Senate
20 March 1974

28th Parliament · 2nd Session

  1. Senate
  2. 28th Parliament
  3. 1974

The PRESIDENT (Senator the Hon. Sir Magnus Cormack) took the chair at 4 p.m., and read prayers.

page 417

PETITIONS

Pornographic Literature

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– I present the following petition from 185 citizens of Australia:

To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of undersigned citizens of Australia respectfully showeth:

That the undersigned persons believe that some literature and films being published and shown throughout Australia arc detrimental to the wellbeing of the Community.

Your Petitioners thereby humbly pray that the Government will take steps to sec that the publication and availability of pornographic and other material of that nature is restricted and that the people are made aware of the dangers to the Community from such literature and films.

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

Petition received and read.

Human Rights

Senator GIETZELT:
NEW SOUTH WALES

– I present the following petition from 204 citizens of Australia:

To the Honourable the President of the Senate and Parliament assembled. The humble petition of citizens of the division of Sydney respectfully showeth that in view of the present situation in Chile, where twenty out of thirty articles of the Universal Declaration of Human Rights are not being adhered to.

We, the undersigned, request that the Australian Government protest in the United Nations against the widespread atrocities by the illegal military junta in Chile.

Your petitioners therefore pray that your Honourable House will take the necessary steps to make it widely known in Chile that the Australian Government will assist and facilitate the rapid transit of all refugees to Australia.

And. your petitioners, in duty bound, ever pray.

Petition received and read.

Estate Duty

Senator KANE:
NEW SOUTH WALES

– I present the following petition from 4 1 citizens of the Commonwealth:

To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of the Commonwealth respectfully showeth:

That we urge the Parliament to legislate for the total abolition of all Commonwealth probate.

That Estate Duty has become an oppressive, punitive and discriminatory tax which is carried by those people least able to alford it.

That Estate Duties tax the poorer citizen rather than the richer citizens.

That Senator J. T. Kane’s Bill now before the Senate entitled Estate Duty (Termination) Bill should be supported by all Senators irrespective of their party membership.

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

Petition received and read.

Solar Energy

Senator JESSOP:
SOUTH AUSTRALIA

– I present the following petition from 84 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of undersigned citizens of Australia respectively showeth:

That, as the World resources of fossil fuels and fissionable material have a limited life and will present growing environmental problems.

We taxpayers of Australia request that the Australian Government provide increased finance to accelerate the research and development of Solar Energy in Australia.

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

Petition received and read.

National Health Scheme

Senator JESSOP:

– I present the following petition from 289 citizens of the Commonwealth.

To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of the Commonwealth respectfully showeth:

  1. 1 ) That Australian citizens place great value on their freedom to choose their own doctor in all aspects of medical care.
  2. That we believe in a doctor’s freedom to provide a personal service based on personal responsibility within a system based on quality rather than quantity, as opposed to an impersonal service in which doctor and patient lose their identity.
  3. That proposals to change the existing health scheme are unacceptable to the people of Australia.

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

Petition received and read.

page 417

ANSWERS TO QUESTIONS

Notice of Motion

page 417

REFUGEES FROM CHILE

page 418

ALWEST ALUMINA PROJECT

page 418

CONSTITUTIONAL REFERENDA

Senator McManus:

– Why did you tell me that it had not been done when it had been done? You told me that they had not even approached him.

page 419

AUSTRALIAN BROADCASTING COMMISSION

page 419

INDUSTRIAL RELATIONS: TASMANIA

Senator McManus:

– What about his troubleshooter, Mr Foster? What trouble has he shot?

page 420

OVERSEAS BORROWINGS IN AUSTRALIA

page 420

AUSTRALIAN PARLIAMENTARY SYSTEM: ADVERTISEMENTS

page 420

IMMIGRATION: GOVERNMENT POLICY

page 421

REDUCTION OF SPEED LIMIT

page 421

COMMONWEALTH EMPLOYMENT CENTRES

page 421

MINING OPERATIONS IN WESTERN AUSTRALIA

page 422

RURAL RECONSTRUCTION SCHEME

page 422

INDUSTRIAL DISPUTES IN TASMANIA

page 422

POLITICAL PRISONERS IN CHILE

page 423

ROAD SAFETY: SOUTH AUSTRALIAN PROGRAM

page 423

CONDITIONS AT INTERNATIONAL AIRPORTS

page 423

CONDITIONS AT INTERNATIONAL AIRPORTS

page 423

NAVAL INSTALLATION ON DIEGO GARCIA

page 424

WEEDAZOL

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– No. I think the question was directed to me yesterday by my colleague in my capacity of Minister representing the Minister for Health. I advised my colleague that because it was a matter coming within the ambit of the South Australian Government it was not considered to be one for intrusion by the Australian Minister for Health.

Senator Wriedt:
ALP

– No.

page 424

MINING DEVELOPMENTS IN AUSTRALIA

page 424

PUBLISHERS’ MARKET AGREEMENT

page 425

ROADS: COMMONWEALTH GRANTS

page 425

WHEAT STABILISATION

page 425

PROPOSED ALBURY-WODONGA DEVELOPMENT

page 426

TELECAST OF AUSTRALIAN RULES REPLAY

page 426

AUSTRALIAN FLAGS

page 426

DRUGS

page 426

ADELAIDE AIRPORT

page 427

STATEMENT BY A SENATOR

page 427

THE NATIONAL LIBERAL PARTY

Statement by Senator Hannan

page 428

INTEREST RATES

Formal Motion for the Adjournment

Senator Murphy:
ALP

– I ask for leave to move a motion to limit the debate to 2 hours rather than 3 hours.

Senator WITHERS:
Western AustraliaLeader of the Opposition

– I indicate that before the 2 hours are up we would want a vote upon the question.

Question resolved in the affirmative.

Senator COTTON:
New South Wales

– I move:

I do so for the purpose of debating a matter of urgency, namely:

The imposition by the Government of the highest and most onerous interest rates since Federation.

It is very clear that, with the Australian Labor Party in government, we have 3 facets. It is a dear money Party, it is a high inflation Party, and it is a high taxation Party. This is on record in the House of Representatives Hansard of yesterday. The Leader of the Opposition there, Mr Snedden, asked the following question of the Treasurer (Mr Crean):

Does the Treasurer accept that there are only 3 ways in which there can be a redirection of resources towards the public sector, that is by inflation, by higher taxes or by higher interest rates, each of which implies an even greater burden for the average Australian than he is at present bearing from crippling tax and incredible interest rates?

Mr Crean replied:

All three will be used in the most commonsense combination.

Not only do we have that answer but we have on record by the Treasurer public statement No. 19 which is dated 18 March 1974. At page 12 of that statement the Treasurer has said publicly:

There should be no doubt what that implies- a greater relative role for the public sector means a smaller relative role for the private sector.

In simple terms that statement means that the Government will have a great deal more to spend itself in order that the people as such will have less to spend by themselves. Another point which the Treasurer made in his statement should be taken much more to heart. This is his observation of the year 1945:

This was the writing into the charter of the then Commonwealth Bank- now, of course, the Reserve Bank- the duty to exercise its powers in such a way as would best contribute to the stability of the currency, the maintenance of full employment and the economic prosperity of the people.

Stability of the currency and economic prosperity are 2 ingredients now missing from the present management-labour scene. What I suggest is happening in Australia under the present Government is this: It is turning Australia into a nation of Shylocks and pawnbrokers. There ought to be a 3-ball sign hanging outside the present Commonwealth Government premises. The total cost of interest to the Australian community in the 16 months of office of this Government has risen by approximately 3 1 per cent. We can work this back quite simply to the pacemaker, the Commonwealth bond rate, which stood at 6 per cent and which now stands at 8.5 per cent. That is a rise of 2.5 per cent on 6 per cent- over 31 per cent. That has affected the whole economic and interest rate scene. It has led to increasing interest rates and all that flows out of that. It has increased costs quite unnecessarily and exorbitantly. It has made home ownership more difficult. It has made acquisition of property more difficult. It has facilitated the transfer to the public sector and to government without any doubt at all.

This was a conscious act of economic policy by this Government, as the Treasurer has stated. I believe that this has destroyed in this country the concept of what I call a property owning democracy which so many of us have stood for all our lives. I believe that this is a half thought through decision to make some taxation concessions available to some home owners. But what it does is confirm in the minds of people who look at these things- I invite honourable senators to do so- that the concession must mean an acceptance by the Government that it will continue with a high interest, dear money policy. That is what it has to mean. Otherwise, why would the Government do it? The simpler way is to reduce interest rates to a level which makes the situation what it ought to be. Later on my colleagues in the Opposition will deal exhaustively with the total problems of housing, of increased costs and this proposition of a housing taxation deduction for some but not all people.

It is pertinent to comment that the average building society loan now costs 25 per cent more per month to repay than it did prior to this Government’s recent action. I suggest that this proposed concession is not well thought through. It is full of strange positions which need further elucidation. There is an area which is not clear and there appear to many anomalies. But I do not think this helps those who rent houses. It does not help those who have to raise deposits to buy houses. Many of these people are low income earners. On analysis this concession could benefit the higher income earners more than the lower income earners. It does nothing to reduce the deposit gap. It is no reward whatsoever for those people who, in the past, have been thrifty and provident. I suggest to the Senate that a much better and more sensible and equitable method would have been to reduce interest rates to the old levels applying under the previous Government. Once again I draw attention to the fact that the real pacemaker in interest rates in society is the long term bond rate. That has risen by 3 1 per cent in about 14 months. Therefore the whole interest rate structure will have been adjusted upwards.

I say to honourable senators that we are not a society which ought to encourage this kind of exorbitant money lending rate by anybody. The Government should not be leading in that process. A table is available showing the interest rate structures through time. I shall make that available by putting it on the table. It is rather large to incorporate in Hansard. It shows that at the end of June 1972 the 20-year long term bond rate was 5.99 per cent. At the end of January 1974 it was 8.50 per cent, a rise of slightly over 2.5 per cent on a then rate of a little bit less than 6 per cent.

The ACTING DEPUTY PRESIDENT (Senator Wilkinson)- Order! Senator Cotton, are you going to table that paper?

Senator Sir Kenneth Anderson:

– There is no Minister in the chamber to give leave.

Senator O’BYRNE:
Tasmania

-The Opposition has attacked the Government on the subject of interest rates. We are very conscious of the substance of the charge that it has made against us but we also are becoming accustomed to attacks of this nature on every front by the Opposition. Yet every step that the Government takes to curb inflation and to create conditions to reduce interest rates- action such as the reduction of tariffs right across the board- is condemned right along the line. We were condemned when we uplifted our exchange in relation to other currencies. This attack is just another of the snide attacks by the Opposition, having canvassed the length and breadth of Australia to try to deter the Australian Government from having a strong weapon, in the way of price controls, with which to fight inflation.

We are faced today with one of the consequences of the inflationary situation that we inherited from the previous Government which had a long record of allowing interest rates to increase. I have in front of me a chart which shows that ever since the Opposition parties came to power in 1 949 there has been a progressive increase in interest rates. The increases were initiated by the government of the day. We saw between 1951 and 1961 a doubling of the interest rate on 2-year bonds from 2.18 per cent to 5.36 percent. From 1961 until 1 97 1 -the Opposition parties went out of office in 1972- the interest rate on the 2-year bonds was 6 per cent. That was an increase of nearly 2.5 times during the period that the Opposition parties were in government.

The same situation applies in relation to bank overdrafts. While the previous Government was in office the interest rate on bank overdrafts increased from 4.5 per cent in 1950 to 8.25 per cent in 1 970. This group of people which is attacking us now built up the momentum that we are trying to come to grips with at the present time. We hear the Opposition lamenting the existence of inflation and virtually in the same breath condemning all the measures taken by this Government to come to grips with it. What is worse still, neither Senator Cotton nor any of his colleagues who sit beside him and behind him ever put forward any constructive proposal that could assist in coming to grips with this problem. It is our view that changes in interest rates are a legitimate instrument of economic policy. Increases in interest rates, as I have already pointed out, were part of the fiscal policy of Treasurers throughout the last 20 years. In 1970-1 did not refer to that particular yearbank interest rates and long term bond rates were increased. The long term bond rates were increased by 1 per cent- from 6 per cent to 7 per cent- which proportionately was a considerable jump. In answering a question relating to the increase in bank interest rates the then Treasurer, Mr Bury, had this to say:

The demand for money is extremely strong. I would expect this rise in interest rates to weaken the demand.

I interpolate there that Mr Bury was having the same problems that we are having. He feared the continuation and expansion of the inflationary influences in the economy. He realised that the increase in interest rates would tend to weaken demand. We are using this measure as one of the weapons with which to attack this most serious situation of inflation which exists here. In his answer Mr Bury continued:

But, above all. I would expect this increase to serve as a general signal and warning to the whole business and financial community that we are straining our resources and that it is not possible to extract a quart from a pint pot. This is its main purpose. Certainly, it will have the effect of dampening down some new activity at a time when the economy cannot stand it.

I believe 4that the approach taken by the then Treasurer was a reasonable one. What he said at that time is almost word for word what the present Treasurer (Mr Crean) has put forward as an explanation of the present situation. When the Government increased interest rates in September 1973 it did so as part of a broad antiinflation program. I would like to remind the Senate once again that we appealed to the people of Australia to assist us by giving us control over prices. There was no reciprocity from the States and no attempt by the States to assist us in this battle. So we have had to find alternative methods of dealing with it. When interest rates were increased in September 1973 the Prime Minister ( Mr Whitlam ) said: inflation must be fought on all fronts. There is no panacea; no simple solution achievable through one line of policy. But the fact that there is no simple solution to inflation does not mean that we can just throw up our hands in the face of it. On the contrary, we have to tackle it head on.

The tackling of inflation head on is a matter of trying to reduce some of the head of pressure that has built up over the years. I have been able to demostrate that this pressure has been building up over the last 20 years and increased in momentum particularly in the two or three years before we came into office. We cannot be accused of not facing up to our problems squarely and acting decisively. As a matter of fact, the argument that we are acting too decisively and facing our problems too squarely had been one of the weapons used to attack us in the electorate and in the Press. Nevertheless, if one believes in one’s cause and has confidence that what one is doing is right, I am quite certain that the people of Australia will accept that what we are doing is in their interests.

The problem which the increase in interest rates was designed to cope with was in reality another legacy of the inaction of the previous Government. A necessary pre-condition to slowing inflation is curbing the rate of growth in the money supply. During 1972-73, before we came into power, the money supply increased by 26 per cent, having increased by no less than 1 7 per cent in the first half of that financial year. The present figures show that we cut back heavily the increase in the money supply in the second half of that financial year and we did so by means of the revaluation of December 1973 and the consequential effects on the excessive external surplus and the December 1972 and February 1973 actions to curb capital inflow. The need for these measures had been apparent for a long time but the previous Government had lacked the courage to implement them. In addition, there were calls to the statutory reserve deposits of the trading banks in April and August 1973. The Treasurer and his advisers felt that these measures should be taken as part of the battle against inflation. The domestic deficit was cut back in our last Budget from $2 15m in 1972-73 to an estimated $ 162m this financial year. This is another weapon being used in the battle against inflation.

Despite the fact that we have taken all these measures, liquidity remained excessively high, due mainly to the unrestrained increase in 1972. The prospective increase in the money supply, although well below that in 1972-73, remained too large, given the buoyancy of demand and the growing full employment economy. We have critics who would have us put pressure on the situation by throwing people out of work. But the members of my Party and of the Government are proud of the fact that people can obtain useful employment in this country, that business statistics show a boom in nearly every direction and that company profits are high. We have been favoured by nature with good seasons. If we can come to grips with and stabilise this inflationary process this country will be on the pig’s back. One contributing factor to the excessive increase in the money supply- the external surplus- has been dealt with determinedly by this Government, as I pointed out, by means of our tariff and exchange policy and our lifting of the value of our dollar in relation to other currencies.

Senator DAVIDSON:
South Australia

– It is altogether appropriate that the Senate should be debating this subject as a matter of urgency. As you, Mr President, will know, it relates to the imposition by the Government of the highest and most onerous interest rates since Federation. It is appropriate that we take time to discuss this subject. The Senate should take occasion to remind the Parliament and the nation that the very basis of our society, the very fabric of our style of life and the very core of our community and neighbourhood life, is threatened by this increasing interest rates situation: A high and rising rate of interest which, unfortunately, gives no sign of abating. It is appropriate also that, among other things, housing and matters related to it, including matters implied by the reference to housing, are seriously and deeply affected by the increasing interest rate. This is a matter of concern not only to our young people but also to people who make up a wide cross section of our community. The present interest rate situation therefore presents a very serious threat to so much of the nation’s stability. The matter is also one of urgency because we see with regret and disappointment, and notice with some concern, that the Government is not doing anything about the increasing interest rates or, indeed, high interest rates.

It seems to me that two major factors stand out. One is the oft repeated statement- I take leave this evening to repeat it again- made by the Prime Minister (Mr Whitlam) in his policy speech. He said:

Labor will deliberately plan to reduce interest rates wherever practicable.

Here was a Prime Minister giving a call to the nation, a sense of assurance to the nation. He promised to help all people who were affected by high rates of interest. He gave a complete and continuing assurance that his Government would deliberately plan to reduce interest rates. He assured the people that their savings would be good and would have maximum value because interest rates would be contained and costs would not get out of hand. But I think it is important to point out in this urgency debate today that the Prime Minister’s promise, I regret to say, has been rendered unfulfilled and that the cause of hardship and uncertainty has been increased because, it will be seen, there is no deliberate plan by the Government to reduce interest rates. We have the highest interest rates since Federation.

The other matter to which I wish to draw attention is that the underlying facts of this situation disclose the pace setting pattern of the Government. The long term bond rate is at 8.5 per cent with the overdraft rate one per cent higher than that at 9.5 per cent. This being the pace setting pattern throughout the loan structure of this country, the progression of increasing rates of interest has continued. It does not matter whether one considers housing finance, consumer credit or any other form of lending institution, they all have known this spiral. It is important to point out now that no other Government in our history has permitted interest rates to go so high as they are today. I draw attention again to the Prime Minister’s statement about what he called a deliberate plan to reduce interest rates. That plan has been rendered completely ineffective. In fact, I would go so far as to say that it seems to have been completely abandoned. I draw attention also to the grave social consequences of this inactivity on the part of the Government and to this ineffectiveness of the Prime Minister in not giving effect to that which he promised the people.

A high interest rate policy places the burden on that section of the community which can least afford to carry it. At all times there are various types of borrowing and lending. For example, people in the senior levels of banking and finance or in big business can, maybe, by the structure of their own concerns manage to a certain extent the problems which are created by high interest rates. But I draw attention this evening to the small depositor and, particularly the man- or woman- or young person who wants to acquire or build a home. He is placed in incredible difficulty by the increasing problem and turns to such institutions as a building society whereby there is a co-operative way to get a reasonable return for any investment that he may make. He may have only a small amount to invest but, by the same token, he can obtain a maximum loan- and by obtaining that loan he is able to buy, build or establish a home and so provide for himself some real estate which will grow in value as years go by, from which base he can make a contribution not only to his own life and future but also to our total community and well being. Further, by his involvement in an organisation such as a building society he can make an investment and, with a reasonable return, acquire the maximum loan. What is more important, he can expect to pay reasonable interest to the organisation and will have maximum time in which to repay the loan. These organisations, and through them the people concerned, have been seriously affected and hit by the Government’s inactivity regarding the high interest rate pattern.

Interest rates in other places and in other lending institutions have increased markedly. This has had a very serious effect on organisations such as co-operative and permanent building societies. Funds have been diverted, and the housing loan program, of course, has become confused, because those organisations are caught up in the multitudinous, complex and spiralling problems that have followed the high interest rate pattern. The problems of obtaining loan funds have become very much confounded. All this has flowed through in a variety of ways to increase costs on everything that an organisation may wish to provide or which people may wish to buy. The high interest rate pattern cuts right across the plans of anyone who wishes to buy, establish or build a home. It is socially disadvantageous for the community because, interestingly enough, it strongly affects the greatest number of people in our community. There is no point in the Government saying that the Prime Minister has announced recently that payments of interest on mortgages are to be an allowable deduction from income tax. I suggest to the Government that this tends to be a discriminatory procedure because the people who stand to benefit most are those who have already established their homes or have a program of payments to purchase a home. This is of no particular help to the people with whom we are concerned in this debate this afternoon- those people who are trying to finance their homes, trying to establish their homes, and who are gravely affected by the high interest situation.

I underline this by noting in this debate that the Minister for Housing and Construction (Mr Les Johnson) acknowledged this latter situation, and the others which I have mentioned, when he referred only a few days ago in the Parliament to high interest rates. I will quote a reference from his speech which was made on 13 March. He said:

Wc know that people have been affected by the high interest rates.

Here is an acknowledgment by the Minister that there are high interest rates. Here is an acknowledgment by the Minister that people have been affected by high interest rates. He went on to say:

We want to restore lower interest rates as quickly as we can.

Here he acknowledges also that the Government wants to restore lower interest rates. The Government and the Minister acknowledge that low interest rates are required. The Minister added:

We are taking steps towards that end.

To me this statement seems to obscure the fact and tends to mislead the public. I hope that the Government will give some indication today as to what it is doing about lowering interest rates.

I suggest that that statement is causing widespread confusion in both the Department of Housing and Construction and the Treasury and that it has aroused expectations and speculation throughout the financial community. The Government should very soon announce the full details of the steps which it is proposing to take to reduce interest rates. We need a comprehensive and integrated series of anti-inflation strategies that would enable the Government to put before the Senate in a proper statement its plan for a progressive reduction in interest rates. If it does this then certainly we will welcome it and so too will a large number of other people. But we ask the Government to give some indication of what its plans are in this sphere because, after all, the availability of funds for home purchase is a key factor in maintaining the level of the housing program.

I turn in my concluding remarks to a comment made and issued today by the Housing Industry Association. The Association has said:

Because of its ability directly to control activities of some of the major sources of housing finance, and to exert a major influence on the general financial climate of the economy, the Commonwealth Government has been in a position to markedly affect levels of activity in the housing industry.

The major developments in the housing finance field in the last 20-odd years, which have added greatly to funds for housing, have been the entry of the private banks into the savings bank field, thus breaking the monopoly of Commonwealth and State Government operated savings banks, and the rapid growth of the permanent building societies . . .

The Commonwealth Government is able directly or indirectly to control a large proportion of the finance for housing, although the two largest private sources- permanent building societies and finance companies- at present not directly controlled- have been the ones which have grown fastest.

In that statement the Housing Industry Association goes on to point out that policies which were introduced in September last year brought about a sharp increase in interest rates and the permanent building societies were not in a position to raise their deposit rates to compete in the open market for funds. Honourable senators will recall that earlier in my remarks I drew attention to this. The Association also pointed out that the inflow and retention rates of permanent building societies dropped sharply, causing a sharp reduction in new loans advanced. The point that I am making in this reference to the Association’s comment is contained in this paragraph which reads:

The increase in interest rates on housing loans, coupled with higher costs of housing and of residential land which require a higher amount of loan finance, has meant that many potential home buyers cannot meet the necessary repayments from statutory income and have been forced to defer home purchase to save more money to overcome the resultant ‘deposit gap’.

This is the enormous problem which is affecting so many people. This is why so many people are affected by the high rates of interest. This is the key to the many problems which have been occasioned by the high rate of interest. I call upon the Government as a matter of urgency to do something about implementing the promise which the Prime Minister gave at the election and to take note of the fact that there are a large number of people today who are concerned about, who are affected and hurt by, the imposition by this Government of the highest rate of inflation that we have had in the last 74 years.

Sitting suspended from 6 to 8 p.m.

Senator MULVIHILL:
New South Wales

– The Senate is debating a matter of urgency sponsored by Senator Cotton on behalf of the Opposition. The terminology of the motion refers to the highest and most onerous interest rates since Federation. Speaking for the Government, I counter that by pointing out that the buoyant economy is a deliberate result of our policy to redistribute incomes and to revise priorities. I commence my remarks on the subject upon which Senator Davidson concluded his remarks before the suspension of the sitting for dinner. He referred to the building industry and to housing.

The position seems ironical to me. Opposition senators know in their hearts that unquestionably any government in a democratic country like Australia, whether it is composed of members of the present Government or members of the present Opposition, could do many things if it had additional powers. We know when we study governments of the far right and governments of the far left that they have certain powers that are used, legally or for that matter illegally, that we do not possess. This Government recognised that there were certain economic fluctuations and it sought additional power to deal with them. But we have been lectured for the last 6 weeks on the evils of centralism. Dealing with the housing theme, I would explain the position in this way: In Sydney the capital city of New South Wales, the State that I represent, one can see a myriad skyscraper buildings. If work ceased on them for the next 20 years, it would be found that not one of them would have made a contribution towards a better society in Sydney.

This Government has plans for massive hospital construction in the outer western suburbs of Sydney and the corresponding areas of Melbourne and Adelaide. But the plain fact of the matter is that with the scramble for materials and the diversion of capital we have little or no control over those plans. The Minister for Housing, Mr Les Johnson, and the Treasurer, Mr Crean, have used certain economic implements in an endeavour to control these fluctuations, but they have virtually had one hand tied behind their backs. Obviously in a democratic society it is difficult to direct and maintain the flow of materials and, for that matter, capital in the way that one would like to. Whether we speak of West Germany, the Britain of Heath or the Britain of Wilson, I think that we would accept the fact that it is far better to live with a certain high degree of inflation than to have the wheels of industry grind to a halt. Some of the theories that have been advanced by Edward Heath of Britain and by some of the spokesmen opposite do visualise a return to that ill-fated Holt era during the 1 960s with the famous horror Budget. It can be well argued that in some of the areas of financial fluctuations some price increases could have been curbed. After all, the central theme of our argument has been that in each of these dramatic national wage cases the judge or the bench- not the government of the day, mark you- has accepted the fact that industry should accept perhaps a 7 per cent imposition on its production costs. It would be reasonable to assume as a natural corollary that there would be an acceptance, even voluntarily, of current prices. We know that this does not happen.

I say particularly to members of the Country Party, who ought to be well aware of the position, that I have seen situations in which we have redressed certain imbalances on behalf of farmers, yet we have found that retailers have damaged the marketing position of farming products by imposing excessive price increases. This is a dilemma that faces every government today, but because of the Labor Government’s trade policy that was expounded and developed overseas by Dr J. F. Cairns, we find that today we have given rural industries permanent markets for years ahead. We have arranged trade agreements with countries such as East Germany, North Korea and the People’s Republic of China. Let us be honest about the position. In years gone by when Canada moved in on the Chinese wheat export trade, Australia was involved in a sort of double standard as to whether it was contrary to the concepts of our rigid foreign policy to trade with China. That has all gone. The fact that we have provided permanent markets is far more important than the less important argument about subsidies. It is not much use subsidising industries, whether they be manufacturing industries or rural industries if it is not known where the markets will be. We have reversed the priorities, and that has been our broad attitude.

I think that one of the questions to be asked during an inflationary period is: Who makes the most worthwhile contribution in the community? I have had a lifetime in the trade union movement, and notwithstanding the fact that during the last 8 years I have sat in the Senate in a much easier atmosphere than that of working with my hands, it still amazes me how young people can leave school at 1 8 years of age, work in a clerical position in one of these sky-high office buildings and receive excellent amenities and wages, while the Miners Federation will probably have to indulge in a rather vigorous industrial campaign to achieve comparable conditions and reasonable wages. What I am expounding in the Senate was expounded in Britain during the unnecessary miners ‘strike there.

I wish to refer to one of the problems that besets our economy today. In doing so, I might coin a term used by a former Prime Minister, the late Ben Chifley, when he referred to the people who really keep the wheels of the economy rolling. We see the situation today in which some loco engine driver has to sign on for work at 4 a.m. or a miner’s deputy has to go down into a mine at some ungodly hour and yet loses his wage relativity with luxury industries. But this same society is able to produce a man named Barton who can make a big financial kill and then go to another country. It is no wonder that on many occasions the trade union rank and file members feel that the processes of arbitration, whether they be conciliation or decisions to be handed down by judges, are not fast enough. I know that there comes a time when wage demands have to be equated with the overall national aspirations of a country. But unfortunately, with these distorted values today, people look up to big developers because they can make a quick dollar. This is the sort of thing that develops this counter-militancy from the trade union movement. It also has an effect on the average and small businessman. He cannot get into all these tax lurks that have been part of the game for the big entrepreneur.

I repeat that the present Treasurer, Mr Crean, is endeavouring to block up these taxation loopholes. He is going further than that. I know that further details will be given in subsequent debates in the Senate. On the question of giving justice to people who have taken out home loans, I say that we are endeavouring to introduce a formula that will bridge the gap. But I repeat, worthy or not as the tables on interest payments may be that have been advanced by the Opposition, the plain fact of the matter in regard to building materials is that while the Australian Government is not allowed to have the additional powers, and while the States, if they do have the powers, cannot control the blackmarketing across State borders involving bricks, timber and other commodities, the priorities of the building industry will be distorted. I say this without any inhibitions whatever: I would like to see a building czar, whether appointed by the State Premiers or by the Australian Government, who would issue cease work orders in regard to every skyscraper under construction in metropolitan Melbourne and Sydney.

Honourable senators opposite know in their hearts that the people erecting such buildings are anti-social. They make no attempt to become involved in the community. Look at the miserable contribution that the major developers made to the flood relief funds during the recent flooding. They have been bloodsuckers living off normal building activities. Then consider their blood brothers. When you talk about cheap money have a look at the various insurance companies. I have heard honourable senators opposite bleat about the decision of the Queensland Trades and Labour Council to place a ban on the construction of the AMP Building in Brisbane. But what do we find? I interjected when Senator Lawrie was in full flight making his speech. I said to him: Do you defend these insurance companies?’ He could not. All that could be said is that the clients did not read the small print, but if that is the concept of business that is held, morality does not count. No insurance companies are guilty, some naive folk would say. On every occasion that Senator Murphy has argued the need for more effective control of insurance companies the Opposition has bleated about socialism. There is no question about it.

We are not wedded to the idea of an automatic freezing of credit. We want to improve society. I challenge honourable senators opposite to get out on the hustings and tell the people that it is accepted business enterprise. We may all come into the Senate with different ideas. Perhaps we should put aside our boyhood, but I cannot forget the Westinghouse Brake Company of North Strathfield on the western suburbs railway line. Its management took a fiendish delight as late as 1937 and 1938 in saying to men looking for work: ‘Get off the premises or we will prosecute you’. The Australian Gas Light Co., another industrial giant, was also notorious for its industrial relations. When its managing director retired recently he had the temerity to question the manifestation of Australian nationalism because we are determined that we will control the pipeline that is to be built in Australia.

Earlier today an honourable senator oppositeI think it was Senator Webster- interjected about the percentage of foreign capital. We have never disputed the need for foreign capital but we have said that it must be allowed in on our terms. It is not an important ideology. Anyone looking for precedents should turn his eyes to Latin America. I have in mind, for instance, pre-junta Chile, Peru, Bolivia and other South American countries, most of which have military governments. Their citizens were certainly not raised in socialist households, much less by the tenets of Marxism, an ideology to which I do not subscribe. Purely on a socialist evaluation those countries are demanding at least equity with foreign capital. I may be going a little beyond the subject of this debate, but my personal viewpoint has been that John Gorton got a somewhat better agreement with Esso/ BHP than did his 2 predecessors as Prime Minister. But that does not mean that if Rex Connor, Dr Cairns or Mr Whitlam were negotiating we would not get a better deal.

I ask honourable senators opposite to ponder on what I am about to say. There have been misgivings today- and justifiably- about Indonesia and its attitude towards civil liberties. When we have raised the subject I have noticed honourable senators opposite line up in their ranks of defence because they have the vague idea that they are reacting against any semblance of socialism. However, the present Indonesian Government has imposed far harsher terms- the word ‘harsh’ is really erroneous- on the foreign oil companies engaged in off-shore drilling. Nobody would claim that the Indonesian Government has become leftwing. I am amazed by all the apologies that are made by the Opposition when we are rightly concerned about maintaining the outflow of capital to foreign countries. Irrespective of which party is in office, the Australian companies can be lumped together. Far be it for me to defend Broken Hill Pty Co. Ltd. At least taxes can be imposed on the big companies, but it may be found that the directions are given from outside the boardrooms.

Let us have no illusions about it. Even if certain inbuilt advantages are accepted- we have the Bass Strait oil- the plain fact of the matter is that when it comes to bunker fuelling it is then that the fangs of the oil companies are shown. Our Minister for Minerals and Energy (Mr Connor) indicated that trying to grind Australia down just was not on. The days of Australia as a Crown colony as in the time of Governor Phillip and Governor Macquarie are finished. We realise that a certain price must be paid to develop our national economy, but I would call it moderate nationalism. We do not run away from it. We have injected massive expenditure into education and if we are given assistance or a fair go from the Opposition Parties we will do the same in the field of health. Some inconveniences may be experienced but the economy is being kept within reasonable bounds. We are deliberately deciding that immigration numbers will be geared to the number of jobs available and not to exploitation.

The ACTING DEPUTY PRESIDENT (Senator Lawrie)- Order! The honourable member’s time has expired.

Senator LITTLE:
Victoria

-The urgency motion we are discussing refers to the disgraceful rates of interest chargeable in this country today on borrowed funds. Before we criticise we have to decide whether the situation has arisen from the normal market fluctuations or the market forces that tend to cause fluctuations in industrial rates, or whether it has emanated from deliberate official policy. Those of us who take an interest in these matters must readily recognise that both factors can affect the interest rates in the country. The reasons given for the situation are quite varied. Some people presume that higher interest rates will slow credit and therefore slow demand. There is not much proof in the marketplace that it largely follows that pattern. Indeed, if some steps are not taken to prevent the influx of overseas capital attracted by high rates of interest in a politically stable country such as Australia, even more demand may be created than existed before the increase in interest rates.

On this occasion before criticising the Government we must decide whether the dominant factor has been the market forces or the Government’s deliberate policy. I propose to quote from no less an authority than the Prime Minister (Mr Whitlam) and to ignore what was said by the Leader of the Government in the Senate (Senator Murphy) when endeavouring to square off in this House a few nights ago. He then suggested that the situation had arisen from the pressure of overseas circumstances. I do not think that he took any real part in the actions leading to an increase in interest rates, but I believe that the Prime Minister primarily understood what the Labor Party was quite deliberately doing, particularly to people with whom Labor had entered into a contract in the last election campaign in order to win their votes. I wish to quote from an address given by the Prime Minister as recently as 14 March. He said:

We have elevated the status and importance of the trading banks in Australia to a position they have not enjoyed for more than 20 years. We did this by removing the ceiling on bank interest rates for negotiable certificates of deposit. In that way we enabled the banks to compete vigorously for funds on the money market. Instead of being the first institutions to feel the effects of necessary monetary restrictions, the banks are the beneficiaries: other institutions arc forced to compete with them. I suggest that the extraordinary success of our February loan, which attracted $509m in cash subscriptions -

Of course, the increased interest rates may have helped- is evidence of the new role we have given to the banks. The private banks- for so long anathema to Labor governmentsarc back on top. I welcome the fact. They are great institutions. My only regret is that 1 have yet to hear any acknowledgement from them of the fact that a Labor Government has restored their position as the dominant financial institutions in this country.

That cannot be interpreted in any other way than a deliberate statement of policy, lt is clear that the Prime Minister of this country was discarding completely the interests of the little men buying a home, people endeavouring to buy on time payment a refrigerator or washing machine, and the other people in the indebted class in the community. They are seldom the wealthy unless their indebtedness is attractive to them as a tax deduction when expanding their businesses. I renounce the Labor Party that is prepared to put that forward as a deliberate act of policy. I hope there are Labor men in this House who will try to explain it away. I see no explanation for it. The increases in interest rates that were forced upon the community were a deliberate act of policy by the Government and had nothing to do with the market circumstances of the time. Proof of the deliberateness of the intent was the fact that the Australian currency was revalued in an endeavour to stop the influx of overseas capital, to coincide with the increase in interest rates. These facts show quite clearly that the Government recognised what the results could be. Yet, this was done to the detriment of those people in the community who could least afford to pay. I refer to the indebted class whose interest rates are not claimable as a taxation deduction, as the debts of businesses invariably are.

More shocking in its intent was the contract that was deliberately manoeuvred by the Government. In a statement issued by the Prime Minister the reason why the contract was deliberately manoeuvred was given, lt was that, whilst the opportunity was given for the credit institutions of this country to charge 10 per cent, they were not obliged to pay more than 3.75 per cent to those members of the community who had smaller sums of money in savings accounts in banks. That injustice is still being inflicted on the public. I know that the Government has made a move now- after 12 months of effort, particularly by the Democratic Labor Party, to expose the attitude of the Labor Government to the people it allegedly represents- to make tax deductible interest payments that are made on loans for home building purposes. But as yet, in spite of questions we have asked deliberately in this House and in spite of our opposition to Government proposals which do not recognise this need, no move has been made by this Government to remove this injustice from the poorer people of this community who are receiving interest at a paltry 3.75 per cent on their money deposited in the savings banks. The banks are at liberty to re-lend that money at interest rates of up to 10 per cent. Indeed, interest rates of 10.25 per cent are being offered by large companies to attract capital for credit purposes to expand businesses. That, of course, is understandable. The large companies do not really pay 10.25 per cent on that capital. This is a cost of running a business and the cost of expanding a business and this sum is tax deductible from profits.

Senator Gair:

– The Labor Party proposed to reduce interest rates.

Senator Wilkinson:

– Inflation would be at 20 per cent if it was not for this Australian Government.

Senator Douglas McClelland:
Minister for the Media · NEW SOUTH WALES · ALP

– This debate has been a very interesting and historical debate because for the first time in the history of this country 4 Opposition parties have supported an urgency motion against a government. They are the Liberal Party of Australia, the National Liberal Party- of Victoria, if not of Australia- the Australian Country Party and the Australian Democratic Labor Party. I suppose I must also include the National Alliance- the unity ticket between the Country Party and the Democratic Labor Party. These parties have presented a united front in support of the motion that the Senate, as a matter of urgency, discuss the following subject:

The imposition by the Government of the highest and most onerous interest rates since Federation.

As a member of the Government, I wonder how seriously the 4 political parties in the Opposition -

Senator Carrick:

– Compared with this year?

Senator Wright:

– How is the imposition of higher interest rates supposed to bring the money situation under control?

Senator CARRICK:
New South Wales

– Methinks he doth protest too much. If the Minister for the Media (Senator Douglas McCelland) had generated as much light as heat our energy crises would be resolved. It is well to remind the Senate and the people of Australia that the Senate is debating a motion of urgency moved by the Liberal and Australian Country Party Opposition censuring the Government for having achieved in its unique 16 months the highest interest rates in history. We censure the Government because, by its deliberate action in putting up interest rates, it has created a unique inflation of prices. The Minister is now seeking cover. He talks about inflation being a worldwide phenomenon. Let us remind him quite clearly that when we left office inflation was running at 4.7 per cent and falling. For the 20 years that we were in office, with all the overseas inflation, in this country we averaged a 2.5 per cent inflation, the lowest in the world. So, with the outside world breathing on us, we still managed. We are debating the effect of the record interest rates. They affect the people of Australia in every purchase of goods they make and they affect notably the home buyers and the intending home buyers. Tonight I say emphatically that in no issue, in no policy promise, has this Labor Government created a more shabby hoax- I repeat, a disastrously shabby hoax- than it has in its housing policy and its recent extension of tax deductability on interest. I remind the people of Australia that the Labor Party went to the people with 4 main policies on housing. It said: ‘We will reduce inflation in Australia.’ It has converted a 4.7 per cent inflation rate to 14 per cent, rising to 20 per cent. It stated:

Labor will deliberately plan to reduce interest rates wherever practicable.

In fact, it has by its own action put up interest rates. The Labor Party policy speech stated:

We will make a massive attack on the problem of land and housing costs.

The Treasurer (Mr Crean), in his own words said that in 1973 land and housing costs rose 20 per cent. Labor promised interest deductability and by its silence implied that it would maintain the homes savings grants. Let us see what has happened. The Treasurer and the Prime Minister (Mr Whitlam) have said that by this tax deductability, the people of Australia in buying homes will now be saving money. I want to show honourable senators what a disastrous situation has occurred. In tonights Press the building authorities say that of all the people in Australia who are seeking to acquire homes in the coming year less than half will be able to do so because they have been priced out of the market. Let us look at this. Because of inflation in 1973, in the Treasurer’s own words the cost of a house has gone up 20 per cent. A $20,000 home- a modest cost- has gone up to $24,000. The cost of a $25,000 home has gone up by $5,000, so the people of Australia, by the action of this Government, have to pay another $5,000 for the most modest of homes. This year the cost will go up another 20 percent.

On top of that, by raising interest rates by an average of 2 per cent, shall we say, the cost of repaying a $20,000 home over 25 years has been increased by the Labor Government by some $8,000. By two strokes of the pen- as a result of inflation which puts up the cost of a house by $4,000 to $5,000, and by raising interest rates and thereby putting up the long term repayment of a house by $8,000- the Government has robbed individual people in Australia of an extra $13,000 on a home. The Government took from the people the homes savings grant and therefore made it impossible for them, in many cases, to bridge the gap.

Let us look into this matter. The Government is going to finance this interest subsidy out of taxation and says it will cost between $120m and $150m a year. There are some 5 million taxpayers in Australia. By looking at the tax scale, the Government should know that it will cost on average an extra $ 100 a year at least for the average taxpayer to finance this $150m, and that is $2,500 over a period of 25 years. The very best that anyone can get out of this scheme will be about $2,500 by way of tax abatement over 25 years. It would cost a person $14,500 to get it by the deliberate action, in one year, of this Government.

Senator McLaren:

– What about the National Liberal Party?

Question resolved in the affirmative.

Question put:

That the motion (Senator Cotton’s) be agreed to.

The Senate divided. (The President- Senator Sir Magnus Cormack)

AYES: 29

NOES: 21

Majority……. 8

AYES

NOES

Question so resolved in the affirmative.

page 445

CRIMINOLOGY RESEARCH COUNCIL

Senator MURPHY (New South WalesAttorneyGeneral and Minister for Customs and Excise)- Pursuant to section 43(5) of the Criminology Research Act 1971, I present the first annual report of the Criminology Research Council together with a report from the AuditorGeneral on the financial statements of the Council for the year ended 30 June 1 973.

page 445

AUSTRALIAN INSTITUTE OF CRIMINOLOGY

Senator MURPHY (New South WalesAttorneyGeneral and Minister for Customs and Excise)- Pursuant to section 33(3) of the Criminology Research Act 1971, I present the first annual report of the Australian Institute of Criminology for the year ended 30 June 1973 together with a statement by the AuditorGeneral on the financial statements of the Institute.

page 445

MINISTERIAL STATEMENTS

Senator MURPHY (New South WalesLeader of the Government in the Senate)- During the past 2 sitting weeks the Prime Minister (Mr Whitlam) has made 2 ministerial statements in the House of Representatives, one relating to his recent visit to South-East Asia and the other announcing extended terms of reference for the national rehabilitation and compensation scheme inquiry. It is the normal practice that statements such as these be made in the Senate also. If it were desired to debate the statements, particularly the one on the visit of the Prime Minister to South-East Asia, I would be prepared to discuss the matter and an opportunity would be given for the Senate to debate them. I seek leave to have the statements incorporated in Hansard.

I seek leave to make my remarks at a later stage.

Leave granted; debate adjourned.

page 449

ARBITRATION (FOREIGN AWARDS AND AGREEMENTS) BILL 1974

Motion (by Senator Murphy) agreed to:

That leave be given to introduce a Bill for an Act to approve Accession by Australia to a Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to give effect to that Convention, and for related purposes.

Bill presented, and read a first time.

Standing orders suspended.

page 449

INDUSTRIES ASSISTANCE COMMISSION BILL 1973

Bill presented by Senator Drake-Brockman and read a first time.

page 449

REPORTS FROM SENATE STANDING AND SELECT COMMITTEES

Senator MURPHY (New South WalesLeader of the Government in the Senate)- by leave- I move:

The reason for this is that otherwise there will be an overlap on Thursdays. We have fixed a time for the debate of the reports and also a time for the consideration of General Business, and they would overlap. This proposition would mean that we would provide against that overlap.

Question resolved in the affirmative.

page 449

AIRLINES EQUIPMENT BILL 1974

Bill received from the House of Representatives.

Standing orders suspended.

Bill (on motion by Senator Cavanagh) read a first time.

Second Reading

Senator CAVANAGH:
South AustraliaMinister for Aboriginal Affairs · ALP

– I move:

This Bill merely amends the Airlines Equipment Act 1958-1973 by introducing metric units into appropriate sections. This Act is one of the keystones of the 2-airline system, and under its provisions the Minister determines the aircraft capacity required by Trans-Australia Airlines and Ansett Transport Industries Ltd to carry the estimated traffic on their competitive and noncompetitive routes during a particular period. The air transport industry is progressively adopting metric units of measurement, and statistics will in future have the kilometre as the unit of distance and the tonne as the unit of weight. The basic unit of capacity and performance is the tonne-kilometre, which is one tonne carried one kilometre, and it is approximately equivalent to two-thirds of a ton-mile. Consistent with the general move towards metric conversion, it would now be appropriate to specify these metric units in the Airlines Equipment Act. I commend the Bill to the Senate.

Senator WITHERS:
Western AustraliaLeader of the Opposition

-The LiberalCountry Party Opposition has had a look at this Bill. As the Minister for Aboriginal Affairs (Senator Cavanagh) said in his second reading speech, the Bill provides for the substitution of new metric measures for the old imperial measures. The Minister, quite rightly, says that we shall convert ton-miles to tonne-kilometres and 200 lb to 90 kilograms. We wish the Bill a speedy passage. It is purely a technical Bill to facilitate metrication in the airline industry.

Bill read a second time, and passed through its remaining stages without amendment or debate..

page 450

ANNUAL REPORTS OF GOVERNMENT DEPARTMENTS AND AUTHORITIES

Senator MURPHY:
New South WalesLeader of the Government in the Senate · ALP

That notice of motion No. 1, which states that annual reports shall be referred, without any question being put, to the Legislative and General Purpose Standing Committees, be adjourned to the next day of sitting.

I understand that at least one senator wishes to have further time to discuss the matter.

Question resolved in the affirmative.

page 450

APPROPRIATION BILL (No. 3) 1973-74

Bill received from the House of Representatives.

Standing orders suspended.

Motion ( by Senator Murphy) proposed:

That the Bill be now read a first time.

Senator WITHERS:
Western AustraliaLeader of the Opposition

– I take the unusual course, for me, of speaking on. the first reading of this Bill, which is a money Bill which the Senate may not amend. I do so in order to point out some features of the Bill. This Bill seeks parliamentary approval for an appropriation “of $ 168.575m for the payment of salaries and other related charges. It is an amount additional to that approved in Appropriation Bill (No. 1) passed on 29 November 1973, which should have lasted the Government until 30 June 1974. But, apparently, the fat cats have had more kittens than even the Labor Government expected. .

The Opposition will not vote- against the Bill, because we do not believe that any citizen should suffer direct financial loss or embarrassment because of this Government’s maladministration and financial lunacy. Ho weyer,, the Opposition wishes to take this opportunity to place on record its rejection of the Governments. reckless expan-sion of the Commonwealth Public Service. The Prime Minister (Mr Whitlam) may be nominally a republican, but at heart he is surely a true empire-builder. Just look at the Commonwealth Public Service. I say: ‘What an empire’! How the Prime Minister has built upon it. Not only is it an expanding empire, but the Prime Minister sees it as a model empire, a pace-setting empire- and he certainly set quite a pace when he took over.

In the first 10 months of his reign the Prime Minister increased the number of government departments from 27 to 31 and created 95 boards, commissions of inquiry and task forces and 157 new divisions and branches of the Commonwealth Public Service. Furthermore, he increased the number of Second Division officers, on salaries ranging from $17,000 to $27,000 a year, by 205. On top of this, the Prime Minister has forecast that the Public Service will expand at the rate of 240 new public servants each week. I repeat: It is an expansion of 240 new public servants each week or, in his language, 5 per cent per annum. So far the cost to the public for these extra public servants is in the vicinity of $150m a year. This increase in the wages bill for the civilian Public Service is augmented by the general wage rises for all public servants and has sent the total bill for the Australian taxpayers from $569.9m in 1972-73 to $802.3m in 1973-74. That, Sir, is the cost that the rest of the Australian community has to bear. It is equal to an astronomical growth in the Public Service income expenditure of some 41 per cent in the current financial year.

The public servants are ripping off the Australian community. The only thing they add to the nation is wages and sadly enough the wages bill is not the end of this sorry story because there are ancillary services. Each public servant who puts a.foot outside his own town or city on official business is entitled to first class air travel- unlike the United States, the United Kingdom, New Zealand and many other countries where only very senior officers are entitled to travel first class, with economy class travel provided for other members of the Public Service. Every Commonwealth public servant is entitled to the most expensive form of travel. The Public Service Board estimated, as far back as 1972 that the total cost of air travel alone by Australian public servants in 1971-72 was approximately $9m in respect of domestic journeys and approximately $4m in respect of international journeys. The Board also estimated that if all these public servants had travelled economy class approximately $ 1.2m would have been saved on domestic journeys and $0.75m on international journeys. These figures were taken out before the great expansion in the Public Service, so today the savings would be very much greater.

Now let us take a look at housing and another hidden cost in the Public Service- a financial handout masquerading as regulation 97 allowances. For the uninitiated, regulation 97 is a housing subsidy which provides eligible married officers with $33 a week towards their rent if they have no children and $40 a week if they have children. The original purpose of the allowance was to help officers ‘where the quarters provided are temporarily not available for occupancy, or where an officer, upon transfer, cannot enter into occupancy of quarters or private residence through unavoidable delay in the transmission of furniture and household effects’. The second sentence of that regulation provides:

  1. . such allowance shall not be paid for more than 3 months except upon the approval ofthe Board.

On 1 November 1973 there were 13 first level second division officers on $17,000 a year who were receiving the regulation 97 allowance.

Senator POYSER:
Victoria

– I want to speak on another subject on the first reading of this Bill. I could answer well the arguments that have been put up by Senator Withers because most of the things he said were implemented by his Party when it was in office, but I have something far more important to discuss tonight. I refer to the victimisation of a member of the Australian Labor Party in the State of Victoria by an insurance company known as Federation Insurance Ltd which is directly associated with the financial activities of the Victorian branch of the Australian Country Party. I believe that the best way in which I can demonstrate the victimisation that has taken place is to read a statement from a gentleman by the name of Mr Brian Smith. I have his authority to use his name and to read into the record the statement that he gave me. It is prefaced with these words:

Statement of facts involving political persecution by the Country Party’s Victorian financial source. The Federation Insurance Limited, against the endorsed Australian Labor Party candidate for the Federal seat of Mallee.

I hereby state that all accusations made in this statement can be supported by factual proof contained in documents in my possession.

It reads: 1, Brian Smith, the endorsed ALP candidate for the Federal seat of Mallee in the House of Representatives have been employed by the Federation Insurance Limited of 342-348 Flinders Street Melbourne since February 1972 as their resident inspector at Charlton.

I was informed by the companies Victorian Country Branch assistant manager, Mr Alan Gallagher upon my appointment that my job would involve addressing meetings of the Victorian Farmers Union and obtaining insurance business from their members.

About seven months after my appointment the Victorian Farmers Union broke away from the insurance arrangement with the Federation Insurance Limited.

The Federation Insurance Limited then began to rely heavily on members of the Victorian Country Party for continued support.

At a later stage in my remarks I will indicate the extent of that support. The statement continues:

At about this time, Mr Tudor the Victorian Country Branch manager of the company, instructed me to accompany him to a Country Party meeting at Donald on 16 October 1972.

I was instructed to make myself available to accompany him to this meeting which took place at night in my own time. No overtime or like compensation was offered.

At this meeting I was asked to join the Country Party and assist in the 1972 Federal elections. I declined both offers.

I was a member of the Australian Labor Party at the time and was giving all the assistance to Brian Brooke the ALP endorsed candidate for Wimmera that 1 could.

At the end of 1973 I was nominated as candidate for the ALP for the seat of Mallee. I informed Mr Tudor of this fact and he did not complain or advise otherwise except tell me not to send any political letters to newspapers as it could be inferred that I was speaking on company policy and in fact

ALP policy could be embarrassing to the company’s relationship with the Country Party.

From that occasion on I never released anything to any newspaper unless it clearly stated my position as ALP endorsed candidate, in this way no inference could be drawn that I was speaking on behalf of the company.

The whole Mallee area knows that I am the endorsed ALP candidate and when I do speak there is no question that it is the ALP view that I deliver. Not the view of an insurance company.

On 15 January 1974 I received a memo from Mr Gallagher on behalf of Mr Tudor which was photo-stated among all company inspectors instructing them to strike up personal friendships among Country Party branch executives throughout Victoria and become invited to branch meetings. All inspectors were instructed to send a monthly list of all Country Party branch meetings attended and all meetings proposed to attend during the following month.

On Friday, 1 March 1974 many Mallee newspapers carried a story of my address to the Birchip branch of the Australian Labor Party concerning the governments decision to abolish the present subsidy on superphosphates. I was identified in the newspapers as the endorsed Labor candidate for Mallee.

At 3.30 p.m. on the same day, Friday, 1 March 1974, 1 received a telephone call from an inspector colleague of mine, Mr Allan Plant, of the company’s Ararat branch, Mr Plant is also the Country Party candidate for the state seat of Hamden. He asked me to confirm if it was me that the newspaper report referred to. I told him it was. He then told me that it would be unlikely that Federation Insurance would view the situation favourably.

Senator WRIGHT:
Tasmania

– Speaking in reference to the speech to which we have just listened, I state that it is a matter of great regret that individual charges of that sort should be brought before the Senate as an ex parte statement of public denigration without some preliminary investigation by a committee of the Senate. I say nothing for or against the allegations to which we have listened. But I simply say that the use of parliamentary privilege for purposes of that sort is an abuse unless the honourable senator who has spoken guarantees to sustain the charges upon examination.

Senator BISHOP:
Minister for Repatriation · South Australia · ALP

– I wish to take a few minutes of the Senate’s time tonight to reply to what, to me, have been most extravagent speeches by Senator Wright and, more particularly, by Senator Withers who holds a very senior position in the Senate. He is the Leader of the Opposition. He attacked Commonwealth public servents and accused them of bludging. He attacked the Government for introducing an Appropriation Bill which seeks the appropriation of over $168m. Both honourable senators claimed that the expenditure generally is largely on salaries, and so it is. I wish to point out some of the expenditures about which they talked. Let me refer firstly to an important sector about which they have been campaigning for many months, that is the Labor Government’s failure to assist the defence forces. The expenditure, as shown on page 39 of Appropriation Bill (No 3), for the Department of Defence is $5 5. 5m. It is for salaries and wages, which are necessary and which are a part of the obligation which the Government has in respect of all the Services. That is a part of the Bill which we are presenting to the Parliament tonight. But the Opposition says that it is a most extravagant Bill, the amounts are too high, and something should be done about it.

Senator Withers attacked Commonwealth public servants. He called them fat cats. He attacked their housing subsidies. Under division 548, on page 33, the additional amount required to service the Leaders of the Opposition and the Parliamentary Parties, Deputy Leaders of the Opposition and the Whips is $ 1 1 1 ,000. It is a necessary amount. I do not disagree with it. They are some of the additional payments about which the Leader of the Opposition in this place is complaining.

Senator Wright:

– I attacked the cost.

Senator TOWNLEY:
Tasmania

-I shall mention 3 items briefly tonight. The first one I want to deal with is the criticism that we have seen of the Senate over the last few weeks by the Prime Minister (Mr Whitlam). The second point 1 shall be dealing with will be inflation and then, briefly, I shall comment on tourism. The first thing is the criticism of the Senate by the Prime Minister. No doubt he would like every Bill which comes before this chamber to go straight through. No doubt he would like to have open slather with all his legislation so that, as quickly as possible, he could push through socialist schemes which could well prove to be irreversible, no matter how far in the future we look. Perhaps in their wisdom the people who drew up our Constitution foresaw our present Prime Minister with his desire to change everything as quickly as possible. Perhaps they knew that at some stage in the future we would need the Senate to act with judgment based upon the needs of the States rather than the political needs of the major parties. I make no apology for siding at times with those who suggest a certain slowness of action as is required by our Standing Orders and by the Constitution. Because one Party- the Australian Labor Party- recieved a very small surplus of seats and votes at the last election, that does not mean that that Party should have a completely open go.

It has been my contention always that a Party does not actually win office. The Government of the day loses it. During the last year or for a bit more than a year we have heard about this Government having a mandate to do whatever it likes. To me that is just rubbish. The Government has a bare majority of some .5 per cent to one per cent. I expect that at the next Senate election we will see quite a swing against the Government. One of the reasons that I expect a swing is that the referenda questions will confuse people. In this I agree with Mr Bob Hawke ‘s first contention, anyway. I feel that Mr Whitlam is quite crazy having the referenda questions at the same time as the Senate election. I have said before that Mr Whitlam just does not understand figures. If he did he would not spend so much of his time overseas on ministerial trips and he would not be buying 707 aircraft for the VIP fleet. If he knew anything about figures he would be able to reduce taxes rather than continually increase them.

Senator Wriedt:
ALP

– Who was the independent Tasmanian colleague who said that?

Senator Milliner:

– What about Launceston?

Senator LAWRIE:
QUEENSLAND · CP; NCP from May 1975

– I want to take the opportunity on the motion for the first reading of the Appropriation Bill (No. 3) 1973-74 to refer to a couple of matters. Firstly, I would like to refer to some of the statements made by Senator Poyser earlier in this debate. I did not hear all he said, but I understand that he attacked Federation Insurance Ltd and attacked particularly the Victorian Branch of the Australian Country Party. Federation Insurance Ltd is an Australian owned and controlled insurance company. It is one of the few insurance companies in Australia that is entirely owned and controlled in Australia. It deals with many organisations, and the Victorian Branch of the Country Party happens to be one. I know also that it has agreements with other political organisations and many primary producer organisations such as wheat boards, wheat growers and other people of that type. It makes no secret whatever of its premium refunds; they are widely publicised. It carries on business all over Australia, and it saves on advertising and many other things. Many organisations insure with Federation Insurance Ltd, including some trade unions. Why do we not go a little further and look at the operations of the Australian Council of Trade Unions? It receives rebates from its major suppliers of goods, and much of this money passes as profits from the ACTU back to the Victorian Branch of the Australian Labor Party. We have no objection to an inquiry being held into Federation Insurance Ltd or any other insurance company, provided there is also an inquiry into Bourke’s store, and why they receive such large discounts. An inquiry should be held also into the ACTU travel service which is trying to obtain discounts and rebates in order to provide cheap travel for its members. There is nothing wrong with that at all. But why should one organisation be attacked and no reference be made to the others?

I want to refer also to the appropriation for the Postmaster-General’s Department in this Appropriation Bill. Strange to say, the PostmasterGeneral’s Department is not mentioned in this particular Appropriation Bill. I know that I will be told that it has a one line appropriation, that money can be transferred from one section of the Postmaster-General’s Department to another without reference to the Parliament. One would think that there would be a very high wages content in that one line appropriation. Since the main purpose of this Appropriation Bill is to provide extra money for wages, one would think that the Postmaster-General’s Department would figure a fair bit in this.

I want to refer particularly to a couple of matters related to the Postmaster-General’s Department. I refer, firstly, to its telephone services. When the previous government was in power we had quite a good policy in relation to country telephones: Fifteen miles of line was constructed free of charge and for distances more than that the line was constructed at a very cheap rate; and it was maintained in perpetuity. This had to be the case because of the high standard of line required for automatic telephone exchanges. Some progress was being made under the previous Government in providing services for those who, by their very occupation or the place in which they lived, whether it was by accident or otherwise, required a telephone service of their own. They were not like the people who had access to public telephones in the next street or a telephone in the neighbour’s place.

In Australia there is a very large number of telephone exchanges which operate on restricted hours. When one goes to other parts of the world and talks about one’s telephone service being cut off at 6 p.m. or 8 p.m. and not starting again until 8 o’clock or 9 o’clock in the morning and a telephone service which finishes at midday on Saturday with no other service until Monday morning apart from possibly a short time on Sunday, one is just laughed at. One is not believed. People overseas do not believe that any place could be so backward as far as its telephone service is concerned. When we were in government we were beginning to get away from these restricted hours by putting in automatic telephone exchanges and by helping people with the construction of their telephone lines. It all came to an end with the change of Government.

Senator Gair:

– Andrew Fisher introduced penny postage here.

Senator McLaren:

– Who told you that?

Senator McLaren:

– What would you do in the circumstances if you were in government?

The ACTING DEPUTY PRESIDENT (Senator Wood)-Order!

Senator McLaren:

– What would you do?

The ACTING DEPUTY PRESIDENT-

Senator McLaren, you are most persistent in your interjections. If you persist any further on that line I will take action.

Senator McMANUS:
Victoria

– I recall that prior to the last election when his Party became the Government, Mr Whitlam made a statement that he had to admit that there was a vein of authoritarianism inside the Labor Party. That vein of authoritarianism has been illustrated by the fact that we now have in Australia a government which for the first time in history has decided to tell Australians whom they can play sport against and whom they cannot play sport against. I refer to the announcement that the Lawn Tennis Association of Australia has been pressured by the Government and told that it should not send a team of women to South Africa to play tennis. A statement that I heard tonight is to the effect that this organisation- a voluntary organisation which in my view is not subject to Government dictation- has been instructed that this tour should not take place. I regret the fact that it did not tell the Government that voluntary sport is controlled by the people who run the sport and not by governments. They have pointed out that should South Africa win through to the finals of the Davis Cup, under that ruling Australia would have to forfeit the Davis Cup by not playing against South Africa.

Senator McLaren:

– It is not as bad as in Spain.

Senator O’Byrne:

– And in Portugal too.

Senator GREENWOOD:
Victoria

- Mr Acting Deputy President, there is only a minute or two before you put the question.

page 464

ADJOURNMENT

The ACTING DEPUTY PRESIDENT (Senator Marriott)- Order! It being 11 o’clock, in conformity with the sessional order relating to the adjournment of the Senate, I formally put the question:

That the Senate do now adjourn.

Question resolved in the affirmative.

page 465

ANSWER TO QUESTION UPON NOTICE

The following answer to a question upon notice was circulated:

Political Rights of Women (Question No. 3)

Senator Greenwood:

asked the AttorneyGeneral, upon notice:

How many and which countries have ratified or acceded to the Convention on Political Rights of Women and deposited instruments of ratification or accession with the SecretaryGeneral of the United Nations.

Senator Murphy:
ALP

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

As at 27 February 1974, seventy-four countries had ratified or acceded to the Convention on the Political Rights of Women. The countries are as follows: Afghanistan, Albania, Argentina, Austria, Barbados, Belgium, Bolivia, Brazil, Bulgaria, Byelorussian SSR, Canada, Central African Republic, Chile, China, Congo, Costa Rica, Cuba, Cyprus, Czechoslovakia, Denmark, Dominican Republic, Ecuador, Ethiopia, Fiji, Finland, France, Gabon, Democratic Republic of Germany, Federal Republic of Germany, Ghana, Greece, Guatemala, Haiti, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Laos, Lebanon, Madagascar, Malawi, Malta, Mauritius, Mongolia, Nepal, Netherlands, New Zealand, Nicaragua, Niger, Norway, Pakistan, Philippines, Poland, Republic of Korea, Romania, Senegal, Sierra Leone, Spain, Swaziland, Sweden, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukrainian SSR, Union of Soviet Socialist Republics, United Kingdom, Yugoslavia, Zambia.

Cite as: Australia, Senate, Debates, 20 March 1974, viewed 22 October 2017, <http://historichansard.net/senate/1974/19740320_senate_28_s59/>.

View PDF View XML View in Voyant