 1976-77, the Commonwealth provides funds to the States for general purpose assistance to local government authorities. The assistance is provided as a proportion of Commonwealth net personal income tax collections in the preceding year. The proportion applying from 1976-77 to 1978-79 was 1.52 per cent. In 1979-80, the proportion was increased to 1.75 per cent, and, in accordance with an undertaking given by the Prime Minister in November 1977, the proportion has been increased to 2 per cent in 1980-81. Partly as a result of the increased share these grants are estimated to increase by $79.0 million, or 35.6 per cent, to $300.8 million in 1980-81. Payments to the Northern Territory Under the *Northern Territory (Self-Government) Act* 1978, the Legislative Assembly of the Northern Territory has power, with the assent of the Administrator or the Governor-General, to make laws for the peace, order and good government of the Territory, and Ministers of the Territory have executive authority in respect of specified functions of a State-type nature. An outline of the financial arrangements applying to the Northern Territory is provided in Chapter V of Budget Paper No. 7, *Payments to or for the States, the Northern Territory and Local Government Authorities, 1980-81.* The financial arrangements agreed between the Commonwealth and Northern Territory Governments provided that, as from 1979-80, Commonwealth assistance to the Territory would be on a State-type basis, and include both specific purpose and general purpose funds. The main payments to be made to the Territory in 1980-81 which are not included under other functional headings are described below: {:#subdebate-103-50} #### General Revenue Assistance The bulk of general purpose assistance is provided as a tax sharing entitlement in a similar manner to arrangements applying in respect of the States. The Territory's entitlement changes each year in proportion to changes in net personal income tax collections in Australia (lagged by one year) and to changes in the population of the Territory. The Northern Territory's entitlement for 1980-81 is $269.1 million, an increase of $60.3 million on the 1979-80 amount. Included in this increase is a small adjustment relating to the cost of functions transferred after the date of self-government. {:#subdebate-103-51} #### Additional Assistance For each of the six years from 1979-80, when State-type financial arrangements began, the Northern Territory receives either a special grant on the recommendation of the Commonwealth Grants Commission or an additional assistance grant, whichever is the greater. The additional assistance grant is $20 million a year for the first three years and will then phase out over the following three years. The Territory did not apply for a special grant in 1980-81 and therefore will receive the additional assistance grant of $20 million. *Grant in Lieu of Uranium Royalties* Commencing in 1980-81, the Commonwealth will make an additional grant to the Northern Territory Government of an amount in lieu of uranium royalties, as provided for in the Memorandum of Understanding. The payment in 1980-81 is estimated at $0.9 million. {:#subdebate-103-52} #### General Capital Assistance The Commonwealth has undertaken to provide general purpose capital funds to the Northern Territory on the same terms and conditions as apply to the State Loan Council programs. In line with this undertaking one-third of these funds is provided as grants and the remaining two-thirds as advances from the Commonwealth at rates of interest and on similar terms to those applying to the States under the Financial Agreement. The level of general purpose capital assistance to the Territory changes each year in proportion to changes in State Government Loan Council programs, excluding any special additions. The level of assistance may, by agreement, be supplemented by temporary or permanent additions to the Territory program. In accordance with the 5 per cent increase in the States' Loan Council programs in 1980-81, the Territory's general purpose capital funds would normally also be increased by 5 per cent. The inclusion of an additional small increase to cover the full-year cost of functions transferred to the Northern Territory Government in 1979-80, brings the amount to be provided to $114.9 million, an increase of 6.9 per cent or $7.4 million on 1979-80. {:#subdebate-103-53} #### Debt Charges Assistance Under the State-type financial arrangements the Northern Territory in 1979-80 began receiving general purpose capital advances from, and paying associated debt charges to, the Commonwealth. These charges will rise rapidly in the early years of self-government and the Commonwealth has agreed to fund them by way of annual specific purpose payments during this initial period. The Budget provision of $10.6 million is equal to the debt charges estimated to be incurred by the Territory in 1980-81 and is an increase of $9.0 million on the 1979-80 payment. {:#subdebate-103-54} #### Assistance for Local Government A specific purpose payment of $1.4 million will be provided to the Northern Territory for distribution as general purpose assistance among local government authorities in the Territory in 1980-81 in a similar manner to the local government tax sharing entitlement payments to the States. The payment in 1980-81 represents an increase of $0.4 million on 1979-80 and is in line with the agreement that annual payments are to vary in proportion to changes in net personal income tax collections (lagged by one year) and changes in the percentage of personal income tax payable to local authorities in the States. {:#subdebate-103-55} #### Natural Disaster Relief Under arrangements introduced in 1978-79, the Commonwealth provides assistance on a $3 Commonwealth: $1 State basis for expenditures by each State (and the Northern Territory) on agreed relief and restoration measures necessitated by major disasters where such expenditures exceed annual base amounts established for the State. In addition the Commonwealth meets half of the cost of assistance provided by the States for the immediate relief of personal hardship and distress. A provision of $12.8 million is made for natural disaster relief payments to the States and the Northern Territory in 1980-81. This provision is to meet outstanding commitments, mainly in respect of disasters occurring in previous years in New South Wales, Queensland and Western Australia, and to make some allowance for expected payments in respect of possible new disasters of which some, on the basis of past experience, can be expected to qualify for Commonwealth assistance in 1980-81. Summary of Commonwealth Payments to the States, the Northern Territory and Local Government Authorities The payments described above are largely of a 'general purpose'-^as distinct from 'specific purpose' - nature. Detailed information on both categories of payments is provided in Budget Paper No. 7, *Payments to or for the States, the Northern Territory and Local Government Authorities, 1980-81.* Estimated total Commonwealth payments to the States and the Northern Territory in 1980-81 are summarised below. Net Payments to the States and Local Authorities 10 478.1 11 118.7 12 265.5 +1 146.8 +10.3 {: type="A" start="B"} 0. PUBLIC DEBT INTEREST Interest payments from the Budget sector to other sectors are recorded under this heading. OSset against gross interest payments on Commonwealth securities is interest received on Commonwealth securities held by Government Trust Funds. Public debt interest is estimated at $2409.1 million in 1980-81, an increase of 8.4 per cent on the amount in 1979-80. As a proportion of total outlays, public debt interest is estimated at 6.7 per cent in 1980-81 compared with 7 0 per cent in 1979-80. 1978-79 1979-80 1980-81 Actual Actual Estimate Change $ million S million S million $ million Gross Interest Paid on Commonwealth {:#subdebate-103-56} #### Securities...... 2 068.6 2 349.3 2 575.2 +225.9 {:#subdebate-103-57} #### Other Interest Payments . 10.0 9.5 8.2 -1.3 Gross Interest Payments 2 078.5 2 358.8 2 583 .4 +224.6 Interest Received on Government Securities and Cash Balances held by the Commonwealth Government on its own behalf- {:#subdebate-103-58} #### Loan Consolidation and Investment Reserve...... 83.2Cr 106. 5Cr 140. OCr -33.5 Other...... 24.6Cr 29.7Cr 34.3Cr - 4.6 *Cross Interest Paid on Commonwealth Securities* Recorded under this heading is interest paid on all Commonwealth securities including Commonwealth Bonds, Australian Savings Bonds, Treasury Notes, Treasury Bills and Income Equalisation Deposits. The Commonwealth securities in question include those issued on behalf of the States and certain Commonwealth authorities. Reimbursement of interest paid on these Comonwealth securities by the States and the relevant authorities is recorded as receipts under the heading 'Interest Rent and Dividends' *(see* Statement No. 4). The estimated increase in interest payments in 1980-81 is $186.4 million or 8.4 per cent, compared with the $252.0 million or 12.8 per cent increase recorded in 1979-80. The effect on interest payments in a particular year of securities issued in that year depends on the type of security and, in the case of bonds, on the timing of the borrowing within the year. Large sales of Treasury Notes were recorded in 1979-80; Treasury Notes "are short-term securities, with maturities of 13 and 26 weeks, and are issued at a discount and repayable at par so that the interest cost falls within the financial year of issue; as a result, there was a disproportionate increase in interest payments recorded in 1979-80. New arrangements for the marketing of Commonwealth Bonds and Treasury Notes came into effect in 1979-80. A Treasury Note tender system was introduced in December 1979 and a new 'tap' arrangement for Commonwealth Bonds was introduced in April 1980. Under the new 'tap' arrangements Commonwealth Bonds will be available in one or more maturities on a more or less continuous basis throughout the year at prices which may be varied during the period of issue. This contrasts with the past practice of issuing new Commonwealth Bonds in periodic cash/conversion loans with fixed issue prices and set closing dates for subscriptions. {:#subdebate-103-59} #### Other Interest Payments Interest paid by the Commonwealth on trustee moneys lodged with it at call ($7.5 million in 1980-81) comprises the bulk of this item. Included also are interest payments on borrowings from private lenders by the ACT Commissioner for Housing ($0.7 million in 1980-81). Final interest payments of $0.4 million were made in 1979-80 in respect of credit arrangements in the United States for defence equipment purchases. *Loan Consolidation and Investment Reserve (LCIR)* Interest is received by the LCIR on investments in Commonwealth securities which were issued mainly in Special Loans to assist with the financing of State Loan Council programs. These amounts, which represent the receipt of interest by the Commonwealth (through one of its Trust Accounts) from the Commonwealth itself, are offset against gross interest payments, in order to record only public debt interest payments to other sectors. The LCIR subscribed to three special loans totalling $609.4 million during 1979-80. This is the main cause of the estimated increase of $33.5 million in interest receipts of the LCIR in 1980-81. {:#subdebate-103-60} #### Other Interest is received also on investments in Commonwealth securities and in cash balances held by other Commonwealth Trust Funds, including the National Debt Sinking Fund. These amounts are also offset in arriving at public debt interest payments. {: type="A" start="C"} 0. ALLOWANCE FOR WAGE AND SALARY INCREASES (NON-DEFENCE) A bulk allowance of $125 million is included in the 1980-81 Budget estimates, to allow for prospective increases during the year in wage and salary rates (including those on account of work value increases) of public service employees, other than for employees and service personnel paid from votes included under the Defence function. A separate allowance of $110 million is included in the Defence function. These bulk allowances are not appropriated at this stage. Their purpose is to allow a more accurate picture of the prospective calls on the Budget to be presented. The allowances are necessarily approximate; any supplementation of appropriations that proves to be needed in the light of actual wage and salary rate increases will be reflected in additional appropriations later in the year. {: .page-start } page 1 {:#debate-104} ### STATEMENT No. 41 - ESTIMATES OIF KECEBPTS 1980-81 TABLE OF CONTENTS {:#subdebate-104-0} #### Page {:#subdebate-104-1} #### Introduction............. 220 {:#subdebate-104-2} #### Measures - {:#subdebate-104-3} #### Summary Table............ 220 {:#subdebate-104-4} #### Personal Income Tax........... 221 {:#subdebate-104-5} #### Business Income............ 224 {:#subdebate-104-6} #### Liquefied Petroleum Gas.......... 225 {:#subdebate-104-7} #### Estimates - {:#subdebate-104-8} #### Summary Table............ 226 {:#subdebate-104-9} #### Customs Duty............ 227 {:#subdebate-104-10} #### Excise Duty............ 227 {:#subdebate-104-11} #### Sales Tax............. 229 {:#subdebate-104-12} #### Income Tax - {:#subdebate-104-13} #### Individuals............ 23^ {:#subdebate-104-14} #### Companies............ 23 1 {:#subdebate-104-15} #### Departure Tax.......... .231 {:#subdebate-104-16} #### Estate Duty............. 232 {:#subdebate-104-17} #### Gift Duty............. 232 {:#subdebate-104-18} #### Other Taxes, Fees and Fines.......... 232 {:#subdebate-104-19} #### Interest, Rent and Dividends.......... 234 Net Receipts from Government Enterprise Transactions..... 236 {:#subdebate-104-20} #### Sale of Existing Assets........... 237 {:#subdebate-104-21} #### Appendices - {:#subdebate-104-22} #### I Crude Oil and Liquefied Petroleum Gas: {:#subdebate-104-23} #### Pricing and Levy Arrangements......... 239 II Taxation Expenditures.......... 244 {: .page-start } page 279 {:#debate-105} ### STATEMENT No. 4- ESTIMATES OF 1RECEEPTS 1980-81 Total receipts in 1980-81 are estimated at $34 471 million, an increase of 16.2 per cent over receipts in 1979-80. In the absence of the tax measures identified in the following table, estimated receipts in 1980-81 would have grown by 18.2 per cent to $35 058 million. {: .page-start } page 279 {:#debate-106} ### TAXATION MEASURES The table below lists taxation measures announced both prior to and in the Budget and shows the estimated effects on receipts in 1980-81 and in a full year. Estimated Change in Receipts Measure 1980-81 Full Year(a) {:#subdebate-106-0} #### Personal Income Tax - Indexation of rate scale(6)....... ~ Increase in dependant rebates^)...... j Australians working overseas....... {:#subdebate-106-1} #### Gifts- To TAFE institutions....... To certain overseas aid organisations..... Superannuation deductions for self-employed persons and employees not covered by employer-sponsored arrangements Business Income - Farm water conservation and conveyance^) .... Accelerated depreciation....... Measures related to eradication of brucellosis and tuberculosis in cattle.......... Interest rate on income equalisation deposits(/i) Liquefied Petroleum GasIncrease in rate of levy(£)....... {: .page-start } page 279 {:#debate-107} ### TOTAL.......... -587 -872 $ million 8 million -636 -690 -1 -2 -- (c) -9 -100 -8 -38 -2 -110(/) *- -KkT)* -2(i) +1(7) +71 +71 {:#subdebate-107-0} #### Personal Income Tax {:#subdebate-107-1} #### Rate Scale and Dependant Rebates In line with the decision announced on 6 March, a half-indexation adjustment has been applied to the rate scale effectively applying from 1 December 1979 to 30 June 1980, to derive the 1980-81 scale. The factor applied was 1.038. As also announced on 6 March, various dependant rebates for 1980-81 have been increased by 34 per cent. The rebate for a spouse, housekeeper or daughter-housekeeper has been increased from $597 to $800, the sole parent rebate from $417 to $559, the invalid relative rebate from $270 to $362 and the parent or parent-in-law rebate from $539 to $722. In addition, the notional rebates for dependent children that are taken into consideration in calculating zone allowance rebates have been increased from $270 and $203 to S362 and $272 respectively. The rate scale for assessment of 1980-81 income tax is: On 1 July 1980 the PAYE instalment deductions were adjusted to reflect the increase in the spouse and associated rebates and the indexation adjustment of the rate scale. Provisional tax arrangements seek to achieve reasonable consistency between the treatment of PAYE and provisional taxpayers. Since 1976 the provisional payment of those who do not self-assess has been derived by applying to their preceding year's income, rates which are somewhat higher than the current year's rates. For example, a loading of 3 percentage points was applied to the normal rates in calculating their 1979-80 provisional payments. This was done as a means of achieving a degree of consistency in times of rising incomes between them and PAYE taxpayers and provisional taxpayers who self-assess. In 1980-81 that objective will be met by adjusting the income, rather than the rates, in the calculation of the provisional payment of those who do not self-assess. Specifically, the 1980-81 rate scale will be applied to their 1979-80 income increased by 7.5 per cent and dependant rebates will be allowed at 1980-81 values. The 7.5 per cent is a conservative estimate of the average rise in provisional incomes for 1980-81, and the arrangements should result in provisional tax of taxpayers who do not self-assess being closer over the whole range of incomes to the provisional tax payable by taxpayers who do self-assess (and by PAYE taxpayers) than has been the case in the past. Provisional taxpayers of course retain the option of self-assessing, i.e. providing an estimate of their income for the current year which is used in calculating their provisional payment. The provisional payment of those who self-assess will be derived by applying 1980-81 rates and rebates in conjunction with their estimate of 1980-81 income. {:#subdebate-107-2} #### Australians Working Overseas The present law contains provisions to prevent international double taxation on foreign-source income which Australian residents earn from personal services performed in another, country. Under those provisions, which are varied in some respects by double taxation agreement's, the income is exempt from Australian tax if the country of source taxes it, and is taxed by Australia if the country of source exempts it. It is proposed to provide some relief from Australian tax on certain foreignsource income which Australian residents earn from personal services overseas where the country of source does not tax it, either because it does not levy income tax or because it forgoes its tax (e.g. where the work is done under contracts with international bodies such as the World Bank or the Asian Development Bank). The new treatment will not apply where the country of source exempts the income only because of the terms of a double tax agreement with Australia, the intention of which is to avoid double taxation of the income in question. The new arrangements will apply where the personal services are performed overseas in connection with approved development, construction and other projects. A certificate of approval for the project should be sought from the Department of Trade and Resources. A certificate would be issued on the approval of the Minister for Trade and Resources (or his delegate) and the Treasurer (or his delegate) being satisfied, on the basis of Australia's national interest, that the project is an approved project and is of the following types: {: type="a" start="a"} 0. the design, supply or installation of equipment or facilities; 1. the construction of works; 2. the development of urban and regional areas; 3. development of agriculture; 4. advice and/or assistance for the management or administration of a government department or a public utility; or 5. such other projects of a type approved in writing by the Minister for Trade and Resources and the Treasurer. The certificate would be one of the necessary conditions for exemption of persons engaged on the project. The certificate would be given on the condition that certain details of the project would be provided following entry into a contract to carry out the project, and that certain arrangements be completed with the Australian Taxation Office before the departure of personnel. The major features of the arrangements will be: Australian residents working overseas on approved projects, whether employees or self-employed, may be eligible for relief if they are working for an Australian resident or an Australian government, for the Government of the country where the work is performed, or under contract to an international body such as the World Bank; o where the work is performed on a single project in the other country for a continuous period of twelve months or more, the foreign-source income will be exempted in full; o where the work is performed on a single project in the other country for a continuous period of between three and twelve months, the relief will be exemption of a minimum of 25 per cent of the foreign-source income, increasing on a time basis to 100 per cent for an assignment of twelve months; o to permit short-term returns to Australia in connection with the eligible projects, two or more periods of absence from Australia will be treated as a continuous period where the number of intervening days in Australia does not exceed one sixth of the total dme spent on the project site; and ° these new arrangements, which will include appropriate safeguards, will apply to income earned on projects approved and entered into after 19 August 1980. {:#subdebate-107-3} #### Gifts Two additional categories of gifts will become deductible for income tax purposes. Gifts to eligible non-governmental overseas aid organisations providing financial support to appropriate programs and organisations in developing countries will be an allowable deduction. Eligible organisations will be determined by the Treasurer after consulting the Minister for Foreign Affairs, and will be announced at a later date. Gifts made after that date to the eligible organisations will be deductible. Gifts to TAFE institutions and to other Commonwealth institutions prescribed under the Tertiary Education Commission Act will be deductible where the gifts are to be applied to technical and further education or other tertiary education. Where an eligible institution provides both TAFE and secondary courses, the Minister for Education will certify, for purposes of determining deductibility of gifts, which purposes and facilities are for tertiary education. The deductible gifts will include those made to residential colleges at eligible institutions. The present certification in respect of gifts to colleges of advanced education is no longer necessary, and gifts to such colleges will be allowable deductions without the certification process. *Superannuation Deductions for Self-employed Persons and Employees not covered by Employer-sponsored Arrangements* The main features of the present law relating to superannuation arrangements are: o contributions by an individual to a fund to provide superannuation benefits for himself or his dependants are included in rebatable expenditure, within a limit of $1200 per annum for the sum of life insurance premiums and superannuation contributions, and entitle him to a rebate at the standard rate of tax on any excess of his total rebatable expenditure over $1590. That applies whether the contribution is by an employee contributing to an employer-supported fund, an employee who is not supported by an employer-sponsored scheme and who makes his own arrangements to contribute to a public superannuation fund, or a self-employed person; o employees who are members of an employer-supported fund also have the benefit of employer contributions on their behalf, and are not taxed on those amounts. There is no corresponding benefit for self-employed persons or for employees who are not supported by an employer-sponsored scheme; and o retirement benefits received as pensions are assessable income, except to the extent of any undeducted purchase price. Retirement benefits received as lump sums by self-employed persons and unsupported employees are taxfree, while 5 per cent of lump sums received on retirement by employees who are members of employer-sponsored schemes is assessable income. It is proposed to amend the treatment of contributions and lump-sum benefits in respect of self-employed persons and employees not covered by employer-sponsored arrangements in the following main respects: o up to $1200 per annum of contributions made by them after 19 August 1980 to a qualifying fund (i.e. a fund that qualifies under section 23 (ja) or section 79 of the Income Tax Assessment Act) to provide retirement benefits for themselves and their dependants will be deductible from their assessable income. This will provide something comparable to the benefit which supported employees obtain when their employer contributes to a fund for them; ° contributions in excess of $1200 per annum will remain rebatable expenditure, up to the existing limit of $1200 for life insurance premiums and superannuation contributions, as they are for all contributions by supported employees; and ° 5 per cent of lump sums received from qualifying funds after 19 August 1980 will be assessable income, to the extent that those lump sums are derived from contributions after that date and from earnings of the fund from the investment of those contributions. In other words, that part of the lump sums will be taxed to the same extent as lump sums received on retirement by supported employees. The part of their lump sum retirement benefit derived from contributions made up to 19 August 1980, and earnings on the investment of these contributions, will remain tax-free. It will be a condition for eligibility that no other person contributes to a fund for the taxpayer's benefit or agrees to provide superannuation benefits for the taxpayer or his or her dependants. {:#subdebate-107-4} #### Business Income {:#subdebate-107-5} #### Farm Water Conservation and Conveyance The Prime Minister announced on 14 April that expenditure contracted for after that date on conservation or conveyance of water in a business of primary production would be deductible in full in the year in which the expenditure was incurred. {:#subdebate-107-6} #### Accelerated Depreciation Existing rates of depreciation will be increased by 20 per cent (by means of a Joading on the rates) in respect of new or second-hand plant ordered after 19 August 1980. The loading will not apply, however, to motor vehicles of the types to which the investment allowance does not apply or to plant for which concessional statutory rates are available. *Eradication of Brucellosis and Tuberculosis in Cattle* The income tax law will be amended in two respects to encourage further progress towards eliminating brucellosis and tuberculosis infection in cattle: o Section 36aaa of the Income Tax Assessment Act will be extended to profits arising from the death, or disposal for destruction in pursuance of a compulsory destocking order, of livestock from 1 July 1980 in respect of any animal disease. That extension will permit a primary producer to offset any relevant profit against the deductible cost of replacement stock acquired for up to five income years after the year of death or disposal for destruction (any unabsorbed balance being assessable income in the last of those five years), and so defer tax on the relevant profit until the replacement stock is sold. A primary producer who breeds replacement stock may elect to include an appropriate part of the profit in assessable income; and o for cattle properties certified as subject to brucellosis or tuberculosis and in relation to which herd control is difficult, expenditure incurred by 30 June 1984 on internal fences and stockyards under contracts entered into while a certificate is in force will be deductible in full in the year in which the expenditure is incurred. The investment allowance will not apply to expenditure written off in full in one year. *Interest Rates on Income Equalisation Deposits* On 6 August 1980 the Treasurer announced that the interest rate paid to primary producers on income equalisation deposits would be increased from 5 per cent per annum to 7 per cent. The higher rate took effect from 7 August 1980 and applies to deposits held at that time as well as to deposits made subsequently. {:#subdebate-107-7} #### Liquefied Petroleum Gas On 8 April 1980 the Minister for National Development and Energy announced LPG pricing measures and new arrangements for determining the levy on naturally occurring LPG. Under these arrangements producers of naturally occurring LPG from fields in production prior to 17 August 1977 pay excise at a rate equivalent to 60 per cent of the margin by which the weighted average of wholesale prices on domestic and export sales exceeds $147 per tonne. The excise accordingly rose from $27.55 per tonne to $77.00 per tonne on 8 April 1980, and to $80.40 per tonne on 1 July 1980. {: .page-start } page 285 {:#debate-108} ### RECEIPTS ESTIMATES The following table compares estimated receipts in 1980-81 with actual receipts in 1979-80. A comparison between the Budget estimate for 1979-80 and the outcome for that year is provided in Statement No. 5. Comparative figures for the years since 1970-71, including the estimates for 1980-81, are shown in Table 6 of Statement No. 6. 1979-80 Change 1980-81 Change on on {:#subdebate-108-0} #### Budget Receipts Actual 1978-79 Estimate 1979-80 {:#subdebate-108-1} #### Taxation Revenue After taking account of the measures described above, total taxation revenue in 1980-81 is estimated to increase by 16.4 per cent to $31 796 million. The main components are described below. *Customs Duty* (a) *Imports* Collections of customs duty on imports are estimated to increase by $232 million to $1770 million in 1980-81. This is an increase of 15.1 per cent compared with 12.8 per cent in 1979-80. The ratio of duty to imports is assumed to be the same as in 1979-80. The larger increase in 1980-81 collections is thus broadly in line with the expected stronger growth in imports. {: type="a" start="b"} 0. *Coal exports* Coal export duty receipts are estimated at $90 million, virtually the same as in 1979-80. Higher receipts resulting from projected increases in exports of coking coal from Queensland are estimated to be offset by the full year effects of reduced rates of duty announced in the 1979-80 Budget. The estimate assumes an increase in dutiable export tonnages in 1980-81 of about 5 per cent, which allows for some loss of exports from Queensland arising from industrial disputes. {:#subdebate-108-2} #### Excise Duty Total collections of excise duty are estimated at $5902 million in 1980-81, an increase of $937 million or 18.9 per cent over 1979-80, compared with an increase of 29.1 per cent in 1979-80. The main components of the 1980-81 estimates and comparable figures for 1979-80 are as follows: {: type="a" start="a"} 0. *Crude Oil and LPG Duties* Total receipts from these sources are estimated to increase by 39 per cent, or $887 million, in 1980-81, to $3157 million. Taken together they are estimated to represent 9.2 per cent of projected total receipts in 1980-81 (compared with 7.7 per cent in 1979-80), and to account for 3 percentage points of the estimated increase of 16.2 per cent in total receipts. The key assumptions underlying the *crude oil* estimate and their impact on the projected increase of $827 million in levy receipts in 1980-81 are: o maintenance throughout 1980-81 of the import parity prices applicable since 1 July 1980 of S27.S0 per barrel for Bass Strait oil, $27.83 per barrel for Barrow Island oil and $28.42 per barrel for Moonie oil - these prices are 28 per cent higher than the weighted average price of $21.44 per barrel in 1979-80 ... 885 o the occurrence of an extra weekly excise payment in 1980-81 .... 58 9 an increase of about 5 per cent in the rate of production (following a decline of about 5 per cent in 1979-80 when production was adversely affected by maintenance activities and industrial disputes), coupled with projected changes in the production mix from large, medium and small fields..... 42 o a further increase in the proportion of domestic production for which producers receive import-parity related returns . -158 827 The main reason for the estimated increase of $60 million in receipts from the duty on *naturally occurring LPG* in 1980-81 is the full year effect of the increased levy rate (from the equivalent of $27.55 per tonne to $77.00 per tonne), which formed part of the new arrangements announced by the Minister for National Development and Energy on 8 April 1980. The rate was increased to the equivalent of $80.40 per tonne on 1 July 1980. Excisable production of naturally occurring LPG in 1980-81 is assumed to increase marginally on 1979-80. Current pricing and levy arrangements for crude oil and naturally occurring LPG are described in more detail in Appendix I to this Statement. {: type="a" start="b"} 0. *Other Duties* Revenue from excise duties other than on crude oil and LPG is estimated to increase by $50 million or 1.9 per cent in 1980-81, compared with an increase of 2.9 per cent in 1979-80. The faster increase last year reflects the full year effect on 1979-80 collections of increases in rates of duty announced in the 1978-79 Budget. Clearances of goods subject to duty in 1980-81 are generally estimated to increase at about the same rate or slightly faster than in 1979-80. It is assumed that total consumption of alcohol will increase at about the same rate as in 1979-80, when it rose by about 2.7 per cent. It is assumed that wine, which is not subject to excise, will continue to increase its share of the market at the expense of beer and spirits but at a slower rate than in recent years. The estimate of brandy clearances allows for stronger growth than last year, reflecting the full year effect of the reduction in the excise rate from 9 November 1979. The estimated increase in total excise revenue from petroleum products mainly reflects an assumption that clearances of products other than motor spirit, mainly diesel, will increase in 1980-81. The estimate for motor spirit excise revenue assumes that clearances will fall slightly in 1980-81, following the small decline recorded in 1979-80. The impact on clearances of the stronger growth in the overall level of activity, and the estimated slower rate of price increase in 1980-81 than in 1979-80, are assumed to be more than offset by the ongoing substitution effects of the sharp increase in motor spirit prices since 1978-79. Rates of duty for the main items subject to excise are shown in the following table. Kates ©2 Essis® IDtaittys *19* Amgnnsa 1980 Potable spirits (per litre of alcohol)- {:#subdebate-108-3} #### Brandyffl)............. 16.00 General rate for other 5pirits(6)......... 18.75 Spirits n.e.i. and liqueurs n.e.i.(ft)......... 19.25 Beer(6) (per litre)............ 0.52 Tobacco products(A) (per kilogram) - {:#subdebate-108-4} #### Cigarettes............. 24.75 {:#subdebate-108-5} #### Cigars.............. 21.12 Manufactured tobacco........... 12.58 Petroleum products(c) (per litre) - Aviation gasoline............ 0.04555 Motor spirit............ 0.05155 Aviation turbine fuel........... 0.0419 Diesel fuel............. 0.05155 Crude oil(rf) (per kilolitre) - Fields producing less than 2 million barrels per year...... 18.90 Barrow Island - parity-related oil: 2-15 million barrels per year . 85.34 Barrow Island - controlled-price oil......... 155.81 Bass Strait- parity-related oil - 2-15 million barrels per......... 84.23 15 million barrels per year or more........ 103.76 Bass Strait- controlled-price oil......... 157.21 Liquefied petroleum gas(e) (per kilolitre) - Fields on stream before 17 August 1977........ 43.48 Fields on stieam after 16 August 1977........ Nil {: type="a" start="a"} 0. Applicable from 9 November 1979. 1. No change; same rate has applied since 15 August 1978. 2. No change; same rate has applied since 16 August 1977. (rf) Applicable from 1 July 1980. All rates changed except that applying to fields producing less than 2 million barrels per year which has been $18.90 per kilolitre since 16 August 1977. *(e)* Applicable from 1 July 1980. {:#subdebate-108-6} #### Sales Tax Revenue from sales tax in 1980-81 is estimated at $2060 million, an increase of 10.5 per cent, compared with growth of 5.4 per cent in 1979-80. The estimate for a higher rate of increase in 1980-81 reflects assumptions that there will be a somewhat faster growth in wholesale prices and in consumption expenditures. The estimates assume moderate growth in the volume of commercial vehicle sales and small growth in the volume of motor car and station wagon sales in 1980-81. In 1979-80 sales (registrations) of motor cars and station wagons declined by 2.5 per cent and sales of commercial vehicles were virtually unchanged from 1978-79. Estimated sales tax collections and rates of increase by rate class for 1980-81 and the previous year are set out in the following table. {:#subdebate-108-7} #### Income Tax - Individuals It is estimated that net collections of income tax from individuals in 1980-81 will increase by 13.S per cent to $17 070 million. This estimated total comprises components which relate mainly to taxable incomes in 1979-80 - PAYE refunds and collections from other individuals - as well as gross PAYE collections which relate to earnings during 1980-81. {: type="a" start="a"} 0. *PAYE Instalment Deductions* Gross PAYE receipts are estimated to increase by 13.8 per cent to $15 120 million in 1980-81. This compares with increases of 16.2 per cent in 1979-80 and 8.1 per cent in 1978-79. Uncertainties regarding employment statistics (see Statement No. 2) make the determinants of PAYE receipts also uncertain. The National Accounts statistics imply 1.8 per cent growth in wage and salary earner employment in 1979-80 compared with 2.4 per cent recorded in the Labour Force Survey. Average weekly earnings increased by 9.6 per cent. The estimates for PAYE receipts in 1980-81 assume a 12 per cent increase in average weekly earnings and If per cent increase in wage and salary earner employment. The estimated stronger growth in the tax base in 1980-81 compared with the previous year has been offset by the reduction in the standard rate from the average of 33.07 per cent which applied in 1979-80 to 32 per cent, for 1980-81 and, as from 1 July 1980, by indexation of the rate scale by a factor of 1.038 and by the substantial increase in the rebates for spouses, sole parents, etc., details of which are provided earlier in this Statement. {: type="a" start="b"} 0. *PAYE Refunds* Refunds in 1980-81, which are in respect of tax assessed on 1979-80 incomes, are estimated to increase by 15.3 per cent to $1300 million compared with 8.4 . per cent in 1979-80. The estimated stronger growth mainly reflects the corresponding increases in gross PAYE receipts in 1979-80 and 1978-79. {: type="a" start="c"} 0. *Other Individuals* Receipts from other individuals are estimated to increase by 12.9 per cent to $3250 million in 1980-81. The slower growth in estimated receipts than in 1979-80 largely reflects the slower growth in incomes of primary producers in 1979-80 (on which tax is payable in 1980-81) than in 1978-79. The estimate includes an allowance of $170 million for revenue shortfalls due to tax avoidance schemes, compared with $160 million estimated for 1979-80. {:#subdebate-108-8} #### Income Tax - Companies Company tax collections are estimated to increase by 32.1 per cent to $4500 million in 1980-81. This estimate compares with an increase of 12.2 per cent in 1979-80. The estimated stronger growth in receipts reflects several factors: o significantly greater increase in company income in 1979-80 (on which tax is paid in 1980-81) than in 1978-79; o abolition of the trading stock valuation adjustment with effect from 1 July 1979, which accounts for about 7.5 percentage points of the estimated overall increase of 32.1 per cent; and o phasing down of the investment allowance to 20 per cent for eligible plant first used or installed ready for use after 30 June 1979, which accounts for about 5.3 percentage points of the estimated overall increase. The estimate includes an allowance of $130 million for reduced collections due to tax avoidance schemes. This compares with an estimated shortfall of $120 million in 1979-80 attributable to such schemes. The estimated costs to revenue of the investment allowance and the trading stock valuation adjustment in respect of both companies and individuals during the period 1978-79 to 1980-81 are set out in the following table. {: type="a" start="a"} 0. Revised. {: type="1" start="6"} 0. In respect of deductions effectively carried forward from previous years. {:#subdebate-108-9} #### Departure Tax Collections from the departure tax are estimated at $20 million, $1.6 million or 8.8 per cent higher than in 1979-80. Collections in 1979-80 were 53.6 per cent higher than in 1978-79, mainly reflecting the fact that the tax applied for only part of 1978-79. {:#subdebate-108-10} #### Estate Duty Collections of estate duty are estimated to decrease by a further $28 million or S8.7 per cent to $20 million in 1980-81. The continuing decline reflects the phased abolition of estate duty, with partial effect from 21 November 1977 and complete abolition from 1 July 1979. {:#subdebate-108-11} #### Gift Duty Gift duty receipts are estimated at $1.5 million, compared with $0.5 million in 1979-80. Gift duty has been phased out in parallel with estate duty, with complete abolition from 1 July 1979. The estimated increase reflects an allowance for additional collections in respect of tax avoidance schemes that are in dispute before the Courts. {:#subdebate-108-12} #### Other Taxes, Fees and Fines Estimates for the major items of other taxes, fees and fines are shown in the following table: Revenues from *broadcasting and television station licence fees* are estimated to increase by $3.4 million to $21.5 million in 1980-81. This increase reflects the higher level of gross earnings by stations in 1979-80 on which the fees payable in 1980-81 are levied. A new scale of fees for users of the radio frequency spectrum came into effect on 1 July 1980. The new scale brings particular fees broadly into line with the costs of administration attributable to specific categories of users. Many fees have been reduced as a consequence. Revenues from *radio communication licence fees* are expected to decline by $3.3 million in 1980-81 to $9.2 million. The Government has also decided, in principle, that Commonwealth users of the radio frequency spectrum should in future pay fees also; but the necessary arrangements have not yet been finalised and no allowance for any such fees is made in the estimates for 1980-81. *Unfunded employees retirement contributions* are estimated to increase by $1.9 million to $69.1 million in 1980-81. Included in this item are contributions paid during the year by Parliamentarians ($754 000 in 1980-81) and Service personnel ($54 million) to their superannuation schemes. The remainder of this item comprises net amounts retained by the Commonwealth in respect of retiring Commonwealth employees who opt for a contributor-financed pension in lieu of a refund of their accumulated contributions to the Superannuation Fund. *Stevedoring industry collections,* which are receipts from levies on employers of waterside workers, are expected to remain at about the same level in 1980-81 ($20 million) as collections in 1979-80. A matching outlay is made to the Stevedoring Industry Finance Committee, which is responsible for making certain payments in respect of waterside workers (mainly for retirement benefits). Included in revenue from *taxes and charges in the Australian Capital Territory* are estimates for general rates ($18 million), gambling revenue ($3.1 million), drivers' licences ($7.8 million), liquor licences ($2.8 million), and fines for parking infringements ($1.2 million). *Passport fees* ($25 per passport) are estimated to yield $12.5 million in 1980-81, compared with $11.2 million in 1979-80. *Quarantine charges* are levied in respect of animal, plant and other imports. Additional charges are levied for the disposal of waste from aircraft and in 1980-81 revenue will also be derived from charges made for the disposal of waste from ships. In total, these charges are estimated to yield $3.9 million in 1980-81, an increase of $1 million on 1979-80. The *'Other'* category includes estimated revenues from the diesel fuel tax ($1.9 million), bankruptcy charges ($1.8 million), and the Australian Capital Territory Corporate Affairs Office ($1.4 million). {:#subdebate-108-13} #### Other Receipts {:#subdebate-108-14} #### Interest, Rent and Dividends Details of estimated receipts of interest, rent and dividends are set out below: {: type="a" start="a"} 0. New arrangements for the collection of offshore petroleum royalties take effect from 1 January 1981- see text below. Interest received by the Commonwealth Government from sources outside the Budget sector is included under this general heading, together with land rents collected in the A.C.T., dividends received from Government-owned companies other than financial enterprises, and net amounts available from offshore petroleum royalties. Total receipts from *interest, rent and dividends* are estimated to increase by $183.8 million or 9.0 per cent in 1980-81 to $2217.0 million. *Interest received on advances for State works and housing programs* is estimated to increase by $132.8 million to $1221.5 million in 1980-81, in part reflecting the continuing growth in outstanding Commonwealth advances for this purpose and the assumed timing of borrowings against the State works programs approved by the Loan Council. *Interest on specific purpose advances for housing* also reflects growth in the level of advances outstanding, and is estimated to increase by $6.7 million in 1980-81; this increase is however somewhat smaller than in previous years. In 1979-80 almost 40 per cent of assistance provided for - ~~ housing was by way of grants rather than advances. In previous years, grants represented a much smaller proportion of the total assistance provided under housing agreements. *Other interest receipts* are estimated to increase by $16.1 million to $610.2 million in 1980-81. Interest receipts from the Territories are estimated to be $10.1 million greater than in 1979-80. The first general purpose capital advances to the Northern Territory Government were made in 1979-80; interest payable on these advances is estimated at $10.6 million in 1980-81, an increase of $9.0 million. Equivalent debt charges assistance will be paid by the Commonwealth to the Northern Territory Government *(See* Statement No. 3, Payments to the States, the Northern Territory and Local Government Authorities nec). Interest receipts from the Defence Service Homes Corporation are estimated to increase by $6.6 million, due largely to an increase in average interest rates as a greater proportion of the capital of the Corporation comes to bear rates more in keeping with current interest rates. Interest received from the Australian Telecommunications Commission is forecast to increase by $3.1 million in 1980-81, reflecting the routine conversion, at current interest rates, of maturing components of interest bearing capital. During 1979-80, some of the advances made in previous years to Qantas, the Australian National Airlines Commission, the Australian Postal Commission and the Australian Industry Development Corporation were repaid, resulting in expected lower interest receipts from these authorities in 1980-81. Included in *'Other** is an estimate of $5 million in respect of interest expected to be received in 1980-81 on funds held by the United States Foreign Military Sales Trust Account, pending disbursement to contractors. This is the first time that such interest will be paid to the Commonwealth. Interest receipts from banks on advances made to them in 1975 for the provision of housing finance are estimated to fall by $3.0 million in 1980-81, following substantial repayments by the banks concerned in 1979-80. Other receipts under this heading include interest on the fixed deposits of a number of primary industry stabilisation trust accounts ($9.6 million), and on investments of the Defence Forces Retirement and Death Benefits Fund ($6.7 million). *Rent, dividends, etc.,* are expected to increase by $21.4 million in 1980-81 to $97.6 million. The increase of $17.5 million in *offshore petroleum royalties* (net) reflects an increase in the proportion of domestic oil production that will attract import-parity related prices in 1980-81. Offshore petroleum royalties and permit and licence fees have hitherto been collected by the States. In respect of Bass Strait production, Victoria has paid about one third of the relevant royalties to the Commonwealth. Legislation governing the collection of all these revenues has been amended following the High Court decision which upheld the Seas *and Submerged Lands Act* 1973. Under arrangements expected to commence on 1 January 1981, the Commonwealth will collect all revenues related to offshore petroleum royalties and permit and licence fees, including royalties resulting from Bass Strait production, and will pay to the States all those revenues except for about one third of the relevant royalties (that is, the Commonwealth will retain for its own benefit the same proportion of the revenues as it currently receives). In 1980-81 the estimated amount to be paid to the States in the second half of the year ($57.8 million) will be offset against the gross proceeds to be received by the Commonwealth, so that treatment of corresponding elements of this revenue for the two halves of the year is comparable. The *Overseas Telecommunications Commission (OTC)* is to pay in 1980-81 a final dividend of $17.5 million in respect of 1979-80 profits. An interim dividend of $7.5 million in respect of 1980-81 profits is also expected to be received in 1980-81, bringing total Budget receipts this year to $25 million. *Lands rents in the A.C.T.* are estimated to yield $5.1 million in 1980-81, an increase of $1.5 million on 1979-80, mainly as a result of an expected reduction in rents outstanding. Included in the *'Other'* category are the first royalties to be received from uranium mining in the Northern Territory (estimated at $2.8 million). There is no provision in the 1980-81 estimates for a possible dividend payment from the Housing Loans Insurance Corporation; in 1979-80 the Corporation paid to the Commonwealth a dividend of $1.1 million. As noted under the function 'Housing' in Statement No. 3, issues relating to the sale of the Corporation are currently under consideration. *Net Receipts from Government Enterprise Transactions* Estimates of these receipts, which include receipts (other than taxation revenue) from public financial enterprises and the net operating revenues of certain activities carried on as business type enterprises, are shown in the following table. The receipts by the Commonwealth from the *Reserve Bank* in 1979-80 comprised an interim payment of $185 million from Note Issue Department profits for that year and a final payment of $41.4 million from 1978-79 profits. Of the estimated Commonwealth receipts of $232.7 million from the *Reserve Bank* in 1980-81, $62.7 million is a final payment from 1979-80 profits. The remaining $170 million represents provision for an interim payment from projected profits of the Note Issue Department for 1980-81. The estimated receipt of $41.6 million in 1980-81 from the *Commonwealth Banking Corporation* represents the Commonwealth's share of the net profits of the Commonwealth Trading Bank (after tax) and the Commonwealth Savings Bank in 1979-80. Fares on the *Canberra Bus Service* were increased in March 1980. The loss on operations for 1980-81 is estimated at $10.6 million. Responsibility for *Northern Territory electricity, water supply and sewerage* enterprises was transferred to the Northern Territory Government from 1 July 1978. Estimated receipts relate only to recoveries in respect of operations prior to that date. *Water and sewerage rates in the Australian Capital Territory* are estimated to yield $16 million in 1980-81. Offset against these revenues are the estimated $8.8 million operational costs of maintaining the service. The *'Other'* category includes the operations of various government canteens, the Government Printer and publications trust accounts and business undertakings by the Department of Housing and Construction. {:#subdebate-108-15} #### Sale of Existing Assets Sales of existing assets are estimated at $181.4 million in 1980-81, an increase of $123.2 million on 1979-80 receipts. The 1980-81 figures include receipts from the expected sale of the Commonwealth's interest in the Ranger Project. During 1979-80 the Government announced its intention to sell the Commonwealth's interest in the *Ranger Uranium Joint Venture.* The Commonwealth accepted the proposal submitted by Peko Wallsend Operations Ltd (Peko) which involved the creation of a new company, Energy Resources of Australia Ltd (ERA) to take over the Commonwealth's interest, along with that of Peko, in the Ranger project. It is expected that the assignment of the Commonwealth's interest will take place during 1980-81. Estimated receipts comprise the sale premium ($125 million), reimbursement of direct expenditure on the project financed from the Budget in 1978-79 ($17.0 million), and other revenues associated with the sale ($4.7 million). It is intended that ERA will reimburse the Australian Atomic Energy Commission also for the expenditure which the Commission has made on the project from borrowed funds to the date of assignment and for interest and other borrowing charges incurred in respect of these funds. Receipts from the *disposition of the Commonwealth's uranium stockpile* are estimated at $7.6 million in 1980-81, compared with $34.1 million in 1979-80. In 1977 the Commonwealth entered into agreements to provide access to the Commonwealth's uranium stockpile by certain Australian companies to enable them to meet initial delivery obligations under approved contracts entered into prior to December 1972. The final withdrawals of uranium concentrates under these agreements will be effected in 1980-81. Some of the borrowed concentrates will be returned in 1980-81. (Expenditures relating to these concentrates are recorded under 'Assistance to the Mining Industry' in Statement No. 3.) The *'Other'* category mainly comprises receipts from the sale of assets by the Department of Administrative Services, and includes estimated revenues of more than $5 million in 1980-81 from the sale of all the issued share capital in the Fawnmac group of pharmaceutical companies which is currently held by the Commonwealth. {: .page-start } page 298 {:#debate-109} ### APPENDIX I TO STATEMENT No. 4 {: .page-start } page 298 {:#debate-110} ### CRUDE OIL AND LIQUEFIED PETROLEUM GAS: PRICING AND LEVY {: .page-start } page 298 {:#debate-111} ### ARRANGEMENTS The Appendix to Statement No. 4 attached to the 1979-80 Budget Speech detailed the development of crude oil pricing and levy arrangements in Australia to that time. This summary describes developments since the last Budget and indicates the pricing and excise arrangements currently applicable to liquefied petroleum gas. {: .page-start } page 298 {:#debate-112} ### CRUDE OIL On 30 December 1979 and 30 June 1980, the Minister for National Development and Energy announced new determinations of import parity prices and associated crude oil levy rates to apply from 1 January 1980 and 1 July 1980, respectively. Those determinations were in accordance with the policy announced by the then Minister for National Development on 4 July 1978, which is to base the import parity price for domestically produced crude oil on the official Saudi Arabian Light 'marker' price, converted to Australian dollars, and adjusted to reflect allowances for quality differentials, freight, wharfage and credit terms. Australian refiners pay the resultant import parity prices for indigenous crude oil. Producers receive those prices less the levy payable to the Commonwealth. The official prices of Saudi Arabian Light 'marker' crude and the equivalent Australian import parity prices for Bass Strait crude oil are shown below: >Prices (and levy rates) are set in dollars per kilolitre but, for purposes of comparison, are converted to dollars per barrel equivalents. (A) Unchanged from 1 July 1977. > >Increased to SUS14.55 per barrel with effect from 1 April 1979, and to SUS 18. 00 per barrel with effect from 1 June 1979. > >Increased to 5US24.00 per barrel with effect from 1 November 1979. > >The increase to JUS26.00 per barrel was announced in February 1980, with retrospective effect to 1 January 1980. (/) Based on SUS24.00 per barrel, see footnote *(e).* vThe Commonwealth Government's excise 'take' in 1979-80 was equivalent to about 70 per cent of the average price to refineries, for domestically produced crude oil, of $21.44 per barrel. (In addition to the levy proceeds, the Commonwealth receives a share of the royalties paid by the producers, which in 1979-80 amounted to $43 million; those *offshore petroleum royalties* are recorded in 'Other Receipts'.) The excise rate varies according to the date of discovery and size of each field. In 1979-80 producers of oil discovered prior to 14 September 1975 received parity related returns (i.e. import parity prices less the appropriate levy) on 35 per cent of their production or 6 million barrels per annum, whichever was the greater, for each field or new development within a field.* In 1980-81 the proportion of such oil attracting parity related returns will be 50 per cent or 6 million barrels, whichever is the greater. For the balance of their production from such fields, producers receive a controlled return, i.e. the Government determined price which applied at the time of the 1977-78 Budget, adjusted for changes in the costs incurred by producers in extending credit to refiners. Producers of oil from fields discovered on or after 18 August 1976 are not subject to any levy and receive the import parity price on the whole of their production. The Government has taken an 'in principle' decision (announced originally in the 1977-78 Budget) to continue the phasing in of parity related returns to apply after 30 June 1981 for all fields other than those producing more than 15 million barrels per annum. The nature of this phasing is to be considered during 1980-81. For fields producing more than 15 million barrels per annum the proportion of production attracting parity related returns is to be held at 50 per cent. When the import parity price of oil rises, the following revenue sharing arrangements apply in respect of *parity related oil:* o for fields with an annual production of less than 2 million barrels (small fields) the levy remains at $3 per barrel and the increase in price accrues entirely to producers; o for fields with an annual production greater than 2 million but less than 15 million barrels (medium fields), the levy is $3 per barrel plus 75 per cent of increases in the import parity price after 30 June 1979; producers therefore receive 25 per cent of any increase in the import parity price after that date; and o for fields with an annual production greater than 15 million barrels (large fields), producer returns from 1 January 1980 were determined by indexing the 31 December 1979 return of $9.59 by the cumulative increases in the Consumer Price Index after the December quarter 1978 or cumulative increases in import parity prices after 1 July J 979, whichever is the lesser. (This arrangement was subsequendy reviewed and the September quarter 1978 became the starting point for calculating increases in the Consumer Price Index from the 1 July 1980 adjustment.) Both 1980 adjustments have been based on movements in the Consumer Price Index, with the levy taking up the balance of the increase in the import parity price. * Formally, the effect of the present excise by-laws is that this basis applies to oil discovered prior to 18 August 1976; this machinery provision reflects the fact that at this stage no discoveries between 14 September 1975 and 17 August 1976 have been identified. The import parity prices for crude oil, levy rates and (gross) returns to producers applicable to the different categories of oil during 1980 are set out below: Parity-related Oil {:#subdebate-112-0} #### Bass Barrow Strait Island Moonie S per barrel S per barrel $ per barrel {:#subdebate-112-1} #### From 1.1.80 to 30.6.80- Import parity price....... 24.77 25.21 26.44 Lew levy......... 3.00 3.00 3.00 Return to producers...... 21.77 22.21 23.44 {:#subdebate-112-2} #### From 1.7.80 to 31. 12.80- Import parity price....... 27.50 27.83 28.42 lew levy......... 3.00 3.00 3.00 Return to producers...... 24.50 24.83 25.42 {: type="a" start="b"} 0. Medium fields (2-15 million barrels per annum) Bass Barrow Strait Island $ per barrel S per barrel {:#subdebate-112-3} #### From 1.1.80 to 30.6.80- Import parity price......... 24.77 25.21 {:#subdebate-112-4} #### Lewlevy........... 11.33 11.60 Return to producers........ 13.44 13.61 {:#subdebate-112-5} #### From 1.7.80 to 31.12.80- Import parity price......... 27.50 27.83 {:#subdebate-112-6} #### Lesstevy........... 13.38 13.56 Return to producers........ 14.12 14.27 {: type="a" start="c"} 0. Large fields (over 15 million barrels per annum) Bass Strait $ per barrel {:#subdebate-112-7} #### From 1.1.80 to 30.6.80- Import parity price............ 24.77 *Less levy.............* 14.54 Return to producers(a).......... 10.23 {:#subdebate-112-8} #### From 1.7.80 to 31.12.80- Import parity price............ 27 . 50 {:#subdebate-112-9} #### Lesskvy............. 16.49 {: type="a" start="o"} 0. Derived by indexing the December 1979 return of $9.59 by the movement in the Consumer Price Index from the December quarter 1978 to the September quarter 1979. As noted in the text, subsequent adjustments (including the 1 July 1980 adjustment) take the September quarter 1978 as the base for calculating Consumer Price Index movements. {:#subdebate-112-10} #### Controlled Oil {:#subdebate-112-11} #### Bass Strait {:#subdebate-112-12} #### Barrow Island From 1.1.80 to 30.6.80- Import parity price *Less* levy Return to producers From 1.7.80 to 31.12.80- Import parity price *Less* levy Return to producers $ per barrel $ per barrel 24.77 22.27 2.50 27.50 24.98 2.52 25.21 22.16 3.05 27.83 24.76 3.07 {: .page-start } page 301 {:#debate-113} ### LIQUEFIED PETROLEUM GAS (LPG) Some significant changes in the pricing and excise arrangements for LPG were announced during the first half of 1980. On 24 January 1980, the Minister for National Development and Energy announced that a subsidy of $80 per tonne would be provided in respect of LPG used for household purposes for a period of three years. On 8 April the Minister announced that this subsidy would be extended to include LPG used by non-profit residential institutions and schools. The subsidy is being paid through State Governments to registered distributors of LPG, backdated to 28 March 1980. On 8 April the Minister also outlined further pricing measures and revised levy arrangements for LPG. The effect of the pricing arrangements is to control the price of LPG sold for domestic, automotive and traditional uses, while leaving prices for petrochemical and non-traditional usage to be determined by commercial negotiation between the parties concerned. As part of the pricing arrangements, a common maximum wholesale price of $205 per tonne (before allowance for the subsidy, where appropriate) was set for naturally occurring and refinery produced LPG. This price implied, at the time of its inception, a differential of approximately 50 per cent between the Melbourne retail price of automotive LPG and that of 'super' grade petrol; the precise differential could vary from place to place, and time to time, because of differences in distribution costs and retail margins. For *naturally occurring* LPG, the new arrangements provide for the price to be increased by the same percentage movement as the import parity price for indigenous crude oil but, if world price movements result in the export parity price for LPG falling below the oil related domestic price, the export parity price is to be adopted for domestic purposes. The Prices Justification Tribunal has been directed to follow these arrangements in setting prices for refinery produced LPG. (Prior to the introduction of these new arrangements the domestic price for refinery produced LPG was set by the Prices Justification Tribunal having regard to the export parity price of butane and propane; naturally occurring LPG was not subject to price control but producers elected to make sales at the prices recommended for refinery produced LPG.) Under the new excise arrangements announced on 8 April, producers of naturally occurring LPG from fields in production prior to 17 August 1977 pay excise at a rate equivalent to 60 per cent of the excess of the weighted average of domestic and export prices over $147 a tonne; this resulted in an increase in the equivalent excise rates from $27.55 per tonne to $77.00 per tonne. Naturally occurring LPG from fields brought into production on or after 17 August 1977 remains free of levy. Total excisable production of naturally occurring LPG in 1980-81 is estimated to be marginally higher than in 1979-80. Recent movements in the controlled domestic price, levy and (gross) return to producers from domestic sales of naturally occurring LPG are shown below: {:#subdebate-113-0} #### Return to Price Levy(a) producers S tonne S tonne $ tonne {:#subdebate-113-1} #### From 25.1.80 to 8.4.80 {:#subdebate-113-2} #### From 9.4.80 to 30.6.80 . From 1.7.80 {: type="a" start="a"} 0. Approximate dollars per tonne conversions of levy rates which are set in dollars per kilolitre. 1. Propane, (e) Butane. 2. The prices for domestic sales of propane and butane were unified as a result of the policy changes announced on 8 April. The prices charged to households, non-profit residential institutions and schools will be reduced by the $80 per tonne subsidy to be paid by the Commonwealth, through the States, to registered distributors of LPG. / 252.00(6) 27.55 224.45 301.00(c) 27 .'55 273.45. 205.00(d) 77.00(e) 128.00 227.63(d) 80.40(e) 147.23 {: .page-start } page 303 {:#debate-114} ### APPENDIX II TO STATEMENT No. 4 {: .page-start } page 303 {:#debate-115} ### TAXATION EXPENDITURES Individuals and businesses derive financial benefits from taxation concessions of various kinds which reduce the tax liabilities of particular groups of taxpayers. The concessions reduce, or delay, collections of taxation revenue, and are as much a call on the Budget as are direct outlays. They are comparable with direct outlays in other ways and are often referred to as 'taxation expenditures'. This Appendix provides information on some major categories of taxation expenditures. {:#subdebate-115-0} #### Assistance to Individuals Concessional income tax rebates or deductions provide assistance to particular groups of individuals. The principal *rebates* are those for maintenance of dependants, for sole parents and housekeepers, zone rebates allowed to taxpayers residing in remote areas, and rebates for certain types of allowable expenditures. In 1975-76 rebates were allowed for the maintenance of dependent children in addition to the categories of dependants for which rebates are now allowed. In 1976-77 the system of direct outlays by way of family allowances was introduced; it took over the role previously performed by rebates for dependent children, and those rebates ceased to apply. (A component of the zone rebates, however, is still calculated as a percentage of a base which may include a notional rebate for dependent children.) The inclusion of the cost of dependant rebates in this section does not indicate that they are considered a departure from an equitable tax distribution. Rather, it implies no more than that they confer a benefit on recipients and could conceivably be regarded as alternatives to direct expenditures in the same way that family allowances replaced dependent child rebates in 1976. Zone rebates are allowed to taxpayers who live in remote areas. Residents in Zone A receive a rebate equal to $216 plus 25 per cent of rebates for dependants, sole parents and housekeepers (including notional rebates in respect of dependent children). Residents of Zone B receive a rebate of $36 plus 4 per cent of the rebates for dependants, etc. A rebate, at the standard rate of tax, is allowed on the excess of a taxpayer's aggregate expenditure on certain concessional items above a prescribed figure, currently $1590. Eligible expenditure includes certain expenditure in respect of the taxpayer and his dependants on medical and hospital services net of recoupments, funeral expenses up to $100, adoption of children, life insurance premiums and superannuation contributions up to a total of $1200, educational services in respect of the taxpayer, his children or dependants, up to $250 per person, and rates and land taxes up to $300 in respect of the taxpayer's sole or principal residence. Prior to 1 October 1976, contributions to a registered health insurance fund were also included in this category of rebatable expenditure. On the basis of income tax statistics for 1978-79, about 7 per cent of taxpayers had concessional expenditures in excess of SI 590. *Deductions* from assessable income of taxpayers are allowed for gifts of $2 or more to organisations covered by section 78(1) (a) of the Income Tax Assessment Act. Between 1 July 1974 and 31 October 1978, interest paid on home loans was deductible, subject to an income test and certain other conditions. Details of tax revenue forgone under the aforementioned taxation provisions in respect of income years 1975-76 to 1978-79 are shown in the following table. {:#subdebate-115-1} #### Provision Dependant rebates: Spouse/housekeeper/daughter-housekeeper Sole parent..... Dependent children .... Other dependants .... {:#subdebate-115-2} #### Total Zone rebates...... Other concessional rebates(o) . Deductions: Gift provisions..... Interest on home loans {:#subdebate-115-3} #### Total {: .page-start } page 1 {:#debate-116} ### TOTAL {:#subdebate-116-0} #### Estimated Revenue Forgone for Income Years 1975-76 1976-77 1977-78 1978-79 {: type="a" start="a"} 0. Excludes cost of general concessional rebate which was absorbed into zero rate step of rate schedule with introduction of standard rate system in 1977-78. {:#subdebate-116-1} #### Industry Assistance Industry also has received considerable assistance over the years through various taxation concessions. The main concessions available in recent years have been investment allowances, accelerated depreciation and trading stock valuation adjustment, all of which affect a wide spectrum of industry, while special arrangements have benefited primary production, tourism and mining industries. The investment allowance applies to a wide range of plant and equipment, including leased plant. It provided for a deduction equal to 40 per cent of the cost of plant purchased under a contract made in the period 1 January 1976 to 30 June 1978 and first used by 30 June 1979; it now provides a deduction of 20 per cent of the cost of plant ordered in the period 1 July 1978 to 30 June 1985. The 40 per cent allowance also applied in the case of partly-completed plant to so much of the expenditure incurred on that plant as was attributable to its installation as at 3 June 1979. Double depreciation applied to new plant and equipment first used or installed for use by taxpayers in the manufacturing and primary production industry sectors on or after 1 July 1974 and before 1 July 1975. The double depreciation scheme also applied in 1975-76 and was extended in coverage, but was discontinued after the 1975-76 income year. The trading stock valuation adjustment was a special deduction equal to a prescribed percentage of most classes of trading stock including livestock. The prescribed percentage was based on half the percentage increase in the goods component of the Consumer Price Index between the June quarter prior to the year of income and the June quarter of the year of income and was applied to the value of the trading stock at the commencement of the year. The adjustment was terminated with effect from the 1979-80 income year. Depreciation allowances are provided for certain new income-producing buildings commenced after 21 August 1979, where the buildings are used to provide short-term accommodation for travellers. The allowance is *2i* per cent per annum of the construction cost of the building. Most of the relevant concessions in the income tax field may be grouped in three broad categories, namely: A - those allowing the deduction of amounts that are not authorised under the general provisions of the law; B - those allowing certain taxpayers to deduct the cost of items of plant over shorter periods than is the case for the general run of taxpayers; and C - those exempting certain classes of income (now confined to exemption of income from gold mining). Details of estimated amounts of revenue forgone in 1979-80 under the main provisions in categories A and B, which exceed $840 million, are shown in the following table. A miscellany of other provisions is not included, in some cases because of lack of data on revenue forgone or questions about the extent to which they may properly be regarded as wholly 'Industry Assistance'. These provisions include the rebates allowed to shareholders in respect of capital subscribed for petroleum exploration and mining (conditional on the company forgoing certain deductions); the concession whereby primary producers are allowed to adopt artificially low values for natural increase in their livestock accounts for taxation purposes; and the accelerated depreciation of expenditure on employees' amenities. The income equalisation deposits scheme and the averaging provisions applied to primary producers are also not included. The income equalisation deposits scheme permits deposits by a primary producer, within specified limits, to be deducted against assessable income in the year the deposits are made and withdrawals of deposits to be included in assessable income in the year they are withdrawn. (Deposits up to 31 August are deductible against assessable income of the preceding income year.) Interest is paid on the deposits. Under the averaging provisions, primary producers effectively have their income from primary production taxed at rates corresponding to their average income (for the current and preceding four years) in a year when average income is less than taxable income. Depending on the amount of their income not derived from primary production, some or all of that income may also be effectively taxed at the lower rates corresponding to average income. The purpose of the averaging provisions is to ensure that fluctuations in income in conjunction with progression in rates of tax do not lead to those taxpayers bearing higher tax rates than other taxpayers having incomes which, over a period of years, are comparable but non-fluctuating. The effects go beyond that when there is an upward (e.g. inflationary) trend in money incomes over a number of years since, even if fluctuations in income are superimposed on that trend, the averaging provisions result in the taxpayers covered by them bearing lower tax rates than other taxpayers whose incomes over an equal period of years are comparable. Furthermore, even in the absence of an upward trend in income the provisions introduced in 1977-78 do more than remove the effect on tax of fluctuations in income, as averaging is applied only in years when to do so benefits the taxpayer, and tax is calculated at ordinary rates in other years. Estimated Revenue Forgone Main Provisions in 1979-80 $ million *Category A -* Investment allowance........... 414 Trading stock valuation adjustment......... 324 Certain expenditure on land used for primary production^) and for telephone lines allowed to primary producers and deductible over 10 years ..... 3 Expenditure on scientific research (excluding accelerated depreciation on plant) . 1 Capital expenditure of certain mining enterprises and in respect of transport of certain minerals (excluding deductions in respect of plant otherwise depreciable)(Zi) 74 Total Category A........... 816 *Category B -* Double depreciation on certain plant........ 20 Special rate of depreciation on plant used for scientific research . . / Deduction for plant used in mining or exploration and in respect of transport of certain minerals which would otherwise be subject to depreciation ... (c) {: type="a" start="a"} 0. Special deductions (Section 75a) are allowed to taxpayers engaged in primary production in respect of certain classes of capital expenditure not subject to depreciation by which the amount of the expenditure is allowed in equal annual instalments over 10 years. 1. Development expenditures by general mining and petroleum mining companies are now deductible on a diminishing value basis by reference to a maximum life of mine or field of 5 years. Expenditure on facilities for the transport of minerals is deductible in equal instalments over either 10 years or 20 years, at the taxpayer's option to be exercised with the first claim for the deduction. However, some expenditure is deductible under provisions of earlier years which continue to apply to expenditure made in those earlier years. 2. The total amount of deductions allowed for such purchases of plant used in mining, exploration and in respect of transportation of minerals allowed under Divisions 10, 10aa and 10a aa in respect of the 1978-79 income year was $240 m. The absence of precise information on the amounts that would otherwise have been deductible by way of depreciation of the relevant plant makes it impossible to provide a reliable estimate of the effect of these deductions on revenue. The total amount allowable will in no case exceed the deduction allowable over the life of the mine or the plant by way of normal depreciation. However, where the deduction results in a deferment of tax or in the carrying forward of deductions which otherwise would be lost to the business where it remains non-taxable for more than 7 years, there is a cost to the Budget. Where there is a constant or increasing rate of investment in plant or equipment subject to accelerated depreciation the concession can provide for the taxpayers concerned a revolving or increasing credit in their account with the taxation revenue. {: .page-start } page 1 {:#debate-117} ### STATEMENT No. 5- BUDGET OUTCOME, 1979-80 Total outlays for 1979-80 were $2 million more than the Budget estimate. With total receipts exceeding the Budget estimate by $162 million (0.6 per cent), the actual deficit of $2034 million was $160 million less than the Budget estimate. The closeness to the aggregate Budget estimates of the actual results is the outcome of a number of largely offsetting variations to the component 'figures. The more significant of these variations from the estimates are discussed in this Statement. In summary, the main features of the 1979-80 Budget outcome were: o total outlays were held within about $2 million of the estimate notwithstanding post-Budget decisions to increase Defence outlays significantly and to provide additional emergency relief for Kampuchea and East Timor and for Afghanistan and Zimbabwe refugees; o increases over the Budget provisions of $121 million for Defence and $43 million for Public Debt Interest payments were more than offset by shortfalls on many other outlay estimates, the largest being $73 million in unemployment benefit payments (the number of beneficiaries being lower than estimated); o net PAYE income taxation receipts exceeded the estimate by $210 million, largely reflecting a stronger than forecast growth of employment during the year and lower PAYE refunds than estimated at the time of the Budget; the effect of this on receipts was, however, more than offset by a shortfall of $298 million in estimated receipts from personal income tax on assessment; and o receipts from excise on crude oil exceeded the Budget estimate by $204 million reflecting the net effects of higher import parity prices and lower than estimated production mainly because of the effects of industrial disputes on Bass Strait production in May and June. {: .page-start } page 1 {:#debate-118} ### OUTLAYS The following table compares the actual outcome with the Budget estimate for each function. {:#subdebate-118-0} #### Budget {:#subdebate-118-1} #### Estimate Actual Difference {: type="a" start="a"} 0. Block grants for pre-schools have been reclassified from 'Social Security and Welfare' to Education'. The Budget estimates for 1979-80 have been adjusted to take account of this change. *(jb)* The bulk allowance for prospective wage and salary increases was not apportioned by function at the time the estimates were prepared but was effectively apportioned during the year as actual increases occurred. The disbursement of this provision is therefore partly responsible for some of the differences between estimates and outcomes at the functional level. *Defence* - up $121 million Defence outlays exceeded the Budget estimate by $121 million, reflecting cost increases during the year and the effect of post-Budget decisions taken to increase defence preparedness in the light of international developments. In real terms actual defence outlays were around 3 per cent greater than last year (an increase of about 2.6 per cent was implied in the Budget estimates). Outlays on defence equipment and stores exceeded the estimate by $93 million. The major components of that increase were the initial payment ($25 million) associated with the ordering of a fourth guided missile frigate (FFG), the rescheduling of payments for the three FFGs already on order ($25 million), and increased costs of fuels and lubricants together with increased purchases of these products ($38 million). Manpower costs were $8 million greater than allowed for in the estimates. Outlays associated with the maintenance of industrial capacity were $7 million above estimates; these outlays included the provision of an additional $6 million working capital to the Government Aircraft Factories for the continuing production of Nomad aircraft and also to finance unsold stocks of the aircraft. Acquisition of sites and buildings cost $5 million more than estimated because of the purchase from the NSW Government of maritime docks at Woolloomooloo for the expansion of the naval dockyard at Garden Island. There was a shortfall of $8 million in outlays on buildings and works mainly because of slippages in projects such as the Cairns Patrol Boat Base, the Williamstown Naval Dockyard Development, and the construction of FFG facilities at Garden Island. *Education* - up $4 million A shortfall of $7 million on tertiary student assistance payments (reflecting lower than forecast numbers of recipients and lower average allowances) was more than offset by a number of smaller differences from the estimates. The post-Budget decision to introduce a school-to-work transition program in conjunction with State Governments added $5 million to Education outlays. Recoveries through overseas student charges were $4 million less than estimated because of a lower than estimated number of students identified as liable for the charge (partly attributable to post-Budget refinements to the scheme) and a greater than assumed proportion paying the lowest scale of charge. Outlays on schools in the ACT were $3 million more than estimated, reflecting general cost increases related to higher than estimated enrolments. *Health* - up $4 million There was a number of largely offsetting but significant variations within this function. Overruns on estimates occurred on payments of medical benefits ($28 million), medical and hospital services for veterans and their dependants ($14 million) and nursing home benefits ($8 million). In large measure these overruns reflected higher usage and demand levels, particularly by pensioners, than those assumed at Budget time. In addition the number of approved nursing home beds increased more than allowed for in the Budget and attracted a higher than expected average rate of benefit. Of the $14 million increase in expenditure on medical and hospital services for veterans, $8 million related to medical services to veterans outside repatriation institutions and reflected, in part, increases during the year in doctors' and dentists' fees. Payments to the Health Insurance Commission were $6 million more than estimated because redeployment of staff did not occur as quickly as expected following the wind-up of Medibank Standard. Additional costs for the construction of Calvary Hospital (ACT) and increases in operating costs of hospitals and other health facilities resulted in outlays on health services in the Territories exceeding the Budget estimates by $3 million. Offsetting the major part of these increases were shortfalls of $38 million in hospital payments resulting mainly from hospital operating budgets being negotiated at lower levels, and $23 million in pharmaceutical benefits (down $17 million for the general population and $7 million for pensioners) reflecting usage rates lower than assumed. Grants to the States under the Community Health Program were $5 million less than estimated because of a change in the timing of payments to the States. *Social Security and Welfare* - down $95 million Unemployment benefits were $73 million less than estimated. A lower than estimated number of beneficiaries, due in part to the improvement in the employment situation during the year, was the major factor in this shortfall. There were also significant shortfalls in payments of age pensions ($21 million), assistance to veterans and their dependants ($20 million), widows' pensions ($11 million) and invalid pensions ($9 million). In each case the actual numbers eligible for such benefits were less than estimated at Budget time; increases in indexed pension and benefit rates were also lower than allowed for. Outlays on aged persons' homes and hostels were $11 million less than estimated at Budget time mainly because approved projects did not proceed at the rate originally assumed. Grants to the States for deserted wives were $3 million less than estimated; the shortfall was largely attributable to the withdrawal of Victoria from the arrangements in 1979-80. This withdrawal also contributed to an overrun of $12 million on the estimate for special benefit payments, but the bulk of that increase reflected a greater than estimated number of other beneficiaries. The major overrun in the social security and welfare function was $35 million for family allowances, where a higher than estimated number of children attracted the allowance and payments made to banks in respect of the 1 July 1980 family allowance pay-day were brought to account in 1979-80. Smaller overruns included $3 million for sickness benefits, $2 million for sheltered employment allowances and $2 million for supporting parents benefits. *Housing* - down $16 million Net outlays for housing in the ACT were $11 million less than estimated. Greater than expected repayments by mortgagees accounted for $6 million of this difference, and the balance reflected lower demand than assumed for loans under current arrangements. Early repayment of loans by some banks contributed a further $5 million to the total shortfall in housing outlays. Home Savings Grant payments were $3 million less than estimated, reflecting an underestimation of the effect of rising home prices on application rates for grants which were available only in respect of homes not exceeding $40 000 in value. Net payments under Defence Services Homes arrangements were $5 million more than estimated largely because the sale of surplus land proceeded more slowly than assumed and the funds drawn under the provision for borrowers' excess deposits to be available for specified purposes were underestimated. *Transport and Communication* - down $20 million Qantas Airways Limited discharged aircraft loans of $25 million earlier than expected while exchange rate fluctuations on loans raised in foreign currency on behalf of the Australian National Airlines Commission (TAA) resulted in repayments being $3 million above the estimate. Receipts from light dues were $4 million more than estimated, reflecting greater than estimated shipping movements. In addition there was a shortfall of $6 million in payments to the States for mainline upgrading under the *National Railways Network (Financial Assistance) Act* 1979 because agreements were finalised with only two States (Queensland and Victoria). These reductions were partly offset by an $11 million increase against the estimated costs of operation and administration of civil aviation services; $6 million of this reflected increased salary costs, while receipts from air navigation charges, which are offset against these outlays, were $4 million less than estimated. Payments to Australian National Railways to meet operating losses were $3 million more than estimated, reflecting costs of wage determinations and increased fuel prices; these increased costs were partially offset by additional revenues generated by stronger demand and by higher freight rates and fares effective from 1 March 1980. *Industry Assistance and Development* - down $12 million Net outlays associated with the wool industry were $14 million less than estimated, mainly reflecting late June wool tax collections not transferred to the Australian Wool Corporation (for promotion and market support purposes) until July 1980. Similar timing factors connected with the receipt and spending of the dairy industry stabilization levy, together with higher than forecast dairy industry returns (with consequent lower underwriting outlays for dairy products), led to a shortfall against estimates of $4 million in net outlays on the dairy industry. Advances under the rural adjustment scheme were $4 million less than estimated. Outlays on energy research and conservation also fell short of the estimate by $4 million due mainly to delays in projects financed from the newly created Energy Research and Development Trust Account. Phosphate fertilizer bounty payments were $11 million more than estimated, reflecting higher consumption following an improvement in seasonal conditions and, more importantly in this context, some building-up of stocks in anticipation of phosphate price increases. Outlays on the petroleum products subsidy were $9 million more than estimated, mainly due to the Government's decision to reduce the freight differential borne by country consumers from 1 April 1980 but reflecting also increased transport costs. *Labour and Employment* - down $22 million Shortfalls of $16 million for the National Employment and Training (NEAT) scheme and $12 million for the Commonwealth Rebate for Apprentice Full-time Training (CRAFT) scheme resulted from the cost of claims under the schemes being less than assumed in the Budget. For NEAT the effects of the 1978 changes to benefits and conditions were greater than estimated and for CRAFT the average days attendance at educational institutions claimed was less than assumed. *Foreign Affairs and Overseas Aid* - up $19 million Post-Budget decisions to provide additional aid for Kampuchea, Tanzania, Uganda and East Timor and assistance for Afghanistan and Zimbabwe refugees accounted for $15 million of the increase in this function. General administrative expenditure, mainly for the overseas operations of the Department of Foreign Affairs and the Overseas Property Bureau, was $4 million more than estimated at Budget time. *Administrative Services* - down $16 million Customs and excise administration expenditure was $7 million less than estimated. Factors contributing to this shortfall included the transfer, at the end of November 1979, of the Narcotics Bureau to the Australian Federal Police (included under the function 'Law, Order and Public Safety'), delays in the procurement and delivery of communications and ADP equipment, and delays in Nomad aircraft becoming operational for use in customs coastal surveillance. Recoveries under the function were $4 million more than estimated and resulted from relatively small increases in a large number of items, including rents and survey fees collected by the Department of Administrative Services, and the miscellaneous revenues of the Departments of Finance and Business and Consumer Affairs and of the Taxation Office. *Payments to or for the States, the Northern Territory and Local Government Authorities nec* - up $10 million This function includes outlays on natural disaster relief assistance; in accordance with past practice, no contingency allowance was made in the 1979-80 Budget for disasters that might occur during that year. In the event several disasters, including cyclones in Queensland and Western Australia and drought in Queensland, occurred after the Budget estimates were prepared and the drought in Western Australia continued. Payments made for relief and restoration expenses associated with these disasters were the main factor contributing to outlays under this function exceeding the Budget estimate. *Public Debt Interest* - up $43 million Significantly higher than estimated subscriptions to Treasury Notes and rates offered on them were the major factors in interest payments exceeding the estimate by $43 million. Because the interest liability for Treasury Notes is recorded at the time of issue, changes in the balance of net sales between these and other securities have immediate effect on interest payments. {: .page-start } page 313 {:#debate-119} ### RECEIPTS The differences between the Budget estimates and actual receipts in 1979-80 are set out in the following table; the accompanying notes comment briefly on the main variations. *Customs Duty - Imports* - down $32 million The shortfall was the net result of a higher level of imports and a lower ratio of duty to imports than estimated at the time of the Budget. The post-Budget decisions to reduce the rate of duty on brandy and to provide additional exemptions from the 2 per cent revenue duty are estimated to have cost about $6.5 million in 1979-80. *Excise Duty* - up $194 million Receipts from the excise on crude oil were about $204 million higher than the Budget estimate as a result of higher parity prices, partly offset by lower production. On the basis of the production forecasts underlying the Budget estimate, the increase in the import parity price on 1 January 1980 would have increased receipts by $405 million. Actual production was significantly lower than the level estimated at the time of the Budget mainly because of the effects of industrial disputes on Bass Strait production during May and June. Receipts from the LPG levy were $9 million higher than estimated at Budget time, largely as a result of the increase in the rate of excise on naturally occurring LPG from 9 April 1980. As in the case of the crude oil levy, the gain to revenue from the excise increase was partly offset by lower than expected production of excisable LPG; Receipts from other excise duties were $19 million lower than the Budget estimate, largely due to a shortfall in receipts from motor spirit. At the time of the Budget some growth in clearances was assumed. Preliminary data indicate that clearances were slightly lower than in 1978-79. The post-Budget decision to reduce the rate of duty on brandy from $18.75 to $16.00 per litre alcohol is estimated to have resulted in a loss of excise revenue in 1979-80 of about $2 million. Clearances of tobacco products in 1979-80 recovered more rapidly from the excise rate increase announced in the 1978-79 Budget than had been expected. Preliminary data indicate an increase in clearances of cigarettes of 3.1 per cent in 1979-80 which compares with a fall of 4.3 per cent in 1978-79 and virtually unchanged clearances in 1977-78. The following table compares the 1979-80 revenue outcome for commodity groups with the Budget estimate for 1979-80 and the revenue outcome for 1978-79. *Sales Tax* - down $35 million Sales of household goods in the *2i* per cent rate class were somewhat lower than estimated at Budget time. In the 15 per cent rate class the effect of lower than estimated volume of sales of motor vehicles was partly offset by slightly larger price increases than expected; sales of goods other than motor vehicles and spare parts were also lower than the Budget estimate. Post-Budget measures relating to goods for handicapped people and the increase in the exemption level for small businesses reduced the estimate by a further $3 million. *Income Tax on Individuals - Pay-As-You-Earn* - up $210 million The net overrun in PAYE receipts reflects larger than estimated Gross PAYE collections (by $137 million) and lower than estimated refunds (by $73 million). At the time of the Budget it was estimated that average weekly earnings would increase by 9 to *9i* per cent and wage and salary earner employment by 1 per cent in 1979-80. There is some disparity between the available employment indicators but both suggest that employment increased at a higher rate than estimated. *Income Tax on Other Individuals* - down $298 million The shortfall was a reflection of several factors. First, the growth in 1978-79 income of primary producers was over-estimated at the time of the Budget. Secondly, an expected increase in the rate of issue of assessments was not achieved, resulting in lower than expected tax collections. The necessarily protracted administrative process involved for the Taxation Office in handling tax avoidance cases was one factor contributing to the slower issue rate of individual income tax assessments than originally estimated at Budget time. The estimated shortfall in revenue due to identified tax avoidance schemes was $160 million compared with the allowance of $175 million included in the Budget estimate. Thirdly, the Budget estimate assumed that amendments to the law concerning the tax treatment of trusts and other arrangements involving dependent children would be reflected in collections of provisional tax for 1979-80; this was not the case as the amendments were not enacted until the Autumn sittings of Parliament. *Company Tax* - up $126 million The Budget estimate for company tax assumed an increase of about 74 per cent in income subject to tax in 1978-79 (the year to which most collections in 1979-80 relate); in the event, company income subject to tax grew at a significantly higher rate (about 11 per cent). It is estimated that identified tax avoidance schemes reduced collections by about $120 million which compares with the allowance included in the Budget estimate of $75 million. *Dividends and Interest Withholding Tax* - up $21 million This outcome was mainly due to interest payments being higher than estimated at the time of the Budget. *Estate Duty* - up $8 million Average duty on assessment was greater than estimated at the time of the Budget. *Other Taxes, Fees and Fines* - down $4 million Revenues from broadcasting and TV station licence fees were $6 million less than the Budget estimate because the proposed increase in licence fees did not proceed. *Interest, Rent and Dividends* - down $14 million Interest received from the States on advances for works and housing programs was $21 million less than estimated, resulting from variations to the assumed pattern of loan raisings during the year due largely to the absence of the Commonwealth from the bond market pending introduction of the 'tap' issue system. Offshore petroleum royalties were $3 million more than estimated and the dividend received from the Australian National Airlines Commission (TAA) was $1.5 million more than allowed for in the Budget. *Sale of Existing Assets* - down $8 million Depressed residential land market conditions in the ACT, which prevailed for most of 1979-80, were reflected in' a shortfall on estimated revenues from sales of leases of $9 million. Receipts from the disposition of the uranium stockpile were $3 million less than the Budget estimate. On the other hand revenues from the sale of sites and buildings by the Department of Administrative Services exceeded the Budget estimate by $4 million. {: .page-start } page 316 {:#debate-120} ### FINANCING TRANSACTIONS The manner in which the Budget deficit in 1979-80 was financed is summarised in Tables 1 and 2. Table 1 is the presentation of Budget financing transactions, as published monthly in the Statement of Commonwealth Government Financial Transactions, rearranged to indicate the concept of Domestic Borrowings and its composition (see beloW). While Table 1 shows aggregate financing transactions, and the securities or financing instruments involved in those transactions, it does not bring out the net changes in the holdings of government debt of the various sectors with which the Budget sector transacts. These changes, which are relevant to analysis of the monetary implications of the financing of the Budget, reflect both net proceeds of government securities' sales (subscriptions to new issues less redemptions) and subsequent market transactions in those securities. They are shown in Table 2. The concept 'Domestic Borrowings' is designed to indicate the increase in the indebtedness of the Commonwealth to domestic non-Budget sectors arising from Budget financing either by the issue of Commonwealth securities to domestic non-Budget sectors or by the use (running-down) of Commonwealth cash balances with the Reserve Bank. However, in the presentation in Tables 1 and 2, not all intra-Budget sector transactions are netted out so that the figure shown for Domestic Borrowings reflects not only transactions between the Budget sector and domestic non-Budget sectors but also certain transactions within the Budget sector itself. During 1979-80, there were sizeable transactions which, in essence, involved a transfer from Loan Fund to the Loan Consolidation and Investment Reserve (LCIR) - and so were infra-Budget sector transactions - which are reflected in Domestic Borrowings. In the absence of conversion offers in December and February, the LCIR (which usually converts its maturing debt) redeemed maturing securities in its portfolio to an amount of $291 million; the LCIR held $207 million of the December 1979 maturity and $84 million of the February 1980 maturity. The increase in LCIR cash is reflected in Table 1 as an increase of $291 million in Other Financing Transactions, while the reduction in the LCIR's bond portfolio is reflected in reductions of $291 million in net proceeds of other loans in Australia in Table 1 and Government Sector domestic borrowings (bond holdings) in Table 2. To make the figures coincide more closely with the concept of Domestic Borrowings in the sense of net Commonwealth borrowing from the domestic non-Budget sector, adjustments should be made to the tables to exclude these transactions, i.e., in 1979-80 Domestic Borrowings in the sense mentioned above were about $1728 million. Table 1 - Government Financing Transactions 1979-80 ($ million) Total Financing Transactions (= Budget deficit) .... 2034 *Less* Net overseas borrowings ...... 187 *Less* Other financing transactions^)...... 410 {:#subdebate-120-0} #### Domestic Borrowings......... 1 437 Financed by: - Loan Raisings in Australia - Net proceeds of Australian Savings Bonds and Special Bonds . . 174 Net change in Treasury Notes on issue..... 20S Net proceeds of other loans in Australia..... -77 -- 302 {:#subdebate-120-1} #### Residual Financing - Use of cash balances........ 635 Borrowings from Reserve Bank(6)...... 500 -- 1 135 {: type="a" start="a"} 0. Other financing transactions include funds obtained from coinage transactions, amounts borrowed by Commonwealth Government trust accounts, net amounts available from Commonwealth Government trust account transactions in government securities (including the redemption of securities held by the LCIR), and amounts available from moneys held in trust. 1. This item cannot be compared directly with the item 'Reserve Bank' in Table 2 (Domestic Borrowings). The Table 1 entry refers solely to Treasury Bills whereas the Table 2 entry encompasses all net changes in domestic borrowings by the Government from the Reserve Bank. Thus, for example, Reserve Bank purchases of Treasury Notes direct from the Commonwealth are recorded for the purposes of Table 1 with other Treasury Note sales under 'Net Change in Treasury Notes on Issue' whereas, representing part of the Reserve Bank contribution to domestic borrowings, they -re recorded in Table 2 under the 'Reserve Bank' item. Brief comments on the main items in Table 1 are provided below. {:#subdebate-120-2} #### Net Overseas Borrowings In October 1979, an institutional loan was undertaken in the Japanese capital market, the proceeds of which amounted to $155 million. This was followed in November by the Commonwealth's fourth public bond issue on the Tokyo capital market which raised the equivalent of $109 million. In February 1980, two borrowings were undertaken in Germany, by way of a public issue and private placement. The proceeds of these two borrowings were $130 million and $78 million, respectively. Repayments during the year of previous drawings on behalf of Qantas and TAA amounted to $38 million and $57 million, respectively. Repayments on behalf of the AIDC amounted to $30 million. A repayment of $1 million was also made to Eximbank. Other securities to the value of $144 million were redeemed in the USA, UK, Canada, Switzerland, Germany, the Netherlands and Japan. These redemptions included an amount of $33 million for the early repayment of a Swiss loan raised in 1968. In addition, repayments of $5 million were made on borrowings from the International Bank for Reconstruction and Development, and repayments amounting to $9 million on borrowings previously undertaken in the USA for defence purposes. In summary, total gross overseas borrowings amounted to $471 million'11; total redemptions and repayments amounted to $284 million, giving net overseas raisings of $187 million. {:#subdebate-120-3} #### Other Financing Transactions The major components of this category were: $291 million from the redemption of maturing securities by the Loan Consolidation and Investment Reserve; $61 million as proceeds from Australia's share of gold purchased from the IMF under its fourth redistribution (at the official price of SDR35 per ounce) and sold to the Reserve Bank at market prices; net receipts of $31 million from the Postal and Telecommunications Commissions, representing the Commissions' employer contributions to the Commonwealth Superannuation Scheme deposited with the Commonwealth; $27 million received from the Commonwealth Superannuation Fund towards the liability assumed by the Government in respect of the Fund's share of the liability for benefits existing at 1 July 1976; $25 million from the realization of National Debt Sinking Fund investments with the Reserve Bank; $9 million in net proceeds from coinage transactio