Senate
1 June 1976

30th Parliament · 1st Session



The PRESIDENT (Senator the Hon. Condor Laucke) took the chair at 2.30 p.m., and read prayers.

page 2099

MINISTERIAL ARRANGEMENTS

Senator WITHERS:
Minister for Administrative Services · Western AustraliaLeader of the Government in the Senate · LP

– I inform the Senate that the Minister for Immigration and Ethnic Affairs, Mr MacKellar, left Australia on 28 May to lead the Australian delegation to the Habitat Conference which is being held in Vancouver. He will also visit migration centres in the United Kingdom and Europe and represent the Government at independence celebrations in the Seychelles. He is expected to return to Australia on 3 July. During his absence the Attorney-General, Mr Ellicott, is acting as Minister for Immigration and Ethnic Affairs.

I also inform the Senate that the Minister for Repatriation, Mr Newman, is acting as Minister for Environment, Housing and Community Development.

page 2099

PETITIONS

Family Planning

Senator COLEMAN:
WESTERN AUSTRALIA

– I present 2 petitions from 603 and 180 citizens of Australia respectively as follows:

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

That the Family Planning Association and similar organisations throughout Australia contribute to the welfare and well-being of a great proportion of the Australian people both in family planning and in an advisory capacity on the prevention and control of social diseases.

Your petitioners therefore humbly pray that urgent consideration be given to a favourable decision on the continuation of Federal Government finance to enable the activities of the Family Planning Associations and like organisations to proceed unimpaired throughout Australia.

And your petitioners as in duty bound will ever pray.

Petitions received.

Australian Assistance Plan

Senator BAUME:
NEW SOUTH WALES

– I present the following petition from 48 citizens of Australia:

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

That since the Australian Assistance Plan is Railway possible for citizens to help themselves, thereby ensuring est possible use of limited Government resources, as shown by the stimulus and support given to community groups through the Australian Assistance Plan in the Albury Wodonga Region.

Your petitioners most humbly pray that the Senate in Parliament will take immediate steps to continue the Australian Assistance Plan as recommended in the Report tabled by the Honourable the Minister for Social Security, Senator Margaret Guilfoyle in Parliament on the 4th of March, 1 976.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Darwin to Larrimah Railway

Senator ROBERTSON:
NORTHERN TERRITORY

– I present the following petition from 557 citizens of Australia:

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

That the Federal Government has announced its intention to withdraw all services on the Darwin/Larrimah railway link.

That the withdrawal of these services will cause serious economic and social hardship to the people of the Northern Territory especially those in Darwin.

That the officers at present employed by the North Australian Railways will suffer hardship through absence of alternative employment.

Your petitioners therefore humbly pray that the Government will reconsider its decision to withdraw the services and allow the North Australian Railways to continue to operate at its present level.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Australian Assistance Plan

Senator MISSEN:
VICTORIA

– I present the following petition from 220 citizens of Australia:

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

That since the Australian Assistance Plan is making it possible for citizens to help themselves, thereby ensuring best possible use of limited Government resources, as shown by the fact that over 200 community projects have been initiated or funded through the AAP in the Outer Eastern Region.

Your petitioners most humbly pray that the Senate in Parliament will take immediate steps to continue the Australian Assistance Plan as recommended in the Report tabled by the Honourable the Minister for Social Security, Senator Margaret Guilfoyle in Parliament on 4 March 1976.

And your petitioners as in duty bound will ever pray.

Petition received.

The Clerk:

– Petitions have been lodged for presentation as follows:

Immigrant Teachers

To the Honourable the President and Senators of the Senate in Parliament assembled. The humble petition of the undersigned students and staff of Christ College and State Colleges of Victoria respectfully showeth:

That teachers recruited outside Australia by the Victorian Education department have their income taxation exemption for the period of their stay in Australia cancelled.

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

Petition received.

Metric System

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

And your petitioners as in duty bound will ever pray. by Senator Wood (2 petitions).

Petitions received.

Family Planning

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

That the Family Planning Association and similar organisations throughout Australia contribute to the welfare and wellbeing of a great proportion of the Australian people both in family planning and in an advisory capacity on the prevention and control of social diseases.

Your petitioners therefore humbly pray that the Senate, in Parliament assembled, give urgent consideration to a favourable decision on the continuation of Federal Government finance to enable the activities of the Family Planning Associations and like organisations to proceed unimpaired throughout Australia.

And your petitioners as in duty bound will ever pray. by Senator Jessop.

Petition received.

Overseas Development Assistance

To the Honourable the President and Members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that many Australians are concerned at the announced decision by the Australian Government to reduce the 1975-76 Overseas Development Assistance vote by $2 1m, and by the abolition of the Australian Development Assistance Agency.

We your petitioners do therefore humbly pray that the Australian Government:

  1. as a matter of urgency, reverse the decision to cut the 1975-76 Overseas Development Assistance vote, so as to ensure that the full amount appropriated by Parliament for Overseas Development Assistance is spent this financial year to meet the pressing needs of those in the developing countries;
  2. reaffirm Australia’s commitment of Overseas Development Assistance being a minimum of 0.7 per cent of GNP, and
  3. establish a fully independent statutory authority to administer Australia’s official Overseas Development Assistance.

And your petitioners as in duty bound will ever pray. by Senator Carrick.

Petition received.

Immigrant Teachers

To the Honourable the President and Senators of the Senate in Parliament assembled. The humble petition of the undersigned students and staff of Christ College in Victoria respectfully showeth:

That the Immigration of teachers recruited from outside Australia be prevented while students with similar University qualifications are refused entry into Diploma of Education courses, and school leavers are refused entry into the State Colleges of Victoria.

And your petitioners as in duty bound will ever pray. by Senator Webster.

Petition received.

Social Security Payments: Indexation

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

That distress is being caused to social security recipients by the delay in adjusting pensions to the Consumer Prices Index months after prices of goods and services have risen, and that medications which were formerly pharmaceutical benefits must now be paid for.

Additionally, that State housing authorities’ waiting lists for low rental dwellings for pensioners grow ever longer, and the cost of funerals increase ever greater.

Your petitioners call on the Australian Government as a matter of urgency to: Adjust social security payments instantly and automatically when the quarterly Consumer Prices Index is announced.

Restore pharmaceutical benefits deleted from the free list.

Update the State Grants (Dwellings for Pensioners) Act of 1974, eroded by inflation, to increase grants to overcome the backlog.

Update Funeral Benefit to 60 per cent of reasonable cost of funeral. (This benefit was 200 shillings, 20 dollars, when introduced in 1943. It was seven times the 1948 pension of 27 shillings a week).

And your petitioners as in duty bound will ever pray. by Senator Douglas McClelland.

Petition received.

page 2100

NOTICES OF MOTION

Senate Standing Committee on Social Welfare

Senator BAUME:
New South Wales

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

That there be referred to the Senate Standing Committee on Social Welfare the following matter: Evaluation of the adequacy of Australian health and welfare services with particular reference to-

1 ) standards of performance and provision of health and welfare services;

the pattern of current practice in the provision of such services in terms of need and demand;

mechanisms for evaluation of the effectiveness and efficiency of health and welfare services; and

requirements for ongoing evaluation as an integral part of the development of health and welfare programs.

Standing Committee on Regulations and Ordinances

Senator WOOD:
Queensland

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

That the 55th report of the Standing Committee on Regulations and Ordinances relating to Australian Capital

Territory Ordinances containing substantive legislation, and presented to the Senate on 27 May 1 976, be adopted.

City Area Leases Ordinance

Senator WOOD:

– (Queensland)- I give notice that 6 sitting days after today, I shall move:

That the City Area Leases Ordinance 1976, as contained in Australian Capital Territory Ordinance No. 12 of 1976 and made under the Seat of Government (Administration) Act 19 10- 1973, be disallowed.

page 2101

QUESTION

QUESTIONS WITHOUT NOTICE

page 2101

QUESTION

SOCIAL SERVICE BENEFITS

Senator GRIMES:
NEW SOUTH WALES

-I ask the Minister for Social Security: Is it a fact that investigating officers of her Department are being instructed or will in the future be instructed by the Commonwealth Police force in methods of questioning and investigating beneficiaries of the Department regarding the validity of continuation of their benefits? Does the Minister believe that such training is appropriate for a department whose chief purpose is to help those in need?

Senator GUILFOYLE:
Minister for Social Security · VICTORIA · LP

– I am not aware of any instruction or direction that Commonwealth Police should give instruction to my officers. I shall have the matter investigated and give a further report to the honourable senator in due course.

page 2101

QUESTION

CENSUS FORM

Senator BONNER:
QUEENSLAND

– My question is directed to the Minister representing the Treasurer. In view of mounting public concern regarding the highly intimate nature of answers required to certain questions alleged to be contained in the forthcoming census form, will the Minister arrange to have a pro forma of this document tabled in both Houses of the Parliament to permit honourable senators and members from both sides of the respective Houses to thoroughly examine the nature and the full extent of the questions asked and the information sought therein?

Senator COTTON:
Minister for Industry and Commerce · NEW SOUTH WALES · LP

– I have heard some comment about this matter and I understand that some people have apprehensions about it. I have not seen the document myself but I would share the honourable senator’s concern. I will take up the matter with the Treasurer.

page 2101

QUESTION

ATOMIC REACTOR

Senator KEEFFE:
QUEENSLAND

-Does the Minister for Science possess up to date information concerning a proposed reactor to replace HIFAR at the Lucas Heights establishment of the Australian Atomic Energy Commission? If so. can the Minister advise the Parliament of its proposed location, its accessibility to the scientific community of Australia and, in the light of the inadequacies of the present facilities, when it will be built?

Senator WEBSTER:
Minister for Science · VICTORIA · NCP/NP

– Any work or any building which may go on at the Lucas Heights establishment is not within my portfolio. I believe that would come within the portfolio of the Minister for National Resources.

page 2101

QUESTION

METRIC SYSTEM

Senator WOOD:

– I ask the Minister for Science a question. What is the balance of the cost involved in introducing metrication to the Commonwealth of Australia? In view of the Government’s professed intention to cut back expenditure, does the Minister not consider that any further cost associated with metrication might well be deferred?

Senator WEBSTER:
NCP/NP

-The honourable senator will be aware, as he was a member of the Senate at the time, that a Senate select committee put forward a report on the metric system and it was debated in this chamber. In that report the committee advocated to the Parliament and to the people of Australia that a metric system should be introduced in Australia. I do not recall the honourable senator speaking against that proposal at the time but he may have done so. The metric system has been gradually introduced into the community for some years now. It is my opinion that Mr Norgard, the chairman, and the members of the committee which is bringing that system into being are doing an outstanding job generally and in economic terms.

My recollection is that the cost of implementing decimal currency was more than $40m. To the end of 1975 the cost to the Federal Budget of introducing metrication had been of the order of $3.5m. It had been an extremely low figure due to the method by which the Metric Conversion Board had gone about its work. I am unable to say how much more money will be required. From a statement that I put down in this place recently it is understood that metrication has been approximately 75 per cent achieved. There are some difficulties relating to real estate and other matters. I am confident that the community will benefit, as nearly every major country that has introduced the metric system has benefited. America, I believe, in January of this year legislated for conversion to the metric system.

page 2102

QUESTION

ATOMIC REACTOR

The PRESIDENT:

– That lies within the determination of the Minister concerned in the first instance. I call Senator Withers.

Senator WITHERS:
LP

-Mr President, when Senator Keeffe asked his question I actually thought, as he did, that responsibility for the Atomic Energy Commission lay with the Minister for Science. It was not until Senator Webster, the Minister for Science, pointed out that it comes within my area of responsibility that I realised that that is the case. I will seek the information for which the honourable senator has asked.

page 2102

QUESTION

CHILEAN MIGRANTS

Senator BUTTON:
VICTORIA

– My question is addressed to the Minister representing the Acting Minister for Immigration and Ethnic Affairs. I refer to newspaper reports of the last day or two which generally have carried such headings as: Chilean Migrant Racket Exposed’. Those reports indicate that a number of Chilean migrants probably are to be deported from Australia. Before any deportation orders are signed in respect of Chilean migrants, will the Acting Minister ensure, firstly, that interpreter services are made available to the people concerned and, secondly, that steps are taken to ensure that they have every opportunity to explain whether they class themselves as political refugees from Chile?

Senator GUILFOYLE:
LP

– I feel sure that I could give an undertaking on behalf of the Acting Minister for Immigration and Ethnic Affairs with regard to matters relating to political refugees. I also could give an assurance that interpreter services would be available to enable people to have a full understanding of the situation. It could be said with regard to this matter that inquiries by the Department of Immigration and Ethnic Affairs have revealed that the direct transit facility has been abused by a number of Chileans to gain entry to Australia and to remain here illegally. Twenty such persons have been identified and reports suggest that the number could be substantially greater. This facility provides for bona fide international air travellers passing through Australia to a third country to remain here for up to 3 days without the prior need to obtain visas. The Chileans now in question obtained tickets for travel to Manila through a travel agency in Chile and were allowed entry to Australia for the period required for them to join connecting flights to Manila. These people have not left Australia and are now prohibited immigrants liable for deportation. It also could be said that deportation orders against 7 Chileans, 2 of whom are in custody, have been signed by the Minister for Immigration and Ethnic Affairs. The actual deportation could not be arranged for several days because of the difficulties in arranging passages. In response to the question raised by the honourable senator, I will ensure that interpreter services are available and that a full understanding of the situation is available to the people concerned.

page 2102

QUESTION

LOCAL GOVERNMENT FINANCES

Senator YOUNG:
SOUTH AUSTRALIA

– I direct a question to the Minister Assisting the Prime Minister in Federal Affairs. Has he seen a reported statement by Mr Whitlam in today’s Press that ‘local government should prepare itself for Fraser ‘s squeeze’? Is this not a case of playing politics and a misleading statement by Mr Whitlam? Will the Minister state what is the factual position regarding local government financing?

Senator CARRICK:
Minister Assisting the Prime Minister in Federal Affairs · NEW SOUTH WALES · LP

-In fact, I have not had my attention drawn to Mr Whitlam ‘s statement. However, I accept that it was couched in the manner in which the honourable senator retailed it to me. If so, Mr Whitlam is misleading the people of Australia. Local government has conveyed to my Government and me its warm response and pleasure at the federalism policies of the Government as they relate to local government and has commended the sum of $140m which has been allocated for the coming financial year, that sum being 75 per cent larger than the amount made available by the previous Government in untied grants for this year.

Senator Young:

– Did you say 75 per cent?

Senator CARRICK:

– The amount is 75 per cent greater in quantum for this coming year than the Whitlam Government made available. Local government has been able to say that unlike the times when Labor was in power, when it had to put up its municipal and shire rates by 35 per cent -

Senator Button:

- Mr President, I raise a point of order. Senator Carrick began his answer to the question by saying that he had not seen the statement in question and that he could not comment on it. He has now gone on for nearly 5 minutes debating the issue. That is the point of order I raise.

The PRESIDENT:

– The point of order is not sustained. No point of order arises.

Senator CARRICK:

-It is a good try by the honourable senator bearing in mind that a recording of question time will be replayed on the radio this evening. Let me reiterate the simple fact, which will help to underline Senator Button’s reluctance to have this point made, that in the last 2 years of the Labor Government it was necessary for municipalities and shires to raise their rates by 35 per cent. The federal body of the Local Government Association has indicated that if rate increases are necessary in the coming year they will be of the order of 5 per cent.

page 2103

QUESTION

LOCAL GOVERNMENT FINANCES

Senator WRIEDT:
TASMANIA

– I address my question also to the Minister Assisting the Prime Minister in Federal Affairs. Can he advise the Senate what proportion of moneys that were paid to the States in the last financial year was eventually used by local government authorities throughout the Commonwealth?

Senator CARRICK:
LP

-No, not offhand. I will get information and give it to the Leader of the Opposition when it comes to hand.

page 2103

QUESTION

SECRET MEETING OF THE FAMILY COURT

Senator WRIGHT:
TASMANIA

– I direct my question to the Minister representing the Attorney-General. No doubt the Minister saw the front page news headlined in the Sydney Morning Herald last Friday reporting that 2 persons had been committed to prison by the Family Court operating in secret. I ask the Minister whether he will put to study by the Attorney-General the question whether our Constitution permits secret courts, whether the 2 terms are not diametrically inconsistent having regard to the British Constitution and whether secret courts are completely prohibited; and will he let the Senate know the Attorney-General’s advisings on that constitutional matter?

Senator WITHERS:
LP

-In fact, travelling in an aeroplane to Perth, I did have my attention drawn to that report by one of my colleagues who used to practice or perhaps still practices as a lawyer- unlike myself. I will pass the honourable senator’s request along to the AttorneyGeneral to have this matter looked at. But I would say to the honourable senator that the matter of whether family courts could meet in closed session, if one could put it that way, was specifically decided in a recent High Court judgment. Whether that decision went only to matters dealing with family law proceedings as such and did not necessarily deal with contempt proceedings I could not answer, but I will bring this matter to the notice of the Attorney-General and ask him whether he can put an advising down in this Parliament.

page 2103

QUESTION

PUBLICISING OF GOVERNMENT DECISIONS

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

-Has the Minister for Administrative Services seen a report that the Australian Government intends spending several hundred thousand dollars a year on publicising its decisions and announcements and that from 1 July the Government will be producing a weekly booklet in the form of a digest setting out all Government statements and policy announcements? Is the report correct? If so, in what way will the publication be different from the Australian Government Digest, the publication of which was abandoned by the present Government ealier this year because it was alleged that it was political propaganda?

Senator WITHERS:
LP

-I think that I did see something in a newspaper about this matter. Somebody did draw my attention to it. But, for the life of me, I cannot recall which newspaper or what it said. Therefore, I am unable to comment from recollection on the accuracy of that report.

page 2103

QUESTION

CONCORDE AIRCRAFT

Senator MISSEN:

– My question is addressed to the Minister representing the Minister for Transport. I refer to the statement by the Minister for Transport of 28 May 1976 advising of Government approval of Concorde aircraft commencing regular services to Australia. In that statement, the Minister explained that one of the major reasons for this decision was based on an environmetal impact statement on planned Concorde operation to Australia prepared by the British Government in association with British Airways Ltd and the Concorde’s manufacturers, the British Aircraft Corporation. Will the Minister advise the Senate whether this environmental impact statement has been or will be made available to the public and to those who are expressing concern at the Government’s decision?

Senator CARRICK:
LP

– I have the statement of the Minister for Transport in front of me. He has in fact based his decision on 3 major considerations. The first is the Department of Transport’s noise and sonic boom measurements that were taken during the Concorde’s proving flights to

Australia during August 1975. The second, to which I think the honourable senator has referred, is an environmental impact statement on planned Concorde operations to Australia that was prepared by the British Government in association with British Airways and the Concorde’s manufacturers, the British Aircraft Corporation. The third is the submissions from the public and environmentalists on the Concorde’s operations into Australia. Senator Missen has asked whether the impact statement has been released or published. To my knowledge the answer to that is no. He has also asked whether we could arrange for that to be done. I shall communicate that message to the Minister and see whether it can be done.

page 2104

QUESTION

CONCORDE AIRCRAFT

Senator MULVIHILL:
NEW SOUTH WALES

– I direct a question to Senator Carrick. It follows from Senator Missen ‘s question. Were the 3 reports that the Minister has referred to evaluated solely by the Minister for Transport? Mindful of the unfortunate illness of the Minister for Environment, Housing and Community Development, I ask: Did either Mr MacKellar or Mr Newman jointly evaluate those reports with Mr Nixon or was it entirely, as I suspect, Mr Nixon’s show?

Senator CARRICK:
LP

– I rise to respond, wearing 2 representative cloaks- transport and environment. My understanding is that the environmental impact statement was made by the British Government itself, that in its preparation and in the whole of its journey up to the drafting stage, which we understand is its final stage, there was continuous association between this Government and the British Government, and that that knowledge was available to both departments. I think that the impact study itself can be taken as having been done on the broad lines that are now accepted internationally- thank goodness- as standard by governments in preparing these kinds of statements; and that the Department of Environment, Housing and Community Development can be taken to have been associated with that investigation. The Department of Transport itself undertook the noise and sonic boom measurements during the proving flights in Australia. I understand that both departments received submissions from the public and from environmentalists, and evaluated them. There has been a continuous flow of information on this matter to both departments. Essentially the report rests on the British environmental impact statement, together with the 2 streams of testing that have been done in Australia.

page 2104

QUESTION

RADIO OPERATORS’ EXAMINATION

Senator ARCHER:
TASMANIA

– I address a question to the Minister representing the Minister for Post and Telecommunications. When can the Tasmanians who sat for the amateur radio operator’s certificate at an examination conducted by the Radio Regulatory and Advisory Branch on 19 February 1976, and who still have not received their examination results, expect to do so? The next examination is due to be held in August and those whom the results may show to have been unsuccessful are not able to recommence studies until the information comes to hand. Can these results be expedited?

Senator CARRICK:
LP

-I understand that this trouble has arisen from some fairly continuous industrial trouble that occurred during 1975 with the Professional Radio and Electronics Institute, the body of which I think the examiners are members. Because of these industrial troubles, there were delays. I am advised that consequently there was a greatly increased number of candidates for the examinations held in February of this year. Preference in the correction of the examination papers was given to candidates for the commercial certificates, and these results have been notified. The next preference was given to the telegraphy test in morse code because a supplementary examination was to be held in May. Any candidate who failed was notified of his failure so that he could sit for the supplementary test.

It is expected that the results of the amateur examinations will be completed well before entries close for the next amateur examination in August. I say ‘the next amateur examination’ without prejudice, as the lawyers say. I am advised that candidates would be well advised to retain some familiarity with the examination syllabus until their results are notified.

page 2104

QUESTION

EAST TIMOR CEREMONY

Senator GIETZELT:
NEW SOUTH WALES

– Has the Minister representing the Minister for Foreign Affairs noted the decision by the Australian Government not to be present at the sham ceremony in Dili yesterday which purported to make a determination for the integration of East Timor with Indonesia? Does the Minister know that that act is contrary to the declaration made by the Indonesian President and his Foreign Minister, Mr Malik, and flouts the decision made on several occasions by the United Nations Security Council? Can the Minister inform the Senate whether the decision not to attend this charade was made because Australia recognises the immorality and illegality of the whole ceremony and the proposed integration decision?

Senator WITHERS:
LP

-As to the first question, yes; as to the second question, no; as to the third question, I will find out.

page 2105

QUESTION

PORT OF DARWIN

Senator KILGARIFF:
NORTHERN TERRITORY

-I direct a question to the Minister representing the Minister for the Northern Territory. In view of the fact that the Bureau of Transport Economics has had tabled in the Senate a report entitled Provision of General Cargo Facilities at the Port of Darwin, will the Government indicate to the Senate what action is contemplated in regard to the report? Secondly, does the Government agree with the contents of the recommendations, and what is its intention with regard to options A, B, C and D, which list variations to the port of Darwin wharf facilities? Thirdly, as these wharfage facilities are outmoded and without land backed berths, which incidently the report considers are warranted economically will the Government take firm action to upgrade the port to cope with future cargo, whether it be for the development of Northern Territory industries or for defence?

Senator WEBSTER:
NCP/NP

-The honourable senator has asked a quite wide question relating to the report. I am aware that following cyclone Tracy in Darwin it was well recognised that new port facilities would be necessary. Over many years, Senator Kilgariff has taken a great interest in developments in that area. I recall that many years ago when I was a member of the Public Works Committee Senator Kilgariff was present during an inspection which took place following a report by Maunsell and Partners as to what should be advocated for the development of the port of Darwin. My understanding is that the report to which the honourable senator referred agrees with the advice of the Public Works Committee, which said that new facilities would be necessary and in general terms advocated that development should take place at Stokes Hill and at Fort Hill, although my recollection is that Frances Bay was indicated originally by the Public Works Committee. However, I am sure that I cannot do justice to all the questions asked by Senator Kilgariff. I will obtain the information from the Minister for the Northern Territory and advise the honourable senator.

page 2105

QUESTION

CHILEAN MIGRANTS

Senator GEORGES:
QUEENSLAND

– My question is directed to the Minister representing the Minister for Immigration and follows upon the question asked previously about illegal Chilean immigrants. I ask the Minister to consider the consequences which may flow to the Chileans if they are deported back to Chile. Will she advise the Minister for Immigration that those consequences could be so severe as to affect the liberty and lives of the people concerned? Will the Minister make representations seeking some allowance For these people? Will the Minister seek to inform them that they may have a right to amnesty or to political refuge in this country? Will the Minister consider at least delaying any deportation until such time as those who wish to support these people may do so by representation to the Minister?

Senator GUILFOYLE:
LP

– This question does relate in general terms to the question asked earlier by Senator Button. In answering the earlier question I did refer to those who would fall within a special category and who claimed that they were political refugees. I think it would be understood that in such cases the usual provisions would apply. The other matter that has caused some comment is the fact that it was apparent that these people had willingly used the direct transport facility in a way that was not in accordance with the provisions that are laid down. I think it would be understood that our immigration policy ensures that people admitted for settlement have fulfilled the necessary entry requirements. It follows that those who fall within this other category do have some difficulty. I shall certainly refer to the Minister for Immigration the matters that have been raised, particularly with regard to those people who do claim political refuge in this country. I shall refer to him also the suggestion of delaying any deportation until these people have full knowledge of their rights and have a full understanding and interpretation of what may be given to them. I certainly shall draw the Minister’s attention to the matters that have been raised by the honourable senator.

page 2105

QUESTION

FULL EMPLOYMENT POLICY

Senator DAVIDSON:
SOUTH AUSTRALIA

– In addressing my question to the Minister for Industry and Commerce I refer to his comments at the weekend and again last night and, in particular, to the references he made to a full employment policy and to the need for what he called ‘consultation between the Commonwealth and the States’, particularly in relation to industrial development and foreign investment. Does the Minister propose to establish consultation in all areas? If so, what will be the effect of this on the rate of growth and development of the country and what will be the effect on the employment situation? I further ask the Minister in relation to his other references to consultation in regional and international development: Will this contribute to Australia’s role in a practical sense in terms of regional development assistance?

Senator COTTON:
LP

-I think I had better give a general answer because I am unable to recall in fine detail all the points raised by the honourable senator. Australia is a country that has, first of all, a mixed economy with public and private sectors which are very much involved with each other, reacting to each other and dependent upon each others decisions and performances. It also has a federal system in which the tiers of government have responsibilities, in some cases complementary and in other cases separate. The critical art of management in Australia is to be able to manage the mixed economy and to manage the federal system. This makes it more complicated than some of the unitary systems that exist in the world. One therefore must say this: If real progress is to be made in this country, if real achievement is to be gained and if living standards are to rise, there has to be a solid process of consultation between the public and private sectors of the economy and between the various levels of government. It is that process of consultation that I was referring to and that the Fraser Government has solidly set programs in train to ensure.

We are making a lot of progress in this area right across the board. In my case, specifically, I have 12 councils of industry that operate right across the industrial area. They consist of people from the associations of manufacturers, the consumers, the buyers, those who in effect are the users, the government departments concerned, members of the trade unions and, equally, members from both this side of Parliament and from the Opposition side of Parliament. Also, in the Treasury area there is a range of consultation under the Financial Corporations Act umbrella between people from various levels within the finance area including the banks and others like that. The aim is to get a degree of consultation and an understanding of the overall national problem. In giving this long answer I point out that the reason for this is that governments can only take things a certain way. In the present process of an Australian economic recovery and a return to full employment we now need to have the active support and help of the other part of Australia which is not the Federal Government part. I refer to the State governments, the consumers, the businessmen, and the trade union movement. This is an area in which all Australian are inter-related. It is that for which I am arguing, if we wish to return to sensible economic growth, full employment and better opportunity for people.

page 2106

QUESTION

INSTITUTE OF FAMILY STUDIES

Senator HARRADINE:
TASMANIA

-My question, which is addressed to the Minister representing the Attorney-General, relates to the AttorneyGeneral’s statement of 20 May indicating that the commencement date for the Institute of Family Studies would be deferred until the end of the 1976-77 financial year. Does the Minister recall the concern that a number of people within the community expressed that the philosophy behind the Family Law Bill would strike at the concept of the family being the basic unit of society? Does the Minister recall that as a result of that concern the previous Attorney-General inserted into the Bill in July 1974 a provision for an Institute of Family Studies? Does he also recall that the Institute was established to promote, by encouragement and co-ordination of research and other appropriate means, activities directed towards the protection of the family as the natural and fundamental group in society? Does he further recall that the introduction of that particular part of the Family Law Bill gave rise to an expectation on the part of those persons concerned in the community that it would take effect immediately the Bill was proclaimed? Having had his memory refreshed, will the Minister now reconsider the proposed deferral, particularly as the saving will be only $140,000 but the cost of the deferral to our society could be very great indeed?

Senator WITHERS:
LP

-I think there are 6 parts to that question. As to the first 5 parts, I think the answer is yes in each case. As to the last part, I will ask the Attorney-General whether he will reconsider.

page 2106

QUESTION

MEDIBANK PAYMENTS

Senator MELZER:
VICTORIA

– My question is addressed to the Minister representing the Minister for Health. Is it true, as reported, that the Government has reversed the decision it took to make cheques payable to the patient who would then pay the doctor, so that the system will be that cheques will be made payable to the doctor where the patient has sent an unpaid bill to Medibank? Was this decision to reverse the planned procedures made at the insistence of the Australian Medical Association? Will the Government be as sympathetic to the views of other sections of the community on Medibank as it has been to this pressure group?

Senator GUILFOYLE:
LP

– I am unable to detail the reasons behind some of the questions that have been asked. I remind the Senate that we will be debating all of the Medibank Bills, I hope, during the course of this day. I feel sure that matters that have been the subject of this question could be covered in that debate.

page 2107

QUESTION

FAMILY ALLOWANCES

Senator TEHAN:
VICTORIA · NCP

– My question, which is directed to the Minister for Social Security, relates to the new and increased family allowances which, following on the existing system of child endowment, will be paid to the mother of the child or children. Can the Minister clarify the position in relation to the payment of the newenefits to the father of the child or children where the father has actual and legal custody and maintains the child or children? Will the payment under the new scheme go. to the father in these circumstances?

Senator GUILFOYLE:
LP

– I am able to assure the honourable senator that where a father has the care, custody and control of the child the payment of this benefit, which is a benefit for the children of Australia, will be made to him. Where a child is living with the mother or within the family, the payment will be made to the mother. Where the mother is not directly related to the care, custody and control of the child, the payment will go to the parent who has that responsibility.

page 2107

QUESTION

SOCIAL SECURITY BENEFITS

Senator DEVITT:
TASMANIA

– I also direct a question to the Minister for Social Security. It concerns the situation of a young unmarried girl who becomes pregnant and her entitlement under the law to social security benefits. What action can be taken to remedy the situation where a girl under 16 years of age who becomes pregnant- I understand that under the law a girl of that age is not permitted to marry- and who otherwise would be entitled to a social security benefit of $10 a week as a junior, has the benefit reduced to about $3 a week because her mother is receiving child endowment for her of in the vicinity of $7 a week? Should there not be provision in relevant legislation to meet a case of this kind so that a young expectant mother might have a better chance of preparing for motherhood and, in due course, of giving her baby a chance of a reasonable start in life? Is the case I have put correctly stated? In other words, is the Minister aware of this situation? Does the local departmental director have any special authority in such cases? If not, what can be done to alleviate the distress and anguish of a very young person who, it seems, must bear this burden alone in a condition of virtual poverty?

Senator GUILFOYLE:
LP

– I believe it would be desirable to clarify accurately the situation of a child under sixteen years in the circumstances mentioned by the honourable senator in relation to the payment of the new rates of child endowment which will take effect shortly. I will give consideration to the position outlined and determine whether it has been accurately stated and whether there is any way in which assistance can be given to a pregnant girl under 16 years of age in these circumstances. I will advise the honourable senator later.

page 2107

QUESTION

PRODUCTION OF OIL FROM COAL

Senator JESSOP:
SOUTH AUSTRALIA

– My question is directed to the Minister for Science and refers to experiments being carried out by scientists in the Commonwealth Scientific and Industrial Research Organisation on the flash pyrolosis process to convert coal to liquid fuel. Can the Minister say how advanced these studies are and when his department or that section of his department will be in a position to offer a viable proposition to Australian industry? Can the Minister say whether this process is similar to the FischerTropsch technique that is currently employed by SASOL in the Orange Free State in South Africa and from which petrol is being supplied to South African motorists? Have scientists at CSIRO consulted with the counterparts in South Africa? Is the Minister aware that the General Manager of SASOL addressed the Australian Gas Convention in Canberra last year and offered to cooperate with Australia in the development of this technology?

Senator WEBSTER:
NCP/NP

-No honourable senator has been more interested than has Senator Jessop in the possibility of using our natural resources for producing energy. In his questions relating to both solar energy and the use of coal for this purpose he has shown a great interest in the matter. My understanding is that the Federal Government and various State governments have been most interested in this subject. Victoria has had consultation with West German developers of machinery to convert brown coal into petroleum and within the Federal Government the Commonwealth Scientific and Industrial Research Organisations has done much in this field. My understanding is that an efficient system is some years away as yet although

CSIRO has been carrying out research into different processes. The nash pyrolosis method to which Senator Jessop referred is one of heating coal and obtaining petrol from the tar residue. In Victoria the system is somewhat different and there is some prospect of the residue being a particularly valuable product.

I noted with interest Senator Jessop ‘s comment about the developments in South Africa but I am unable to advise him whether my department is fully aware of the achievements there. However, I take his question on board and will see whether we can make arrangements to gather information on their achievements. As I said formerly, I think the likelihood of our obtaining petrol from coal is some distance away. Mr Anthony announced a few days ago that he was actively seeking an overseas investor to look at the possible production of petrol from the vast coal reserves in Queensland. Senator Jessop can be assured that I will get further information for him and will report shortly.

page 2108

QUESTION

SOUTH AUSTRALIAN COUNTRY RAILWAYS

Senator BISHOP:
SOUTH AUSTRALIA

– My question is directed to the Minister representing the Prime Minister or to the Minister representing the Minister for Transport. It refers to the agreement between the Australian Government and the South Australian Government on the takeover of South Australian country railway services. The Minister will remember that this Parliament ratified the agreement. Can he say whether the Commonwealth Government intends to reject or frustrate the agreement in any way? I remind the Minister that in this place the agreement was ventilated, debated and supported by the Opposition and the Government of the time.

Senator CARRICK:
LP

– Because in the early stages the question was directed to the Minister representing the Prime Minister I did not hear the opening words. If the honourable senator will put the question on notice I shall study it and get an answer for him.

page 2108

QUESTION

ORIENTAL FRUIT FLY

Senator BAUME:

– My question which is directed to the Minister representing the Minister for Health, who is responsible for quarantine matters, concerns the presence of the oriental fruit fly in Australia. I remind the Minister that the fly was identified last year and it was thought that it had only recently been introduced. I also remind the Minister that surveys have revealed that it is spread widely throughout the Northern Territory. I ask the Minister: What is the current view of the length of time that the oriental fruit fly has been in Australia? Specifically, is there evidence which indicates that it may have been here for some years without having been recognised previously? Finally, what is the present state of programs designed to eradicate this serious pest.

Senator GUILFOYLE:
LP

– If the honourable senator had asked me last week the question about the oriental fruit fly I could have given him some very interesting facts and figures. Today I am not as well briefed as I was last week. I assure the honourable senator that the knowledge that the oriental fruit fly is in this country is not new. It was detected many years ago. As the question had some specific areas on which the honourable senator required comment, I shall refer it to the Minister for Health and obtain some information from him.

page 2108

QUESTION

QUALIFICATION FOR SICKNESS BENEFIT

Senator RYAN:
ACT

-My question which is directed to the Minister for Social Security arises out of a query which I received from the Working Women’s Centre in Melbourne. It relates to a woman who has been sacked because of her inability to work following an accident. The woman is the family breadwinner and she applied for sickness benefits. She has been refused benefits by the Minister’s Department until such time as she is visited by ‘ a man ‘ from the Department to see whether she is really the breadwinner. My question is: Is such an investigation carried out in relation to male breadwinners who seek sickness benefis? What evidence, apart from a dismissal notice and medical certificate, is required by the Department? What form will such an investigation take?

Senator GUILFOYLE:
LP

– I assure the honourable senator that the requirement for a female breadwinner would be no different from the requirement for a male breadwinner. If there is a specific area in relation to a person who has been refused a benefit under the circumstances mentioned, I would be pleased to have information about it. I shall ensure that her entitlements are given to her as promptly as possible, but with that assurance I shall seek further information about the personal nature of this inquiry so that I can have it followed through.

page 2108

QUESTION

EDUCATION EXPENDITURE

Senator WALTERS:
TASMANIA

-My question is directed to the Minister for Education. As the Minister for Education in my State of Tasmania is still talking about Federal education cuts and as this has inspired many letters to both myself and other honourable senators from schools in our State showing concern regarding those supposed cuts, will the Minister once again spell out the facts in relation to the maintenance of the Schools Commission and the proposed spending on education, with particular reference to the Karmel report.

Senator Wriedt:

- Mr President, I raise a point of order. We all understand the processes by which this Senate operates at question time, but that question surely is a blatant invitation for a policy statement to be made. It does not seek information. Perhaps if the honourable senator had been a little cleverer she would have worded the question differently to enable it to appear at least as though she was seeking information. If we allow a blatant question of this nature to pass, then question time will simply become a time for making policy statements.

The PRESIDENT:

– I will allow the question to go through to the Minister to enable him to answer those parts of it which do not relate to matters of policy.

Senator CARRICK:
LP

– The Tasmanian Minister for Education should be informed of one thing: The only government which has cut expenditure on education is the former Federal Labor Government. That Government cut education for the calendar year 1976 by a total of $105m compared with the calendar year 1975. 1 repeat that the Federal Labor Government cut expenditure on education for the calendar year 1976 by $105m. By contrast, the present Fraser Liberal Government has increased expenditure on education in all areas. This year there has been a 2 per cent growth in real money terms for universities; a 5 per cent real money growth for colleges of advanced education; a 7 ½ per cent real money growth in the area of technical and further education; and a 2 per cent real money growth for the Schools Commission area. The Government has reactivated the system of triennial planning, thus giving real growth for the future. There is no truth at all in any talk of money cuts.

Senator Wriedt:

– There is not much truth in what you are saying, either.

The PRESIDENT:

– Order! The honourable senator must not reflect on another honourable senator.

Senator Wriedt:

– I am sorry, I apologise. I accept your rebuke, Mr President.

Senator CARRICK:

– Just as the interjection itself was not only out of order but also totally inaccurate, Mr Batt ‘s continuous allegation that we propose to abandon the Schools Commission is totally wrong. The Government’s policy is to retain the Schools Commission in an investigatory and advisory role.

page 2109

QUESTION

RESERVE PRICE OF WOOL

Senator WALSH:
WESTERN AUSTRALIA

– My question is directed to the Minister representing the Minister for Primary Industry. Now that indexation is all the rage will the Government, in accordance with the recommendations of the Farmers Union of Western Australia, among other organisations, and in conformity with the strident demands of many of the Minister’s own colleagues just 12 months to 15 months ago, index the reserve price of wool for the 1976-77 season and thereby maintain the real value of the Labor Government’s assistance to the industry?

Senator COTTON:
LP

-AU these noble thoughts will be taken into account by the Government when the time comes.

page 2109

QUESTION

NORTH AUSTRALIA RAILWAY

Senator ROBERTSON:

-My question, which is directed to the Minister representing the Minister for Transport, concerns the present financial position of the North Australia Railway and is in 4 parts. Firstly, what was the cost in 1974-75 and 1975-76 of the re-sleepering program of the North Australia Railway? Secondly, what was the cost to the North Australia Railway of postcyclone Tracy benefits paid to employees? These benefits would have included rest and recreation fares, R and R paid leave, hard living allowance and time lost while on railway pay but not engaged in productive work. Thirdly, what is the cost to date of post-cyclone Tracy repair work for the North Australia Railway? Finally, can the Minister advise whether the 3 items mentioned above are included in expenditure figures and costed against NAR operational expenses?

Senator CARRICK:
LP

-I ask the honourable senator to put the question upon the notice paper.

page 2109

QUESTION

DARWIN EMPLOYMENT BUREAU

Senator MCINTOSH:
WESTERN AUSTRALIA

– I preface my question, which is directed to the Minister representing the Minister for Aboriginal Affairs, by reminding him that at present the Darwin Employment Bureau has only one acting vocational guidance officer working in the Aboriginal employment section. Will the Minister take appropriate action to ensure that the Darwin Employment Bureau will not suffer from further financial cutbacks? Will the Minister initiate action to ensure that those Aborigines living on isolated settlements in the Northern Territory, especially where unemployment is most ciritical, are visited regularly by the vocational officers?

Senator GUILFOYLE:
LP

– I am sure that I could assure the honourable senator that Aborigines will be given whatever assistance can be given to them to make employment prospects easier for them. I am unaware whether the existing state of affairs is that there is only one vocational officer in Darwin and whether there is some shortage of entitlement in that area. I will draw this matter to the attention of the Minister to enable whatever can be done for Aboriginal employment to be done as quickly as possible. I will obtain whatever information I can for the honourable senator.

page 2110

QUESTION

DARWIN-LARRIMAH RAILWAY

Senator McLAREN:
SOUTH AUSTRALIA

– I direct a question to the Minister representing the Minister for Transport. The Minister will recall telling the Senate on Tuesday, 25 May, as recorded on page 1844 of the Senate Hansard, that railway rolling stock no longer required because of the Government’s decision to close the Larrimah-Darwin rail link may be able to be put to good use on other parts of the Australian National Railways system. How will the locomotives and rolling stock be transported from the Northern Territory to the areas that he mentioned? What is the estimated cost of transporting these vehicles? Was an indepth cost study carried out prior to the Government making the decision to close the line? If so, will the Minister table a copy of the study in the Senate? If no study was made, can the Minister say how the Government arrived at its decision to close the line? Is it the intention of the Government to operate its own road transport system in the Northern Territory in lieu of rail transport, or is the entire carriage of freight to be handed over to private enterprise with a large government subsidy?

Senator CARRICK:
LP

– The Senate will appreciate that this is a long and involved string of questions seeking a large and involved amount of detailed information. Therefore, I ask that it be put on the notice paper.

page 2110

QUESTION

PRIMARY INDUSTRY

Senator O’BYRNE:
TASMANIA

– My question is addressed to the Minister representing the Minister for Primary Industry. I preface it by pointing out that yesterday in Tasmania a large number of primary producers assembled and presented their case to members of the Federal Cabinet, and that during the course of that meeting it was suggested that the way to overcome the problems of primary industry was by price fixing, rationalisation of production and the relocation of people now in depressed areas. Was not this policy widely condemned by the Minister and his colleagues when the previous Labor Government made efforts to introduce a plan to stabilise primary industry along these lines? Could the Minister state whether this suggestion could be taken as the future primary industry policy of the present Government?

Senator COTTON:
LP

-I gathered from all that that the Minister for Primary Industry was in Tasmania yesterday or the day before and that he met some people from farmer organisations, listened to them and had talks with them. I am quite sure that, as a result of those talks and of listening to the particular problems involved, he will take all the factors into account in reaching any judgment that he needs to reach.

page 2110

QUESTION

TERTIARY EDUCATION ASSISTANCE SCHEME

Senator PRIMMER:
VICTORIA

– I direct a question to the Minister for Education. In view of the parlous financial position of students in receipt of the tertiary education assistance scheme allowance, is it proposed that the allowance be increased from its present level of $30 a week? If so, when and by how much? Also, will the allowance be indexed?

Senator CARRICK:
LP

– The honourable senator will know that his own Government over a period of 2 years made a decision to maintain the tertiary education assistance scheme allowance at exactly the same level. It also did nothing about the Williams Committee report regarding anomalies. Therefore, it is true that the value of the allowance has eroded, due to the inflation that was caused during that period. Any decision as to the alteration of the allowance is a budgetary matter and will be dilated upon during the Budget period.

page 2110

QUESTION

PUBLIC LIBRARIES

Senator COLSTON:
QUEENSLAND

-I ask the Minister for Administrative Services: Is it a fact that the committee of inquiry into public libraries found that (a) 82 per cent of the population of all States but only 44 per cent of the population of Queensland is served by free municipal libraries; (b) 41 per cent of the population of Queensland but only 1 1 per cent of the population of all States has to depend on subscription libraries; and (c) 15 per cent of Queensland’s population but only 7 per cent of the population of all States has no access to public libraries? Has consideration been given to the Committee’s recommendation that a special allocation of funds be provided to Queensland to facilitate the replacement of subscription libraries by free public libraries?

Senator WITHERS:
LP

-I do not know whether the figures are accurate; I take it that the honourable senator or his research officer has been through the report and has dug up those figures. Therefore, I take them to be correct, but I have no personal knowledge of their being correct. When the Government’s decision on the Horton Committee’s report has been finalised, it will be made public.

page 2111

QUESTION

TAXATION

Senator SIBRAA:
NEW SOUTH WALES

– I preface my question which I direct to the Minister for Industry and Commerce by referring to a question that I asked the Minister on 26 May 1976 in answer to which the Minister directed my attention to figures published by his department on tax indexation, the Medibank levy and increases in child endowment being introduced. These figures show that a taxpayer on $120 a week with 3 dependants gains only $1.68 in his weekly take home pay whilst a taxpayer on $460 a week with 3 dependants gains an extra $8.33 a week. Is the Minister now prepared to concede that, as a result of these changes, most benefit will accrue to those on the highest incomes as opposed to those on the lowest incomes, who are in most need of tax relief?

Senator COTTON:
LP

-That answer, I believe was in response to a question directed to me as Minister representing the Treasurer. I made available to the whole of the Senate the various tables illustrating the areas of tax benefit. All I will concede is that the Government has done a lot for everybody in Australia.

page 2111

QUESTION

REPATRIATION

Senator DEVITT:

-I ask a question of the Minister representing the Minister for Repatriation. It concerns tax remission for incapacititated ex-service people when purchasing motor vehicles. A similar provision exists also for the civilian incapacitated. Will the Minister give consideration to extending this concession to people who cannot avail themselves of the remission for motor vehicles this could be for a number of reasons, for example, people do not have motor vehicles or cannot operate them but who would be greatly assisted by a sales tax remission on a television set, the amount of which would be very considerably less in terms of loss to federal revenue?

Senator GUILFOYLE:
LP

– This matter is one of policy and perhaps is as appropriate to the area of the Treasurer’s responsibility as it would be to the Minister for Repatriation. Whether either of those Ministers would see tax exemption on television sets as in the same category as tax exemption on motor vehicles to enable mobility of handicapped people, I think, would remain for them to say. But I will draw the matter to the attention of the Treasurer and the Minister for Repatriation to see whether as a matter of policy they have anything that they wish to discuss in answer to the question.

page 2111

CENSUS

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

– With your indulgence, Mr President, I point out that earlier Senator Bonner asked me about the census form. I sought information. As of this moment the Treasurer (Mr Lynch) does not intend to table the pro forma census form but he does hope this week to circulate to all honourable senators and honourable members detailed information on the census and the form that is to be used.

page 2111

COMMONWEALTH CAPITAL FUND FOR ABORIGINAL ENTERPRISES: MARGINAL LOANS COMMISSION

Senator GUILFOYLE:
Minister for Social Security · Victoria · LP

– For the information of honourable senators I present the final report on the Commonwealth Capital Fund for Aboriginal Enterprises together with financial statements for the period 1 July 1974 to 27 November 1974; and pursuant to section 36 of the Aboriginal Loans Commission Act 1974 I present the first report on the activities of the Aboriginal Loans Commission, together with financial statements, since its inception on 28 November 1974 to 30 June 1975.

Senator KEEFFE:
Queensland

-I ask for leave to propose a motion.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted.

Senator KEEFFE:

-I move:

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

Leave granted; debate adjourned.

page 2111

ASSENT TO BILLS

Assent to the following Bills reported:

Appropriation Bill (No.3) 1975-76.

Appropriation Bill (No. 4) 1975-76.

page 2112

PUBLIC ACCOUNTS COMMITTEE

Senator BAUME:
New South Wales

-On behalf of the Joint Committee of Public Accounts, I present the 160th report. I seek leave to make a statement.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted.

Senator BAUME:

-Mr President, this statement is from the Committee and has the approval of all members of the Committee. I seek leave to have the statement incorporated in Hansard

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. (The statement read as follows)-

Honourable senators will recall that on 20 May 1976 I tabled the 158th report relating to expenditure from the Advance to the Treasurer for the financial year 1974-75 and the 159th report, which contained Treasury minutes on 2 previous reports of the Committee. The 160th report which I have tabled today relates to expenditure from the Consolidated Revenue Fund for 1974-75 and covers the remaining items included in the previous Committee’s annual examination of the expenditure results of departments in that year.

In examining expenditure from the Consolidated Revenue Fund the Committee seeks to ascertain whether the principles relating to the formulation of estimates have been adopted by the departments under examination. These principles, which are included in Treasury direction 16/9, have also been set out in chapter 1 of the 160th report. In recent years the Committee has paid particular attention to the estimates and related expenditure of departments. As a poor standard of estimating has wide ramifications the Committee has concerned itself not only with excess expenditure charged to the Advance to the Treasurer but also with the over-provision of funds. The Committee has made it clear that such overprovisions are undesirable, misleading and could be unfair to other departments whose financial needs might not have been satisfied. At the same time, the Committee has emphasised that it does not regard the total expenditure of available funds under a particular appropriation item as an objective to be sought without regard to other important considerations. Indeed undue emphasis on the need to match expenditure and available funds can give rise to unnecessary and uneconomic expenditure and can result in the distortion of administrative practices. In this regard the Committee has on previous occasions criticised departments that have accelerated payments in order to prevent an appropriation from lapsing.

As this and previous reports relating to expenditure from the Consolidated Revenue Fund show, frequently there are explanations for expenditure variations from the estimates which are acceptable to the Committee. These variations usually arise from unforeseeable circumstances and certain other factors which are beyond the control of the departments concerned. In this report, however, the Committee has also found it necessary to refer to 10 cases of unsatisfactory estimating and administrative performances that have resulted in shortfalls in expenditure. Attention has been drawn to these inadequacies where they have arisen. The Committee again found it necessary to comment adversely on the quality of written submissions and the inadequacy of briefing of some witnesses. As the Public Accounts Committee is a committee of the Parliament, it is essential that all departments present evidence of a high quality. In this context the Committee notes that the Treasury recently issued a circular directing the attention of all departments to the Committee’s requirements. I commend the report to honourable senators.

page 2112

AUSTRALIAN CONSTITUTIONAL CONVENTION

Motion (by Senator Withers) agreed to:

That the Senate agrees that the Commonwealth Parliament participate with the Parliaments of the States in the continuing work of the Constitutional Convention established to review the Commonwealth of Australia Constitution and accordingly resolves:

1 ) That, for the purposes of the Convention-

a Delegation from the Commonwealth Parliament consisting of sixteen members of the Parliament take part in the deliberations of the Convention, of whom six shall be members of the Senate and ten shall be members of the House of Representatives:

the six members of the Senate comprise two members of the Liberal Party of Australia, one member of the National Country Party of Australia and three members of the Australian Labor Party;

That-

three Senators, two being members of the Liberal Party of Australia and one being a member of the National Country Party of Australia, nominated by the Leader of the Government in the Senate: and

three Senators, being members of the Australian Labor Party, nominated by the Leader of the Opposition in the Senate, be members of the Delegation;

That the Prime Minister be the Leader of the Delegation, and the Leader of the Opposition be the Deputy Leaden

That a member of the Delegation cease to be such a member if-

he ceases to be a member of the Commonwealth Parliament;

b) the House of the Parliament of which he is a member terminates his appointment; or

he resigns as a member of the Delegation by writing addressed to the President of the Senate or the Speaker of the House of Representatives, as the case requires;

That where, because of illness or any other cause, a member of the Delegation is not available to attend a meeting, or part of a meeting, of the Convention, the Leader or senior available member of the Party in the House from which the member was drawn may nominate an alternate member (being a member of the House of which the firstmentioned member is a member) and the member so nominated shall be a member of the Delegation for that meeting, or that part of that meeting;

That, in the event of a member of the Delegation ceasing to be such a member, the Leader of the Party in the House from which the member was drawn may nominate another member ( being a member of the House of which the first-mentioned member is or was a member) to replace the first-mentioned member;

That the Leader of the Delegation from time to time make a report for presentation to each House of the Parliament on matters arising out of the Convention, and that the Deputy Leader of the Delegation may make an accompanying report.

page 2113

SITTINGS OF THE SENATE

Senator WITHERS:
Western AustraliaLeader of the Government in the Senate · LP

- Mr President, I seek leave to move a motion relating to the sittings of the Senate for the remainder of this week.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted.

Senator WITHERS:

-I move:

  1. That, unless otherwise ordered, on Friday the sessional order relating to the adjournment of the Senate have effect at 10 p.m.

The Government hopes to finish this week. I assume that most honourable senators would rather sit on Friday and Friday night if need be and finish than come back next week.

Senator Georges:

– What is happening on the other side?

Senator WITHERS:

-I understand that these hours of sitting are being proposed in the House of Representatives. Normally I would not be prepared to sit so early on Wednesday because Party meetings are held on that day, but the House of Representatives will be sitting those hours. I understand that the House of Representatives has hopes of rising on Friday afternoon.

Question resolved in the affirmative.

page 2113

PUBLIC ACCOUNTS COMMITTEE AMENDMENT BILL 1976

Bill returned from the House of Representatives without amendment.

page 2113

AUSTRALIAN CONSTITUTIONAL CONVENTION

The PRESIDENT:

– I have received a message from the House of Representatives acquainting the Senate of a resolution appointing members to the Australian Constitutional Convention.

page 2113

REMUNERATION AND ALLOWANCES AMENDMENT BILL 1976

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I move:

I seek leave to incorporate the second reading speech in Hansard.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. ( The speech read as follows)-

The purpose of this Bill is to provide for increases in the salaries and allowances of judges of the Family Court of Australia. The rates of salaries and allowances of judges of the Family Court, which are at present prescribed in the Family Law Act 1975, have fallen behind the rates for judges of other Federal courts of comparable status. This has occurred largely because the

Family Law Bill occupied so much of the time of both Houses during its passage through Parliament last year.

The proposed new rates of salary and allowances are based on a recommendation obtained by the previous Government from the Remuneration Tribunal, and are the same as those proposed in a Bill to give effect to the recommendation introduced into, but not passed by, the last Parliament. The rates proposed for the Chief Judge and for senior judges of the Family Court are equivalent to the rates for the Chief Judge and the judges respectively of the Australian Industrial Court. The proposed rate for ordinary judges of the Family Court- at which level the majority of judges are being appointed- is $5,000 less than that for senior judges.

Since the proposed increases were to have been made before the commencement of the Family Law Act, and appointments to the Court have been offered and accepted on this basis, the Bill now before the Senate provides for the increases to be retrospective to 5 January 1976, the date of commencement of the Family Law Act. Honourable senators will be aware that one of the most significant provisions of the Family Law Act is the establishment of Family Courts. It is important both to the judges already appointed and for the appointment of further judges that the salary increases provided for in this Bill be made, and made as soon as possible. I commend the Bill to the Senate.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 2114

PAPUA NEW GUINEA (STAFFING ASSISTANCE) TERMINATION BILL 1976

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I move:

I seek leave to incorporate the second reading speech in Hansard.

The PRESIDENT:

– Is leave granted? There being no objection, leave is granted.

The purpose of this Bill is to amend the Papua New Guinea (Staffing Assistance) Act 1 973- 1 97 5 to wind up the Australian Staffing Assistance Group arrangements in Papua New Guinea on 30 June 1976. The Australian Staffing Assistance Group was established under the Papua New Guinea (Staffing Assistance) Act 1973 and came into being on 1 December 1973, the date on which responsibility for the Papua New Guinea Public Service was transferred to the Papua New Guinea Government. At that time there were some 4500 overseas officers of the Papua New Guinea Public Service and the Papua New Guinea Police Force who had been appointed as permanent officers or engaged as contract officers by former Ministers for External Territories under the former Papua New Guinea Act.

Under the Papua New Guinea (Staffing Assistance) Act 1973 these officers, together with a small number of temporary employees of the Papua New Guinea Public Service and staff of the Electricity Commission who where contributors to the Papua New Guinea Superannuation Fund, were separated from their respective Papua New Guinea services and became the Australian Staffing Assistance Group, or ASAG, as it has become known. The purpose of the Group was to make personnel available to occupy and carry out the duties of established positions in the Papua New Guinea Public Service and other areas of public employment until Papua New Guineans became available to fill these positions, and the services of the ASAG personnel were no longer required. The salaries, conditions of employment, superannuation, and retirement and other termination benefits of the personnel employed in ASAG have been prescribed or determined under the Act, and the Australian Government has accepted full and direct responsibility for them. The only personnel who have been added to the Australian Staffing Assistance Group since its establishment in 1973 have been those officers of the Australian and State Governments who have been seconded to ASAG for service in Papua New Guinea.

In June last year the former Australian Prime Minister and the then Chief Minister- now Prime Minister- of Papua and New Guinea announced jointly that, following a review of staffing assistance arrangements, it has been agreed between the two Governments that the direct employment by Australia of the 2900 or so personnel who were then in ASAG- many occupying senior and influential positions in the Papua New Guinea Public Service- was not in the immediate or long term interests of either

Government, and should be discontinued. Accordingly, it was decided that further recruitment to the Group would cease on 30 June 1975, and that the Australian Staffing Assistance Group arrangements themselves should be wound up on 30 June 1976. In the meantime, new arrangements would be introduced to encourage those personnel in the Group whose services were still required, to transfer to direct contract employment with the Papua New Guinea Government.

On Australia’s part, the arrangements took the form of special conditions under which personnel could voluntarily terminate their employment in the Australian Staffing Assistance Group in order to accept contract employment with the Papua New Guinea Government. These conditions were settled after full consultation with the staff association representing ASAG employees, and included leave pay concessions, deferment or preservation of certain existing entitlements, accelerated payment of compensation instalments according to the period of contract service with Papua New Guinea, and certain superannuation and retirement benefits concessions. The Papua New Guinea (Staffing Assistance) Act 1973 was amended in September 1975 to facilitate the introduction of these special conditions, the detailed provision of which will be made by regulations under the Act. On Papua New Guinea’s part, the new arrangements involved negotiation with the staff association of terms and conditions of contract employment broadly equivalent to those which applied to personnel of the Australian Staffing Assistance Group.

The Papua New Guinea (Staffing Assistance) Termination Bill 1976, which is now before the Senate, consists of 34 clauses, most of which are of a machinery or ‘savings’ nature to preserve the residual entitlements of personnel when the Australian Staffing Assistance Group is wound up on 30 June 1 976. To this end, the Bill provides that personnel of the Group who have not voluntarily terminated their employment by 30 June 1976, either to accept contract employment with the Papua New Guinea Government or to return to Australia, will have their employment terminated on that date. The Bill includes provision that the regulations and determinations made under the Act will continue in force after 30 June 1976, so that former personnel of the Australian Staffing Assistance Group will not be disadvantaged as a consequence of the wind up of the Group and will receive their full entitlements.

The winding up of the Australian Staffing Assistance Group arrangements has also meant that personnel are becoming entitled to benefits from the superannuation schemes to which they have been contributing much earlier than acticipated by the Boards which were responsible for investing the two funds involved. In earlier years, the Boards could not have foreseen the need for substantial amounts of cash at this time and until recent years have invested the funds in medium and long term securities. This is resulting in serious liquidity problems for both the Papua New Guinea Superannuation Fund and the Contract Officers’ Benefits Fund. In the case of the Superannuation Fund, these problems have been overcome temporarily by loans under the present legislation, but a permanent solution is necessary.

The Bill therefore provides for the Commonwealth to take over the assets and liabilities of both funds and, thereafter, to be responsible for the payment of all benefits that become payable under the two schemes. This will avoid the funds having to sell securities at a loss in order to pay benefits becoming due over the next few months, and will ensure that the members of the two schemes will receive the full amount of the employee-financed share of benefits as they become payable. I should mention that, to avoid drafting complications and possible legal problems, the changeover will now take place on the date on which the Bill receives the royal assent, instead of 31 March 1976 as announced earlier by the Minister Assisting the Treasurer.

The Bill provides for the operation and administration of the Papua New Guinea schemes and two pre-war schemes- the Papua Superannuation Fund account and the New Guinea Superannuation Fund- to become, from 1 July 1976, the responsibility of the Commissioner for Superannuation, a position that will come into being under the Superannuation Act 1976 on that date. It also provides for applications to be made to the Administrative Appeals Tribunal for review of any decision confirmed or varied by the Commissioner. Regulations are being prepared to enable those contributors to the Papua New Guinea Superannuation Scheme, who so elect, to continue to contribute until the expiration of their first contract with the Papua New Guinea Government or until 30 June 1978, whichever occurs first. The regulations will also provide for variation of the method of updating pensions payable under that scheme and the two pre-war schemes, so as to place them on the same updating basis as will apply to pensions payable under the Superannuation Act 1922-1976, that is, the whole pension will be increased annually in accordance with the formula 1 times the percentage change in consumer price index, March quarter to March quarter.

Mr President, it may seem unusual that the Australian Starring Assistance Group is to be terminated not many years after its inception. This, however, is a consequence of the speed with which events have moved in Papua New Guinea’s attainment of independence. The Australian Staffing Assistance Group was devised as a mechanism to provide the Papua New Guinea Government with the professional, technical and high level administrative expertise which it needed, particularly in the period between selfgovernment and independence. I believe that it has been an effective arrangement for that purpose. The new arrangements under which personnel of the Australian Staffing Assistance Group are encouraged to transfer to direct contract employment with the Papua New Guinea Government will, however, enable Papua New Guinea to retain most of that expertise. Already over 1200 personnel have taken up contracts and at least a further 300 are expected to do so before 30 June 1976. 1 commend the Bill to honourable senators.

Debate (on motion by Senator Grimes) adjourned.

page 2116

SUPPLY BILL (No. 1) 1976-77

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

First Reading

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

– I move:

Senator McLAREN:
South Australia

– I am impelled to take the opportunity to speak on the first reading of this money Bill in view of the fact that Senator Carrick could not give me an answer to a question I asked concerning the closure of the Larrimah-Darwin rail link. Senator Carrick was quite able to give an answer in the Senate on 25 May. I take it he gave it off the cuff because we were dealing with questions without notice at the time. In asking him a question today I referred to the answer he gave, on 25 May. I shall refresh his memory. In the last few lines of his answer he said: 1 am advised that rolling stock and other equipment released from the North Australian Railway may be able to be put to good use on other parts of the Australian National

Railways system and should be so utilised rather than remaining unproductive in Darwin.

Because of that answer given on 25 May we know that Senator Carrick was well aware of what would happen to the rolling stock with the closure of the line. I posed a series of questions to him today and he asked me to put them on notice. I have been interested in this north-south railway link for many years. As a matter of fact, one of the first questions I asked in this Senate was of Senator Cotton on 2 November 1971 when I asked whether in fact the Government intended to carry out the provisions of the Northern Territory Acceptance Act 1910-11. I asked that question only a very few months after I took my place in this chamber. I refer to the answer that was given to this question by Senator Cotton, as reported in the Adelaide Advertiser of 3 November 197 1. It was reported as follows:

Reports of a proposed $2S0m standard-gauge rail link between Adelaide and Darwin were rejected by the Minister for Civil Aviation (Senator Cotton) yesterday. Senator Cotton said reports of the project in the ‘Sunday Times’ of W.A. and the ‘Sunday Mail’ of S.A. did not reflect the true position. The Commonwealth was committed by the N.T. Acceptance Act and the 1949 Railway Agreement (S.A.) Act to the eventual building of a standard-gauge line from Darwin to Port Augusta.

The Commonwealth agreed in principle to the construction of new standard-gauge lines from Tarcoola and Alice Springs to replace the narrow-gauge line’, he said. ‘The Surveyor-General has surveyors studying detailed routes of this line. This will be a major step in fulfilling these obligations. But there are no plans for constructing the line beyond Alice Springs at this stage’. Senator Cotton was replying to Senator McLaren . . .

As Senator Cotton said, the Government was bound by the N.T. Acceptance Act of 1 9 10- 1 1 to construct a standard-gauge line from Port Augusta to Darwin. Of course, that has never been carried out. I have pursued that question as often as I possibly could. Right throughout the hearings of the Joint Parliamentary Committee on the N.T., of which I was a member, I posed the question to practically every witness: ‘What is your opinion of the necessity for a line from Port Augusta to Darwin?’ I think that without exception every witness agreed that that line should be constructed. Now, a few months after coming to office, we find the Fraser Government has decided to close a line that already exists. Far from complying with the obligation to construct a standard-gauge line to which Senator Cotton has referred, we find that the Government is going to close the Une from Larrimah to Darwin. I shall repeat the questions that I asked this afternoon of Senator Carrick. I asked:

How will the locomotives and rolling stock be transported from the Northern Territory to the areas that he mentioned? What is the estimated cost of transporting these vehicles?

Senator Carrick was able to tell us that these vehicles would be dispersed to other areas, yet he could not tell me the cost of doing so. Surely some survey of the cost must have been undertaken before a decision was made. I asked him further:

Was an in-depth cost study carried out prior to the Government making the decision to close the line? If so, will the Minister table a copy of the study in the Senate? If no study was made, can the Minister say how the Government arrived at its decision to close the line? Is it the intention of the Government to operate its own road transport system in the Northern Territory in lieu of rail transport, or is the entire carriage of freight to be handed over to private enterprise with a large Government subsidy.

Of course, Senator Carrick ‘s answer was that I should put the question on notice. We are in the last few days of the sittings of this Parliament. If I were to put the question on notice it is anybody’s guess when I would get an answer. I am concerned to know in the immediate future the answer to those questions that I posed. We have had a co-ordinated freight carrying system operating between Alice Springs and Larrimah and have been subsidising private enterprise to carry this freight. I am now concerned whether this enterprise will carry the freight right from Alice Springs to Darwin and be heavily subsidised by government funds. That is why I posed the question. I wanted to know whether a cost study has been made to see whether we would save money or pay more money to private enterprise because the Government had decided to close that line.

I remind Senator Carrick, in case he is not aware, of the 2 pertinent sections of the Northern Territory Acceptance Act- Act No. 20 of 1910. 1 refer to the provisions relating to the carrying out of the Agreement. Section 14, sub-section (b), which deals with the construction of the transcontinental railway, states:

Construct or cause to be constructed a railway line from Port Darwin southwards to a point on the northern boundary of South Australia proper (which railway with a railway from a point on the Port Augusta Railway to connect therewith is hereinafter referred to as The Transcontinental Railway).

Sub-section (d) provides:

Construct or cause to be constructed as part of the The Transcontinental Railway a railway from a point on the Port Augusta Railway to connect with the other part of The Transcontinental Railway to a point on the northern boundary of South Australia proper.

This rail link is of great importance not only to the people who live in the Northern Territory, but also to the people who live and manufacture goods in South Australia. In times of flood, how does the Government envisage getting goods to the Northern Territory from South Australia? I ask honourable senators to remember the inconvenience that these people have suffered in recent years because of big floods. The roads have been closed for months on end and freight cannot be transported. The Government is proposing to close the one link by which freight can be transported in times of heavy rainfalls and high rivers. This rail link is vital to the welfare of the people who live in the Northern Territory. It is vital to the manufacturing industries of South Australia which send their goods to the Northern Territory.

When I was at Kununurra on the Ord last year I was informed that most of the goods, the groceries and the refreshments used in Kununurra came from Adelaide. Will we now find that those goods will be road freighted all the way from Alice Springs to Kununurra at exorbitant cost when we are closing down our own railway system and handing the carriage of goods over to private enterprise? That will be the only way freight can be moved unless, of course, the Government intends carrying out the clause that was put into the National Australian Railways Charter by the previous Minister, Mr Charles Jones, which provided that the Commonwealth Government could operate its own road transport. That is why I posed the question. Is the Government going to operate its own road transport or is it intending to hand the entire carriage of freight over to private enterprise, a course which invariably will cost the taxpayer of Australia much more money? We are already subsidising the company concerned to carry freight from Alice Springs to Larrimah. If the company cannot carry freight on an all-weather road, a bitumen road from Alice Springs to Larrimah which was built by a Labor Government during the last war, how will freight be carried from Larrimah northwards to Kununurra and Darwin and to points east and west? That is what I want to know and that is why I have taken the time of the Senate on the first reading of this money Bill. This question needs to be answered; it does not need to be put on notice. The Government must know why it made the decision and how it arrived at it. Surely, if a cost study had been done the Government must have it available. I ask Senator Carrick to table it in the Senate. I have a deep interest in this matter as do all the people in the Northern Territory who are so vitally concerned as to what their fate will be when the Government closes this line. We are concerned not only for the carriage of the freight but also for the economy and for the welfare of the employees who work on the north-south line. I hope that Senator Carrick, before the Senate rises this week, will be able to provide me with the answers to the questions which are now recorded twice in Hansard so that I can convey the information to the people who reside in the Northern Territory.

Senator BISHOP:
South Australia

– I, like Senator McLaren, wish to take a few minutes to talk about railways. I will supplement the points he has raised and points which have been raised before. The displacement of 200 employees on that service ought to be of very much concern to the Government. We have asked the Government for replies to questions on this matter. I do not doubt that we will get them in time. In addition, Mr President, as a good South Australian you would know that we are very concerned about railway projects affecting South Australia. Comments already have been made by me and other honourable senators in this place about the Tarcoola line and the Adelaide to Crystal Brook connection but I am more concerned in these few comments with asking the Minister for Industry and Commerce (Senator Cotton) to give some assurance about the agreement between the Australian and South Australian governments to which I referred at question time today because if there is a clear decision by the Australian Government that there will be no disturbance of the agreement, the sooner the Minister for Transport (Mr Nixon) states that the better. I refer to the comments made by Mr Nixon in the House of Representatives last Wednesday recorded on page 2464 of Hansard in reply to a question asked by Mr Jacobi. This answer has excited a lot of comment in South Australia and most of the South Australian Press has been concerned about what the statement means. Mr Nixon said:

The Agreement between the Commonwealth Government and the South Australian Government, which was signed by the then Prime Minister, Mr Whitlam, and the Premier of South Australia, Mr Dunstan, makes it impossible Tor the Australian National Railways to take any decision which the South Australian Minister cannot veto, and if agreement cannot be reached between the 2 parties the matter has to go to an arbitrator. Has any honourable member ever heard of a business selling out and then letting the seller control the business? It is the most stupid deal ever undertaken by a federal government in the history of Federation.

I remind the Senate that in this place a member of the then Opposition, Senator Jessop, supported the agreement. All the details of that agreement were announced on a number of occasions. However when the agreement came before the Senate there was no opposition to it. That agreement dealt with the arrangements to which Mr Nixon referred and provided that if there were any curtailment of services there had to be consultation with the South Australian

Government with respect to the displacement of staff or new arrangements. The South Australian Government as the ex-owner had to be consulted. Not only I but also the South Australian Government understood that that agreement was acceptable to all parties and it was simply a matter of perhaps protracted negotiations to settle the argument as to operational activities and the extent to which it would affect such matters as staff and superannuation. I think it was in the Adelaide Advertiser that this matter was first reported with very heavy headlines which concerned everybody. On Thursday 27 May the newspaper reported:

Government sources denied last night that the Fraser Government wanted to dismantle the Agreement and hand the railways back to South Australia.

One source said the Government would honour the Agreement, but wished it did not have to.

Mr Virgo was reported as having said:

Mr Nixon apparently resents the fact that a South Australian is still looking after the interests of South Australian country people.

He has already sent one of his henchmen to S.A. to investigate what country lines should be closed.

In other words, he is deliberately embarking on a campaign to disadvantage those people his Party claims to represent.

He said other things but the situation can be summed up by Mr Virgo’s words when he said:

Mr Nixon is looking at line closures and reducing services purely as an economic exercise without thought or regard for country people.

There is no doubt that the agreement of which honourable senators will be well aware by now, because it was debated at some length in this place in May last year, was considered to be appropriate. I put on record the substance of my question today and would like the Minister for Industry and Commerce to answer it if he can: Is it clear that the statement by a so-called Government source that the agreement will be honoured is a reliable indication of what the Government proposes to do in respect of the agreement or is there already some intervention by either one of the Minister’s officers or a member of the Department of Transport in relation to the examination of lines in South Australia with or without the knowledge of the South Australian Government? No doubt this matter will be followed up in the same way it was followed up before but I hope that the Minister will be able to elucidate it at this stage.

Question resolved in the affirmative.

Bill read a first time.

Second Reading

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

– I move:

I suggest that the speech be incorporated in Hansard, it having been made in the House of Representatives.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

This Bill, together with the companion Bill, Supply Bill (No. 2) 1976-77, seeks interim appropriations for the services of the Government for the period 1 July 1976 to 30 November 1976, by which date it is expected that the Appropriation Bills for 1976-77 will have been enacted.

The amounts sought in the Bills reflect the decisions relating to expenditures referred to in the statement of the Treasurer (Mr Lynch) of 20 May 1976 and, more generally, the Government’s continuing policy of expenditure restraint.

Supply Bill (No. 1 ), which relates to the ordinary annual services of the Government, seeks interim appropriations totalling approximately $3,412m. This is $720m or 26.8 per cent higher than the amounts provided in Supply Act (No. 1) 1975-76. The major element in this higher provision is an extra $49 5 m for Medibank. The balance of $22 5 m is due to higher salary and wage rates- $ 130m- higher administrative costs- $43.7m- of which the postal and telephone increased tariffs form a significant partand an extra $5 1 m for other services.

Excluding Medibank, and notwithstanding the increases in the other costs, the total supply provisions in the two Bills are less than those in the Supply Acts for 1975-76 which were introduced by the previous Government. Supply Bill (No. 1) includes $1 10m for the Advance to the Treasurer, compared with $ 120m in 1975-76. I need hardly add that Supply Bills, being interim financing measures, do not and cannot anticipate the Budget for the forthcoming year. They are essentially carry-on measures which will be subsumed by the Appropriation Bills when these are enacted. I commend the Bill to honourable senators.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 2119

SUPPLY BILL (No. 2) 1976-77

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

– I move:

I suggest that it may be appropriate to have the second reading speech incorporated in Hansard.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

This Bill seeks interim appropriations for capital works and services, payments to or for the States and certain other services totalling, in all, approximately $8 18.3m, for the period 1 July 1976 to 30 November 1976. The amount included in the Bill for the Advance to the Treasurer is $100m, compared with $120m in 1975-76. I repeat and emphasise that Supply Bills do not anticipate the forthcoming Budget. They are carry-on measures to finance on-going expenditures of the Government until the Appropriation Bills, which will be introduced on Budget night, are enacted. I commend the Bill to honourable senators.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 2119

WOOL INDUSTRY AMENDMENT BILL 1976

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator Cotton:
Minister for Industry and Commerce · New South Wales · LP

(4.8)- I move:

I suggest that the second reading speech be incorporated in Hansard.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

The main purpose of this Bill is to amend the Wool Industry Act 1972-74 to extend provisions relating to the certification of and dealing with profit or loss of the Australian Wool Corporation in respect of the wool minimum reserve price arrangement. The principal amendments proposed provide for machinery accounting arrangements for the minimum reserve price policy during the current season, and extend them to include the 1976-77 season. In addition, the amendments vary the accounting provisions of the Act to include in the Corporation’s trading results any profit or loss arising from the manufacture of wool products or the trading in such products. This is necessary because the expanded trading functions provided to the Corporation in 1974 were not supported by prescribed accounting arrangements.

The Bill also provides for the amendment of the principal Act to require consultation between the Australian Wool Corporation and employer groups before the Corporation takes action that could reasonably be expected to affect the conditions of employment, or the demand for labour, in the wool industry. This amendment balances a similar requirement for consultation with trade unions which is already included in the Act. Honourable senators will recall that the amendment was requested by the coalition parties when an amendment to the Wool Industry Act was before the Parliament in NovemberDecember 1974.

Opportunity is also being taken to amend the reference in the Act to the Wool Scourers, Car.bonisers and Fellmongers’ Federation of Australia by retitling the Federation as ‘Association’, in keeping with the former Federation’s recent change of title. The previous Government’s decision on wool marketing for 1975-76 provided, in essence, for the continuation of the 1974-75 floor price arrangements including continuation of the 5 per cent wool tax on sales of wool. The revenue from this tax provides a fund to meet any losses that arise out of the floor price arrangement. However, the existing accounting provisions in the Wool Industry Act provide only for the determination of profit and loss from the operation of the floor price scheme during the 1974-75 season, and they must be extended to include the 1975-76 season.

In accordance with the Government’s declared policy to maintain the floor price arrangement for the 1976-77 season, the Bill further extends the accounting provisions to cover floor price operations in that season. The existing legislation, together with the amendments proposed in this Bill, will provide that the results of the minimum reserve price operation of the Wool Corporation are to be accounted for, in a number of periods:

  1. 2 September 1974 (when the floor price arrangement commenced) to 30 June 1975

    1. the period July 1 975 to June 1 976
    2. the subsequent period July 1976 to June 1977
    3. and further as necessary until wool purchased under the reserve price arrangements during the three seasons has been disposed of.

The amendments provide only for continuing accounting procedures. Details of the Government’s policy on the floor price arrangements to apply in 1976-77, including the level of the floor price, will be announced after the end of the 1976-77 season.

A defect discovered in the Wool Industry Act, consequent upon the amendment of the Act in 1974, makes it desirable to introduce amendments to provide explicitly for the inclusion in the Wool Corporation’s trading results of any profit or loss arising from its activity in the processing or manufacture of wool products and trading in such products. The amendment introduced by the Bill relates only to accounting procedures and does not provide an authority for the Corporation to engage in such activities. That authority may be exercised only to such extent as the Minister approves.

Until comparatively recently the existing accounting requirements has been adequate because the Wool Corporation did not engage in processing or manufacturing activity. However, during the latter part of 1975 the Corporation undertook two relatively small projects involving the processing of wool in the United States of America, and there is now a need to provide appropriate accounting procedures. The amendments to the legislation for this purpose are of a machinery nature. I commend the Bill to honourable senators.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 2120

WOOL TAX AMENDMENT BILLS

(Nos 1 to 5) 1976

Bills received from the House of Representatives.

Motion (by Senator Cotton) agreed to:

That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of all or several of the Wool Tax Amendment Bills’ (Nos 1 to 5) 1976 being put in one motion at each stage and the consideration of all or several of such Bills together in Committee of the Whole and as would prevent the reading of the short titles only on every order for the reading of the Bills.

Ordered that the Bills may be taken through all their stages without delay.

Bills (on motion by Senator Cotton) read a first time.

Second Readings

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

– I move:

That the Bills be now read a second time. 1 suggest that the omnibus speech might be incorporated in Hansard.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

The object of these 5 Bills is to amend the Wool Tax Acts (Nos 1 to 5) 1964-1975 so as to continue in force for another year the special levy of 5 per cent on the sale value of shorn wool which is collected in connection with the minimum reserve price scheme for wool. The levy was introduced at the inception of the scheme on 2 September 1974 to provide a fund for meeting any losses that may arise from minimum reserve price operations. Originally, both the scheme and the levy were to operate for one season only. Their operation was subsequently extended for another season and the present statutory provisions for the payment of the levy expire on 30 June 1976.

In accordance with the Government’s declared policy, the minimum reserve price scheme for wool will be extended further to operate during the 1976-77 season. A separate Bill will extend the relevant accounting provisions in the wool industry act for this purpose. It is now proposed that the special levy which has been collected in connection with the scheme be similarly continued. If there is to be no interruption in the collection of the levy, that statutory provisions under which the levy is imposed must be amended before 30 June.

As the Government is pledged to the continuation of reserve price support during 1976-77 at not less than the equivalent of 250 cents per kilogram clean for average-style 21 micron fleece wool, which is the basis of current support, continuation of the existing 5 per cent levy is seen as appropriate. Revenue from this levy is credited to the market support fund established by the Australian Wool Corporation under amendments made to the wool industry act in 1 974. As already mentioned the primary purpose of that fund is to meet any losses arising from the minimum reserve price scheme. In the meantime the money contributed by growers for the purpose of the fund may be used by the Corporation for the purchasing of wool in its reserve price operations and for advances to growers in respect of wool that has been temporarily withheld from sale at the Corporation’s behest. Interest on such money used for those purposes is credited to the fund by the Corporation.

For administrative convenience the special levy of 5 per cent is collected in conjunction with the 3 per cent levy that represents wool grower contributions towards the financing of programs of wool research and promotion and the administration of the marketing functions of the Australian Wool Corporation. The present total levy of 8 per cent has been in force since August 1975. All the 5 five wool tax bills are similar in their text, which simply extends the operation of the special 5 per cent levy until 30 June 1977. The Acts which they amend are also similar but each covers a different wool marketing channel. The need for 5 separate acts arises from a consitutional requirement that laws imposing taxes should deal with one subject of taxation only.

I commend the Bills to the Senate.

Debate on motion by Senator Douglas McClelland) adjourned.

page 2121

HEALTH INSURANCE AMENDMENT BILL 1976

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator GUILFOYLE:
Minister for Social Security · Victoria · LP

– I move:

I seek leave to incorporate the second reading speech in Hansard.

The PRESIDENT:

-Is leave granted? There being no objection leave is granted. (The speech read as follows)-

The Bill before the Senate is one of a number of Bills which are designed to authorise modifications to the health insurance program, Medibank.

The Government is concerned to develop the most effective and efficient system of health services delivery and to ensure that every Australian has adequate access to high quality health care.

The Government is therefore committed to the maintenance of universal insurance coverage for hospital and medical expenditure. Every Australian will continue to have the right to remain in Medibank. This is the basic concept of Medibank, and the Government is determined that it will be maintained.

However, it is clear that Medibank in its present form has serious weaknesses. It has achieved universal coverage, but at the expense of largely disregarding the need for economy and efficiency in overall health care expenditures by the individual and the community. It provides few incentives to economy in the use of health services, either on the part of the consumer or, more particularly, on the part of the medical profession which has a key role in determining overall health costs.

The Government’s proposals follow a comprehensive review of the operation of the health insurance program. This has been carried out with the assistance of the Medibank Review Committee which was appointed in January of this year.

The funds for health services flow from both the public and the private sectors. The share of the burden accepted by the public sector has grown sharply in recent years from 52 per cent between 1963 and 1970 to 57 per cent in 1972-73 and an estimated 74 per cent in 1975-76.

Within the public sector, the Commonwealth share has risen from 55 per cent in 1972-73 to an estimated 73 per cent in 1975-76. Not only has the Commonwealth share grown quickly, but the actual amounts of expenditure have risen from $260m in 1963-64 to an estimated $2,500m in 1975- 76.

These rises have been associated with an increase in the proportion of the gross domestic product devoted to health from 5.2 per cent twentyfive years ago to an estimated 6.5 per cent. Total expenditure on health in Australia are estimated at $4, 700m in 1975-76 and $5,400m in 1976- 77.

The health insurance program is not concerned with all health services costs. It helps to pay for general hospital and medical services which will cost about $2,850m in 1975-76. The Commonwealth Government share of this expenditure would be over $1,800m in 1976-77 if no changes were made.

In its present form Medibank places on the State and Federal Governments virtually the whole responsibility for financing the basic level of hospital and medical care. It does this not only for those who need assistance with their health care costs, but also for those who can afford to pay for themselves. Indeed, voluntary health insurance only contributed 8 per cent of the money that went towards meeting health costs in 1975-76, while in 1972-73 voluntary health insurance contributed 14 per cent. The cost of Medibank to the Commonwealth in the current financial year is estimated to be approaching $1,400m. If nothing were done, the cost next year would rise to over $1,800m. Moreover, the program is quite open ended and there is every likelihood that subsequent years could bring even larger increases.

Finally, Medibank has threatened the continuance of private medical practice in hospitals. While the majority of the population has chosen to maintain insurance coverage which would allow them to be treated by their own doctor in hospital, there is considerable doubt whether they would have done so if an across the board levy had been introduced as the Labor Government proposed. In addition, the charges for intermediate and private accommodation in public hospitals have been set at unrealistic levels which deliberately undermine the competitive position of private hospitals.

The Government is therefore proposing a number of modifications to Medibank, while retaining the principle of universal coverage. These proposed changes are designed to provide immediate savings to the Budget by encouraging people to take out their own health insurance with private insurance organisations, and by requiring those who choose to remain in Medibank and who are able to contribute towards the cost of their hospital and medical care, to do so. As a result, Government subsidies out of general revenue will be concentrated on the members of the community who are in greatest need, yet means tests will be avoided.

The changes we are proposing are also designed to provide incentives to the medical profession, and private insurers, to constrain costs by establishing competition between the public and private sectors. Competition between private insurers and Medibank should maintain both the quality of services and their cost efficiency. For virtually the first time in Australia the medical profession will have an incentive to participate in schemes to help curtail unnecessary usage and expenditure in order to maintain the long term viability of private practice.

The Bill before the Senate provides for persons, who are not privately insured persons, to continue to be eligible for Medibank medical benefits. In addition, they will continue to be eligible for free standard ward treatment in public hospitals. However, it is proposed, as a general principle, that those who choose to remain in Medibank will be required to contribute towards the cost of their health care by paying a levy of 2.5 per cent of their taxable incomes or by paying contributions to the Health Insurance Commission.

I shall be introducing separate legislation to authorise the arrangements for people to contribute to the Commission. It is anticipated that the arrangement for people to contribute to the Commission will provide an effective ceiling on levy payments of about $ 1 50 a year for a person without dependants and about $300 a year for a family.

By introducing a system of direct entry into Medibank by payment of a contribution, those who have a personal preference for Medibank, but have high incomes, will be able to exercise their preference. No one will be compelled to insure privately. Others on lower incomes who choose to pay the levy will receive the same benefits at a lower .cost than the full premium and on a graduated scale related to their means. Those on the very lowest incomes will pay no levy.

Briefly, people will continue to be eligible for the benefits of Medibank unless they have private insurance with a health benefits organisation registered under the National Health Act which will provide them with protection against the fees for the range of health services covered by Medibank. I shall be introducing separate legislation relating to the provision of this insurance.

I want to emphasise that the only difference between coverage by Medibank and coverage under the standard private health insurance tables will be that Medibank will provide cover for treatment in public hospitals rendered by doctors engaged by the hospitals, whereas the standard private insurance tables will relate to shared accommodation in public or private hospitals with treatment by doctors engaged by the patient. Apart from this, there will be no difference in entitlements. For example, the medical benefits for treatment by a private practitioner outside of a hospital will be the same.

The difference between Medibank and private insurance coverage will thus be no greater than already exists between those who at present rely entirely on Medibank and those who have taken out additional insurance coverage.

I have already stated that the Medibank program is quite open ended. This is reflected in the provisions relating to the payment of medical benefits. The Government believes that these benefits should be directed to assisting individuals in meeting the fees they incur for professional services. However, such benefits should not be paid to relieve governments, government authorities, or employers of costs that, but for Medibank, would be borne by them. The Bill provides that medical benefits will no longer be paid in these circumstances unless the Minister otherwise directs. It is considered important that the Minister should have this power of direction to ensure that individuals are not disadvantaged in any circumstances.

It is consistent with the approach that medical benefits under the Health Insurance Act should be directed to assisting individuals, that Medibank, through the payment of medical benefits in cases such as workers compensation and third party cases, should not relieve insurers of their liabilities. The Bill provides that, where persons have a right to, or have received compensation or damages under the law of a State or Territory related to fees for professional services, the Minister may take into consideration the compensation or damages paid or payable and determine that medical benefits are not payable or are payable at a reduced rate. Provision is also made for the Minister to make provisional payments of medical benefits where it appears that a claim may relate to expenses in respect of which compensation or damages may be payable. The provisional payments may, of course, be recovered in part or in full, as is appropriate, where compensation or damages are subsequently paid.

Similar provisions relating to daily bed payments made in respect of patients in private hospitals have also been included in the Bill.

The provisions are designed to protect individuals and providers of services while avoiding the present situation whereby Medibank is paying about $30m a year on workers compensation and third party claims.

All States are requested to adopt fee charging policies for compensation and damages cases in public hospitals, designed to achieve the Government’s objective that the cost of such claims should be recovered from the insurers.

There have been a number of allegations of abuses of Medibank by both doctors and patients through the provision of excessive or unnecessary services. This problem has been considered very carefully by the Government and the Medibank Review Committee. It is apparent that there are some abuses.

It has been widely suggested that direct billing of Medibank by doctors, which is authorised by sub-section 20 (3) of the Health Insurance Act, should be discontinued in order to reduce abuses. On the other hand, direct billing is by far the least costly way for Medibank to process claims and it is convenient for many patients and doctors.

The Government has therefore decided to retain direct billing. However, the Bill before the Senate permits practitioners who direct bill to charge the patient an amount in addition to the benefit payable by Medibank provided that the total charge does not exceed the scheduled fee for the service. This should provide the patient with an opportunity to scrutinize and query accounts. For pensioner health benefits recipients, practitioners will be asked to accept the Medibank medical benefits in full settlement.

Where evidence occurs of fraudulent practices, they will be dealt with by prosecution. This approach has already been adopted and several prosecutions are pending. However, the major problem is not one of fraudulent activity, but of the excessive use and provision of medical services. The Government believes that the best way of dealing with this problem is not by confrontation but by obtaining the co-operation of the medical profession to establish systems to restrain unnecessary usage. The changes being made by the Government to Medibank should help provide incentives for the profession. I shall refer to this again later.

A number of cases have been revealed where services are being charged to Medibank which, because of the circumstances in which they are provided, do not warrant the payment of the usual Medibank benefit. The Bill provides that the Minister may refer such cases to the Medical Benefits Advisory Committee. If the Committee recommends that medical benefits should not be paid in particular circumstances, regulations may be promulgated to provide that the benefits are not payable.

Section 18 of the Health Insurance Act at present prevents the payment of benefits for diagnostic services (pathology and radiology) to private patients in public hospitals. This section was a product of the previous Government’s vendetta against private practice in hospitals and has caused serious anomalies. As a result the provision of diagnostic services has been impaired in many public hospitals. The Bill provides therefore for the repeal of this section of the Health Insurance Act.

The Bill also provides for the present arrangements under which visitors from overseas are automatically eligible persons for the purposes of the Medibank program to be discontinued. Visitors will in future be informed that they are personally responsible for any health costs and will be advised to take out appropriate private insurance to cover their stay. However, arrangements will be made in cases of genuine hardship for visitors from overseas who have not insured to receive the benefits of the Medibank program.

I wish to emphasise that the modifications to the Medibank program are being proposed with much more than immediate budget savings in mind. They will provide real incentives to the medical profession and private insurers to help constrain costs.

Health care costs have been growing rapidly both in Australia and in most countries overseas. Whether any particular country is spending enough or too much is an open issue. However, making people more aware of the costs involved may be an important first step in any assessment. Moreover there is a clear need to control cost escalations that are not related to benefits and to ensure that as much value as possible is obtained for the money spent in both the public and private sectors.

Doctors play a key role in determining overall costs because it is largely they who make the decisions to put patients into hospital, the length of stay, the need for and nature of operations or other courses of treatment. The costs generated by doctors are not restricted to their own fees, but involve the total costs resulting from the decisions they make. Efforts to curtail the growth in costs must therefore start with the decisions made by doctors.

The Government attaches considerable importance to this matter and will ask the medical profession to institute systems of professional standards review, designed both to assess the quality of, and to seek the justification for, services rendered. The Government expects the profession to establish review arrangements in close consultation with the Department of Health. The participation of private insurers in the provision of information and in other ways will also be sought. Failure to have workable systems in operation within three years could result in the introduction of mandatory systems.

Preliminary discussions with professional groups have indicated that they will co-operate in programs of quality assurance. Mr President, I commend the Bill to the Senate.

Debate (on motion by Senator Grimes) adjourned.

page 2125

NATIONAL HEALTH AMENDMENT BILL 1976

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator GUILFOYLE:
Minister for Social Security · Victoria · LP

– I move:

I seek leave to have the second reading speech incorporated in Hansard.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

This Bill relates principally to private health insurance organisations. It contains many matters of detail which I will outline shortly. Before I do this, however, I want first to outline the Government’s proposals as they will affect both the people who choose private health insurance and the health insurance organisations.

People who choose to insure themselves and their dependants for benefits in accordance with the standard hospital and medical benefits tables provided by organisations registered under the National Health Act, will be exempt from payment of the Health Insurance Levy. Briefly, the standard medical benefits table will provide the same level of medical benefits as Medibank. Included in the benefits payable in accordance with the standard hospital benefits table, will be benefits sufficient to cover the charges for privately insured patients who are treated by their own doctors in the standard wards of public hospitals.

These benefits will, of course, also be available for application towards the fees for accommodation in private hospitals. Those who choose private room accommodation will need to take out additional private insurance to cover the extra hospital charges. The setting of contribution rates for the standard tables will be a matter for the individual organisations but will continue to be subject to the surveillance of the Minister. There may be variations in contribution rates both between individual organisations and between States. However, it is estimated that the combined contribution rates for the standard tables will be of the order of$ 175 a year ($3.35 a week) at the single rate and $350 a year ($6.70 a week) at the family rate.

While these are substantial amounts they still represent only part of the full cost of hospital and medical insurance when averaged over the community as a whole. The Government believes that those who are able to do so should meet a substantial proportion of their hospital and medical costs through direct insurance payments, rather than through taxes. Subsidies from general revenue can thus be directed to those with the lowest incomes.

Treatment in public hospitals by private doctors will not be restricted to those who insure for the benefits I have just described. People who remain in Medibank will continue to be able to contribute to a hospital benefits fund for cover for the fees charged by public hospitals in these cases. The cost of this additional cover is estimated at $135 a year (or $2.60 a week) at a family rate and would be payable in addition to the levy.

In one respect, the Government will be narrowing the differences in benefits available to Medibank and privately insured patients. At present, an additional benefit is paid by the private funds to their members while they are in nursing homes. This benefit is also paid by the Government to pensioners who satisfy a means test, but not to other persons. The Government has decided to extend this benefit to all persons who continue in Medibank after 1 October 1976. The cost of this concession is estimated at $ 10m in a full year and $7.5m in 1 976-77.

The changes being introduced by the Government will ensure a continuing role for private health insurance organisations. However, the Government does not intend that this should result in a mere reversion to the situation that existed prior to the introduction of Medibank. We believe that organisations will need to give much greater attention than in the past to economy and efficiency in their operations and to devising ways to keeping overall costs and contribution rates down.

In the United States of America, health insurers have made substantial progress in developing methods of monitoring the usage of services, in cooperation with the medical profession, in order to eliminate unnecessary expenditure and so restrain costs to contributors. In Australia these developments have, so far, been totally neglected. The Government intends that this situation should now change.

We have considered whether it would be desirable to permit commercial insurers to undertake health insurance business in Australia, in order to provide greater competition and to stimulate the adoption of new techniques to monitor usage and control costs. However, for the time being we have decided not to take this step and will restrict health insurance business to non-profit organisations. This will allow existing organisations to adapt to the new environment in which they will be in competition with Medibank and to develop their own arrangements to monitor usage in cooperation with the medical profession.

To date medical and hospital benefits provided by most registered organisations have been cash benefits. Provisions in the Bill will enable registered organisations to expand their activities to include the provisions of medical, hospital and other allied health services to contributors. The provisions will assist in creating an environment in which health maintenance organisations might successfully operate.

The Bill requires hospital and medical benefits organisations, as conditions of registration, to admit any contributor to the standard benefits tables in respect of himself and any of his dependants. The conditions of registration also require organisations to limit any benefit waiting periods for contributors to the standard benefit tables to a maximum of two months and for no waiting period to be applied to persons who become contributors on or before 30 November 1976. Registered organisations will also be required to continue to pay benefits for contributors and their dependants for a period of two months after they cease to pay contributions. This requirement will enable levy relief certificates to be issued by organisations before the end of each financial year.

To contain excessive billing of privately insured patients, organisations will also be required to limit medical benefits to amounts equivalent to the schedule fees. To discourage overutilisation of hospital services benefits are to be limited to the fees charged, and where the medical services charge is less than the schedule fee, the medical benefits will be the lesser amount.

Organisations will also be required to maintain records of contributors and their dependants.

The Bill also provides for registered organisations to play a greater role than in the past in the case of the chronically ill. In the past, contributors or their dependants who were classified by the fund as having a pre-existing condition or as chronically ill, or who had prolonged stays in hospital, could be placed in a special account and the deficits in these accounts were met by the Commonwealth. The cost to the Commonwealth of these arrangements is estimated at over $60 m in the current financial year. This would rise to over $100m next year with the expected increases in hospital charges. The Bill provides for these arrangements to be ceased, with effect from 1 October 1976 but special provision is made for them to continue to apply for persons who make claims after that date in respect of expenses incurred prior to that date.

In future registered medical and hospital benefits organisations will be required to provide benefits for all contributors to the standard benefits tables regardless of their state of health. It is recognised that the financial liabilities of hospital benefits organisations resulting from this requirement may vary quite significantly. The Bill provides for hospital benefits organisations to establish and maintain Reinsurance Accounts within their hospital funds to record these differing experiences to the extent that contributors attract hospital benefits in excess of sixty days in any period of twelve months.

The Bill also provides for the establishment, operation and administration by Trustees appointed by the Minister, of a Hospital Benefits Reinsurance Trust Fund. The trust fund will operate to even out differences between hospital benefits organisations in the incidence of hospital costs for chronically ill members, while at the same time ensuring that each organisation contributes towards these costs. The Commonwealth will make a fixed contribution to the trust fund. The Minister for Health proposes that detailed arrangements for the pool will be discussed with the registered hospital benefits organisations.

In view of the above requirements the Bill provides for the Minister to review the registration of all organisations presently registered under the Act. Where the Minister is not satisfied that the organisation will be able to meet the requirements, he is empowered to cancel the registration of the organisation. An organisation which has had its registration cancelled will be able to apply for registration at any time from 1 October 1976, when it claims it will be able to meet the requirements for registration.

The Bill provides power for the Minister to give directions relating to a number of matters including the rates of contributions, the scope and level of benefits, the provision of services and the admission of contributors and the provision of necessary information.

It is not intended that these powers should be used extensively, or that they should be used in relation to contribution rates in such a way as to discourage competition between organisations. The Government’s primary concern is to ensure that the benefits provided by organisations to contributors to the standard benefits tables are adequate, and that funds do not limit membership so as to discriminate against people who are regarded as poor health risks. Regulation by the Government will be kept to the minimum necessary to the achievement of these objectives and the protection of the interests of contributors and the provision of necessary statistical and other information.

I have mentioned that the legislation confers power on the Minister to give directions in certain matters. In other areas, the Minister has power to decide whether the registration of the organisation, or changes submitted by it in relation to matters contained in section 78 of the Act, should be refused. The Bill also enables the Minister to impose or vary a term or condition. These are significant powers and the Bill therefore provides, in new part VII A, for a decision taken by the Minister in relation to the matters I have just outlined to be subject to review by the Administrative Appeals Tribunal, which will be operating at the time these provisions commence.

As a corollary to its objective of universal coverage against medical and hospital costs for all persons in the community, this Government sees as its responsibility the need to protect the interests of persons who elect to contribute to registered medical and hospital benefits organisations.

Consequently, the Bill includes provisions to enable the Minister, where it appears that a registered organisation is or may become unable to meet its liabilities or has contravened or failed to comply with requirements arising from the operation of the Act, to request an organisation to show cause why it should not be investigated in relation to specified matters. Where the organisation fails to satisfy the Minister, and he believes it to be in the contributors’ interests, he may appoint an inspector to conduct an investigation into specified matters relating to the affairs of the organisation. The Bill further provides that after he has considered the report of the inspector, the Minister may take such action consistent with the Act as he considers appropriate. This may include making an application to the Australian Industrial Court for the appointment by the

Court of a judicial manager to manage the affairs of the fund or for the fund to be wound up by the Court.

The Bill also provides that the Minister may make application to the Court for the appointment of a judicial manager where the Minister is satisfied that the organisation has failed to comply with a provision of the Act, a term or condition of registration or a direction of the Minister.

Provision is included in the Bill to require a judicial manager, appointed by the Court, to conduct the affairs of the fund with the greatest economy consistent with efficiency and to report to the Court, as soon as possible, as to the course of action to be taken in relation to the fund. This could include recommendations to return the fund to its former management; to transfer all or part of its affairs to another organisation with the consent of the other organisation; or that the fund be wound up. The Bill provides for funds to be wound up under the supervision of the Court upon an application and in accordance with a scheme submitted by the Minister, the judicial manager or the organisation conducting the fund. All schemes for winding up are to be subject to confirmation by the Court which may vary the schemes. The Court is required where practicable to effect the transfer of contributors to a fund to be wound up to a fund conducted by another registered organisation.

These provisions are similar to provisions in other legislation relating to the supervision of insurance business. Although I would anticipate that they would be used only rarely, except perhaps at the instigation of organisations which might apply to have a fund wound up, I believe that contributors should have the security of such provisions under arrangements deliberately designed to achieve universal health insurance.

There are many provisions in the National Health Act which have become redundant.

Commonwealth medical benefits have not been payable under the Act in respect of services rendered after 30 June 1975. Commonwealth hospital benefits have not been payable in respect of hospital treatment received by qualified hospital patients after 31 March 1976. As these provisions are no longer required the opportunity has been taken in this Bill to provide for their repeal.

Provisions have been included in the Bill which ensure that benefits continue to be payable in respect of services provided on or before the dates to which I have just referred.

I am confident the Government will obtain the ready co-operation of registered health benefits organisations which will have an important role to play in providing health care protection for a significant percentage of the Australian community.

Mr President, I commend the Bill to the Senate.

Debate (on motion by Senator Grimes) adjourned.

page 2128

HEALTH INSURANCE COMMISSION AMENDMENT BILL 1976

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator GUILFOYLE (Victoria-Minister for

Social Security) ( 4. 1 4)- I move:

I seek leave to incorporate the second reading speech in Hansard.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

In my second reading speech on the Health Insurance Amendment Bill 1976I explained that people would be able to choose to pay the Health Insurance Levy of 2.5 per cent of their taxable incomes, contribute to the standard benefits tables of registered medical and hospital insurance organisations, or contribute to the Health Insurance Commission.

The Bill before the Senate provides for persons to contribute to the Health Insurance Commission on behalf of themselves and any dependants. Such persons will be exempt from the levy.

Precise contribution rates will be determined when the contribution rates of the major private health insurance funds are known. As a guide, annual contribution rates to Medibank are expected to be about $150 a year for a person without dependants and about $300 a year for a family.

I wish to emphasise that this contribution process provides an effective ceiling on levy payments. By introducing a system of direct entry into Medibank by payment of a contribution, those who have a personal preference for

Medibank, but have high incomes, will be able to exercise their preference. No one will be compelled to insure privately.

This Bill ensures that every Australian can exercise his right to remain in Medibank.

Mr President, I commend the Bill to the Senate.

Debate (on motion by Senator Grimes) adjourned.

page 2128

STEVEDORING INDUSTRY (TEMPORARY PROVISIONS) AMENDMENT BILL 1976

Second Reading

Debate resumed from 20 May, on motion by Senator Withers:

That the Bill be now read a second time.

Senator MULVIHILL:
New South Wales

– It is not the intention of the Opposition to oppose the Stevedoring Industry (Temporary Provisions) Amendment Bill. This is an important Bill. We are entering a new phase in this important industry which obviously means that over the next 6 months there has to be considerable tooling up for the instrument which will be created for subsequent years. With all the criticism which is often voiced about the turbulence of the waterfront industry it is significant that the actual work force has decreased from 27 000 to 12,000. When we consider some of the disturbances which have occurred on the London docks and in other areas when certain rationalisation came in, I do not think anyone with a sense of fair play will deny that people like the General Secretary of the Waterside Workers Federation of Australia, Charlie Fitzgibbon, have played a notable role in these changes which have taken place.

When I came to the Senate about 10 years ago there used to be considerable criticism about the massive work force on the north Queensland coast relating to the sugar industry. I think it is agreed that the compression in the number of operatives at the port of Mackay is indicative of this virtually quiet industrial revolution which has occurred. As to the future, I think we all realise that in any industry, particularly where manual operations occur, it has never been the desire of the Waterside Workers Federation or of any of the other unions associated with it to object to labour saving devices. But these unions have been equally vigilant to ensure that wages commensurate with the responsibilities involved should be paid for the operation of lifting appliances. I do not think anybody going around the port of Sydney, seeing these containers which are getting bigger and bigger and seeing the people responsible for their conveyance into the olds of ships will deny that a high degree of vigilance is needed.

We realise the complexities when we read reports by people like the former illustrious member of this Parliament, Mr Norman Foster, who is now a member of the Legislative Council in South Australia or a subsequent report by Mr Justice Northrop. Of course, the difficulty is that everybody has his own solution. I have heard some honourable senators on the Government side complain about the imposition on the industry of service charges. I often wonder whether they feel that the States should abdicate this field completely. When we look at the situation at the moment we find a communique emanating from the Australian Council of Trade Unions, the Waterside Workers Federation, the Federated Clerks Union, the Miscellaneous Workers Union and the Foremen Stevedores Association. These unions were adamant that the present statutory body should be no more. True, the Federated Clerks Unions did not accept the elimination of the Australian Stevedoring Industry Authority, nor did it indicate any final view of that body’s future. But the union was rightly concerned about the future employment of its members. I think that is a reasonable attitude.

But as far as the major componentsparticularly the Waterside Workers Federationin the making of this statement are concerned, I suppose it could be said that the situation is something like a United Nations force being phased out of an area of conflict. The question is whether the principals can live together. I know only too well the concern of the Waterside Workers Federation about some of the Authority’s shortcomings. Perhaps it is good that these 2 groups can live together. I have in my hand the current issue of the Maritime Worker for Tuesday, 25 May. 1 notice that on page 3 the General Secretary when writing about the tasks ahead speaks about the body which succeeds the present Authority. He states:

For example, this will mean the transfer of long service leave provisions from legislation to the award, the construction of some form of registration system between the employer and the employee, maybe by a preference clause in the Waterside Workers’ Award, introduction of new funding methods, reorganisation of employment in the major ports including methods of transfer of men between companies. . . .

I emphasise those words: ‘Methods of transfer of men’. I know that Senator Wright usually goes on the rampage about this term ‘locked up labour’, but it is advocating a new system which the waterside workers have advocated as being indicative of the way in which people want to see labour effectively deployed. But let us not forget that when there is continuity of production without any interference or industrial stoppages that has to be paid for. Fairly high payments have to be made under the award. We have found that the waterside workers have negotiated some agreements, but the only satisfaction they have received is for some uninformed people to refer to the agreements as sweetheart agreements although smooth transport operation have ensued.

The working conditions of people in industry who have to work in all kinds of inclement weather are far different from the working conditions of people who work in air conditioned offices people who suffer from what I have always called the air conditioned office syndrome. It is all very well for people who work in an office to mouth on about increasing production. I suppose that if we think back to what we have done in the past most of us remember that at some time or other we have worked under inclement conditions. I refer to members of the National Country Party who work on their farms or the rest of us who have worked in industry. We have to make allowance for turbulence. Often on a hot summer’s day or on a cold day there will be a spark of antagonism between a foreman stevedore and a member of the Water side Workers Federation. People are normal and quite often it spreads into something that is more tense and man-hours can be lost.

I say respectfully that if one looks at the major ports in Australia today one finds that disputes of long duration do not occur. In any case, if a dispute of a long duration did occur, I challenge anybody to think back a long way and to compare the duration of that strike with the duration of strikes which have occurred at times on the west coast of America. Some people believe that the position on the west coast of America personifies the private enterprise atmosphere and demonstrates that the perfect position has been achieved. I am not saying that any dispute should go on aimlessly. The point I am making is that I believe there is a choice. If one pays wages over a particular minimum one will get industrial harmony and a minimum of disputes. On the other hand, I retrace my steps to the quotation which I gave from the Maritime Worker which refers to the establishment of some form of national body to replace the Stevedoring Industry Council. That to me is the hub of the problem that confronts this Government or any other government. People such as those in the Broken

Hill Pty Co. Ltd and wool growers have some apprehensions about this matter and believe that there should be a third party. I do not know what the national secretary of the Waterside Workers Federation had in mind when he wrote the article to which I have referred, but I think it is understood that the waterside workers believe that the slate should be wiped clean and a new chapter of industrial relations begin but it is not always easy to say what will happen.

Let us look at some of the problems that make us all ponder. I refer to the safety issues. From time to time new vessels arrive in Australia, new piers are constructed and new types of cranes are built. In the case of the crane operator it is essential that adequate provision is made to ensure that the ladders which he has to climb are safe. There are a host of other things to be considered. Anybody who reads the Maritime Worker regularly would know that whilst there has been a loose agreement with the shipping companies, on occasions there have been accidents. I think of occasions when waterside workers or seamen have put a ban on a ship- I am talking in the main about ships that sail under the Panamanian flag- and I have argued that perhaps we could be more penal clause conscious in regard to the Navigation Act and should warn off a ship that has been notorious for its lack of safety provisions. Those are the problems that have to be faced. It may well be that when we get to December we will find that there may be a bit of reasonable give and take between the stevedoring authorities and the waterside workers.

At times there are deadlocks. I do not know whether at this stage the Minister can hazard a guess or whether, with the assistance of his advisers, he can say to me: ‘Look, if it becomes a normal private enterprise industry, employer and employee, yes, you have an award, and in regard to those day to day disputes the Department of Transport experts on lifting appliances will be available’. If the Minister can say that, that will be very good. I understand that in some ports they have utilised the services of the State Departments of Labour in relation to safe working practices.

There is another aspect that I know was not canvassed in the debate in the other place, and it applies not only in this field but in any field where we introduce reforms. It is very much like a jigsaw puzzle. One gets to the last 3 pieces. One puts the last 2 pieces but one into place, but when one tries to push the last piece into place the whole jigsaw comes asunder. I say that because I am a little concerned about another matterquite apart from the redundancy problem that could face some workers on the waterfront. I think the Minister, among others, would have partaken of a meal prepared by the Department of Labour canteen service. I am wondering whether the Australian Government, through its various instrumentalities, will abdicate its responsibility on the waterfront in regard to the canteen service. I am wondering whether the canteen service will continue and in what form. It could well be that if some mutually agreed payment could be made by the employer the Australian Government would retain the canteen service on the waterfront. If we want efficiency it is essential that food facilities be provided for people who work after 6 p.m. and before 6 a.m. or even 8 a.m.

All of us who are interested in manpower policy will watch what is happening on the waterfront with interest. Terms like the ‘hungry mile’ and the ‘bull system’ are all behind us in the waterfront industry. I know that the Minister is an avid reader, and perhaps he has read a book recently published about Jim Healy, an earlier national leader on the waterfront. It is like everything else that has happened on the waterfront since World War II: When that bull system went out Jim Healy did not get much applause from sections of the membership of the Waterside Workers Federation, because some people may have had certain privileges which the majority of members did not have. Jim Healy ‘s successor, Charlie Fitzgibbon, has close liaison with international dock workers and kindred organisations and his response to change has always been very refreshing. If some of the stevedoring firms can reciprocate, well and good.

It does not matter what form the new authority takes. We are dealing with an industry in which the accident rate can be high. There is no question about that. It might be said that not all the accidents are fatal; but, if we were to make a comparison within the all lifting appliance industry generally between those people employed on the waterfront and those people employed in other areas of the industry, I believe we would find that on the waterfront the number of people who have maimed fingers and toes is considerable. I realise that some of the views that have been advanced by all the parties, including those advanced in the reports to which I have referred, will have to be revised from time to time. All I hope is that in the ensuing months the matter will not be allowed to lag behind. There would be nothing worse than finding by November or December that the jobs of the people in the fringe areas of employment on the waterfront, as distinct from the inner waterfront work force, were in danger. Perhaps we can have a quick solution to their problems. I would like to feel that even beyond what apparently the major elements want- this employer-employee relationshipthe Australian Government will provide the expertise that can be needed at times in regard to safety appliances. In concluding on that sentiment, I state that the Opposition does not oppose the passing of the legislation.

Senator WRIGHT:
Tasmania

-The Stevedoring Industry (Temporary Provisions) Amendment Bill which we are debating is simply a transitional Bill. Nevertheless, it is one of great importance. It is one of a series of transitional Bills extending in intermittent stages legislation which was experimented with in 1967 and was intended to be temporary and which has now extended to a long life of nearly 10 years. No government has come up with a complete solution in a situation which everybody concerned with the organisation of the waterfront regards as grossly unsatisfactory. I submit that the importance of the matter arises from the fact, especially in Australia, that imports and exports depend upon sea transport. Our coastal operations, both foreign and interstate, are particularly subject to the control of the 2 monopoly maritime unions, the Seamen’s Union of Australia and the Waterside Workers Federation of Australia.

We had an instance revealed to us in the second instalment of the Sweeney report issued last week which has gone almost unnoticed. We have such a sleepy Press today that these impositionsblackmail on the ships and on the waterfront- are considered to be so endemic that they do not even deserve note. We have a situation on the waterfront in which the union has been using its monopoly power to hand spike out of the industry conditions which are far out of line with general conditions in industry in Australia. It was when we were confronted with the war crisis that the genesis of these successive organisations on the waterfront began. There was the Stevedoring Industry Commission in 1942, several reports on the matter during the 1950s and the establishment of the Australian Stevedoring Industry Authority in 1956. The Authority came into being on the last day of the calendar year. The system then operating, which gave the industry much more ample control than now, gave way in 1967 to the system that operates today, namely, what is called permanent employment. It is remarkable how that name has misled so many people.

In actual fact, in 1967 the shipowners came to agreement with the waterside workers, under the aegis of counsel, to carry on the operations of the waterfront. They agreed to take the waterside workers in various pons successively upon the payroll, not for casual employment per shift but on the basis of weekly hiring. The purpose of that agreement was to usher in a period of peaceful industrial conditions so that the container system of transport would not be subject to the same obstruction and hindrance as had been experienced overseas. A term of that agreement under which waterside workers received weekly employment was that there would be a power to apply to adjust the number of waterside workers required on the waterfront and to eliminate those who were redundant upon the application of the employer and after adjudication by the Council. Such a degree of strike activity and force of monopoly power was brought to bear on the waterfront in 1972 that one of the concessions that the employers had to make was that no more applications should be made by employers to declare employees redundant; that henceforth a man on the waterfront payroll could be declared redundant only upon his own application. That meant that the employees on the waterfront were given life employment. That is a most extraordinary condition to develop.

Let me refer to the position outlined in the last annual report I have of the Australian Stevedoring Industry Authority. I regret to say that it is only up to June 1975. The report states:

Due largely to wage increases under the 1974 National Agreement, the average weekly earnings of waterside workers showed a general increase over 1973-74. Those of men employed under the normal award provisions rose from $ 1 34.28 to $ 1 62.89 per week -

I interpolate to say that they are now about $ 1 90 a week- permanent ports . . . The average weekly earnings of men employed under special agreements increased from $162.73 to $208.64 -

I point out that that was as at 30 June 1975. Honourable senators can see that the cost of employment, as well as the tenure of employees, has grown out of all recognition. Discipline on the waterfront is simply non-existent. The throughput of employees is gradually diminishing and the actual time worked is on the decrease.

I wish to refer to one submission that has been made for the purpose of discussion of this situation. It instances that in 1959 the remuneration of the waterside worker was 89 per cent of that of the fitter. In 1967, it had risen to 108 per cent. Since 1 967- that is to say, since the introduction of permanent employment, so-called- it has risen to such an extent that in 1 975 it was 1 29 per cent. I wish to make one other comparison. I do not wish to give very many references because this is a transitional Bill.

In the period 1967 to 1975 stevedoring costs increased by 192 per cent. Broken Hill Pty Co. Ltd records that the increase in the price of steel products in that period was 70 per cent.

Let me take another instance. Rail freights between Newcastle and Adelaide increased by 68 per cent whereas freight costs by sea rose by 135 per cent. The increase has been so great that although BHP has its own shipping facilities and owns its own wharves in New South Wales ports and Brisbane it is cheaper for BHP now to use the rail service and pay the government railways than to use its own ships and wharves for transporting its products. I mention that fact because out of the system of permanent employment has come general dissatisfaction on all hands. I use this illustration so that honourable senators may gauge that general dissatisfaction. When the stevedoring industry charge was first imposed in 1956 it was at the rate of 6d a man hour. Today it is at the rate of $4 a man hour. That shows the extravagance of this system which is eroding our coastal commerce through monopoly forces.

When the Labor Government approached this matter, it first obtained a report from Mr Foster. Still vacillating and in its period of indecision, the Labor Government directed Mr Northrop, as he then was- now Mr Justice Northrop- to sample the various opinions as to what reconstruction of the organisation was required. He issued a document- I will not call it a report- which is properly called a ‘Position Statement’. He did no more than assemble the various points of view and point out some of the problems. He made no recommendations out of his experience as Chairman of the Stevedoring Industry Council as to the solution which should be adopted.

When Mr Street came to office, he applied himself energetically and enthusiastically to this seemingly insoluble problem. He had before him Mr Justice Northrop ‘s document which threw up this rather odd situation. For a continuation of government organisation on the waterfront there was strong advocacy from the present government authority, the Australian Stevedoring Industry Authority, which said some governmental agency was needed to organise the general activities the.e and to match the union power. It said that the employers could not be trusted, by reason of their business connections with the overseas shipping companies, to withstand the pressure of the monopoly power of the employees. Arguing for the same proposition was BHP which I would have thought would be regarded as the citadel of private enterprise in this country. But it is so convinced as to the chaotic conditions on the waterfront and the extravagant costs involved in stevedoring that it advocated the continuation of a government organisation.

On the other hand, advocating the entire exit of government control and regulation was the employers’ body, the Association of Employers of Waterfront Labour, and with the same thrust, although it is not identical when closely looked at, and arguing in the same direction was the Waterside Workers Federation itself. On one side we find the government organisation allied with BHP. On the other side we have the employers on the waterfront allied with the Waterside Workers Federation.

It is to solve the predicament that that division of opinion throws up that the Government is seeking more time to bring forward a Bill in the next session of this Parliament which we hope will be a final solution but which will be at any rate a further step in the evolution of this situation. The Minister has gone so far as to indicate that the trend of his thinking is to favour the exit of government control from the waterfront and to leave the activities to be decided by employer and employee relations assisted by the agencies of the Conciliation and Arbitration Commission for the purpose of disputes, possibly with some aid from the Prices Justification Tribunal or an organisation of that sort to see that there is no undue hike in freight rates caused by excessive agreements for stevedoring charges and, possibly so far as shipping practices are concerned, some oversight and jurisdiction from the Trade Practices Tribunal.

The Minister has indicated that that is the trend of thinking. But everything depends upon being satisfied that, if these people are given the right to operate the stevedoring activities on that system, there will be a guarantee that the commerce of the country will not be unduly eroded by monopoly power on the part of the federation and the terrific commercial advantage that the shipowners have to pass on their freight costs. Let us illustrate the importance of this aspect.

I come from a State where we have a small industry, but a very precious industry, the apple exporting industry, some 80 years old, which has been reduced to half its proportion mainly because as the Industries Assistance Commission in its report records- and I will quote 2 words only from that report and reject most of the rest of it- in the port of Hobart the apple industry is particularly subjected to the ‘worst performance’ on the part of stevedores in the country. The costs of freight therefore to that industry are threatening to destroy it.

Let us take another industry which you, Mr Acting Deputy President- I am speaking to Senator Devitt who now occupies the Chairmay not find so much out of the realm of your concern. I remind you that the loss by the Australian Coastal Shipping Commission last year was $9m. We are told, if the grapevine is to be believed, that this year it will notch up a loss of $ 15m or in excess of that amount and, further, that $6m of that loss was incurred through disputes by unions which in the waterfront and on the sea-going vessels have a monopoly situation enabling them to hold up shipping. Therefore, we do hope to see- this is our determination- in the next 3 months a Bill forged which will introduce into this vexed industry a structure that will prevent the enormous drift into extravagance and huge costs which have characterised the 10 years of so-called permanent employment.

I have taken out a schedule of statistics from the establishment of the Australian Stevedoring Industry Authority in 1956 until 1975 showing the decline in the number of waterside workers from 26 000 to about 12 000 at the present time; the cargo throughput year by year; the gross earnings, which rose from $50m in 1956 to $11lm in 1975; the average earnings, which grew under the award from $38.28 to $129.61; and the average weekly hours, which decreased from 26.9 in 1956 to 19.2 in 1975.

The document refers then to the three or four very vexatious problems that have arisen as a direct consequence of the permanent employment situation. It refers to the man hours lost through unauthorised stoppages, which have been quite colossal. It refers to idle time, which is the direct result of weekly hiring. Sevedoring A has 2000 men and employment for only 1000 and Stevedoring B has 2000 men and employment for 3000; yet ships are locked up and men are idle. The amount paid out in idle time in the year 1974-75 was $8.3m and this year it is likely to be about $ 1 3m. It refers also to the subject of redundancy and the pensioning off of surplus personnel which, as I have said, under the terms of this arrangement was to be done in the same way as other employees are retired, that is, on proper notice and with fair compensation on the application of either the employer or the employee, but since 1972 the employees have insisted that it is their sole prerogative to say when they will retire.

In 1971-72 we paid out $2.8m to get some of them off the waterfront. In 1972-73 we paid out $2m;in 1973-74, $0.5m; in 1974-75, nearly $ 1m. Up to April of this year nearly $8.37m has been paid out. Since then-a fact which I am sorry not to see expressly emblazoned in rubric red in the second reading speech- some 150 or 200 stevedores have been persuaded to retire at a cost which I believe is nearly $2m. The average outgoing for those gentlemen to be retired from this industry is something like $ 10,000 to $ 14,000 per head. That is to be done on pensions which in 1974-75 cost $4.3m. If I recite those figures once or twice round Huonville it will not be question of grubbing out the apple trees; the people of that area will be marching on the waterfront with their implements to take over the citadel of the new aristocracy.

I hope that the legislation that is to be introduced will solve the problems concerning idle time and make for a system of proper transferability of labour as between stevedores that will make it possible to retire surplus labour on fair terms from the waterfront and, all importantly, ensure that there is discipline and a proper performance of work on the waterfront. I notice that Mr Kelly said in his speech in the other House that a boat loaded in Sydney under this system can go to Norfolk Island, where there are no proper wharf facilities and all work is done by lighter, and there be unloaded by a lighter at 3 times the rate of the Sydney loading.

Solving of the 3 problems of idle time, redundancy and the carrying out of a proper performance of work so that the conditions in this industry are kept somewhat in line with general conditions is absolutely imperative in the Bill that we have been promised will be before us in the autumn session. Having worked on the consideration of this matter, with the Minister for Employment and Industrial Relations (Mr Street) and with such colleagues as Senator Scott, Mr Kelly and Mr Macphee for three or four months now, I do not need to add that I am confident that the Minister will be able to produce a Bill which, although it will not solve all of the problems, I feel will be a substantial improvement in relation to this vexatious problem, but it can be only a balanced judgment as to whether it is an improvement.

I want to say one more thing in conclusion. 1 listened to the speech of Senator Mulvihill. He would seem to believe that there are those on this side of the House who wish that the waterside workers would go back to the bull gang days, the days when there were no amenities and when the waterside workers were waiting in crowds for casual employment and were running from ship to ship. Nothing is further from my thought. The organisation of labour and the improvement of conditions can take part only if there is responsibility on the part of those who enjoy the improved conditions. I am sure that the sole aim of everybody on this side of the House is to get recognition of the need for responsibility in the performance of work and recognition of those improved conditions. If the stevedores employ their own personnel, although there is a considerable doubt as to whether the monopoly of the union can be contained, we believe that with the assistance of proper agencies there should be success. It may finally come to be realised that union power has to accept the responsibilities that other sections of commerce accept, namely, the payment of compensation for breaches of agreements and proper amenability to the conditions of employment. Those are provocative words. I close by leaving them for calm contemplation.

I have ascertained that it is convenient to incorporate in Ilansard the schedule of statistics to which I referred earlier. I have shown it to you, Mr Acting Deputy President. I seek leave to incorporate it in Hansard.

The ACTING DEPUTY PRESIDENT (Senator Devitt)- Is leave granted? There being no objection, leave is granted. (The document read as follows)-

Senator HARRADINE:
Tasmania

– It is precisely for the reasons that were outlined in Senator Wright’s last few words that I had hoped that the Senate would debate the position statement on future arrangements for the stevedoring industry before it debated these Bills. The inferences underlying the last statement by Senator Wright have vast ramifications. I state, and state categorically, that the majority of the trade union movement does not wish to see a situation develop where the law of torts operates in place of a regulation of disputes by procedures governed by the trade union movement itself. I believe that if a proper examination of the situation facing the stevedoring industry were undertaken, then proper responsibility for the conduct and control of industrial disputes would emerge and the challenge would be laid at the door of the central trade union organisation to see whether it would accept that responsibility. Yet we hear the implied threat that into the field of industrial relations we are going to see more and more the law of tort, the Trade Practices Tribunal and other authorities coming where they should not be if proper responsibilities were accepted in the area of industrial relations.

On 31 March 1976 I put down notice of a motion in this Senate that the Senate take note of the paper entitled Position Statement on Future Arrangements for the Stevedoring Industry by Mr R. M. Northrop, Q.C., who was then not a judge. I let that lie, hoping that it would receive the attention of the Senate. However, subsequent to the Minister’s second reading speech in the other place, I put down a contingent notice of motion. The reason for putting down that contingent notice is to be found in some of the remarks made by the Minister in the other place. In his second reading speech on 6 May 1976 the Minister for Employment and Industrial Relations (Mr Street) said:

Finally, I must say that it is recognised that in recent years direct government involvement in the industry has centred on its limited and diminished regulatory role. Now it considers that, in the light of the trend of recent years, that role is no longer necessary. That is not to say, however, that it will no longer give attention to and seek to influence events and attitudes in relation to those matters affecting the industry which give greatest concern to the community generally. But for these matters to be given government attention does not require the continued presence of a government regulatory agency.

I believe that had this Senate been given the opportunity to debate the position statement on future arrangements for the stevedoring industry prepared by Mr Northrop, now Mr Justice Northrop, we would have been able to give to the Minister some indication of the line which he could follow in this most important matter. It is a most important matter. The future of the stevedoring industry is one of the vital matters facing this nation today. We are a great trading nation. We depend on a stable situation in our stevedoring industry. We are not likely to get that if there is a substantial withdrawal of community interest in the industry. We are certainly not going to get it if the industry is turned over to monopoly power which is governed purely by self-interest.

I am not going to proceed with an amendment in this debate in order to attempt to have my contingent notice of motion proceeded with. I am told that I will not get the majority support of the Senate, and I suppose that is a good enough reason for not proceeding with the contingent notice of motion.

Senator Wright:

– But in effect this second reading debate provides the opportunity to debate the Northrop report.

Senator HARRADINE:

– With respect to Senator Wright, I would have thought that if there were a debate on the position statement, the debate would have ranged far and wide over the matters contained in that statement instead of the matters that are contained in these Bills, which in effect mainly extend the time of operation until 1 January 1977. 1 cannot do anything to amend these Bills, and I support them. However, one provision in this Bill does give me concern in that it perpetuates, at least until 1 January 1977, charges that are based on man hours and not on tonnage rates. In the position statement Mr Northrop stated:

The ASIA anticipates that the accumulated deficit as at 30 June 1976 in its accounts will be of the order of $20m. The NIC submission estimates this deficit as being between $20m and $30m. The ASIA says this deficit is primarily the difference between the accumulated liability for long-service leave for waterside workers and the amount invested for that purpose. The NIC and the WWF claim that current liquidity problems being experienced by the ASIA are restricting the implementation of redundancy procedures since the ASIA cannot fund the redundancy payments.

Who is going to pick up the tab for that $20m to $30m? Is the taxpayer going to pick up the tab? Surely arrangements should have been made last year to ensure that the levy was on a tonnage basis so that there would be sufficient moneys for the stevedoring industry to meet its obligations. Quite obviously, any levy that is based on man hours is likely to decline in importance. The reason for that, of course, is increased mechanisation and technological change and containerisation. In those circumstances, it would have been quite obvious that the recommendation made last year for the change of the basis of the levy from man hours to tonnage would have gone some way towards overcoming that problem.

Senator Wright:

– But redundancy and idle time are the chief causes of that, and they should disappear.

Senator HARRADINE:

-I am not going into that question. Of course, that is a matter we would have been able to go into, I should imagine, had we been discussing the position statement. I want to refer to something Senator Wright said. I may have misunderstood him; I feel sure that I have. He seemed to reflect on the Hobart branch of the Waterside Workers Federation. I want to say that the Hobart branch of the Federation, as I am sure Senator Wright knows, has an enviable record so far as strikes are concerned. I know that Senator Wright did not go into that aspect, but I want to say to him and to the Senate that the Hobart branch of the Waterside Workers Federation has a good industrial record. Over recent years, it has not participated in political stoppages, as have the Melbourne and Sydney branches to the detriment of Tasmanian shipping. Much of the credit due to the Hoban branch should go to the late Arch Fulton, who was the secretary of the Hobart branch of the Waterside Workers Federation.

My concern about the statement of the Minister is that if the Government is going to withdraw from an interest in the stevedoring industry and if the community’s interest is withdrawn from the stevedoring industry then not only will the hard work that went into getting a community interest in the stevedoring industry go to waste but also we could see the whole of the industry turned over to monopoly power. I can well remember discussions that took place on this matter in the mid-1960s when I was a member of the Australian Council of Trade Unions Executive and there were some substantial disputes on the waterfront. I can recall the conferences that were held at that time with the Ministers and the discussions that were held within the ACTU. The ACTU was concerned to ensure that the rights of all parties on the waterfront were maintained.

At the present moment I notice that the Association of Employers of Waterside Labour suggests that the Government should get out of the stevedoring industry. Of course, the Association wants the Government to get out of the stevedoring industry so that it can have it all its own way. What is the AEWL? It represents the ship owners. If one analyses which shipowners are associated with the AEWL one finds that the majority in strength of these are the overseas shipping interests. On the other hand we have the Waterside Workers Federation saying that the Government should not play a major role in the stevedoring industry. It further adds the suggestion that the Waterside Workers Federation should be the only union on the waterfront. I can tell honourable senators that suggestion went up like a lead balloon with the other unions on the waterfront. But we hear the employers- the ship owners- saying that they ought to have monopoly power over the workers on the waterfront. I think that the Senate ought to be aware of the dangers of these proposals.

We have also the suggestion that the council to run the stevedoring industry would ensure that the cost lies where it falls. What is this going to do to ports within Australia? What is it going to do to ports within my State? Obviously, through economic blackmail, the monopolists who would then control the stevedoring industry would force the centralisation of ports. That would mean a loss of employment opportunities on the wharf. That is something that should be borne in mind by not only workers on the waterfront but also by the community as a whole and by the marine authorities concerned.

Finally, I want to say that insufficient guarantees have been given to the workers of the Australian Stevedoring Industry Authority. These workers have not been given proper guarantees as to their future. I should like to see the Minister give an assurance to this chamber that the accumulated rights of the workers employed by the ASIA will be preserved- their rights to continued permanent employment. Many of the clerks who have been employed by the Australian Stevedoring Industry Authority have known no other work. If the Government is thinking about chopping out the Australian Stevedoring Industry Authority it has a duty to tell the workers employed by that Authority right here and now that their rights to a future will be preserved. I believe that the Minister should go into immediate consultation and negotiation to this effect with the union concerned.

As I mentioned before, I shall not proceed with my contingent notice of motion. I shall support the legislation since it serves only to extend the operation of the existing legislation until 1 January 1977. I look forward with interest and not a little trepidation to what the Government proposes to do about the problems facing the stevedoring industry and about the need to make sure that there is a viable community interest in the stevedoring industry- an interest which is truly national and nationalist to ensure that the community will not be held to ransom by monopolists.

Senator SCOTT:
New South Wales

– I rise briefly to support this legislation, which fortunately receives the support of both sides of the chamber. The Stevedoring Industry (Temporary Provisions) Amendment Bill and the Stevedoring Industry Charge BDI for 1976 constitute very simple legislation for they merely seek to extend the provisions that apply to this most important industry from the end of June this year to the. end of December this year. But although it does that, it does one other thing. It seeks in the first mentioned Bill to provide the authority for reimbursement of the Fremantle Port Authority for the employment of some 30 crane drivers and it gives authority to the Australian Stevedoring Industry Authority to reimburse those men who worked for that Authority and who have since become members of the Waterside Workers Federation and therefore to whom are relevant all those conditions and payments that are due to members of that particular Federation.

Although this is certainly a relatively simple and non-controversial piece of legislation, I believe that the tragedy of the situation is apparent when we look back to 1967 when, as a result of Mr Woodward’s investigations and recommendations a trial period in this industry which was to end on 30 June 1970, as I recall, was undertaken. The tragedy of the situation that confronts us today is that we are prolonging yet again that sort of trial situation. Here we are, 6 years after the finish of the initial 3-year trial period, still seeking desperately to find a solution to the many problems of the waterside industry in Australia.

I want to make just a few comments referable to the urgency that must be attached to the next 6 months and particularly, perhaps, to the next 3 or 4 months- an urgency which is relevant to the establishment of legislation and of agreement between, in particular, the employers and the employees in the waterfront industry in order that this industry may settle into an efficient and progressive state. I suggest that this is one of the most fundamental, if not the most fundamental, industries in the context of the Australian economy. In a country such as Australia, the areas of import and export are directly referable to the circumstances that exist on the waterfront. We are an island country; consequently the costs that are established on the waterfront and the efficiency or lack of efficiency that exists there are relative to the standard of the whole crosssection of the Australian community.

The urgency that confronts us is relevant to what I believe, regrettably, is a real measure of inefficiency in the history of the wharfside enterprise in Australia- an inefficiency which was indicated by Senator Wright when he spoke on this issue just a few moments ago, an inefficiency which is represented by an idle time commitment of from $8m to $ 13m annually, and an inefficiency which is represented by the somewhat paradoxical situation that the loading of wharfside cargo in Sydney takes three times as long as the unloading of the cargo by the somewhat more difficult method of lightering at Norfolk Island. These things are evidence of the inefficiencies which exist in this industry and which have to be overcome. There is a great measure of responsibility on government and employers and employees alike to come to a solution.

Regrettably there has been a measure of malpractice in this area. I refer to the report of the Royal Commission of Inquiry into Alleged Payments to Maritime Unions. A recent description by the Commission referred to the:

  1. . grossly improper maritime union system of demanding payment from ships’ agents under threat of bans.

That is an area of malpractice to which surely, in the interests of the whole Australian people, some sort of real solution must be found, and it must be found in the very near future. The Commission went on to say that the system is contrary to the best interests of the Australian community, trade unions and their members generally and to particular unions and their members. Clearly there is an area of inefficiency, costliness and malpractice. They are all inter-related. We must come to grips with the problem quickly and solve it this time in a permanent way.

We have been in this temporary circumstance, as has been said before, for some 9 to 10 years. The urgency of the waterfront situation is related surely to Australia’s dependence on trade and international relations. This country, because of the excessive cost and expenditure on the waterfront and in the waterfront industry, is rapidly becoming an unattractive country. It is becoming unattractive from the point of view of both the importer and the exporter. The importer, faced with enormous and spiralling costs, finds that when these costs are carried forward the goods in Australia are excessively expensive. This of itself is serious enough; but it is even more serious when one considers that the level that is established as a consequence of the waterside or import situation sets unnaturally high levels of price for the products which are competitive and which are manufactured in this country. Of course, the cost at the waterside is particularly relevant to the export industry in Australia. The export industry covers the vast range of the traditional primary industries- meat, wheat, grain, dairy produce, wool and so on, together with the minerals industry. Insofar as the freight costs are bearing heavily on the products of these industries, they are threatening the survival and development of our whole economy; they are threatening the whole Australian community. We can never forget that in this country in those areas our industries are dependent- to an extent between 65 per cent and 95 per cent- on their markets overseas.

I suggest that the extreme cost of the waterfront exercise in Australia, when looked at as being relevant to the import and export circumstances in this country, means that at long last steps have to be taken and results have to be seen if we are to survive as a community. I am sure that people are aware of the problems of waterside labour, and there is a proper measure of sympathy for the problems in that area. Nevertheless, other industries face problems of a temporary and casual nature from time to time, and in general overcome them. I am sure that these problems in the stevedoring industry can and must be overcome.

I do not believe it is necessary to canvass the ground that already has been covered effectively by those who have spoken in this debate. The history of the industry was referred to by Senator Wright. I believe that the Commonwealth’s statutory role in the industry goes back to about 1928. It seems to me to be regrettable that it took a wartime situation for the 1942 National Security Regulations to be invoked in order to arrive at some sort of real efficiency in an urgent circumstance in this industry. From that point on we have seen the establishment of the Australian Stevedoring Industry Authority in 1956, the investigations of 1965 to 1967 and the establishment in 1967 of the trial period to which I referred. That trial is a continuing circumstance, and it is hoped that the legislation that is before us today, providing a continuance of the trial period, will be the last that is necessary. It has to be admitted that there are problems in this industry, relative to technological change and to the safety and security measures mentioned by Senator Mulvihill, which have tended to increase or to prolong the necessity for the trial period. I am sure that there has been sufficient time for the industry now to come down with real measures to establish a program which will see the industry work effectively on behalf of all Australians from this point on.

Mr Clyde Cameron, when Minister for Labor and Immigration in the Whitlam Government, looked at the possibility of nationalisation in this industry, but he did not proceed along that course. It was his successor, Senator James McClelland, who asked Mr Northrop to bring down a report on the problems confronting the stevedoring industry. That report is one which Senator Harradine, I believe quite rightly, considers should be looked at at length and in depth. Most of us who have been involved in the problems of the stevedoring industry are aware of the findings of the Northrop report which are significantly related to the inflexibility of the labour force on the waterfront. This in turn is related to redundancy and is an area in which we must seek a proper and real solution. The Northrop recommendations are related to the problem of mobility and transferability of labour on the waterfront. In this regard I think Senator Wright highlighted the circumstance that occurs from time to time when in the same report one stevedoring company can be short of 1000 men and another can have 1500 men too many. Yet there is no provision which enables the sort of transferability or mobility which would in large measure overcome that problem.

In respect of restrictive practices, Mr Northrop, Q.C., referred to the equalisation of earnings and idle time in a port. He recommended that the funding of the industry be on a tonnage and not a man hour basis. He referred to the existence of an excessive number of strikes and unuathorised stoppages and the lack of proper dispute settling procedures. These are the problems which have been highlighted by that investigation. They are the problems that can be solved only by a realistic approach by employers and employees in this industry having a view to the extreme measure of responsibility that the industry must assume because of its basic significance to the whole Australian economy. The proposals in the Bills that confront us are simply that the temporary legislation shall be extended to 3 1 December and that the operations of the Australian Stevedoring Industry Authority and the Stevedoring Industry Council also be extended to that date; that in that period the employers and the Waterside Workers Federation should submit solutions to the well-canvassed and clearly understood problems of this industry; and that the charge is to be extended and to remain unaltered.

I draw the attention of the Senate to the 4 major considerations that were highlighted by Mr Northrop. In the first place he suggested to the industry, to all those concerned and to the Government, that it could well be that the situation should go on as it is but this is considered on all sides to be totally unacceptable and a hopeless situation. Secondly, there is the question that the industry be nationalised. The problems here are many. Of course, there is the philosophic problem which relates to nationalising anything and when we look around the world at the evidence to support the nationalisation of industries, and I think of the British steel industry which is losing something like £stg9m a week and of nationalised health services in many countries, there does not seem to be much support for the suggestion that nationalisation of itself will be any solution in this area. Thirdly, there is the suggestion that there should be a third authority which shall engage and hire out labour to the various stevedoring companies. Again this would appear to be introducing a third party into a situation where a third party is totally unnecessary. Finally, there is the suggestion that the Government should in large measure opt out of the problems of this industry and leave it to the constructive efforts of those directly involved to establish solutions. I believe that in this fourth option there is the greatest hope for a permanent and responsible solution to the stevedoring industry problems in this country.

In closing I want to submit the need for all those people involved to recognise that one of the major concerns must surely be community interest. In the solution of the problems of this industry the public interest must be in the forefront of matters considered. There has to be a provision which will enable a flexible work force and a situation in which unions, whatever unions they be, are not able to take a position whereby they can pick off individuals, as employers or shipping companies. This sort of thing must be avoided if a measure of permanence and responsibility is to enter into the stevedoring industry, an industry which is absolutely basic to both the import and export sections of this great economy. Imports and exports are of much greater significance in the Australian scene than they are probably in any other developed economy in the world. I have pleasure in supporting the extension of these temporary measures and I hope sincerely that the 6 months extension will see the solution that is so badly needed.

Senator CARRICK:
New South WalesMinister for Education · LP

– The 2 measures which have been the subject of this cognate debate are, as honourable senators have said, relatively simple matters. They are identified simply as extending the duration of legislation and of the present system to the end of this year. The measures have the support of both sides of the Senate. In both the Senate and the other place the debate, which has been a good one, has hinged on identifying the dilemma and the need to find a solution which must be found within the course of the next 6 months. This has to be done in the light of two quite important factors. The first is that Australia ranks amongst the 12 leading trading nations of the world and therefore its maritime trade has an immense significance to its living standards. The second is that freight costs of all kinds make up 40 per cent of the cost of all goods and commodities. The solution that we find to our stevedoring problems is of enormous significance, particularly as with growing inflation we have tended to cost ourselves out of world markets.

Various speakers in the debate have referred to the inquiry that Norman Foster undertook. He reached the conclusion that there should be a nationalised body responsible for the stevedoring industry. They also have referred to the inquiry by Mr Northrop, Q.C., who presented a paper which identified a number of alternative solutions, and to the fact that everyone is agreed that the present situation is quite intolerable and cannot continue. So we have a situation where no one wants us to stay where we are. The experiment has run for some 9 years with various degrees of unsuccess. We now have on the one hand suggestions of solutions through nationalisation and on the other hand suggestions of the industry and the unions finding their own solutions.

Against that background I want to say that the solution itself must have 2 essential ingredients. It is imperative that it should provide effective and good working conditions in terms of remuneration, amenities and safety and, parallel with that, modernised methods of stevedoring which, taken with the human content, will result in increased productivity for Australia. Essentially, whether employer or employee, we must realise that there is a vested interest for both in increased productivity. Of course, that is the challenge. The Minister in another place made reference to the future of the staff of the Authority. I read what was read for him in the other place:

The Minister has indicated that in relation to the staff of the Authority he will carry forward his expressed intention to ensure that their interests are protected. He has already told the unions concerned that discussions on these matters will take place once this Bill has been passed. The Minister will act to see that the fears the Authority’s staff may have are settled as quickly as possible and that they are treated fairly and responsibly.

I thank all honourable senators for their contributions to the debate.

Question resolved in the affirmative.

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

page 2140

STEVEDORING INDUSTRY CHARGE AMENDMENT BILL 1976

Second Reading

Consideration resumed from 20 May, on motion by Senator Withers:

That the Bill be now read a second time.

Question resolved in the affirmative.

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

page 2140

INCOME TAX ASSESSMENT AMENDMENT BILL 1976

Second Reading

Debate resumed from 25 May, on motion by Senator Cotton:

That the Bill be now read a second time.

Senator WRIEDT:
Leader of the Opposition · Tasmania

-I understand that the Government is prepared to allow the Income Assessment Amendment Bill, Superannuation Amendment BDI (No. 2), Income Tax (International Agreements) Amendment Bill, Income Tax Assessment Amendment Bill (No. 2), Income Tax (Rates) Bill and Income Tax (Individuals) Bill to be debated cognately.

Senator Carrick:

– That is right.

The DEPUTY PRESIDENT (Senator DrakeBrockman) Is it the wish of the Senate that those 6 Bills be taken together? There being no objection, it is so ordered.

Senator WRIEDT:

– I indicate immediately that the Opposition will move an amendment to the motion that the Income Tax Assessment Amendment Bill be now read a second time. The actual wording of that amendment will be circulated in due course. Initially, I shall take the first 3 Bills. I shall deal with the second 3 Bills separately in the course of my remarks.

The Income Tax Assessment Amendment Bill provides for a number of changes to the Income Tax Assessment Act. The main features are, firstly, that securities issued after 12 April 1976 by Government banks are to be excluded from the classes of securities which may be taken into account in ascertaining whether the superannuation fund or the life insurance company has maintained the 30-20 ratio of public securities in the investment of its assets. The Opposition will not oppose this measure.

Following the withdrawal of the former concessional basis of valuation of trading stock of manufacturers of wine and brandy for income tax purposes, special provisions were enacted in 1973 to bring it into assessable income over a 5-year period. The accumulated amounts of income had not been taken into account in wine makers’ income tax assessments. The Bill proposes to extend to a minimum of 8 years the transitional period.

The purpose of moving the amendment during the second reading debate is to highlight the failure of the Government to carry out its promise that it would abolish the new stock valuation system which was introduced by the previous Labor Government in the 1973 Budget.

Although the Opposition very strongly opposed the abolition of section 31a of the Act which had provided the concessional basis of stock valuation, it is now retaining the new system of valuation. I shall come back to that later.

A new investment allowance in respect of the capital cost of acquiring new plant and equipment will be available in respect of plant ordered after 1 January 1976. The allowance is 40 per cent in respect of plant ordered between 1 January 1976 and 1 July 1978 and 20 per cent in respect of plant ordered after 1 July 1 978 and before 1 July 1983. Although the Opposition will not be opposing the actual clauses of the Bill it opposes the thinking behind the measures and hence the proposed amendment to the second reading. I shall come back to that again. Coupled with this provision the Bill ends the scheme of double depreciation for new plant which was introduced for 1974-75 and extended last year.

Income tax deductions for interest paid by an individual taxpayer on a housing loan used to acquire or extend the taxpayer’s principal residence are to be restricted to interest payments during the first 5 years of occupation of the first residence owned by a taxpayer or by his or her spouse. The Opposition opposes this change. It will move the deletion of clause 1 1 at the Committee stage.

There are 2 additional factors concerning this Bill to which I shall refer now. The first one requires tests to be satisfied for a company to get a tax deduction for interest paid on borrowed money convertible to share capital. These tests are to be relaxed. Secondly, the liability of a company to pay the third instalment of income tax during the financial year in respect of the 1974-75 income and the three instalments which would otherwise be payable during 1976-77 in respect of the 1975-76 income year is to be removed. The amount of the tax not collected is to be payable as part of the final assessment for the relevant year of income. The Opposition will not oppose either of those sections of the legislation. We are of the view that both of themparticularly the first of the two- have some real benefit for the business community. For that reason, as I say, we will not oppose either of those sections.

Coming back to these points I would like to deal with them briefly and individually. We are dealing in this legislation with some very complex matters. We all know that the area of company tax, indeed any form of tax adjustment, is complex, and we have not had much time to go into the background of these Bills. Much of what

I say is based on the belief that what the legislation says it will do in fact will be done. With a group of Bills of this nature it is very difficult for any of us to be able to make a definitive statement. In regard to many sections of this legislation, generalities and, I think, matters affecting Government policy and Opposition policy can be dealt with.

With regard to the question of eligibility of securities for the 30-20 status, as I have indicated the Opposition has no objection to this alteration. From information available government banks have not and will not have difficulty in obtaining investment by institutions and the public in their securities. The measure will have the side effect of increasing the importance of Commonwealth bonds and borrowings by State government instrumentalities.

We will not oppose the proposal relating to the trading stocks of wine makers, but it is necessary to highlight the fact that the proposal is a breach of a government undertaking given during the last election campaign. When the amendment to the Act was made by the Labor Government in 1973 there was strong criticism from the then Opposition. Now that the Liberal and National Country parties are in government we find that apparently they believe that the measure is basically sound. It will be continued, although it will be varied. We do not argue with the variation to make it easier, perhaps, for the transition to be made. Nevertheless, it is important to note that the principle which was enacted by us in 1973 now is being continued by this Government, despite the assurances that were given during the election campaign.

Turning to the investment allowance, this is a major feature of the Bill and one about which there has been considerable debate already in this Parliament. I restate that this measure indicates a quite clear error of judgment on the part of the Government. Even with the allowance, business will not invest because of the existing excess capacity. We may well ask: What is the point of increasing excess capacity prior to orders reaching a satisfactory level? The measure will not increase consumer demand which, of course, is what is needed. If we look at a joint survey which was issued by the Australian Chamber of Commerce and the National Bank in only April of this year- some weeks ago- we find, it reveals that only 8 per cent of respondents said that the investment allowance had greatly affected their investment decisions.

This is a measure of the concern felt by the business community. It believes that measure will have little opportunity, until consumer demand picks up, of availing itself of this allowance. Business will not invest until there is a demand, with or without the allowance. Once there is the demand business will invest, whether there is or is not an allowance. In other words its decisions will be determined by the market conditions that operate at any given time. The only purpose which the allowance will serve will be to provide a subsidy to business without producing any desirable economic consequence. The measure demonstrates that the Government has made a mistake in a major area of economic management. The allowance is an open-ended commitment and the Government has no idea what it would cost over a full period.

This surely must be one of the great dangers of the allowance. Even if this investment allowance could be justified at the present time, it is impossible to predict what the state of the economy will be in two years or three years time. It may well be that the allowance will be available at a time when the economy is booming, at a time of very loose money supply. I am quite sure that no government would wish a taxation concession of this nature to be operating under those conditions. But we are talking not only about two years or three years ahead; we are talking about 1983- in fact to the end of the financial year in 1984.

Although the Minister for Industry and Commerce (Senator Cotton) indicated in his second reading speech that the measure was likely to create jobs, it will not have that effect. If not most, then a great deal of the equipment purchased will be purchased overseas. That will have very little impact, if any, on local employment. Local employment will improve only when there is sufficient demand for labour. The Government’s recent cost cutting measures will reduce that demand and further increase unemployment.

The fourth area of major concern is the interest on housing loans. Restrictions on the tax deductibility of mortgage interest is a further breach of an electoral promise. Prior to the last Federal election the Government said unequivocally that it would continue to support the tax deductibility scheme. The introduction of this measure will partly wipe out gains made by tax indexation. The combination of this measure and the Medibank levy will leave many taxpayers substantially worse off. This will be particularly noticeable in the outer suburban areas in the new growth centres. No protection is afforded for persons forced to move from their first home for employment reasons or other reasons. In those circumstances they will lose the benefits of the tax deductibility scheme. The Government has substituted the old discredited home savings grant scheme for the tax deductibility scheme. The effect of that scheme, as it is contemplated now, will be inflationary. It will add to the price of houses, thus making it increasingly difficult for first home buyers to purchase a home. The Opposition will oppose at the Committee stage the variations in the mortgage deductibility scheme.

The Opposition will not oppose the measure relating to convertible notes. It is one of those areas in which it is difficult, I believe, for one to make a full assessment of the need or justification for the measure. Similar comments apply in the case of the payment of instalments of company tax.

The amendment to the Superannuation Amendment Bill, which is one of the Bills we are debating cognately, is consequential on the changes which are required under the 30-20 rule. The Opposition does not oppose that measure. The Income Tax (International Agreements) Amendment Bill provides legislative authority for entering into comprehensive double taxation agreements with the Netherlands and France. If my memory is correct, this legislation was originally agreed upon by the Labor Government last year. Naturally, we do not oppose the measures that are intended.

We are looking at a series of quite complex Bills. Because we have had to deal with these matters quickly I hope that during the course of the next few months- indeed, during the whole of the coming financial year- we do not find that we have had placed before us legislation which hides matters. I trust that in the comments that I have made to the Senate we can see holes in the legislation, particularly in relation to the Government’s undertakings during the course of the election campaign.

The second group of Bills which are the subject of this cognate debate may be summarised in the following way: Firstly, they introduce personal income tax indexation. Secondly, they increase certain tax rebates in lieu of indexation. Thirdly, they do not index other tax allowances, such as payments for life insurance, superannuation, etc. Fourthly, they will tax certain social security benefits, such as service pensions, widows’ pensions and supporting mothers’ pensions. Fifthly, they do not index payments for provisional tax for 1976-77.

Sitting suspended from 6 to 8 p.m.

Senator WRIEDT:

-Mr President, I seek leave to continue my remarks later.

Leave granted; debate adjourned.

page 2143

QUESTION

FOREIGN POLICY

Ministerial Statement

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

- Mr President, I ask for leave to make a statement on behalf of the Prime Minister (Mr Malcolm Fraser).

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted.

Senator WITHERS:

-Where I use the personal pronoun, honourable senators will note that I am speaking for and on behalf of the Prime Minister.

Tonight I am going to talk about Australia’s place in the world and about the interrelationship of domestic policy and foreign policy. The purpose of this statement is to outline some of the basic guidelines for the Government’s approach in its dealings with other countries. The first requirement for an effective Australian role in the world is a realistic assessment of the state of the world, in which Australia must act. That assessment must, as far as possible, be free of self-deception, self-delusion. We must be prepared to face the world as it is, and not as we would like it to be. Only in that way can we avoid becoming involved in the pursuit of policies whose assumptions are so remote from reality that their failure is inevitable. Only in that way can we hope to perceive accurately possible problems for Australia and seek to overcome them. Only in that way can we effectively advance our objectives of peace and security. To point to possible problems and dangers is not to be gloomy or pessimistic. It is an essential step in the development of realistic and appropriate policies. It is an essential step in enabling us to avoid problems and dangers which may arise.

First of all, I will discuss the Government’s general approach to Australia’s foreign relations. Australia’s basic interest is in survival as a free and democratic country, a country which can work effectively towards a world in which all people can live in self-respect. We want to help diminish the dangers of war and conflict, to help others- as well as ourselves- to live in peace and prosperity and to work towards an international enrivonment which is favourable to these ends. There is a yearning in the world for peace and security. These must be the constant objectives of our policy. We will also seek to further our own deeply held values of democracy, freedom and respect for the individual at every opportunity. In our relations with other countries, the ideology of regimes is nor irrelevant but it cannot be the guiding principle of our policy. While common values and attitudes may serve to make operating easier, their absence need not preclude such co-operation if there are parallel interests. Whatever the basis of a regime, whatever the organisation of its domestic government, the chief determinant of our relations will be that country’s approach to foreign relations, how it meshes with ours, and of necessity the extent of the interests we share. We should strive to deal with other countries, and look to the development of cooperative relations with those countries with whom we have some common interests, regardless of ideology. A relationship founded in common interest is ultimately the only relationship that can be depended upon.

In recent years, abroad as at home, lack of realism has inhibited Australia from the constructive role open to us. A government does a great disservice if it encourages acceptance by the people of an unrealistic view of the state of the world in which they live. At home, the cost of a lack of realism have become very apparent in the economic dislocation Australia has suffered. Abroad, unrealistic notions that an age of peace and stability had arrived encouraged a neglect of power realities- a neglect which did not serve our interests. It is time to move towards realism abroad, as we are at home. Australia in common with other medium and smaller countries is now facing a more difficult task in developing foreign policy in a deeply disturbing world environment. The evidence for concern is apparent to anyone who takes a realistic and dispassionate view of the world. The aspects of the international situation which give rise to concern are: Firstly, the continued readiness of some states to pursue their interests by the use of force- by the growing influence on the international scene of countries opposed to the freedom and respect for the individual persons on which our own democratic system is based. Goodwill between nations would be enormously advanced if all nations could treat those within their boundaries equally and justly, and if nations could refrain from forcing their own form of government on others. But unfortunately, it would be unrealistic to expect that they will do so. Indeed, the practice of noninterference places a heavy responsibility on states.

We have come far beyond the point where anyone can pretend that the denial of rights to minorities, or of basic rights to majorities, is not a matter of international concern. It is a tragedy, nevertheless, that great powers have sought to use problems arising from such situations not to achieve actively a just solution but to achieve the dominance of one ideology over another. A second aspect of the world situation giving rise to concern is the state of relations between the super powers. Despite the hopes placed in detente, it has not stabilised relations between the great powers. Indeed a renewed arms race now looms as a real prospect. I shall comment on this matter further in a moment.

Thirdly, there has been a spate of criticism, often ill-founded, of the United States which has reinforced domestic disputes within that country. Disagreement between Congress and Executive has impaired the capacity of America- the only power which can provide a balance to the Soviet Union- to act with full effect abroad. Let me not be misunderstood. This is not a plea for any power to be a policeman for the world, nor to do what small powers should do for themselves. A country without the fortitude to defend itself does not deserve help. But having said that I want to draw attention to the fact that there are many things which only the world’s greatest free power can do. If she leaves them undone, they remain undone.

Fourthly, the internal economic and political problems of many countries have led to uncertainty in their external relations. Fifthly, there is a serious problem of double standards in international life. Countries demand from others standards they do not observe themselves, while too often judgments are based not on the nature of an action but on the identity of the actor. Sixthly, problems of energy and raw material supplies have faced the international community with a novel set of problems which, if unwisely handled, could add a new set of disputes to the catalogue of dangers confronting mankind. Finally, the appalling widespread problems of poverty, hunger and disease are not only an affront to human dignity, but constantly threaten discord and conflict between nations. By no measure can the developed nations of the world claim that they have acted with adequate foresight to redress the balance.

The developed countries have pursued a policy of tied loans and tied aid but have completely failed to open their markets to the developing countries to permit terms of trade which will provide proper returns for their products to the developing countries. The developed countries are regrettably more interested in trade between themselves than they are in facilitating the progress of nations poorer than themselves. They can take no pride in their actions in this area.

These factors show that a nation does not have to face a threat of imminent invasion before it has grounds for concern at the international situation. From our own point of view the primary concern is an international environment which could progressively limit the capacities of Australia, her friends, and allies, to advance their interests and ideals, which reduce options, which almost imperceptibly weakens the capacity to pursue our interests and advance the cause of human dignity. Whether or not such an unfavourable external situation occurs is ultimately, of course, not in Australia’s control. But it is not totally beyond the influence of our policies.

A successful Australian external policy must be flexible, alert and undogmatic. We must recognise that Australia, a middle power, lives in a world where power in a broad sense remains the major factor in international politics. In international politics power includes not only military strengths. Economic resources, industrial capacity, population, domestic stability and diplomacy all contribute to a nation’s power and influence in the world. Australia lives in a world where predominant power is controlled by the United States and the Soviet Union. It is a world whose relations also depend however, on the actions of other major powers- China, Japan and the European powers- and within particular regions also on the distribution of power between middle and small states. The international diplomacy of the major powers- with which Australia has to deal- has to be understood principally as an effort by these powers to create a balance in the world favourable to their interests. It is in the pursuit of a more favourable balance that their policies impinge on middle powers, such as Australia, and on areas of immediate importance to Australia, such as South East Asia, the South Pacific area, and the Indian Ocean.

We have certain advantages in achieving our international objectives. One lies in the common interest between us and others in the pursuit of similar goals. We have, for example, a common interest with the Association of South East Asian Nations countries that no one power should dominate the region. It is not in China’s interests that the Soviet Union should become dominant in South East Asia, nor in Japan’s interests that the Soviet Union should become dominant in the Indian Ocean. On the other hand, it is not, presumably, in the Soviet Union’s interests that relations between China, Japan and the United States should be too close. In current international circumstances it is in the interests of many countries that South East Asia not become a region of increasing great power competition.

Such a development would not merely be dangerous to our security; it would greatly restrict our freedom of action across the whole range of our foreign policy objectives.

Another advantage we have in pursuing our objectives lies in the fact that we have not only relations of convenience, common interests or even necessity with a great variety of nations. With some we also have common philosophical commitments and friendships which we can and will strengthen. The guiding principle for Australia’s role in the world ought to be an active and enlightened realism. Although our capacities to advance our interests are limited we should be active and constructive in pursuit of a peaceful and favourable international environment. I turn now to consider relations between the superpowers and how these affect Australia’s foreign policy.

Detente

It is clear, and it has been clear for a long time, that the United States of America and the Union of Soviet Socialist Republics have, as a major policy imperative, the avoidance of nuclear war. Their principal common interest lies in limiting the possibilities of nuclear conflict and ending the wasteful arms race. This interest, shared by the rest of the international community, gave rise to the first Strategic Arms Limitations Talks and then to the enunciation of certain ‘basic principles of relations between the U.S.A. and the U.S.S.R.’. These principles were signed in Moscow by President Nixon and Leonid Brezhnev in 1 972. They included the declarations:

That the different ideologies and social systems of the two powers would not prevent them developing proper relations;

That both countries attached major importance to preventing situations capable of causing a dangerous exacerbation of their relations;

That efforts to obtain unilateral advantage at the expense of the other were inconsistent with these objectives; and

That both powers would seek to promote conditions in which all countries would live in peace and security and would not be subject to outside interference in their internal affairs.

Every country which desires peace must wish to see these principles observed. In an important sense, these principles, far wider than the mere containment of possible superpower conflict below the nuclear level, is what the world hoped detente was all about. After all, earlier relations between the superpowers also involved a concern to avoid nuclear war, and detente was heralded as a significant advance on this. As understood by people throughout the world, detente meant not merely the search for security from nuclear war, but a genuine overall relaxation of political and military tension. Unfortunately, the reality has not matched these aspirations.

It is clear that maintenance of a stable relationship between the superpowers depends on realistic negotiation and crisis management. Negotiation is not a substitute for, it is an essential concomitant of, a stable military balance. Negotiations will not succeed unless they are accompanied by a clear determination to maintain a balance of forces and are free from illusions about the effectiveness of unsupported goodwill. Our interests are in a lessening of tensions between the superpowers which only realistic negotiations make possible. I now turn to consider more closely the roles of the superpowers.

The Soviet Union

The Soviet Union has an immense responsibility before mankind to use its power and influence to strengthen the fabric of international peace and security. It has an historic opportunity to use its position to help build a stable and humane international order and to end the arms build-up. It will be judged by the great majority of mankind against these standards. The Soviet Union is unquestionably committed to the avoidance of nuclear warfare. Reasonable people can however reasonably conclude that the Soviet Union still seeks to expand its influence throughout the world in order to achieve Soviet primacy. Its actions all too often appear inconsistent with the aim of reducing world tension. The U.S.S.R.’s actions during the 1973 Middle East war increased tensions to the point that the U.S.A. was led to put its armed forces on a world wide alert. The U.S.S.R. substantially assisted the North Vietnamese to take over South Vietnam. In Angola, the U.S.S.R. intervened by introducing 12 000 Cuban troops into the situation, and supplying them. In the last decade, the Soviet Union has expanded its armed forces by 1 million. The Soviet navy has grown substantially while the size of the United States’ naval forces has declined.

The Warsaw Pact countries have a major advantage in conventional forces over the North Atlantic Treaty Organisation. NATO has 70 divisions; the Warsaw Pact has 178 divisions, excluding the 43 Soviet divisions on the Sino-Soviet border. This is a discrepancy of major proportions even when allowance is made from the difference in the sizes of the respective divisions. In addition, it would appear that the superior quality of NATO equipment which served to offset partially NATO’s numerical inferiority has been eroded. The build up of the Warsaw Pact far exceeds the objective requirements of defending Eastern Europe. The Warsaw powers possess the conventional capacity to move into Western Europe with such rapidity and penetration that the use of even tactical nuclear weapons against them is now questioned.

The U.S.S.R.’s nuclear armory has been elaborated to a point where there is considerable debate about the possibility of the Soviet Union gaining a strategic advantage. The Soviet leaders now have a strategic and political reach- a capacity to influence and even to intervene- well beyond the periphery of the established zones of Soviet security interest. The U.S.S.R. has demonstrated the will to exploit that capacity where the opportunity offers. Angola is not the only place affected by Soviet trained and sponsored movements. The Soviet Union is engaged in a major political offensive backed by the known presence of force, by training and by propaganda.

The fabric of negotiations with the Soviet Union, which we strongly support, has unfortunately had limited success in winning restraint in this campaign. President Ford’s abandonment of the term detente clearly shows a recognition that the more extreme claims made for changes in the superpowers’ relationship were quite unrealistic. Stability is disturbed and tension increased if the Soviet Union makes geopolitical gains through its support of wars of national liberation, by the use of surrogates. The time has come to expect a sign from the U.S.S.R. that it understands this and that it is serious about reaching global accommodation with the West. A tangible signal is required from the U.S.S.R. in the form of a restraint in its military expansion. The pace is being set by the U.S.S.R. not by the U.S.

While the NATO powers’ capability remains relatively static, why is the Soviet arms build-up proceeding apace? It is reasonable to ask: Why does the Soviet Union desire a military power far greater than any needed to secure its own frontiers or the expanded frontiers embraced by the Warsaw powers? It is for the Soviet Union to show that the conclusions so easily drawn from its actions are wrong, that its basic purpose is world peace-a world in which different nations can live and co-operate in harmony. That opportunity is open to the Soviet Union. It is up to the

Soviet Union whether it pursues that path or whether it takes a different path which would lead to disturbing conclusions.

The United States

Along with many other countries concerned for their security and political independence, Australian security is greatly affected by the role of the United States. The world cannot afford any reduction of the credibility of the U.S. foreign policy. In that way would lie huge risks. The dangers of miscalculation by other powers could become substantial, not only for the United States herself but also for all those countries which look to a confident exercise of American policy in the cause of peace and stability. America is the only power that can balance the might of the Soviet Union. If America does not undertake that task it will not be done. If it is not done the whole basis of peace and security is unsupported.

The Vietnam war and Watergate undermined America’s self confidence and sense of purpose. Unfortunately, a contributory cause has also been undue world criticism of the United States- opposition by people who ought to have been her friends and who ought to have understood America’s objectives in the world. Mutual recriminations about the causes and results of foreign events and differences between President and Congress on the conduct of American foreign policy area are producing concern about America’s capacity to act effectively around the world.

This Government, while maintaining to the full its own independent national perspectives and sovereignty, will ensure that the ANZUS alliance with the U.S. and New Zealand does not fall into disrepair and disrepute. The interests of the United States and the interests of Australia are not necessarily identical. In our relations with the United States, as in our relations with other great powers, our first responsibility is independently to assess our own interests. The United States will unquestionably do the same.

The fact remains that of all the great powers with active interests and capabilities in the areas of critical concern to Australia, the United States is the power with which we have the closest links. Those links are based not merely on known common interests in, and commitments to, a peaceful and stable world, but on common traditions of democratic institutions and values of respect for the individual. As long as Australia values freedom and respect for the individual, the United States is the power with which we can realistically establish close and warm friendship and with which we can most closely work to advance world peace and humane values we share. The U.S. can expect all proper co-operation from us in support of our common objectives. Although relations between the superpowers are a fundamental determinant of the world environment, Australia has the most vital interest in the relations between countries in the areas of critical concern to us. We are and must be intimately involved in our own region.

South East Asia

The South East Asian region has been an area of close Australian concern and involvement for many years. Our interests are that the region should not become in the future an arena for great power conflict; that relations between states should be peaceful and co-operative; that political change in the area should not provide occasion for the assertion of a dominant role by any of the great powers; and that there should be opportunity for commercial and cultural exchange between Australia and the countries of the area. Beyond these interests we would wish, within the limits of our possibilities, to help in the region’s development needs and to be an understanding and dependable neighbour.

Internally, most of the countries of the region are vitally concerned with problems of economic development and social stability. Externally, they are adjusting to the victories of communist movements in Vietnam, Laos and Cambodia and the changing roles of major powers with interests in the region. This change has inevitably brought a period of uncertainty and anxiety for countries in the area. We share the concern of regional states at insurgency problems and at the continued armed insurgencies encouraged and supported from abroad. It would, in our opinion, be undesirable for mutually exclusive groupings to develop which could foster antagonism at the expense of economic and social development. We therefore have an interest in establishing as broad relations as possible with countries in the region and this, of course, means that we stand ready to explore with the new governments in Indo-China the development of relations of mutual benefit. It is critical for the peaceful development of the region that there should be mutual non-interference between the states and a commitment to the peaceful resolution of differences. Australia will seek to play a constructive role in the reduction of tensions and the resolution of disputes.

Australia has long-standing friendships with all ASEAN governments. We welcome the activities of ASEAN as providing a constructive basis for regional relations. We want to identify and develop further areas of practical cooperation on shared political and strategic interests. We will seek to do so through our aid programs, through involvement in regional efforts to advance economic and social development, and by the promotion of trade and other economic co-operation.

Australian has a deep interest in maintaining sound and close relations with Indonesia. The broad relationship is of great importance to both countries. Relations are such that both countries can state their views plainly. Both countries have interests in the stability of and the avoidance of great power conflict in South East Asia. It is against that background that we have stated our views on Timor. We support a genuine act of self determination in Timor. The very fact that we have stated our views on Timor plainly is a mark of the underlying strength of our relationship. Despite differences, a major concern of our policy will be to continue the friendship we both value.

We would like to see the development of constructive relations between the region and countries beyond. The major powers will continue to be interested in South East Asia. The Australian Government will urge the major powers to restrain their competition in the region. Restraint will in any case be induced by the independent national interests of the countries in South East Asia. Our role is similiarly influenced by what is acceptable to these governments.

Papua New Guinea

The Government places very great value on Australia’s relations with Papua New Guinea. The warmth and respect between the 2 countries provides a strong foundation for our relationship. Papua New Guinea’s needs will have the highest priority in our aid programs. We have recently announced a 5-year aid program which represents a substantial increase in Australian assistance. This program has been warmly welcomed by the Prime Minister of Papua New Guinea. The Australian Government firmly supports the concept of a united Papua New Guinea. The unity of Papua New Guinea is of great importance to the stability of our part of the world.

Japan

Japan is of fundamental importance to Australia’s long term political, economic and security interests. Few countries match Japan’s economic significance in the global system and with no country do we have closer economic links than with Japan. The Australia- Japan bilateral trade flow is the seventh largest in the world. Japan’s political and economic security is largely a function of her relations with the great powers. The role which she defines for herself will be influenced by the condition of the great power balance, by her relations with China and the U.S.S.R., by the credibility of America’s strategic role in the Pacific and by the qualities of her relations with countries like Australia. But Japan’s role will also be defined by the reliability with which these relations guarantee her access to critical sources of supply of raw materials and markets for her products.

Australia and Japan therefore share an interest in a stable, great power balance in which no potentially hostile power dominates a region of critical concern to either of us. We share a respect for democratic institutions. We have mutual interests in establishing and maintaining reliable access to each other’s markets.

Since the agreement on commerce was signed in 1957 Japan has become Australia’s largest trading partner. Australia is in turn one of Japan’s most important suppliers. The AustraliaJapan Ministerial Committee- AJMC- was established in 1971 as a recognition of the importance of the economic ties between the 2 countries, and provides a forum for wide-ranging discussion at the highest level on matters of mutual interest. In the light of change in the composition and structure of trade between the 2 countries, since the revision of the commerce agreement in 1963, at the October 1973 meeting of the Committee it was decided that the agreement should be reviewed taking account of the discussions on the basic treaty.

As a result of Mr Anthony’s visit to Japan, there is greater understanding of the importance of stability of trade both ways. Australia also understands the importance placed by Japan on access to the markets of the United States and the European community. These concerns provide a sound basis for a friendly and expanding relationship between Australia and Japan. Early in the life of the new Government, the Prime Minister of Japan expressed to us the wish of the Japanese Government that a treaty of friendship and co-operation should be concluded in the near future. The Government welcomed this indication of interest and the negotiations delayed last year were continued. The negotiating officials some weeks ago agreed on a draft text of the treaty. It could be expected that the treaty will be signed by Prime Minister Miki and myself during my visit to Japan.

The Government also places importance on broadening our relationship with Japan. Earlier in this Parliament the Government introduced the Bill to establish the Australia-Japan Foundation. The Foundation will have the important role of promoting the study by the people of Australia and Japan of each other’s culture and institutions. Relations between Australia and Japan will be enhanced by the personal contacts and research which will come from the work of the Foundation. Understanding between Australia and Japan can play a vital role in strengthening peace and security in the AsiaPacific region. Australia will act consistently to deepen that understanding.

China

In moving towards a world in which peace is secure, a vital part must be played by the People ‘s Republic of China. The development of China’s foreign policy is difficult to foresee. In many respects, China remains a great unknown in international affairs. This is one reason why it is desirable for as many countries of the world as possible to develop close links with China. We look forward to a continuation of good working relations with the Chinese Government both now and in the future.

A realistic view requires us to recognise that despite ideological differences, there are important areas where our interests overlap. In recent years, China’s relations with the United States have improved due to certain mutual interests. China is clearly concerned at the Soviet role on her northern and southern frontiers. Australia and China have a like interest in seeing that Soviet power in the Pacific and South East Asia is balanced by the power of other major states or by appropriate regional arrangements. We can therefore expect Chinese support for our own views on the need for an effective American presence in the Pacific and Indian Oceans. Such support has, in fact, been given.

While I was in New Zealand, the Pacific Forum countries agreed to accept the movement of United States nuclear ships in the Pacific Ocean area. Such a decision, of course, reflected each country’s independent assessment of its own interests. China has acknowledged that such an arrangement is in her interests also. In other areas, too, China can make a positive contribution to peace and stability. We welcome the development of commercial relationships between China and Japan and look forward to an expansion of our own trading ties with both. China’s attitudes and view of the world are often far removed from our own. Chinese judgments of the West, or its systems of representative government and the ideals of liberty and freedom of the individual, seem to us mistaken. Moreover, China continues to give support to insurgencies in South East Asia. Australia does not support interference by great powers in the domestic affairs of smaller countries. We hope that China will give priority to the development of constructive relationships with a region which needs to be given every support for stable and effective government to develop and prosper. Nevertheless, constructive relations do not depend on agreement on all aspects of relations but on the development of those areas where there are common interests. My Government believes that interests of this kind provide a solid basis for working relations. We shall work to develop these, as well as improve our understanding of each other.

Indian Ocean

The Indian Ocean is of considerable political and strategic importance to Australia. It is crossed by sea and air communication routes vital to Australia. Much of the vital flow of oil to our neighbours, friends and trading partners passes through it. The entrance to the Persian Gulf has become a major focus of international attention. The objective of a neutral zone in the Indian Ocean, while admirable, has little chance of success with the U.S.S.R. significantly increasing its permanent presence in the vital north-west sector of the Ocean. It is clearly contrary to Australia’s interests for the balance in this area to move against our major ally, the United States of America.

It is also against our interests for both superpowers to embark on an unrestricted competition in the Indian Ocean. We seek balance and restraint. We have supported the United States development of logistic facilities at Diego Garcia so that the balance necessary to stability in the area can be maintained. We also strongly support the recent appeal by the United States Administration for restraint so that the balance can now be maintained at a relatively low level. This analysis cannot pretend to be a complete description of Australia’s attitude to all parts of the world, but it would be unrealistic to make this speech and to refrain from mentioning two areas of great concern to us, and to the rest of the world- the Middle East and Africa.

Middle East

In the Middle East the only future lies in negotiationin a proper and broad recognition of the rights of all groups within that troubled area; of an absolute recognition of the right of Israel to survive as a nation; and an equal recognition of the problems of the Palestinian refugees. There have been many wars in the Middle East, but no one has been the ultimate victor. There can be no ultimate victor. Compromise through negotiation is essential if there is to be any real settlement.

Africa

Even more than the Middle East, tensions and problems in Africa grow and become more difficult the longer they remain without solution. If movements towards majority rule in Rhodesia are not made within a reasonably short timespan, the result will be inevitable conflagration. There are a number of leaders in Africa who certainly do not support the white minority supremacy in Rhodesia but who have no wish for armed insurgency and no wish for ultimate conflict. They realise that such a solution to the problems of Rhodesia would lead to lasting bitterness, lasting divisions, and an increased possibility of dominaiton of the continent of Africa by external forces. The national leaders of Africa have no wish to see that happen.

I have previously indicated in plain terms why we believe the policies of apartheid will not work in the longer term. The greater the success of the Bantustans, the greater will be their failure to achieve the objectives they were set up for. The more equal men become in economic and social matters, the less they will be prepared to accept denial of their basic political and human rights. However, we note with great hope the growing relationship between South Africa and some of the black nations of Africa. It offers the prospect of a broader and more sensible solution to Africa’s problems. Within the framework of the Commonwealth of Nations we will seek to play what constructive role remains open to us and to the Commonwealth to help achieve a reasonable solution to these intractable problems.

International Co-operation

In a world where increasingly complex problems transcend national boundaries, a commitment to multilateral co-operation, particularly in the field of economic and social development, is an indispensable part of Australian foreign policy. We support the United Nations, its Charter, and the work of the various specialised agencies. We have noted the degree to which the United Nations has come under attack. Its alleged failings have caused disillusion and even dismay. Despite the hopes held out for it, grievous problems between nations remain, lt must indeed be recognised that the United Nations is still an imperfect instrument for the solution of major problems. Some disquieting features have become apparent in its deliberations. These have included the use of confrontation tactics and the curtailment of the rights of participation of some member states.

However, in our view, a number of the attacks on the United Nations have largely sprung from an unrealistic view of what the United Nations could hope to achieve. They also stem from a lack of understanding of the magnitude of the problems besetting the United Nations because of the sharp divisions throughout the world. The problems faced by the United Nations in no way diminish the need foi all nations to support the United Nations and make it a more effective instrument for peace. There are in fact many areas where the United Nations has achieved a great deal in improving conditions of life around the world. Australia will make every effort to help the organisation to expand its effectiveness. We shall be seeking opportunities to work cooperatively within the United Nations framework as in other multilateral forums. These include the Commonwealth of Nations. We believe the Commonwealth has continuing relevance as a distinctive- indeed a uniqueframework bringing together something like a quarter of the world’s population. As a means of fostering co-operation and consultation in many varied areas, it retains a lasting importance.

Economic Relations

One of Australia’s most prominent roles in the world is that of an important trading state. Indeed, with our annual trade worth some $17 billion, Australia ranks fifteenth in the world as a trading country. Despite an expanding export trade in manufactured products the bulk of our exports are raw materials and foodstuffs. Australia is a resource-rich country in a resourcetight world. We have energy and raw material resources of great importance to the world, and we are one of the few food exporting countries. Our position in world trade also implies duties and responsibilities. Countries which are rich in resources cannot neglect the needs and concerns of those countries whose principal resource is the energy and initiative of their people. This Government intends to have a reputation of responsibility and reliability in its international dealings. I believe other governments overseas, whose economies depend on Australia for energy, raw materials, or foodstuffs, will welcome this. At the same time let me emphasise that the Government will ensure that our resource producers receive fair returns for their commodities. The Government will strive to widen and secure access to overseas markets for Australian producers. The Government is concerned, in particular, to improve access to the European Economic Community.

The expanded European Economic Community is the largest source of our imports and the second largest market for our exports after Japan. Raw or processed minerals, wool and other rural products account for 87 per cent of our exports to the EEC and 13 per cent are manufactured goods. Because the EEC is the world’s largest trading bloc, the trade policy decisions taken by the community are important to Australia, especially as they frequently affect not only the development of our direct trade but also our prospects in Third countries. The decisions of the Community, especially as they affect trade in primary products, are of course, also of great importance to the developing countries. As the second largest economic unit in the world, the Community has a major role to play in world economic development. We welcome the Community’s prosperity and progress, which is also in our interests. The Government strongly hopes that it does not develop into a narrow and inward looking grouping but will come to play the role in the world which other countries expect of it. We welcome the constructive role Great Britain will play in the European Common Market, and the more outward-looking approach she has undertaken to encourage.

There is a great need in general for more practical recognition of the significance of international economic relations for the developing countries. More than any other single factor the developing countries need adequate access for their products to the markets of developed countries which we believe would come to be reflected in more appropriate terms of trade for their exports. International trading arrangements which provide relatively free trade for the industrial products of the developed countries while placing excessively high barriers before the products of the developing countries, offer little hope to the poorer countries in solving their great and grave problems. One of the greatest contributions which could be made by the industrial countries to the peace of the world would be international trading arrangements which provide greater opportunities for the primary products of the developing countries.

We will co-operate closely with the developing countries in the Asia-Pacific region. But further afield, the Government is ready to concert its activities with other like-minded countries. In general, we must participate fully in the shaping of those world economic arrangements which will, in turn, help to determine our own economic progress. In world financial and currency arrangements, in international raw materials, and energy bodies we must stand ready to play our part. The answer to these great world economic problems lies in international co-operation. Neither an abrasive confrontation between competing nationalisms nor decisions by too narrow a club of decision makers is likely to be helpful. Australia will meet the international responsibilities I have outlined.

Domestic Conditions and Foreign Policy

Finally, I come to the crucial relationship between domestic and foreign policies. Given the reality of the world situation it is critical that Australia, her friends and allies, must be able to bring their capacities to bear in the most effective way, if their position is not to be continually eroded in favour of regimes more effectively able to commit resources of all kinds.

The international situation I have outlined clearly requires a carefully formulated approach to defence policy. The Government has asked for much more definitive work to be done in this area, so that defence planning can be based on the most realistic foundation. Our determination to act to improve our defence capabilities is evidenced by the program announced by the Minister for Defence (Mr Killen) last week.

The capacity of democratic countries to conduct effective foreign, defence, economic and social policies depends- fundamentally- on the understanding and backing of the people, on their will, and their commitment. One of the most critical conditions in securing developments in the world congenial both to our interests and to our ideals, is that the democratic countries should retain their faith in systems of government based on the freedom of, and concern for, individual people.

Our capacity to act effectively in the world in the end depends on our sense of ourselves, on the strength of our commitment to ensuring that all Australians can live in freedom and dignity, and in our determination not to follow the paths of other states where belief in the capacity, and right, of people to seek their own goals is increasingly replaced by an enforced conformity to the wishes of those who control powerful bureaucracies. We believe that Australians will wish to take a realistic view of the world, and Australia’s place in it. So long as our institutions foster a resourceful and independent minded people and a society based on self-respect, Australia need not fear the future. It is here that the Government’s domestic policies and long term conception of Australia’s role in the world are linked.

Our ability to act with maximum effect to realise both our interests and our ideals in the world depends to a large extent on our capacity to work together at home. One of the great tests for the character and stamina of democracies is whether we can combine individual freedom with the capacity to acknowledge our responsibility to the common interest- whether we are prepared to sacrifice some of our apparent shortterm interests to the long-term interests of the whole of the Australian people. If we cannot work together as a people except under threat of a clear and present military danger to our national integrity, it is certain that we will not be able to advance effectively our national interests in the world. There are common interests which unite all Australians- interests in a region and a world which is constructively meeting the problems which face it; interests in an Australia which is competitive in word markets; interests at home in securing a return to soundly based growth in the economy. Only out of such growth can higher real wages and salaries and improved social welfare provision be paid, without inflation and unemployment. Without such growth we cannot meet as we might the requirements of security and aid. We will not achieve these objectives unless all sections of the Australian community are prepared to work together in the common interest.

The question which faces Australia in common with other democracies is whether we are going to meet the challenge of co-operation and mutual restraint required from all the diverse groups in our society. In achieving success in our domestic policies, the Government hopes that Australia can be an example of the vital strength of the values of freedom and democracy which are still pursued- and still far from reach- in many parts of the world. The Government believes that the days of an elite forming foreign policy in isolation are long since gone. They depended on a badly educated and apatheticpublic that could readily be manipulated. The people of the Western democracies are not passive or apathetic. The freedom and pluralism of democracies should not be regarded as a constraint on responsible foreign policy. On the contrary, free and open discussion, fairly conducted with respect for the views of others, will strengthen our foreign policy. A foreign policy that ignores the realities of the international situation is irresponsible. A foreign policy which ignores the intelligence and goodwill of the people, that does not trust its people sufficiently to explain and seek support of its actions, cannot succeed.

The contemporary international situation is a test of the capabilities of democratic leaderships and democratic peoples. It is an environment with disturbing tendencies and shifts in balance. This diffuseness and complexity is the test. In finding our way in such a world, the democracies must not lose their sense of purpose. There must be no failure of will or resolution. The first step towards an adequate response must be a realistic assessment of the world and Australia’s role in it. On the basis of such an assessment, we can work to advance our objectives of people and humanity. The survival of democracy depends on a recognition that its values cannot be taken for granted. Let history not record that this was the age when the democracies abandoned their faith.

I present the following paper:

Australia’s Foreign Policy- Ministerial Statement, 1 June 1976- and move:

That the Senate take note of the statement.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– We have just listened to a long-winded, verbose and cliche-ridden speech delivered in the Senate by Senator Withers on behalf of the Prime Minister (Mr Malcolm Fraser). One would have assumed that, in trying to get across the message which is quite clear in this document, he would have been a little more precise and, indeed, concise in the manner in which he presented the case. The reasons for the verbosity of this document are not lost on the Opposition. So much of what has been said tonight would promote a great debate which could last literally for days. We have, for example, almost irrelevancies, such as when the position of the European Economic Community in the world scene is dismissed in two 4-line paragraphs. I find it astonishing to think that the significance of the EEC and its economic place should be a subject to be dismissed as quickly as that.

I intend to confine my remarks to one or two aspects of this speech, which is quite remarkable and which, I would say, will prove to be one of the most significant documents presented in this Parliament for a long time past and for some years to come. The central theme coming through in this speech is simple. It means that Australia will involve itself and take sides in the dispute that exists between the Soviet Union and China. It is a s simple as that.

Senator Cavanagh:

– The parties of another cold war.

Senator WRIEDT:

-The beginnings of another cold war. I could not imagine anything more dangerous and stupid for this country than to declare itself on one side or the other in that dispute. I cannot imagine for a moment what we as a nation have to gain by taking sides in it. I admit that in view of the hysteria that exists in this country from time to time there may be some political advantage for this Government in that, just as there was political advantage in 1965 in the alleged threats of China coming down, with those big broad arrows from the north, to gobble us up.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– The downward thrust of Chinese communist aggression.

Senator WRIEDT:

-Indeed. Let us go back to a statement made by Sir Robert Menzies in the House of Representatives on 29 April 1965. Let us see the double standards, about which we were told in this speech tonight, of the LiberalNational Country Party Government now. Suddenly China has become respectable. I do not know why. In the eyes of the Liberal and National Country Parties, China is now respectable. Let us look at what Sir Robert Menzies had to say on 29 April 1965. He said:

The takover of South Vietnam would be a direct military threat to Australia and all the countries of South and South East Asia. It must be seen as part of a thrust by Communist China between the Indian and Pacific Oceans.

At the time the Labor Party, in a very difficult position, attempted to explain the falsity of that proposition. The people of Australia were stampeded into believing that the downward thrust of China was here to stay and we were to be gobbled up by the Chinese, not the Russians. Now the story is different. We are told that we must show our friendliness, our common interest with China even. What a change of attitude! On what is it based? It is unfortunate that there has been little time in which to document all the statements which are contained in this speech, but one thing remains paramount above everything else: There has been this dramatic change towards China.

Senator Cavanagh:

– Under American instructions.

Senator WRIEDT:

-I do not know. I am not going to -

Senator Jessop:

– You did not even put down a decent foreign policy statement.

Senator WRIEDT:

-We will let Senator Jessop have his say and he might then keep quiet.

Senator Jessop:

– You made one foreign policy statement during 3 years, and it was the worst travelogue ever.

Senator WRIEDT:

- Senator Jessop has made his interjection. Perhaps he will now sit back for 5 minutes. I answer the interjection by referring Senator Jessop to a speech made by the then Leader of the Opposition, Mr Calwell, a week after the speech made by Sir Robert Menzies from which I have just quoted. Mr Calwell pointed out the dangers of the policies in respect of which the Liberal and Country Parties were aiding and abetting the United States in South East Asia in 1965. With great respect, I ask honourable senators in reading that speech to realise the prophetic nature of what he said and how it eventually came true. The United States was embarrassed by that exercise, which was encouraged by the Liberal-Country Party Government at the time and which eventually put half a million American troops into Vietnam and left 50 000 of them dead on the battlefield. It is no wonder that the United States is cautious now about any involvement in South East Asia or any other part of the world.

I do not believe that this document will be welcomed necessarily by the United States; it may be welcomed by some people in the United States. We should consider statements which have been made recently by leading United States figures, including Dr Kissinger. I think it is worth our while to look at the statement that he made on only 22 March of this year. He was addressing the World Affairs Council of Dallas at the Southern Methodist University in Texas. We are told in this speech about increasing Soviet power, new ships, new missiles and so on. I do not doubt that that is true. Russia is not the only country doing it. None of us likes to see this increase in military power around the world, but we might accept some of the realities. What Dr Kissinger said, I think, is a fitting reply to some of the statements contained in the speech which we have heard tonight. Dr Kissinger said:

I do not accept the propositions that other nations have gained military ascendancy over us, that the Administration has neglected our defenses, or that negotiations to reduce the threat of nuclear war are unwise. These charges sound remarkably like the ‘missile gap’ claims which aroused anxieties in I960 only to dissolve suddenly a few weeks after the election.

Ladies and gentlemen, we do face serious challenges to our security. They derive from the unprecedented conditions of the thermonuclear age, the ambiguities of contemporary power and the perpetual revolution in technology. Our task is to understand the real and permanent requirements of our security, rather than to be seduced by the outmoded vocabulary of a simpler time.

I cannot imagine a more fitting comment on the speech that we have just heard here tonight. I will go on and quote a little more from Dr Kissinger’s speech. I think Senator Jessop could well do with a copy. If he has not got one, I would be only too pleased to let him read the one I have. He would then see that some Americans- some Americans, we know, are called ‘hawks’ and some ‘doves’- fortunately at least are trying to establish some measure of trust in one of the most difficult exercises any Secretary of State ever had in that country.

Dr Kissinger went on to talk about the efforts that had been made in order to reach some measure of agreement with the Soviet Union. This is what Dr Kissinger said:

The SALT agreements - the Strategic Arms Limitations Talks agreements- are the opposite of the one-sided concessions to the U.S.S.R., as they are so often portrayed. Soviet offensive programs were slowed; none of ours were affected. Nor has the Administration countenanced Soviet violations of the first SALT agreement as has been irresponsibly charged. In fact we have carefully watched every aspect of Soviet performance. It is the unanimous view of all agencies of our government-only recently reconfirmed- that no Soviet violation has occurred, and that none of the ambiguous actions that we have noted and raised has affected our security.

I do not know whether Dr Kissinger has suddenly gone soft on communism; but it is strange that that man, who is probably in a better position to speak on these matters than anyone else, is prepared to make a statement as clear as that. What else does Dr Kissinger say? As reported in the Congressional Record of October 1975, he made this comment:

America’s principal alliances have proved their durability in a new era. Many feared that detente would undermine them. Instead, detente has helped to place our alliance ties on a more enduring basis by removing the fear that friendship with the United States involved the risk of unnecessary confrontation with the U.S.S.R.

Many incipient crises with the Soviet Union have been contained or settled without ever reaching the point of public disagreement.

The world has been freer of East-West tensions and conflict than in the fifties and sixties. A series of bilateral cooperative relations have turned the U.S.-Soviet relationship in a far more positive direction.

We have achieved unprecedented agreements in arms limitation and measures to avoid accidental war.

New possibilities for positive U.S.-Soviet co-operation have emerged on issues in which the globe is interdependentscience and technology, environment, energy. These accomplishments do not guarantee peace. But they have served to lessen the rigidities of the past and offer hope for u better era. Despite fluctuations a trend has been established; the character of international politics has been markedly changed.

By contrast this statement is the very sort of thing which will reverse the trend for which many people have been working throughout the world, including the Kissingers, the Brezhnevs, the Fords and others, in order to break down these long standing antagonisms. They realise that the doctrines of the fifties and sixties no longer apply. We heard in the speech where President Ford is alleged to have gone back on the principle of detente. I have a telex dated 5 March of a Press conference given by President Ford in which he does not appear to be saying that. This is what President Ford said:

The process of detente- and it is a process- looks toward a saner and safer relationship between us and the Soviet Union. It represents our best efforts to cool the cold war, which on occasion became much too hot for comfort.

It is a matter of great concern that we should now listen to this speech which undoubtedly is a return to the cold war mentality. It serves the political interests of this Government to return to it. It was a winning issue in the 1960s to put fear into people’s minds that we were to be gobbled up by China. Now, presumably, we are to be gobbled- up by the Soviet Union. The speech deals also with the increased military strength of the Soviet Union which, as I said earlier none of us wishes to see. None of us wishes to see any country arming itself to the teeth. The speech asks:

Why does the Soviet Union desire military power far greater than any needed to secure its frontiers or the expanded frontiers embraced by the Warsaw powers?

Cannot the same question be asked of China and the United States? Does anybody suggest that either of the superpowers, Russia and America, is not armed to a stage far and beyond that needed to defend its frontiers? Is it reasonable to single out one nation? Is the same question contained in the speech asked of China? It is not. There is an entirely different tone to the attitude of the Soviet Union than there is to that of China and that is quite clearly the intention.

Senator Walters:

– China is not in the Indian Ocean.

Senator WRIEDT:

-I do not wish to speak at great length about other matters tonight because I said that I would confine my remarks to specific issues but we come to the presence in the Indian Ocean of Soviet warships. Senator Walters just interjected that China is not in the Indian Ocean. China may or may not be present there. I do not know where Chinese warships happen to be but if the information given to us by the Research Section of the Parliamentary Library is any indication, the countries with the biggest naval force in the Indian Ocean are France and Iran rather than the Soviet Union or the United States. The important thing is that we ought not to be trying to secure political points off each other in a debate of this nature because the implications are far too great for all of us. Instead let us try to rationalise the position that other countries find themselves in.

We find repeated reference with every justification to the United States or any other country ensuring the proper safe passage of its merchant shipping and to protect its trading interests. The speech refers to the $17 billion annual trade that Australia has. The Soviet Union has a trade balance of about $35 billion, twice the size but not very great in view of the vastness of its own economy. Nevertheless, it is a very big trade in terms of world shipping. That country is something like the United States. It has an east and a west. It has a vast industrial complex in its eastern part in Siberia. It has cities as big as Melbourne and Sydney in that area. Naturally it is concerned with communications between both ends of the country exactly as is the United States with its communications and exactly as we are in this country with ours except that in Russia those communications are over a much greater distance.

The Soviet Union has 3 avenues by which it can transport goods and maintain its communications from one end of Russia to the other. It has a northern sea route across the north of Siberia but this is closed for 8 months of the year because of ice and therefore is non-available. It has one railway, the trans-Siberian railway, which for hundreds of kilometres runs very close to the Manchurian, or Chinese, border and this becomes a very vulnerable link with Russia’s eastern provinces in the event of hostilities with China. The third alternative route is around southern Asia.

Geoffrey Jukes in his book which is called Soviet Union in Asia makes the point that before the Suez Canal was reopened 25 per cent of all merchant shipping around the Cape of Good Hope was Russian shipping. That includes its shipping fleet. Obviously Russia is concerned about protecting its trade and merchandise passing from one country to another. I suggest that we ought to think seriously of the position in which it finds itself. It is analogous to the United States having a hostile neighbour, Canada, with a railway line that ran along the border between Canada and the United States. The United States also would protect its sea lanes in the Gulf of Mexico and the Panama Canal. It would do exactly the same thing; it would have to. This is what the Russians are concerned about because they fear hostility. This is not a world in which we can afford hostility. The greatest mistake I could imagine would be for this country to involve itself simply because the Prime Minister is going to Peking in a few days time and has to go there, presumably, with a clean slate, having said the right things before he gets there.

Senator Gietzelt:

– He said the wrong things three or four years ago.

Senator WRIEDT:

– Exactly, as I have just said.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– To plaster up the cracks.

Senator WRIEDT:

– Yes, to plaster up the cracks and for domestic consumption in Australia. Ten years ago the Australian Labor Party warned the Government of the day of the dangers of the policies it was pursuing in South East Asia. I do not think many people today would argue that we were right. Even the overwhelming majority of Republicans in America would admit now that the policy pursued then was wrong. Yet here we have seen a repetition of it. This is not a debate about Solzhenitsyn. It is not a debate about the social or economic system of another country and I do accept this part of the speech. That is its business whether we like it or not. The same as our system is our business whether others like it or not. It is a matter of our capacity and desire not to provoke or to strengthen the blocs and antagonisms which, unfortunately, are in the world and are strengthening. We are only exacerabating those things by taking sides on these issues.

The Government and the Opposition have a common interest in respect of the Middle East dispute. We both adopted the correct position and observe the United Nations resolution of 1967 to be even-handed in this war and not to take sides. I think there has been a commonalty of viewpoint on this issue between the major parties in Australia for some years.

Why then should we see this Government depart from that principle and involve itself? Do not let us kid ourselves. This statement involves Australia in the Sino-Soviet dispute. That is an act of madness. I suggest that we will live to regret it. Others will live to regret it also. I cannot over-stress my disgust at the thought that we will embark again as a nation on this course after the lessons we learned in the 1960s. I can only hope that wiser counsel will prevail in other places. Obviously it will not prevail in this country under this Government. When the speech was being read it appalled me to hear the encouragement coming from certain honourable senators on the

Government side as though they were almost glad to see this happen and to know that the Government is embarking on this course. I assume that at some time later we will have an opportunity to discuss this matter further. But I re-state the position which I take. I have had only a limited time to study the speech, but I believe that this is a dangerous, disastrous course of events for this country to be following.

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

- Senator Wriedt has the advantage over me. He has had some time to study the speech and I have not. Normally, in a case like this, with a considered statement of total position of national interest and foreign policy an Opposition would take some time to study the matter and would give some thoughtful consideration to it. In due course the whole Senate would have an opportunity to engage in a purposeful debate and discuss the matter. Therefore, I was somewhat regretful to hear the instantaneous response which came from the Opposition. I observe that when in Opposition we waited for 3 years for the then Minister for Foreign Affairs, acting from time to time on behalf of the Prime Minister, to give us a considered statement on foreign affairs which we might debate. We never got one. On the basis that this represents a considered view of a total position it seems appropriate that the debate should be now adjourned. I seek leave to continue my remarks at a later stage’.

Leave granted; debate adjourned.

page 2155

INCOME TAX ASSESSMENT AMENDMENT BILL 1976

Second Reading

Debate resumed.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– Prior to the suspension of the sitting for dinner we were debating cognately 6 Income Tax Bills. At that stage I was commencing my comments on the 3 later Bills, namely, the Income Tax Assessmment Amendment Bill ( No. 2), the Income Tax (Rates) Bill and the Income Tax (Individuals) Bill. It is to these 3 Bills that I now wish to direct my remarks. As I indicated earlier, the Opposition will not oppose the Bills. The precise measures are very complex. In view of the Government’s rushing a whole package of legislation through the Parliament, the Opposition has not had time to study precise amendments in detail. On that basis the Opposition’s consideration of comments on the Bills is based on what we believe the Government intends in them. The fact that the Opposition is not opposed to particular provisions should not be taken as an agreement to those provisions.

Firstly, I shall discuss the effect of tax indexation. It does not necessarily involve less tax on taxpayers. If wages rise by 1 3 per cent in 1976-77 there will be no tax relief. Any benefits which may flow to taxpayers from these measures will be negated by the combination of, firstly, Medibank; secondly, the reduction in tax deductibility of mortgage payments; thirdly, the increase in taxes, rates and charges which State governments will have to impose to compensate for loss of revenue; and, fourthly, indirect taxes which the Commonwealth Government will impose because of its obsession with the Budget deficit. These measures are intended to inject confidence into the economy by increasing consumer spending. Not only will this not happen as a result of other Government measures, but also the measures are part of a package to lower the value of real wages. Rather than increase confidence, this will cause industrial strife and lead to further wage demands.

The attack on real wages has been pursued by excluding the effect of indirect taxes on the consumer price index for the purpose of tax indexation. This will be particularly important in view of the likelihood of massive increases in indirect charges at Commonwealth, State and local government levels. When these factors are combined with an erosion of wage indexation there will be a substantial fall in real wages and a consequent loss of confidence. The Government has introduced tax indexation at the same time as it is pursuing its attempts to reduce the deficit to unrealistic levels. This has caused massive cuts in the capital works side of government expenditure to produce a deficit which suits the Treasurer (Mr Lynch). This will have the effect of increasing unemployment in the construction and engineering industries, thus delaying a return in confidence and the recovery of the economy. When seen as part of the Government’s economic package, the measures are likely to produce effects quite contrary to those anticipated by the Government.

I come now to the very important effect which this will have on the States. We believe that the Government has misled the States over its federalism policy by causing the States to believe that they would be substantially better off as a result of that policy. On 9 April the Prime Minister (Mr Malcolm Fraser) knew certain things. I enumerate them. Firstly, he knew that full tax indexation would be introduced in 1976-77; secondly, that there would be major cuts in specific purpose grants, particularly on the capital works side; thirdly, that the Commonwealth would be raising revenue through the Medibank levy from which the States were excluded and, fourthly, that the Commonwealth proposed to abolish rebates for dependent children and to substitute a system of family allowances. None of these features were disclosed to the States on 9 April. On that day the Prime Minister promised to consult the States in relation to substantial changes to the tax system but no consultation took place in relation to the measures announced by the Treasurer.

The Prime Minister permitted the States to go along with the false impression that they had got a good deal even though he knew it was the worst deal the States had ever received. The measures announced by the Treasurer contained a breach of the arrangements agreed to on 9 April. The Commonwealth will abolish rebates for dependent children, thus causing personal income tax collections to rise by approximately $750m. Under the 9 April arrangements the States could be expected to receive approximately one-third of that amount. However, the Commonwealth does not propose paying the States any of that amount. That is a clear breach of the arrangements agreed upon with the Premiers. Because of the introduction of full tax indexation and of the cuts in specific purpose grants, Commonwealth payments to the States for the functions which the States presently carry out will be increased by less than 10 per cent in money terms. This is a substantial reduction in real terms. As a result, some of the States will be in severe financial difficulties before the end of the next financial year. Even if the Commonwealth makes additional grants to the States, they are likely to be funds for new functions and not extra funds for existing functions. This will make the introduction of State income taxes inevitable and it is likely to cause all States to increase indirect taxes in the next financial year.

The additional charges by the States will add to inflation without any increase in productivity. Thus the measures will have the effects which will defeat the Government’s stated purposes. What we see is a totality of charges and concessions which will not be of any real benefit to the Australian people. I emphasise again that unless we can have legislation and decisions by the Government which will ensure that consumer demand will be increased effectively and that real wages will not be reduced effectively, it will be almost impossible for the economy to regain the degree of confidence which we all wish to see. In closing, I move:

Senator MESSNER:
South Australia

– I should like, firstly, to make a few comments about various aspects of the Bills, taking them not necessarily in the same order that Senator Wriedt did during his speech. First of all, Senator Wriedt discussed the question of wine makers. This is one of the key elements of the amendment which he has just moved. It refers to inadequate alterations having been made to wine makers’ tax liability. The point about this matter is that had there been no amendment to the Income Tax Assessment Act in 1973 to remove section 31a there would not have been the necessity to face up to the position now where we have to establish a transitional situation to help wine makers out of their difficulties. During the State election campaign in South Australia in July last year- a very opportune time- Mr Whitlam made statements to the effect that the Labor Government would alleviate the pressure on wine makers who were affected by section 31a and the decision to remove it. He said that the Government would increase the period during which tax would be payable, as a result of the removal of section 31a, from 5 years to 7 years. He also stated that there would be a maximum liability falling due under that proposal of 15 per cent in addition to tax payable otherwise. That was Mr Whitlam ‘s proposal.

The Government’s proposal goes a lot further than that. We have put down an adjustment to the tax liability for wine makers over an 8 year period with a maximum liability in any one year of 10 per cent of the tax increase. This means, of course, that the payments for the liability for tax could extend far beyond the 10-year period. In addition, there has been a major adjustment in the removal of the effect of Division 7 taxation on the extra tax that would be payable. Also, a deduction will be allowable for any additional tax payable due to the removal of section 3 1a. So we have a very generous proposal laid down in this Bill. The proposal varies significantly from the proposal laid down by Mr Whitlam at a most politically opportune time last year prior to the State election in South Australia. Senator Wriedt went on to say that the former Government did not have enough time last year to introduce those proposals. In fact, the Labor Government was in office for at least 5 months last year after Mr Whitlam announced his proposals. Mr Whitlam stated in July that he would introduce measures to that effect, well ahead of the Budget that was brought down in late August. There was no move at all by the Labor Government to effect a transitional adjustment so as to give some relief to winemakers as a result of a deliberate policy decision taken by the Labor Party in 1973.

The point that Senator Wriedt missed entirely is that included in the statement from the Treasurer, Mr Lynch, is an undertaking to investigate the effects of the recommendations of the Mathews Committee of Inquiry into Inflation and Taxation, as they would affect wine makers. Stocks are increasing in value and, consequently, tax which should not otherwise be paid is being paid on an adjustment amount. The Mathews Committee recommendations cut across that. Senator Wriedt did not note that point which was made by Mr Lynch in his statement. However, some difficulties and some anomalies arise from this proposal. Chiefly, they affect unincorporated wine growers. A company which is making wine, which is covered by the removal of the effects of Division 7, and which is looked after to the extent that it is allowed to make extended payments, will face a maximum tax payment of 52.5 per cent. However, the unincorporated or private wine maker trading as a sole operator or in partnership will find himself taxed at a rate higher than 52.5 per cent. Submissions on these matters have been made to the Treasurer, and they refer to questions which I hope will receive favourable consideration. These small wine growers, who produce perhaps 2 per cent of the total tonnage of grapes handled, constitute a special sector of the wine industry inasmuch as they produce a special varietal wine rather than the bulk wines which are now being distributed more and more by the big co-operatives and private wine makers.

I pass now to the phoney argument that Senator Wriedt continued to advance tonight concerning whether we are having a consumer led or an investment led recovery. The fact is, as is fully realised by honourable senators on this side of the chamber, that we must have a period when we get the economy moving at the retail level, at the consumer level, in order to provide the impetus for investment. That goes without saying. Honourable senators opposite make a great song and dance about the fact that we appear to be hooked up on some sort of premise that we are interested only in an investment led recovery. The truth of the matter is that we need an investment led recovery to restore the growth in the economy that has been destroyed over the last 3 years. As we all know, the share of the gross national product which is going to profits has declined from 16 per cent in 1972-73 to around 10 per cent in 1974-75. The whole object of the exercise of providing incentives for businessmen is to get those profits up. That can be done only through increasing sales in the consumer area. This will allow businessmen to be able to absorb costs and then to use up the capacity which is obviously slack at the moment as a result of previous policies. They will then be in a position to spend money on future investment. That investment allowance, which will amount to $500m and which is the subject of this Bill, will not be spent by the Government this year or next year. The rate of 40 per cent will be spread into 1978 and then 20 per cent through to 1984. Considerable lead time is involved in the major projects which we hope business will undertake. It is that which will generate the full roaring growth which we hope to see in the economy in years to come.

Of course, we need to develop the consumerled recovery now, and we are seeing the results of the Government’s policies already with rising retail sales, increased production figures in the last few months and further developments taking place in the investment area as well, even at this early stage. One special feature of the investment allowance is its application for the first time to equipment that is subject to lease agreements. The Bill contains an arrangement which provides that lessors and lessees can agree between themselves as to how the benefit is to be claimed. However, there is provision that the lessor may retain the benefit of the investment allowance but pass on that benefit to the lessee by way of lower rental payments if that is an arrangement that suits all parties. I can imagine situations in which that could occur. For instance, a lessee in the early days of his business career may not have profits sufficient to pay for equipment and receive any real tax advantage from this sort of benefit. Also he may have carried forward losses which mean that he cannot gain any tax benefit from an investment allowance. Consequently, this is a far more realistic way of approaching that problem.

There is one other matter that I would like to mention, namely, the quarterly tax payments by companies which are removed by one of the Bills. In 1973 the Labor Government, in one of its most ham-fisted moves, introduced a system of quarterly tax payments without any notice, requiring businesses to meet payments amounting to one-quarter of their liability, as I remember it, in November of that year, within the short space of about 2 months. At the time this threw the business community in chaos. Naturally, businessmen had been planning on later cash flow requirements. Of course, it is now necessary to remove that provision, although it has been removed temporarily by administrative action in the last few months.

On the whole, I find that the remarks of Opposition senators in respect of the economy continue to be damaging, irresponsible and without real appreciation of the serious problems which the economy has faced and from which it is in the process of emerging delicately. We have heard the sorts of remarks that are tossed around in an attempt to mislead people as to the effects of the Government’s federalism policy. For instance, we have just heard from Senator Wriedt on the effects of imaginary impositions of indirect taxes at State and local government levels, and at the Federal Government level as well. Those remarks were made in an entirely destructive manner rather than a constructive way. Obviously they will only undermine confidence at the very delicate stage of recovery which we are in at the present time. I am disappointed to hear the remarks of Opposition senators. I hope that they see their way clear to think through some of their own problems and to come up with some more constructive remarks about the future development of our economy.

There is one other matter which I would like to mention quickly before I finish my remarks. I refer to the effect of the removal of the home mortgage interest deduction. I was one of those lucky people who last year obtained a deduction for interest paid. It amounted to a considerable sum of money- something like $1,300- which I was entitled to deduct from my income for the 1974-75 year. That resulted purely from a technical situation, as my income was affected by certain transactions involving capital in that year. Although I had owned a house for something like 12 years and although I really had no need for that deduction, I was entitled to it. I know that other people were in the same position. People who did not necessarily need that sort of advantage were taking advantage of it against the interests of the very people whom I believe it was designed to assist in the first place. The Government has paid attention to this sort of problem and is aiming to give the benefit to those who are in the most need. It is to people who are in the first years of buying their first home and who need that assistance at the time that this adjustment to the Act is of the greatest importance. It will allow an application of resources in that direction. The assistance will not be wasted on people who do not really need it. I support the various Bills and commend them to the Senate.

Senator WALSH:
Western Australia

-The 6 Bills which we are debating cognately this evening cover a great number of taxation issues. I shall not attempt to cover them all. My remarks will be directed, firstly, towards the indexation Bills which are the last 3 Bills listed on the notice paper for cognate debate and also to the investment allowance Bill- the first one listed- which, among other things, covers the implementation of the Government’s policy of a 40 per cent investment allowance.

I must say that I am a little surprised that Senator Messner thought it would be advantageous to himself or to the Liberal Party to resurrect the question of section 31a of the Income Tax Assessment Act and its effect on the wine producers. I have before me a letter dated 17 May 1976 and signed by Mr D. R. Mcwilliam, the General Manager of Mcwilliams’ Wines Pty Ltd. Of course, as we all know Mr Mcwilliam could scarcely be regarded as a raving leftist or a supporter of the Australian Labor Pary. Indeed, Mr Mcwilliam himself or his company circulated just before the last Federal election a letter which was tantamount to a threat of dismissal to all of his employees if the Labor Party were returned at the election on 13 December 1975. So, on the authority of someone with such a well known and publicly established record of opposition to the Labor Party, I quote what Mr Mcwilliam said:

The present Government has now given wine makers a longer period in which to pay but it has not fulfilled its election promise, a promise made by the Honourable P. Lynch on 19.6.1975. to ‘abolish Labor’s new stock valuation system’.

Of course, we have learned since then that remarks and promises made by members of the present Government in the period prior to 13 December 1975, and in particular those remarks and promises- the absolute guarantees- made by the Prime Minister (Mr Malcolm Fraser) himself, on his own admission on the Monday Conference television program last week were valid only for the period of the election campaign. Of course, they were all cancelled on 13 December last. So, on the Prime Minister’s own admission, we have a position that goes beyond the confirmation of the charge laid in the National Times newspaper in about June of last year that the more one looked at the then Opposition- the Liberal and National Country Parties- the more they looked like a shonky insurance company rather than an alternative government. The National Times said that when you got to the fine print you found that the cover was cancelled. The modern or most recent variant of that is the Prime Minister’s admission on Monday Conference last week, once we reached 13 December 1975, all his pre-election promises ceased to have any validity. It is only a matter of time before the Australian electorate as a whole recognises that that is so.

I turn to deal with the question of tax indexation. My Leader, Senator Wriedt, already has made the point that indexing taxation does not mean that taxes will be lower. By discretionary adjustments in the taxation table itself one can put the level of taxation or the general incidence of taxation up or down regardless of whether taxes are indexed. All that indexation meansthis is the most succinct definition that is possibleis that the proportion of income paid in tax will remain constant providing other relevant factors such as the level of real income of taxpayers, the number of dependants and so on, remain constant.

I will seek to incorporate in Hansard at the end of my speech tables that rather forcefully illustrate this point, demonstrating that a result similar to that which will flow from the Government’s indexation policy operative for the next financial year was achieved in the 1974-75 and the 1975-76 Budgets by the then Labor Government. The 3 tables that I will seek leave to incorporate show the proportion of income paid in taxation in the years 1973-74, 1974-75, 1975-76 and 1976-77 inclusive. Naturally, the figures for 1976-77 represent an estimate but the assumptions underlying the estimate are stated in the table. The proportion of income paid as taxation for all of those years for 3 categories of taxpayers is shown. These are the single person on a median income of 10 per cent below average weekly earnings, the taxpayer on a median income with a dependant spouse and 2 children and- the taxpayer on average weekly earnings with a dependant spouse and 2 children. 1 mention in passing that those 3 categories either encompass or very closely approximate the majority of Australian taxpayers.

For all of those taxpayers the proportion of income paid in taxation in those 4 years has remained constant with these slight abberations: For example, the single taxpayer in 1976-77 will be paying 18.5 per cent in tax as against 16.38 per cent in the 1975-76 financial year under the Hayden Budget. The other 2 notable features for taxpayers with dependant spouse and 2 children are that there was a significant fall in the proportion of income paid in taxation in 1975-76 pursuant to the introduction of the tax rebate system and that there will be a significant rise in 1976-77 in the proportion of income paid in taxation by taxpayers in those categories. To be absolutely fair and objective, I also mention that that quite significant increase in taxation paid will be offset or slightly more than offset by the payment of the family allowances; that is, by the increased family allowances which the Government has forecast its intention to pay.

The picture which emerges, contrary to that which is popularly asserted, and which it suits our political opponents to assert, is that taxes defined in the most accurate way as a proportion of income did not continuously escalate under the Labor Government; nor have they declined under the indexation policy which has now been accepted by the present Government. Indeed, it is not surprising that the taxes have not declined under that indexation policy because all that this Government has done by indexing income tax is to re-impose the level of taxation which was imposed by the Labor Government for the financial year commencing July 1976. This Government has just restored the same level of taxation that was prevailing in 1975. If inflation continues throughout the next financial year at the same rate as in the current financial year, as it almost certainly will, the proportion that this Government rips off, to use the emotive term of which our opponents are so fond, in the form of taxation will be precisely the same as it was in the previous year. In addition to that, this Government proposes to impose a21/2 per cent levy to finance Medibank. Granted, a ceiling will apply to that levy. But that action is conceptually indistinguishable from any other form of income tax and must be regarded as such. So it is a myth that taxes continuously escalated under the Labor Government. It is a myth that taxes have been reduced by the present Liberal Government.

Having said that, I wish to make a personal qualification. I do not necessarily support a policy of lower taxes; nor do I believe or accept and I will quote the evidence for this assertion that direct taxation in Australia has reached intolerable levels and that it is a matter of economic necessity that that taxation be reduced. In fact, if we look around the world we find that countries with such high average incomes, with such good economic growth rates and with such reasonable records of control of inflation and unemployment I refer to countries such as the Netherlands, Norway, Sweden, Denmark and even the United States of America have considerably higher levels of taxation than prevail in Australia. Conversely, we find that some of the most lowly taxed countries in the world include places like Nicaragua, Hong Kong and Brazil. It is patently absurd and it is contradicted by facts from the real world to argue that economic prosperity is threatened by the level of taxation currently prevailing in Australia. A number of countries equally as or more prosperous than Australia have higher levels of taxation. Those countries which must be regarded as being economically depressed or generally economically depressed have levels of taxation significantly lower.

I turn to the question of the investment allowance. I was appalled to discover in the House of Representatives Hansard of 20 May 1976 that the honourable member for Balaclava (Mr Macphee) who is generally regarded, I think, and certainly regarded by me, as being one of the more enlightened and competent members of the Liberal Party, clearly does not have an accurate conceptual grasp of what this investment allowance is about. He stated:

The money provided -

Through the investment allowance- is in the nature of a loan from the Government in the sense that when the companies are operating at something like their optimum level they will be paying company tax to the Government.

That assessment could be accurately used to describe the policy of accelerated depreciation or of complete deduction for purposes of taxable income for the year in which it has incurred expenditure on the purchase of capital equipment. But this policy is not a policy of accelerated depreciation or for total write-off in the year of purchase. This policy enables a taxpayer making capital purchases which qualify to claim not 100 per cent deduction from taxable income but 140 per cent from taxable income. This is a most important conceptual difference.

It is not a question of allowing companies or individuals to defer effectively the payment of taxation by rapidly writing off their capital expenditure. It is a policy which enables them permanently to avoid paying taxation because they are able to claim more than the cost of the capital item as a tax deduction. The level of irrationality or the conflict between the assertions of Government spokesmen and the factual evidence available which is relevant to the subject in this instance has not been surpassed by any policy introduced by this Government other than for the superphosphate bounty. The level of irrationality with respect to the 2 actions is comparable. This one is much more obnoxious because it is infinitely more expensive. It has been estimated by the Government itself to cost $470m in the next financial year.

The Government’s commitment to this policy seems to have twin origins. Firstly, there was the theory that was vociferously propounded and that now, I notice, has been largely discounted or cast aside, that Australia had to have an investmentled recovery and that the only way to restore economic growth was to have an investment- led boom that would ultimately, because of the multiplier effects on incomes that the investment-led boom generated, become a consumer recovery. It is a theory which, to his credit, Senator Cotton publicly disowned as early as, I think, February of this year. It now seems to have been disowned by most of the Government’s spokesmen. But, of course, the Government, by the time it finally realised that its investmentled recovery theories were substantially if not entirely invalid, was firmly committed to this policy. In fact, if the promises of the Liberal Party of Australia are to be given any credencereasonable experience suggests that they should be given very little credence- the Liberal Party was committed to it in mid- 1975. It was seen by the Government at one stage as being the Lynch’ pin- pardon the pun- of its program for economic recovery.

The second root or origin of this policy seems to have been a simplistic belief that is lamentably prevalent in the Liberal Party that a tax dodge is a panacea that will cure every problem. I suppose it springs from the residual 19th century belief or the 19th century belief that is still extant in the Liberal Party that taxation is somehow or other immoral and that therefore any policy or any method which enables a group or a particular person either to avoid taxation entirely or to pay very much less in taxes is highly commendable. It has a simplistic belief that a tax dodge is the way to solve every problem and that if there is depression in a particular industry a tax dodge is always preferable to a subsidy and so on.

The importance that the Government attached to that particular policy was spelt out as recently as 6 May by the Treasurer in a Press release when he said that the allowance itself was an outstanding feature of the Government’s program for getting the economy on the move again. There were, of course, and there still are very compelling theoretical reasons why this policy would not succeed in getting the economy on the move again. As the honourable member for Balaclava acknowledged in his speech on 20 May and as many other Government spokesmen have acknowledged, it is rather difficult to persuade companies to embark upon an expanded or new investment program when they already have a surplus capacity.

The honourable member for Balaclava assessed the current utilisation of capacity by Australian manufacturing industry to be as low as 70 per cent. Commonsense would lead one to the belief that when companies already have that much surplus capacity and that when many companies already have some sort of liquidity problem it is extremely difficult, to say the least, to persuade them to embark upon a new investment program even though substantial tax rip-offs are available. Of course it is quite impossible, irrespective of whether one can persuade them to do so, for them to embark upon new or expanded investment programs if they do not have the initial funds to outlay or if they are not in a position to borrow them.

More important than that rather commonsense theory, of course, is the fact that the evidence available to date shows that the Government’s policy has dismally failed. The most recent evidence that I have- this evidence came out only last week, so I doubt whether there is anything more recent- is the Bureau of Statistics publication New Capital Expenditure by Private Businesses in Australia, which has the reference number 5.7 and which shows that on a seasonally adjusted basis the new capital investment for all industries excluding agriculture for the March quarter of this year, although marginally higher than the December quarter, being only 1 per cent higher, was lower than it had been in the September quarter of last year and in the June quarter of last year.

The actual figures for the 4 quarters commencing June 1975 are $l,366m, $l,372m, $l,339m and $ 1,354m. They are the actual figures. If one were to correct them by applying a deflator or to express them in terms of constant money values one would find that in fact the investment in all industries excluding agriculture in the March quarter was the lowest that it has been for 12 months. In case someone should think that I am distorting the position by quoting the seasonally adjusted figures, I point out that on the original figures the investment for the March quarter was $167m lower than it had been in any of the preceding quarters. So the seasonally adjusted figures provide the most favourable possible interpretation from the Government’s point of view.

Mr Lynch has not only asserted that the policy is central to the Government’s plans for economic recovery or for economic growth and that it is working; he has also become very specific. The speech from which I am about to quote is actually Senator Cotton’s second reading speech, but I am not holding Senator Cotton responsible for it. He is only acting on behalf of Mr Lynch in this House. Senator Cotton said:

The evidence is that investment, particularly in manufacturing industry, has begun to move ahead.

Again I quote from the same Bureau of Statistics publication the figures for the total manufacturing capital expenditure for the last 4 quarters commencing June 1975. They are $428m, $346m, $355m and $319m. New capital investment in the manufacturing industry in the March quarter of this year was not only the lowest it has been for the last 4 quarters but also the lowest figure recorded on a quarterly basis for more than 2 years. Those are the facts. Notwithstanding the facts, the Treasurer of Australia has the audacity to assert that the evidence is that investment, particularly in the manufacturing industry, has begun to move ahead.

Senator Georges:

– That is what his representative said.

Senator WALSH:

– I made it quite clear before that I am not holding Senator Cotton responsible for that. I know that he reads in good faith what his colleague the Treasurer provides. I do not hold Senator Cotton responsible for the gross factual error in the second reading speech.

The next point is that the major rationale for the introduction of this policy has been the desire to restore full employment or at least to make a significant contribution to the restoration of full employment. Once again the honourable member for Balaclava, after acknowledging the difficulties in inducing additional capital investment at a time when industry is already operating at a surplus capacity, said that because of the inducement and because the inducement was extending over a period of time the investment allowance was working and new capital investment had been stimulated. Firstly, as I have already made clear, the facts contradict his assertion, but what I am interested in at this stage is the logic. If it is correct that an investment allowance will stimulate investment in manufacturing, even though in the short term there is already surplus capacity, one would expect that the most effective way of coercing or cajoling business into embarking upon a new investment program would be to tell business that an investment allowance is available this financial year or this calendar year and that if business has not taken advantage of it by then it is not on thereafter. That sort of logic was adopted by the Whitlam Government in early 1975 to clear the stocks of

Australian made motor vehicles. The actual mechanism, of course, was to reduce sales tax. It was highly successful, bearing in mind that at the time the announcement was made it was quite explicit that the sales tax would be restored progressively, until in about 6 months time it was right back to its former level. The message was given to car buyers that cars would be available at relatively cheap prices for two or three months and that if they wanted to take advantage of this they should get out in the next two or three months and buy cars. That is what people did, because by and large people are irrational.

What this Government has done, recognising that there is surplus capacity and that it is difficult to induce business to invest, is to say: We are going to provide an investment allowance because we want to stimulate investment by you, particularly in the short term. The spending on capital equipment will generate employment in the capital goods industries and, because of its multiplier effects, throughout the economy as a whole. We are going to provide this investment allowance because we want you to invest in the next 3 months, 6 months, next week.’ It then brought in legislation to provide a 40 per cent allowance for 3 years and a 20 per cent allowance for 5 years thereafter. It is mind boggling that if the objective is to achieve an increase in the level of investment in difficult circumstances the Government could have legislated to provide this allowance for that time period. This legislation will be passed because facts and logic do not have anything to do with what legislation gets through this chamber, any more than States’ rights do. The legislation will be passed and we will then have on the statute book a subsidy for capital investment to business operative at 40 per cent for 3 years and at 20 per cent for 5 years thereafter. It is quite conceivable that within a couple of years we could be back in a situation of excessive demand, partly induced by the demand for capital goods. We would then have on the statute book a policy which is totally inapplicable to the economic management needs of the day.

It is possible that the Act will be repealed in those circumstances. It is possible, I suppose, although if the present Government is still in power I would think it is highly unlikely. So we are going to be stuck not only with the short term cost, not only with the enormous expense of this policy, but also with a policy which is costly and which within 2 and certainly 3 years could well be exacerbating a condition of excessive demand. In the longer term, and bearing in mind still that the major rationale for this policy is the alleged desire to create jobs, to use the Prime Minister’s favourite phrase, what the Government is doing is subsidising the substitution of capital for labour. The Government, through the tax system, pays to a company anyway an effective subsidy of 16 per cent on capital. If it wants to restore just equilibrium in the trade-off between capital and labour it should also be subsidising wages through the tax system to the extent of 16 per cent. It has not done that. The Government is subsidising capital by private business; it is not subsidising labour. And by and large, in the long term anyway, private business reacts rationally to the realities in which it operates. Without doubt, sooner or later private business will substitute capital for labour, partly because of the subsidies provided by this Government, and all of this in the name of generating additional employment.

That is not just a fancy theory. I will present a piece of evidence upon which one could possibly place 2 alternatives, each of them equally unpalatable to the present Government, I should imagine. The Swan Brewery Company Ltd, which is the only company producing beer in Western Australia, on 9 March this year announced that it will retrench 350 of its employees when its new $50m Canning Vale brewery is completed in 1978. The new brewery, like a lot of new factories, is very capital intensive. It has a lot of automated equipment and so on. Although it will be turning out just as much or more beer than ever, it will require a 35 per cent smaller labour force and, pursuant to the construction of that new brewery, 350 people will be displaced from jobs. That will not be caused directly by the investment allowance because the Swan Brewery announced as early as October 1 975 that it was going to proceed with this building program. The facts can be looked at in 2 ways. On the one hand, it could be said that the Government through its investment allowance policy is subsidising the destruction of 350 jobs in the name of creating jobs. On the other hand, it could be said that the Government’s investment allowance had absolutely nothing to do with the brewery’s decision since the decision predated the election of the Government and its announcement that it was going to legislate for this allowance. If we accept that interpretation, what the Government has done L provide a windfall gain to the Swan Brewery Company of some $8. 5m, which is approximately the ultimate tax saving which will accrue to the brewery because of the investment allowance. Of course, the Government is still stuck with the difficulty that for an effective expenditure of $8.5m it has not generated any additional employment because the brewery was going to go ahead and build this plant in any case.

From the history of this legislation, through its embryonic stages, we can deduce quite clearly that the Treasury was appalled by this policy, as well it should have been. Immediately it set about doing what it could to trim it back, somehow to reduce the enormous cost to revenue which would flow from it. The Treasury’s first attempt to do this was to persuade the Government to disqualify individual items of capital expenditure below $ 1 ,000, and it was announced by the Treasurer that that would be so. Then the pressures came on from outside, and many of the Government’s supporters and their organisations squealed. The Government then caved in and said that it would exempt individual items below $500 and in the area between $500 and $1,000 it would have a shading in area. That is the way the legislation finally turned out. The Government committed itself to a foolish policy. The Treasury tried to extricate it from some of the cost of that foolish policy. Political pressures were then applied from outside and the Government settled for an extremely complex and clumsy final compromise.

The other provisions which indicate the scant attention given to the legislation when the Government first committed itself to it are the provisions for leasing. The vagueness of the provisions for leasing were criticised by, among other people, the honourable member for Balaclava who said in his speech on 20 May:

We certainly hope that the discrimination which is currently brought about by this Bill in respect of the hire industry will be eliminated after due consideration over the weekend.

He expressed the hope that the Government would introduce an amendment which would place leased equipment on the same basis from the point of view of taxation gain as equipment which was purchased outright. Obviously, at the time that the Government introduced this legislation it had not thought of all the complexities which would flow from the leasing arrangements. The Government has been criticised by such august and extremely conservative bodies as the Taxpayers Association for its sloth in this area.

I have been lectured many times as a captive audience by Senator Wright at committee meetings on the matter of simplicity in the law. I agree with Senator Wright’s general proposition that it is highly desirable that the law be as concise and as simple as possible, provided it adequately covers the subject. But as a result of the provision of this Bill that refers to investment allowances we have no fewer than 19 additional pages of complex legal jargon setting out qualifications, exemptions and so on. Much of it, of course, is concerned with this attempt to clarify the legislation’s provisions with respect to leasing. Apparently, in the judgment of many well qualified people it is an unsuccessful attempt. The Income Tax Assessment Act was once described by Professor Ronald Gates who I think is a friend of the present Government as being a document so lengthy and complex that no person actually understood it. Yet this legislation will now have 19 pages added to it.

There is no evidence available at this stage to prove this or otherwise, but I am quite happy to go on record as predicting that when evidence eventually comes to hand it will show that there is probably one area in which the Government’s investment allowance has succeeded in stimulating purchases that would not have been undertaken otherwise. I refer to a subsection of agriculture and in particular to affluent grain growers and affluent sugar cane growers. This was the subject of a question I asked of Senator Cotton a way back on 25 February. I referred Senator Cotton to a forecast which had been printed in The Australian Financial Review. The source of the forecast, by the way, was the sales projections of the distributors of the machines referred to in the forecast. The newspaper articles forecast that 546 tractors with power in excess of 162 kilowatts, which I think is about 250 horse power in the old terminology, would be sold this year. The units referred to cost a little above or below $50,000 each so the total market price of those 546 units would have been $27m, the investment allowance would have been $ 10m and the loss to revenue, given the very high marginal rates of taxation which most wheat growers are currently paying, would probably have been in the vicinty of $5m. Senator Cotton answered the question that day by saying that I was quoting from a newspaper report and he did not know whether the report was correct or not. So I followed the matter up the next day by acknowledging that my source of information was mainly a newspaper report and that I could not guarantee the accuracy of the assessments. But I asked Senator Cotton that day:

Does the Government have its own estimates relevant to this question? If so, will the Minister present them to the Senate? If not, is the Government flying blind on this issue without any idea of the consequences or costs of its policy?

Senator Cotton replied:

I sent the question the honourable member asked me yesterday through to the Treasury for a more definite answer, but it has been my experience with the Treasury that it is not noted for giving money away. I think the honourable senator will find when the facts are available they will dispel his doubts.

If the Treasury has replied and made available its expectations and forecasts they certainly have not been made available to me. I agree with Senator Cotton on the point that the Treasury is not noted for giving money away and I should certainly be astounded if the Treasury recommended this particular policy to the Government. Bearing in mind, once again, that the rationale for this policy is the belief that it will generate employment in manufacturing industryin the capital goods industry- in Australia and that it will thereby lead the investment-led recovery, the really crucial point about these 546 tractors which it is expected will be purchased by affluent wheat growers is that all of these machines are imported. So to whatever degree this investment allowance induced wheat growers to buy these particular machines, it would not have any effect on the level of employment in Australian manufacturing industry other than in respect of the few things that might be added to those machines in Australia- a battery and a few things like that. So the gain there would be minimal and even that minimal gain would probably be negatived when all the facts were considered.

Farmers, probably wheat farmers in particular, are very loath to pay taxation, to say the least. In fact, it was once very accurately stated that such management strategies as are applied by wheat farmers in Western Australia are directed towards minimising taxation instead of towards maximising incomes. I think that that was a very astute observation. Given the propensity of farmers to rush eagerly to accept any proposition which might give them the opportunity to minimise their income tax burden, even though it may not maximise their net income, it is quite conceivable that many farmers were induced by the Government’s investment allowance policy to buy those particular machines. Had they not been induced to buy these extremely expensive imported machines they would have settled for smaller tractors which probably would have been made in Australia. So on balance in this particular area the probable final effect of this investment allowance policy is to reduce the level of employment in manufacturing industry within Australia. The situation of sugar cane harvesters, of course, is somewhat different. Once again, they are extremely expensive but I understand that virtually all, if not all of them are made in Australia. So perhaps there would be a marginal gain to the level of employment among those few small manufacturers that make harvesting machinery for sugar cane.

As a final thought, still looking at the position of these farmers and this tax dodging syndrome, 2 factors are operative. I am familiar with the psychology of wheat farmers, particularly in Western Australia. They get caught up with 2 things- a rabid desire to avoid paying income tax if they possibly can, usually legally but not always legally -

Senator Harradine:

– That is not peculiar to them.

Senator WALSH:

– I agree with Senator Harradine, but it has reached a level of development among these people which is not generally applicable in Australian society. These farmers have a rabid desire to avoid paying income tax and also a failure to think through properly the wisdom of their capital investments. Of course, they have a desire also to keep up with what everyone else in the district is doing. If Senator Wright, who is attempting to interject, wants to make a speech I hope he will get up and make a speech about the desirability of simplicity in the law and that he will tell us that he is opposed to this particular piece of legislation because it adds 19 pages of complex legal gobbledygook to the Income Tax Assessment Act, which is already incomprehensible.

Senator Wriedt:

– What have you got to say to that?

Senator Wright:

– I think that the criticism of its complexity is quite justified.

Senator WALSH:

-Of the complexity of the legislation?

Senator Wright:

– Yes.

Senator WALSH:

-I thank Senator Wright. I am pleased to see that he agrees. I apologise to Senator Wright. I will be even more pleased to see him over here voting with the Opposition. The point I am making- I apologise for being a bit long-winded- is that there is a deplorable tendency among farmers, wheat farmers in particular, to dissipate in years of high income their windfall gains. They have had extraordinarily high incomes in the last few years because of a concurrence of favourable prices and generally favourable seasons. They have a propensity to dissipate their windfall gains, to invest irrationally and to over-invest in all sorts of gadgetry and superfluous extravagant equipment without being encouraged by the Government to do so.

I regret that the Government has provided this additional incentive to this group of farmers to behave even more irrationally than they otherwise would have done. Ultimately it will be to their own disadvantage. Even those people who are not particularly familiar with agriculture know that farmers’ incomes fluctuate violently for a variety of reasons. Within two or three years it is quite conceivable that some of these wheat farmers who are gaily buying $50,000 tractors and $40,000 trucks today, spurred on by the Government’s investment allowance, will rue the day when they dissipated so much of their current high incomes on those frequently unnecessary purchases.

Senator Steele Hall:

– On the figures you gave, you speak of a very small number of people.

Senator WALSH:

– Five hundred and forty farmers is not a great number, but I am talking about only those who will buy the big tractors. There are something like 50 000 wheat growers in Australia; but only 40 000 could be seriously considered as commercial growers, because the other 10 000 grow very little. Certainly it is a small number of farmers who are buying these particular items of equipment. Although the figures will not be available for 12 months, I do not believe that the magnitude of the capital invested in wheat farming would be low; likewise I believe that it will be affected significantly by this measure. It has fluctuated very wildly in the past. The Green Paper showed that in 1968 new capital investment in wheat-sheep farming was some $75m; 3 years later it was down to $ 14m. That, for people who are interested in the effects of the backward linkage, has drastic effects on the Australian farm machinery manufacturers, as it did on the Massey Ferguson and International Harvester companies in 1971. It is a small number of farmers who are buying $50,000 tractors and $40,000 trucks; that is true. I do not believe, even though that is a small number, that the amount of money involved is insignificant. A probable cost to revenue of $5m is hardly to be sneezed at.

The amount, for example, would be welcomed by the Australian Broadcasting Commission. It might help the ABC to maintain its television and radio programs in rural areas. I am sorry that no one from the National Country Party is in the chamber to give its views on whether radio and television programs in rural areas ought to be cut, particularly as the ABC radio and television programs are the only ones which are available in many parts of rural Australia. The amount involved is not a small sum. When the figures finally come out I think we will see that the sum is quite significant.

The investment allowance will achieve very little in terms of generating employment within Australia, because so much of this very expensive equipment is imported and some of that which is imported replaces what otherwise would have been purchased from Australian sources. Finally, I question very seriously whether it will be in the ultimate interests of the wheat farmers, bearing in mind that only a fool would think that the Australian wheat industry, or the Australian sugar industry for that matter, will be as prosperous forever as they have been for the last 3 years.

I seek leave to have incorporated in Hansard the tables to which I referred earlier.

The PRESIDENT:

-Is leave granted? There being no objection, leave is granted. (The tables read as follows)-

  1. Assumed $500 deductions from taxable income for medical expenses, household rates etc.
  2. Assumed income will increase by 10 percent.
  3. Includes 214 per cent Medibank Levy but with a $150 limit.
Senator McLAREN:
South Australia

– We are discussing 6 Bills in a cognate debate. I want to address my remarks, in the main, to clause 5 of the Income Tax Assessment Amendment Bill 1976 which deals with the tax borne by winemakers. This has been a very hot topic ever since I entered the Senate. Promises have been made by various governments. It has been claimed against my own Government that we dishonoured promises. We have now entered another phase. The Government in office now is being attacked by winemakers and grape growers as also having dishonoured a promise. If we cast our minds back we will remember that it was a Liberal-Country Party government which first imposed an excise on the wine industry. I think it was 50c a gallon. You, Mr President, were mixed up in that to a large extent, as I was when I first entered this chamber.

Promises were made by my Party that if we were elected to office we would abolish the wine excise. We duly carried out that promise. We were then accused of going overboard and imposing another tax. We had been criticised for the whole 3 years of our tenure of office because we had repealed section 31a of the Income Tax Assessment Act. Promises were made by the Government, when in Opposition, that if it were elected to government it would see that section 31a was reinserted in the Income Tax Assessment Act. I will refer to that later. The Minister for Industry and Commerce, Senator Cotton, in presenting the second reading speech on this Bill on behalf of the Treasurer, Mr Lynch, made these opening remarks:

This Bill will give effect to a number of important taxation proposals that have been announced by the Government.

The second reading speech goes on to deal with section 31A which we repealed. It comes in for quite a lot of comment in the memorandum which has been circulated with the Bill. On this aspect the Minister says:

When the special stock valuation provisions applicable to wine and brandy producers were repealed in 1973, the producers were faced with difficulties in paying off the tax of earlier years that had been deferred through the operation of the provisions. The previous Government allowed a period of 5 years for paying off the deferred tax, but this is now seen to be insufficient time.

Throughout the 3 years of our Government it was said on many occasions that we should not have given the winemakers an extended time to pay the tax. It was said that we should not have repealed section 31 A. Promises were made to reinsert that section. As the Minister says, the previous Government allowed a period of 5 years for paying off the deferred tax, but this is now seen to be insufficient time.

Some criticism was levelled at Mr Whitlam during the State election campaign in South Australia last year when he said that we would increase the period for payment from 5 years to 7 years. Because of the events that happened after we put the Budget down- members of the Opposition at the time did not want to debate the Budget; all they wanted to do was to delay it and to defer it until such time as they got their own way, which they eventually did on 11 November- we did not have the opportunity to do anything to carry out the promise that was made. Our promise, in effect, was to give wine makers 7 years in which to pay the deferred tax. This Bill, in effect, gives the wine makers an extra 12 months. It extends our proposed period of 7 years by one year to 8 years- one year over and above what the Whitlam Labor Government promised. The Minister goes on to say:

We gave careful thought to the producers’ position in the months preceding the election and said that, on being returned to office, we would review the taxation arrangements that apply to wine and brandy stocks.

Of course, that is not what the coalition parties’ Shadow Treasurer said at all. I will refer to that later. The Minister continued:

The provisions I shall shortly mention have been decided on after frequent and close consultation with industry representatives. The tax deferred in the past is not to be forgiven.

I emphasise that sentence. The Minister went on:

We had made no commitment on that score and forgiveness would not have been the appropriate step.

That is not what the wine makers thought; that is not the way in which they interpreted Mr Lynch ‘s statement. The Minister continued:

But wc propose that producers will have a more extended period to pay off the deferred tax.

As I have said, in effect this is an extension of one year over and above the promise made by the Whitlam Labor Government or 3 years over and above the provision in the existing legislation. The Minister goes on to say:

This should ease their liquidity problems considerably in the coming months.

In the Adelaide Advertiser of 2 December 1975 when we were engaged in an election campaign there was an article headed ‘Liberal Pledge on Wine Tax Relief. It said:

The Federal Treasurer, Mr Lynch, yesterday pledged a Liberal-National Country Party Government to a fundamental revision of wine company taxing methods. Mr Lynch met wine industry representatives in Adelaide to discuss the problems facing the industry. He said the NCP Government would hold further discussions with Australian wine producers early in the new year. He would also call for an immediate report on the matter from the Federal Treasury.

Arising out of these discussions that the Minister had, the wine makers interpreted the promises made by Mr Lynch to mean that he would reinsert section 31A in the Income Tax Act. In the Murray Pioneer of 79 April 1976 there is quite a large headline- inch high type- ‘The Government attacked on wine stock taxation issue’. It said:

A strong attack was made on the Federal Government this week by a wine industry leader regarding a lack of action in reinstating the former wine tax valuation system. The attack was made in a statement issued by Mr R. B. O ‘Grady, the President of the Federal Wine and Brandy Producers Council of Australia. Mr O’Grady said that the wine industry was completely taken by surprise by the announcement of the Treasurer, Mr Lynch, and the Minister for Primary Industry, Mr Sinclair, that they would in effect continue Labor’s wine stock valuation system with marginally improved repayment periods for the redistribution tax involved.

Of course, the margin over our promise is 12 months. It continued:

Mr O’Grady said that the clear cut categorical statement by Mr Lynch in his statement on 19 June 1975 that a coalition Government would abolish Labor’s new stock valuation system was widely interpreted throughout the industry to mean that section 31a of the Income Tax Act would be restored.

The article referred to the statement made by Mr Lynch on 19 June 1975. Mr Lynch, however, says in his second reading speech on these income tax Bills that all he promised the industry was to have a look at a revision of the tax. The wine industry referred to a Press statement that he had issued on 19 June saying that the Government would restore section 31a. So the wine makers and wine grape growers were misled by the Treasurer. As my colleague Senator Walsh pointed out in his remarks tonight, many of the promises which were made by the present Government during the election campaign have been dishonoured. A lot of these promises were made just as a bait to the electors. I am sure that in the Riverland district of South Australia with which I am very conversant the people at their next opportunity to go to the polls might force the election to go to a distribution of preferences as happened several years ago when the wine tax was imposed. The present sitting member, Mr Giles, then went through some great gymnastics to get himself out of the predicament he got himself into by making promises to the industry.

Whilst we were in Government, Senator Cameron, former Senator Drury and I made repeated representations to our Treasurer and to our Minister for Agriculture in an endeavour to get some assistance for the wine makers and the wine grape growers. We thought that we were getting somewhere. We found that one day when we were putting up a strong argument, that same day Mr Dunstan, the Premier of South Australia and the then State Minister for Agriculture, I think it was Mr Casey, were also in Canberra putting forward a strong case for relief to be given to the wine makers and wine grape growers. However, the Ministers of our Government trotted out a balance sheet of two of the biggest wine makers in the country. One of those is B. Seppelt and Sons Ltd of South Australia. The Australian of 3 March 1 976 under the heading ‘ Wine Grower Doubles Profit ‘ said:

  1. Seppelt and Sons Ltd, South Australian vigneron, is making a 1 .4 for four bonus issue after a sparkling profit performance in the half year to December 3 1 .

Net profit more than doubled from $485,000 to $l,107m-14 per cent more than the $969,000 Seppelts earned for the whole of the 1 974-75 financial year.

Profit was struck after tax $857,000 ( previous $429,000 ).

So the company’s tax doubled- and depreciation $ 1 95,000 ($ 1 75,000 ).

We were faced with balance sheets like that by our Treasurer. No doubt his attention had been drawn to them by officers of the Australian Taxation Office who pointed out that in reality, although section 31a had been repealed, wine makers still were making huge profits. They made them probably by increasing the price of wine to consumers. That is what he gave to Senator Cameron, former Senator Drury, the Premier of South Australia, the Minister for Agriculture and me when we sought some relief. We had to go away convinced that probably relief was not really necessary.

Even this year we find that there was another kite flown in South Australia and I referred to this in a speech I made here some weeks ago. It was reported by wine makers in South Australia that they could not take the surplus grapes and that there would be a surplus of 5000 tonnes of the vine unless the Government stepped in and gave assistance to the industry. The South Australian Labor Government was so concerned about this that it offered to buy the 5000 tonnes of grapes and have them processed so that grape growers could be paid. What was the result? We found that there was something less than 100 tonnes of surplus. As soon as the wine makers saw that the South Australian Government was to make an effort and guarantee the finance to process the surplus grapes they thought that that would not be any good because they would be in competition with their own produce. So they hurriedly bought all the grapes. The only grapes put into the pool that was established by the South Australian Labor Government was by Mr Priest who was the man who had made a lot of noise. I think he is Chairman of the South Australian Wine Grapegrowers Association in South Australia. I might have his position wrong. His grapes were the only grapes that went into the pool. So in effect there were no surplus grapes at all. Yet the Government was being blamed because it had repealed section 31 A. It was said to be the great bogey on the wine industry.

When the Liberal-National Country Party coalition came to government and had a look at the situation it came to the same conclusion as our Treasurer; that we were right in repealing section 31 A. The present Government has made no effort to restore that section despite promises which were made during the election campaign. Some of the spokesmen for the wine industry are not very happy. I refer to a circular dated 1 7 May 1 976 which I received from Mcwilliam ‘s Wines Pty Ltd. It is signed by Mr D. R. Mcwilliam, the general manager. Senator Walsh quoted from it earlier but for the purpose of my remarks I will quote from it also. The third paragraph of the circular states:

In 1973, the then Government abolished section 31a and required wine makers to pay in full the deferred tax this represented. The present Government has now given wine makers a longer period in which to pay but it has not fulfilled its election promise -

That is what I have been referring to- (Hon P. Lynch, 19.6.75) to ‘abolish Labor’s new stock valuation system’.

So while we were in Government our actions were all wrong. What we did was cripple the wine industry. It was said that if only there could be a change of government the incoming government would rectify that by restoring section 31a. Now, in government, honourable senators opposite can see the wisdom of the Whitlam Labor Government’s action. We have been proven right. On 20 May 1976 in the House of Representatives Mr Hurford, the honourable member for

Adelaide, when speaking to clause 5 of this Bill made some remarks about a circular which had been put out by Mc William’s Wines Pty Ltd. To put the matter in its proper perspective I shall read into Hansard the words of that circular, with which I have been provided. I received a letter today, dated 28 May, which was signed by Mr D. R. McWilliam. It criticised Mr Hurford for referring to that circular. In effect, it stated that what Mr Hurford had said was all wrong. These are Mr Hurford ‘s remarks:

I have been advised that one of the large private winemakers in Australia went so far as to suggest to its workers during the last Federal election campaign I am referring to McWilliam ‘s Wines Pty Ltd and I believe it is in its interest that I bring this matter into the openthat they would be sacked if a Liberal and National Country Parry Government was not returned to office because the coalition parties were making promises relating to section 3 1A.

The circular which is headed ‘ McWilliam ‘s Wines Pty Limited’ and which is dated 1 December 1975 states:

page 2169

QUESTION

TO OUR GRAPE GROWERS, SUPPLIERS AND STAFF

Over recent months there has been a great deal of publicity dealing with the problems of the wine industry. These problems arise principally from the action of the Whitlam Labor Government in changing the method of valuing stock for taxation purposes. The old methods of valuation have now been used in the industry for some SO years, and they received statutory recognition by being included in the Taxation Act in 1953. Briefly, they consisted of the use of standard values (a practice which is still made available to a number of primary industries), and the use of these standard values assist a company financially by making available as a taxation concession the major part of any increase in wine and brandy stock and thus deferring the payment of income tax on such amount until the goods are sold. This financial assistance has enabled companies in the wine industry to uplift the full crop from growers in years of surplus and to mature wines to such effect that Australia ‘s standing in world wine circles has been greatly enhanced.

The effect of withdrawing the right to use standard values is that there is a compulsory increase in stock values in our taxation accounts, and although no money comes into the company whatsoever, tax has to be paid on this write-up of values. This has placed a very great strain on the financial resources of wine companies and, due to Australian taxation laws, private family companies such as McWilliam ‘s are more adversely affected than multinational companies and public companies, and much more adversely affected than co-operatives.

As a result of representations to Dr Cairns in February 1975 the industry was encouraged in a belief that an early decision would be made to repeal the wine industry taxing measures.

It was at about that time the people I have mentioned were also negotiating with Dr Cairns. We were hit with those balance sheets of those companies which showed the massive profits which the companies were making. In effect, they were not going too badly at all. The circular continues:

Accordingly we purchased all wine grapes offered by growers and thus processed a record tonnage of grapes at prices 40 per cent per tonne greater than 1974, and 75 per cent per tonne greater than 1973. Having relied on Dr. Cairns’ indication of assistance to the industry our Company now had greater stocks of wine than previously, and thus our problems were greatly aggravated by a negative decision by the then Prime Minister, Mr Whitlam, followed by his dismissal of Dr Cairns as Treasurer.

Our hopes were raised again when Mr Whitlam, during the South Australian State Election campaign in early July this year, promised three forms of partial relief in his support for the Dunstan Labor Government which was returned to office. It has come as a bitter disappointment to us, on following up these promises by Mr Whitlam, to find that not one of them has been honoured in the Budget prepared by the Whitlam Government and which has now been passed.

As I said earlier, we all know how that Budget was passed. It was not even debated. It was deferred and deferred. Then, it went through with a snap of the fingers when certain things happened by the lake side. The circular further states:

As a result of their difficulties, a major South Australian Wine company has already retrenched 83 staff, and Tolley, Scott & Tolley Limited have retrenched 14, as well as giving notice to 205 South Australian grape growers that they will not be able to take their grapes in the 1 976 season.

This is a very pertinent point and I referred to it earlier in my remarks. The threat was held out to the grape growers that the winemakers could not take their grapes because the Labor Government had repealed section 31a of the Income Tax Assessment Act. At this time Mr Lynch was promising to restore that section. When the L abor Government in South Australia offered to process the grapes, there were none forthcoming because there were none there. It was just a hoax. The circular continues:

Smith & Son Pty. Ltd. (Yalumba) have spread payment for their 1975 grape intake and did not expect to complete paying for the 1975 crop until November this year, although grapes are usually paid for by the end of June. Thomas Hardy & Sons Pty. Ltd. deferred payment for their 1975 grapes in a similar manner, and’ will be curtailing their intake in the 1976 vintage.

Again, a red herring was drawn across the trail to frighten the Government and to scare the grape growers into believing that unless something was done they would be left high and dry. The circular continues:

No doubt you have wondered what is the position with our own Company. We have been among the worst affected and have experienced major financial problems. It is of the utmost concern to us that we were not able to continue our policy of paying our Riverina grape growers in full by 30 June, and that we had to extend payment of over $1m until the end of September. The Company’s Directors and Senior Management have studied and continue to study the position at great length and are using their utmost endeavours to overcome our Company ‘s difficulties.

Our aims would be to handle a full crop in the 1976 vintage and not to retrench any of our staff, but these aims are incapable of achievement under the present conditions. We are therefor encouraged that in a Press release dated 1 9 June 1975 the Hon. P. Lynch, MP, announced that a Liberal Country Party Government would abolish Labour’s new stock valuation system, and we would hope that if such Government is elected this promise will be honoured.

Their hopes have come to nothing. The last paragraph states:

We look forward to your co-operation in working towards the establishment of conditions that will enable this Comany to continue as a viable enterprise so that it can proudly honour its obligations to its growers, suppliers, and staff.

On Behalf of the Board of Directors

r. Mcwilliam

General Manager

What can one get out of that circular which was sent to the grape growers, suppliers and staff? One can get nothing except that the company was saying to those people, as Mr Hurford said, that unless those people voted Liberal they would be out of a job. Mr Hurford made that statement. Today I received a letter from the same Mr D. R. Mcwilliam. It is dated 28 May 1976 and it is headed Mcwilliam ‘s Wines Pty Limited. It states:

Senator G. T. McLaren, Parliament House, CANBERRA.

Dear Sir,

Mr Chris Hurford, the Shadow Treasurer, referred in Federal Parliament on 20 May 1976 to an alleged threat to our employees during the 1975 elections. I can only assume that the reference is to a circular to our Grape Growers, Suppliers and Staff on 1 December 1975 drawing attention to the intolerable position in the wine industry as a result of the repeal by the Labor Government of Section 31a of the Income Tax Act. This circular was a factual recital of the serious position in which our company was placed and it is categorically denied that in any way it was meant to suggest to our workers that they would be sacked if a Liberal and National Country Party Government was not returned to office.

In recent years, from a platform of total ignorance of the facts of wine industry lite, successive Governments have imposed on the industry a range of crippling blows. However, it is significant that when an independent fact finding inquiry has been held- such as that by Professor Grant into the effects of excise in April 1972, the Government has invariably modified its stance.

My company believes that the unique conditions attached to the making of wine require certain special considerations. It would therefore be appropriate that an inquiry be established to investigate the effect on the grape growing and wine making industries of variations in the tax structure, and to look into the whole position, so that any future decisions the Government makes affecting the industry are based on adequate information.

Yours faithfully,

Mcwilliam ‘s Wines Pty Limited

r. mcwilliam

General Manager

Mr Mcwilliam states in this letter that he did not attempt to mislead either the growers or the staff. Yet in it he makes no reference to the fact that he stated that certain wineries in South Australia would be left with a surplus from the 1 976 crop if certain action was not taken by governments. He completely ignores that part of the statement in writing to me. He may have been of the opinion that honourable senators on this side of the chamber would not have been in possession of this document, but we came into possession of this document very early in the piece. That is why we have said consistently that wine makers were misled by this Government to such an extent that they told their employees and their grape growers that their whole salvation rested in the election of a Liberal-Country Party government, that if they did that their problem would be solved. That was set out in Mr Lynch ‘s statement of 18 June.

It was referred to by Mr Hardy and by Mr Mcwilliam. So honourable senators opposite cannot deny that the promise was made. Of course it was made. When one looks at the second reading speech one finds that Mr Lynch does not say that he made that promise. He says the only promise he made was that he would have a review of the problems facing the industry. On 20 May last I posed a question about the wine industry to Senator Cotton. I asked him whether he was aware that the South Australian Labor Government had come to the assistance of people in South Australia to the extent that it would finance the processing of 5000 tonnes of surplus grapes which in effect did not exist. In his reply to me Senator Cotton said:

I have not seen the circular from Mcwilliams Wines Pty Ltd but I listened with care to what the honourable senator said in reference to it. I have been informed that some of the claims made by the wine industry are not correct. I cannot go further than that. This is a matter for clarity and precision in the answer and the question will be directed to the Treasurer.

Senator Cotton may have seen that circular that was put out by Mcwilliams Wines, that some of the claims made by the wine industry are not correct. As people who read Hansard will see, it is borne out in that circular put out by Mcwilliams Wines that some of the claims made by the wine industry are not correct. The wine makers deliberately set out in the first instance to fool the grape growers that they would be left with a surplus. In any primary producing industry, no matter whether one is producing eggs, pigs, fat lambs or whatever it is, if you feel that you will not be able to sell the whole of your production, you leave yourself wide open to sell at a lower market price so that you recoup some of your losses.

I am happy to say that in this instance, because of the actions of the Labor Government in South Australia, the wine grape growers on the river were able to quit their grapes at the ruling price. This is the way it ought to be. We should not have any primary producer put in the position where he is held to ransom by processors. The case that I have put here tonight should encourage wine grape growers to give serious consideration to going further into the co-operative wine making area so that they will not be held to ransom by private wine makers as set out in these documents, and so that the staff will not have a big gun held at their head at election time by shadow Treasurers going around and making promises which they do not honour.

Let us hear no more from honourable senators opposite about the fact that while we were in government we made promises which we did not honour, because day after day, week after week, the chickens are now coming home to roost. Practically every promise that was made by the present Government during the last election campaign has now been slowly torn away and dishonoured. I hope that honourable senators opposite will see the errors of their ways and that when the next election comes around they will not go out on to the hustings and make false promises because the electors, like elephants, have very long memories. If honourable senators opposite do not mend their ways and honour some of the promises that they have made to the electors in Australia, they will find themselves sitting on this side of the chamber after the electors get their next opportunity to go to the ballot box.

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

– in reply- This has been an interesting debate although, very largely, a quite useless debate. Senator McLaren spoke at great length. I did not listen to all he said, but he did say one thing which I thought was most interesting. He complained that when they were in government what they did was always wrong. As I listened to him speak I thought how right he was, and the people thought so on 13 December last year. What are we trying to do here? We have a series of taxation measures. As honourable senators can detect, Senator Mulvihill and I have the same affliction. We have what is known as the virus Canberra throat. One has no wish to prolong the agony of the Senate or to exacerbate one’s affliction.

We have an interesting situation. There are still 3 days to go this week. Everybody is trying very hard to get the work completed. I had a look at the notice paper and of course I am not assuming that it is the Opposition’s intention to debate seriously all the matters listed on the notice paper. If that was the Opposition’s intention, there is a total of 1 18 items on the notice paper now. Today we have dealt with two of them, so that leaves 116 items on the notice paper. Here we are working purposefully forward at a pace to conclude the work this week, and debating seriously matters which the Opposition says it does not intend to oppose. One wonders really what we are doing here when perhaps honourable senators opposite have other items which they might regard as being of more consequence and which they in the wisdom of their decision will be -

Senator Cavanagh:

– We could oppose them if you want us to.

Senator COTTON:

– I have no problem about what Senator Cavanagh would want to do. He does not worry me in the slightest degree. Senator Wriedt moved an amendment to the Income Tax Assessment Amendment Bill which seems to me to be almost farcical. The question of wine makers tax liability, I thought, was dealt with adequately by Senator Messner. The taxation measures that have come into the Parliament since I came here have always been very well supported by the Department with explanatory memoranda. Adequate information has always been available for those who sought to inform themselves about these revenue raising devices. Three memoranda were provided for the purpose of explaining the 6 measures that are before us. Only one Bill is not dealt with in the memoranda, and that is the Superannuation Amendment Bill which is consequential upon the eligibility securities test, the 30-20 rule under the Income Tax Assessment Amendment Bill. Those memoranda are worthy of being in one’s file lest later a question arises or matters are brought forward by individuals who have complaints or concern. One has the ability to get from the Department’s own information, without having to chase around a great deal, facts which help greatly to satisfy one’s own queries and the queries of people who come to see one.

Senator Walsh made the interesting observation that he was not necessarily or at all in favour of lower levels of taxation. He said something which I think can well be restated. One often reads that Australia is one of the highest taxed countries. I concur with Senator Walsh in saying that that is not the case. In fact, having said that myself long ago I do not abate from that view. Australia is not one of the most highly taxed countries. It is fairly highly taxed, but there are countries which are more highly taxed. That is not an argument for a very high rate of taxation; it is just a statement of fact. What we are looking for in a society like ours is to get our revenue, as far as possible, in a fair way from those people who are best qualified to produce it, to ensure that those who spend that revenue have some regard to what they are doing with it and try to be economical and sensible, and in the process try to help those who perhaps are less well off than are other sections of the community.

These measures, which cover a great range of things, are designed to bring more equity into the overall raising of revenue and of disbursing the proceeds in the Australian society. I am afraid that the taxation laws will always be complicated. It is always the dream and the hope of reformers in government to simplify the total body of law and, in particular, the body of taxation legislation. It is also traditionally true that every country in raising revenue has the problem of protecting that revenue against a small percentage of people who seek to evade their liability. That is why the laws are complex. There is always somebody who is trying to defeat particular measures by using certain devices, and devices have to be created to counter devices. A large part of the problem is contained in the fact that people hold some kind of view that the government is fair game.

Debate interrupted.

page 2172

ADJOURNMENT

The PRESIDENT:

– Order! 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.

Senate adjourned at 11 p.m.

page 2173

ANSWERS TO QUESTIONS

The following answers to questions were circulated:

Union Elections (Question No. 447)

Senator Colston:

asked the Minister representing the Minister for Employment and Industrial Relations, upon notice:

  1. 1 ) Does the Government intend introducing secret ballots for the election of all officials of industrial organisations in Australia.
  2. Will the necessary legislation refer to both trade unions and employer organisations.
  3. Has the Minister, or officers of his Department, officially discussed these proposals, with representatives of the trade unions and representatives of employer organisations; if so, when have these discussions occurred, and with whom.
Senator Carrick:
LP

– The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator’s questions:

  1. 1 ) The Government will be introducing legislation to give effect to its policy that elections in organisations registered under the Conciliation and Arbitration Act be by secret postal ballot under the supervision of the Australian Electoral Office. The cost of the elections will be borne by the Commonwealth. The Government’s policy has two main aims. The first is to encourage greater participation in elections in registered organisations by giving members a real opportunity to vote and by making it as easy as possible for members to vote. The second aim is to remove any deterrent to voting that might result from suspicion that elections conducted by the organisation are not, in fact, secret and that a vote against incumbent officials could result in victimisation. The ultimate objective is to have organisations that truly reflect the desires of their memberships.
  2. The legislation will apply to trade unions and employer organisations.
  3. The Minister has undertaken to discuss these proposals with representatives of trade union and employer peak councils before any legislation introduced into the Parliament. (The answer replaces the answer given to Question No. 447 on 25 May).

Conciliation and Arbitration Commission (Question No. 225)

Senator Cavanagh:

asked the Minister representing the Minister for Employment and Industrial Relations, upon notice:

  1. 1 ) Does the 1975 Annual Report of the President of the Australian Conciliation and Arbitration Commission suggest an amendment to section 34 of the Conciliation and Arbitration Act; if so, did the President claim that the proposed amendment would reduce the work load on Presidential Members and thus expedite the hearing of disputes.
  2. Does the Report also complain of accommodation provided for the Commission in Brisbane and Hobart.
  3. What does the Government intend doing in respect of the suggestion and complaints made in the Report.
Senator Carrick:
LP

– The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator’s question:

  1. The President of the Conciliation and Arbitration Commission in his Annual Report for 1975 did indicate that it would be helpful if the Act were to be amended to make provision whereby references under section 34 of the Act could be dealt with by a Presidential Member and two Commissioners. He stated that the amendment would enable him, if he desired, to set up a reference Bench comprising three members of the Commission who had knowledge of the industry in question. The Government considered the matter in the context of its proposals to amend the Conciliation and Arbitration Act which were incorporated in the Bill introduced into the House of Representatives on 20 May 1976. The Government decided against an amendment along the lines suggested by the President in the interests of a consistency of approach to the composition of Full Benches.
  2. The Report does refer to accommodation difficulties in Brisbane and Hobart. In Hobart, Commission hearings arc conducted in accommodation provided by the AttorneyGeneral’s Department and the State Government. Thc leasing of suitable premises has been included and given a high priority in the Department’s 1976-77 proposals. In Brisbane, most Commission hearings are conducted in the Bankruptcy Court. The leasing of suitable accommodation for the Commission will be considered when leasing proposals for 1 977-78 are being drawn up.
  3. 3 ) See the answers to ( 1 ) and ( 2 ).

Immigration: Refugees from Angola (Question No. 245)

Senator Colston:

asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice:

  1. Has the Australian Government received any (a) enquiries and (b) applications for Australian residence from refugees of the civil war in Angola; if so, how many of each have been received.
  2. Have any Angolan citizens received approval for residence in Australia to date.
Senator Guilfoyle:
LP

– The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable senator’s questions:

  1. 1 ) A few overseas posts, including the office in Lisbon, have reported a small number of inquiries from people who had left Angola during the emergency situation there and since independence. Precise records of the number of such persons from Angola are not available as they have been listed in the statistics under their own nationalities. Those Portuguese citizens or citizens of other countries formerly resident in Angola who have returned to their own countries could not be regarded as refugees in accordance with thc usually accepted definition.
  2. Statistics concerning arrivals from Angola are available only from the Australian Bureau of Statistics. At present the statistics available cover the situation only up until June 1975. Prior to the beginning of 1974 separate figures were not kept for Angola. The statistics show that in the period January 1974June 1975 eleven persons born in Angola arrived as settlers in Australia.

Immigrants from United Kingdom (Question No. 334)

Senator Jessop:

asked the Minister representing the Minister for Immigration and Ethnic Affairs:

  1. 1 ) Is the Minister aware of a report in the Adelaide Sunday Mail of 21 March 1976 headed ‘Australia to push for more UK migrants’, which was attributed to a statement by the Minister for Immigration and Ethnic Affairs.
  2. Has the Minister’s attention also been drawn to a report in the Adelaide Advertiser of 23 March 1976 headed Alarm at migrants dropa Farce’, by Mr J. Farmer, who has tried unsuccessfully for three months to sponsor his brother, sister-in-law and mother-in-law for entry into Australia.
  3. Will the Minister release details of the policy guidelines laid down by the present Government relating to the admission of British migrants into Australia.
  4. Is the Minister satisfied that Government policy in regard to the issue of permanent entry permits to United Kingdom applicants is being carried out by officers of the Department of Immigration and Ethnic Affairs.
  5. Will the Minister examine the case referred to in the Adelaide Advertiser of 23 March 1976.
  6. Will the Minister satisfy himself that the rejection of the applications by the Department do not contravene stated Government policy in regard to United Kingdom applicants.
Senator Guilfoyle:
LP

– The Minister for Immigration and Ethnic Affairs has provided the following reply to the honourable senator’s questions:

  1. 1 ) I am aware of the report in the Adelaide Sunday Mail of 21 March 1976. It should be noted that in the statement reported there, I mentioned that an effort would be made to attract more British migrants ‘as soon as the economic situation allowed’.
  2. I am also aware of the report in the Adelaide Adverliserof23 March 1976 see also (5).
  3. The present immigration policy is non-discriminatory and applies equally to all applicants or nominees irrespective of nationality.

In brief, provision exists for residents of Australia to sponsor for migrant entry their spouses, minor dependent children and parents who do not intend to join the workforce. On 20 May, I announced the extension of family reunion provisions to include non-dependent workforce age parents and their dependent children. Their eligibility will depend only on economic viability and satisfaction of the usual health and character checks.

Other applicants for migration may normally only be considered where they come within an approved occupational category. They must possess employment skills which are in strong and continuing demand in Australia. My Department is advised in this area by the Department of Employment and Industrial Relations.

The occupational restrictions may be waived only in cases presenting strong humanitarian considerations, e.g. refugees, or where other exceptional factors are present.

  1. Yes.
  2. Mr Farmer’s nomination was the subject of representations to me and a report has been obtained. His brother does not come within the occupational groups currently eligible for migration. His nomination for the entry of his mother-in-law was not rejected and she is eligible to migrate provide she meets normal health and character requirements.
  3. It is unfortunate that the policies which currently are necessary do not enable approval for Mr Farmer’s brother and sister-in-law to migrate to Australia, even though Mr Farmer has indicated that a job is available in Australia for his brother. However, under present conditions of continuing high levels of unemployment it is necessary to ensure that those persons approved for migration to Australia do not, after their arrival in Australia, take jobs which otherwise would be available to persons already resident here.

While there are ‘family reunion’ considerations present, they are no different from such considerations applying in respect of many other applications and nominations outside the eligible criteria.

It is to be hoped that economic recovery will occur quickly and to a sufficient extent to enable approval to be given for the entry of intending migrants like the Farmers.

Tape Recorders (Question No. 403)

Senator Rae:
TASMANIA

asked the Minister for Industry and Commerce, upon notice:

  1. 1 ) What companies or firms manufacture or assemble reeltoreel tape recorders in Australia.
  2. What brands of tape recorders are manufactured or assembled by each company or firm.
  3. If the answers to (1) and (2) are nil, are there any import quotas or tariffs imposed on these products; if so. what is the justification for their imposition.
Senator Cotton:
LP

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

  1. and (2) I understand that there are three manufacturers of reeltoreel tape recorders:

Consolidated Electronic Products Pty Ltd, Melbourne are producing “Cepak’ and ‘Cuemaster’ brands,

Optra Pty Ltd, Melbourne producing’Optro’ brand,

Electrodata Associates, Sydney producing ‘Electrodata’ brand.

The above firms produce equipment for professional studio use. There are no known manufacturers of the more common domestic reeltoreel tape recorders.

  1. The current rate of duty on these goods is 35 per cent. However, I understand that units imported for domestic purposes have entered Australia duty-free under By Laws issued by the Department of Business and Consumer Affairs.

There are no import quotas applicable to the goods in question.

Television Manufacturing Industry (Question No. 468)

Senator Colston:

asked the Minister for Industry and Commerce, upon notice:

  1. Will the Australian television manufacturing industry collapse because of a massive build-up of imported colour sets.
  2. Are European and Japanese manufacturers dumping cheap sets on the Australian market because of depressed markets in their own countries.
  3. ) Is there a danger of Australian buyers of foreign-made television sets being left without adequate maintenance facilities, and of thousands of Australian workers losing their jobs.
  4. Will the Minister take urgent action to investigate these claims and, if necessary, take steps to remedy the situation.
Senator Cotton:
LP

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

  1. 1 ) This seems very unlikely. Although local production is no longer at the peak levels of last year, it is still well above earlier industry estimates. It should also be noted that the local industry itself imports many colour television receivers, some of which are competitive with its own production.
  2. There is excess capacity in Europe and Japan, and manufacturers in those areas appear to be trying to find additional markets for colour television receivers. However, I understand that local manufacturers have not requested the Department of Business and Consumer Affairs to undertake an inquiry into any alleged dumping.
  3. There is a danger that purchasers of some television receivers could be left without adequate maintenance facilities. The Australian Buyers ‘Guide’ issued by the Government in 1974 advised potential purchasers that one way of minimising long term service problems was to buy from a company which has a reputation for maintaining spare pans and for providing service. Future employment levels depend on several factors including the rate at which Australians continue to purchase colour television receivers.
  4. The Department of Industry and Commerce is currently examining an application by some manufacturers for emergency protection. However, not all manufacturers have supported the application. In late 1974, it was claimed that imports were threatening to disrupt the local industry, but an inquiry by the Temporary Assistance Authority early in 1 975 found there was no need for urgent Government action. I expect to receive a report from the Department soon on the outcome of its current inquiries. In any event the situation will continue to be kept underdose review.

Urban Affairs Policy (Question No. 474)

Senator Colston:

asked the Minister for Environment, Housing and Community Development, upon notice:

  1. 1 ) Did the National President of the Urban Development Institute of Australia, Mr Neville Telfer, state in the Melbourne Age of 1 April 1976, that it was a disgrace that the Federal Government has still not released its urban affairs policy.
  2. Does the Government have a complete urban affairs policy; if so when was it announced; if not, when will a policy be released for public scrutiny.
Senator Carrick:
LP

– The Acting Minister for Environment, Housing and Community Development has provided the following answer to the honourable senator’s question:

  1. 1 ) I did see the report which Senator Colston refers to.
  2. The senator’s question suggests that it is both realistic to have a single all embracing policy in urban affairs and that urban affairs are exclusively a Commonwealth concern. The Government sees little ment in trying to force the many complex issues which we face in our urban areas into some allembracing policy document. It prefers to develop a range of policies in response to changing circumstances and opportunities. Our housing policy refers among other things to the need for assistance to home buyers; for diversity in the housing market and for stability in land process. Through reform of the finance and functions of local government our local government policy seeks to increase the independence and expand the role of local government in health, social welfare and community affairs. Our environmental policy takes up the difficult issues of pollution monitoring, waste management and noise controls. The National Estate and other conservation matters are included in that policy. Other elements of our policy in respect to urban affairs are contained in our transport and social welfare policies. 1 also take issue with the senator’s assumption that urban affairs are a Commonwealth preserve. In line with our federalism policy all the policies mentioned above refer to the need for consultation and co-operation with the States. Senator Greenwood and officers of the Department have had a series of meetings with State Ministers and officials with responsibilities for environmental matters: for the land commissions and growth centres; for sewerage activities, population settlement and for a number of other activities. Further meetings will be held over the next few months. From the findings of the Administrative Review Committee and from the development of our federalism policy through the Premiers Conference the broad responsibilities of the Commonwealth and the States in urban affairs will bc defined, and then translated into workable co-operative arrangements.

Government Expenditure: Reductions (Question No. 475)

Senator Colston:

asked the Minister for Industry and Commerce, upon notice:

  1. 1 ) Did Mr J. S. Jackson, of the industrial economists John Jackson and Associates, state on 2 1 March 1976 that the cutbacks instituted by the Government can only result in unemployed resources.
  2. Is the implementation of civil works and social infrastructure drawn-up under the Whitlam Government essential for the survival of the building and construction industry in Australia.
  3. Is it correct, as stated by Mr Jackson, that, as a result of the cutbacks in Government expenditure, it could be 1980 before commercial development returns to a satisfactory level.
Senator Cotton:
LP

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

  1. 1 ) Mr Jackson’s full comment, delivered during a speech on 30 March 1976 at the opening of the Aetna Life Building, was:

The cutting back of construction programs in thc 1975-76 Budget compounded with the trimming of subsidies for welfare building, as anti-inflationary measures, can only have one effect on the national economy, unemployed resources.’

Thus the cutbacks referred to by Mr Jackson were those initiated by the previous Labor Government in the 1975-76 Budget.

  1. ) Over recent years the contribution of the public sector to total expenditure in the building and construction industry has grown significantly above its long-term average. This has certainly provided work for the industry but it has also produced many undesirable consequences. The growth added to, if not caused, the inflationary strains in the industry: the increased expenditure also added to thc budget deficit which because of its impact on money supply fueled inflation. Inflation has reduced the incentive for private development and our policies are designed to correct that situation and to encourage a recovery in the private sector.
  2. 3 ) Mr Jackson stated that:

It could be 1979-80, perhaps, before commercial development returns to a fairly satisfactory level’. However, he attributed this situation, not to cutbacks in the present Government’s expenditure but to the following more fundamental causes:

Population isn’t growing, secondary industry isn’t expanding; overseas companies aren’t setting up here in their previous number; the tourists aren’t coming; employment has reached previously unsought of levels; investment in other fixed assets is unsatisfactory; inflation is rampant; all in all the only optimistic sector is retailing and even they are rationalising in face of rising costs. ‘

He was, in effect, summarising the situation inherited by this Government.

The Government is fully aware of the problems faced by the building and construction industry in Australia. The matter is receiving the fullest consideration and the Government is in close contact with the industry.

Livestock and Marketing (Question No. 494)

Senator Colston:

asked the Minster representing the Minister for Primary Industry, upon notice:

  1. Has the Graziers’ Association of the Riverina requested the Australian Government to institute an enquiry into livestock and marketing aimed at examining labour relations, shipping rates, rural income stabilisation and access to overseas markets: if so, when was the submission received.
  2. Has a decision been taken on the Association’s request; if so, what was that decision.
  3. Have Departmental or other enquiries taken place on any of these matters in the last five years; if so, when?
Senator Cotton:
LP

– The Minister for Primary Industry has provided the following answer to the honourable senator’s question: (1)I have received no such request.

  1. ) See reply to (1).
  2. The Government is continuously reviewing all matters relating to the cattle industry. Several reports on specific matters have been received, which include:

Industries Assistance Commission Report ‘Beef (September 1975)

IAC Report ‘ Brucellosis and Tuberculosis’ (April 1975)

IAC Report’Rural Income Fluctuations’ (June 1975)

IAC Interim Report ‘ Financing Promotion of Rural Products’(December 1975)

I.A.C. Report’Report Reconstruction ‘(January 1976)

I.A.C. Draft Report ‘Financing Rural Research’ (April 1976)

Stabilisation of Meat Prices ‘a report from the Joint Committee on Price, Parliament of Australia (September 1973)

Rural Policy in Australia ‘report to the Prime Minister by a Working Group ( May 1 974)

Regular reports of the Bureau of Agricultural Economics

Report from the Select Committee of the Legislative Assembly upon the Meat Industry’ New South Wales Government 1972)

Enquiry into the Economics of Marketing of Livestock and Meat in Victoria’, by L. E. Cozens of the Department of Agriculture, Victoria, at the request of the Victorian Cabinet (May 1973)

Meat Production, Processing, Marketing, Abattoir Facilities and Fees, Desirability of a Government Supervisory Authority’, report of a Select Committee of the House of Assembly, Tasmania (November 1974)

Meat Industry Enquiry in Western Australia’, a report by the Meat Industry Advisory Committee to the Government of Western Australia (February 1975 )

Tourist Liner Galileo (Question 510)

Senator Colston:

asked the Minister representing the Minster for Transport, upon notice:

  1. 1 ) Did a violent attack occur on passengers on the Lloyd Triestino Company’s tourist liner Galileo by members of the ship’s crew; if so were there any Australians involved; if so. has the Australian Government taken steps to ensure their safety.
  2. Will the Minister consider refusing entry into Australian waters of the Galileo until a full enquiry into any such incident has been satisfactorily completed.
Senator Carrick:
LP

– The Minister for Transport has provided the following answer to the honourable senator’s question:

  1. Based on advice received from the Australian Embassies in Mexico City and Rome there is no evidence to support newspaper reports that passengers on the Galileo were attacked by members of the crew or that any Australians were involved in the reported incident. The advice from overseas indicates that as result of the Galileo changing course to answer a distress signal from a British ship which had onboard a sick sailor the Galileo arrived in Acapulco 1 3 hours late. As the vessel had booked its passage through the Panama Canal for a certain time and date the Captain decided to reduce the scheduled period of stay at Acapulco from 20 hours to 4 hours, to which some passengers protested. The Captain had explained to passengers that failure to arrive at the Canal on schedule could result in a wait of several days, perhaps weeks, for the transit of the Canal. Five passengers are understood to have left the ship at this stage none of whom was travelling on an Australian passport. At the time of disembarkation the Captain assembled the crew on deck as a precaution. The Company, Lloyd Triestino, has rejected unequivocally any assertions that passengers were manhandled or mistreated.

No request for assistance or protection was received from an Australian citizen by either the British Consul, Acapulco or the Australian Embassy, Mexico City as a result of the incident.

  1. As both Italy and Australia are parties to the Convention and Statute on the International Regime of Maritime Ports the Minister for Transport cannot consider refusing entry of the Galileo into Australian waters.

Japanese Beef Import Embargo (Question No. 522)

Senator Colston:

asked the Minister representing the Minister for Overseas Trade, upon notice:

  1. Did the Queensland Minister for Primary Industries claim that the lifting of the Japanese beef import embargo in June 1975 was a direct result of work carried out by a mission to Japan led by the Queensland Minister of Primary Industries in March 1975.
  2. What part did the Australian Government play in having the embargo lifted.
Senator Cotton:
LP

– The Minister for Overseas Trade has provided the following information in answer to the honourable senator’s question:

  1. 1 ) Since I do not have the text of the statement made by the Queensland Minister for Primary Industries to which the honourable senator refers, I am not in a position to comment.
  2. The Australian Government made representations to the Japanese Government concerning the beef embargo, both bilaterally and through multilateral consultations under the auspices of the GATT.

Immigration: Skilled Workers (Question No. 525)

Senator Colston:

asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice:

Did a recent meeting of Federal and State Ministers discuss a proposal that the Australian Government should actively seek skilled workers from Great Britain, Holland and Germany; what action has been taken as a result of these discussions.

Senator Guilfoyle:
LP

– The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable senator’s questions:

At the Conference of Commonwealth and State Ministers for Immigration held in Sydney on 12 April 1976 the approach to immigration in the years ahead was discussed. It was agreed that there would be a continuing need to recruit skilled workers overseas especially in those occupational areas where demands could not be satisfied within Australia. It was accepted that shortages of skilled workers in fact inhibited employment opportunities to the extent that semiskilled and unskilled workers could be employed in some areas only if skilled workers were available. The Conference discussed, in general terms, the recruitment of skilled workers and saw merit in concentrating on those areas where they are likely to be available. They included Britain, the Federal Republic of Germany and the Netherlands, an important consideration being that skill qualifications gained in those countries are readily acceptable in Australia.

The program for 1976-77 has since been announced and steps are being taken to promote recruitment of the skilled workers needed to fill bottlenecks in the workforce.

National Wetlands Survey (Question No. 530)

Senator Mulvihill:

asked the Minister for Environment, Housing and Community Development, upon notice:

Has the Minister received a report containing a survey of Australian wetlands; if so, what steps does he intend taking with regard to its recommendations.

Senator Carrick:
LP

– The Acting Minister for Environment, Housing and Community Development has provided the following answer to the honourable senator’s question:

Under the National Environment Investigations and Surveys program the CSIRO was engaged to conduct a feasibility study for a national wetlands survey. The report of this study has been received and was discussed at the meeting of the Standing Committee of the Council of Nature Conservation Ministers on 7 May 1976.

Members of the Standing Committee should by now have advised their respective Ministers on the study.

Further work on the wetlands survey will then depend upon consideration by the members of the Council of Nature Conservation Ministers and the availability of funds next financial year.

Regional Employment Development Scheme (Question No. 554)

Senator Rae:

asked the Minister representing the Minister for Employment and Industrial Relations, upon notice:

When can Senator Rae expect an answer to Senate Question No. 299 concerning the legality of abolishing the Regional Employment Development Scheme.

Senator Carrick:
LP

– The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator’s question:

The answer to Question No. 299 appeared in Hansard on 25 May 1 976 (pages 1 9 1 2 and 1 9 1 3 ).

Immigration: South Africans and Rhodesians (Question No. 560)

Senator McLaren:

asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice:

  1. 1 ) How many South Africans and how many Rhodesians have emigrated to Australia in the past five years.
  2. Is it correct, as reported, that most Rhodesians do not carry Rhodesian passports; if so, are a fair proportion of South African immigrants Rhodesians; if so, does thc Government make a distinction in its figures.
Senator Guilfoyle:
LP

– The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable senator’s question:

  1. 1 ) and (2) I am uncertain of precisely which reports the honourable senator has in mind in part (2) of his question. The UN Security Council resolution of 29 May 1 968 requires that countries do not recognise Rhodesian passports Tor travel purposes. The requirements of that resolution include:

Decides that all States members of the United Nations shall:

  1. Prevent the entry into their territories, save on exceptional humanitarian grounds, of any person travelling on a Southern Rhodesian passport, regardless of ils date of issue, or on a purported passport issued by or on behalf of the illegal regime in Southern Rhodesia: and
  2. Take all possible measures to prevent the entry into their territories of persons whom they have reason to believe to be ordinarily resident in Southern Rhodesia and whom they have reason to believe to have furthered or encouraged or to be likely to further or encourage, the unlawful actions of thc illegal regime in Southern Rhodesia, or any activities which are calculated to evade any measure decided upon in this resolution or resolution 232 (1966) of 16 December 1966.’

Prior to I January 1974 statistics did not refer separately to the arrival of citizens of Southern Rhodesia. They had until then been combined with citizens of Malawi and Zambia.

Since that date arrivals of citizens of Southern Rhodesia have been maintained separately and the following tables show arrivals for the past five years:

Imported Cheeses (Question No. 565)

Senator McLaren:

asked the Minister representing the Minister for Health, upon notice:

  1. 1 ) Which Australian experts were directly involved in the decision to impose a quarantine ban on imported cheeses.
  2. Why did the Minister refer only to research in the United States of America when initially announcing the quarantine ban.
  3. Do Australian experts see some danger associated with another disease in cheese, salmonella; if so, is there any research into this matter, and what action is the Governent intending to take.
Senator Guilfoyle:
LP

– The Minister for Health provided the following answer to the honourable senator’s question:

  1. 1 ) The following Australian experts, outside the Department of Health, were involved in the formulation of recommendations leading to the decision to introduce a quarantine withholding period for certain imported cheeses-

The Chief Veterinary Officers in each State

Dr A. K. Lascelles, Chief, Division of Animal Health,

CSIRO

Dr W. Snowdon, Officer in Charge, Australian National

Animal Health Laboratory

Mr R. W. Gee, Director, Bureau of Animal Health.

  1. The research at the Plum Island Animal Disease Centre, United States Department of Agriculture established that, contrary to previously held views, the virus of foot and mouth disease could survive in cheese. The announcement of a quarantine withholding period for cheese imported from foot and mouth risk countries was based on expert consideration of these research findings.
  2. Australian experts do not regard cheese as being associated with a significant risk of salmonella in man. The main sources of human infection with this organism are meats and meat products, including poultry.

My Department with the assistance of the CSIRO has recently completed a survey of the association of cheese with organisms causing food poisoning in man both in Australia and overseas. This has confirmed the view referred to in the preceding paragraph.

Nevertheless, the situation is being kept under scrutiny. The results of spot checks for salmonella, and other organisms are studied as part of this surveillance.

Foreign Aid (Question No. 566)

Senator McLaren:

asked the Minister representing the Treasurer, upon notice:

  1. 1 ) What is the reaction overseas to recent cuts of about $21 min foreign aid.
  2. Did the Treasurer give reasons to the countries concerned for the cuts; if so, what were they.
  3. Did the Treasurer indicate to those countries what the expectations are in the future for aid.
Senator Cotton:
LP

– The Treasurer has provided the following answer to the honourable senator’s question:

  1. 1 presume that it would be well understood overseas that when a Government, faced with the budgetary situation which confronted the present Government on taking office, has to cut expenditures, no areas can be immune; accordingly, I have had no reaction from overseas to the Government’s decision to reduce expenditure on aid in 1975-76 below ther Budget estimate for that year. I should also mention that before the decision was taken, consultations took place with various multilateral institutions which advised that temporary deferments of Australian contributions, as proposed, would not cause them any inconvenience.
  2. No. Administration of the bilateral aid program is not carried out in terms of the disbursement of specific amounts of aid in particular financial years but in the basis of the implementation of programs involving projects, training awards, etc. agreed with the recipient countries. The reductions proposed in bilateral aid were relatively minor and could be absorbed without any significant adverse effect on individual country programs.
  3. . No. The Government has, however, made public statements of its intentions regarding future aid to Papua New Guinea and Indonesia, and of our prospective contributions to a number of international funds.

Shipping: Meat Exports (Question No. 588)

Senator Colston:

asked the Minister representing the Minister for Primary Industry, upon notice:

  1. 1 ) Does the Department of Primary Industry accept as accurate the claim by the Australian Meat Exporters Federal Council, as reported in Queensland Country Life dated 29 April 1 976, that the Australian Meat Board is responsible for current shortages of shipping space for Australian meat exports.
  2. To what extent can the Minister direct the Australian Meat Board in its activities.
  3. Will the Minister consider directing the Board to immediately draw up an acceptable plan to control beef shipments to the United States of America after November 1 976, as suggested by the Australian Meat Exporters Federal Council.
Senator Cotton:
LP

– The Minister for Primary Industry has provided the following answer to the honourable senator’s question:

  1. 1 ) No. In order to regulate the flow of Australian meat exports to the U.S.A. to ensure that all regions of Australia have access to the market, including Queensland, the Australian Meat Board has been limiting the amount of meat that can be shipped in each quarter of the year. If this was not done, Australia’s U.S. quota would be filled early in the year, thus preventing northern meatworks from participating in this higher priced market.

The Board has arranged shipping space to cover the permissible total of exports in the current quarter (March-May). Any alleged shortages would be caused by exporters endeavouring to ship quantities in excess of the Board’s limits.

  1. The powers of the Minister for Primary Industry in relation to the Australian Meat Board are specified in the Meat Industry Act 1964-1973.
  2. The Board has appointed a special committee to draw up recommendations on the type of scheme that should operate to regulate the exports of Australian beef after November 1976, In their deliberations committee members will be considering submissions from all sectors of the industry, including the Australian Meat Exporters Federal Council.

International Tin Council (Question No. S91)

Senator Colston:

asked the Minister representing the Minister for Overseas Trade, upon notice:

  1. Is the future of the International Tin Council being threatened by the possible withdrawal of Bolivia because of its disapproval of the new price limits set by the Council.
  2. Would the stability of Australian tin producers be adversely affected by the withdrawal of Bolivia from the Council; if so, what action has the Australian Government taken to persuade Bolivia to sign the recent International Tin Council Agreement.
Senator Cotton:
LP

– The Minister for Overseas Trade has provided the following answer to the honourable senator’s question:

  1. 1 ) Immediately prior to the expiry date for signature of the Fifth International Tin Agreement, the Bolivian Government announced that it would not participate in the Agreement because it was dissatisfied with a number of elements relating to the terms of the new Agreement. The Agreement cannot come into force without Bolivian participation.

Following discussions with a delegation led by the Chairman of .he International Tin Council, the Bolivian Government announced that while ratification of the Agreement would be conditional on the satisfactory negotiation of a number of issues of concern to it, including the price levels set by the Council, it would sign the Agreement. It did so on 30 April.

The Government is hopeful that the outstanding issues can be resolved by consultation and that Bolivia will ratify the Agreement.

  1. Past International Tin Agreements have brought very real benefits to both tin producing and consuming countries. They have helped to moderate price fluctuations thereby providing a degree of market stability which is in marked contrast to the situation of other non-ferrous metals. The Australian industry has fully supported Australian participation in past Agreements and similarly supported participation in the new Agreement which was signed by Australia on 28 April. Immediately I was advised of the Bolivian Government’s intentions, I cabled the Bolivian Minister of Mines and Metals urging reconsideration of the decision in the interests of both tin producing and consuming countries. The Malaysian and Indonesian Governments made similar representations. I believe that these representations together with those of the International Tin Council delegation had an important bearing on the Bolivian Government ‘s decision to sign the new Agreement.

National Health and Medical Research Council (Question No. 593)

Senator Colston:

asked the Minister representing the Minister for Health, upon notice:

  1. 1 ) What is the function of the National Health and Medical Research Council.
  2. Did the Council provide a grant to enable the appointment of Dr C. J. Bain to study ambulance and casualty services in Australia; if so, when was Dr Bain appointed, and what was the total grant provided by the Council for this purpose.
  3. If the answer to (2) is in the affirmative, has Dr Bain presented any report; if so, (a) did the report contain a recommendation that a National Ambulance Council be sei up and financed by contributions from the Australian Government and the various State Governments, (b) is the Department of Health studying any such proposal, and (c) when would the Department expect to complete its consideration.
Senator Guilfoyle:
LP

– The Minister for Health has provided the following answer to the honourable senator’s question:

  1. The functions of the National Health and Medical Research Council are:

    1. to inquire into, advise and make recommendations to Australia and the States on matters of public health legislation and administration and on any other matters relating to health, medical and dental care and medical research;
    2. b ) to advise the Minister on the application, and matters connected with the application, of the Medical Research Endowment Fund for the purpose of the Medical Research Endowment Act 1937;
    3. to advise and make recommendations to Australia on the expenditure of money on medical research and in connection with projects of medical research generally; and
    4. to inquire into and advise Australia and the States on the merits of reputed cures or methods of treatment that are from time to time brought forward for recognition.
  2. The Council awarded a grant of $12,000 for 1973 and $16,484 for 1974 to Dr K. 5. Jamieson, Department i>r Neurosurgery, Royal Brisbane Hospital for a ‘National Survey of Australian Ambulance Services’ and a ‘National Survey of Casualty Department Operations’, which were undertaken on behalf of the Australian Medical Association’s Road Trauma Committee.

Dr C. Bain was employed by Dr Jamieson under this grant as a Senior Research Officer. In 1974 Dr Bain was awarded a NH and MRC Clinical Science Fellowship in Epidemiology and is currently studying in the U.S.A.

No report has been received to date. I understand it was about to be distributed at the time of Dr Jamieson ‘s untimely death in December 1975.

Defence: Services Strengths (Question No. 402)

Senator Rae:

asked the Minister representing the Minister for Defence, upon notice:

  1. 1 ) What do Australia’s Defence Authorities regard as the present optimum number of servicemen and women necessary for the (a) Navy, (b) Army and (c) Royal Australian Air Force.
  2. What numbers of servicemen and women are presently engaged in the (a) Navy, (b) Army and (c) Royal Australian Air Force.
  3. What areas in the Defence Force are most urgently in need of recruits.
  4. What number of positions are presently available in those areas.
Senator Withers:
LP

– The Minister for Defence has provided the following answer to the honourable senator’s question:

  1. Resource requirements for the Australian Defence Force are determined by the Government under the Five Year Rolling Program process. Government determinations relating to Service manning and other requirements will be available later in the year when a White Paper is tabled.
  2. 2 ) At the end of March 1 976 the total strength of the Permanent Defence Force was:
  1. and (4) Between March and June 1976 a total of 2,965 recruits are required in the following categories for each of the Services:

Airports: Local Ownership Scheme (Question No. 338)

Senator Missen:

asked the Minister representing the Minister for Transport, upon notice:

  1. 1 ) Will the Minister report on the progress of the local ownership scheme for Australian airports.
  2. Is this scheme being used to save the Federal Government money at the expense of local communities.
  3. How many public aerodromes have been closed in the last five years and why were they closed.
  4. What public aerodromes are expected to close in the next 12 months and why are they expected to close.
Senator Carrick:
LP

– The Minister for Transport has provided the following answer to the honourable senator’s question:

  1. The Aerodrome Local Ownership Plan was introduced in 1958 when it was realised that Commonwealth resources, in terms of funds and personnel, could not cope with the demand for aerodromes which under earlier Government policy would have been provided and operated by the Government. The Plan has been accepted by subsequent Commonwealth Governments. Its main aim is that aerodromes serving a local rather than a national need should be owned and operated by the communities they serve, with technical and financial assistance being provided by the Government. The Plan has allowed available Government funds to be spread more widely throughout Australia and the present network of aerodromes is due, to a large extent, to the success of the Local Ownership Plan.

There are 195 licensed aerodromes owned by local government authorities which are receiving grants towards approved development and maintenance works. These comprise 126 aerodromes developed by the local authorities concerned, with assistance from the Government, and 69 ex Government aerodromes transferred to local ownership.

There are a further 191 licensed aerodromes owned by private interests and available for public use, and of this number those which have a regular air service are eligible for maintenance grants.

Of the 88 civil aerodromes currently owned by the Government there are 55 which are regarded as serving local needs, and which are therefore available for transfer by mutual agreement to the appropriate local government authorities. Of these Goodiwindi in Queensland and Benalla and Echuca in Victoria are in the final stages of transfer negotiations and in other cases negotiations are proceeding.

The 23 aerodromes which it is currently intended to retain as a Government responsibility are those at the capital cities, and other special cases such as the airline training aerodrome at Avalon and Forrest in Western Australia.

It is also proposed that the civil areas at a further 10 aerodromes being used jointly by civil and military aircraft will become available for transfer when planning on them is finalised.

  1. Funds for aviation in Australia are necessarily limited and it is the objective that the maximum benefits be achieved throughout Australia from that expenditure.

The aerodrome Local Ownership Plan enables the funds available for the development and maintenance of those aerodromes serving local needs to be allocated to a much wider range of works than would be the case if the whole of the costs were borne by the Commonwealth Government.

Under the Plan, the Government continues to provide and maintain at full cost specialist aviation facilities such as navigational aids, communications and fire services, and share equally with the owners of the aerodromes the costs associated with other facilities such as runways, aprons, buildings and roads.

Since the inception of the Plan in 1958 some SI4m has been provided in Government grants for the development and maintenance of locally owned aerodromes.

Most aspects of providing and maintaining a community aerodrome are within the capabilities of Local Government authorities. They can run these aerodromes more economically than the Government and their share of the costs generally does not impose an undue burden on the community. All revenues derived from aerodromes through leases of buildings and sites, building concessions and landing charges are retained in full by the aerodrome owners to offset their share of the costs.

There remains the anomaly of those Government aerodromes which could be operating under the terms of the Local Ownership Plan. We will continue to seek the cooperation of the local authorities involved to accept ownership of their aerodromes to allow a greater equity in the distribution of Commonwealth aviation funds.

  1. In the past five years, 4 Government aerodromes have been closed, in addition 37 licensed aerodromes have been delicensed.

The Government aerodromes closed are:

Camooweal in Queensland- closed because the limited traffic using it did not justify the expense of maintaining it. Its proximity to Ml. Isa and the seating of the Barkly Highway caused a reduction in air traffic at Camooweal.

Turkey Creek and Yalgoo in Western Australia have been reduced in status to Authorised Landing Areas which are adequate for the limited traffic using them.

Katherine (Northern Territory) became redundant when civil operations were transferred to the nearby military aerodrome at Tindal.

The 37 licensed aerodromes were closed by their owners who allowed the licences to lapse, and presumably did so because the cost of maintaining the aerodromes to licensing standard was found to be not justified by the traffic using them.

  1. The only Government aerodrome currently intended for closure in the next twelve months is Bond Springs in the Northern Territory. This was originally intended as a light aircraft alternate aerodrome for Alice Springs but it has not been used as such for years. The lease of the site has been transferred by the Department of Northern Territory to the Alice Springs Gliding Club which is now the main user of the aerodrome. Other aerial activity is very limited.

It is also probable that some small licensed aerodromes will be closed by their owners but the actual number of licensed aerodromes in Australia has remained fairly static for several years, with new aerodromes being licensed as others are delicensed.

Brisbane Airport: Aircraft Movements (Question No. 253)

Senator Colston:

asked the Minister representing the Minister for Transport, upon notice:

  1. 1 ) How many ( a ) aircraft movements and ( b ) jet aircraft movements have there been in and out of Brisbane Airport in each year since 1970.
  2. Have any recent surveys or estimates been made on the likely (a) number of and (b) increase in jet aircraft movements into and out of Brisbane Airport during the next ten years, if so, what do they reveal.
Senator Carrick:
LP

– The Minister for Transport has provided the following answer to the honourable senator’s question:

  1. Statistics for total jet aircraft movements and total aircraft movements into and out of Brisbane Airport since 1970 are as follows-
  2. The most recent assessments of future trends at Brisbane indicate that a growth averaging around 3 per cent per year in jet aircraft traffic can be expected over the next tcn years. Growth over the last five years has tapered off from 1 2 per cent in 1971 to a little over 5 per cent in 1975. During this period turbo prop aircraft on services to Queensland coastal cities were replaced with jet aircraft. The projected increase over the next ten years takes account of the increase in the size of aircraft, particularly on major domestic routes, and the probable development of some direct services from Sydney to other Queensland centres by-passing Brisbane. Overall, the number of jet aircraft movements at Brisbane in 1 985 is projected at about 43 000.

Qantas Airways Ltd: Hotel Ownership (Question No. 581)

Senator Colston:

asked the Minister representing the Minister for Transport, upon notice:

  1. 1 ) Has Qantas Airways Ltd taken an option on the hotel being built as part of the new Collins Place complex in Melbourne; if so, when does Qantas expect the hotel to be completed, and when must a final decision be made on whether to exercise the option.
  2. ) If the answer to ( 1 ) is in the affirmative; what is the anticipated cost of purchase of the hotel.
  3. Does Qantas currently own or operate any hotels in Australia or overseas.
Senator Carrick:
LP

– The Minister for Transport has provided the following answer to the honourable senator’s question:

  1. In December, 1975, Qantas Wentworth Holdings Ltd on behalf of Qantas Airways Ltd signed a Management Agreement with the AMP Society for a hotel being erected at Collins Place, Melbourne. The hotel is not expected to bc completed before the middle of 1980.
  2. The estimated cost of the hotel section of the total Collins Place complex is expected to exceed $40 million.
  3. The Wentworth Hotel in Sydney is the only hotel owned by Qantas. Qantas also hold a management contract interest in Fiji Resorts Ltd.

Department of Transport: Expenditure (Question No. 201)

Senator Wriedt:

asked the Minister representing the Minister for Transport, upon notice:

  1. What was the expenditure by the Department of Transport for the financial years 1973-74, 1974-75 and what is the anticipated expenditure for 1975-76 in each of thc States and Territories.
Senator Carrick:
LP

– The Minister for Transport has provided the following answer to the honourable senator’s question:

  1. 1 ) As stated by the Prime Minister in answer to Question No. 1 92 departmental expenditure is recorded under functional headings as set out in the Appropriation Acts and these are readily available on a total basis. Dissection of the expenditure between States and Territories is difficult and a great deal of effort is required to extract meaningful figures. In view of the heavy workload in the Finance area in connection with the 1976-77 Budget I cannot afford to divert the resources necessary to provide an accurate answer at this time.

Soviet Shipping (Question No. 526)

Senator Colston:

asked the Minister for Transport, upon notice:

  1. 1 ) Has the Minister received any representations requesting him to prevent ships of the Union of Soviet Socialist Republics entering the Australia-Japan shipping trade, if so, from whom have submissions been received.
  2. What action has the Minister taken as a result of any such representation.
Senator Carrick:
LP

– The Minister for Transport has provided the following answer to the honourable senator’s question:

  1. 1 have received representations from several shipping lines in regard to Russian shipping.
  2. In the interests of Australian exporters and importers any action to restrict competition in overseas liner shipping must be given careful consideration. I have arranged to be kept closely informed of the development of state owned shipping services operating in the liner trades serving Australia and will keep this matter under review.

Defence Service Homes (Question No. 596)

Senator Archer:

asked the Minister representing the Acting Minister for Environment, Housing and Community Development, upon notice:

Of the applications received under the Defence Service Homes Act, or similar legislation, in the past five years how many applications were in each of the following categories: (a) World War I, (b) World War II, (c) Korea, (d) Vietnam, and (e) Permanent Services- ‘Not War Zone’.

Senator Carrick:
LP

– The Acting Minister for Environment, Housing and Community Development has provided the following answer to the honourable senator’s question:

  1. 2221- This figure includes applications based on service in Malaya.
  2. 18 578.
  3. 9026-The Defence Services Homes Act was amended in May 1973 to provide assistance to full-time serving members of the Forces and certain national servicemen. This figure represents applications arising from that amendment.

Defence Service Homes (Question No. 597)

Senator Archer:

asked the Minister representing the Acting Minister for Environment, Housing and Community Development, upon notice:

  1. How many applications for Defence Forces Homes Loans over the previous five years have been subject to second mortgages.
  2. For each year, what is the average amount of second mortgage finance obtained.
  3. For each year, what is the average rate of interest on second mortgage finance obtained.
Senator Carrick:
LP

– The Acting Minister for Environment, Housing and Community Development has provided the following answer to the honourable senator’s question:

  1. In the five years ending 31 March 1976 there were 41 612 applications settled, 8534 of which were subject to a second mortgage.
  2. and (3) Particulars of secondary borrowing have not been recorded on a basis which would enable details of the average amount borrowed and the average rate of interest to be provided.

Defence Service Homes (Question No. 598)

Senator Archer:

asked the Minister representing the Acting Minister for Environment, Housing and Community Development, upon notice:

Of the applications received under the Defence Service Homes Act or similar legislation in the past five years how many applications were in each of the following categories, (a) totally and permanently incapacitated, (b) Service, and (c) other.

Senator Carrick:
LP

– The Acting Minister for Environment, Housing and Community Development has provided the following answer to the honourable senator’s question:

It is not possible to provide an answer to this question as particulars of applicants are not recorded on the basis requested by the honourable senator.

Concorde Aircraft (Question No. 589)

Senator Colston:

asked the Minister for Environment, Housing and Community Development, upon notice:

Did the Minister meet with the Minister for Transport on 27 April 1976, to discuss whether a public inquiry should be held into Concorde flights to Australia; if so, what was the result of these discussions.

Senator Carrick:
LP

– The Acting Minister for Environment, Housing and Community Development has provided the following answer to the honourable senator’s question:

I am advised that Senator Greenwood did meet with the Minister for Transport on 27 April 1976 for discussions on a number of matters of mutual interest. The question of u public inquiry into Concorde was touched on but deferred for further discussions at a later date.

Mail from Rhodesia (Question No. 600)

Senator Colston:

asked the Minister representing the Minister for Post and Telecommunications, upon notice:

  1. 1 ) Is the Minister aware of claims made in the Melbourne Age of 3 May 1976 by a Melbourne man, Mr Ron Gordon, that letters from Rhodesia to Australia are being opened and that pro-Rhodesian literature is put in them; if so, has the Minister, or his Department, undertaken an investigation into this matter to ascertain whether any literature was placed in the letter sent to Mr Gordon in Australia or elsewhere.
  2. If the material was not placed in the letter within Australia, will the Minister refer the case, and any other similar cases brought to his attention, to the Minister for Foreign Affairs, so that appropriate action to stop this invasion of privacy may be taken.
Senator Carrick:
LP

– The Minister for Post and Telecommunications has provided the following answer to the honourable senator’s question:

  1. 1 ) Yes. An examination was commenced immediately of each air and surface mail receipt from Rhodesia to check whether mail is being interfered with before receipt in Australia. No evidence of interference has been found so far but the checks are continuing. Although it is most unlikely that pro-Rhodesian literature would be inserted in letters from Rhodesia during postal handling within Australia, supervisory staff within Australia Post have been alerted to watch for any interference of this nature.
  2. If evidence is found to confirm that mail from Rhodesia is being interfered with before arrival in Australia, the matter will be taken up with the Rhodesian postal administration through the appropriate channels.

Arrests in the Northern Territory (Question No. 610)

Senator Missen:

asked the Minister representing the Minister for the Northern Territory, upon notice:

  1. 1 ) Is the Government concerned at the great discrepancy between the ratio of arrests to proceedings by way of summons in the Northern Territory of 5 to 1 referred to in the Interim Report of the Law Reform Commission on Criminal Investigation, which also revealed that in comparison to figures for the Territory, the proportion of arrests to summonses was 1 to 2 for the Commonwealth Police Force, 1 to 4 in the Australian Capital Territory and 1 to 3 in South Australia with figures for arrests in the Norther Territory, per head of population, running approximately 7V4 times greater than State and other Territory figures; if so, is the Government taking steps to (a) ascertain the reasons and/or (b) taking action to remedy the excessive incidence of arrests in the Northern Territory.
  2. Do the Government’s investigations agree with recent American research which indicated that the expense to the Government of proceeding by way of arrest costs approximately five times that of the cost of proceeding by summons.
Senator Webster:
NCP/NP

– The Minister for the Northern Territory has provided the following answer to the honourable senator’s question:

  1. 1 ) The greater discrepancy between the ratio of arrests to summons in the Northern Territory is attributable to two factors.

First, there are particular reasons why the figures quoted by the Law Reform Commission for arrests in the Territory appear high: where more than on charge is laid against a person each charge is counted as an arrest and it is often necessary io arrest persons who, it is believed, could not be summoned at a later date because they have no fixed address. This latter action enables the police to institute proceedings so that the alleged offender will appear in court shortly after his arrest.

Second, a considerable number of summons matters do not proceed to the courts. No figures have been kept for thc period in question ( 1973-74) but, generally, summons action is halted when it is learned that the person concerned has departed the Territory and his forwarding address is unknown.

  1. The American research findings cannot be reconciled with the procedure in the Northern Territory.

Algeria: Ben Bella (Question No. 612)

Senator Mulvihill:

asked the Minister representing the Minister for Foreign Affairs, upon notice:

Is the former leader and liberator of Algeria, Ben Bella, still imprisoned. If not, where is he?

Senator Withers:
LP

– The Minister for Foreign Affairs has provided the following answer to the honourable senator’s question:

  1. I note the honourable senator’s continuing interest in this question and refer him to answers given in the House of Representatives on 10 March 1966, and in the Senate on 25 March 1969, 14 October 1970, 30 October 1972 and 1 1 December 1973.
  2. Inquiries made by the Department of Foreign Affairs in response to the honourable senator’s question indicate that there has been no change in the situation of the former Algerian President, Ahmed Ben Bella. He is believed still to be under confinement and is taking no part in public life.

Governor-General: Security (Question No. 646)

Senator Primmer:

asked the Minister for Administrative Services, upon notice:

Can the Minister supply details of the cost of security incurred at each official function attended by the GovernorGeneral, Sir John Kerr, from 1 July 1975 to 1 April 1976.

Senator Withers:
LP

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

To supply an accurate costing of the security provided for the Governor-General at each official function he has attended since 1 July 1975 to 1 April 1976 would entail extensive and costly inquiries by State authorities and Commonwealth departments.

The security arrangements for the Governor-General arc not accounted for separately by the organisations responsible for this function. To extract this information would bc an expensive and time-consuming task which I am not prepared to authorise.

Strike at Garden Island Dockyard (Question No. 648)

Senator Sibraa:

asked the Minister representing the Minister for Defence, upon notice:

  1. 1 ) What stage have the negotiations reached between the Department of Defence and striking unionists at the Sydney Carden Island Naval Dockyard.
  2. Will the Minister give an undertaking that his Department will seek a speedy end to this prolonged dispute, which has caused hardship to other unionists who have been stood down through no fault of their own.
Senator Withers:
LP

– The Minister for Defence has provided the following answer to the honourable senator’s question:

  1. and (2) Following a series of conferences, the striking unionists returned to work on 25 May 1976.

There will be further discussions and conferences involving the Union, the ACTU and senior Departmental officers to find a method of recruitment and deployment of painters and dockers at Garden Island Dockyard which will be accepted as a permanent solution to the problems which caused the strike.

Aid to Indonesia (Question No. 652)

Senator Button:

asked the Minister representing the Minister for Defence, upon notice:

Have (a) the four Nomad aircraft and (b) the six small patrol boats, referred to in the Minister’s reply to Senate Question No. 220, already been delivered to Indonesia.

Senator Withers:
LP

– The Minister for Defence has provided the following answer to the honourable senator’s question:

  1. Yes.
  2. The six small patrol boats are currently under construction. None has yet been delivered.

Pharmaceutical Benefits Scheme (Question No. 663)

Senator Colston:

asked the Minister representing the Minister for Health, upon notice:

  1. 1 ) What is the progress of the Departmental review of the Pharmaceutical Benefits Scheme announced by the Minister for Health on 25 February 1 976.
  2. Will the Department of Health, in making this review, be consulting with the Australian Medical Association, the Pharmacy Guild of Australia, and the Australian Pharmaceutical Manufacturers’ Association to obtain their sub.misions to such a major review.
  3. If no consultation is undertaken, will the Minister take steps to ensure a discussion paper is prepared by the Department of Health and comments sought from representative organistions who participated in the Pharmaceutical Benefits Scheme, including consumer groups.
  4. Does the Minister intend to make public the finding of the Departmental review.
  5. When does the Minister expect the review to be completed.
Senator Guilfoyle:
LP

– The Minister for Health has provided the following answer to the honourable senator’s question:

  1. to (4) My Department has prepared a discussion paper for the review of the Pharmaceutical Benefits Scheme. I am currently examining the paper and having discussions with the senior Departmental officers on this subject. When this examination has been completed, I will be in a position to decide which further consultations should be sought or what other action may be desirable.
  2. I am unable to indicate at this stage when the review might be completed.

Influenza Vaccine (Question No. 665)

Senator Sir Magnus Cormack:
VICTORIA

asked the Minister representing the Minister for Health, upon notice:

  1. 1 ) Is the Minister aware of the apparently Australia-wide shortage of 1976 Influenza Vaccine.
  2. Does the Minister realise that the people who are currently most affected by this shortage are young children, old people, and people suffering from heart and respiratory conditions.
  3. What action has the Government been taking to rectify this desperate situation.
  4. Is the Department of Health aware of an expected influenza epidemic in North America caused by another new mutation.
Senator Guilfoyle:
LP

– The Minister for Health has provided the following answer to the honourable senator’s question:

  1. Yes.
  2. and (3) There are current delays in filling orders because of the artificially high demand for the vaccine by the public following media stories on overseas influenza epidemics earlier this year.

As a result of these media stories average healthy adults are requesting influenza vaccination even though their need for protection is, on medical grounds, of a lower order of priority than the groups mentioned by the honourable senator. This had led to a scarcity of supplies to these groups.

The Commonwealth Serum Laboratories, who manufacture the vaccine, are working at maximum effort on vaccine production and it is estimated that 1 289 000 doses will have been distributed by the end of May 1976.

Distribution of the majority of the vaccine is made direct to wholesalers in accordance with established industry and professional practice; the Commonwealth Serum Laboratories has absolutely no control over the distribution of the vaccine to pharmacies once the stocks are despatched to these wholesalers.

  1. The Department of Health is watching the A/Swine influenza position overseas very closely and there is no indication that the virus will reach Australia this winter.

Paracetamol (Question No. 667)

Senator Walsh:

asked the Minister representing the Minister for Health, upon notice:

  1. Is it accepted that the drug Paracetamol can cause irreparable liver damage; if so, do the tablets freely sold as Panadol and Paradene contain Paracetamol.
  2. Are there any restrictions on the sale and use of Paracetamol; if not, what restrictions on the sale and use of Paracetamol are envisaged.
Senator Guilfoyle:
LP

– The Minister for Health has provided the following answer to the honourable senator’s question:

  1. 1 ) Yes, if taken in overdoses or continually abused. The tablets sold as Panadol and Panadeine do contain paracetamol.
  2. There are no restrictions on the sale or use of paracetamol at the present time. This matter has been under examination by the Public Health Advisory Committee of the National Health and Medical Research Council and a recommendation will be forwarded shortly for consideration by that Council.

Vietnamese Refugees (Question No. 684)

Senator Knight:
ACT

asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice:

  1. Is it a fact that of 61 Vietnamese refugees who came from Thailand to Australia in March this year, only three were related to Vietnamese people already living in Australia.
  2. Does this indicate that family reunion was not a major consideration in deciding which Vietnamese refugees were permitted to come to Australia.
  3. Is the Government planning to bring to Australia further Vietnamese refugees, for example from Thailand; if so, will special emphasis be given to family reunion.
  4. What other major criteria will be applied in assessing such applications for entry to Australia.
Senator Guilfoyle:
LP

– The Minister for Immigration and Ethnic Affairs has provided the following reply to the honourable senator’s questions:

  1. 1 ) Yes. They were the only Vietnamese with close family relationship with Australian residents who could be contacted by the Australian Immigration Selection Team in Thailand. The group of 568 Indo-China refugees from Thailand who arrived in Australia included 28 Cambodians and 1 10 Laotians who have close family relationships with Australian residents. Although the immigration selection team had lists of all Vietnamese close relatives in Thailand who had been sponsored for entry by Australian residents and more assiduous efforts to locate all of them, it was able to make contact with only the three Vietnamese refugees who were approved. People included in those lists may, of course, have resettled elsewhere before the selection team reached Thailand.
  2. In fact priority was given to the entry of close relatives, with preference being given to those who were spouses, children, parents, fiancees and fiances, and brothers and sisters of Australian residents, including students.

I am informed that all persons in those categories who had been nominated by Australian residents and who were contacted were approved and are now in Australia.

  1. and (4) There is no present intention to undertake a refugee program in Thailand similar to the one mounted earlier this year. 1 can assure the honourable senator, however, that the position is being kept under continuing examination in consultation with the United Nations High Commissioner for Refugees. I emphasise that any Indo-Chinese refugees in Thailand or elsewhere who qualify for entry under the normal migration criteria are approved for entry to

Australia. This means that any refugees who are the spouses, dependent children or parents of Austraiian residents would be approved as migrants provided they met the normal health and character requirements for migrants. Parents of working age would, in addition, have to satisfy minimum requirements of economic viability through employment in Australia. As is the case with all applications and nominations for migration, humanitarian or compassionate circumstances are given full consideration in deciding whether migrant entry is approved.

Subsidised Health Benefits (Question No. 697)

Senator Colston:

asked the Minister representing the Minister for Health, upon notice:

Has the Minister been requested by the Australian Medical Association to amend regulations which require medical practitioners to endorse prescriptions for Subsidised Health Benefits Plan recipients with their Subsidised Health Benefits number; if so, what action has so far been taken on this request.

Senator Guilfoyle:
LP

– The Minister for Health has provided the following answer to the honourable senator’s question:

The Subsidised Health Benefits Plan in respect of the supply of pharmaceutical benefits was abolished as from I March 1976.

Emergency Fire Services

Senator Carrick:
LP

– On 18 March 1976 Senator Messner asked the Minister representing the Minister for Post and Telecommunications the following question, without notice:

Is the Minister aware of the huge increases in telephone costs of as much as 600 per cent to emergency fire service units in non-metropolitan South Australia. In the light of the significant sacrifices in time and substance made by volunteers staffing these units, will the Minister request his colleague to investigate the matter with a view to reinstating the previous concessional charges.

The Minister for Post and Telecommunications has provided the following answer to the honourable senator’s question:

For many years prior to 1 September 1975, concessions were granted to public Fire Brigades and Bush Fire Fighting organisations throughout the Commonwealth by reduced rental charges for both telephone exchange line services and associated equipment, as well as for fire alarm lines. The cost of the concessions was a recognition of the part played by thc organisations in the protection of all Australian Government buildings.

When developing its financial budget for 1975-76. Telecom Australia decided to continue the concession on fire alarm lines in recognition of the protection afforded to its properties. The Commission considered, however, that it should not continue to be its responsibility to compensate Fire Brigades for the costs of protecting other Commonwealth properties.

The protection of Commonwealth property is thc responsibility of the Minister for Administrative Services who advises that the matter of compensating fire brigades for the protection of Commonwealth property is now under review.

Consumer Price Index for Darwin

Senator Cotton:
LP

-On 24 March 1976 Senator Robertson asked me a question without notice concerning the exclusion of Darwin from the computations of a consumer price index for capital cities.

The Treasurer has provided the following answer to the honourable senator’s question:

The Australian Statistician has advised that he proposes to make a start shortly on the development of a consumer price index for Darwin. However, progress will depend on the resources that can be allocated for the task.

Prices of a range of food items are already being collected each month from representative retailers in Darwin. With some extension of the list of items currently priced it should be possible, by early in 1977, to commence publication of monthly index numbers for the total food group of the CPI and for its component sub-groups, as is done for other capital cities.

The development of a full CPI for Darwin, on the other hand, would involve the establishment of a wide range of price collections in fields of consumer expenditure other than food including, for example, clothing, household supplies and equipment, housing, fares, motoring, health services, recreational goods and services. For each item of expenditure it would be necessary to select and define appropriate specifications’ to be priced on a regular basis. As many as 800 such specifications may ultimately be required for the full index.

Another aspect is the determination of a suitable weighting (consumption) pattern as a basis for combining the prices of the selected items into a single index. Various sources would have to be used, including results of the 1974-75 Household Expenditure Survey which will start to become available shortly. Some months of work would be necessary to develop a weighting pattern specifically for Darwin.

Additional staff and funds would be required if the task were to be completed in reasonable time. Even on this basis it would be the second half of 1977 before there would be any possibility of publishing a full CPI for Darwin. At this stage it is not possible to predict whether such additional staff and funds will be available in the coming year so as to meet that timetable.

Postal Services

Senator Carrick:
LP

-On 29 April 1976, Senator Tehan asked me the following question, without notice:

In view of the Minister’s recent statement that the number of letters sent by post has fallen since the introduction of the 1 8c postage rate and because many commercial institutions, including banks, are now using alternative means of communications, will the Minister arrange for a public inquiry to be held into all aspects of postal services before any further increase in postal charges becomes effective.

The Minister for Post and Telecommunications has provided the following answer to the honourable senator’s question:

A major public inquiry into all aspects of postal services was made by the Australia Post Office (APO) Commission of Inquiry under the Chairmanship of Sir James Vernon. The Commission commenced its inquiries in February 1973 and reported in April 1974.

It received submissions from many individuals and community groups and heard evidence in public. It inspected postal services in the United Kingdom, Sweden, the United States and Canada.

Enactment of the Postal Services Act 1975 and establishment of the Australian Postal Commission followed as a consequence of the Vernon Commission’s recommendations. The Act, in Section 76, provides that the Commission shall pursue, as far as practicable, a policy directed towards securing in each year, revenue sufficient to meet all expenditures chargeable to revenue and to provide not less than fifty per cent of its capital expenditure. The Act requires also that the Commission obtain the approval of the Minister for its determinations of standard postage rates and of tariff for registered publications. Other tariffs are determined by the Postal Commission as provided for in the Act.

The fall in postal traffic is well within the limits predicted by the Postal Commission which confidently expects to meet its financial objective this year. No purpose is seen in holding a public inquiry before any increases in tariffs are determined. The accounts of the Commission are subject to audit and comment by the Auditor-General and its operations and finances are subject to scrutiny in several other ways including consideration by the Senate Estimates Committee.

Immigration (Question No. 674)

Senator Mulvihill:

asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice:

Will the Minister provide an updated schedule of migrant entries for the first nine months of the financial year ending 30 June 1976, based on the format used by the former Minister for Labor and Immigration, Mr Cameron, in response to Question No. 524 contained on pages 4108-9 of House of Representatives’ Hansard of 26 November 1974.

Senator Guilfoyle:
LP

– The Minister for Immigration and Ethnic Affairs has provided the following reply to the honourable senator’s question:

Official statistics of arrival in Australia prepared by the Australian Bureau of Statistics are not yet available for the period requested. A manual count in the Department of Immigration and Ethnic Affairs of passenger cards lodged by persons at time of arrival indicates that some 39 803 migrants arrived in the first nine months of the financial year which ends on 30 June 1976. Countries of their last permanent residence or selection are shown in the following table:

Cite as: Australia, Senate, Debates, 1 June 1976, viewed 22 October 2017, <http://historichansard.net/senate/1976/19760601_senate_30_s68/>.