27th Parliament · 2nd Session
The PRESIDENT (Senator the Hon. Sir Alister McMuilin) took the chair at 3 p.m., and read prayers.
– Has the Minister representing the Minister for Shipping and Transport any information about the reported oil slick in Bass Strait, especially about its origin?
– I first heard about a reported oil slick in Bass Strait when I arrived here at about 12.45 p.m. today. Since then I have been trying to obtain information about it. I cannot get that information. No-one seems to know anything about it - if it occurred, how it occurred, or where it occurred. I may have that information before question time finishes, or later this afternoon. When I get the information I will pass it on to the honourable senator.
– Has the attention of the Minister representing the Minister for Primary Industry been drawn to the extensive damage caused by frost to cereal crops in the southern Murray-Mallee area in South Australia? Experts have estimated that the expected barley yield of 3.5 million bushels will be cut to 500,000 bushels, that approximately 10 per cent of the sultana and wine grape crops have been affected and that the wheat yield will be affected. Will the Minister ask the Government to extend to the growers affected by this disaster the same assistance that is extended to those entitled to drought relief?
– I am not aware of the situation to which the honourable senator has referred, but I will take up the question with the Minister for Primary Industry and obtain an answer for the honourable senator.
– Will the Minister representing the Minister for Shipping and Transport take steps to ensure that the Australian authorities keep in close contact with the United Kingdom authorities about developments concerning the Liberian registered ship ‘Pacific Glory’, which is reported to be in danger of spilling 77,000 tons of crude oil into the English Channel, as this information could bc of use in a possible future mishap in Australian waters?
– I am sure that the appropriate Minister, the Minister for Shipping and Transport, will do as the honourable senator has suggested.
– My question is directed to the Minister representing the Minister for Defence, lt refers to the discussions currently being held in Canberra between representatives of the United States of America Defence Department and representatives of the Australian Department of Defence, ls the Australian Government promoting a strong, positive policy that Australian industry, government and private, should have a greater share in coproduction or offset orders related to the heavy Australian purchases of the United States military equipment? If this is the position what results or new understandings have taken place between the 2 governments?
At the present time I am not in a position to give any information. As a matter of fact, as late as half an hour ago 1 had one of the senior representatives with me in my office. I assure the honourable senator that Australia’s express view in relation to offset orders is quite clearly being put. I do know that discussions were held this morning with the defence complex and they are continuing this afternoon. I am not in a position to give any further information beyond saying that there should be no fear that Australia’s express views in relation to offset orders are not being put quite clearly in the context of the general and wide sweep of discussions which ate going on.
– Is the Minister representing the Minister for National Development in a position to advise the Senate of the outcome of the talks held in Sydney last week by the Minister for National Development, Mr Swartz, with the New South Wales Minister for Conservation, Mr Beale, the Victorian Minister of Water Supply, Mr Smith and the South Australian
Deputy Premier, Mr Corcoran, about the future of the Dartmouth and Chowilla dams projects.
– I understand this discussion took place in Sydney last Friday. The closest I have been to the discussion was to see the Minister for National Development on his way to the talks and wish him luck. More than that I do not know. As soon as he lets me know something which is of use to the honourable senator from South Australia I will see that the honourable senator obtains the information.
– Can the Minister for
Air inform the Parliament whether any of the Phantom fighter bombers will be committed to action in Vietnam? If the answer is in the affirmative when will the first aeroplanes and crews leave Australia?
– I cannot look into the future and say what is going to happen. At this moment there is no intention to commit the Phantom aircraft to Vietnam. I cannot say more than that.
– Did the Minister for Civil Aviation issue a Press statement in Canberra last Thursday stating that the information contained in his Department’s noise exposure forecasts had been misinterpreted? Why was this statement issued as a Press release and not made to the Parliament by way of a ministerial statement, bearing in mind a number of questions asked of the Minister in Parliament in recent weeks? If, as reported, the noise exposure forecast report is still under review with a view to its being brought up to date, was the tentative forecast report issued merely for the purpose of gauging and testing the reaction of local municipal councils to any proposals contained therein? Is the Minister aware that the Rockdale Municipal Council intends lodging a strongly worded protest to him concerning what the Council asserts is a grossly discourteous action on the part of the Department in providing information on noise exposure forecasts exclusively to the State Planning Authority of New South Wales before the Noise Abatement Committee has had a chance to discuss the material and is threatening to withdraw its representation on the committee unless councils are treated as equal partners entitled to the information as much as the State Planning Authority is?
– Yes. Of course I issued a Press statement last week. Why did I do it? Because I though it ought to have the widest possible currency. I thought a lot of the information had been misinterpreted and as far asI could judge people were in a state of misunderstanding. Therefore,I thought that the information ought to be communicated as widely as possible. I make no apologies, nor shall 1. The matter is continuously under review. When information is at a certain stage we make it available. It is a strange situation that the Commonwealth Government should be criticised for telling the Government of a responsible State what the information is to allow that Government to take the appropriate course of action. We do that, of course.
Equally we make information available where we can to those who feel they are interested or those who have an interest. The Rockdale Council is one such body. When one reads what the Rockdale Council has to say in the Press and in letters to me it becomes quite clear that it is properly concerned with the future of the municipality. We are concerned with the future of the Sydney Airport in the interests of the people of Sydney, of the whole of the State of New South Wales and, indeed, of Australia. This is how we behave. As we from time to time have information which will help, we will make it available. My present conclusion is that when the next information comes out I ought to make it available to everybody, not just to one or two sections.
– I direct a question to the Leader of the Government in the Senate. Does the Government believe it proper that a foreign embassy should enlist nationals of the country it represents to spy upon the political activities of others of that country’s nationals who are resident in Australia? What inquiries has the Government made concerning allegations that the Embassy of the Saigon Government has attempted to enlist such spies? What does the Government intend to do about this matter?
– Obviously, the question is directed to a Press story which, as I read it, was an allegation and a denial. In all the circumstances I think the honourable senator’s question should go on notice to the department concerned for it to be examined.
– My question, which is directed to the Minister representing the Postmaster-General, refers to the request in the Australian Broadcasting Commission’s report for the introduction of colour television in Australia. Can the Minister say whether colour television is to be introduced before television services are further extended to outlying country areas? If so, what effect will that have on the extension of such services to country areas such as the upper Eyre Peninsula in South Australia-
– Government policy on the introduction of colour television has not yet been determined, but the Postmaster-General on a number of occasions has given an assurance that the . extension of monochrome television will not be affected by any decision on the introduction of colour television. Under plans so far approved, black and white television services will be available to 97.9 per cent of the population when the present programme, which is scheduled to be completed in 1973, is finished. The remaining areas are distant and isolated, and consequent difficulties apply.
– Has the Minister representing the Minister for Social Services received correspondence from highly distinguished and reputable citizens who are sponsoring the pensioners little budget campaign - the correspondence has been forwarded to the Prime Minister and copies have been forwarded to senators and Federal members - requesting that pensions be raised by a further $1 a week in order to meet the large increase in living costs? As the Parliament will adjourn this week for approximately 4 months, will she approach the Minister for Social Services in order to secure justice for pensioners, as this matter has the support of 80 per cent of the Australian people?
– I and, I am certain, a number of other people have received similar letters; but this is a matter which came up in the Budget and which was part of the Budget. That is the reply that I give to the honourable senator; but the points he has raised concerning this matter have been noted by the Minister for Social Services.
– I ask the Minister for Civil Aviation a question. I understand that Viscount aircraft were taken out of service by Trans-Australia Airlines in August last. Has any date been set down for when the Fokker Friendship will be taken out of service? Will he ask TAA not to keep printing in its timetable that a certain class of aircraft will be used on a certain flight when more often than not there is a change of aircraft? I know that the Minister, in an answer last week, said that people should read what is on the back of the ticket. If a person has a magnifying glass he may be able to read it. But the fact is that people book on aircraft after looking at the timetable and seeing the aircraft that is scheduled to be used on a certain flight.
– It is true that Viscounts have gone out of service. I would need to direct a question to Trans-Australia Airlines and the Department to be quite precise about the date on which they went out of service. I have not heard of any plans to take the Fokker Friendship out of service, much as the honourable senator might like to have them off the Canberra run. The 2 things Senator Kennelly is concerned about - firstly, the use of Friendships, in which he does not care to fly and, secondly, the use of types of planes other than those notified in timetables - are, of course, of concern to me as well. These problems are caused partly by the time taken for new equipment to come in. Within about 12 months the jet fleet available will have increased by SO per cent. By then I sincerely hope we will have eliminated these timetable changes, when aircraft used are different from those notified in the timetables, and that Friendships will not be seen very often in Canberra.
– J ask the Minister representing the Minister for the Interior whether his attention has been drawn to the fact that when maps of the world are produced the Australian continent is usually shown in the right hand lower section of those maps? Does the Division of National Mapping, which is under the Minister’s control, produce world maps which demonstrate Australia to be thus located? Will the Minister direct the Division of National Mapping that it would be wise and in Australia’s interest to reproduce world maps with the Australian continent shown as the centre of such maps?
– The Division of National Mapping is under the administration of the Minister for National Development. Having taken the Interior hat off and donned the National Development hat I can direct the question to the Minister for National Development. I doubt very much that the Division of National Mapping produces maps of the world which do not feature Australia as the centre of the world,-
– Would you delete China from the maps?
– I will ask the responsible Minister on behalf of Senator Webster, and also Senator Wheeldon who interjected, to reproduce maps of the world which will satisfy demands for both types.
– I ask the Leader of the Government in the Senate whether he has seen the article in this morning ‘Australian’ in which the Victorian Employers Federation refers to what it describes as the plight of the rural sector? The Federation states that the number of people receiving unemployment benefits in the non-metropolitan areas is now almost twice as high in the country as in the city and rhat the rural economy is in an extremely grave situation, far worse than can be gleaned from statistics alone. What action does the Government intend to take to restore the rural economy, which is vital to Australia?
I have not had the advantage of seeing the article to which the honourable senator refers but before the sun goes down no doubt I will. Nevertheless, as to the rural sector we did have a series of questions and answers last week in relation to recent statistics which were published and which acknowledged that whilst the unemployment percentage across the board in Australia was something less than 1 per cent - .9 per cent as I recall it - more significantly, there were pockets of unemployment in the rural areas. The honourable senator asked what the Government is doing in relation to the matter. The Government is aware of the problems of the rural industries but in the debate we have had it has been made apparent that many of the problems of the rural industries are international in terms of the price factor, rural production across Australia and across the world. Nevertheless the Commonwealth Government proposes to bring down certain legislation calculated to assist notably the wool industry. I hope that we will have an opportunity to debate the legislation in this place before the end of the week.
– I direct a question to the Minister representing the Postmaster-General, ls it a fact, as reported, that the Australian Broadcasting Commission has instructed one of its senior officers, Mr Allan Ashbolt, that he cease writing articles for the London journal ‘New Statesman’? Can the Minister assure the Senate that no such instructions have been given? As articles written by officers including senior officers, of the Australian Broadcasting Commission appear frequently in other publications, if the report is correct why was this instruction given to Mr Ashbolt?
– The honourable senator asks me whether certain instructions have been given to a person connected with the Australian Broadcasting Commission. I do not know whether they have or have not, but I shall place his question before the PostmasterGeneral and get a reply for him.
– Has the attention of the Minister representing the Minister for Trade and Industry been drawn to a report in the ‘Australian’ under the heading ‘Tougher Stance on Wheat by China’ which refers to a United States report, issued in Washington, that China is harvesting record crops and will this year export more primary produce than she imports? Does this not place China in a stronger position with respect to her balance of trade? What effect will this have on the future of our trade with that country?
I am asked to state whether or not the fact that a country has more to export than normal will have some bearing on its imports. I cannot look into the crystal ball and give an answer to that. One would need to look at all the circumstances associated with it. I would not be in a position - I do not suppose anybody would be - to make a considered judgment on the implications of China’s productivity and her exports as related to her imports of wheat. For that reason I cannot add anything to the newspaper report which obviously was the basis of the honourable senators question.
– I ask the Minister for Civil Aviation whether his attention has been drawn to the fact that the police received a phone call stating that there were bombs on certain northbound flights out of Brisbane on Sunday morning last. A search of these planes and all freight, luggage and passengers’ hand baggage proved this report to be false. What action does his Department take to track down and severely punish these despicable persons who cause such disruption and worry to airlines and passengers?
– Generally we believe that the least publicity that is given to exercises of this kind the better it is for everybody in the interests of safe air travel. Where we find these people out, the honourable senator may rest assured that we take the severest action we possibly can. Like anybody else, we regard this sort of act as stupid, dangerous and, to say the least, criminal folly.
– Will the Leader of the Government in the Senate agree with me as a fellow New South Wales senator that, notwithstanding any plans that the New South Wales Government may have for an environmental authority, interim measures embracing Federal grants for modern sewage treatment plants on the New South Wales metropolitan coastline are the only practical measures to overcome Sydney’s mounting beach pollution? Is he further aware that any continued delay in this direction will force the Metropolitan Water Sewerage and Drainage Board either to slow down the present programme for sewage treatment works for both the northern and southern sides of Sydney Harbour or to delay the commencement of the Shoalhaven water catchment scheme when in fact both projects need simultaneous action?
I find myself in some agreement with (he honourable senator in relation to the background of bis question. I live in the metropolitan area of Sydney and T go to the beach, happily on the north side. I am aware of the pollution that occurs from time to time. As I understand the situation., it is the clear responsibility of the New South Wales Government. It in turn has an instrumentality, the Metropolitan Water Sewerage and Drainage Board, which has certain responsibilities in relation to effluent which is discharged into the sea. I am not aware of anything else that can be done in the short term. The Commonwealth, under an arrangement made at the Premiers Conference and under a loan programme agreed to by the Loan Council, makes funds available to the States. The States in turn have the responsibility of how those funds are allocated. Presumably that allocation has regard to the needs of their instrumentalities. I understand also that the instrumentalities have a right, under certain circumstances, to borrow for themselves. We all want to see a solution to this problem. I do not think the solution is one which involves an answer at question time in the Senate; it is one which involves long-term action, but primarily the responsibility is with the States.
– A little earlier Senator Lillico asked me a question about a spillage of oil in Bass Strait, and I said that if any information came in I would let him have it. A minor spillage of oil from the vessel ‘Esso Macquarie’ occurred at the refinery at Western Port Bay yesterday. Jt has not caused extensive pollution, and inquiries are being made into the incident at the present time.
– Will the Minister for Air inform the Parliament of the flight range of the Phantom fighter bomber fully loaded and operating under Australian flying conditions? What arrangements have been made for in-air refuelling of the Phantom, and have tankers been hired or purchased? What is the cost or likely cost of such tankers for the 2-year period during which, the Phantoms will be operating?
– The honourable senator knows as well as I do that one cannot state categorically what will be the range of a Phantom unless one knows the load, the conditions under which the aircraft is flying, the height at which the aircraft is flying, and so on.
– I said when fully loaded.
– The honourable senator can say what he likes, but I would not attempt to answer the question unless he gave rae a lot of figures. In the lease agreement there is an arrangement whereby tanker training will be available for the Royal Australian Air Force, but tankers are not included in the lease.
– I desire to ask the Minister representing the Minister for External Affairs a question following upon the question asked by Senator Wheeldon. Whatever may be the Government’s view on the propriety of a country asking its students overseas to spy, will the Minister make a full inquiry into the application by a South Vietnamese student for political asylum in Australia and report to the Senate the results of such an inquiry and the Government’s decision on the application?
– If an application for political asylum is made by any person, obviously it has to be examined and processed and a decision taken by government on it. The question is hypothetical.
– Does the Minister say there has not been an application?
Senator Sir KENNETH ANDERSONI said that if there is an application and if it is dealt with, it will ultimately become public andI will be in a position to give some information about it.
– I direct my question to the Leader of the Government.Is it not a fact that, according to Press reports this morning, the allegations made by a South Vietnamese student have been denied by the South Vietnamese Embassy?
Senator Sir KENNETH ANDERSONLn my answer to the first question on this matter asked by Senator Wheeldon I said that, as I understood the position, allegations had been made and a denial had been made. I am still of the same opinion, and I have nothing to add to what I said earlier.
– I know that the Minister representing the Minister for Primary Industry is cognisant of the severe problems facing many primary producers in Australia. I ask: Is the Minister confident that existing government and private banking facilities are adequate to meet the urgent borrowing needs of adversely affected primary producers? Will the Minister have a prompt survey undertaken by his Department or by Treasury officials to ensure that adequate facilities exist and that attention is given to the problems which exist in this important sector of the community?
– The Treasurer in his Budget Speech referred to the fact that the Minister for Primary Industry would be carrying out an investigation into debt reconstruction. This inquiry has been proceeding for some time through the Bureau of Agricultural Economics and is rather well advanced. It is hoped that very shortly the Minister for Primary Industry will be receiving a report from the Bureau on the basis of which he may be able to make a statement as to further policy.
– I ask the Minister representing the Minister for Labour and National Service: In view of the recent High Court decision that civilian fire fighters are not engaged in an industry and therefore do not come within the ambit of industrial legislation, will the Minister consider the introduction of amending legislation for the purpose of giving this section of workers the protection afforded to other workers in Australian industries?
– This decision has perplexed me. I am having inquiries made and will have the matter referred to the Minister for Labour and National Service. The difficulty involved in the honourable senator’s question is that the expression industrial’ occurs in the Constitution, and therefore no amending legislation can change it. However, I am having the matter examined.
– Can the Minister for Civil Aviation tell the Senate who are the members of the International Civil Aviation Organisation Legal Committee, which is considering international sanctions to combat hijacking? Who is the Australian representative on the Committee? What link does Australia have to ensure that its policy is implemented by our representative on the Committee?
– The International Civil Aviation Organisation as a whole deals with these matters. The Department of Civil Aviation sends its legal people and some policy people to ICAO meetings, the people chosen depending upon the matter being discussed. In the case of hijacking we have been involved in discussions with ICAO since this problem began. We have as much ability as anybody else to see that our ideas gain force in these assemblies. We have been very effective in having our ideas accepted in many areas. I think the honourable senator will understand why I cannot say any more than that.
– I direct my question to the Minister for Civil Aviation. Does the noise exposure forecast assess likely noise levels near Mascot (KingsfordSmith) Airport up to 1976? Does it suggest that by that year there will be a 70 per cent increase in aircraft movements at Sydney? Because the Minister in a Press statement has asserted that there is no dispute that Sydney will need a second air port, should I take it from his remarks that the interdepartmental committee has recommended the siting of a second airport for Sydney rather than the enlargement of Sydney (Kingsford-Smith) Airport by the proposed extension of parallel runways? Will the Minister ensure that the public is advised of the recommendations of the committee before Parliament adjourns for the forthcoming Senate elections?
– None of the contentions advanced by Senator McClelland should be take for granted, particularly the contention that the report of the Committee might be given to Parliament before it adjourns for the Senate elections. There is no prospect of that. The report is being studied in great detail and there is a lot of work to do concerning it. I should like the balance of the question to be put on notice because I am anxious that the honourable senator should receive in an answer to a question like this the greatest accuracy that I can possibly manage. It is very evident from letters I have received and from listening to people that there is some confusion about this matter. I do not know why there should be, but I am quite anxious that the confusion should not continue.
– My question is addressed to the Leader of the Government in his capacity as Minister representing the Minister for External Affairs. Does the Minister agree that the Japanese statement of the new military role of Japan is of the utmost significance for Australia? Will he request the Government to bring down as soon as possible a formal statement of its attitude to the statement made on behalf of Japan?
– The Leader of the Opposition has asked about a statement purported to be issued by the Japanese Government in relation to defence. I think this question should go on notice and be referred because one would need-
– I am asking you to bring down a statement on it.
– Before one can bring down a statement on a statement one must have the first statement. Therefore I suggest that the question be put on notice.
– Can the Minister for Air inform the Parliament of the cost or estimated cost of air tankers for the 2 years during which Phantom fighter bombers are being leased, rented or borrowed for the Royal Australian Air Force? Has Australia purchased or hired the air tankers? What type of aircraft is being used for this purpose?
– Under the lease agreement with the Americans with regard to the Phantoms provision was made for the use of tankers to ferry the aircraft to Australia and for training purposes during the 2-year period while the Phantoms were in Australia. In that agreement there was no provision to buy or lease tankers from the United States. The tanker at present being used by the United States is the KC135, which is going out of production. I have informed the Senate on a number of occasions that the Department of Defence and my own Department are considering trying to get a 707-320 as a tanker-cum-transport aircraft. I believe that the estimated cost of an aircraft of this sort could be in the vicinity of$10m.
– Will the Leader of the Government bring into the Senate whatever the Government has in the way of a full record of w’hat has been stated on behalf of the Japanese Government in relation to its new military role?
Senator Sir KENNETH ANDERSONI can give no assurance that this will be done. Obviously communiques between governments are not normally brought into a Parliament.
– I am talking about public statements, not confidential statements.
Senator Sir KENNETH ANDERSONThat is not what the honourable senator asked. He asked me whether 1 would bring into the Senate a statement from one government to another. Obviously I cannot commit myself on that. I shall take the question on notice and have it examined.
asked the Minister representing the Minister for Repatriation, upon notice:
With reference to the recent incidentin which several soldiers were killed or injured when a bus overturned near Newcastle, how many of the soldiers who were injured will receive Repatriation benefits and how many of the dependants of those who were killed will be entitled to benefits under the Repatriation Act.
– The Minister for Repatriation has provided the following answer to the honourable senator’s question:
None of the personnel involved in the accident was or had been on special service within the meaning of the Repatriation (Special Overseas Service) Act. Accordingly, neither the soldiers injured nor the dependants of those killed in the accident referred to in the honourable senator’s question have any entitlement to repatriation benefits.
(Question No. 597)
asked the Minister representing the Minister for the Interior, upon notice:
Was wire netting, to the value of approximately $10,000, sent to Groote Eylandt to assist the establishment of a cattle industry; if so, was the wire ever used for this purpose.
– The Minister for the Interior has provided the following answer to the honourable members question:
The answer tothe first part of the question is No’.
(Question No. 710)
asked the Minister representing the Minister for the Interior, upon notice:
Does the Minister know of any national elections where a circular ballot paper is used; if so, do candidates draw for positions or are they listed in alphabetical order.
– The Minister for the Interior has provided the following answer to the honourable member’s question:
Investigations have failed to reveal any national elections at which a circular ballot paper is used.
(Question No. 740)
asked the Minister representing the Minister for the Interior, upon notice:
– The Minister for the Interior has provided the following answer to the honourable member’s question:
(Question No. 764)
asked the Minister representing the Minister for Repatriation, upon notice:
– The Minister for Repatriation has provided the following answers to the honourable senator’s question:
(Question No. 767)
asked the Minister representing the Minister for Repatriation, upon notice:
How many soldiers wounded in Vietnam are in receipt of:
full pensions (T.& P.I.):
General Rate or part General Rale pensions; and
other forms of compensation.
– The Minister for Repatriation has provided the following answer to the honourable senator’s question:
Particulars of the number of pensions payable specifically in respect of wounds are not available. However, the number of soldiers receiving pensions for disabilities accepted as due to Vietnam service are:
Special (T & P.I.) rate- 22.
Intermediate rate - 2.
General rate -
at 100 per cent- 241
at 10 per cent to 95 per cent- 2,489.
By his use of the termother forms of compensation,I presume the honourable senator is referring to payments under the Defence Forces Retirement Benefits Act and the Commonwealth Employees’ Compensation Act. I am not aware of the number of Vietnam servicemen receiving payments under that legislation.
(Question No. 703)
asked the Minister representing the Postmaster-General, upon notice:
Has the Postmaster-General noted reports in the Melbourne Press that Australian troops in Vietnam will be able to ring home at rates of $10.80 per 3 minutes plus $3.60 for each additional minute; if so, are these rates correct and why do they compare so unfavourably with rates to United Kingdom, $7.50; Canada and United States of America from $6.09 to $10.80; and Hong Kong and South Africa, $7.50.
– The Postmaster-General has provided the following answer to the honourable senator’s question:
Telephone calls between Australia on the one hand and Britain, Canada, Hong Kong, South Africa and the United Stales of America on the other, are routed over direct circuits between Australia and those countries, whereas telephone calls between Australia and South Vietnam must be routed via an intermediate point (Hong Kong) since there are no direct circuits between Australia and South Vietnam. Calls connected via an intermediate point involve extra handling costs and it is necessary to apply higher charges to cover these costs.
The existing charges for telephone calls to and from South Vietnam, namely, $10.80 for the first three minutes and $3.60 for each additional minute are in accord with those applying for calls to other countries in South Bast Asia, including Cambodia and Laos which are also switched via Hong Kong. Like South Vietnam, these countries do not have direct circuits to Australia because there is insufficient traffic to warrant the substantial outlay that would be involved in the establishment of such circuits.
(Question No. 730)
asked the Minister representing Ihe Treasurer, upon notice:
– The Treasurer has provided the following answer to the honourable senator’s question:
– Mr President, before we move from questions upon notice, may I ask whether it will be possible for me to get an answer to question No. 488 before the Senate rises. I think this must be the third occasion on which T have raised this matter. T ask whether something can be done. I know it is not the responsibility of the Minister for Housing who represents the Minister for Health in this chamber, but is the Minister for Health deliberately neglecting to furnish an answer to that question?
– It is true that Senator Murphy has asked me about this question and T have taken it up with the Minister for Health. A reply is being obtained for the honourable senator. I was informed that one of the reasons for the delay was that when he first placed this question on the notice paper it was directed to the Minister representing the Minister for Primary Industry. Therefore it had to be redirected to the Minister for Health. That has created some delay for which the Minister I represent was not responsible. However we are obtaining an answer for the honourable senator.
– 1 ask the Minister representing the Minister for National
Development when it will be possible to get an answer to question No. 567 standing in my name on the notice paper. My anxiety about it is caused by its impingement upon the so-called mirror legislation in relation to off-shore petroleum resources
– Order! Senator Cant, it is out of order for you to be asking that question now. You had the opportunity to ask it during question time.
– In any event, Mr President, I shall certainly chase it up.
Reports on Items
– I present the following reports by the Tariff Board:
Vinyl acetate; cellulose acetate flake - an interim report under the review inquiry on industrial chemicals.
Gauze, cloth, grill, etc, of copper or copper alloy wire.
I present the forty-ninth report of the Commissioner of Taxation dated 1st October 1970.
– For the information of honourable senators I present the text of a trade agreement, dated 21st July 1970, between the Government of the Commonwealth of Australia and the Government of the Socialist Federal Republic of Yugoslavia. A statement by the Minister for Trade and Industry (Mr McEwen) accompanies the trade agreement and I ask for leave to incorporate the statement in Hansard.
– Order! Is leave granted? There being no objection, leave is granted.
– No, leave is not granted yet. How lengthy is the statement?
If there is any objection to leave being granted I will read the statement.
– There was no objection. I asked whether there was any objection to leavebeing granted and as I heard nothing I took it that leave was granted.It is of no use for honourable senators to discover afterwards that leave was asked for and granted.
Senator Sir KENNETH ANDERSONI was trying to be co-operative in expediting the business of the Senate. The statement that I am about to make was made in the House of Representatives by the Minister for Trade and Industry, and honourable senators will understand that when I use the first person personal pronoun it refers to the Minister for Trade and Industry. The statement is as follows:
I table a copy of the Trade Agreement between Australia and Yugoslavia, signed by me on behalf of the Government on the 21stJuly in Belgrade. This Agreement will come into force on the date on which the 2 countries notify each other that their respective constitutional and other requirements necessary to give effect to the Agreement have been complied with. This Agreement is further evidence of our efforts to diversify Australian export markets generally. Amongst other things these efforts are designed to alleviate potential problems associated with the possible British entry to the European Economic Community by broadening the basis of our trade. This has, of course, been the policy of the Government for many years.
Australian exports to Yugoslavia in 1969-70 were in excess of$17m and there are further export prospects in this very promising market. The economy of Yugoslavia is growing at a strong rate and market forces are allowed to influence purchasing decisions to an increasing extent. Australian businessmen will, therefore, be operating in a market with many familiar Western characteristics. In addition, the recent establishment of a direct AustraliaYugoslavia shipping service will be of further assistance to those exporters interested in this market. Yugoslavia is of interest not only for its own market but also because of the unique status it has in relation to both the European Socialist countries and the Western countries. Whilst it has Associate status in the Council for Mutual Economic Assistance, generally referred to as COMECON, it is also a member of the General Agreement on
Tariffs and Trade, commonly known as GATT, the International Monetary Fund and the International Bank for Reconstruction and Development. This unusual crossroads position gives Yugoslavia trade access to both Eastern and Western Europe and some triangular trade is already developing. Australian traders could well be advised to look into these aspects.
The special position that Yugoslavia holds in relation to Eastern Europe could be significant because of the potential which exists for the expansion of international trade with that area. Trade between Eastern Europe and the Western countries has been expanding at about 8 per cent per annum in recent years. The area offers openings for wool and wool tops, wheat, meat, hides and skins and other raw materials, fresh, canned and dried fruit, dairy products, footwear, coal, iron ore and pellets, and other items of export interest to Australia.
Trade is a 2-way street and if our exports to Yugoslavia are to iucrease then we must expect increases in imports from Yugoslavia.I discussed these matters in the course of my visit to Belgrade and I would anticipate that Yugoslavian exporters will make increased efforts in the Australian market. The basis of the Agreement with Yugoslavia is a simple exchange of mostfavourednation tariff treatment. Its existence is expected to benefit trade between the 2 countries as it gives a stable and secured basis for the expansion of mutual trade and provides a concrete indication to traders that it is the wish of the 2 governments that trade be expanded. The Department of Trade and Industry stands ready to assist businessmen in their endeavour to increase trade with Yugoslavia and other countries in the area.
– I move:
That the Senate take note of the statement.
I seek leave to continue my remarks at a later date.
Leave granted; debate adjourned.
– by leave -
Honourable senators know that regulation 4a of the Customs (Prohibited Imports) Regulations prohibits the importation of literature and articles that are blasphemous, indecent or obscene; or unduly emphasise matters of sex, horror, violence or crime or are likely to encourage depravity. Honourable senators also know the regulation provides that even though a book is prohibited under regulation 4a the Minister for Customs and Excise may approve any application to import such works provided a report has been received from the Chairman of the National Literature Board of Review or the Director-General of Health. The purpose of this provision is to permit the importation of copies of prohibited publications for special purposes such as recognised scientific, social or cultural work by qualified persons; original research or advanced study; or for use as reference material in the practice of professions such as medicine or law. When regulation 4a was introduced in 1963 the then Minister undertook to report annually to the Senate in respect of books released in accordance with the above provisions. This report, the seventh to be presented, covers the period 1st July 1969 to 30th June 1970. During this period a total of 77 applications were received. Of these, 68 were approved and 9 refused. Details of the applications approved are as follows:
Medical, Psychiatric and Sociological Works 1 3 to university researchers 10 to university lecturers 3 to medical practitioners 3 to psychologists 2 to public libraries 2 to teachers college lecturers 3 to ministers of religion 1 to the Institute of Technology, Western Australia 1 to the Mental Health Research Institute of New South Wales 1 to the Director of the Art Gallery of New South Wales 1 to an art critic 1 to an art collector 1 to an architect 1 to an author 1 to a Commonwealth instrumentality 1 to a publisher 1 to a model film set maker
Fictional Works 10 to university researchers 6 to university lecturers 2 to medicalpractitioners l practitioners 1 to a psychologist 1 to an author 1 to a teachers college lecturer 1 to a solicitor
– I move:
That the Senate take note of the statement.
I seek leave to continue my remarks at a laterdate.
Leave granted; debate adjourned.
– I present the second report of the Publications Committee. Copies of the report have been distributed to honourable senators.
Report - by leave - adopted.
-I have the honour to present the report of Estimates Committee E. On 17th September 1970 the Senate referred to the Committee the departmental estimates for the year 1970-71 relating to the departments of Air, Repatriation. Primary Industry, Army, and Navy. The Committee has considered these estimates and has received explanations of them from the Minister for Air (Senator Drake-Brockman) and officers of the departments concerned. A copy of the minutes of proceedings and Hansard report of the evidence are tabled for the information of the Senate in connection with the Appropriation Bill (No. 1) 1970-71 and the Appropriation Bill (No. 2) 1970-71. The Senate’s attention is drawn to observations made by the Committee appearing in the minutes of proceedings of Tuesday, 20th October. I move:
That the report be printed.
– Mr President, could I seek guidance from the Leader of the Government? In the event of this report being printed am I right in taking it that the estimates for the departments mentioned in the report will come before the Senate in the usual way?
– In response to the question asked by Senator
Kennelly, when we deal with the Appropriation Bills we will go into the Committee of the whole in the normal way. As I understand it these reports will be tabled and a debate will ensue.
Question resolved in the affirmative.
(3.57) - I move:
If there is to be a debate on this motion I do not mind standing it over until tomorrow, but I understand that the Government Whip has circulated copies of this to the Opposition and to the Democratic Labor Party and if we can dispose of it today I would be happy to do so. If there is to be any disputation about it I would be happy to stand it over until tomorrow for further discussion by the Parties.
– As I understand it, these days and times of sitting are acceptable to us but I think this ought to be done on the basis that we have an intelligent programming of whatever work is to be done. There may be unexpected matters come forward and we may find it necessary to sit longer than has been indicated. We may want to sit - some of us, anyway - for longer than has been expected, but whatever we do I think we ought to endeavour as far as possible
– More days or more hours?
– No, I meant the programming of the actual work.
– Do you mean more days or longer hours?
– The honourable senator is going back to what I said before about sitting more days. I do not know that we can sit many more hours than are proposed. After all, there are only-
– Seven days in a week.
– Yes, and 24 hours in a day. But what I want to see, and I have said it before on at least two occasions, is that as far as possible there ought to be some allocation of time to the matters we have to deal with where this can be done by agreement, so that we do not waste time in the relative sense. Time is precious at this stage and we ought to have a reasonably even sort of allocation of it. There may be some matters that can be dealt with extremely expeditiously but I do not want to see a situation develop in which we go on and on and, at the end of the week, find matters being pushed through without any discussion at all, and the gag being applied when it ought not to be applied. We had a most unfortunate experience earlier this year and I think that no-one would want a repetition of it. I therefore appeal once more to the Government to ensure that some effort is made to programme the work that is to be dealt with and where possible to agree upon it. Let us not have the spectacle, which not only is degrading to the Parliament but is against the national interest, of pushing important matters through at the end of the session with virtually no discussion upon them.
– I will not take up the time of the Senate at any length. The words in this motion which interest me are ‘unless otherwise ordered’. I have no quarrel with the proposed times if it is desired to get the business of the Senate finished by the end et this week to enable honourable senators to get out into the electorate. But I am concerned about what the words ‘unless otherwise ordered’ mean. Do they mean that the Government may introduce new Bills after 1 1 p.m.? If we have an assurance that no Government business will be introduced after 1 1 p.m., I will be quite happy with these hours.
– I want to say something about this motion. On other occasions when there has been a suggestion to alter or prolong the hours of sitting I have always stated that 1 thought the Opposition would be found to be most co-operative. Before such a proposal is put to the Senate it should be referred to the Leader of the Opposition so that he, or whoever else is responsible, may discuss it with members of the Opposition so as to get complete agreement. We know that the business of the Parliament has to go on and we are prepared to co-operate. We know of the proposal now before us because it was circulated to the leaders of the two Opposition parties. Surely it is not co-operation when the Government decides on the hours and days and then issues a notice to the Leader of the Opposition.
– It was circulated last week.
– But should not there be some discussion with the Leader of the Opposition so that the matter can be referred to a meeting of members of the Opposition? I suggest that the Minister may consider deferring this matter until tomorrow for the purpose of our discussing it.
– (New South Wales - Minister for Supply) - by leave - We are now having a discussion which is identical to the one we had last week. Senator Murphy has made an almost identical speech, and I am about to make an identical reply. As soon as we know what the work load is we will enter into an arrangement with the parties as to timing. We cannot do this until we know what the work load is. As early as today I had a discussion with the Government Whip to work out the number of Bills that remain to be dealt with so that the Whips may have a preliminary discussion. This is what I promised and this is what will be done. This debate is an echo of the one we had last week when the proceedings of the Senate were being broadcast.
– I would like to indicate that the work programme for this week as announced by the Leader of the Government in the Senate (Senator Sir Kenneth
Anderson), and a copy of which I understand was circulated to the Leader of the Opposition (Senator Murphy) and to the Whip of the Australian Democratic Labor Party, is quite acceptable to my colleagues and myself. I think we all have a common aim to conclude the business of this Senate by Friday next. I think that with a little understanding and with a bit of cooperation we should succeed in achieving that objective. There is merit in the suggestion made by Senator Murphy. I am pleased to hear the Leader of the Government say that as soon as he knows what the workload is he will be prepared to go into consultation with the Leader of the Opposition and myself.
– Since we do not know the work load- one of my colleagues has requested this information - there seems to be no reason why we should decide this matter now. Could we stand it over until tomorrow on the basis that the Senate commence at 10 a.m. tomorrow and we leave the time of adjournment for today 11 p.m.? Perhaps by tomorrow we will know what the work load will be and we can then decide this matter formally.
Debate (on motion by Senator Murphy) adjourned.
Motion (by Senator Sir Kenneth Anderson) agreed to:
That the Senate this day adjourn at11 p.m. till tomorrow at 10 a.m.
Motion (by Senator Murphy) agreed to:
That so much of the Standing Orders be suspended as would prevent Business of the Senate, Order of the Day No. 1, being discussed at 8 p.m. this day.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Cotton) read a first time.
Senator COTTON (New South Wales -
Minister for Civil Aviation) (4.8) - I move:
That the Bill be now read a second time.
The purpose of this Bill is to re-introduce the provisions inserted in the Navigation Act during the autumn session giving the Minister for Shipping and Transport (Mr Sinclair) powers to deal with ships and their cargoes in cases where there is pollution, or threat of pollution, of the Australian coast or coastal waters by oil. Honourable senators will recall that in March this year an amendment was made to the Navigation Act as a matter of considerable urgency at a time when the tanker ‘Oceanic Grandeur’ had grounded in the Torres Strait and was menacing our northern coastline. The Bill was amended during its passage through Parliament to provide that its provisions ceased to have effect after a period of 6 months. That period expired on 18th September.
The Bill now before the Senate is in accordance with the Minister for Shipping and Transport’s undertaking at the time to review the provisions of the Act and to bring in legislation to ensure that to the maximum extent possible the powers which already existed in State legislation in relation to oil spillages would be permanently supplemented by such powers as could be vested in the Commonwealth. The debate on the previous Bill showed that honourable senators fully endorse the need to provide the Minister with powers to take urgent and effective action to ensure there is no delay in the removal of a potential oil pollution hazard. They also agreed that the Commonwealth should be provided with authority to recover under its own right costs which it incurred in taking action to prevent the discharge of oil, or to reduce the effects of a spillage. T. would assure the Senate that in preparing this Bill very careful consideration has been given to all points of view put forward in the debate on the previous Bill, and to all subsequent representations. Where that consideration showed that a point had merit and could be adopted, appropriate provision has been made for its inclusion in the Bill.
The earlier Act had five main provisions: Firstly, it provided for the Minister to take action when he was satisfied that oil was escaping, or likely to escape, from a ship and cause pollution. Secondly, it empowered the Minister to require the owner, master or agent of a ship to take whatever action appeared appropriate in relation to the ship, or its cargo, and failing action by such person the Minister could himself cause action to be taken. Furthermore, any costs incurred by the Minister in taking action could be recovered from the person on whom the notice was served, and the Commonwealth’s cost of cleaning up any oil that escaped from the ship by reason of the notice not having been complied with could also be recovered from the person on whom the notice was served. Penalties of up to $2,000 were applied in respect of each day on which a notice was not complied with and the oil continued to escape. The legislation applied to all vessels to which the Navigation Act applied, but it was specifically provided that the Act did not apply in relation to a foreign-registered ship unless the ship was in Australian coastal waters.
As the present Bill, in the main, follows the pattern of the previous legislation, the principal provisions of which 1 have just outlined, I shall confine my further remarks to those aspects in which it varies from the earlier legislation. Perhaps the most significant change is that a general liability is now imposed on the owner of a loaded tanker to meet the Commonwealth’s cost of cleaning up any spill that his vessel causes. The liability attaches whether or not a notice has been served on the shipowner and whether the oil escapes prior to or after any such notice has been issued. At the same time the tanker owner is given the same general defences, relating largely to acts of war, natural phenomena and wrongful acts of a third party, as are provided for in the 1969 Brussels Convention on Civil Liability for Oil Pollution Damage.
Under the earlier legislation no limitation was placed on the strict liability of a shipowner to meet the Commonwealth’s costs of cleaning up after an oil spill. It has been put to me by shipowners that such a provision would load them with a risk against which they could not insure. In the circumstances it has been decided to permit the owner of a loaded tanker, but not the owner of any other ship, to limit his liability to the same extent as is provided for in the Brussels Convention- to which I have just referred. This is $120 a ton of the ship’s tonnage with an overall limit of $l2.6m. This overall limit would of course apply only in relation to the very largest tankers likely to visit Australian ports. As was the case in the earlier legislation, strict liability is imposed on owners of vessels other than loaded tankers, for the consequences of them failing to comply with a notice and oil escaping as a result. However, in a prosecution or a Commonwealth claim for clean up COStS, it will be a defence that their failure to comply with the notice was in order to save life at sea, or because it was not possible to comply with the notice.
The earlier legislation applied only to the so-called persistent oils. The laws of the various States dealing with pollution aspects, which this legislation supplements, all define oil to include the non-persistent oils. The Bill has been drawn so as to apply its provisions to all oils, including refined petroleum products, lt was thought necessary to do this so that a notice could be issued on the owner of a vessel carrying non-persistent oils requiring him to take action in relation to the vessel or its cargo to prevent or reduce spillage, if the circumstances were such that the State legislation did not apply, ft will be most unlikely that the Commonwealth would have to claim clean up costs iu relation to non-persistent oils as, by their very nature, they evaporate before cleaning tip would be necessary.
– 1 do nol know, but I should imagine that 1 will be able to find out after I have finished reading this speech and before the afternoon draws too far on.
Another area in which the Bill departs from the earlier legislation is in relation to the responsibilities of the master and agent of a ship. Formerly, both the master and agent could be issued with a notice and were faced with the possibility of prosecution for failing to comply with that notice. They could also be held liable in certain circumstances to meet the Commonwealth’s cost of cleaning up after a spill. As the financial resources of both the master and agent would be soon exhausted in a case of serious pollution, these provisions served little purpose and it has been decided to place full responsibility on the owner of the ship for these things. It will be possible, however, to serve a notice on the shipowner by serving it through the master or the agent of the ship. Having done this, it is then possible to increase considerably the penalties for noncompliance with a notice, and to provide for penalties of a recurring nature to apply daily whether or not oil escapes from the ship on that particular day.
Other amendments made to the earlier legislation have been introduced mainly in the interests of precision and clarity and do not fundamentally affect the scheme of the legislation. The amendments have been found necessary in the light of practical application of the legislation. They serve to make the law a more effective and appropriate measure, and they take account of the various comments and representations that have been made in relation to the subject matter of the Bill. As 1 mentioned earlier, the legislation which this Bill replaces lapsed on 18th September, and it is most desirable that this replacement legislation be enacted as early as possible. Australia could be faced with a serious pollution problem in the event of an accident to any of the numerous tankers which operate on our coasts. I commend the Bill to the Senate.
Debate (on motion by Senator Cant) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Sir Kenneth Anderson) read a first time.
That the Bill be now read a second time.
The purpose of. this Bill is to obtain Parliamentary approval for a contribution by Australia of the equivalent of $US10m to the special funds of the Asian Development Bank. Mr Deputy President, the balance of this second reading speech includes a page of figures setting out information relating to subscription to capital stock of the Asian Development Bank, a half page of figures concerning various aspects of the special funds, and explanations of the figures. The speech will be difficult to follow without honourable senators having the figures before them. With the concurrence of honourable senators I shall incorporate the remainder of the second reading speech in Hansard. As honourable senators will be aware, Australia is a foundation member of the Asian Development Bank which opened for business in Manila in December 1966. Membership of the Bank now totals 35 countries, 21 of which, including Australia, are in the Asian region and 14 outside it. Total capital subscriptions to the Bank at the present time amount to $US1 ,004m, only half of which is, however, payable. The balance will remain at call as security for any borrowings of the Bank on international capital markets to supplement its subscribed capital. As indicated in the following table - which, with the concurrence of honourable senators, I incorporate in Hansard - Australias subscription of $US85m to the capital stock of the Bank is exceeded only by those of the United Stales of America, Japan and India.
I might perhaps add that the final instalment of Australia’s subscription was paid in August of this year. The Asian Development Bank is empowered under its Articles of Agreement to conduct both ‘ordinary operations’ and ‘special operations’. In the case of ‘ordinary operations’ the Bank lends on commercial terms - the standard lending rate by the Bank at the present time is 7 per cent per annum, with repayments spread over 10 to 25 years including grace periods ranging from 2 to 5 years, depending on the nature of the project involved. The Bank has to finance such loans either by drawing on paid-in capital subscriptions or by using funds raised for this purpose by selling bonds on the capital markets of the world. To date, the Bank has successfully floated 2 such bond issues. In 1969 it raised a loan equivalent to $USl6m in the Federal Republic of Germany and in April 1970 it borrowed the equivalent of $US5m in Austria. Efforts are being made to float bond issues in other capital markets in order to establish the Bank’s standing in the international financial community and enable it to borrow funds to finance its normal lending activities in much the same way as the World Bank now does.
In the case of ‘special operations’ the Bank lends on concessional terms and can finance such loans in part from its paid-in capital - 10 per cent of which can be set aside specifically for this purpose - but more importantly by drawing on resources contributed to special funds by its member countries. The terms of the loans financed from special funds to date have involved rates of interest ranging from li per cent to 3 per cent per annum with periods of repayment extending from 16 to 40 years including grace periods of from 4 to 10 years.I would emphasise that special funds are employed only to finance high priority development projects which meet the same technical standards and satisfy the same economic criteria as projects financed from the Bank’s other resources.
In a sense, special funds are to the Asian Development Bank what the International Development Association is to the World Bank group of institutions, namely, a means by which assistance can be provided on more liberal terms than apply to normal loans by the respective banks. By a skilful blending of ‘ordinary operations’ andspecial operations’ the Asian Development Bank is able to reduce the average costs of its overall lending to de veloping member countries to more manageable levels. To date the Bank has approved loans to a total value of $US189m, of which $US39m will be financed from special funds on concessional terms.
To assist the Bank in meeting the growing demands on its own limited special funds resources, Canada, Denmark, Japan, the Netherlands, the United Kingdom and the United States have all made or offered to make voluntary contributions to the Agricultural Special Fund and/or the Multi-Purpose Special Fund. In addition, each of these countries, along with Finland, Germany, India and New Zealand has contributed to the Technical Assistance Special Fund. Details are set out in the following table, which, with the concurrence of honourable senators, I incorporate in Hansard.
In recognition of the important role which the Asian Development Bank has to play in promoting economic development in the ECAFE region, and the great need of many of its developing member countries for external assistance on concessional terms so as not to exacerbate their growing external debt servicing problems, the Government decided earlier this year that, subject to the approval of Parliament, Australia should contribute the equivalent of $US10m - about $A8.9m- to special funds over this and the next 2 financial years. The Treasurer (Mr Bury) made an announcement to this effect at the third annual meeting of the Board of Governors of the Bank in Seoul last April. Of this amount, it is intended that $US9,750,000 will be allocated to the multi-purpose special fund and be paid in 3 equal annual instalments commencing in 1970-71, while the balance of $US250,000 will be allocated to the Technical Assistance Special Fund. No restrictions will be placed on the rate at which the latter sum may be used by the Bank.
Except as otherwise agreed by the Government of Australia, the proposed contribution to the Multi-Purpose Special Fund will be tied to the procurement of goods produced in, or services supplied from, Australia. Likewise, the contribution to the Technical Assistance Special Fund may be used only to pay for the services of Australian consultants and experts hired by the Bank in connection with its technical assistance activities. No restrictions will be placed on the developing member countries of the Bank in which these contributions may be used, although the Bank will be asked to pay special regard to the needs of less developed countries in South East Asia and the Pacific region which are of special interest to Australia.
This Bill provides us with a tangible opportunity to confirm Australia’s continued strong support for the activities of the Asian Development Bank. The additional funds to be authorised by this Bill will not only add to the Bank’s resources and permit a desirable expansion of its lending activities, they will increase the Bank’s versatility and enable it to tailor the terms of its overall lending to the requirements and borrowing capacities of its developing member countries. There is no need for me to enlarge here on the great importance to Australia of the Bank succeeding in its efforts to help developing countries in Asia to achieve faster rates of economic growth, and so help to raise living standards throughout the ECAFE region. I commend the Bill to honourable senators.
Debate (on motion by Senator Wilkinson) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Cotton) read a first time.
– I move:
Mr Deputy President, the Bill now before the Senate introduces legislation to amend the Phosphate Fertilizers Bounty Act 1969. As members of the Senate Wil recall, this Act increased the rate of bounty on phosphate fertilizers as from 13th August 1969. In the case of standard superphosphate the bounty rose from $8 per ton to $12 per ton. In accordance with section 5 of the principal Act, the new rates were only payable in respect of unsold stocks held by fertilizer manufacturers immediately prior to that date and production on and from that date. Following announcement of the Government’s decision, representations were received requesting that stocks of phosphate fertilizers held by resellers on 13th August 1969 be eligible for payment at the higher rate of bounty. Resellers holding stocks had been compelled in this case by competitive pressures, to drop the price to the farmer by the full extent of the bounty increase. As a result they suffered some financial loss.
The phosphate bounty was specifically intended to reduce the price paid by the user. The Government considers that it is unreasonable for resellers to carry the burden of the increase in the bounty on stocks held at the time the rate was changed. Accordingly, the Phosphate Fertilizers Bounty Act 1969 is being amended to provide for retrospective payment of bounty on unsold stocks held by resellers, who absorbed the increase, at midnight on 12th August 1969. As a result of the changing structure of the industry, it appears that higher levels of stocks are being held by resellers. The Government intends to apply this principle to any future changes in the phosphate fertilizer bounty rates. I commend the Bill to honourable senators.
Debate (on motion by Senator O’Byrne) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator DrakeBrock*man) read a first time.
– I move:
Mr Deputy President, this is a short Bill, the principal effect of which will be to permit the States to enact legislation requiring the licensing of premises used for processing fish for either domestic consumption or export. It also omits Nauru from the scope of the Fisheries Act following the granting of independence to that country. The Government believes that the effects of this Bill have significant importance for the Australian fishing industry. In particular, it will provide a path not at present available for the Commonwealth and States to cooperate in the rationalisation of the secondary sector of the industry in so far as it will clear the way for any State to enact legislation requiring the licensing of premises used for the processing of fish. This process of licensing would not be possible without the enactment of this Bill for reasons to which I shall refer later in this speech.
The need for rationalisation of fish processing facilities is particularly indicated in the more lucrative fisheries, such as prawns, rock lobsters, scallops, etc., where the creation of a total processing capacity in a particular area in excess of the ability of the fishery resources to supply would lead to overcapitalisation. Indeed, 2 prawn processing companies in northern Australia have already failed because of their inability to secure a share of the total catch sufficient to make their operation economically viable. An important consequence of rationalisation of processing capacity will be to reduce the risk of excessive pressures being placed on the resources in situations where processors are urging fishermen to increase their catches at any cost in order to keep the processing facilities in operation. In many of our fisheries, the sustainable yield from the resources is not yet fully known and the Government is taking all possible steps to carry out research with the objective of providing this information. In these circumstances some pragmatic management decisions have had to be made and the Commonwealth has taken action in the Northern Territory to limit the number of prawn processing opportunities and has held regular consultations with the Queensland fisheries authorities on the desirability of extending this kind of control to the Queensland sector of the fishery.
I believe it is appropriate to emphasise to honourable senators and the fishing industry that the Commonwealth is not by this Bill proposing itself to enter the field of licensing fish processing plants for reasons of fishery management. Whether or not processing plants are to be licensed will depend entirely on decisions by the several State governments to enact suitable legislation for this purpose. I should also make it clear that the operations of the Exports (Fish) Regulations which provide for standards of hygiene, sanitation and product quality in respect of plants processing fish for export and for registration of plants meeting those standards, will not be affected in any way either by this Bill or by any State legislation that may subsequently be enacted.
The Bill has a secondary purpose connected with the Government’s decision to establish under the Fishing Industry Research Act 1969 a matching fund for research education, extension and development for the benefit of the fishing industry. At the time that negotiations were proceeding with the States on the establishment of this fund it was agreed that each State would collect the contribution from the fishing industry in whichever manner was considered most suitable to the structure and organisation of the fishing industry in the State concerned. Queensland authorities took the view that in that Stale the most suitable form of levying the contribution would be by way of fees collected from the licensing of fish processing plants. However, the Queensland Government felt some concern for the validity of legislation to give effect to this proposal in view of the judgment in O’sullivan v. Noarlunga Meat Pty Ltd, where the High Court held that State legislation requiring the licensing of premises used for processing meat for export was invalid. Accordingly, in 1969 fisheries and legal officers of the Commonwealth and Queensland conferred with a view to devising a legal course of action which would offset the effect of this judgment. The result of this conference is embodied in the Bill now before the Senate. It has the concurrence of the Queensland Government and of the Australian Fisheries Council.
Accordingly, the Bill has a secondary importance for the development and conduct of research into our fisheries by making the way clear for any State, which desires to employ the device of licensing premises used for the processing of fish as a means of collecting money from the fishing industry to be matched by the Commonwealth under the Fishing Industy Research Act, to do so without fear of the legislation concerned being ruled invalid in the light of judgment in the Noarlunga case. The provisions of the Bill are brief and to the point. I believe that I have adequately outlined them in my opening sentences. This Bill is part of an overall review of Commonwealth fishery legislation which has been undertaken in the Department of Primary Industry and which will form the basis of more extensive amendments of the Fisheries Act and Continental Shelf (Living Natural Resources) Act during a subsequent session of the Parliament. I commend the present Bill to honourable senators.
- The key to the attitude of the Opposition is to be found in the last few words spoken by the Minister for Air (Senator Drake- Brockman) who represents the Minister for Primary Industry, that this Bill is part of an overall review of Commonwealth fishery legislation which has been undertaken. The present Bill deals with certain important but relatively minor matters. The principal Act touches on some extremely important aspects of the industry, matters of constitutional development as between the Commonwealth and the States and some other very important considerations of the application of the laws of this Commonwealth to citizens in such a way as to have differing applications in different States or territories. However, the Bill is not directed to those matters, and the Opposition finds it not convenient to raise these great issues during the debate on a Bill which is making important but minor amendments to the Act. Therefore, in order that the Bill may have a speedy passage the Opposition will not oppose it.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Bill returned from the House of Representatives without amendment.
Debate resumed from 2 1st October (vide page 1383), on motion by Senator Sir Kenneth Anderson:
Thai the Bill be now read a second time.
Upon which Senator Wilkinson had moved by way of amendment:
Leave -out all words after ‘That’, insert ‘the Bill be withdrawn and re-drafted because whilst it reduces rates of taxation it does so in a regressive manner’.
– The Bill that we have before us relates to the declaration of general rates of tax for the current financial year. The general rates payable by taxpayers will result in some tax reductions, lt is claimed that the tax reductions will be substantial in the lower and middle income groups but that they will taper off in a graduated scale for those in the higher income groups. A most interesting table is available to honourable senators and honourable members as the result of a question that was asked in another place. It shows that there are 4,027,000 taxpayers in the $417 to $4,000 income range and that they have 874,000 wives and 989.000 first children and student children. The deductions for this group total $398m. In the income group from $4,001 to $10,000 there are 901,000 taxpayers. They will receive total deductions of $407m. The 71,000 taxpayers in the $10,000 and above income group will receive deductions of $89m.
I have quoted those figures to illustrate that although the Government claims to be making considerable concessions, in reality what it is giving with one hand in direct tax deductions it is taking back again on an even greater scale through the incidence of indirect taxes, it is preferable to have direct taxes rather than indirect taxes. Unfortunately, indirect taxes increase the cost of goods and cause inflation - one of the greatest menaces in our economy today. The collection of indirect taxes takes place at the distribution point and this has an effect on the final price of many commodities that influence the cost of living.
The claim that these tax deductions favour those in the lower income group can be challenged. Generally speaking, the Government’s offer of taxation relief for these 2 income groups - the middle and lower income groups - as announced in the policy speech last year is not, as was indicated, a real benefit to these people. In reality it is an insult to Australians. They know very well that they have only to look behind the facade of these tax deductions to see whether people are better off or worse off in the final analysis. Reports from individuals reveal clearly that already the imposition of the additional indirect taxes and the price rises which followed the announcement that various rates of taxation would be increased have more than equated the concessions offered by this legislation. The 10 per cent taxation remission certainly will help those in the higher income group, but it is a very debatable point whether those in the lower income group will gain at all. Any temporary gains are more than neutralised by the slugs of the extra charges imposed by the Budget. The tax remissions are a handout to the rich and a kick in the teeth for the poor. The higher income group, up to $32,000 a year, covers relatively few fortunate members of the community. For the overwhelming bulk of Australians whose average earnings are between $2,000 and $3,000 a year the gains are more than swallowed up by the losses.
It has been pointed out that the Government’s objective was to try to control inflation. But the slugs introduced by the Budget are all inflationary. They have brought about increases in the cost of household commodities and a higher cost of living. As the cost of living rises, the number of claims before the courts for increased wages increases also. So the vicious cycle continues. One of the most vicious of the indirect taxes imposed was that on motor fuel. In this day and age people who consider that a motor car is a luxury are closing their eyes to the facts of life. The motor car is as important a part of the equipment of a human being as is a pair of shoes, a pair of socks or a suit. One section of the community which will have to pay this increase in the cost of fuel consists of the people who use their motor cars to travel to and from their place of employment. If an executive of a big company uses a company car, the company gets a tax exemption on the fuel used. But the ordinary wage and salary earner has to pay this extra 3c a gallon on petrol.
The irony of the whole situation is that Australia has improved its position wilh regard to the supply of crude oil. We have reached the stage where we have in sight the provision of 60 per cent or more of our domestic requirements. A series of increases in indirect taxes on fuel will negative the Government’s claim that the direct taxation concessions will be of value to the middle and lower income groups. The contracts drawn up with the Bass Strait oil operators have resulted in increases in the price of petrol. They are a very poor reflection on those who are in control of the country’s economy. It is absolutely ridiculous that we can get high quality crude oil just off our coastline and yet the cost of bringing ashore that oil is not competitive with the cost of bringing crude oil half way across the world. There is no doubt that the quantities discovered, the potentials of the fields and the like are such that there should be a reduction of quite a considerable amount in the price of our petrol. Instead of that, since the discoveries, there has been a succession of increases. These things are nullifying any benefits accruing from this legislation which will give income tax deductions. To illustrate this, a person who uses 10 gallons of fuel a week has to pay another 30c a week because of the extra 3c tax on each gallon of fuel. The same consideration applies to the indirect tax on cigarettes. An extra 3c tax has been imposed on the price of a packet of cigarettes. An average family man and his wife who smoke a packet a day are up for an extra 42c a week. An extra indirect tax has been imposed on telephone rentals. The increase is $7 a year. This is quite a large amount for the ordinary wage and salary earner. People who want to buy a new car are up for an extra slug of about $50 on a car in the lower than average range - about the $2,000 mark.
All these items are contributing in a general way to the inflationary spiral. Those who have to bear the burden of the inflationary spiral are those who have to wait until there is an appeal to the court before wages are increased. The myth that rising wages are the cause of inflation does not ring true when one realises that prices have to be increased to a certain extent before the courts grant increases in wages so that the extra costs can be met by the wage and salary earners. We see that the general inflationary trend is being accelerated, and it bears most heavily on those in the lower income groups. They are the people who spend most of their weekly salary on the necessities of life. Those in the higher income groups can make long range investments and have interests which are often tax deductible and for which considerable concessions arc available. But these deductions and concessions are not available to those in the lower income groups. As an added impost a wide range of items are covered by the extra 21 per cent sales tax. The iniquity of these indirect taxes is such that the increases do noi stop at 2i per cent. An opportunity is given to retailers passing on this tax to increase their prices. The tax is the signal for the increase in prices.
In the Senate recently we had a debate on the imposition of the 50c a gallon excise on Australian wines which was supposed, I think, to amount to about 9c a bottle. But by the time this increase is passed on the consumer pays anything from 25c to 75c extra a bottle. What happens is a disturbance in the wine price schedule which gives the green light for widespread increases at levels higher than that at which the original tax was levied. It is of the nature of the society in which we live that people are ready to accept these alterations in tax rates as being the signal for a general price increase on top of the amount of tax which is imposed.
I have related these increases to the wage and salary earners. But what is happening to the person who has not the advantage - if one can call it an advantage - of the wage or salary earner who has access to conciliation and arbitration or to public service tribunals and has periodical adjustments in his salary? What about the poor people of Australia? When T say ‘poor people’ I mean those who are poor in spirit because of disillusionment and the sense that they have been doublecrossed by the policy of the Government? 1 refer to people on superannuation. They do not have redress to a court for increases. Often they are excluded by the means test from recouping any of the contributions made over their working life to the social service scheme through income tax. There is no doubt that a proportion of income tax does not cover social service contributions and therefore this section of the community is being deprived by the means test of benefits from funds to which they have contributed throughout their lifetime. They are deprived of access to any judicial body to see (hat their amount of income is regulated and increased to meet inflation. They are the people who are suffering most. They felt that in making provision for their future their equity would be maintained. They have been badly treated by the policy of this Government. I believe that even now a review should be made of the impact of this ever-increasing inflationary spiral on this section of the community.
I move on from the superannuitants to the aged, invalid and widows in the community. This is where a really raw deal has been given to a very deserving section of the community. 1 do not suppose anyone doubts that there has been a growing spiral in prices. Every 3 months there has been a 2 per cent or 3 per cent increase in prices. T have seen records recently which show lhat over one quarter there were increases in prices on a thousand different commodities, and these are prices which affect those on age, invalid and widows* pensions. Any Government supporters with a conscience or any fellow feeling towards these people who .vet can sit in their places and support the miserable handout of 50c in the pension which was made in the Budget should be filled with shame.
– Why did not the honourable senator move for the withdrawal of that Social Services Bill? The Labor Party did so on the postal charges.
– If we thought we could rely on Australian Democratic Labor Party support we would have done that. But the DLP is so steeped in political manoeuvring, horse dealing and tactics of every kind and every variety that if ever we were to place our confidence in that Party for anything that would be to the good of the people rather than to the good of supporters of that Party our faith would be misplaced. Whatever comes from the honourable senator’s corner has a trick in it. The increase of 50c which was given to the pensioners will cost S20m a year. Yet the wool growers, who I will admit have been badly hit, in one fell swoop received a subsidy of $30m which was supported very readily by Government members.
– Is the honourable senator opposed to that?
– No. I am making a comparison to show how readily Government members will support a $30m subsidy without a word, while no move is made by any of them to redress this great injustice which has been imposed on pensioners. I hope that widespread support will be given by Government members to the movement for a Little Budget whereby a review can be made of the Budget in the near future and some redress given to this section of the community. We find too that this Government is able to make expenditure practically regardless of any thought of the cost. One has only to look back and evaluate our position at the moment on the tragic F111 project. For 6 years we have been muddling and waffling along with this project trying to cover up for the great mistake which was made by buying a pig in a poke for election purposes in 1964. There was no difficulty in finding the amount which had to be paid as a deposit, the provision of spare parts, the provision of aerodromes and facilities for this aircraft. Of course today it is parked somewhere in the distant south of the United States.
In the present situation, for some reason or other, the Government likes to generate a fear complex. It likes to pull the wool over the eyes of the Australian people by selling them the story that we are under threat of invasion - although from where I do not know because the Government has never said. The Government has found it imperative to lease very expensive Phantom aircraft from the United States. Those aircraft will be well and truly out of date and obsolete before they will ever be given any operational duties, on the estimate of even the most pessimistic person.
– Which aircraft are they?
– The Phantoms. It is quite likely that they will be used for interference in other people’s affairs outside our country.
– Are you hoping for that, or are you just imagining it?
– I am not imagining it at all. It is a fact. We are interfering in other people’s affairs in Vietnam-
– Are you?
– Australia is interfering in a civil war and an undeclared war there.
The ACTING DEPUTY PRESIDENT (Senator Laucke) - Order! Senator O’Byrne, will you kindly come back to the provisions of the Bills?
– I am speaking on the provisions of the Bills, Mr Acting Deputy President, if I may be excused for reminding you, because the so-called concessions that are being made are being paid for very dearly by the ordinary citizens of this country. As I said, members of the Government parties have no compunction at all in supporting the expenditure of vast amounts of money on phoney exercises outside our territory. They can sell these propositions through their good friends in the Press, the television stations and the like. But in reality it is just an exercise in public relations.
One has only to read the memoirs of a predecessor of the present Prime Minister to see the way he is trying to explain the mistakes that he made in practically every instance in which he involved us in foreign affairs. Our involvement in the Suez Canal incident, Vietnam, Korea and all the other places has been an exercise which has been tremendously costly to Australia.
Senator Yoting You are against the United Nations action in Korea, too, are you?
– Perhaps there was more in the Korean conflict than the honourable senator would like to admit. The position is that Australia is being involved in these situations, but we do not seem to be getting any of the industries that are being kept going as a result of the expenditure of these vast sums of money. Where are our war industries? Where are our aircraft manufacturing organisations? Where are we building tanks? Where are we making rifles?
– At Lithgow.
– I know that we are making them at Maribyrnong.
– To a very limited extent. The benefits that are coming to Australia are negligible compared with those that are flowing to overseas countries which have a vested interest in keeping little wars and big wars going throughout the world.
With regard to inflation, a tremendous problem is facing this nation today. It relates to the ever increasing interest rates which are bearing most heavily on the middle and lower income groups, the home purchasers and those who need to furnish their homes. We see a Budget go by and we see taxation concessions made to people. Yet there is nothing for those who are the greatest asset we have - the young Australian parents who are starting off a home but whose interest payments are increasing all the time. The family man who borrows money to purchase a horns costing $12,000 finds that by the time he has paid it off with interest at a flat rate of 8 per cent or more he pays $36,000 for his home. That means that he has to pay 3 times the price of the house.
We believe that this is an unjust measure inasmuch as it does not do what it was supposed to do. Tt makes some concessions to those in the higher income groups who can afford to pay the indirect taxes. But it does not help those it was supposed to help; that is, those who have to pay indirect taxes on so many ordinary every day commodities. We have moved the following amendment:
Leave out all words after ‘That’, insert - ‘the Bill be withdrawn and redrafted because whilst it reduces rates of taxation it does so in a regressive manner?
To support that amendment, I have pointed out that the incidence of taxation is still very heavy on the wage and salary earners. It is practically intolerable, because of the way indirect taxation is increasing the cost of commodities, on people on fixed incomes such as people on superannuation and pensioners. Therefore, we believe that not only should the Government be censured but that it is only just and fair for the Government to make a review so that in some way or other the amounts received by people on fixed incomes - particularly the aged, the invalid and the widowed - will be increased. The present social service payments are totally inadequate to meet the growing costs of living that are confronting those people today. I support the amendment.
– The Senate is debating the Income Tax Bill 1970. This is the Bill which declares the general rates of taxation for the current financial year. 1 rise mainly because the previous speaker, Senator O’Byrne, referred to the Opposition’s amendment but spent the main part of his speech criticising the Government for bringing in such a measure and taking us over a wide area of the Australian economy ranging through the oil industry, the Fill, the Phantom, the wool subsidy and Sir Robert Menzies’ memoirs and finishing up on interest rates as they apply to housing. I am concerned that the Opposition should criticise this measure, and criticise it quite unjustly in the terms in which Senator O’Byrne did.
The fact is that this reduction in income tax on individuals is the result of an assurance given by the Prime Minister (Mr Gorton) in his policy speech. In his original assurance, he indicated that he would attempt to reduce the incidence of income tax on lower income earners during the period of the Government’s term of office; that is, over a period of 3 years. But the Prime Minister and the Government not only have kept their word in relation to that but have brought in adjusted rates of income tax which are particularly favourable to people with annual incomes below $10,000. The reduction amounts to about 10 per cent of the tax that would have been paid. In short, the Government has effected in its first year of office a total reduction of about S289m. That amount would have been collected from individuals by way of personal income tax. but now it will be left in the pockets of mainly the lower income earners. lt is very difficult to understand how members of the Opposition can criticise this measure. They certainly must be given credit for the fact that they can find some basis for criticism of any measure that this Government brings forward. I am eager to give credit to the Prime Minister and the coalition Government for having kept their promise at a most difficult time and for giving effect to it not within 3 years but within one year. Two other benefits which arise from this Bill are, firstly, that the level of taxable income which is completely exempt from taxation is to be raised and, secondly, the benefit which accrues from- adjustments to the shading-in arrangements which are designed to ease the change from complete exemption to tax at normal rates. They are two particularly important measures which this Government has adopted, as well it should following its assurance to the people that taxation relief would be granted during this term of office.
We have heard the Opposition criticising this Bill. Indeed, if it had found some strong basis for criticism it should have found it in the fact that the Government has seen fit to increase the rate of taxation for companies by 2i per cent. One can well argue that when profit is made taxation should be applied. I am a little unhappy at the fact that taxation upon companies generally will be raised by this measure. More so, I find my opposition in the fact that the tax is to be raised retrospectively. If the Opposition wanted to offer congratulations one would think that as it is so devoted to socialisation it would have found that to be a basis for congratulation. I personally abhor the idea that the Government should bring in a retrospective tax measure so that companies which had already completed their annual accounts to 30th June found that they had to restrike their balance sheets and include a further 2i per cent tax for the just completed year. There has been only a little complaint, which demonstrates a great responsibility by companies generally towards the community. I imagine they feel they are contributing in some way towards the reduction of. personal taxation in the lower income group.
I feel the Government should give some consideration to the volume of retention which should be allowed to private companies. When private companies do not achieve a sufficient distribution of profits by dividends they pay a further tax of 50 per cent. This is a very harsh measure. I feel that In these times when private companies have a big problem in retaining sufficient funds in their own hands to make possible their development, from the point of view of capital and liquidity, the Government should review this matter and apply a further reduction. The effect of that would be to allow a greater retention in the hands of private companies before they are taxed at this very great rate of 50 per cent.
Attention should be paid to the volume of taxation that is levied on the profits of private companies and, to some degree, of public companies. But I have in mind in particular a company which is taxed at the rate of from 40 per cent to 45 per cent mark on the profit that it makes and then, after allowance is made for retention, is taxed again at a rate of 50 per cent on that which is left. The amounts which are distributed go into the hands of private persons and are taxed at the personal rate of tax. In short, the Commonwealth does fairly well out of the profits which are made by private and public companies. I feel that as proprietary limited companies are of such great importance in our commercial society the Government should give consideration to allowing a greater volume of funds to be retained within the hands of private companies.
– The Government is naughty after all.
– It is nol on the basis of the criticism that Senator O’Byrne made. If Senator Lacey had been paying attention while Senator O’Byrne criticised the fact that the Government had lowered the burden on private individuals he would know this. I feel that credit should be given to this Government and the Prime Minister, having given an assurance that they would do something within a 3-year period, for doing it in the first year of this term. They could have swung this lowering of taxation over a 3-year period and in the third year have gained some electoral benefit by saying: ‘Look what we have done. We have lowered this taxation rate to individuals in the third year of this term.’ Perhaps the Opposition could have said: ‘You have only done this for support’. This Government has shown a real sense of responsibility to the people by honouring the assurance it gave them. 1 repeat that congratulations should be offered to the coalition Government for what it has done in the introduction of this Bill.
– I wish to take up the case submitted by my colleague from Tasmania,
Senator O’Byrne. Senator O’Byrne pointed out very clearly that what was gained on the swings was lost on the roundabouts. It s quite obvious that insufficient consumer protection is syphoning off the so-called benefits to be provided under this Bill. It is very significant that the Minister for Supply (Senator Sir Kenneth Anderson), in dealing with the benefits of the Bill, talks in terms of aggregate benefits. He mentioned a sum of $289m for a full financial year. If that was divided by the number of taxpayers receiving the benefits we would get a closer appreciation of what we are up against. I will deal with Senator Webster’s arguments briefly in a moment.
We naturally approach this matter with a different attitude. I would rather apply a trade union axiom to what is contained in this Bill. On many occasions 1 have argued that if one gains some concession by way of reduced hours where the rising cost of living cannot erode leisure time one is better off than if one gets some minimum fee for dirty or arduous work which inflation can destroy. Let us take the analogy a little further. Let us consider the position of people in the middle income group who are supposed to be the chief beneficiaries under this legislation. Let us assume that they are paying off a home. They have been belted to leg because of the failure of the Government to give them protection in the purchase of the essential components of their home. Let us assume that they have budgeted their affairs for 12 months and are then confronted with the need to replace a lawn mower or to make some plumbing repairs which involves stripping out a complete shower unit in the bathroom. Some may ask: ‘Are you not adopting a Utopian attitude?’ This leads me to suggest to Senator Webster and others that they look at the current issue of ‘Newsweek’ where they will note that Washington has adopted a more positive role by establishing federal agencies to protect the consumer. The need for such agencies was exemplified more than ever in an answer I received from Senator Dame Annabelle Rankin last week after I pinpointed, in a question to her, the absence of standards for sunglasses. Two years ago when the United States armed Services made a damning indictment of the manufacture of Australian sunglasses we were blandly told that States were having a look at it. As late as last week the Minister told me the Standards Association was working on a particular formula and we hoped we could get something done. Whether it be sunglasses or replacements for a motor mower, the cost of these things finally falls on the income group that we are talking about.
If we take it a little further we could ask: Why are so many people in heavy industry earning far less, even when overtime is taken into account, than a salesman, for example, who has use of a car provided by his firm? I do not begrudge the salesmen that privilege, but the fellow who works his heart out under dirty conditions to get the same rate of pay as another fellow in these better conditions is worse off because he does not get the fringe benefits. This could lead us to examine the various companies that Senator Webster talked about, but I come back to the argument advanced by Senator O’Byrne: The Government should see that taxpayers receive realistic gains. It is not much use their getting a 10 per cent reduction in income tax only to lose their savings in increased indirect taxation. Senator Webster talked about electoral strategy and things of that sort. The plain fact is that everybody, particularly those in the lower income group, was forced to contribute for higher medical benefits. Inevitably they will have to go into higher hospital benefits scales in the next 6 months. I will guarantee that by the end of this financial year these invisible increases will more than offset the tax reductions.
I have mentioned the man who has plumbing work done in his bathroom and the man who has to buy parts for his lawn mower. Assume that after doing his day’s work one of those men goes out for a game of golf. What an expense he faces if he loses two or three golf balls. He cannot buy repaints all the time. Sales tax should be lifted completely from all sporting goods, whether gym boots, squash racquets or golf balls. While we are talking about going into the Asian market with a lot of these products we are still slugging the Australian people who buy sporting goods.
Whatever the Government may have given the taxpayer by way of reduced income tax it has not worried very much about child endowment. If the Government increased child endowment instead of reducing income tax, more people would benefit.
– lt would be more beneficial.
– -I agree with Senator Lace/s logical interjection. The Government is giving with one hand and taking it back with the other. After all, we operate under a Federal system similar to those operating in the United States of America and Canada. When expressing his fears about the company structure, Senator Webster used the word ‘nationalisation’. There are constitutional limitations on any party seeking to engage in nationalisation. We have been very clear about our nationalisation policy ever since Mr Chifley was Prime Minister. Nobody is talking about nationalising the local soft drink firm, but effective curbs must be placed on monopolies. I have never known a big company to do anything for the workers unless a union has threatened an industrial stoppage or government inspectors have enforced safety regulations. Big companies never act voluntarily to improve the lot of the workers. I can assure Senator Webster that we want to protect Australian companies from unfair overseas competition. That is why we have objected to overseas companies taking over Australian companies. People who sit back and collect dividends on their investments are less entitled to reduced taxes than those who earn their living by the sweat of their brows or by their mental effort.
Companies can always adapt themselves to a changing set of circumstances. There is no question about that. This factor is highlighted by what has happened in the wine industry. Senator O’Byrne pointed out how retailers had increased the price of a bottle of wine out of all proportion to the excise. They are exploiting the public. When we of the Opposition have argued about bread and butter matters the Government has accused us of having a prewar outlook. I am well and truly in 1970. Whether the Government likes it or not, the public is being conned. Whereas previously people were paying 25c for a goblet of wine at restaurants in the Cahills chain in Sydney, they now pay up to 30c. I suppose this could be regarded as a free plug for Cahills Restaurants, but I do not think they will regard it as such because I believe they and other restaurants in Sydney are exploiting the public. Why does the Government permit people to increase wine charges by more than the excise levied? If the price of a goblet of wine is increased by 5c, only 2c of which represents excise, the middle man is making a handsome profit. I venture to suggest that the products of some of the firms that Senator Webster talked about would be in this category. They are allowed a certain flexibility in respect of prices. There is no prices control. 1 can imagine that at board meetings of these firms they are not worried about ethical considerations when increasing prices to cover increased taxation. They always go a bit further. This is so not only in Australia but also in other countries. Anybody who has read any of the books about Senator Bobby Kennedy when he was the United States AttorneyGeneral would be familiar with his battle with the Bethlehem steel company and some of the other big industrial giants in the United States. He was even concerned with the price of the humble commodity ice cream. In each instance the price rise sought was not equivalent to the amount of tax to be imposed by the Government; it was always a lot more. This is where ethics comes into ali of these situations.
If the Government had challenged my remarks in the Budget debate in relation to tax reductions and said: ‘Look, Senator, we will cite all the restaurant chains which profiteer on the excise on wine’, I would have said: ‘You cannot as our unfair trade practice structure is too weak.’ I do not think it is unusual for people to have a glass of wine with a meal. In doing so they are helping a very valuable industry, as Senator Young would agree if he were here.’ I am talking about a sense of fair play and the Government’s inability to grapple with this cancer in our society. It is on that theme that I have developed my arguments a lot further than did Senator O’Byrne. We of the Opposition believe that the Government could have done considerably more for the community if it had reduced sales tax, because people on different incomes have to pay the same price for a commodity. I think the Government could have done something there. Although the Government is feeding back to the taxpayers millions of dollars, I feel it would mean something in terms of real money if it could convince me that it will curb some of the profiteering activities of middle men.
I have sympathy with some of the arguments put up by Senator Young in relation to primary industries. By the time many of their products from South Australia reach Sydney and Melbourne a lot of intermediate groups have moved in and profiteered from the Government’s decision to impose excise duty on wine. This is one of- many reasons why we oppose this move. If we reduce the tax on an income of $10,000 we should take into account whether a man works 35 or 40 hours a week to earn that income. Perhaps another chap earns it by working on weekends or by working lengthy shifts. All of these things could be considered. I venture to suggest that somebody working on a construction job in New Guinea or in Western Australia - in these frontier atmospheres - expends greater effort for a given income than does a man in a luxury industry or one who works in an air conditioned office. 1 summarise the situation in this way: If in reducing income tax, the Government was able to provide an efficient federal agency to control the quality of household commodites, we might get value for our money. Look at the life of pots and pans and other kitchen utensils. When a stud wears out on an ordinary kitchen pot one finds that one cannot get another. One is forced to replace the whole pot. Household budgets are. increasingly affected in this way. 1 know a man who shopped around Sydney in an unsuccessful endeavour to get a new nozzle for a shower.
This kind of thing results in an invisible erosion of purchasing power. That is why the Opposition is sceptical of the Government’s claims. In order to meet this position the Government should create an effective agency such as George Nader had sei up in the United States of America. As a result of the activities of that agency excesses were publicised and the public were given some idea of how they had been milked. Everyone is concerned about this. People in receipt of incomes up to $10,000 a year would probably be in the process of buying their own homes and would have children going to school. They would have to buy footwear which would not last those children very long. A con sumer protection agency would give this legislation a much better cutting edge.
– In speaking on the Budget papers I expressed the view that I believed that the Prime Minister (Mr Gorton), in giving effect to promises he made prior to the House of Representatives election 12 months ago, and in response to the campaign carried out by many big unions for tax reduction on the lower and middle range of incomes, had exceeded what I would have expected in his taxation remissions. I expressed also the view that perhaps, had he not carried the 10 per cent reduction into a much higher bracket than I would classify as a middle class income section, he would have been in a much better position to have given the pensioners more than the Budget gave them. However, even though I held that view, I do not feel disposed to support this amendment because at this stage it would have little or no effect and could not have any effect, within reason anyway, in altering the budgetary position of the Commonwealth, lt would have nothing more than an embarrassing effect on the Government, which would be required to withdraw, in the circumstances, the provision for a reduction in taxation generally.
On at least 2 occasions, my Party has moved for the withdrawal of a budget in toto because it did not contain provision for an increase to pensioners and because it did not increase child endowment or contain many other things we thought it should have contained. But on these occasions when we have moved for the withdrawal of a budget because of those things, we were the only ones who supported the amendment, lt is one thing to ask for the withdrawal of a budget in toto; it is another thing merely to oppose revenue Bills and advocate additional expenditure. That attitude is an irresponsible one, because we all know that the Government of this country depends on its revenue from income tax, sales tax, customs and excise duty and company tax, in the main, plus income from miscellaneous fields. That being so, its expenditure must be measured by the income it has in hand. If we are merely to argue for and advocate increased expenditure under many headings and then go on opposing every means of raising revenue, what would be the result?
I repeat that to do that is irresponsible. It is not facing the facts. We have to be realistic and we have to act as responsible people when we come to the handling of finance.
– There was a natural increase of $800m without any alteration of tax rates.
– I am conscious of that, but ihe Government is giving away $228m in the balance of the financial year 1970-71 and $289m in a full year. That is a big reduction in the income of the Commonwealth, and to meet that reduction it is faced with 2 things: It has failed to meet the just claims of pensioners and others and has added to the indirect tax that has to be paid by the people. So when we are dealing wilh these financial Bills we must surely act responsibly. I deplored the miserable increase in allowances that the Budget provided for all pensioners. I deplored also the fact that there was no additional provision for the family man in the form of child endowment. As you know, Mr Deputy President, the Party which I am privileged to lead has been a strong advocate for generous payments under the heading of child endowment because we believe the family man is bearing a burden out of proportion to what he should be bearing today because of increased costs of living and because of the relatively poor position that he is in compared with his married fellow worker with no family or the single man.
We have the position in recent times of equal pay for the sexes. I am not contesting the justice of that principle, but a spinster could be working in a job side by side with a married man who has five or six children and they both receive the same income. No-one could tell me that there should not be a generous provision for that man for the maintenance of his wife and children. The only means that I can see of doing justice to him is under the heading of child endowment.
It is not my intention to delay the Senate by going over all those matters which were more or less dealt with in speeches made in the debate on the Budget.In dealing with these Bills we must have regard to both sides of the balance sheet. Perhaps honourable senators will forgive me for repeating the old saying that you cannot get more out of a pint pot than a pint. 1 believe that that is indisputably sound logic. If we are not satisfied with the Budget we have the privilege and right of asking for its withdrawal in toto. To my mind it is an unbalanced procedure to single out the revenue Bills for rejection and at the same time advocate greater expenditure.
– I had not intended to intervene at this stage, but I would like to point out that one of the main reasons why the Australian Labor Party sought to do exactly what Senator Gair has said - reject the Budget - was because we wanted to have an election based on the Budget. However, the Australian Democratic Labor Party has not supported us in that follow up action. We have opposed the enabling Bills which are designed to bring into the legislative programme the matters outlined previously by the Government. Up to now supporters of the DLP have been saying that if we were to stop the Government from gathering revenue through the Bills we would upset the budgetary position in an irresponsible way.
Senator Gair has just reminded us that you cannot get more out of a pint pot than a pint. We are not seeking to take anything out. The Government is seeking to take something out of the pint pot, because this Bill is to carry out more in toto than was promised as taxation concessions by the Prime’ Minister (Mr Gorton) during the last election campaign.I was at a loss for a while to understand why more is to be given tothe Australian taxpayers than the Prime Minister indicated. During the debate on the Budget I and several of my colleagues pointed out that one of the worst forms of promise is one made during the course of an election campaign. Such a promise gave rise to the F111 debacle and to debacles in other areas. In the parliamentary system today and in the whole field of government and big business, because of the fast moving economic times in which we live, it is not sufficient for a Government supporter simply to talk off the top of his head without proper research.
Obviously in the case of the F111, as well as the taxation concessions we are now debating, serious thought and proper research were not engaged in. That is why, when the Budget was introduced, there was provision for greater concessions to the Australian taxpayers than had been indicated by the Prime Minister. The reason was obvious. Very clearly Treasury had not been consulted at the time of the election campaign. An election promise was made without any research. When the Prime Minister gave instructions to the Taxation Branch of the Treasury to bring down the proposals he had referred to, the Branch was unable to do it in time. It is not possible to alter the whole of the taxation schedules in 5 minutes.
In. order to find a way out of the difficulty the Government has proposed a flat rate reduction of 10 per cent, a system which contains all the anomalies to which the Australian Labor Party is opposed. We have proposed that the legislation be withdrawn and redrafted so that the real promise made by the Prime Minister can be carried out. Only half of the promise is being carried out in this legislation. Some money is being given back to the Australian taxpayers, but the part of the Prime Minister’s political promise that the middle and lower income earners would be benefited is not being carried out. The middle income earners, and particularly the lower income earners, are to be worse off. The people who are to get the benefit are the upper middle income earners and higher income earners.
I cited figures supplied by Professor Brown of the Australian National University showing that about one person in 80 has annual taxable income of over $10,000. The people who are to get the greatest benefit of these taxation concessions are those with the highest incomes on the scale. People who do not pay any taxation will receive no direct taxation concessions and will be much worse off because of the swinging increases in indirect taxation. I remind honourable senators that there are people in the community who do not pay direct taxation. I refer, for example, to a person with a low income who has a period of a few weeks unemployment during the year. In that circumstance he might not be liable to pay income tax. The whole of this regressive system of taxation has been exposed and highlighted through the combination of a hasty deci sion made during an election campaign and a system of taxation which operates so that the people who are best off in the community will receive the greatest taxation concessions. People on low incomes will obtain no benefit and some will even be worse off. The Government has said quite honestly that if it gives a certain amount back in direct taxation concessions it has to find avenues through indirect taxation to regain those sums.
I do not want to go over all the arguments about indirect taxation that have been raised in the Senate in the last few weeks. The difference in our position from that of the Government on that score is not a proper subject for debate at this time. The fact is that the Government has sought to compensate itself through indirect taxation for the direct taxation concessions. Those taxpayers who are to receive a small concession through this measure will suffer through increases in indirect taxation. People on higher incomes will not suffer any more through indirect taxation but will get the greatest benefit from direct taxation concessions. For that reason we move that the legislation be withdrawn and redrafted.
I have no doubts that had this amelioration of taxation come about in the normal manner the Government would have done precisely what was in the mind of the Prime Minister when he made his election campaign promise. He said then that the lower and middle income earners would get the benefits. That result has not been achieved because the Prime Minister had not done his homework or proper research. His officers had to tell him that it was impossible to carry out his promise in the short space of time available. I. repeat that that is why the concessions to be granted through this measure exceed the amount that was suggested by the Prime Minister.
We have been over this ground before. I rose merely to point out the inconsistencies in the approach of the Democratic Labor Party and also point out that it would not cost the Government a penny more if it were to carry out our suggestions. It might even cost less, because it might be possible to get back to the figure originally suggested by the Prime Minister during the last election campaign. This measure will serve as a warning to the people of Australia to distrust promises made during election campaigns, lt is not possible to do business like that any more in Australia. Proper research is essential.
Had the promise of taxation concessions not been made as it was, the Taxation Branch would have bad an opportunity to introduce the concessions that the Prime Minister had in mind. We are now giving the Government an opportunity to carry out what was implicit in the Prime Minister’s promise in the first place; that is, when concessions are given to the Australian people, the burden should be borne by those people with the broadest backs. When something is given back, it should be given to the weaker section of the community, to the middle and low income earners. A thought should be spared for the people who do not pay any direct taxation. I support the amendment moved by Senator Wilkinson which is designed to give the Government an opportunity to recast these taxation proposals even at this late stage.
– Senator Willesee issued to us the useful warning that we must be careful of promises made during election campaigns. I hope that we will all bear that advice in mind during the next few weeks. Senator Gair reminded us very sensibly that we are involved in a responsible exercise in financing governmental activities. We are now dealing with a revenue raising part of the budgetary proposals designed to cover the expenditure proposals with which everybody seems to agree. Nobody ever seems to worry very greatly about the expenditure proposals, except to suggest that they should be increased, but there is always calamity when it comes to the point of looking at where you will get the money to meet the expenditure proposals. The Government cannot accept the amendment; it declines to do so. It was mentioned earlier in the debate) - quite some while ago now it seems - that we would be taking together the Income Tax Bil! 1970, to which Senator Wilkinson moved an amendment on behalf of the Australian Labor Party, and the Income Tax (Partnerships and Trusts) Bill 1970. Therefore, for the purpose of this exercise, we are dealing with them as if they were one.
Referring briefly to the second reading speech of the Leader of the Government in the Senate (Senator Sir Kenneth
Anderson) on behalf of the Treasurer (Mr Bury), I propose to recapitulate in order to get back to where we started on this a week ago. The Minister said in referring to the Income Tax Bill:
This Bill will declare the general rates of lax for the current financial year 1970-71.
This is a yearly action; it is done every year as part of the exercise of financial responsibility that a government takes upon itself at Budget time. The Minister continued:
The general rates of tax payable by individuals for the current financial year, as proposed in this Bill, will result in tax reductions - substantial in the lower and middle income ranges - for most taxpayers.
He went on to say that the Government has been concerned, and has said on earlier occasions that it has been concerned, about the way in which the graduated rate scale has operated in times of rising incomes. So to that extent the Government is honouring what it believes to be its obligation to rectify the situation. It has done so in the best manner possible. I have never known a situation in which tax rates were adjusted when everybody was satisfied. I suggest that it is quite impossible to achieve that. A government does the best it can within the limits of ils manoeuvrability - very often it is much more restricted than is imagined - and it does what it can to effect as much justice as it can. That is what the Government has tried to do on this occasion. The effect of some of these developments over the years has been to put on to the shoulders of personal income tax payers an increasing burden of taxation. One of the reasons for the reduction of personal income tax has been to alleviate this situation in some manner.
Briefly, some of the facts of the situation as it confronts the Australian people in this year 1970-71 might bear recapitulating. Also I go back over a 21-year period to 1949-50, because this is a long span of time. I have some middle distance figures also, but they are not necessary for this occasion. For the purpose of what we are talking about, in this period of 21 years the expenditure of the Commonwealth Government on behalf of the Australian people for a variety of reasons has become 7 times greater. It is now $7,882,708,000, which is an immense amount of money. Nearly $8,000m is spent. In that 21 years expenditure on defence has become 10 times greater although the total amount spent has risen by 7 times only. Payments to the States have become 11 times greater, although the overall expenditure has risen by 7 times. Various other items are involved, but in the broad a great lump of the money that the Commonwealth provides for expenditure is in the area of defence and payments to the States. It will be seen that in both these cases the rate of expenditure has gone up much more than has the rate of total expenditure. So to some extent this has a marked effect on the Commonwealth Budget. In that period, similarly the revenue of the Commonwealth has become 7 times greater.
I have chosen this span of time because 1949-50 and 1970-71 - 21 years apart - are both years of balanced Budgets and the figures are not, therefore, in any way inflated or deflated by deficits- or surpluses. They are relative figures.In that 21 years revenue has gone up by 7 times, but indirect taxation has gone up by 5 times and income tax by 8 times. This demonstrates how the burden of taxation in order to raise revenue to spend for various essential reasons for the Australian people has shifted through the years from indirect taxation to direct taxation. The Government, as honourable senators realise, is doing something now to set the levels of direct and indirect taxation in better balance. The amount of money that is raised by income tax, without any reference to indirect taxation, payroll tax or estate duty - income tax only - is in the order of 57½ per cent of the total Commonwealth revenue. To upset that level, to call for a review, to send the Bill back for change otto be altered would be to upset the fundamental balance of the Government’s Budget, on which it goes to the people and on which it governs responsibly. This could not be accepted. One other comment that one might make and one might note is that we have passed out of a period of fairly heavy deficit financing into situations of balanced Budgets so that we are in a situation of financial equilibrium and financial responsibility. The money that is being spent by governments is being raised by governments and we have not been going into debt in these last 2 years to finance expenditures above our income raising rates.
The explanatory memorandum which is circulated with the Bill gives some of the illustrations that t have been talking about - how the Income Tax Bill will operate, that the rates of taxation on individuals will be revised, reduced tax will be payable by individuals earning less than $32,000 a year, rates of tax on companies will be increased by 2i per cent and age allowances will be changed upwards to make the provision better. The second Bill, which is the Income Tax (Partnerships and Trusts) Bill, provides for special rates of tax payable by certain trusts and by partnerships. That is what can be described as the hard core of what we are talking about in this overall examination of the 2 Income Tax Bills. A great number of comments have been made in this debate by various speakers and they are entitled to have some answer to their comments. I apologise for taking longer than I might have needed to take, but 1 do so out of courtesy, to answer honourable senators.
Senator Wilkinson said that the thing we are looking at is the actual money reduction - not the percentage reduction. Senator Wilkinson said that progressive tax scale reviews have provided very little relief for those on low incomes. If we tried to ensure that the money reduction for everybody was no greater than that for the smallest income there would be little relief from the inflation of tax rates which has occurred since the scale was last revised. The inflation of rates is what we wish to moderate and the money values involved in that inflation of rates is greater on the larger incomes, but we have revised the rates of tax, not the incomes to which they apply. Taxation reform is the only thing that can do that. I mention in passing that I held the view long before I became a Minister that we in this country were involved in a substantial case for the examination of taxation as a total exercise, looking at how we should try to raise the revenue that we spend. There was therefore, I believed, some case for a review of methods of taxation. That is not the exercise in this debate; this would be an exercise for an extremely expert committee, sitting for a long time. I referred earlier to the change in indirect taxation and direct taxation. This is part of what we would need to be looking at.
The inescapable thing is that the public demands increasing services from governments and these have to be paid for. How are they to be paid for? Senator Wilkinson said that it takes more weeks of work to pay taxes now than it did in 1954-55. I think this would be expected as more benefits are paid out by governments now than was the case in those years. But in addition, the services that the Government has had to finance have grown greatly in that, period. The calls for funds from universities, for roads, health, social services, defence and assistance to industry have increased greatly, not only in total but also per head of population. In some cases, such as with health benefits, we are now paying people’s bills out of Government revenue. This all costs money and it is inevitable that the taxation per bead must rise with the expenditure per head that it has to finance. Again Senator Wilkinson, who was leading for the Opposition in this debate, mentioned that much revenue would be lost by allowing deductions for interest on convertible notes. This was the earlier part of the discussion that we had. Because of the terms and conditions that have to be met, convertible notes will not be a straight substitute for share capital, since the issuing company cannot be sure that the lender will exercise his option to convert. It is expected generally that convertible notes will be substituted for fixed interest borrowing so that there will be no effect on revenue in these cases. There will, of course, be some cost to revenue to the extent that convertible notes are substituted for shares but it is not expected that this will be of great magnitude. There is no basis on which an estimate of any cost could be made.
Senator McManus, in his discussion on this matter, was concerned about the level of taxation. He made a comment which is often made. I have heard it a lot myself. It runs something like this: Australia is the highest taxed country or one of the highest taxed countries. A strict examination of the total facts does not support that view. There are individual areas - the middle income group, so classified, is one of the areas - where Australia is amongst the highly taxed countries. However, taxation is to be taken as the total body of tax, income tax and indirect taxation - in effect, what is taken out of the pockets of the people. The only really valid analysis and comparison in this area is the total taxation per head of population as a percentage of the gross national product of a given country. These are the figures that I have been able to obtain and they are interesting: The figure for the United Kingdom is 36.3 per cent; for the United States of America it is 32.3 per cent; for Canada it is 30.9 per cent; and for Australia it is 25.4 per cent. I suggest that that is the proper level for examination and on that level we are amongst countries which are not included in the highest taxed countries. In fact we stand very well indeed. I think that is something which we ought to be able to state with more precision than perhaps it has been stated in some other areas in the past.
Senator McManus expressed concern at the use of Norfolk Island in schemes to avoid Australian income tax. The Government is well aware that attempts are being made to use Norfolk Island to avoid Australian tax. The Commissioner of Taxation is conducting a thorough examination of the arrangements involved and is pursuing the matter vigorously within the framework of our existing laws. It is not possible at this stage to indicate what course of action the Government might take in this matter. I. think ali honourable senators understand why one cannot indicate this. However one could refer honourable senators to a statement made by the Treasurer in answer to a question in the other place, that the Government would be concerned if it were possible for persons prepared to enter into such schemes to avoid tax by the simple expedient of creating what might be called paper companies on Norfolk Island.
The matter having been raised in this chamber, I want honourable senators to know that this question is being looked at and examined under the tax laws and the taxing ability of the Commonwealth in order to try to see to it that revenues are fairly provided and that people do not escape through loopholes. Traditionally throughout history the tax gatherer has had 2 problems. Firstly, he had no popularity and could not achieve it. Secondly, he had to make sure that those who should pay did pay and did [lOt avoid it. Clever people always have been able, by devices of one kind or another, to escape the obligation to pay for a period but not forever.
Senator McManus said that it would have been better to leave income tax rates as they were and to give much more relief to farmers and pensioners and so on. It is a long time since tax scales were changed - a very long time - and in that period the burden of income tax and its distribution has changed very markedly. It was considered that the changes and the distribution of the burden were causing serious inequities and that they had to be arrested and corrected. These corrections involved adjustments not merely for one or two years. In effect 16 years of change were being modernised or beginning to be modernised.
Senator McClelland was concerned that the shift to indirect taxation was inequitable. I understand his concern. It always will be a tremendous problem when society is expecting the revenue to provide a great number of services; where in effect it has a great expenditure pattern for various reasons such as defence, development of the country, social welfare - all these things which really call for a lot of money. When we get into that situation - as we are now - we reach the point where we cannot get our resources other than by entering into the indirect taxation field. Many people always feel that this is unfair to the family man and to people on low incomes. It does not have to be the case and it need not necessarily be the case.
Sitting suspended from 6 to 8 p.m.
Business of the Senate, Order of the Day No. 1, taking precedence at 8 p.m.
Motion (by Senator Cotton) agreed to:
That Business of the Senate, Order of the Day No. >, bo postponed until a later hour.
– 1 thank the Senate for its indulgence in deferring the matter standing in Senator Devitt’s name. Prior to the suspension of the sitting I had been replying to some of the matters raised by honourable senators. I shall now dispose of the remainder. Senator McClelland had said that he was concerned about the shift to indirect taxation and that that system of taxation was inequitable. I had made some comments on that earlier. Since 1954-55 income tax collections have grown much faster than has any other form of taxation and the different taxes have got out of balance. I think I mentioned that also in my remarks. The reduction in income tax and increases in other taxes were aimed at removing some of the imbalance and the inequities it had caused. The increases, which included an increase in company tax and indirect taxation will take much less in revenue than income tax reductions will give away. It is well to remember that the basic necessities are exempt from sales tax and that only 1 of the 3 rate classes of sales tax was increased.
Senator McClelland mentioned also that the more dependants a taxpayer has the less is his tax relief. Relief is not determined by the number of dependants but by taxable income, and it is only insofar as dependants’ allowances affect taxable income that they effect the relief. The purpose of the tax relief is merely to moderate the increase in tax rates which has occurred in the past. Taxation reforms do not reform the entire social services system; they have a different purpose altogether. Senator Keeffe claimed that the taxation system as such needs a total restructuring. Many of us have had the view for some time that the whole taxation system could well stand a critical examination by an expert committee. In his Budget Speech the Treasurer announced that now that we have honoured our promise to relieve the burden of income tax on the middle and lower income groups we shall be looking in more detail at other aspects of our taxation system.
Senator Webster was concerned that the increase in company tax was retrospective. The present system of taxing companies on the income of the preceding year at current rates has been in operation since the inception of Commonwealth income tax in 1915. In fact for nearly 30 years taxpayers were assessed on that basis but in 1944 individuals were placed on the pay as you earn syslem. Since company tax has been on this basis since 1913 it is well known to and understood by companies and their accountants that this is a possibility in any given year. The system provides a distinct advantage to companies in that, unlike the ordinary taxpayer, a company does not have to meet its tax in advance and therefore, in comparison with individuals, it has the equivalent of an interest free loan for that part of the time when its tax is not due.
Senator Webster was also concerned about retention allowances for private companies. The Government in the past has reviewed the level of retention allowances on several occasions and the allowance is now at the highest level ever. On incomes other than incomes from property the retention allowance is 50 per cent of the reduced distributable income to $10,000, 45 per cent from$10,000 to $20,000, and 40 per cent from$20,000 upwards. It needs to be remembered that although private companies are liable for additional tax if they do not make a sufficient distribution of profits, their rate of primary tax is lower than that for public companies, and with the retention allowance they can relate 50 per cent of their reduced distributable income and still pay less tax than does a public company at all levels of income.
I listened very carefully to the comments made by Senator O’Byrne and Senator Mulvihill. I. think that the points raised earlier in the debate by Senator Wilkinson, Senator McClelland and others were in much the same area of argument, and therefore 1 have sought to answer them in the essential points that I made to both Senator Wilkinson and Senator McClelland. I do not think 1 need add a great deal more to this debate. I have said what [ needed to say for my own part and I have given, in reply to the matters raised, the answers which apply to the view of the Treasury and also of the Taxation Office. lt still is a revenue producing exercise to cover expenditure that is being made on behalf of the Australian people. My feeling has always been that it was essentially wise on this occasion not to budget for a deficit and, equally, that to give tax concessions in the range in which they were given was to remove some of the inequalities of the past in the lower and middle income groups. Furthermore, one would hope that it would produce a greater incentive to save and to try to increase the prosperity of the country without which it is impossible to give either benefits in expenditures or, in the end, saving to the taxpayers in tax collections.
For the variety of reasons that I have given the Government, as honourable senators will readily realise, is unable to accept the amendment. The Government feels that the amendment does nothing, adds nothing, solves nothing. You cannot abdicate the responsibility in responsible government of raising the revenue that needs to be spent to satisfy demand. That is what this Government seeks to do and will do.
That the words proposed to bc left out (Senator Wilkinson’s amendment) be left out.
The Senate divided. (The President - Senator Sir Alister McMullin)
Majority . . . . 2
Question so resolved in the negative.
Original question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Consideration resumed from15 October (vide page 1 166), on motion by Senator Sir Kenneth Anderson:
That the Bill be now read a second time.
Question put. The Senate divided. (The President - Senator SirAlister McMullin)
Majority . . . . 2
Question so resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from 22 October (vide page 1412), on motion by Senator Devitt:
That the Land Rent (Interim Provisions) Ordinance 1970, as contained in Australian Capital Territory Ordinance No. 30 of 1970, and made under the Seat of Government (Administration) Act 1910-1965, be disallowed.
– When I spoke on this matter on Thursday of last week I gave the main outline of the reasons for the Australian Labor Party’s view that the Land Rent (Interim Provisions) Ordinance should be disallowed. The Ordinance will give the green light or the approval of the Senate to the introduction of anew system of land tenure in the Australian Capital Territory commencing on 1st January 1970.I expressed the view of the Labor Party that before this measure was implemented there ought to be a full and comprehensive inquiry into the whole system, not only to determine its merit or its superiority over the present system but to give to the residents of the community who, after all. are the ones who will be paying the price for this, an opportunity to express themselves on it - one of those things which come very rarely in the life of the people of the Australian Capital Territory. They should not be classed as inferior to the people in the rest of Australia who are given an opportunity invariably and frequently to express themselves on measures which come before theirlocal councils. This is in the nature of a measure which would be handled by a municipal authority.
I do not want to go back over that argument except to reiterate that we believe that the whole system ought to be inquired into. As I mentioned last Thursday, there came into my hands just before the commencement of the debate a document which bears on this subject, and I now want to refer very briefly to some of the observations which were made in it. Table A on page 4 gives a sequence of figures as to valuations of properties, premiums, land rent and the like. For the information of honourable senators I mention that the first item in the table relates to a residential block which was purchased in 1956, presumably for $800. The rent payable at the rate of 5 per cent, is $40. The person concerned is paying a total annual amount of $88 at the moment but under the new system he will be paying $150. That is a rise of $102, which represents, on the basis of the current unimproved value which is shown as $6,000, an increase of 700 per cent or more since the property was first purchased.In other words, there has been an increase of 50 per cent per annum in the value of the property, which is quite a substantial increase. When one takes into account the fact that the reassessments are made only every 20 years, is it any wonder that there is a complaint about the inadequacies of the system when at the end of that 20-year period somebody suddenly finds he is liable to a 400, 500 or 700 per cent increase oyer what they paid before, and in some cases substantially more?
– What would the residents of your local council area say about it?
– I think it is fairly common practice throughout Australia for reassessments to be made much more frequently than this. In local council areas in Tasmania, for instance, reassessments are made at 5-year intervals and this enables the whole system to be brought completely into relativity each 5 years. We could have, 1. suppose, in the Australian Capital Territory a system under which somebody bought a property in 1956 which was valued at say $800 and. paid the resultant land rent, sewerage and water charges, and under which the owner of a property right alongside, who bought 10 years later, pays two. three or four times as much. I do not know whether there are instances of this, but this is the sort of system which would allow that type of thing to happen. The second instance, concerns a residential property with an unimproved value now of $6,000. Incidently, I do not know what authority makes these valuations; perhaps the Minister for Civil Aviation (Senator Cotton), who represents the Minister for the Interior, will clarify that point in the course of his remarks. This property was purchased in 1968. The owner would have paid $162, but under the new system this will drop to $150.
The owner of a residential property now valued at $3,270, which apparently was originally bought for the equivalent of $375, currently pays $58 but under the new system will pay $96. Again, the owner of a residential property purchased in 1969 which has a current unimproved value of $3,300 and who is paying a total of $156 a year will, under the new system, drop to $96 a year, a drop of $60. The reason why I am giving these details is to demonstrate the inequalities of the system. I come now to the case of a garage purchased in 1951 and having a current valuation of $170,000. The owner currently pays $738 but under the new system he will pay $2,680, an increase of nearly $1,900. Then we come to the final illustration - a prop erty with a current unimproved value of $160,000. The total annual payment at the moment for land rent, rates, water, sewerage and so on is $9,934. but under the new system it will drop to $2,530. In other words, there will be a drop in the annual rate of $7,400. Can anybody tell me that a system that has operated in this community over the years in this way has had any basis of equality? I do not think for a moment that we will cure all the problems of this system merely by instituting, at the commencement of next year, some new system of rating. I do not think there is anything very much wrong with the system that was applied before apart from the inequality of reassessments at 20-year intervals.
I have posed the question: Who makes the assessment? Nobody seems to know that at the moment. I believe that there ought to be a complete reassessment right now of all property in the Australian Capital Territory, that all properties ought to be put on an equal footing, and that there should be frequent reassessments thereafter. What is the great virtue of bringing rates and charges here up to the level of those of other capitals? I suggest it shows a lack of knowlege aand understanding of the system here when it is believed that there is a similar basis for the payment of rates in the other capital cities. I suggest there is a very great difference between the rates which are paid in Sydney and those which are paid in Melbourne, and between the services which are provided in those two cities or, in many instances, the lack of them. And we do not want to see a lack of such services here. Why is it that under the present system the valuations, and therefore the commitment of the people each year, vary so much? These are the questions that I pose.
I believe that the Minister should answer the questions which have been posed and also should indicate clearly in his reply why the system to be instituted in the future is better than the one which is provided at the moment having regard to the need to institute a new administrative practice - in other words, a system based upon frequent reassessment whereby all citizens of the community would be placed on a reasonably equal footing. I will leave it at that and strongly suggest to the Senate that before any move is made to alter the present system there ought to be a thorough’ examination of the whole question and the people of Canberra ought at least to be given an opportunity to make some observations about this and have some say in a matter which requires them year by year to pay quite substantial amounts of money to the Commonwealth.
– I am very conscious of the fact that we are in our last week of the sitting. Perhaps not, but this is what is generally accepted as the popular view of those who claim to understand and from whom 1 draw my knowledge. If that is the case I am not at all anxious to hold up my colleagues with a long dissertation on this affair. But it is a little like the boomerang; when one throws it, it comes back the same distance. So I am in the situation now of having to give honourable senators a fairly long and considered reply from the Minister for the Interior (Mr Nixon) plus some additional notes which I hope will elucidate’ this matter for the benefit of the Senate. 1 deal firstly with the purpose of the interim ordinance. The ordinance now before the Senate provides that for leases sold at auction between September 1970 and the introduction of the new system only pro rata land rent, that is up to 31st December 1970, will be payable instead of the full first year’s rent as formerly. This relates back to the Prime Minister’s announcement on 13th May 1970 that as from January 1971 the payment of land rent would be abolished. The intent is that a system of reserve prices should be applied to land offered at auction to ensure that the Commonwealth recovers at that auction its outlay on developing and servicing land. It is believed that when this change is introduced it will be possible to begin to put the assessment and collection of rates in Canberra on to the same kind of footing met in all other capital cities in Australia. In short, the intention is to retain all the advantages of the leasehold system whilst putting Canberra’s finances on to a basis which both the people of Canberra and the people of Australia can comprehend. The intent of the interim ordinance is simply to assist people by reducing their immediate outlay on land rent, knowing that the whole system of charges is to be changed.
Basically the changes are intended to remove inequities inherent in the existing land rent system, and secondly to set up a situation in which Canberra’s municipal income and outgoings can be rationally presented, developed and administered. The proposals emanate from an inquiry into the inequity and anomalies of the present land rents and general rates systems by an interdepartmental committee, as recommended by the Joint Committee on the Australian Capital Territory in 1965. It is necessary to emphasise at the outset that there is no intention to interfere with the leasehold system of tenure.
There will be no weakening of planning and development controls built into the present leasehold system under the City Area Leases Ordinance, other related ordinances, the lease documents themselves and the administrative arrangements. The Government is very much aware of the relatively simple and secure control over the development, use and redevelopment of land which the leasehold system confers. If any underlining of the Government’s attitude were needed it is enough to refer to the recent announcement that an area of more than 20,000 acres of freehold land in the Australian Capital Territory is being acquired to accommodate the Government’s developing urban programme. When the freehold land has been acquired it will be brought into use under the leasehold system. 1 repeat that the leasehold system will be maintained.
What is the system in Canberra? All urban land is owned by the Commonwealth. Land is made available to the public for business, residential or other purposes as leasehold and planned land use is controlled with appropriate provisions in the leases granted. Covenants ensure that all land leased is developed for the desired purpose within a specified time. Town planning requirements are effectively achieved through the simple and economic mechanism of this system. These leases are subject to land rent at 5 per cent per annum of the unimproved value of the land. Leased blocks are revalued during each twentieth year of the lease and land rent is then adjusted according to the new valuation, again at 5 per cent per annum of that valuation. There are some special exceptions for churches, schools, charitable institutions, etc.
The landlord - in this case the Commonwealth - has the opportunity to demand a new rental consonant with the values of the land which have been built up by the use to which it. and adjacent lands are being put. The leasing out of lands is potentially a very profitable exercise as the Joint Committee on the Australian Capital Territory pointed out after its 1965 inquiry into the availability of residential land. The Government would not deny this. But it must be borne in mind that when one considers profits from leasehold in an entire city/Stale like Canberra one is talking about a profit taken largely from residential leaseholders. In any case the citizens have to pay indirectly for land rent and premiums charged for business leases. In i 969 out of a total of 23,076 leases then current, residential leases accounted for 21,266. Business leases totalled 1071 and other kinds of leases totalled 739, including churches and schools, rural leases, clubs and other special purposes.
There are special problems when one is dealing with people. Since the 1960s when the attractiveness of living in Canberra became more apparent it has become pretty much the norm for people to compete for land even at times when the supply was ample to meet demand. People coming info Canberra from other places have tended to overlook or discount the application of land rent and the covenants imposed and have bid for particular blocks, offering premiums which in some cases have been low but in others have been high, up to $10,000 for residential blocks, and which have been perhaps related to their experience with freehold land. Similarly since the 1960s there has been a rapid increase in the premiums offered for business sites. Having paid these premiums, leaseholders begin to look at their outgoings.
Generally I would think it fair to say that over the years public discussion in the Australian Capital Territory Advisory Council and elsewhere has indicated problems about the respective roles of land rent and rates, and has drawn to the situation where high premiums may be paid and then land rent has also to be paid each year subsequently, as well as rates. The discussion has in general stressed the need for anomalies in the land rent system to be ironed out. For example, in May 1967 amongst other recommendations the Council suggested to the Minister that the present method of applying land rentals based on periodic reappraisement of values should be abolished and that a new land rental system based on the total cost to the Commonwealth of resuming and developing each parcel of land be applied.
Under the present system the combined outgoings of land rent plus the municipal charges are not very different in total from the amounts people might expect to pay in a capital city. But if the municipal charges in Canberra are raised to levels comparable with those paid in other capital cities with comparable services, then the addition of land rents payable over and above such levels of municipal charges will constitute a burdensome total charge. If at the end of 20 years the value of the land is reappraised and in addition to realistic levels of municipal charges a new land rent of 5 per cent of the new higher unimproved value is charged the burden can become intolerable. Residential blocks can on reappraisal be increased in value very steeply for rental purposes, for example as much as 16-fold.
A further problem about the land disposal system arises from the fact that leases are offered at different times: thai is. progressively over the years. Values change as the years go by, and as Canberra has rapidly expanded there are mote and more anomalies becoming obvious. For example a lease taken up 10 years ago might then have had an unimproved value of $500, to produce a land rent of §25. A block clown the street of no more than comparable quality may have been sold 2 years ago and at that time might have attracted a valuation of $5,000, requiring a land rent of $250 per year. This kind of anomaly multiplies itself over various parts of the city.
The same sort of anomaly is found often to a greater degree in business sites. It might be argued that businesses can look after themselves and afford to pay. But the hard fact is that any business enterprise is so organised that the consumer ultimately meets the charges. There are situations in Canberra where business sites leased 10 years ago will enjoy for the next 10 years an extraordinarily low rental. Other businesses established close by, perhaps even in the same street, only within the last 2 or 3 years, pay a much higher rental because of the higher valuation then obtaining. Businesses both big and small, both successful and marginal, running towards the end of the 20-year lease are uncertain about the demands to be made on them but they have every reason to expect that they will be very substantial.
Let me give a few practical examples. A residential lessee who paid $10,000 premium has an annual commitment of $147 for land rent and another who paid $50 premium pays $40 land rent. In the first case the first lessee currently pays $35 per annum for rates and the second only $10. An office site for which a premium of $480,000 was paid has annual charges of $22,500 for land rem and $1,603 for rates. For another comparable office site auctioned at an earlier dale a premium of $400,000 was paid but it has an annual charge of $6,250 for land rent and $1,495 for rates. A business site reappraised in 1965 has annual outgoings of §3,200 for land rent, and $766 for rates, while a similar site which has not been reappraised has annual outgoings of $60 for land rent and $642 for rates. There are anomalies between the old residential suburbs and the new suburbs. Given 2 comparable residential blocks in Griffith and Pearce the former has a total annual payment of $74 under the present system and the latter total payments of $162. Given 2 other comparable blocks, one in Griffith and the other in another new suburb, Higgins, the former has a total Outgoing of $58 and the latter $156 per annum. Again a residential block in Barton has outgoings of S69 at present and a comparable residential block in the outer suburb of Pearce has outgoings of $164.
Some 100 residential leases remain to be reappraised in this year 1970. The rent of 1 block in Ainslie is expected to jump from $8 per annum to $74 and a $45 rent in Forrest could be expected to jump to $300. A present rent of $42 in Deakin and $30 in Red Hill could jump to $217 and $354 respectively. If municipal charges then payable were also put on to a realistic basis the to: al outgoings from the Red Hill block would be nearer $500. There are some 30 business leases still due for reappraisal in 1970. Two industrial leases now paying $60 per annum rent could be expected to rise to $8,500 and $8,S00 respectively and 2 industrial blocks in Braddon jointly paying $130 land rent could expect to rise to $18,750. And again I remind you that this is money which goes into consolidated revenue and is not expected to contribute towards the cost of municipal services. The inequities and anomalies in the present system will grow as Canberra grows. Because of the steep rise in valuation since the early 1960*s lease values have been pegged at 1962 values but it is unworkable to keep that peg in indefinitely. Once the peg is removed and reality prevails the growing burden of land rent must fall on the community in very unequal amounts as between different landholders. In addition to the 130 or so leases still to be reappraised in 1970 some 200 to 300 will fall due for reappraisement in 1971 giving urgency to the need for change. The present reappraisal period when applied io residential leases very often means that reappraised values strike home at about the time many people are retiring on to fixed incomes.
What does the Government’s proposal amount to? There are upwards of 28,000 leases current now. Canberra’s potential growth is open-ended and it is reasonable to look to a time of 150.000 or 200,000 leases, it is reasonable to move as far as one can move in a national capital to put the city on to a rational basis of municipal charges. The basic proposition is that land should still bc disposed of under leasehold through the auction system but that a minimum reserve price should bc applied to each residential and business block. Thus the Government would get back as quickly as possible its outlay on the provision of land plus such premium as might be developed in competitive bidding for particular sites. The Government proposes that a peppercorn rental, of 5c per annum, should be paid as and when demanded. For residential blocks the basic technique will be as follows. The costs of developing residential land will be determined from actual contract prices over a moving group of the last 6 suburbs developed. The cost will include land acquisition, rural lease withdrawals, neighbourhood roads, kerbs, gutters and stormwater drains, footpaths and entrance drives, street signs and landscaping, water and sewerage reticulation - but excluding headworks and the mains between them and particular suburbs - design, supervision and testing and town planning and surveys. The actual cost of developing this land will be divided by the number of revenue producing acres included in the municipal land area to give an average cost per acre and a formula will be used to obtain a range of reserve prices over a particular area reflecting the quality ‘of the land and equitably sharing out the development costs. This reserve price will recoup the cost of putting in the services and developing the blocks.
The application of the reserve price system to blocks selected at random and sold between September 1969 and May 1970 indicates the following pattern. A block in Scullin under the. new system would have a reserve price $1,476 but it was sold last year for a premium of $1,000. Another in Macquarie would have a reserve of $1,764 but the premium fetched was $2,100.
– Is that additional to the reserve price?
– Yes, I imagine so. lt is the total sum involved. A block in Weston which would have a reserve of $2,952 brought a premium of only $700. A block in Aranda which would have had a reserve of $2,952 fetched a premium of $6,000. Three blocks in Farrer which would have had reserve prices respectively of $5,220, and $4,680 fetched premiums of $2,500, $7,700 and $8,800. Since the auction system will continue to apply, premiums will still be payable above the reserve prices if bidders offer them in competition with one another.
The present system of offering some residential land at restricted auctions will continue. Under this system only persons who have not owned land in Canberra for a specified period are eligible to bid and the intention is to create circumstances in which competition is less keen and land is cheaper. The reserve price system will apply at restricted auctions. However bidding will start at whatever level the bidders fix above one-quarter of the reserve price. If a bidder obtains a block at less than the reserve price, he will be given the opportunity to pay the difference between his successful bid and the reserve price on terms. If the reserve price is $2,000 and the successful bid is $1,000 the difference can be paid off over a period. On the other hand, if a bidder offers more than the reserve price, that is, if his successful bid includes a premium, he will be required to pay the whole amount in cash. As to business sites the Government would propose that these be auctioned freely as now to the highest bidder. The opening bid will be required to be 75 per cent of the rating value of the block as assessed at the time of offer.
At present provision is made for special treatment of applications for leases from schools, charities, home for handicapped children and the like. Special arrangements are also made to make available land at very low cost to churches, clubs and similar institutions. Special arrangements will apply. The Government proposes to continue to act as the sole developer, offering land under the leasehold system at not less than the cost of development and, except in special cases, offering it at auction. The present tight controls on change of purpose of leases will be maintained. Firstly, the Minister can bar any change on planning grounds. Secondly, if the Minister does not object the change must be approved in the Supreme Court. Additionally, under the new arrangement on change of purposes a premium of 50 per cent of the difference in valuation between the old and new purpose, less $1,500 will be payable, lt is an important aspect of the proposed new system that with the removal of land rents rates charged will he increased to realistic levels. With the changed system coming into effect from 1st January 1971 the revenue from rates and other charges in 1971 will approximate in total the same level of revenue as would have been obtained under the present system from land rent plus rates and other charges.
To sum up. the changes proposed will put the system of land charges in Canberra on a rational and normal basis, and will create a situation in which the people of Canberra will pay not less than the actual cost of development for lands they lease. They will make it possible to develop a municipal accounting system which is based on a proper and full statement of expenses and the assessment and collection of rates at realistic levels, whilst removing a growing incidence of anomalies and inequities. The interim Ordinance relives persons purchasing land at the September and November 1970 auction sales of the obligation to pay a full year’s land rent when rent for only part of a year, that is, up to 31st December 1970, will actually be payable.
That is the end of the Minister’s speech. Last week Senator Devitt asked some questions and in the interim some answers have been prepared. Senator Devitt said: ‘Do not dismantle the system.’ Nothing is being dismantled. Realistic rates are to be substituted for land rent to clear up once and for all any doubt that the people of Canberra pay the development price for the land they use. Senator Devitt said that young purchasers were disadvantaged. The Department and the Minister have provided the answer that young purchasers can still buy land on terms at special restricted auctions. Bidding at specially arranged restricted auctions will be limited to persons who bave not held leases in Canberra in the last 9 years. Bidding will open at 25 per cent of the reserve price. The buyer will pay in cash the amount of his successful bid and any shortfall between that bid and the reserve price can be paid off over 31. years with a minimum annual repayment of $50. Interest will be that applied to Commonwealth Bank loans to building societies. This will not be a mortgage against the lease.
Senator Devitt said that people will pay more through rates to maintain high standards of service. The Minister replies: They will pay a realistic rate. However, in the assessment of municipal costs it can be expected that national and territorial features will be excluded. People will pay for what they get, but even here, in some cases some continuing Commonwealth subsidy can be expected.
Senator Devitt said that the College of Advanced Education is running a special course of study for land administrators in order to make the system work. The Minister replies: This is nonsense. No such conversion courses are being conducted. Officers are studying in the regular way a wide range of subjects.
Senator Devitt said then that town planners are horrified at the change. The Minister and the Department says: Town planners are reading too much into reducing land rent to a peppercorn. They have assumed wrongly that leasing and the controls in leases will be abandoned. They will not be abandoned.
– Whose assessment is that?
– Perhaps Senator Devitt might let me give the Minister’s reply, because it is to be assumed that the Minister knows a little about this matter, and that the Department equally can be regarded as knowing something about it. Senator Devitt said that land rent should not be abolished. The Minister replies: lt will not be abolished, but land rent will be reduced to 5c per annum if and when demanded. The principle of land rent will be retained.
Then Senator Devitt said that the present 20-year revaluations for land rent should be reduced to some lesser period - say 3 years. The Minister replies: Revaluation over a lesser period than 20 years reduces the shock of land rent reappraisals but still leaves the basic problem of progressive increases in rent. Further, even over a short period anomalies and inequities would occur.
Senator Devitt said that a new system has not been worked out. The Minister and the Department reply: lt has been worked out, but its implementation has involved the revaluation of some 30,000 properties - a task now almost complete. Premature announcement of the details could well give financial advantage to some members of the community.
Senator Devitt also said that the Government is moving towards freehold at a time when many people, including Mr Justice Else Mitchell, seek conversion of all Australian freehold to leasehold. The answer of the Department and the Minister is: The new system is not inconsistent with Mr Justice Else Mitchell’s proposals. The tenure of Canberra’s land will be held firmly in leasehold with full retention of all the planning and development advantages of leasehold.
Senator Devitt said that he has letters from societies favouring land rent. The Department says: Most of the suggestions come from groups outside the Australian Capital Territory who can cheerfully advocate land payments without themselves bearing any of the costs or living under the disadvantages. The academic argument for land rents accruing to the Commonwealth are overwhelmed by the real difficulties in making the system work.
Senator Devitt offered the comment that the change is a consequence of the High Court judgment in the Esmonds Motors Case. For the information of honourable senators, Esmonds Motors is a local Holden dealer. It used a block in the city for 20 years at a land rent of $155 per annum. It was reappraised some 2 years ago and the consequent land rent was $20,000. It appealed unsuccessfully to the Supreme court and successfully to the High Court, not against the quantum of land rent but against the method of reappraisement. The answer of the Minister and the Department is: The Government’s decision to change the system of land charging in the Australian Capital Territory was made after an exhaustive 2 years study by the departments concerned. The High Court’s judgment in the Esmonds Motors case in no way influenced the Government’s decision.
Senator Devitt said that Joint Committee on the Australian Capital Territory recommended that the Government acquire land necessary for future control and development in the Australian Capital Territory. The Minister’ replies: The Government recently announced that it is acquiring some 22,000 acres of freehold to the south of Canberra for the purpose of future urban expansion. Surely this is proof positive that the Government has no intention to change the present system of planning, construction and control under the leasehold system.
Senator Devitt also said that he believed there ought to- be an inquiry into the question of land tenure, administration, planning and development in the Australian Capital Territory. There have been exhaustive inquiries by the Joint Committee on the Australian Capital Territory into the supply of leasehold land and the administration of freehold land. The present proposal stems from a departmental inquiry set up on the recommendation of the Joint Committee on the Australian Capital Territory. Any further inquiry by committees must delay substantially the introduction of changes, and in the meantime the burden of revaluation and new rentals and rent from new leases will fall on increasing numbers of leaseholds.
This evening Senator Devitt asked how land values are determined in Canberra.
Land values in Canberra are determined by the Minister for the Interior who is advised by professional valuers of the Department of the Interior. All valuations determined by the Minister are subject to appeal to (a) the Minister; (b) an independent valuation review board; and (c) the Supreme Court of the Australian Capital Territory.
Finally Senator Devitt asked why there are differences in valuation. This is simply because leases are taken out at various times. Values are established at the time of offer of the lease. Over time, values in all areas are rising.
I point out to honourable senators that I am not an expert in the land problems and development problems in the Australian Capital Territory, but having read out what the Minister had to say in his statement and also his answers to the questions raised by .Senator Devitt, it seems to me that Senator Devitt has not made out any case at all.
– The matter which is before the Senate is one of a succession of matters in relation to the Australian Capital Territory which periodically come before this chamber and occupy its attention. The fact that it is before the chamber highlights the strangely dual character of this Parliament as the governing body for the nation and as the landlord in the Australian Capital Territory, just as it highlights the dual position of the Australian Capital Territory itself as a community of people striving towards the elements of a normal municipality and at the same time being required to assume the character of residents in the national capital. Therefore, there is always a certain aura of unreality in relation to this strange dichotomy between the dual characters of the Australian Capital Territory.
This is possibly one of the most significant matters that has come before this Parliament in relation to the Territory for some time. Recently we have had before us other matters concerning the more or less day to day operations of the people in the Territory and the imposition of a particular impost by way of charges or taxation. But this is one that is somewhat fundamental in its character and therefore it is one that should occupy the attention of the Senate and of the Parliament with some concern. The Senate is a body which is so equipped that it may, if it sees fit, disallow this ordinance which is now before the Senate subject to disallowance in terms of the statutes. I am indebted to the Minister for Civil Aviation (Senator Cotton) and to the Minister whom he represents in this chamber, the Minister for the Interior (Mr Nixon), for the comprehensive statements which have been circulated by that Minister detailing the implications of this most important step.
Senator Devitt has presented this matter not in any political partisan manner - I think it is a matter that should not be approached in any partisan way. After all, the national capital is a matter of common concern, divorced from party politics. As 1 say, the only partisanship would lie between those who see its progress towards the normality of a municipality at one rate and those who may still see that it must get particular solicitude because of the duality of its existence and its character. That, if anything, is the only partisanship that I think at any lime projects into this chamber in relation to matters concerning the national capital.
The fact that this is a bi-partisan approach is exemplified by the fact that what we are asked to do tonight stems in part from a consideration and recommendation of a committee back in 1965, which was an all-party committee, lt was constituted of members of the major parties in the Parliament at that stage, and one of the members of it was the now lamented member for the Australian Capital Territory Mr Jim Fraser. The committee came to unanimous conclusions, one of which was that there should be a relook at the question of the relationship between rents, charges and rates and also that an interdepartmental committee should investigate the whole question of rentals. In 1967 there was some ministerial intervention in this field, and then the Government turned its attention, through this interdepartmental committee, to the consideration of the whole question, and the proposal now before the Senate emerges in terms substantially of the recommendation of the committee that the matter should receive closer and more deep and penetrating study.
In the national capital it has been a matter of concern that land should become reasonably available and always at a reasonable price, and without the undue and unfair burden of excessive charges. But certain things have developed in the capital. Because of its strange position there has been a tremendous increase in population - possibly greater than that in any part or city of Australia. There has been a concentration of development here on the initiative of the Government - of the landlord - because of the development of the capital and the transfer of government departments. All of these things have resulted in an accelerated rate of development for Canberra which has brought attendant problems of very great magnitude. Today we are looking at the consequences of these problems.
When land was taken up here in the earlier days - 10, 15 or 20 years ago - under the leasehold system, the desire to come to Canberra was, of course, more limited. There was not so much excitement in being here. The land values were low and one rather hoped that this position would be maintained. But the contrary has been the case and with the interest in coming to Canberra, with the stimulated development, the stimulated residential development because of the compulsory transfer of whole government departments, there has been an enormous increase in land values, an enormous increase iu laud demand and a tremendous increase in population. Today we find that, by the telescoping of lime, people who came here a few years ago have all the attendant advantages of values determined in those earlier days, when the present position was not contemplated, and of rentals which could not be visualised today as being real. But because so many people did come later on, whether of their own initiative or virtually compulsorily because of transfer, they fell into the common problem of having to discover land and having to discover it in the context of the new and expanded Canberra. Today, therefore, there is this extreme dichotomy of young people and the newer residents paying high prices and high rentals for land, and older residents, with perhaps more valuable land on which a very low initial premium was paid, paying very low rental while their land is not subject, even at this stage, for any further reappraisal for probably up to 10 years. This is a situation that in common sense, In equity and in good economics could not be allowed to continue.
As I have said, there is this conflict between those who want to accelerate the rate of progress of Canberra towards the normality of a city municipality - and we have had contests in this chamber where it has been put that the people of Canberra should accept their fair charges consonant with the services they share in common with those who live in other parts of Australia - and those who, on the other hand, say that the residents of Canberra would be required to pay for services much greater and much beyond what could reasonably be required or would be provided in any other municipality; that it would not be fair to burden the people of Canberra with charges that should be, at least partially, borne by the nation in respect of its national capital. That is, in brief, the problem that faces anybody trying to approach this question of land tenure.
We of the Austraiian Democratic Labor Party have always been conscious of the position of Canberra and of the need to see it advanced towards a condition of normality - that is, of normality in the economic, in the social and in the municipal sense. It would give a new self-reliance to the people of Canberra, but we have always argued that, insofar as charges are imposed upon the Australian Capital Territory consonant with those in other parts of Australia, it is not possible justly to do that if the people of Canberra are to be deprived of those liberties which are attached to municipal organisations elsewhere in Australia. If there are to be assumed responsibilities, corresponding entitlements must be granted to the people concerned. Therefore, insofar as the Democratic Labor Party has always supported the contention that reasonable charges should be borne by the people of the Australian Capital Territory, we have pressed accordingly for corresponding freedoms and liberties in the domestic, municipal and even Federal government areas. We feel that that ultimately will not only give the Canberra people what we regard as their entitlements but also will bestow upon Canberra a new character which, up to this time, has been denied to it because of the necessary circumscriptions that have surrounded its people and its development. In these circumstances our attitude to this motion for disallowance is not to support the motion because, having analysed the position as carefully as we can - and it is an analysis made in quite a technical field - we do not see the dangers inherent in this ordinance that those who have propounded the motion for disallowance are able to visualise.
In the first place we consider that the retention of the leasehold system is highly desirable. But there is nothing in this ordinance which would preclude the complete retention of that which has gone on. While we are debating the substance of the effect of this measure - that is, the ultimate implication of any change from the present method of charging for lease rentals - it is only an interim ordinance. But nevertheless we are discussing its ultimate implications. Those implications, stated by the Minister and obvious from the terms of the ordinance, do nothing to derogate from the principle of leasehold land. It has been suggested to me that the reduction of the lease rentals from what might be called the substantive rental of say 5 per cent to a nominal rental of 5c or even a peppercorn, in some way will have the effect of eroding the very character of the lease until it will trespass so closely upon the freehold tenure that it will disappear and there will be a complete identification. Those who would propound that proposition may be unacquainted with the fact that the nature of the tenure has nothing to do with the level of the rental. Freehold and leasehold are 2 different tenures of land and the fact that the rental on leasehold may be nominal - may be 5c, 50c or the traditional peppercorn - does nothing, as far as I can perceive, to affect the actual character of the tenure.
The Minister, of course, has drawn attention to this and has said that there is no intention whatsoever of abandoning or eroding the system of leasehold tenure. What it is proposed to do is to make the upset value price of a developmental piece of land realistic in terms of its cost and realistic in the fair charge that might be made to those initially purchasing the land. The Minister gave instances where land, the reserve price of which was to be assessed on the principles which are now predicated by the Minister, would be lower [than the prices which are actually being paid. We would be concerned if young people, who are attempting to secure land here, should be precluded from doing so by unduly high reserve prices. The Minister has pointed out that a formula has been discovered, a mechanism devised, which will be applied so that young people who have not held land here before - and the young people would be those least likely to have held land before - will be able to bid and if they are not able to find money equal to the reserve price the difference between that and the reserve price can be paid over a period of many years at a rather low rate of interest
– Over some years, not many years.
– Over quite a considerable period of years, and therefore the availability of land wm not be denied to them. If it were otherwise T think it would be a very serious intrusion upon the legitimate aspirations of young people. We have the extraordinary position in the Australian Capital Territory that there are very wealthy organisations holding land, and have held it for some years, which is not due for reappraisal for many years and paying correspondingly relatively low lease rentals while there are people with far less valuable land more recently acquired who are paying extraordinarily high rentals on the present market value of the land - the assessed value of the land. That is the extraordinary dichotomy and something that I believe must be operating as a grave injustice against many residents of the Australian Capital Territory. As this present programme proceeds from the recommendations of a joint committee, which included gentlemen who are intensely identified with Canberra and its welfare, which has taken some years to complete its investigations and which has examined land sales trends in the area and assessed the future development of Canberra in terms of population and services, we feel that the Parliament is now in a position to look at this matter with considerable objectivity and apaproach the motion for disallowance accordingly.
One thing that concerns me is the striking of the rate, which will be a compound of the former ren’al and what one might call the proposed municipal charge. Because of the strange dual character of Canberra the rate that should fairly be struck should have no relation to the total level of services provided in the Australian Capital Territory. We who come from other parts of Australia cannot help noticing that the standard of the services provided here for the aesthetic and functional development of the Capital is much higher in proportion than that which is offering in other capital cities. Australians today do not begrudge the spending of money to produce that result.
– Are you speaking for Queensland?
– J think that the Australian people are becoming quite proud today of the Australian Capital Territory. Every day more and more people are resorting here by the bus loads.
– lt is a pilgrimage to the national capital.
– Yes. Bus loads of senior classes from the schools are coming here. Perhaps 2 or 3 busloads come down from schools in the Brisbane metropolitan area and further north at least every session. I notice that the halls are always crowded with young people from all over Australia. Today I do not hear the criticism that once I heard, that money was being lavished on the national capital to the exclusion of other parts of Australia. Now that the opportunities for travel have been expanded and the facilities for travel and accommodation are here, and as Australians become more mobile, more people come here. They enjoy coming here and they are proud of the national capital. That is not any commendation for undue extravagance in the national capital, but I think we must recognise as we grow up to maturity that the level of expenditure here has a justification that might be denied to other parts of Australia.
As I say, it cannot be expected that the citizens of Canberra should be prepared to assume an undue burden for this, as if it were a normal municipal obligation. I do not think that the Government will expect that to be done. The compounded charge of rent and rate must be one that is fairly related to the services provided. I notice that the Minister has said it will be such a charge as will have a relevance to similar charges imposed in other capital cities of Australia.
– Which it has not at the moment; that is the important thing.
– That is true
– Equally to the exclusion of things of a national character in the national capital.
– That is comforting, and I would have presumed that was so. In some cases perhaps it will impose an additional burden. In most cases it will not. Bui at least it will give Canberra a rating with other parts of Australia and a relationship which is desirable to the other capital cities. For these reasons the Democratic Labor Party feels that this proposal was absolutely necessary in the light of the extraordinary development of Canberra and the attendant problems which otherwise would have been almost beyond resolution. Various compelling points were made by the Minister, one of which was that as some of the older leases come up for reappraisal the leap forward in valuation will be so great that it will be beyond the capacity of the present lessees to accommodate the new rental related to the new estimated value of the land. Many of these people will possibly have to face a reappraisal at a time when they are on the verge of retirement and when there would be no alternative left to them but to dispose of their property.
For these reasons, and without unduly prolonging this debate, 1 would say that the Democratic Labor Party cannot find its way clear to support the motion for disallowance moved by Senator Devitt. 1 know that Senator Devitt’s motion is inspired by a desire to retain the leasehold system. 1 can sec no threat to that. The honourable senator, on behalf of his Party, is presenting the motion because he feels that there are inherent dangers which we should try to avoid. If my Party thought that that proposition had validity we would find it in our hearts to support the proposition. But we cannot find that. We find that something like this proposal is necessary. It will be equitable. It will confer on Canberra a position which should ultimately be conferred on it. As these changes take place, ultimately Canberra will assume a position of greater and greater autonomy in the whole spectrum of Australian municipal and national life. For those reasons the Democratic Labor Party does not support the motion for disallowance moved by Senator Devitt.
Ordinance 1970, as contained in the Australian Capital Territory Ordinance No. 30 of 1970, should be disallowed. As I understand Senator Devitt’s argument, what he was urging was that this ordinance ought to be disallowed because it is the precursor of a system which he thinks would be disadvantageous for the future of Canberra. 1 think I should stress that the ordinance which is the subject of the disallowance motion is in a sense a formal or procedural ordinance which makes certain necessary changes before the. ultimate and substantive change from a land rent system to a general rate system is introduced in the new year. I think that was made clear in the explanatory note which was circulated to all honourable senators at the time when this ordinance was promulgated.That memorandum stated:
The Prime Minister announced on 1 3th May 1970 that land rent will nol be levied in the Australian Capital Territory from 1st January 1*>7I.
Consequently, it was decided that successful bidders al the land auctions in September and November of this year should not be required to pay the full year’s land rent in advance as is at present provided for tinder the City Area Leases Ordinance t936-69
The proposed Ordinance will provide that persons obtaining leases will be required to pay only the portion of the land rent applicable from the date of the grant of the lease to 31st December 1970.
All that this ordinance does is to introduce a requirement that the land rent which is payable by persons who purchase blocks of land in the Australian Capital Territory will be proportionate to the period of the year up until 31st December of this year for which they hold the land. Of course that requires an explanation. Persons who buy land in the Australian Capital Territory are required to pay an annual land rent which is fixed at 5 per cent of the unimproved capital value of that land or, if they happen to be persons who have held the land for a long time, 5 per cent of the revalued or reappraised land value.
– Does it have to be 5 per cent? Does it have to stick on this figure of 5 per cent?
– My recollection is that the ordinance says that it shall not be more than S per cent. Lt may be that it actually says that it shall be 5 per cent. In response to what Senator Devitt says, all I should say is that it cannot be more than 5 per cent.
– lt could be less.
– lt could be less, I suppose, if my assumption is correct. Before elaborating on the reasons for this change ( would say that I agree with Senator Devitt on one point. That is that this is the occasion when the Senate, as the parliamentary institution responsible for the ordinances and the laws which prevail in Canberra, can express an opinion and pass a judgment on what the Government proposes as best for the development of Canberra. Although this measure is in its substance related only to the establishment of a pro rata land rent for Canberra for the balance of this year. I think it Ls a useful vehicle for the discussion of the broad principles which are involved in the changeover announced by the Prime Minister in May of this year.
I do not think it is without significance that Senator Devitt, at some length and with some enthusiasm and undoubted sincerity, proposed the motion for the disallowance of this ordinance, but he has not had support from any member of his Party, I think that that shows the real interest which members of the Australian Labor Party have in the affairs of the Australian Capital Territory. I do not in any way impugn Senator Devitt’s sincerity or doubt that he has given much study to the motion that he moved, but I think he speaks as a singular representative of a party which is not prepared to put up another speaker to support him. Whilst I have been speaking I have heard Senator Devitt seeking by interjection to assert that his Party supports the motion. As he has asserted it, I can suppose that he has persuaded his Party. That is merely a tribute to his advocacy rather than an acknowledgement of enthusiasm by his Party for the motion. I say that because we on our side have heard similar suggestions thrown at us on countless occasions and it is very useful to be able to throw this argument back at honourable senators opposite on an occasion such as this.
What did the Prime Minister say in May of this year? He said it during a bi-election campaign to elect a representative of the Australian Capital Territory to the Australian Parliament. Whilst the Liberal Party does nol seem to command a great deal of support in the Australian Capital Territory, that I suppose is one of the anomalies of democracy because Canberra, as the city which it has become, has been developed under more than 20 years of successive Liberal-Country Party governments. Whatever standing the Australian Capital Territory has in the eves of Australians at large today is a tribute to the personal interest that Sir Robert Menzies took in this city and to the continuing activity on the part of Australian governments in the development of a proper Capital Territory. If the inhabitants of the Australian Capital Territory do not want to acknowledge what has been done by Liberal-Country Party governments and if they wish to persist in saying that Australia would be governed better by an Australian Labor Party government, I - and I think I am a fair democrat– am prepared to acknowledge their right to say so. But I think it is fitting from time to time to point out to the people of the Australian Capital Territory certain facts because they owe all that they have received to Liberal Parly governments. What did the Prime Minister say? In the course of his by-election campaign he said:
What hus worried me for quite a considerable time while I have lived here . . .
Of course he is and has been for a long time a Canberra resident. He continued: . has been the system of land rents which have been in operation in Canberra. As you know, when people buy a block of land, they may pay a premium for it or they buy at less than the cost of developing it, but there is a value put upon it and a land rate of 5 per cent charged on that land as well as rates. This is not, initially, bad, but at the end of 20 years, there is a revaluation and people have been finding that their land rents as a result of that revaluation have been going up 4, 5, 6 or 7 times. Now there are many people who having saved to buy a house and paid it off, get near to retiring age and suddenly find that there is this revaluation and that there is this enormous increase in land rent which they have to face, perhaps at a time when they have just retired and their income has consequently been reduced. This has been engaging the attention of the Government for the last15 months al my request.
I interpolate that the Prime Minister, by his statement, indicated a personal interest, derived no doubt from a long residence in the Territory, in its affairs and, in particular, in the problems created by land rent in the Australian Capital Territory. I think it is fitting at this stage also to acknowledge, before I refer again to what the Prime Minister said, that the change which is embodied in this ordinance and which was inherent in what the Prime Minister said in May of this year arose from a departmental committee of inquiry which gave exhaustive attention to the problems which the existing situation had created. This departmental committee looked into the matter because of a parliamentary recommendation that it should do so. Last Thursday I was surprised to hear Senator Devitt state that he was unaware that a parliamentary committee had recommended that a departmental committee investigate land rents in the Australian Capital Territory. It is only because of the recommendations of the departmental committee that these changes are now taking place. If there is any point to be made that any change ought to be preceded by an inquiry, that point has been made by the fact that a parliamentary committee recommended this inquiry and that this inquiry has taken place.
– Let us have a look at this report.
– I am sorry that Senator Devitt should be quite so emphatic in wanting to know, in effect, what is the basis upon which I am making my submission. In 1965 there was an inquiry by the Joint Committee on the Australian Capital Territory which examined specifically residential blocks in Canberra. That report contained certain recommendations with regard to land rent. I propose to quote certain remarks from the report because I think they should be stated and read into the record. Paragraph 86 of the report states:
Your Committee was informed that one of the original objectives of the policy of leasehold tenure was to give the Commonwealth a measured return in the form of rents on its capital expenditure incurred on urban development.
There was much divergence of opinion as to the percentage rental the urban works ought to bear and the originators of the scheme never contended that the Commonwealth must show a profit from the venture.
There was much confusion of ideas, especially in regard to rentals customary on freehold buildings in the States, profit margins, buildings’ repair, depreciation and replacement allowances, etc., which, of course, had nothing to do with Canberra, where the capital investment, being in land, was imperishable; or insofar as it was in service mains, roads, etc., it would be covered by General Rates.
Comprised in the unimproved value was the Commonwealth’s purchase price of the land - acquired at an average of £4 16s per acre - and the respective costs of service installations such as mains and roads.
The Government finally decided that land rent would be payable at the round figure of 5 per cent per annum of the unimproved value with a re-appraisal during each twentieth year of the lease.
The next paragraph is the kernel of what the Committee reported. The report continues:
Your Committee finds that, with recent reappraisals increasing the unimproved values by up to 700 per cent and with General Rates somewhere between 3 and 4 per cent in the same sliding scale, the investment is a highly profitable venture for the Commonwealth.
Your Committee also finds that there is no evidence to indicate that re-appraisals are being made at a conservative figure but rather that they are being related to the high premiums paid at auction during a boom period when prices have been inflated due to a shortage of residential blocks.
The report set out certain tables which indicated the return to the Commonwealth on blocks of certain unimproved values. Those returns to the Commonwealth were enormous. If those returns to the Commonwealth were enormous, they represented a just cause of grievance on the part of those people who purchased blocks and who, after a period of time, when reappraisals occurred, were faced with the necessity of paying enormously increased rentals to the Commonwealth.
– Is that the honourable senator’s interpolation or the Joint Committee’s interpolation?
– I am sorry the honourable senator did not appreciate that it was an interpolation on my part. I had hoped that the tone of my voice indicated it was an interpolation. If this was not indicated, I assure the honourable senator it was an interpolation. I return to the body of the report made by the Joint Committee on the Australian Capital Territory in July 1965. It states:
I stress that this is what this Committee recom mended - that a departmental committee of inquiry be set up to examine the method of assessing land rent and general rates with a view to ironing out the inequities that have arisen and producing a more equitable and consistent formula. Specifically that consideration be given to providing that, during the currency of a lease, re-assessment of land rent be made only at point of sale or transfer.
Following that report of the Joint Committee an interdepartmental committee was established. It is as a result of that committee’s investigation that this change has been instituted.
– Is the honourable senator sure of that? On what does he base that judgment?
– 1 am challenged by Senator Devitt as to whether I am sure of that fact. I am as sure of it as a reading of the report from which I have just quoted can make me, as well as a reading of the Minister’s statement and the Prime Minister’s satement as to why this change has been introduced. If lhat is still unconvincing to Senator Devitt - he has the same access to those documents as 1 have - then I can only say that that reflects a typical Australian Labor Party attitude to facts which are made clear and which are constantly reiterated, but which the Labor Party is still not prepared to accept. 1 referred earlier to what the Prime Minister said when he announced the change which was to take place. I think it is useful to refer to the words which the Prime Minister used because we in this
Parliament are always given the words which the Prime Minister has used. Unfortunately members of the public who want to be informed are not so fortunate, because they are given only those fact3 which the Press or other media think *rc significant or important. From time to time it is useful to be able to refer to the exact text of what the Prime Minister said because it indicates - I think this is fair of all his statements - that what he is saying is well grounded and well reasoned and can be sustained against any attack which is not so well grounded and not so well reasoned. The Prime Minister stated:
We will fix a reserve price for leases, but once the people of Canberra have bought the lease at auction and paid the reserve price after lhat. they will no longer pay land rent as from the end of this calendar year. There won’t be any more re-appraisement worries. There will be rates. There will be the normal rates that are charged. … Of course they will go up because don’t the people of Canberra want to pay their way, the way people in other cities do? There will be normal rates for municipal services and I may add, Sir, that municipal accounts will be published showing what has come in in the way of rates and what is being expended by us-
There the Prime Minister indicates that he is speaking as one of the residents of Canberra - 1 heard a cry from the back of the hall which seemed to indicate that the people of Canberra want to have everything for nothing. They can’t have that. They can’t here any more than anywhere else in Australia. But the payment of rates will remove once and for all the great danger, the great worry it must be to people who find themselves approaching a time when there will be a re-appraisal of their land value and their land rent will go up in the way in which all the citizens of Canberra know happens from time to time.
On this aspect the Prime Minister continued: . . wc have made computer studies on this and the indications are . . . that about twothirds of present residential lessees will pay, in rates, less than they arc at present paying in rates and land tax. About one-third of the present residents of Canberra will pay more in rates than they are at present paying in rates and land tax. But those, by and large, are the people living .on properties which are approaching the time for reappraisal and the more that they will pay in rates than they are at present paying in rates and land tax will be much less than they would have to pay as soon as their property was reappraised.
I cannot understand the objection which is being raised by people to the proposed change. At the present time Canberra residents pay a land rent which is fixed at 5 per cent of the unimproved or reappraised land value. In addition they all pay general rates, water rates and sewerage rates. In total one might say that an average Canberra landholder does not pay much more or much less than a citizen in Brisbane, Sydney, Melbourne or any other capital city. But under the present system he is faced with the prospect of a reappraisal of land value every 20 years in which case there will be an enormous increase in the value of the land rent which he will have to pay.
There was a High Court case recently - I think it was Esmonds’ case - of which I do nol know the details. But what caused the court case was an increase in land rent - admittedly on a business property and not a residential property - from about $130 a year to approximately $25,000 a year. Under the present system that is the sort of increase people conducting businesses in Canberra have to look forward to. In percentage terms people living on residential blocks have to look forward to comparable increases. Is it any wonder the Government feels that something should be done to change this system? What do we find from the Australian Labor Party? We find that traditionally conservative, stickinthemud, retrograde 1910 attitude that what was good enough in 1910 is good enough for 1970. I hope that the Australian people will realise that that typifies the Austraiian Labor Party attitude, not only with respect to land rents in Canberra but also with respect to most of the issues of this day and age.
We have heard a lot of spurious arguments. One wonders why I become worked up about the question of land rents in Canberra. I think that in this Ordinance there is something which typifies the whole approach of the Government to problems which arise and which must be determined by the Government. Under that approach we examine the problem, identify the ingredients, and after consideration determine the appropriate courses to rectify that problem. With respect to the land rents in Canberra, the approach is as satisfactory as is the approach that is being followed through in regard to the major problems that confront the whole of Australia. I instance only the problems in the field of social services to exemplify the point I am making. In the field of social services, we all know that there are still areas in which governments ought to be acting, there are still areas of need that ought to be accommodated and there are still changes that must be made. But we know that those needs cannot be accommodated and those changes cannot be made overnight because what is involved is a continuing process over a period. However, the approach is there, and that approach to those matters is as valid and as realistic as the approach that is being adopted to land rents in Canberra.
I listened with attention to Senator Devitt throughout his speech. I have read in the Hansard report that has come to us what he said last Thursday and the words he used. 1 believe that much of what he said is based on assumptions which are not soundly based. I believe that when he indicated, as he did at some length, that any change ought to be preceded by an inquiry he ignored - I suggest that his interjections tonight indicate the substance in what I am saying - the fact that there had been a parliamentary committee of inquiry and there had been a departmental inquiry which, as the Minister for the Interior (Mr Nixon) said in the statement that was tabled in the Senate last Thursday, provides the basis for the changes that are now being made.
What Senator Devitt said to the effect that all that is needed is a change in (he period of time after which reappraisals take place ignores certain realities which would be involved in any change in the reappraisal system. After all, for many years Canberra was a pleasant back water, albeit the national capital. But during a period of time which, as I said earlier, is coincidental with the period since the Liberal-Country Party Government took office in 1949 there has been a tremendous expansion in the development of Canberra, in the facilities that are provided, in the growth and identity of this area as the national capital and in the movement of people to this place.
During that period the demand which the presence of people imposes upon existing land resources for blocks of land on which they can build houses and live has promoted the increase not only in the prices of residential blocks but also in the prices of the blocks upon which the industries and services that provide for those people are conducted. It is this which has created the situation io which there are enormous anomalies in the levels of rent that are provided under the existing system. 1 recall that in the statement the Minister presented last Thursday he instanced certain of the changes that take place once a reappraisal occurs. I mention just 3 of them. He instanced a residential lease winch was purchased in 1968 at an unimproved value of $6,000 and upon which a premium of $4,200 was paid. So, that block of land cost $10,200. On that land there is payable rent of $1 15 and rates and water and sewerage charges of $47, making a total annual payment comparable to the rates and water and sewerage charges that residents of Melbourne, for example, would pay of $162. Because of the proposed change to a general rate system, including rates and water and sewerage charges, the owner of that land will pay $150. The fact that he has a saving of $12 is incidental. Broadly. Hie charges are comparable.
But what about a person who bought a residential block in 1951? In that year he paid $3,270, but he did not have to pay a premium. He pays land rent of $19 and rales and water and sewerage charges of $39. In total he pays $58, whereas the man who bought in 1968 pays $162. The man who pays $58 under the present system will pay $96 under the’ new system One might suppose that he is relatively fortunately placed alongside the man who bought in 1968 in the instance I indicated. Although his charges are an increase on what he was paying, I, for my part, would be prepared to face him and say: ‘It is not unreasonable, having regard to the price you paid in 1951, that you should have some increase in the payments you now have to make’.
There is also the instance of a person who bought a garage in 1951 and paid $170,000. He now pays a total of $738 in land rent, rates and charges. But under the new system that payment would be increased to $2,680. That would be a realistic figure. Ft is made realistic when one considers the position of a person who bought a garage in 1970. He paid $160,000 which, I remind the Senate, is to be contrasted with the $170,000 that a person paid in 1951. He pays $1,934 in rates and charges, which is to be con trasted with $67S that the 1951 purchaser pays. Under the new system the 1970 purchaser will have an annual payment of 52,530.
Those are illustrations. They can be multiplied. But the basic point that I make is that under the old system there are anomalies, there are inequities and there is an unfairness which not only is transparent to the objective observer but must represent to the person who lives in Canberra and experiences the problem a real degree of unfairness and a real sense that the system ought to be changed. What the Government is doing is giving effect to a decision, which was made in 1965, that there should be an inquiry, lt is acknowledging the result of that inquiry and endeavouring to change the land rent system.
For my part, having looked at this matter with, I hope, a degree of objectivity - after all, what happens in Canberra is ot no personal concern to me - I believe that there are anomalies which will be removed. 1 do not think the arguments presented by Senator Devitt establish a case that warrants a change in this Ordinance. I believe that the points made by Senator Cotton have answered the points of substance. I hope that what I have said has, in a sense, elaborated and fortified what he said. I believe that the common sense of the Senate ought to be that this Ordinance ought not to be disallowed.
– in reply - I will be as brief as I can. There are one or two things that I want to say before this motion is put to the vote. Firstly, let me respond to Senator Greenwood’s taunt about my being the only speaker on this side. In the first place, I am one of the representatives of the Australian Labor Party on the Joint Committee on the Australian Capital Territory. Therefore, it would be fairly logical for me to stand up and put the Labor Party’s point of view on this matter. In the second place, what we are doing is in response to an express wish of the Leader of the Government in the Senate (Senator Sir Kenneth Anderson) that we confine our debate to as limited a period of time as possible in order to enable us to dispatch our business during this week. I hope that that disposes satisfactorily of that aspect of the matter.
The second point I want to refer to relates to Senator Greenwood’s comments about the recommendation of ah interdepartmental committee. Let me say that there was an occasion not so far in the past when I was Chairman of the Senate Select Committee on the Canberra Abattoir. The evidence presented to us was that on the recommendation of an interdepartmental committee the Canberra Abattoir was to be closed. Fortunately, because of a subsequent examination of the situation, the Canberra Abattoir is still open and still serving the people of the Australian Capital Territory. So much for the interdepartmental committee’s report. Unless 1 was able to read that report and see for myself what the recommendations were I would dismiss it.
The people of the Australian Capital Territory have very little representation. They have a member in the House of Representatives; they have no Senate representation. The other organisation which represents them is the part-elected Australian Capital Territory Advisory Council. That Council is against this proposal. One could interpret that the view of the Council, as the organisation representing the people of the Australian Capital Territory, is that there should be no change in the present system. It has been claimed that the people of Canberra should make contributions comparable with the level of contribution made in other places. What are these levels? I suggest these are no more than sweeping generalisations which do not get to the root of the problem. It is not enough merely to say that the charges should be comparable with those paid elsewhere, unless the charges can be spelt out and it can be proved that the rates elsewhere are on some sort of standard basis. I have already said that the 20-year reassessment is completely unrealistic and what has been said by Senator Greenwood and everyone else on the Government side is in line with that view.
It is said that if the 20-year reassessments are wrong we should change the whole system. I suggest that we could very easily come to the same basis of assessment of a reasonable figure to be paid in the community by having more frequent re-assessments. If necessary, should valuations of the properties be quite substantial, there is no reason in the world why the interest rate which is currently 5 per cent should not be reduced to a realistic figure. After all, this is the basis upon which municipalities operate. They make an assessment of the property’s value and multiply that by a rate in the dollar. This gives them a product which enables them to carry out the services and provide the facilities they are obliged to provide to the community. So what has been put up tonight is one of the weakest arguments I have seen. There has been no mandate from the people of the Australian Capital Territory. I strongly believe that the National Capital Development Commission is against this proposal. 1 know that the Australian Capital Territory Advisory Council is against it. The people of the Australian Capital Territory know what the old system is. It has to be improved; it has to be modernised; it has to be brought up to date. But there is no need to change the whole system. I pointed out on Thursday when I spoke on this subject that once we start to fiddle with the existing system we erode something and may well find ourselves in the position that is developing in Darwin where there is a move away from the leasehold to the freehold system. If we ever see the freehold system in the Australian Capital Territory we can say goodbye to planning and proper development.
The Minister has not given any example of how the system proposed to be instituted here operates elsewhere. I have heard no guarantee from htm that with the implementation of this new system there will not be a weakening of the arrangements currently made to provide the funds with which to finance services, amenities and facilities for the people of Canberra. It comes back to the old saying that there should be no taxation without representation. The community of Canberra is hopelessly unrepresented. There should be more representation here. The people should know what sort of authority it is which sets out to determine the need for and level of services to be provided in the community rather than the Government saying: ‘You are going to have this’, or Your are not going to have this’, or something of that kind. The people of the Australian Capital Territory are almost totally lacking in representation at municipal level. Yet they are forced to submit to the will of the Government in a case like this where the Prime Minister (Mr Gorton) shoots from the hip, as was said on 13 th May, and says we are to have a new system. He hoped that would produce a greater level of support for the Libera] Party candidate at the then forthcoming election. There was not. There is no mandate to change the system. There is a simple way of curing the anomalies of the present system. The Government is just not prepared to face up to the responsibilities of doing that and instead wishes to foist upon the people of Canberra a new system that the people know nothing about. The details have not been spelt out. We have had some vague generalisations shot at us tonight and in the last few days. It is totally unfair and unjust for a community of 130,000 people to have to submit to the will of the Government in this way.
That themotion (SenatorDevitt’s) be agreed to.
The Senate divided. (The President - Senator Sir Alister McMullin)
Majority . . . . 2
Question so resolved in the negative.
Debate resumed from 16 October (vide page 1213), on motion by Senator Sir Kenneth Anderson:
That the Bill be now read a second time.
– We have before us a Bill to amend the Gold-Mining Industry Assistance Act. Whilst it is true that it may be the intention of the Government to assist the industry, as is suggested by the title of the Bill, it will in fact spell the death knell of the gold-mining industry. The industry has made an application to the Government for a 50 per cent increase in the amount of subsidy paid to it, but that application has been refused and the present assistance of $8 per ounce is to continue for a further 3 years. In the words of the Minister for Supply (Senator Sir Kenneth Anderson), the purpose of the Bill isto allow the present gold-mining activity in Kalgoorlie to continue to phase out gradually’. So the fact is that the Bill promotes the end of the gold-mining industry.
This industry has been very valuable to Australia. It has practically saved Australia on 2 occasions. Back in the 1890s when the land boom burst in eastern Australia and the banks were closing their doors everywhere, the gold-mining industry came to life in Western Australia. This was responsible in part for saving the economy of Australia. Of course, it also meant a dramatic increase in the population of Western Australia. During the depression days of the 1930s the gold-mining industry was the source of fruitful employment for a great many workers throughout Australia. I well remember being on the gold fields at the time. People from all over Australia were seeking work in that industry because it was practically the only industry throughout Australia that was buoyant. There were new towns all over Western Australia. They are ghost towns today. It seems to me that the Government has set out to make Kalgoorlie, Norseman and Mount Magnet, the 3 gold producing centres in the State, ghost towns within the next 3 years.
It is interesting to note that the Western Australian Government proposed to send a deputation to Canberra to discuss with the
Prime Minister further assistance for the gold mining industry. Nevertheless, the Prime Minister was so bent on the destruction of this industry that he refused to hold up the passage of the legislation until he had had negotiations with the committee that was to be sent over from Western Australia. The committee comprised the Minister for Mines in Western Australia, Mr Griffith; the Leader of the Opposition, Mr Tonkin; and the President of the Chamber of Mines in Western Australia. lt is true that the Prime Minister did not succeed in his efforts to rush this legislation through before this deputation arrived in Canberra, because the discussions between the Prime Minister and the deputation took place last Wednesday.
I did not have any discussions with either of the 3 gentlemen following their negotiations with the Prime Minister, but .1 have read in the Press since that they did not get any result from their visit to Canberra, lt was said that this legislation was introduced into the Parliament in August this year and that there had been ample time for the deputation to have met the Prime Minister before the legislation was put through the House of Representatives. Maybe there was plenty of time for the members of the deputation to have had discussions with the Prime Minister, but they were able to have discussions with the Prime Minister only at the Prime Minister’s convenience. It was he who fixed the date for the conference to take place. In my opinion he deliberately set a late date to endeavour to get the legislation passed through the Parliament before the deputation could have these discussions with him.
– Tlie conference has been held and the legislation has not been passed; is not that the case?
– lt was not by any action of the Government or the Prime Minister that the conference was held before the legislation has been passed, because it had passed through the House of Representatives and it had been floated in ibis chamber. For the information of the honourable senator, it cannot be amended in this chamber because it is a subsidy Bill. It can be amended only in the House of Representatives by message from the Governor-General, which simply means of course that it is only the Government that can amend the Bill. But the intention was of course, for the Prime Minister, through the activities of the Government - the numbers racket of democracy - to pass the Bill before the deputation arrived. Here are the words of the Minister for Immigration and Minister assisting the Treasurer (Mr Lynch) who handled the Bill in the House of Representatives on behalf of the Treasurer:
The Bill has been in the House for a reasonable period to allow all of the normal representations to be made and, as a consequence of the most careful and comprehensive investigation to which 1 have referred already, we believe that the Government must press forward with the legislation despite what the honourable member has suggested.
It was deliberately intended to dispose of the matter before the views of the industry and the Western Austraiian Government could be heard. I repeal that it was no fault of the members of the deputation that they did not meet the Prime Minister before the legislation was presented to the Parliament.
The assistance to be given by this Bill will end in 1973. The total subsidy for the period of about .18 years of its operation will be about S36m, or about $2m a year. The industry is very grateful for the assistance that has been given in the past, but it has not been sufficient to make ihe industry buoyant. It has served to keep the industry afloat. People in the industry had to prove that a certain cost structure existed before they could get any benefit from the subsidy. The Minister Assisting the Treasurer also stated that there is a shortage of labour in the industry. That has come about because under the system of assistance given by the Commonwealth Government there has been no security of employment in the industry. Because of that situation, workers have looked for other avenues of employment. They have moved out of the mining industry into other industries. The Minister exposes his lack of knowledge of the industry in saying that the gold mines have unfilled vacancies and that there are plenty of opportunities offering for men in nickel mining exploration. In the view of the Government it is likely that any men displaced from the gold mines will be absorbed in that field of employment.
Let us have a look at the position of the nickel raining industry. Despite all the speculation and pegging of leases that has been going on in Western Australia, there is in fact only one nickel mine of consequence in that State. Western Mining Corporation Ltd is the only company that is developing a nickel mine. Its mine is at Kambalda, about SO miles south of Kalgoorlie. lt is the only nickel business employing any quantity of labour. It is true that Great Boulder Gold Mines Ltd and North Kalgurli (1912) Ltd are producing a small tonnage from Carr-Boyd Rocks and that an eastern States company is producing a small quantity of nickel at Nepean. Despite the rest of the stories about the nickel mining industry, there is not another nickel mine in Western Australia and there is not likely to be for at least 5 years because it takes that long to develop a nickel mine. Poseidon has been said to have the best prospects and it is probable that it will do better than Western Mining Corporation Ltd is doing at Kambalda. But Poseidon has not yet decided how to finance the development of its mine. It is useless for ihe Minister to say that any loss of employment in the gold mining industry will be compensated for in the nickel mining industry. We do not know yet whether we will have a nickel mining industry. Although Poseidon has a promising show at Windarra, we do not know whether that company will be able to raise the capital it needs to develop the mine.
Honourable senators will be aware that Windarra is about 150 miles north of Kalgoorlie, almost in the desert. There are no services or ready means of access to Windarra. The mine there will be a very costly venture to develop. The Minister and his advisers show that they know very little about the mining industry when they talk about the nickel industry providing employment for people who move out of the gold mining industry. The problem goes somewhat further than that. Although the number of miners who would be displaced if the gold mining industry closed down is not very large - about 3,500 workers - in all at least 15,000 workers who are engaged in servicing the industry and supplying the industry are dependent upon it. Some of those people will remain in Kalgoorlie until such times as the railway is put through from Kalgoorlie to Kambalda because Kalgoorlie will be the servicing centre for Kambalda. But immediately the railway line is put through, as the State Government intends, Kalgoorlie will no longer be the servicing centre and will practically close down.
I ask honourable senators to consider what will be the result of the substantial closure of Kalgoorlie, which is the largest city in Western Australia outside the metropolitan area of Perth. If Kalgoorlie closes down the people will have one place only to go in order to seek employment and that is to the metropolitan area. Immediately they move in there they will have moved out of houses that they occupy at present. They will go into the metropolitan area where they will be in competition for housing with people who are there already. They will go into competition with all the people in the metropolitan area for all the community services such as water supply, sewerage, roads, education and health services. All these things are available in Kalgoorlie at present, but the workers who leave Kalgoorlie and move to the metropolitan area will necessitate these services being duplicated to provide for them. It would bc a cheap proposition for the Government to continue to pay a reasonable subsidy to the gold mining industry to allow it to continue. The Minister and his advisers say that the nickel industry will provide employment, but it will not do so for 5 years at least, lt takes about 5 years to develop a mine. It would pay the Government to keep Kalgoorlie open for 5 years to enable the nickel industry to become established, if it is going to be established.
There are other factors in favour of keeping the gold mining industry open until such time as some other industry in the area can provide employment for the workers. One of the chief reasons is that the gold mining industry provides a training ground for miners. Mining is very skilled work. Many people who have not worked in mines may not think that this is a skilled occupation, but I can assure them that it requires great skill. I remember that in the depression days, when there was an influx of unskilled workers into the industry, fatal accidents were occurring every day because of the inexperience of workers. Experienced workers are required for the industry to operate efficiently and there must be a training ground for them. If there is not, there will be no nickel industry for a good deal longer than the 5 years I mentioned earlier as being the time required to develop the industry because it takes more than 5 years to train the necessary workers. The Government should be looking into this aspect instead of allowing the gold mining industry to phase out gradually. We hear a lot said about the boom in the mineral industry in Western Australia but most of the activity there relates to the iron ore industry which does not require miners, lt may require a few workers with ability to handle explosives, but most of the operation is in open quarries where the skills of a miner ure not required. If we are to enter into new underground mining operations we will find that we will be short of the skilled workers required. A greater burden will be placed on any new industrty unless provision is made for training skilled workers.
The Minister also said that in addition to this subsidy the Government had allowed taxation concessions to the gold mining industry. It is true that the profits of the gold mining industry are tax free. The owners of the mines do not pay tax on the profits they make. However, the workers in the industry and those employed in the service industries have to pay income tax. It is not right to say that the Government would lose the benefit of that income tax if the operations at Kalgoorlie were to close down because the workers would have to find employment elsewhere and thus continue to pay income tax- They might pay more or less depending upon where they got employment If these men remain in the gold mining industry the Government will continue to receive income tax from them approximating the amount that it pays out in subsidy. It still will not receive company tax. It would not cost the Government a great deal more to pay the amount of subsidy sought by the industry.
Many people think of gold purely in terms of currency but it is used for many other purposes in the world today. For industrial purposes it is used by the ton, not by the ounce which is generally the measurement in which we think of gold.
Australia naturally will require gold for industrial purposes. Until 1968 905 tons of gold had been used for jewellery, 84.5 tons had been used by the electronics industry, 93 tons had been used for dentistry and 75 tons had been used for coins. A further 41 tons had been used for miscellaneous purposes. If the gold-mining industry is to be phased out, how long will it be before we become an importer of gold? At present we use approximately 450,000 ounces of gold for industrial purposes, and as the population increases so that amount of gold will increase. Kalgoorlie is producing only 600,000 ounces of gold. Nevertheless that would tide us over for a few years if the industry were kept in operation solely for industrial purposes. If we were put in the position of having” to import gold for industrial purposes it would cost us about $19m a year, provided we were able to buy it at the present price for free gold on the London market of $35 an ounce and on the basis of 450,000 ounces a year. That calculation does not take into account any increase in the industrial use of the commodity.
In his reply to the second reading debate the Minister made the following pertinent statement:
In his reply the Prime Minister indicated that legislation to renew the subsidy was already before the Parliament and that he could hold out little hope that the Government would be prepared to amend it at this stage. In that correspondence the Prime Minister mentioned that the subsidy legislation would expire in less than 3 years and the situation would be reviewed by the Commonwealth before that time. The Treasurer (Mr Bury) previously had informed the Chamber of Mines of Western Australia that he had no objection lo its request to make a further submission before the expiry of the 3-year period should any change of circumstances make this necessary.
That is not what the Minister said in his second-reading speech when introducing the Bill into the Parliament. On that occasion he said:
The Government has decided that continued assistance is justified in order to allow the present gold-mining activity in Kalgoorlie to continue to phase out gradually without disruption to the population and the economy of the area.
There is probably no gold or anything else good in Queensland, and if Senator Georges thinks that this is a joke, 1 can assure him that 20,000 people in Kalgoorlie do nol agree with him.
– Are you having a shot at someone on this side of the House?
– I could have a shot at you too. 1 remind you that this is one of the primary industries, but so long as the gold miners do not vote for the Country Party you arc not interested in whether the industry is kept going.
– What a lot of rubbish.
– A lot of rubbish? We are well aware that you have never shown any interest in the industry yet it is one of our primary industries. I have quoted the statement made by the Minister assisting the Treasurer when replying to the secondreading debate in the House of Representatives! It is not known whether it is the policy of the Prime Minister to review the subsidy, but I suppose the Treasurer is the boss in this instance and he said that he had no objection to a further submission before the expiry of the 3-year period should any change of circumstances make that necessary. The gold mining industry would have difficulty planning ahead on such vague terms. It is not an industry in which decisions are made from day to day. It is an industry in which decisions as to the type of development and form of treatment which will take place underground, the machinery which will have to be employed and the period for which the machinery will be used have to be made over a period of 5 or 10 years. The Government believes in short term planning. It does not believe in long term planning. The result is that the Government expects the gold mining industry, which is not a short term planning industry, to make short term plans. It may be that the Commonwealth Government will not heed an application for further assistance until 2 of the 3 years have passed. This gives no security whatsoever to the industry and to the people who are employed in it.
I think it is time the Government sat down and had a look at the consequences of its action in refusing to give this industry the assistance it has asked for over a reasonable period of time. It is not reasonable for the Government to say that it proposes to review the subsidy in another 3 years. Three years would be a reasonable notice for the Government to give the industry to close down, because a mine can be closed down in that period in such a way that it can be reopened at some later date. The industry can then make up its mind whether it wants to continue the mine in a caretaker capacity. However, if a mine is allowed to be flooded with water it is’ unlikely that it will ever be reopened because once the timber has become waterlogged it is very difficult to dry out and be made secure again.
It would be of some assistance to the industry if the Government were to give it some assurance that it will look at the position within a reasonable period of time, but no mention is made of a review in the legislation. Some mention of a review was made in the other place by the Minister when closing the debate. The debate may have forced the Minister to make some sort of a compromise. As far as 1 know, the Prime Minister did not hold out much hope to a deputation which he met of a review of the subsidy within a reasonable lime. I do not want to labour the question, but I do want to impress upon the Senate that many of Kalgoorlie’s 22,000 people will have to move out of Kalgoorlie within the next 3 to 5 years unless an alternative industry provides work for them. They will have to move to the metropolitan areas and work in jobs for which they have not been trained. Many of them will have to take on labouring jobs because they can do nothing else. These people will be moving into areas where there is competition for housing and essential community services. All these facilities are available at present in Kalgoorlie but they will be lost to the community because they are not things which can be picked up and transported from one place to another. The Government should be looking at the gold mining industry as it looks at certain sections of primary industry. It should be looking at Kalgoorlie as a community, 375 miles from Perth, which requires to be sustained.
– Why should this be a Commonwealth responsibility and not a State responsibility?
– Well, it is a national responsibility.
– Why not the States? Kalgoorlie is in Western Australia.
– One of these days I will see the honourable senator stand and talk about Commonwealth and State financial relations. Then he might know why it is a Commonwealth responsibility and not a State responsibility. I would remind the honourable senator that every ounce of gold mined in Australia belongs to the Commonwealth and not to the States. No-one is allowed to buy it; it belongs to the Commonwealth, in order to overcome some of the difficulties in earlier years when the gold mining industry was in trouble the gold had to be sold to the Commonwealth and then bought back by the companies so that they could sell it on the open market. But whatever way we look at it, it is the Commonwealth lhat instituted the subsidy in the first place and took the responsibility for keeping the industry going. If Senator Greenwood wants to say that the Commonwealth has no more responsibility-
– It has increased the subsidy.
– lt has not increased the subsidy: it has left it exactly as it was at $8 an ounce. The industry asked for a 50 per cent increase to $12 an ounce but .he Government refused to increase the subsidy. Whoever has the responsibility, someone should accept the responsibility in view of the disruption that this will cause to the residents of the gold fields.
(10.37) - This Bill proposes to renew the subsidy to the gold mining industry for a period of 3 years from 1st July this year. It is completely wrong for Senator Cant to suggest that there could be any further delay in the passage of this Bill because the subsidy ceased on 1st July this year. Pending the passage of this legislation the subsidy has been met through the normal Treasury provisions. It is true, as Senator Cant says, that as this is a money Bill it cannot be amended in this place and there-, fore if the Opposition does not like the Bill it will have to vote against it. I would find it hard to believe that it would vote against the Bill because a subsidy will be paid at the rate of $8 per ounce for the next 3 years from 1st July this year.
The argument used by Senator Cant is that because the subsidy is to be continued at the same rate it spells disaster for Kalgoorlie. The fact of the matter is, as is stated in the second reading speech, that there has been no lack of alternative employment opportunities and the total population of the town has increased. Therefore the argument that any continuation of the subsidy at the present level means disaster for Kalgoorlie is not proven. To the contrary, the activities in Kalgoorlie in other avenues of mining and the continuation of the gold mining industry are a rebuttal of the argument which the honourable senator put to the Senate this evening. It is true that North Kalgurli and, I think. Great Boulder mines do not have a great life expectancy. But there is no suggestion that Lake View and Star and the gold miners of Kalgoorlie have not gold to mine and gold to win for the life and beyond the life of the proposed subsidy. Therefore it seems to me to be quite wrong to imagine that because the representations to increase the subsidy have not been approved it means disaster for the gold mining industry which is still there.
– What meaning does the Leader of the Government give to the words of the Minister when he says ‘in order to allow- ‘?
I give the meaning to the words that the words say. This Bill does provide for an opportunity for a phasing out, a slowing down if you like-
– To allow it to phase out.
To allow it to phase out but that does not mean it has to. It does not mean that it is forced to be phased out. If, for instance, it is economic to continue and the gold is still there to be won a commercial judgment will be made. Having regard to what is known, particularly in relation to Gold Mines of Kalgoorlie, the output could easily well go beyond the 3-year proposal.
Some reference has been made to the question of review. Reference has been made by Senator Cant to the words uttered by a Minister in another place representing the Treasurer- There is no mystique about the words. In a letter to the Premier of Western Australia the Prime Minister (Mr Gorton) said:
The subsidy legislation will expire in less than 3 years- and that is the reference because it is dated back to 1st July - and the situation will be reviewed by the Commonwealth before then.
This is the norma] procedure in relation to subsidies or bounties.
– The Minister does not say that.
– The Minister does say that and he says other words as well.
– He said that should any change of circumstance-
The honourable senator is taking words out of context. He went on to say that if there were any change of circumstance which would justify some further consideration or some new consideration during the life of the subsidy that would have to be considered. All in all this is a subsidy which is to continue for a further 3 years. The subsidy has been in existence since 1954. lt is quite evident from the study and research that has been done that the population of 22.000 in Kalgoorlie is not likely to decrease. Indeed al) the portents are that it will increase and it will increase in the field of mining and there will be gainful opportunities for those people who live in the area. In those circumstances I would think - and I. think any reasonable person would think - that to continue the subsidy in the context in which it has been continued is a reasonable and proper thing to do.
Senator Cant himself said that in addition to the subsidy there was complete exemption from income tax on profits from gold mining. I understand that the taxation on company profits is now 47i per cent which is not an inconsiderable amount of tax rebate having regard to all the circumstances. The gold mining companies are in business to make a profit. I could not follow the basis of the argument about individual taxation because wherever one works if one has a taxable income one has to pay tax whether one is in Kalgoorlie, or in any other city or suburb of the Commonwealth. But here is a circumstance in which the bounty is being continued. It will be continued for a further period of 3 years on the same terms and conditions. The employment opportunities in Kalgoorlie are improving and no case has been made for an increase in the sub sidy. For that reason 1 would suggest that a speedy passage of this legislation would be completely and absolutely justified.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages with tut amendment or debate.
Debate resumed from 20 October (vide page 1313), on motion by Senator Dame Annabelle Rankin:
That the Bill be now read a second time.
– The Opposition sees some lost opportunities in connection with this Bill. When 1 say that I do not refer to :he amounts to be allocated to the Stales but lo the use that could have been made of. moneys received in repayment of war service homes. There are two fields which I would like to refer to in order to develop my argument. 1 think the Minister tor Housing (Senator Dame Annabelle Rankin) will recall that when we were developing this subject during an Estimate Committee hearing I questioned her about the broad span of expenditure for war service homes. My argument was that the revenue received from repayments by those who had qualified for war service homes as a result of service in the two World Wars and in the lesser conflicts in Korea and Vietnam could wisely be channelled into financing the provision of housing in *he civilian field. So I suggest to the Minister that the money coming in from repayments on war service homes could well be diverted to the purposes of providing civilian housing instead of going into the Consolidated Revenue Fund. The Minister has referred to the amount requested by the States for housing as being $142ni. I wonder whether it was indicated to the States that the sky was not the limit. I ask the Minister whether there could be a complete diversion of money which is received as repayments of war service homes loans into the general field of housing, that is, whether that sum could be married to the $142m which has been requested by the States so that the tempo of demand for housing could be met? T do not think that any State housing minister would not concede that the expansion of housing in his State is limited by a lack of finance. We only have to look at the various Stale housing instrumentalities to see thai this is the case. I would not be far out if I said that in New South Wales there is a lag of at least two or three years in meeting the demand for housing.
The other point I want to make is that in the 1970s we have reached the stage - and the Leader of the Opposition (Mr Whitlam) in the other place has expanded on this - where there should be a greater attention given to the integration of Commonwealth and State responsibility in urban development.
– What does he mean by that?
– What .1 am trying to suggest, senator, is that this Bill is limited in its vision. We do not quarrel about the amount of money that is provided. However, we believe that the Commonwealth could give greater leadership in the fields of housing standards, better planning and these sorts of things. I will take it a little further because 1 see that Senator Greenwood has manifested a keen interest in my speech.
– As always.
– I accept that, The point I am getting at is that last weekend there was a representative here from the United States housing authority and his views were reported in the Australian Press. He referred to high density housing and to ghettos being formed. While his speech contained racial overtones when he referred to the position in the United States, he was implying that we were creating slums for the future.
I recall another occasion when Senator Dame Annabelle Rankin and I were present at a citizenship convention which dealt with this housing theme. A number of British migrants argued there that unless the Commonwealth directed the States to use some of the moneys to provide adequate recreational areas, we would not get the amount of park space that is needed. As a matter of fact, that is one thing for which I always admire Victoria, irrespective of the political party that is in office. Victoria has a high ratio of parks when compared with New South Wales or for that matter Queensland. That does not mean that I underwrite a lol of other things that have happened in Victoria. But the point 1 am making is that there has been planning in Victoria. I know from reading the Press that some of Victoria’s parklands are menaced by Sir Henry Bolte who wants to build certain ring roads and things of that sort. I do not think that the Melbourne Press lies completely. As I read it, the articles were quite logical and truthful.
All of this is fuel for my argument that we need adequate planning. The Commonwealth can say to the State Housing Ministers: ‘If you do not provide enough recreational land, the plain fact of the matter is that we will apply financial sanctions as far as housing development is concerned’. I have found that most State Ministers, irrespective of the parties to which they belong - and 1 am not having a shot at present company here; I do not think that the honourable senator on my left held the portfolio of Housing in his State - do not look outside their own borders. I think that the Commonwealth, with its greater overseas contacts, usually adopts a more modern attitude to standards.
I refer to some of the big housing projects in my own State. In the Mount Druitt area there was unwise planning in relation to recreational centres. 1 do not want to foist an unnecessarily undue responsibility onto the Minister, but we of the Opposition believe that the Commonwealth Minis.tery of Housing should be enlarged more or less to encompass urban development, because to my way of thinking al a later stage the various States will be faced with all sorts of modern problems - whether they be of a pollution nature or otherwise. Often it is found that these problems arise because of poor design. Problems arise with roadways; there are traffic problems. Then the States come back to the Commonwealth and ask for assistance.
I am a flat-out advocate of greater Commonwealth participation in so many facets of urban development. The Commonwealth more or less can dictate policy because it controls the purse strings and can determine the amount of money which will be disbursed to the States. I repeat that rn criticisms arc that the Commonwealth could have used this opportunity to meet with the States in order to enlarge the
Commonwealth’s operations and if anything to cause the States to adopt a broader attitude towards standards generally. That is the nature of the criticism which I make of the Bill. My criticism is not necessarily directed towards what is envisaged by the Bill. If the entire returns from repayments of war service homes loans were used for the construction of homes, plus whatever money was available through normal loan channels, and if the peak of expenditure on war service homes had been maintained right through between the two wars and up to the present a lot of people in all the States would not be waiting for homes to be made available by State agencies. It is not sufficient to say to the States: ‘Here is the money’. The Commonwealth should also say: ‘We think you can enhance building standards generally and attend to a lot of the attendant urban problems as well’.
– I want to contribute only a few remarks to this debate. The Bill enables the allocution of moneys to the States for the purposes of home building. Obviously we cannot disagree with the allocation of such money to the Slates particularly as the amounts will be limited according to the ability of a State to provide the services which are necessary for new housing developments. In Sydney, probably more so than in the other capital cities, houses are being built without the necessary services and such building activity is creating pollution problems. Obviously the housing needs of the Australian public are not being met. This is illustrated in the reports of the individual housing commissions.
My purpose in rising is to ask that the Commonwealth Government should not be satisfied with making annual allocations to the States unless it is assured that the home builders, who are the recipients of housing finance, are getting value for the money that is made available to them. A parliamentary committee in New South Wales has reported on an alarming position in that State concerning the type of homes that are being built and ihe inability of builders, who operate under the sub-contract system, to pay their employees. I do not know whether the situation in New South Wales is worse than that in other States. The situation in South
Australia has been raised in the Parliament by individual members of the Senate and of the other House from time to time, but the position comes into prominence when a parliamentary committee conducts an inquiry and submits a report. It is quite common in South Australia for a person to be loaded with a house that he has contracted to buy but which, after 2 years, is a complete disgrace and requires the expenditure of huge sums to rectify defects in building construction.
– Soil tests are being taken for all government houses.
– Soil tests have always been taken, but I do not know whether the builders comply with the results of those tests. The State Bank of South Australia has taken soil tests meticulously. It builds a better class of structure than do private builders because it specifies foundations in accordance with the results of the soil tests. Unfortunately this is not so with all constructions in South Australia.
– How has the South Australian Housing Trust been?
– It is possibly one of the biggest offenders in South Australia. On farmland, which has been heavily manured for years, houses have been constructed without any digging for proper footings. This has resulted in numerous complaints. In fact some complaints wire so bad and criticism so severe that the Housing Trust had to repossess some houses.
– You are not being fair to the Trust.
– Whether or not it is fair to the Trust, it happens that I have been on numerous deputations to the Trust about such housing. The South Australian Government has condemned (he situation and has pointed out particularly faulty construction by the Trust. The Housing Trust uses the sub-contract system of building. Particular aspects of building construction are sub-contracted and often the sub-contractor further sub-contracts to someone else. The South Australian Housing Trust is building the worst constructions in South Australia.
– We have lovely homes in South Australia that have been built by the Trust, and you know it.
-I repeat that the South Australian Housing Trust has possibly the worst type of construction in South Australia. If one goes down to the Tonsley Park end of South Road one will find whole streets where the tenants have made complaints and the Trust has retaken possession of the houses and have shifted the purchasers.
The DEPUTY PRESIDENT (Senator
Bull) - Order! In accordance with the sessional order relating to the adjournment of the Senate, I formally put the question:
That the Senate do now adjourn.
– I do not want to delay the Senate unduly but I want to direct some remarks to Senator Wright who represents the Minister for Labour and National Service (Mr Snedden). I want to deal with the function of Commonwealth Arbitration inspectors. They have a very difficult job. I think there would be about t,700,000 people under Federal awards and there would be about 52 Commonwealth inspectors. I know, as a result of a complaint some time ago, full consideration is given to the problem I am about to mention. In the electorate of Lowe in which I reside I often receive complaints about industrial matters. One case recently concerned a migrant girl working in a light engineering firm as a process worker. The original complaint involved pro rata payment for annual leave. This was shown to be unfounded but, due to the diligence of the Commonwealth Arbitration inspector who had a look at the wage sheets, an underpayment in another direction was discovered and the girl received more than she had asked for in relation to the pro rata leave payment. With that recommendation I repeat that I have a high regard for the efficiency of Commonwealth Arbitration inspectors. In reply to a follow-up letter that I wrote to the officer concerned it was indicated to me that there are only 52 Federal inspectors and it seems to me probable that spot checks on industries may not be carried out as frequently as they should be. Senator Cavanagh and I have had long experience in the trade union movement. We know that at times there may be confusion in a section of industry. Those are times when not all employers by any means, but some unscrupulous employers can take advantage of the situation.I am directing my remarks to the clothing industry in which, as honourable senators know, there has been considerable confusion. In this industry piece work rates are paid to female workers, and having in mind these problems and some of the work studies which have been carried out it is difficult always to be accurate.I know that the union went through the lengthy process of an award hearing before the Conciliation Commissioners. There was an appeal by the employers. I do not necessarily object to that. The matter has finally to be thrashed out.
I want to relate the particular problem to female employees. I instance the case of the Hestia Bra Company of High Street. Burwood. This case concerns female migrants. I have spoken to residents of Burwood who are Australian born girls. They have said that the company is a pretty tough one. The clothing industry obviously is not like the metal trades industry where there is a lot of on-the-floor militancy which is often justified. I know that the unions have to be rather careful with the employers and that there is a lack of dialogue with the female employees because of language difficulties. This makes the position a lot more difficult. I want to put to Senator Wright that the same efficiency the Commonwealth Arbitration inspectors have shown in past cases should be directed towards spot checks in the clothing industry in New South Wales. I sincerely believe that because of the confusion in the clothing trade industry, plus the language impediment suffered by some of the employees, spot checks should be made in the next fortnight of some of these firms, including the Hestia Company.
I say that because I am a resident of this area. I know that Senator McClelland would appreciate my allusion to Henry Lawson’s The Faces in the Street’. I have watched some of the girls leaving their work places. I have often felt that some of them, both old and new Australians, must have gone home with a feeling of injustice. Contrary to the situation in the television show ‘The Rag Trade’, I am sure that the Hestia Bra Company would not condone much initiative in the shop delegates - far from it. I have said enough. I have named the firm concerned. I ask Senator Wright to suggest to the Minister for Labour and National Service - I am sure he will - that one or two inspectors should make spot checks on some of the clothing establishments in New South Wales in the light of the present award confusion and particularly in the firm I have mentioned. I may be wrong, but I have a shrewd suspicion that some remedies will be effected in relation to wage scales. I will leave it to the good graces of Senator Wright.
– Of course it would be quite improper for me to give any undertaking in relation to any allegation about a particular firm. I say that simply to indicate that there is neither plus nor minus in my mind with regard to anything that Senator Mulvihill has said against any individual not represented here. I rise simply to say that I have listened to Senator Mulvihill and that I will draw the attention of the Minister for Labour and National Service (Mr Snedden) to what he has said. 1 have no doubt that the Minister will give it immediate consideration.
Question resolved in the affirmative.
Senate adjourned at 11.6 p.m.
Cite as: Australia, Senate, Debates, 26 October 1970, viewed 22 October 2017, <http://historichansard.net/senate/1970/19701026_senate_27_s46/>.