Senate
17 February 1977

30th Parliament · 1st Session



The PRESIDENT (Senator the Hon. Condor Laucke) took the chair at 11 a.m., and read prayers.

page 119

PETITIONS

Australian Roads

Senator DAVIDSON:
SOUTH AUSTRALIA

-I present the following petition from 62 citizens of South Australia:

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

Australia’s extensive road system is a national asset wasting because of inadequate Federal and State funding.

Commonwealth Government funding of roads has fallen over the last six years from 2.9 per cent of all Commonwealth outlays to 2.3 per cent.

Your petitioners therefore humbly pray that the Senate in Parliament assembled, should ensure:

That the Commonwealth Government’s long-term policy should be to provide 50 per cent of all funding for Australia ‘s roads.

That at a minimum the Commonwealth Government adopts the recommendations by the Australian Council of Local Government Associations for the allocation of $5,903 million of Commonwealth, State and Local Government funds to roads over the five years ending 1980-81, of which the Commonwealth share would be 41 per cent as recommended by the Bureau of Roads.

Petition received and read.

The Clerk:

– Petitions have been lodged for presentation as follows:

Australian Legal Aid Office

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 grave concern is expressed about the Government’s intention to dismantle the Australian Legal Aid Office which is providing efficient, readily available legal aid to all communities in Australia.

Your petitioners therefore humbly pray that the Government will undertake a full national inquiry as proposed in 1975 by the present Attorney-General, as a matter of urgency.

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

Petition received.

Australian Roads

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

  1. Australia’s extensive road system is a national asset wasting because of inadequate Federal and State funding.
  2. Commonwealth Government funding of roads has fallen over the last six years from 2.9 per cent of all Commonwealth outlays to 2.3 per cent.

Your petitioners therefore humbly pray that the Senate in Parliament assembled, should ensure:

That the Commonwealth Government’s long-term policy should be to provide 50 per cent of all funding for Australia’ s roads.

That at a minimum the Commonwealth Government adopts the recommendations by the Australian Council of Local Government Associations for the allocation of $5, 903m of Commonwealth, State and local government funds to roads over the five years ending 1980-81, of which the Commonwealth share would be 41 per cent as recommended by the Bureau of Roads.

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

Petition received.

Child Care

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 Government’s child care policy should be immediately clarified and announced to ensure continuity of programs and allow effective forward planning.

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

Petition received.

Pensions

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

That the delays between announcement of each quarterly movement in the Consumer Price Index and their application as a percentage increase in age and invalid pensions is excessive, unnecessary, discriminatory and a cause of economic distress to pensioners.

That proposals to amend the Consumer Price Index by eliminating particular items from the Index could adversely affect the value of future increases in age and invalid pensions and thus be a cause of additional economic hardship to pensioners.

The foregoing facts impel your petitioners to ask the Australian Government as a matter of urgency to-

  1. Require each quarterly percentage increase in the Consumer Price Index to be applied to age and invalid and similar pensions as from the pension pay day nearest following the date of announcement of the CPI movement.
  2. Give an open assurance to all aged and invalid pensioners that any revision of the items comprising the Consumer Price Index will in no way result in reductions in the value of any future entitlements to pensioners.

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

Petition received.

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QUESTION

QUESTIONS WITHOUT NOTICE

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QUESTION

REFERENDA PROPOSALS

Senator WRIEDT:
TASMANIA

– My question is directed to Senator Webster in his capacity as Leader of the National Country Party in the Senate. Is it a fact that Mr Bob Sparkes, the President of the National Party in Queensland, telephoned the Deputy Leader of the Country Party, Mr Sinclair, at about 9.30 last night? Is it a fact that Mr Sparkes, with the authority of the National Party Executive and the knowledge of the Acting Premier of Queensland, told Mr Sinclair that National Party members would be advised to vote against the referenda proposals? Is it also a fact that that information was conveyed to the Prime Minister later in the evening? I ask: Is this indicative of a last desperate throw by the National Country Party to preserve its traditional position of privilege under Australia’s electoral system?

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

– The answer to the first question is that I do not know. The answer to the second question is that I do not know. The answer to the third question is that the National Country Party in this Senate and in the Parliament of the Commonwealth has never been stronger in the history of Federation.

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QUESTION

DIESEL ENGINES

Senator COLLARD:
QUEENSLAND

– My question is directed to the Minister representing the Minister for Transport. Recognising the diesel engine’s efficiency, economy and ability to meet Australian Design Rule 27A without major modification or strangling as has happened with the petrol engine, the diesel engine’s improvement by overseas manufacturers so that it operates effectively over a greater range of revolutions per minute thus making it more suitable for cars-this engine is ideal for Australia’s long distances- and the apparent reluctance of Australian manufacturers to be as innovative as their overseas counterparts to develop and use a diesel engine in ordinary passenger vehicles, will the Government give consideration to allowing any diesel engine car or utility into Australia free of tariff or any other restrictions?

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

-I appreciate Senator Collard ‘s keen interest in this matter. I think he has some specialist knowledge of it. I appreciate also that in a country which nas a mounting energy concern in terms of the conservation of petroleum products there is a need to look towards more efficient engines in the long term. As I understand it there is technically a valid case for saying that in certain mechanical processes at least the diesel engine is a more efficient and more economical engine than the petrol engine. Equally it may be argued, although I have not the technical knowledge, that in terms of pollution the diesel engine will not add to pollution quite as much, although having driven behind some diesel engine vehicles at times I question that. I am always puzzled by references to ADR 27A and the like but have taken a note of the honourable senator’s question. My own understanding is that these design rules were made in the light of knowledge available at a time when the normal engine was the petrol engine and the abnormal engine was the diesel engine. The matter needs to be looked at and I have not available to me at the moment specialist knowledge. I will bring the matter to the attention of the Minister for Transport and ask him for a considered reply.

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QUESTION

PLUTONIUM

Senator KEEFFE:
QUEENSLAND

– My question is directed to the Minister representing the Minister for National Resources. I remind the Minister that on 4 November last year I placed a question on the Notice Paper seeking details of the amount of plutonium that had been brought into Australia. I do not propose to read the question now but I ask the Minister whether he has been able to find out anything about the importation of plutonium.

Senator WITHERS:
Minister for Administrative Services · WESTERN AUSTRALIA · LP

-I apologise to the honourable senator that the question has been outstanding for so long. I will do my best to expedite an answer to him.

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QUESTION

AUSTRALIAN TERRITORIES: ELECTORAL LAWS

Senator KNIGHT:
ACT

– I direct my question to the Minister representing the Attorney-General. Following a recent decision of the High Court can the Minister say what consideration has been given to action to ensure that the people of the Australian territories will bo accorded recognition as citizens of the Commonwealth in every respect? Can the Minister indicate whether this can be done by legislative action or is a constitutional amendment required?

Senator DURACK:
Minister for Veterans’ Affairs · WESTERN AUSTRALIA · LP

-Senator Knight’s question arises out of the recent decision of the High Court in the case known as Mackellar ‘s case which held that the people of the Commonwealth referred to in section 24 of the Constitution are people of the States and do not include people of the territories and that for the purpose of the nexus provision, territory senators and members are to be disregarded. An amendment to the Constitution would be required to change this position; it cannot be done direct by legislation being passed by this Parliament. However, this question was raised in discussion at the Hobart session of the Australian Constitutional Convention. It is the Attorney-General’s view that if there is to be a proposal for a constitutional amendment it would be desirable for the matter to be taken up formally at the Constitutional Convention, which is scheduled to meet again in Perth later this year.

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QUESTION

ELECTORAL REDISTRIBUTION

Senator GEORGES:
QUEENSLAND

-I direct a question to the Minister for Administrative Services. Since we are now very much concerned with electoral matters, does he recall that he gave an answer to a Question on these matters last year, saying that redistribution would take some 40 to 45 weeks after the appropriate legislation went through this chamber? Will he reaffirm that that is the program that he intends? Can he assure the Senate that the proposed legislation will provide for a tolerance of 10 per cent, not 20 per cent? Will he also assure the Senate and the people of Australia that this will not be a disadvantage to the electors in rural areas?

Senator WITHERS:
LP

-I hope to introduce at the appropriate time today the 3 Bills of which I gave notice yesterday, namely, Bills to amend the Commonwealth Electoral Act, the Representation Act and the Census and Statistics Act and to make the second reading speeches on them. Of course, most of the amendments flow out of the recent High Court decisions in the McKinlay and McKellar cases. I think I mentioned a period of 40 to 45 weeks. If I can get from my office before the end of question time the sort of timetable which my Department advises me electoral commissioners need I shall give that information. There are certain statutory periods involved in the timetable and there are certain administrative periods also. As I recall, once the commissioners bring down their initial maps there is a statutory period of some 30 days during which the information must be distributed around post offices and be open for criticism and comment.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– Thirty days?

Senator WITHERS:

– Yes. There are some statutory requirements, but there are also administrative problems.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– They estimate about 8 months all told, do they not?

Senator WITHERS:

-Forty to 45 weeks, depending on how things go. Of course, one must always remember that one has no capacity to direct electoral commissioners. They are independent people. I imagine that their task this time will be somewhat more difficult than in a normal redistribution. They will not be just redistributing within a State, as normally, shifting boundaries. In each of 3 States there will be at least one seat fewer- two fewer in New South Wales and one fewer in both Victoria and South Australiawith a distinct possibility of one more in Queensland by the time a determination is made. A redistribution in those circumstances is a totally different ball game from just, say, changing the boundaries for my own State among 10 seats. It is much easier to bring about a balance in the latter situation than when starting de novo and getting a greater or lesser number of seats.

I am informed by the Chief Australian Electoral Officer that should the legislation get through the Parliament in the present 2-week period the whole matter ought to be concluded by 28 October. I have just received from my office the timetable showing how it is suggested things would operate. In a minute I shall seek leave to incorporate it in Hansard. It is all based on the supposition that the legislation will be passed by Thursday, 24 February. In that event we could have the tabling of the report in the Parliament by about 28 October. From that honourable senators will see that, if the legislation is not passed in this 2-week period and if we push it back, we will be starting to look at bringing in legislation maybe in late November, but if the Parliament happened to rise earlier than that it would not be brought in until next February.

The Government is anxious to have the legislation passed at the earliest possible stage. In fairness to our colleagues in the other place, they ought to know their fate in regard to the size, shape or composition of their electorates before the Parliament rises for the summer recess. I hope that the whole matter will be finalised by that time. However, I just sound this note of warning: If the legislation is not passed within this 2-week period, we may not be able to meet that timetable before Christmas. I will seek leave at the end of my answer to have the timetable incorporated in Hansard.

I give an assurance that the 10 per cent tolerance will be maintained. There will be no departure from it. Honourable senators will see in clause 19 of the legislation to be introduced this afternoon that that will be the case. There will be a proviso. The criteria contained in clause 19 are such that some people might say an advantage will be given to non-metropolitan electorates. The proviso will be, to use my own words and not those contained in the Bill, that electorates exceeding 5000 square kilometres in size shall not contain more electors than electorates under 5000 square kilometres in size. That is not to say that the electoral commisioners have not the power to make the electorates exactly the same size. They may still do so. But even with that proviso regarding no electorate exceeding 5000 square kilometres having more electors than those under that area, the commissioners are still bound within the 10 per cent tolerance. Those honourable senators who are mathematically inclined will see that the percentage up or down between small electorates and large electorates will move upwards only by 2 per cent and downwards by 3 per cent from the quota. But the tolerance certainly has to be within the 10 per cent limit in all cases. I gather now that there is all party agreement on both sides of the Parliament on this matter.

Senator Georges:

– Is there all party agreement?

Senator WITHERS:
Senator Georges:

– Why is the Country Party meeting in Canberra today?

Senator WITHERS:

-I tell the honourable senator that I am bringing in legislation this afternoon which has total acceptance within the Government party room. He will see that all my colleagues will vote for my legislation in this place and in the other place. What I am saying is that I understand the Australian Labor Party has not changed its view. There is now total acceptance around the Parliament that the greatest variation from the quota ought to be 10 per cent. I think we all ought to be glad that that argument is behind us and that the constraints to be imposed on the 5000 square kilometre area above and below the quota are still within that 10 per cent tolerance. Mr President, I seek leave to have incorporated in Hansard for the information of honourable senators the document entitled: Timetable- Parliament meeting 15 February 1977.

The PRESIDENT:

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

The table read as follows-

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ATTACHMENT I

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TIME-TABLE- PARLIAMENT MEETING 15 FEBRUARY 1977

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QUESTION

AIR FREIGHT SERVICES

Senator WALTERS:
TASMANIA

-I direct the question to the Minister representing the Minister for Transport. Can the Minister give the Senate any information regarding the new air freight service which I believe will be operating soon between Tasmania and the mainland States?

Senator CARRICK:
LP

-I am not aware in any detail of any such matter. I will immediately contact my colleague, the Minister for Transport, seek the information and let the honourable senator know the answer.

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QUESTION

NORTH AUSTRALIAN RAILWAYS

Senator ROBERTSON:
NORTHERN TERRITORY

– I direct a question to the Minister representing the Minister for Transport. The Minister will recall that last year services on the North Australian Railways were suspended. At that time the Minister gave an assurance that the line and the facilities would be maintained and that services would resume as soon as they were justified. At the present time maintenance staff are being either transferred or declared redundant and workshop facilities are being made available to government departments. Does this mean that the Government feels that the reopening of the line will never be justified or is it a case of assurance being given but not honoured?

Senator CARRICK:
LP

– I will seek the information and let the honourable senator know the answer.

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QUESTION

ELCHO ISLAND SCHOOL

Senator KILGARIFF:
NORTHERN TERRITORY

-I direct a question to the Minister for Education. I refer to questions asked this week by Senator Keeffe and myself directed to the Minister in regard to Aboriginal educational facilities at Elcho Island. There appear to have been considerable confusion and lack of action over the matter and reference has been made to a 1 973 report and to other matters. Will the Minister clear up once and for all why this somewhat chaotic situation has arisen? What action to bring about a satisfactory conclusion can be expected?

Senator CARRICK:
LP

-It is true that both Senator Kilgariff and Senator Keeffe asked me for information concerning Elcho Island. If I may, I direct my answer through you, Mr President, to Senator Keeffe. My delay in responding to his request was purely a technical one. It was this: When I made the statement earlier that a report had made certain recommendations about Elcho Island, I was aware that the report had general public currency. Therefore I made that statement in good faith. The information is in fact accurate, and I shall sustain that statement. I found out later that it was an interdepartmental committee report of the previous Government. The previous Government had not tabled the report but had issued some hundreds of copies of it. It is something of a protocol of governments that the reports of IDC’s are not necessarily tabled. I hesitated before responding to say yes because I did not want to breach a principle of either the previous Government or my own Government. Specifically, that is our attitude to reports of IDC’s. Since I have established that some hundreds of copies of the report were made available to universities, to teacher bodies and to others, I am perfectly happy to table the report or to have the Leader of the Opposition and Senator Keeffe peruse it. It is entitled A Survey of Educational Buildings at Aboriginal Communities- SEB AC. The committee was set up by the previous Government. It made reports on a 5-year plan which included Elcho Island. It made reports in

I yearly stages. It is true that it confirms what I have said. It is merely a matter of principle as to whether the Opposition would like to peruse the report; it was its report. I shall make the report freely available if the Opposition wishes to peruse it. Perhaps the Leader of the Opposition and Senator Keeffe might discuss that matter. On the other hand, if they wish I shall table the report. It sets out a program. Let me make it perfectly clear that I am not seeking to make any political capital out of this matter. It exposes a situation in which a wide number of propositions were put, all of which were not fulfilled in substance in other places. I shall discuss that later. In regard to Elcho Island itself, I hope to make an even more specific statement within the course of the next 24 hours, as to the immediacy of programming to get the restoration and rebuilding done there.

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QUESTION

REVENUE SHARING ARRANGEMENTS

Senator WRIEDT:

-I direct my question to the Minister Assisting the Prime Minister in Federal Affairs. Is it true that the Government is reviewing the method of determining relativities between the States for purposes of adjusting revenue sharing arrangements? If so, can the Minister advise the Senate on what basis this is being done? Does it mean that any State which is experiencing a higher level of private investment than another State may be affected under any proposed new arrangements?

Senator CARRICK:
LP

– In the 3 discussions at Premiers Conferences last year- the transcripts of, I think, at least two of them are available- the basic principle of having a survey of relativities between the States under the new revenue sharing arrangements was not only established but also discussed. The principle was generally accepted. The aim was that the survey of relativities should be done not less frequently than every 5 years. It was thought that it would be done in the first instance within the next year or two. That principle was discussed and generally accepted. Initially the Commonwealth took the view that the Commonwealth Grants Commissiona highly experienced body and accepted by parliaments generally as such- ought to be the body involved. The States expressed alternative views. There have been some discussions between the States and the Commonwealth at official level and ministerial level. The question concerning the body itself has not been concluded. I should imagine it will be concluded within the next month or two. It certainly will be a major decision in principle for the States. I have no comment as to what the principles will be in terms of relativities. The principles in terms of relativities as established by the Grants Commission and as evolved over the years are well known to honourable senators and can be obtained by the simple perusal of the annual reports of the Grants Commission. I do not want to enter into any suggestion that new factors might be intruded as such. This is a matter for discussion with Premiers. As I say, there is a long history in this regard accepted by all sides of politics.

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QUESTION

ABORIGINAL STUDY GRANTS

Senator BONNER:
QUEENSLAND

– I am not quite sure whether my question should be directed to the Minister for Education or to the Minister representing the Minister for Aboriginal Affairs. I should be grateful for an answer from the appropriate Minister. Will the Minister inform me as to the extent of the reported drastic cutbacks in Aboriginal study grants and also as to the number of study grants which will be made available this year. I express once more my bitter disappointment at these cutbacks. I should be obliged if the Minister will give me some explanation as to the necessity for this measure.

Senator CARRICK:
LP

-Without the specific figures in front of me, let me say from my understanding at this moment that the concept of cutbacks is wrong, that is, that certain amounts of money have been made available for the 2 kinds of study grants. The first is that called ABSEGthe Aboriginal Secondary Educational Grantswhich happily will have provided for approximately 13 800 Aboriginal students in high schools this year, representing almost 10 per cent of the total Aboriginal population in Australia. This is one of a series of grants well accepted by both sides of this Parliament and one form of grants recently reported on by Professor Betty Watts. I should report to the Senate the fact that applications for these grants are on the increase, and substantially so, by some hundreds at least this year. The second form was referred to by the honourable senator by the use of the phrase study grants’. These apply to Aboriginals who are adult or of a more mature age and who are returning to study. What I am advised- and what I am looking at at this moment- is that there is an increased number of applications. That increased number of applications is causing pressure on the resources. This is the problem at which I am looking. I will let the honourable senator know the outcome of that study.

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QUESTION

SHIPPING

Senator MULVIHILL:
NEW SOUTH WALES

-I direct a question to Senator Carrick as Minister representing the Minister for Transport. By way of preface, I refer to a plea that I made to the Minister in January to discourage Liberian and Panamanian flag oil tankers on the Australian coast and to encourage, under the provisions of the Navigation Act, only double-bottomed tankers, as is the policy in the United States of America. As the Minister in response favoured regional action and in view of the fact that he has already had a conference on this matter with New Zealand, Papua New Guinea, Malaysia and Indonesia, how much further are we advanced in weeding out those flag tankers which are noted for their high proportion of maritime mishaps?

Senator CARRICK:
LP

– I have information on this matter. I was aware of Senator Mulvihill ‘s continued interest in it and, in any case, of the interest of the Australian people in the need for assuring the highest degree of safety in the carriage of oil throughout the world. Let me point out in respect of the reference made by Senator Mulvihill in the latter part of his question to the effect that there seems to be a higher percentage of accidents involving Liberian and Panamanian tankers that this is due to the fact that these are the flag carriers of a large and significant majority and the number of accidents involving them does not necessarily reflect a higher percentage involvement. My advice is that these vessels carry internationally accepted certificates as do tankers from other nations and that these certificates are checked by Australian authorities when vessels arrive in Australian ports. I will happily take the matter back to the Minister.

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QUESTION

QANTAS AIRWAYS LTD: WINES

Senator YOUNG:
SOUTH AUSTRALIA

– Is the Minister representing the Minister for Transport aware that Qantas Airways Ltd serves mainly French and otherwise overseas wines, not all Australian wines, on its overseas flights? As Qantas is an Australian international airline which is backed by the Australian Government and the country and which promotes itself as an Australian identity, will the Minister see what steps can be taken to have Qantas serve Australian wines and so assist in promoting the excellent products of this important Australian industry rather than some overseas products?

Senator CARRICK:
LP

– Recognising in your presence, Mr President, that I am surrounded by some who are expert in the quality of Australian wines and not wanting to enter into any argument or disputation as between the Hunter Valley and the Barossa Valley, I acknowledgewhether in vino Veritas or not in this regard- that Australian wines, happily are, by objective judgment, as good as any others in the world and some are superior to any others in the world. I happily acknowledge that it ought to be the responsibility of all concerned to promote Australian wines and that, having been brought to the attention of others, they need no further promotion in terms of quality. I am not aware whether Qantas asserts French or other wines ahead of Australian wines. It is a significant situation. Qantas is our flag carrier and a national symbol. I will bring the matter to its attention and see whether something can be done to promote greater interest in and to focus more attention upon what is one of our finer products.

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QUESTION

EMPLOYMENT AND UNEMPLOYMENT: TRAINING OF SKILLED WORKERS

Senator DEVITT:
TASMANIA

– I am not sure whether my question should be asked of the Minister for Education, the Minister for Social Security or the Minister representing the Minister for Employment and Industrial Relations. I will leave it to the appropriate Minister to reply. If we are not to perpetuate a system of mass unemployment for decades into the future, as is now evident in certain other countries around the world, because of a lack of skills, especially among a substantial proportion of young unemployed, is it not a matter of considerable urgency that we engage more actively in programs of training for those people to fit them for useful, productive and interesting jobs? In this age of advancing technology is it not a fact that there is little and diminishing hope of work for the unskilled and untrained people in the community? What efforts are currently being made to evaluate this situation and to assemble available resources in an attempt to get the matter into proper perspective so as to assist productivity and to head off a situation which, if it continues, could be extremely damaging to the national welfare and could lead to all sorts of undesirable social and economic consequences? If the Government believes that what I am saying is correct, is it satisfied that sufficient attention and effort are being given to understanding and correcting what I believe to be a most serious and urgent problem, having regard to both the present and certainly the long term social and economic consequences?

Senator CARRICK:
LP

-The nature and size of juvenile or youth unemployment in Australia is a matter of concern for us all. It is something that has emerged in the past 4 years or so. It is something unique in our history. I say that apolitically. It is something that has characteristics around the world at this moment. It is something that also throws up the fact that it is likely- certain in some cases- that the degree of vocational training that some or even all are getting is not relevant totally to the market place. That in itself has to be accepted clearly, as the honourable senator would know, in that at a time of massive unemployment- Senator Cavanagh would understand this fully- we have nevertheless a very great scarcity of craftsmen, particularly oncoming apprentices.

Senator Cavanagh:

– We have a lot of unemployment also.

Senator CARRICK:

– That is right. We have had that unemployment for two or three years, against a background of 2 decades of full em- ployment We ought to note those things if the honourable senator wants to do a little bit of jousting. The unemployment situation is a very serious matter. The Government, having inherited this problem and having taken it up, has set out a series of training programs. In the field of my colleague the Minister for Employment and Industrial Relations we have the National Employment and Training scheme and the recently announced Commonwealth Rebate Apprenticeship Full-time Training scheme. Under those schemes subsidies are given by way of tax rebates to employers who take on apprentices. We have a pre-apprenticeship training scheme and an apprenticeship training scheme. In conjunction with my colleague Mr Street I was privileged recently to announce a pilot scheme which I hope will be of growing significance. I hope we will all take some interest in it.

With due respect to the length of the answer, may I continue for a few seconds simply to say what we propose to do. We propose to take those unemployed young people who have been unemployed for 4 months or more and give them a very detailed vocational guidance screening in order to try to find out 2 things about them. We want to find out their potential aptitudes and the potential deficiencies in vocational training which militate against those aptitudes being marketable. Having done that and having got them into groups and identified their deficiencies, we intend to arrange with the States to set up, for the moment, about a dozen different centres in Australia where there will be relatively small but we hope effective pilot schemes which will provide some remedial vocational training. At the same time this will keep the spotlight on them so that they can be transferred into employment.

Senator Cavanagh:

– It would be better if you found them jobs.

Senator CARRICK:

-I willingly take up the interjection. The creation of the unemployment was largely if not totally due to 2 causes. The first was the 25 per cent across the board tariff cut which wrecked Australian industry and took 100 000 people out of Australian manufacturing industry as compared with the employment in the industry at the beginning of the Whitlam Government. After 3 years, of the Whitlam Government 100 000 people were lost to that industry. That is a proud record indeed for those who are now snivelling and pretending to be sympathetic. Record unemployment almost destroyed the Australian manufacturing industry. In that time that Government did nothing to recognise juvenile unemployment.

I conclude by saying that in terms of the survey by the Organisation for Economic Co-operation and Development and in terms of the working party set up by the Australian Education Council this Government is now focusing major attention upon the problems of juveniles. This is not a matter for internal political warfare. It is a matter of great human concern to the Australian people. The matter should be diagnosed so that we recognise the factors involved. It involves social, family and community factors as well as economic factors and we are looking into them. We believe that what we are doing is useful and if there are other initiatives open we will take them.

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QUESTION

NATIONAL RURAL BANK

Senator TEHAN:
VICTORIA · NCP

-I direct my question to Senator Cotton in his dual capacity of representative of the Minister for Primary Industry and the Treasurer. My question relates to the Government’s announced decision in its election policy to establish a national rural bank. Whilst appreciating the complex matters which require consideration before practical steps can be taken to set up such an institution, I ask the Minister whether he can give some indication of progress made with the necessary preliminary investigation. Can he also give some indication of when the bank is likely to be established?

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

-As I have said before, the Treasurer and the Minister for Primary Industry have been having discussions about this matter and have been looking into the general ambit of what might be done. I can give the honourable senator, if he would like to have them, the full details provided by the Commonwealth Bank about this matter. I had a talk with bank officials last week about it and they presented a very solid range of proposals. I imagine that other people have also done so but I talked particularly to the Commonwealth Bank about it. I will let the honourable senator have a copy of the submission that the bank gave me. I will give a copy to anybody else who would like to have it.

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QUESTION

BROADCASTING STANDARDS AND PROCEDURES

Senator BUTTON:
VICTORIA

-I direct my question to Senator Carrick as the Minister representing the Minister for Post and Telecommunications. I ask the Minister Which body, if any, is responsible for broadcasting standards and procedures as at 16 February 1977 in each of the 3 sectors of broadcasting?

Senator CARRICK:
LP

– I have an answer which I could communicate. I think it is correct. I believe I responded late last year to precisely that kind of question, but lest there has been any change I shall take the question to my colleague the Minister for Post and Telecommunications and get an answer for the honourable senator.

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QUESTION

SECURITIES AND EXCHANGE

Senator LEWIS:
VICTORIA

– My question is directed to the Minister representing the Minister for Business and Consumer Affairs. It has been reported that a company named Cambridge Credit Corporation Ltd incurred a loss of some $70m for the year to 30 June 1974. It was also reported that the group originally announced a profit of $3.1m on 16 September 1974 and then went into receivership on 30 September of that year. That loss has broken the previous record loss of some $40m which was made by Reid Murray Acceptance in 1962-63. There are other companies such as Minsec to which we could refer. In most cases this is, of course, a loss to the small people because the big people manage to get out.

The PRESIDENT:

- Senator, do not debate the matter or give too much information. Ask your question.

Senator LEWIS:

– Yes. I shall read the first 4 lines from the report of the Senate Select Committee on Securities and Exchange of 1974. They state:

The main finding of this Committee is that the regulation of the securities markets, of the intermediaries which operate in these markets, and of some of the activities of public companies and investment funds, is in need of fundamental reform.

I ask: When will the Government introduce that fundamental reform?

Senator DURACK:
LP

-I can well recall that last year Senator Georges asked me a similar question to which I gave a very lengthy reply. In fact, I think there was some protest about the length of the reply. However, this is a subject in which the Senate and in particular many of my colleagues, including myself, have a very close personal interest because of our experience on the Senate Select Committee on Securities and Exchange to which Senator Lewis has referred. The Minister for Business and Consumer Affairs whom I represent has been in consultation and negotiation with State governments regarding a co-operative arrangement with the States whereby there would be established a national body which would have some regulation over the securities industry and the conduct of corporations which act on the national market. We all know the extremely difficult and complicated constitutional position which arises in this regard. I am sure Senator Lewis will understand that as well.

Senator Georges:

– Go it alone.

Senator DURACK:

– It is not the Government’s wish or intention to go it alone, in the sense in which Senator Georges is speaking. We believe that, with the constitutional position as it is, the matter can be properly resolved only by joint legislation between the Commonwealth and the States. The Minister whom I represent is pursuing those discussions. I understand that he is shortly to have another discussion with the State Ministers on the matter. Although I know that honourable senators and many other people may well become impatient about these matters -Senator Georges certainly seems to be in that state at the moment- it is the Government’s view that it is far better to bring forward a scheme which has constitutional force and effect than to bring forward some half-baked effort like that which the previous Government, of which Senator Georges was a supporter, brought in and which Senator Georges and others who served on the Select Committee know would very likely have been shot down in pieces in the High Court.

page 127

QUESTION

REVENUE SHARING ARRANGEMENTS

Senator WALSH:
WESTERN AUSTRALIA

-My question is directed to Senator Carrick, if he has regained his wind, in his capacity as Minister assisting the Prime Minister in Federal Affairs. The question flows from that asked earlier by Senator Wriedt and concerns a report in the Sydney Morning Herald of 13 January that under the proposed relativities review Western Australia would lose $12m to $14m. I ask: Can the Minister give an assurance that Western Australia’s relative share will not be reduced, as the Sydney Morning Herald reported?

Senator CARRICK:
LP

– What I can do is give an assurance that with the continuing good administration of the Court Government and with the federalism policies, the welfare and general revenue available in the public and private sectors to the people of Western Australia will continue to burgeon. I want to establish the true election nature of Senator Walsh’s question. I think that in the old parlance you would say Come in spinner’. I have played the game and I know the rules and I will not come in.

The simple situation is that over the years all sides of Parliament have accepted that the qualities put forward objectively by the Commonwealth Grants Commission should be studied objectively and accepted, and the rules abided by. Western Australia, with the other less populous States, has benefited in terms of relativities when compared with the big States, and we all accept its need so to do. My own Government, in bringing in its federalism policies, which Sir Charles Court has acknowledged in recent days to be praiseworthy in terms of revenue sharing funds, has said that it understands and will respect the traditional relativities of the less populous States, and that will be done.

Senator WALSH:

– I wish to ask a supplementary question. My question was quite simple. Does Senator Carrick give an assurance that the relative share will not be reduced? Will he give that assurance or will he not?

Senator CARRICK:

-I have said that in the first place the matter is one for the Premiers Conference. I have pointed out -

Senator Georges:

– He will not give the assurance.

Senator CARRICK:

-I take it that the Opposition does not believe there ought to be an opportunity at a Premiers Conference for the 6 Premiers and the Prime Minister to discuss matters of Federal- State relationships and to reach conclusions as to the nature of the body which administers the relativities and the terms of reference applicable to those relativities. I take it that what the Opposition is saying is that that should not occur and that the Commonwealth should impose its own overriding and unilateral view. The answer is that we are not in business to do a Whitlam’ on the States. After all, what Senator Walsh knows and what he is hiding from now is that under Whitlam and under the reimbursement grants of the Whitlam formula the States would have got $89m less this year and the Western Australian Government therefore would have got considerably less. It is only because of the revenue sharing and the new federalism policies that all the States have been able to balance their budgets and to make tax cuts. For the first time in the past 4 years they have been able to achieve stable State government. We will continue with that policy. We will continue with those principles.

page 127

QUESTION

HOUSING COMMISSION RENTS: WESTERN AUSTRALIA

Senator THOMAS:
WESTERN AUSTRALIA · LP

– I direct my question to the Minister representing the Minister for

Environment, Housing and Community Development. Mr Burke of the Western Australia Labor Party has suggested that housing commission rents will rise by 125 per cent when the present Commonwealth and State Housing Agreement is re-negotiated. This has created quite a bit of consternation in Western Australia. Will the Minister comment on the validity of that suggestion?

Senator CARRICK:
LP

-I predict that after next Saturday this epidemic of false and misleading comments will subside. I suggest that the report of the Henderson Commission of Inquiry into Poverty, an inquiry instituted by this Government and implemented by this Government but ignored by the Whitlam Government, should be compulsory reading for both sides of the Parliament and for the Western Australian people. The Henderson report said very simply that of the 183 000 people, give or take a few, who were receiving the benefits of this welfare housing only 5 1 000 were truly poor and that a racket was involved. In making available $375m this year for welfare housing my Government has invited the Premiers to come around the table and suggest when renewing the agreement for future years from June 1 978 how we can better use the money to make sure that people in most need get the most benefit; how we can subsidise the truly needy and not the house. That is the really important thing. Some people who are talking about this are in effect advocating the continuation of the subsidising of rackets. Under the foreshadowed voucher system and a humanitarian approach the truly needy will be subsidised, there will not be a racket in housing, there will not be a capital gain of enormous proportions, the taxpayers’ money will be used properly and the people in Western Australia, as with people in other States, will benefit considerably. There will be a great improvement on the Whitlam Government’s performance.

page 128

QUESTION

DEFENCE SERVICE HOMES: REPATRIATION HOSPITALS

Senator BISHOP:
SOUTH AUSTRALIA

– My question is directed to the Minister for Veterans’ Affairs and concerns the general question of repatriation benefits and the benefits accruing to repatriation beneficiaries and servicemen under the defence service homes plan. The Minister will be aware that in recent times 2 proposals have been considered by the Government. I speak about the increasing interest rates for occupants of defence service homes and the recent report to the Government suggesting that there should be rationalisation of

State and repatriation hospitals. Both these matters have received the strong criticism of Mr Keys, the National Secretary of the Returned Services League. Are these 2 proposals still under consideration by the Government or have they been rejected? In the event that they are under consideration at present, will the Minister take into consideration the long-standing promise of all governments, including the Labor Government, that repatriation benefits to exservicemen and to serving personnel would not be reduced?

Senator DURACK:
LP

-Senator Bishop has raised 2 quite different matters, one dealing with interest rates on defence service homes which I will deal with quickly. I was asked a question by the honourable senator and I think by Senator Keeffe at the end of last year on this subject and I said then, as I say again now, that the Government has no plans to increase interest rates on defence service homes. I have said that on other occasions in the intervening period and I do not see why there should be any continued speculation on the matter. The other question Senator Bishop asked dealt with the future of repatriation hospitals and he used the phrase ‘rationalisation of State and repatriation hospitals’. Any use of the expression ‘rationalisation of State and repatriation hospitals’ implies that there may be a handing over of repatriation hospitals to the States. I have seen some Press reports in relation to this matter and gather that they arise out of speculation over some report that has been made to the Government. That report was made to the Prime Minister and whether and when the Prime Minister tables it is a matter for him. I do not want to say any more about it. However, the Government has made no plans and I have no proposals or any intention of making any pro.posals to hand over repatriation hospitals to the States. There are very sensible arrangements in some States between the repatriation hospital and the State hospital system and there is some co-operation between them. In my own State there is a useful arrangement between the Hollywood Hospital and the Sir Charles Gairdner Hospital. Apart from the development of that sort of co-operation there are certainly no plans or any consideration in my mind in respect of handing repatriation hospitals over to the States.

page 128

QUESTION

PRICE DISCRIMINATION

Senator MISSEN:
VICTORIA

– My question is addressed to the Minister representing the Minister for Business and Consumer Affairs. I refer to the proposed amendment to the Trade Practices Act by the deletion of section 49 which prohibits price discrimination. Is the Minister aware of claims, particularly from small business organisations, that deletion of this section may seriously disadvantage milk bars and other small businesses in favour of the large supermarket chains, due to quantity discounts received by the supermarkets? Is it proposed to consider strengthening, rather than abolishing, the section or otherwise alleviating this further problem facing small businesses?

Senator DURACK:
LP

– I have not any specific advice from the Minister whom I represent on the matter raised by Senator Missen. However, the Bill to which he refers has been lying on the table in another place since the end of the last sessional period and I understand that it is likely to be debated this week or next week. I am not quite sure what the program is. Certainly there has been the widest opportunity for all those interested in the matter to put their views to the Minister. I should be very surprised if the interests to which Senator Missen referred in regard to price discrimination have not already taken the opportunity to put their views to the Minister. However, I shall pass on Senator Missen ‘s concern as well. No doubt I shall be in a better position to answer the question specifically when the Bill comes into the Senate or when the debate is pursued further in the House of Representatives.

page 129

QUESTION

WOOL MARKETING PLAN

Senator GIETZELT:
NEW SOUTH WALES

– I ask the Minister representing the Minister for Primary Industry: Is it a fact that the Chairman of the Australian Wool Corporation met the Minister for Primary Industry yesterday afternoon and that the Government was requested to agree to the Corporation ‘s 1973 wool marketing plan? Is it a fact that the Minister indicated to the Chairman of the AWC that the Australian Government would not agree to implement the plan? Is the Minister able to indicate the reasons for the Government’s rejection of this important plan which has the support of many of the producer organisations?

Senator COTTON:
LP

-I do not know whether Mr Sinclair met with Mr Maiden. If they met, I do not know what they talked about, I do not know the time they might or might not have met and I do not know what the response to requests either way has been. I have no way of knowing without talking to Mr Sinclair, and I shall do that and let the honourable senator know.

page 129

QUESTION

AUSTRALIAN BROADCASTING COMMISSION REPORT ON ELECTORAL MATTERS

Senator CHANEY:
WESTERN AUSTRALIA

– I ask the Minister for Administrative Services whether he heard Mr Begg’s report on the Australian Broadcasting Commission news at 7 o’clock last night that Mr Begg was told that a proposal for amendment of the Commonwealth Electoral Act was greeted in the party room of the Liberal and National Country Parties with a barrage of foot stomping? Can the Minister advise the Senate whether this is so? I must say that if it is so the stomping must have been very soft, or I was asleep. If I was asleep, perhaps the Minister can tell me what else was going on at the time.

Senator WITHERS:
LP

-I did not hear what Mr Begg said at 7 o’clock last night, but I have seen what purports to be a transcript of what he said. As honourable senators opposite will understand and certainly as those behind me know, I would never be greeted in that way by my colleagues no matter what I said. What Mr Begg said on the ABC last night was not true. As I know Mr Begg, and I know him as an honourable man, I cannot conceive that he would have invented that story. I just say to Mr Begg that his informant is not only a despicable person for breaching the confidence of the party room but also a liar, and he has my permission and consent to tell his informant that.

page 129

QUESTION

ABORIGINAL HEALTH SERVICES

Senator MELZER:
VICTORIA

– I direct a question to the Minister representing the Minister for Aboriginal Affairs. The Minister would be aware that last year the Department of Aboriginal Affairs funded a special health project for Aborigines in Victoria through that State’s Department of Health. Funding was made available during March 1976. Can the Minister advise what was the total amount made available and what expenditure it was to cover? Is it true that although 14 Aboriginal people were employed as aides at that time there has been 12 months later no program drawn up for these aides and they have no work to do? Who chose the aides and what qualifications do they have? Has the Department of Aboriginal Affairs been assured that the Aboriginal health services in particular and the Aboriginal people in general will be consulted on the program? Is it true that the amount involved covered the salaries for 14 aides at a salary of $8,000 per annum plus travelling expenses plus $2,798 for departmental expenses while the Aboriginal health services received only $2,589 to cover both medical and dental services for 12 months? Why was the State Health Department funded for this work rather than the Aboriginal health services?

Senator GUILFOYLE:
Minister for Social Security · VICTORIA · LP

– The question raises many matters, several of them serious so far as Aboriginal services are concerned. I have no information about the detail requested but I will refer the question to the Minister for Aboriginal Affairs and obtain an answer as soon as possible.

page 130

QUESTION

AIR FREIGHT SERVICES

Senator WALTERS:

-I direct a question to the Minister representing the Minister for Transport which follows upon my earlier question to him. I believe that the Minister now has the answer to that question and I am wondering whether he could give it.

Senator CARRICK:
LP

-I presume that Senator Walters is referring to her question in regard to possible alterations to air freight services to Tasmania. To make myself clear, I state that I learnt that the Minister for Transport in another place had provided the information and I now convey it to the Senate. I understand that my colleague has said that he has looked at the air services to Tasmania, particularly the freight services to Tasmania, and has concluded that some innovation is desired. This week he approved the import of 2 Corvair aircraft for Air Express and 2 Argosy aircraft for IPEC to commence freight carriage between Melbourne on the mainland and Tasmania. He believes that this innovation involving improved aircraft will assist markedly the capacity of Tasmanian industries to sell their goods on the mainland, and likewise it will improve the capacity of mainland industries to deliver their goods to Tasmania. Should the Minister have other detail on the matter I will obtain it and make it available to honourable senators.

page 130

QUESTION

ADDITIONAL ANSWERS TO QUESTIONS

The PRESIDENT:

-In the event of information coming forward in regard to questions asked during question time, that information should be given at the end of question time.

page 130

QUESTION

COMMONWEALTH EMPLOYMENT SERVICE

Senator GRIMES:
NEW SOUTH WALES

– I direct a question to the Minister for Social Security. Is it a fact that in the last few weeks some 3 1 officers of her Department from the employment benefits office in Victoria have resigned? Have there been similar resignations at this level in other States? Can she give us the reasons for the resignation of such a large number of officers from one department at the one time?

Senator GUILFOYLE:
LP

– I have not had reported to me any matter of 3 1 officers of the unemployment benefits section of the Department in Victoria having resigned. I will seek information with regard to the matters that have been raised. None of these matters has been drawn to my attention nor have any similar resignations in other States been drawn to my attention.

page 130

QUESTION

NURSING COURSE

Senator COLEMAN:
WESTERN AUSTRALIA

– I direct a question to the Minister for Education. It is necessary for me to give a brief background to the matter. The Western Australian Tertiary Education Commission agreed to accredit the undergraduate course in nursing at bachelor degree level and in December last year the Australia Council on Awards in Advanced Education accepted for registration a Bachelor of Applied Science (nursing course). I have been informed that now the Commission on Advanced Education is not prepared to fund the course at degree level. Is this so? What are the reasons for that decision having been made? Is it intended to introduce funding at a later date?

Senator CARRICK:
LP

– The whole question of the future of nursing training, whether at degree, diploma or intramural level in hospitals is at the moment under wide discussion. I am not aware of the technical position applying to Western Australia. Therefore, I will take note of the honourable senator’s question ‘and seek the information for her.

page 130

QUESTION

UNEMPLOYMENT

Senator CAVANAGH:

– I direct a question to the Minister representing the Minister for Employment and Industrial Relations. Have officers from the Department of Employment and Industrial Relations at Alice Springs been restricted to the township of Alice Springs and not permitted to go to nearby towns or settlements as previously was the case? Has this resulted in a reduction in the number of people registered as unemployed and a reduction in the number of people qualifying for social security benefits?

Senator DURACK:
LP

– I shall refer the question asked by Senator Cavanagh to the Minister for Employment and Industrial Relations, whom I represent, and endeavour to get the information as soon as possible.

page 131

QUESTION

ABORIGINAL ASSISTANCE LEGISLATION

Senator WITHERS:
LP

-I think on Tuesday Senator Keene asked me some questions about the Act that never was. He asked 2 specific questions. Firstly, he asked whether any moneys had been paid under that legislation? The Treasurer (Mr Lynch) informs me that the advice he has received from the Treasury is that no moneys were paid under that legislation. Secondly, I think he asked how in fact the Governor-General cancelled his signature. The Attorney-General has no information on that matter. I do not think we ought to ask His Excellency how he did it. His Excellency may care to volunteer that information.

page 131

AUSTRALIAN ECONOMY

Matter of Urgency

The PRESIDENT:

– I inform the Senate that I have received the following letter from the Leader of the Opposition, Senator Wriedt: 16 February 1977

My Dear President,

In accordance with Standing Order 64, 1 give notice that today (Thursday, 17 February) I shall move:

That in the opinion of the Senate, the following is a matter of urgency:

The continuing decline in the Australian economy and the failure of the Government to take remedial action. ‘

Is the motion supported?

More that the number of senators required by the Standing Orders having risen in their places-

Senator WRIEDT:
Tasmania

– I move:

That in the opinion of the Senate, the following is a matter of urgency:

The continuing decline in the Australian economy and the failure of the Government to take remedial action.

The Opposition launches this urgency motion in an atmosphere in which the economy of this country is adrift. It could be said to be floating like the exchange rate in forces which neither the Treasurer (Mr Lynch) nor the Government itself appear to understand. It could be that it is floating but it is certainly not buoyant. Any further mismanagement of the economy could well bring about a disaster and cause the economy to sink altogether.

Let us put our facts quite bluntly during this debate. The urgency of this matter arises because the Government, in a little over 12 months, has completely lost control of the economic forces which operate in this country. This lack of control results in the affliction of increasing consequences on the community. It also results in the

Government changing tack from day to day, causing more and more uncertainty. There are a growing number of people in the community who are becoming aware of 3 essential factors: The Government s mismanagement is having increasingly disastrous consequences; the Government has totally lost control of the economy; and the Government is speaking with a number of voices, none of which can be believed.

Let us look at some of the consequences of those policies. We find initially the tremendous effect that this Government has had on unemployment in this country. The Treasurer seems to ignore this point. The argument appears to be that if we increase the level of unemployment in this country we will reduce inflation. I shall say more on that point later. To give an indication of how much the Treasurer is concerned and how much he understands the significance of this, I quote what he said recently:

Unemployment data are never among the leading indicators of economic recovery.

That is a quote from his statement. On that basis, he believes he can ignore the level of unemployment which now exists. Yet it is almost incredible to believe that this view can be taken when the level of unemployment in this country stands at around 350 000 people. The Treasurer may believe that this figure is yet another dry technicality. But the figure fails to reveal the true nature of the unemployment problem. It fails to recognise the number of people who cannot get jobs but who are not receiving benefits from the Commonwealth Employment Service. It fails to recognise the number of people who are becoming permanently unemployed or unemployable for large periods. It fails to recognise that large numbers of young people, no matter what their qualifications, can now look forward to not getting a job. We also find this of course among university graduates who either cannot get jobs or cannot get jobs for which they are suitably qualified. It fails to recognise that the causes of unemployment are extremely serious and are not amenable to the ad hoc methods adopted by this Government. Where are all the dole bludgers we were told about in the last year of the Labor Government? The then Opposition, the present Government, was going to clean up all these people. It was going to see that the taxpayer was not robbed by the continual payment of benefits to people who were allegedly too lazy to work. We find now that of the 350 000 unemployed only 230 000 are actually receiving unemployment benefits. So, about 120 000 people who cannot get a job are receiving no assistance from this Government. It must be remembered that, while there has been a growth in the level of unemployment between January 1976 and January 1977, there has been a sharp decline in the number of people receiving unemployment benefits.

Let us look at the attitude of the Minister for Employment and Industrial Relations (Mr Street) to this problem. His statements over the last few months indicate that he believes that the problem is not serious. It is interesting for us to consider the series of statements which he has made since October last. I will quote them. At the end of October last, the unemployment figure was 260 000. The Minister said then:

There was no major change in the state of the labour market during October.

We come next to the end of November when unemployment had risen to 272 000.The Minister said that there was:

  1. , very little underlying change in the labour market.

In December 1976 when unemployment reached 327 000, the Minister expressed the view that:

The underlying trend in the labour market during December appeared to be one of virtual stability.

In January when the unemployment figure had reached 354 000 the Minister said that:

The labour market situation remained relatively stable.

There is a series of statements made by the Minister responsible. In every case he was saying that there was stability and that we had no need to concern ourselves. He claimed that the situation remained relatively stable. Yet, in that period, there was an increase of 35 per cent in the level of unemployment representing nearly an additional 100 000 people. That surely indicates a measure of the Government’s concern and indeed a measure of its understanding of the rate at which unemployment continues to grow in this country.

The urgency motion refers to: the failure of the Government to take remedial action.

Not only does the Government not understand the process that has occurred or what is going on but also it has failed to introduce any measures which might remedy that situation. If unemployment is no longer a reliable economic indicator, what are the factors on which the Treasurer (Mr Lynch) relies to demonstrate that 1976 was a year of progress? Those factors certainly cannot include the stock exchange which went into a nose dive after the Government brought down its Budget and went into a further nose dive after the introduction of measures announced on 14

January of this year. The Treasurer’s claim cannot be based on business confidence. For example, the recent ACMA-National Bank quarterly business survey showed that 33 per cent of companies expected the Budget to produce a minor stimulus to business activity compared with the 54 per cent of companies that had made that judgment 3 months earlier. So, we cannot look to the business community or to business indicators for the optimism which we are continually being told about. The same applies in the case of investment expenditure which is on the decline also.

None of these factors is new. They were all apparent before the disastrous economic decisions of November of last year. The one thing that the Government continually pointed to was its control over inflation. It sought to draw some comfort from the decline in the Consumer Price Index during the first 3 quarters of 1976. This was the benefit that it alleged to have flowed from inflicting misery on hundreds of thousands of people. Only this week in the course of question time both in the Senate and in the House of Representatives we have endeavoured to get the Government to give us the latest CPI figures. The Government knows those figures and it knows, as the Treasurer has said, that inflation will show an upturn again in the December quarter. We are told that in the first and second quarters of 1977 we will find the same increase taking place because of the devaluation decision.

Is there any glimmer of hope? If there was, it has been thrown out the window. The decision to make the largest devaluation for 40 years has now ensured that inflation will remain as high as it has ever been. Even the Treasurer’s statement last Tuesday spells that out quite clearly. Not only will the CPI for the December quarter leap because of the disastrous Medibank arrangements, but also the impact of devaluation during the first 2 quarters of 1977 will be still apparent. So the current position is indeed grim. It warrants debates of this nature and it warrants the Government being shown to be the incompetent government that it is. Unemployment, interest rates, prices and the deficit are all higher than they were at this time last year. Yet those are the very things that this Government said it would rectify. In not one case has it been able to get on top of the problems that it claims to be expert at managing. After 15 months we are in fact worse off than we were when the Government took office. What is even more alarming is the fact that there is no prospect of any improvement in the position.

It is quite clear that the Government has lost control of the economy. The Treasurer thinks that the Government has chosen a balanced approach, but that does not square with the facts. In the January 1977 edition of the ANZ Quarterly, in an article entitled ‘Fickle Policies’, the following comment was made:

Rapid reversals of fiscal policy, currency devaluation and instant revaluation, interest rate surges, austere control of the volume of money, and tariff tinkering, at the cost of severe disruption of business and widespread uncertainty, will of themselves solve no basic problems. To be useful, they need to motivate workers of all categories to contribute more to the pool of goods and services from which the community draws its real standard of living. Such effects are difficult to discern among the flush of contradictory measures in Australia since late November.

That is a quotation from the ANZ Quarterly. It is apparent that that authoritative body in that authoritative publication sees the enormous difficulties that this Government has created not only for Australia but also for itself.

Early in November the Government called up statutory reserve deposits and lifted interest rates, putting a further brake on the economy at a time when stimulatory measures were needed. Less than a month later- on 28 November- the Government brought in the devaluation to which I have referred. This completely reversed the policy that up to that time the Government had been saying was essential. Recently, in addressing the Queensland Branch of the Economic Society of Australia and New Zealand, the Treasurer was at great pains to point out that all branches of economic policy were balanced to form what he called ‘an integrated, coherent and effective whole’. One of the branches of economic policy referred to by the Treasurer was control of the exchange rate. He pointed out that this was ‘an important element in our antiinflationary strategy’. He went on to say that there had been some concern about Government borrowing to avoid devaluation. On that issue he had this to say:

Australia’s international credit standing is second to none and it would be anomalous if we could not take advantage of that during a period of temporary sluggishness in private capital inflow. The fact that the Government is readily able to borrow overseas is, of course, a sign of strength.

He then went on to say:

Moreover, there can be no question of over-borrowing.

But what was his attitude 6 days later? When he announced the devaluation he said:

The Government has been forced to devalue because of the deterioration that had occurred over recent years in Australia ‘s underlying external situation.

So, what we find is that in a period of 6 days the Government changed its position from thinking that there could be no question of overborrowing to believing that it was absolutely essential to devalue. All of that would have been tragic enough had it been the end of the story, but there was worse to come. In the weeks subsequent to devaluation we saw changes in the exchange rate day after day.

The question then arose of what to do with tariffs and controls over capital inflows. The line initially taken by this Government was that neither was necessary. It subsequently made minor adjustments to the tariffs and on 14 January this year introduced a whole new range of monetary controls. Back came the variable deposit ratio scheme and embargoes on overseas borrowings were extended. It is interesting to consider the reintroduction of the variable deposit ratio scheme. This scheme was introduced by the Labor Government in 1973 and we were castigated and condemned for doing so. We were told that it was not in the interests of Australia to restrict the flow of capital into the country. We now find this Government in the position where it has had to impose exactly the same restraints that we did. This action has been brought about entirely by its own mismanagment.

But the Government has not left it at that. It has continued to tinker with the statutory reserve deposit ratio and now, of course, the country is facing a credit squeeze. There is no argument about that; there is a credit squeeze in Australia at the present time. The Government’s denials that such is the case have a very hollow ring. It is interesting to note that in the latest issue of Syntec, a journal which many people interested in these matters read regularly, it said to its clients:

If you need early money move now; if not, delay plans a year. That quite clearly spells out the true position. At this stage there is no indication of what the next step will be. The Treasurer said only on Tuesday that he would briefly refer to the developments of 1976 and spell out the strategy for 1977. The review took up 22 pages of his speech, the spelling out of the future took a mere two.

What of this future strategy? The Treasurer claims that it is one of continuing to fight against inflation but that is almost unbelievable in the light of the devaluation decision. What the statement does not say is how the Government will achieve this result. The only guideline given for 1977 is that the Budget outlays will be kept to zero real growth and Public Service ceilings will be maintained. How can that be described as an economic policy? In fact is that not maintaining the policies which the Government has conducted over the past 12 months and which in fact have brought about the present dilemma in which it finds itself?

We have seen a series of statements by the Government over the last few months. There have been reports of leaks about which the Prime Minister (Mr Malcolm Fraser) has been castigating his public servants and, I understand, some of his Cabinet colleagues as well. Yet the most fundamental and damaging leak in recent times came from the Cabinet room itself. That was the leak dealing with devaluation. Attempts were made to rectify the disastrous decision of 28 November. Day after day the Treasury and the Reserve Bank were able to organise revaluations of the currency to try to reduce the worst effects of devaluation. During this time the Prime Minister was attempting to persuade the Australian people that devaluation would benefit them. No such suggestion is contained in the Treasurer’s statement put down on Tuesday. The Treasurer has pointed out that the direct impact of devaluation will show up in the major price indexes of the next two quarters this year- that is up to June. So we see that we do not have any immediate hope of an improvement during 1977.

Until recently there were 2 views about the way the economy should go. The Prime Minister wanted to water down the currency and to lower interest rates. The Treasurer and the Treasury wanted to tighten up monetary policy to reduce inflation. So we now have a third economic view within the Government ranks and the new panacea is income tax cuts- not, of course, at present but certainly at some time in the future, according to the Prime Minister.

The problem facing business in Australia today is the uncertainty created by these various economic views within the Government. Businessmen trying to second-guess the Government are uncertain as to where they should turn. Clearly the Treasurer’s statement cannot be believed. The statement that he put down on Tuesday indicates that he has no confidence in the view he is currently putting forward. It is well known that he had to seek the assurance of the Prime Minister that there would be no tax cuts before making any statement to that effect. He had every reason to be fearful. While the Prime Minister was running around the country assuring everyone that there would be no devaluation, he had decided to the contrary. It is equally clear that the Prime Minister’s views cannot be taken at face value. On the one hand the Prime Minister wants to control inflation, or so he says, yet on the other hand he supports devaluation and low interest rates. It is quite impossible to have it both ways. What is clear is that the Prime Minister is likely to change his mind from month to month depending on the circumstances and, I daresay, the political position at the time.

What of the future? The Government has discovered that devaluation was like opening Pandora’s Box. If the management of the economy will continue to be difficult for a long time in the future, it will be as a result of the actions of this Government. As is so often the case, the real problem with all these measures- no matter what measures the Government adopts- is that they are too little too late. All the failings of Liberal governments at the end of the 1960s have been restored. Once again the Government proposes to put this country into hock. Once again it proposes that the wage and salary earners of this country will pay the price. It is quite evident that the real incomes of the majority of Australians will be affected by the Government’s policy and that there will be a continuing decline in the capacity of the consumer to extend his buying. This, of course, puts the Government in a bind where the business community cannot look forward to increasing or improving market conditions. No matter how many investment proposals and offers are made to business, such as the one of 40 per cent which was made last year, they will not affect the capacity and desire of industry to invest in the future of this country. Again, this is a direct result of a deliberate policy which the present Government is pursuing.

How does the Government react to this? It invites not unlimited foreign investment but a measure of foreign investment about which it will need to be very careful. It was not sufficiently careful last year. As I mentioned earlier, the vanable deposit system had to be reintroduced. The continuation of this course leaves the economy completely in the hands of people who, very often, do not live here, nor do they share the interests of the citizens of this country. Increasingly, interests of the larger companies will dictate the terms of the Australian economy. Because capital is mobile and labour is not, capital can be withdrawn at the whim of an investor without worrying about the consequences of the effect on the wage and salary earners of this country. This is the issue to which the Government must address itself. It must maintain a proper balance between the various sectors of the economy rather than favouring one or two sectors at the expense of others. It must face up to a restructuring of industry rather than putting forward the bland and ill-conceived views contained in those portions of the White Paper which have already been published in the Press but which we, unfortunately, in the Parliament do not seem to be able to get. The Government must face up to the task of developing proper manpower and training policies to ensure that the work force is equipped to handle the tasks ahead. Of course, it must also protect the wage and salary earners of this country, particularly as they constitute something like 80 per cent to 85 per cent of the Australian workforce.

It is of no use the Government running away from the fact that its policies are not working. The Australian people are not concerned with the theoretical arguments which are being advanced by the Government as a means of overcoming the nation’s problems. What the country and the people want is some hope that there will be an increase in the number of jobs, that the unemployment trend will be arrested and that the opportunities for people to work will be created so that all Australians can enjoy the benefits which we know this country can have. It is for those reasons that on behalf of the Opposition I have moved the urgency motion.

Senator COTTON (New South WalesMinister for Industry and Commerce) O2.30)-The speech of the Leader of the Opposition (Senator Wriedt) evidences his own lack of enthusiasm and that of his colleagues for this project. Let us look at the record in late 1972 when in a fit of misguided optimism and false hope the Australian people passed to the Labor Party the custody of a very prosperous country which was doing well. What was the record of the governments from which Labor took over? Senator Wriedt made some comments about the misfortunes of the 1950s and 1960s. Let me recount what happened in the 20 years prior to Labor taking over from the then Government.

Senator Cavanagh:

– You are talking big to justify yourself now.

Senator COTTON:
LP

-I like to be able to look at these things with a slightly longer view than every three or four minutes. In those 20 years gross domestic product at constant prices in this country, which means living standard increases and increased opportunities, went from $10.7 billion to $27 billion, or an annual rate of almost 5 per cent. Exports from this country at constant prices grew from $1.6 billion to $4.7 billion, or almost 6 per cent per annum. Government securities on issue payable overseas rose from $1 billion to $1.6 billion, but the ratio of overseas debt to GDP fell from 2 1 per cent to 5 per cent. Inflation measured by the consumer price index rose at an annual rate of below 4 per cent. We were then at the bottom of the Organisation for Economic Co-operation and Development inflation table. In regard to wage levels, average weekly earnings were $19.40 in 1950 and $76.30 20 years later. Australia had a good reputation, soundly based, with low inflation, low unemployment, high economic growth, rising living standards and good opportunities. The Austraiian people were benefiting from their own endeavours and those of a fairly wise and sensible group of governments. We also had a high savings rate. That was the economy which we had had to look after for some 20 years.

As I said, in a fit of misguided enthusiasm we then had a change of government to the Labor Party. Let us look at its record during its 3 years in office, at the end of which time the Australian people, on the initiative of this chamber, finally threw it out. In 3 years the inflation rate had risen by 40 per cent. Average weekly earnings, which were $96.70 in June 1972, had grown to $156.30 by June 1975, or a 60 per cent increase in three years. The cost disability of Australia compared with its normal trading partners, compared with the United States for instance, which accounts for one-third of our overseas trade, deteriorated by 33 per cent between 1972 and 1975. The reserves overseas declined and the GDP began to fall. It rose by only 3 per cent per annum for the first 2 years, and in Labor’s last year in office it was below 1 per cent- I think 1.6 per cent negative. Unemployment rose from 1.8 per cent to 3.9 per cent and company profitability, of course, was in a state of substantial decline. Those years could well be referred to as the drunken sailor years of Australian government. This Government had the responsibility given to it by the Australian people- let there be no doubt that that is where it came from- to tidy up that mess, to try to achieve stability, and then to grow and develop again. Those who were involved in that task left no doubt that they believed it would be a long hard job. They believed that 3 years would be the shortest time they would need to do a solid job, and they have not resiled from that view. The devaluation incidents certainly have complicated and delayed the process, but let us remember what happened about devaluation. Who was the first person to start a devaluation rumour in this country and run it solidly? It was the previous Treasurer, Mr Hayden. That sort of thing did not help anybody, including Mr Hayden and his Party. It certainly did not help the Australian people.

We have heard a lot about unemployment, and I do not think that there is anybody on either side of the Senate who is not concerned about unemployment. It is the product of earlier decisions, earlier mistakes, earlier bad patterns of government administration. It is still with us and is much greater than anybody would like to see it, and it will take time to be reduced. Let us consider some unemployment facts. In August 1973, after about six or seven months of Labor Party regime, the percentage of the work force which was unemployed was 1.4 per cent. When the previous Liberal Government was put out of office I think the figure was of the order of 1.3 per cent. So at about August 1974 the percentage of the Australian labour force which was unemployed was 1.4 per cent. A lot of people have said that the tariff cut across the board had no effect, but in fact it was an across-the-board cut of 25 per cent in July 1973. In August 1974 the percentage of the labour force which was unemployed was 2 per cent, in November 1974 it was 3.4 per cent, in February 1975 it was 4.6 per cent, in November 1975 it was 4.5 per cent, and in November 1976 it was 4.2 per cent. On the evidence of the unemployment statistics, in the first year of the Fraser Government the figures had begun to decline. Those are actual statistical figures.

I always suggest to people, including myself, that when they read the daily newspapers or hire themselves somebody to tell them what to do with their money or how to borrow money from somebody, they should remember that the world is surrounded by economic pundits, subscriber newsletters, people commenting, and every day there is a new diet of advice on the economy. I suggest that the way in which all of us should behave is to look at the situation in fairly sensible measures of time. I prefer to look at it in 6 monthly or 12 monthly rests. In relation to unemployment I am saying simply that in November 1975- the last month in office of that group of geniuses in economic management, the Labor Party- 4.5 per cent of the work force was unemployed. After our first 12 months in office the figure was down to 4.2 per cent. Devaluation was brought upon this country and its people by malicious rumour and speculation; let there be no doubt about that. I have been clear about my attitude during all my time in this place, and all honourable senators will recall my refusal to engage in speculation about devaluation. I think that people who speculate in the currency of their country are deplorable, to say the very least. Dealing with the manufacturing industry, in August 1973 the unemployment level in the manufacturing work force was 1.2 per cent. By February 1975, again during the time in office of that group of people who are so concerned about Australia and the welfare of the work force, unemployment in manufacturing had risen to 5.3 per cent. In November 1976 it had declined to 4.6 per cent. Those are the answers on the unemployment situation as it was when we took over and as it was at the end of last year. Without doubt devaluation has made the matter more complicated, and everyone would freely acknowledge that.

Senator Wriedt was concerned about how people know that economic growth is taking place. For my own purposes, I use the national account figures which are available, reliably corrected, in June and December. The June national account statistics were talked about in this Senate during the Budget debate. They showed quite clearly that in 1976, after we had been in office for 6 months, economic growth was returning whereas in the previous year it had dropped by 1.6 per cent. It is an almost astonishing fact that in a country like this economic growth was returning by June of last year, and the strengthening trend was clear by December last year. For those who interest themselves in these matters, those figures are available. The Budget calculation of the growth rate in non-farm product had been exceeded in the first 6 months. The complication in the total figure is always the complication of the farm product, which includes price, production, drought and disaster in a ratio situation.

We should be in no doubt about the overall situation of Australia. From being a country in decline under Labor is has become a country which is growing again economically under the Fraser-Anthony Liberal-National Country Party Government That still does not mean that inflation is not far too high. Of course it is. It still means that unemployment is too high, and it means equally, for those who can read the figures, that the difficulties all came from the Labor Party. We have all had an opportunity to look at the statement made by the Treasurer (Mr Lynch), which was read in this place. The figures are available in that statement and there is no point in my going through them again. However, there are one or two things which have been produced which may be useful to honourable senators, and when I deal with these figures I will seek permission to have the table incorporated in Hansard.

The first table relates to economic growth and indicates that between 1963 and 1972, before Labor came into office, the average rate was 5.6 per cent. The average during the Labor years was 2.8 per cent. In its first year the rate was 7.2 per cent, which was a carry-over from our own work, in the second year 2.2 per cent, and in its last year the rate was 0.6 per cent. There was a reduction last year. We inherited at the end of 1975 a negative economic growth rate which we turned into a positive growth rate within 6 months. In the September quarter of 1976 the gross non-farm product was 6.9 per cent above the level of the year before and in the December quarter of 1976 it was 7.6 per cent above the December 1975 level.

I turn now to the inflation factors. Before Labor came to office the inflation rate was 4 per cent. The average during the Labor years was 14.2 per cent. In 1973 it was 8.3 per cent, in 1974 it was 17 per cent and in 1975 it was 17.6 per cent. The annual rate for the 6 months to September 1976 was 10.3 per cent. If we exclude from that the Medibank factor it was 9.8 per cent for the 6 months. Private home building approvals before Labor came to office averaged 117 000 a year. Under Labor approvals went to 184 000 in its first year, 121 000 in its second year and 1 18 000 in its third year. Last year it was 138 000. The company profit share of nonfarm product before Labor came to office averaged 17.5 per cent a year. During Labor’s term of office it went down to 1 1.8 per cent. It has now been restored to 14.4 per cent. The savings ratio before the Labor Government averaged 9.8 per cent a year. During Labor’s term it averaged 18.4 per cent. People were just dead scared and put their money into the savings banks. We are now seeing the savings figures declining, the savings ratio is back to 15.1 per cent and the trend is still downwards. We cannot pay people money and have that money put away in savings banks and not used to generate employment. We have to get people to spend and invest and that is beginning to happen.

There are 3 other factors that might be mentioned now because this will be a long debate and a little economic light will not do anybody any harm. Figures of Commonwealth Budget outlays demonstrate that under Labor what really happened was that the productive sector of the country, the growing and developing sector, was leant upon to increase distribution to what I call the welfare consumption sector. Nobody objects to that as long as it is done in moderation, but the change was quite massive. The Commonwealth Budget outlay in 1972-73 on what might be called the total welfare and defence sector represented 44 per cent of total outlays. In 1975-76, when we inherited the Labor Budget, this proportion had risen to 53 per cent. The proportion spent on economic areas, growth areas and development areas to sustain productivity and expansion went down as had payments to the States. The real problem is that we inherited a changed situation. The country for 20 years was making money, growing, saving, developing and expanding sensibly. There was low inflation and low unemployment. At the end of that 20 years a new group took over. They were big time spenders and let it all rip. It is this which caused the Australian problem and that is why that group was flung out of office. It produced a lot of our problems today, problems which we are managing, I believe manfully, to cope with.

Some comments have been made about a credit squeeze. There will be no credit squeeze. There is no prospect of a credit squeeze. People who say these things are really harming their own cause as well as harming the cause of their country. The country’s real problem is that it is awash with money. There is the product of the deficit which itself is high but is being wound down. It produced a lot of money in the system. The non-payment of quarterly company tax has added to the volume of money in the system. The capital inflow which began recently has again been very heavy and the amount of money in the system is very great indeed. Hence it was wise to increase the call for statutory reserve deposits. It was wise, as the Treasurer said, to restore quarterly company taxation payments because the profitability of companies has gone up substantially. It is equally wise to give the banks back their normal liquid assets and government securities ratio. There is no reason in the present managed system for any credit squeeze and it is the Government’s clear and firm intention to see to it that the management of the money supply is such that it is neither excessive and causing trouble nor deficient and not allowing for logical and sensible expansion and demand.

Of course, money is not available for smart guys who want to play around with the currency of the country or engage in development exercises which amount to nothing more than playing a funny game. Legitimate, solid purposessensible development, home building, consumer demand, and financing transactions for hire purchase- are all capable of being adequately financed providing their purpose meets the sensible and proper tests, and I think honourable senators would all expect that to be the thing which people would do.

In addition to me there are other people who have had comments to make from time to time on the Australian economy. The Treasury is an institution for which I have the highest possible regard and have always said so. I do not say that it necessarily is always 100 per cent correct. I believe that every government needs to have a broad spectrum of advice and this Government does. It has done something in the Treasury area which I think is very important. It has seen to it that there is a division of responsibility that is the counterpart of the more advanced management practices of treasuries in the United Kingdom, the United States of America and Scandinavian countries. The 3 functional parts of the Treasury are put in a position where they can function as units. The job of the Department of Finance is to be the bureau of the Budget, the scrutineer of expenditure and the gatherer of revenue as well as to watch carefully that the patterns of revenue and expenditure are kept under careful monitoring and not allowed to get away, as happened in the time of the previous government.

The figures in the Treasurer’s speech showed that the rate of government expenditure increased uncontrolled under the Labor Government and that this was part of the problem. The Treasury itself is concerned with economic policy, trends, general development, the management of the economic system and the management of the money supply. Then there is the general group comprising the Department of Industry and Commerce, the Prime Minister’s Department, and the Reserve Bank of Australia. We all put in information to try to reach a sensible economic decision. To add to that the Government has seen to it that it has a range of people who come together regularly to talk about the economy and various problems. Included in those activities are trade unionists, manufacturers, financiers, consumers and primary producers. I am on an economic council with those people and they are extremely helpful. They check what the Government has done and make adverse comments if they think they are justified. They also make constructive comments and the Government explains matters to them. On the industry advisory council there is a wide representation with people from the trade union movement, consumers, producers, manufacturers and importers trying to see to it all the time that we have the best input of information on which to base decisions.

Overall we do not have the situation which we used to have in Australia which led to the solitary Brahman-like views coming from only one institution, the Treasury itself. The Treasury is the general body now concerned with economic policy and the management or the economic system in the broad sense. We can credit the Treasury with taking a dispassionate position. It does not run a political system. It runs a professional advisory and management system. It did so for the Labor Government and it does so for us. Governments who take its advice when it is good come home pretty well. If they take its advice when it is bad they have problems. The Treasury gives genuine advice on the best information that is available to it and we try to make sure that that advice is balanced by a lot of other advice.

Senator Primmer:

– I thought you must always have taken its bad advice.

Senator COTTON:

-Not really. In the end what we do is try to make a decision in the public interest and not for the benefit of vested interests. That is this Government’s broad policy. It makes decisions in the public interest and not for the benefit of vested interests. Anybody who has been a Minister in the government whether of my persuasion or of the Labor Party’s persuasion knows the pressures on a minister to give way to all kinds of people who engage in their own special pleadings. Anybody who sits at the industry and commerce desk on a matter such as the clothing and textiles industry hears the manufacturer’s pleas, the importer’s pleas, the retailer’s pleas, the worries of the union movement which very often are genuine, the concern of consumers, the concern of other countries which export products to us and realises that he cannot satisfy everyone. If all he did was respond to the loudest noise and the most urgent request he would get into a lot of trouble. So we seek to reach a decision in the public interest. The Treasury of Australia can be regarded as an essential and perhaps critical part of that general position. The Treasury’s latest statement of the Australian economy, No. 49 of February 1977, as it sees it in summary contains the following:

Latest indicators imply that real consumer spending ended 1976 on a more buoyant note.

That is coincidental with the surveys by the Department of Industry and Commerce. The document continues:

Private building approvals, both dwelling and nonresidential, increased again in the December quarter.

That again is consistent with what we have found. It continues:

Building materials prices slowed further in the December quarter; similar further moderation has been occurring in manufacturing sector prices.

That also is consistent with what we are finding. The document continues:

The usual seasonal increase in the number registered for employment was magnified in January by the effects of new unemployment benefit eligibility rules applying to schoolleavers.

Commonwealth Budget outlays were 1 1.2 per cent higher than a year earlier in the first 7 months of the year1976-77 total expenditure by the States was 1 5.6 per cent higher than a year earlier . . .

There was … a balance of payments surplus of $27Sm in January following a $403m surplus in December; net apparent . . . capital inflow was $381 min January following an inflow of $634m in December.

In the light of the impact of private capital inflow upon domestic liquidity creation and the money supply, the Government announced on 1 4 January its decision to impose and extend controls on borrowings from abroad.

I shall return to that. The document continues:

The Statutory Reserve Deposit Ratio of major trading banks was increased to 9 per cent on 25 January and is being further increased to 10 per cent effective on 2 1 January.

I turn to currency management and capital management post-devaluation. I just observe that in Australia for an unconscionably long time there was an exchange rate that was fixed- I believe that it was fixed at rigid levels- and was not adjusted often enough. That is the view- 1 have held consistently, under all kinds of governments. Concurrently with that, naturally, there was an ability to fix a tariff situation that had some relation to it. After devaluation it was decided to bring about in Australia a management system of the currency. That management system is under the control of the Treasury, the Reserve Bank and the Department of the Prime Minister and Cabinet. The intention is to try to see to it that the currency bears a more realistic relation more frequently to what is its actual value in the world marketplace. One would expect that to be what we would do; we have done it.

The tariff situation following that decision was put into a new situation of adjustment, and that was in effect published and stated in this Senate. When we saw the situation of capital in Australia and the ability of people to move money in and out of this country to suit themselves and to try to cause speculative problems in the value of the currency, the Government properly decided to bring in a situation of capital management. That is the situation that has been clearly laid down. People know what it is. It is under the management of a committee group headed by the previous Managing Director of the Commonwealth Bank, Sir Bede Callaghan, with the head of the Treasury, the head of the Department of Industry and Commerce, the head of the Department of the Prime Minister and Cabinet and the Governor of the Reserve Bank. Those 5 people are capable of scrutinising every application or, if there is no problem, letting the Reserve Bank handle the lot. If the Reserve Bank has any worry about any particular matter, it can come back to the group of people- the people I talked about- who look after this. So that is the overall situation in Australia.

I do not have a lot of time left to me. I return to the motion, which seems to me really to have been designed to take up time that otherwise would have been utilised by going into recess for a couple of days. There are 2 parts to the motion, namely, a continuing decline in the Australian economy, which is manifestly rubbish, and ‘the failure of the Government to take remedial action’, which again is manifestly rubbish. The Government has taken the proper action. It has moved to do what it ought to do to get the country back into growth again. It has been happening; the figures are clear. Despite what anybody says, they are there to be seen and identified. Remedial action by the Government has consisted, first of all, of the proper action of reducing its own excessive demands upon the public purse and upon people’s money, incomes and savings. That had got completely out of hand. If one looks at Australia- I talked about the figures earlier- one will see that the great Australian problem has been that governments of all kinds have put upon the people’s resources- savings and incomes- a government demand well in excess of the system’s capacity to maintain. That had to be brought back into balance. I think one of the treasurer’s figures showed that in one of the Labor years there was an increase in government expenditure of 49 per cent. We have tried to hold it back to about 1 1 per cent a year, and we are holding it.

The design is to have those resources of income and savings available for the country’s logical expansion, for the use of the people by themselves. This Government is trying to see to it that we return to the days when people did more things for themselves and governments tried to do fewer things for them. We are therefore against big government; we are against excessive government intervention. We believe in managing the system so that people can do things and so that their own resources are, as far as possible, available to them. The Treasurer outlined the massive taxation concessions that have already been given to the Australian people by this Government. They are in his statement and I think honourable senators have them all there to look at.

I want, once again, to talk a little about the problem that I see all governments tending to nave if they are not very careful, and that is talking down their own countries and being aided by people who profess to be expert in this field doing the same thing every day. An economically sick country is like a sick person in hospital. He is not helped if someone comes to him every 3 of 4 hours and says: ‘You look slightly worse. You are getting pale. Do you think you are going to die? Could it be that you feel worse than you did yesterday?’ There has to be a good doctor; there has to be a good method of handling things; and one has to have confidence in the person who is sick-as one does in a country that is sick- that he can recover and that he will recover. Very much part of that recovery is his own efforts on his own behalf.

Governments can do only a certain amount. The actual ability of the Commonwealth Government as a government to manage this full system is no greater than about 30 per cent. Transfers to the States account for a lot of money. There are transfer payments that I mentioned earlier. The amount of the area of Commonwealth Government ability to move about is about 30 per cent. But in that context of the overall scene the Government has moved to diminish its own demand on the resources, to get out of big government, to give big taxation concessions, and to get things back into people’s hands so they can do things for themselves. The process certainly has been to see economic growth return, without any doubt at all. The process has been to see the State governments and local government given much fairer treatment. The process has been to see that corporate profitability has increased and the ratio between that and the share of wages has got into better balance, more historically correct, than it was before.

I do not really think the country is helped if its Parliament talks it down. I think we ought to try to be constructive about these things. The problems in Australia are clearly identifiable now. They are to get inflation down to its long term trend established by September of last year and to get increased activity back, to get public confidence back, and to get people spending and people investing and companies believing in their country’s future in order to restore employment to what it ought to be. I do not believe we will achieve that if around this country and in this Parliament there are a lot of people who are what I call calamity howlers every second or third day of their lives. I do not think that helps anybody. If honourable senators are here to serve the Australian people, I suggest that is a line of argument they might knock off. I also suggest to honourable senators that the country today is probably as well placed for a great leap forward as it has ever been in its history, once it tidies up its inflation and unemployment. Perhaps one of the principal prerequisites of that is that the Labor Party should never come back to government.

If one looks at the world in which we live- its resource needs, its energy needs, and the need for foodstuffs for countries with an expanding population- one sees that we have a country that, I believe, has been placed by history and by geography in one of the most fortunate positions in which it could ever have been placed. Not to achieve the results of which the country is capable would be one of the great tragedies of

Australia. I believe that Australia is getting to be unique in the world, which is deficient in resources and has energy problems and population problems. Australia stands in a situation of having an abundance of resources. So its ability to transform those things for its own use and for the use of the world at large is not only a responsibility to itself but also a responsibility to a world that we hope to see peaceful and prosperous for all people. That is part of the great Australian aim; that is part of the great Australian dream. It will not be achieved by people knocking their country down when clearly it is in the process of recovery. What it needs is a sensible understanding of its problems.

Sitting suspended from 12.59 to 2.15 p.m.

Senator GIETZELT:
New South Wales

– The Senate, in debating the state of the national economy, is endeavouring to bring before the Australian people the serious plight that faces so many sections of the Australian community and seeks to express a point of view in respect to the economic management policies pursued by this Government since it came to office some 15 months ago. Of course, we will recall that the conservatives of this Government used the state of the economy as the basis for a great deal of the strategy and tactics to take office. This was because of the problems that beset the Whitlam Government during its 3 years of office. It is interesting that all of the Government speakers on this subject and particularly the Prime Minister (Mr Malcolm Fraser) have stressed the need for a total 3-year period in order to carry out a policy of economic management. That courtesy was not extended to the Labor Government. Therefore, one has to take issue with the document which was put down on Tuesday in the other place and here in the Senate. On closer examination it can be shown to be a document of deceit and deception, a document which must be regarded as something of a joke. I do not think anyone in his right mind can really defend a statement that the Minister for Industry and Commerce (Senator Cotton) made in the Senate on Tuesday. He said:

  1. . 1976 was a year of considerable progress towards the 3 year goals we have set ourselves in bringing Australia ‘s economic problems under control.

Nobody in the Australian community can accept that we have made any progress in overcoming the economic difficulties which are part of a world-wide trend and which, of course, found their reflection at their highest point in the years in which we were in government. I do not know from where Senator Cotton or the other Government spokesmen get their information or in what way they form their conclusions. One has only to read the newspapers to know the position. I am not talking necessarily about the editorials but about statements by business leaders, bank officers,, trade union leaders, community leaders generally as well as State government leaders to appreciate that nobody accepts that we have made any appreciable progress in this direction. I would say that the document is somewhat of a joke. It is to gull the gullible and to fool the fools. It is clearly a sop to the Government back benchers who have correctly been described as oncers and who have been beguiled into believing that somehow the figures which have been produced in the statement and in the contributions made in the Parliament are pointing to some form of economic recovery.

Australia today has the highest unemployment since the Great Depression. It has the highest public debt and the highest deficit. One only has to look at the deficit anticipated in the last Budget to realise the position. It has a serious decline in agriculture and in manufacturing industry. Yet we are led to believe that we are on the way to some form of economic recovery. Australia is no exception in respect to the problems that beset other Western countries. These industrialised countries where capital plays the dominant role have growing unemployment, stagnation and over-production. They have problems of distribution and acute problems of growth and private investment. For example, this document sets out to quote the Prime Minister of England who made a certain statement in respect to the problems facing the economy of that country. He is taking a course of action which is being pursued by this Government But it is quite contrary to the course of action being taken by the President of the United States of America where similar problems of inflation and unemployment exist. Therefore, one finds it difficult to understand the logic or the reasoning of the Minister when he seeks to say that there ought to be a public debate. But then he says that all of those people who talk and write about the economy do a great deal to undermine public confidence.

There has been a dramatic change in the world’s economic order in recent times. Huge amounts of capital funds have shifted from the developing countries to the former colonial regimes. Senator Cotton referred to the Australian capital which we accumulated in the boom years. Is it seriously suggested that if there were some downturn which could be apportioned to the action of the Government over a 2 or 3-year period, it is any different to what has happened in other countries or that that represents the basic problem with which we are confronted today? This shift in investment funds to what capital estimates are growth areas and regions of higher profitability is causing immense difficulties, structural problems and uncertainty in the domestic economies of the developed countries. Unemployment, therefore, has become a permanent feature of all of those economies and, in particular, in our economy. In many ways Australia is now at one of its most dangerous stages in its history. The basis upon which we have developed over the last 100 years is in jeopardy. The country is not in jeopardy because of 3 years under a national Labor Government We have become a pawn in the new international economic pattern which is masterminded by those who control capital on a world scene. We are being forced into a subordinate role by this international capital. International capital now dominates our domestic economy and the real decisions affecting the economy are now being made by people in this area. Even Senator Cotton said that this Government had found it necessary and essential to control the inflow and outflow of capital in regard to this country. Therefore, one has to question whether in fact governments must exercise even more control over the way in which capital is placed.

I believe that Mr Malcolm Fraser takes a somewhat passive position in respect to the movement of capital even though I concede that there are members on the government side who are concerned about the movement of capital into and out of this country and about the fact that we now have hundreds of Australian firms associated with multi-national concepts which have in recent times shifted large portions of their capital into off-shore production outside Australia. The invaluable Jackson Committee report highlights the economic problems on the domestic scene. It pointed out that in manufacturing industry the 200 largest enterprises that account for half of the output equalise the output of the 30 000 smaller companies. But eightyseven of these 200 enterprises are foreign owned and their decisions about production, capital placement, imports and so on do not necessarily always correspond to the interests of this country. Contrary to the stated policy of the Fraser Government, this Government does not aim for a consumer led recovery.

We will recall that in the Budget documents which we debated only a few short months ago the Government’s general strategy was to aim for a consumer led recovery and for an investment led recovery. Surely no honourable senator can suggest that those objectives have been reached. They cannot be achieved in respect to a consumer led recovery because this government since it has come to office has followed a very simple principle, namely, that we should reduce the real wages of the consumers- the workers of this country. Of course, the purpose of that would be to prevent a consumer led recovery. If purchasing power and real wages are reduced, how can the people buy the consumer goods that abound in the warehouses and the retail marketplace? I believe that this Government wants the people to unlock their savings from the savings banks. I think that Senator Cotton referred to that. He referred to reducing living standards so that international capital can get its hands on the meagre savings of the Australian people and so that capital intensive industries can develop the remaining natural resources of the world. We are talking here of the thousands of millions of dollars that are necessary to develop the energy requirements of the Western world. This Government seems to form part of these pressure groups operating in a country- the technocrats in Treasury who helped to compile the document to which I have referred and the technocrats in the Industries Assistance Commission. I make criticism only of the fact that that organisation has not carried out its full charter. I believe it has an objective role to play in analysing the trends that are taking place within our country. But I believe that in its conclusions it seeks to ignore the most important resource of all, and that is the human being.

The people to whom I have just referred and important sections of the media, in the so-called interests of consumerism and efficiency, seek to further integrate the Australian economy into the developing world economic pattern, to make Australia serve the interests of foreign capital and to make the ordinary people of Australia pay the piper. Clearly these interests are against the indigenous local manufacturing industries and the unions associated with them. They are disinterested in the various sectors of agriculture and are prepared to reconstruct out of agriculture whole sectors affected by inter-sectoral changes now apparent in this country. These forces want Australia to accept blandly a permanent unemployment rate of up to 7 per cent. They want to maintain a policy of exchange rate manipulation to suit some more profitable areas of our export industries.

The changes in the Australian domestic economy in recent years have created grave structural problems in agriculture and manufacturing. In a recent Bureau of Agricultural Economics paper, Dr Miller has pointed out that the dramatic growth in the mining and tertiary sectors in Australia in the last decade or so has very severely distorted the Australian economy and the economic base of this country. Agriculture, for example, has declined in your active political lifetime, Mr President, from something like 25 per cent to 7 per cent. Similiarly, manufacturing is declining. The tertiary sector which now controls 65 per cent of the work force is also declining. In the tertiary sector we have public and private sections. In the public section this Government is carrying out a deliberate policy of making cutbacks in government spending. Of course as a result unemployment is developing within that section. The private section of that tertiary sector is being reduced because of the growth of computerisation and because of the general problems and malaise that affect manufacturing industry. If this Government claims it wants an investment-led recovery, it is not taking the essential steps to which our motion seeks to draw attention. Statistics show that the private section which employs a large part of the work force and entails private capital investment- that is what the Government said it wanted when it talked about investment-led recovery- has been in a decline since 1967.

The Government’s own publication from Senator Cotton’s Department has pointed out that public investment has declined in five of the last 6 quarters of 1 975-76. The tertiary sector has passed its peak. Like agriculture and manufacturing, it is on the decline. So from an employment point of view, there is no growth potential in agriculture. The tertiary sector is, at best, stagnant and the much vaunted mining sector has minimal employment prospects in the long or short run. Yet the Government’s strategy is to develop that sector of the Australian economy. This leaves manufacturing as the only sector where employment opportunities can be either maintained or developed. A government worthy of running this country must place restrictions on Australian industries and Australian capital moving to Asian cheap labour areas. There is a need to monitor closely manufactured goods from Singapore, Taiwan, Hong Kong and South Korea. Hundreds of Australian companies have closed down their businesses, stopped output here and moved to these cheap labour areas. So apart from the serious domestic implications, we cannot condone the intensive exploitation of the work forces in those countries any more than we can accept this trend that is taking place.

There are 2 regions in Australia- Queensland and Western Australia- where foreign capital investment now is the major influence. These States have more in common with international capital than Australian capital. Perhaps it is this factor that accounts for the continual conflict between those States and the central government, whether that government be Labor or Liberal. These States want to go even further than Mr Fraser who is pragmatic enough to want to hasten slowly to achieve the aims of international capital. However, despite the preponderance of overseas capital in those 2 States, there is no evidence to suggest that the people there are any better off than those in the rest of Australia. We want to place it on the public record that the Australian Labor Party is a full employment party; the Australian Labor Party is for a proper utilisation of the resources of this country, whether they be men, material or funds. We want to place it on record that the sort of problems that exist in this country are structural problems associated with a society in which capital is the predominant force. It is capitalism itself that is failing to produce the sort of stability that is essential in Australia. I conclude my remarks on the basis of the report of the Metal Trades Industry Association of Australia. It has drawn attention to the problems facing manufacturing industry. The report which was put out at the end of the year states: it is essential for industry to know the Government’s policies and plans, by virtue of the fact that it is a mixed economy, in which the Government exerts a major influence.

It goes on to say:

In the past, however, industry’s decisions concerning investment and expansion were made against a background of confidence- confidence that despite economic fluctuations there was consensus that for Australia to meet its national objectives, a stable and diversified manufacturing sector was a basic requirement.

The PRESIDENT:

– Order! The honourable senator’s time has expired.

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

– It is most appropriate that the Senate should debate the economic situation in Australia. The Government welcomes this debate. It will draw the Senate’s attention to the fact that whilst the previous Labor Government was in office, it did not once promote a debate on this subject. I think that is worthy of note. Here we have a Labor Party, an Opposition party, well entitled to bring forward a matter such as this. Yet not once while it was in government did it ever see fit to provide to the Senate the opportunity to debate the matter. So I believe that

Labor’s reasons for attempting to bring this matter forward at present are questionable. It is appropriate that honourable senators opposite should have the opportunity to do so, but in doing so of course they provide a great forum to demonstrate their total double standard. It is a double standard which has been demonstrated by the Opposition in this and so many other matters. They demonstrate that whilst they were managers of the economy for some 3 years, they brought Australia to a situation where Australia and its people were thrust into the greatest hardship that had ever been encountered in this country ‘s history. Yet we have the audacity of the man who has just been speaking to stand up from his socialist point of view- I understand that he is proud to be one of the left wing socialists of the Labor Party- and say that whilst his Government was in office these things did not happen. His Government took this country from the grand situation it was in to one of disaster. Not once was he willing to discuss this on the floor of the Senate while his Government was in office. Yet he has the audacity to stand up now and attempt to do so.

I believe that people should recall the things that were experienced whilst Labor was in office. We see the same tired old people who are still holding the reins of office purporting, as they did in the House of Representatives within the last day or so, to suggest to the present Government that its ways in relation to the economy are wrong. What a double standard that is. People will recall their experience under Labor. The last speaker spoke of industries going off-shore. He spoke of people moving out of the country. He spoke of the support for local industry and the attempt to maintain jobs. Not once did he criticise his Government when it cut tariffs by 25 per cent and sent 100 000 people out of work in Australia. Not once did honourable senators opposite say that they were responsible for what they had done. The people in this country, the voters of this country, will remember that old saying that a wise man learns by his own experience. We have had the experience of a Labor Government in the Senate in recent times. But the saying does not end with the statement that it is a wise man who learns by his own experience. The fact is that a wiser man learns by another man’s experience. Australia has experienced a socialist government. That Government was the greatest disaster of all time. But Senator Gietzelt now stands up as does his Leader and suggests that the attempts being made by this Government to get Australia back on the rails following the disastrous situation that the Labor Government brought about should be criticised. He condemns the present economic policies of the Government.

I wonder whether people recall that, when Labor took office, 2.4 per cent of the work force was unemployed. Is Senator Gietzelt proud of the fact that as a result of the reign of the Labor Government in just 2 years the unemployment level rose to 4.6 per cent? We heard nothing about that in speeches from the Opposition side. Honourable senators have not indicated how that situation came about. Yet it is evident why Labor did what it did. The honourable senator mumbles into his beard as to why a socialist government which claimed to be the protector of the working man brought the community, particularly persons who sell their labour, to that unemployment situation.

What was the position with regard to inflation when Labor took office in 1972? Inflation then was running at approximately 4.6 per cent. The situation facing Labor was glorious as the management of this country to that time was probably better than that of any other country in the world. Within a few years as a result of Labor’s attempts to induce people to accept its socialist philosophies and to put those philosophies into effect, the rate of inflation increased to 17 per cent.

I turn to the subject of business confidence. Senator Gietzelt mentioned what Labor may have done to support industry. I recall Labor s fine effort in cutting tariffs by 25 per cent across the board and instance the stupidity of imposing that burden on industries whose protection needs had already been assessed by the independent authority which existed at that time to provide protection that was fair and equitable to industries needing assistance. Those industries were economic at that time; yet the Labor Government was willing to cut tariffs by 25 per cent. This action had an immediate effect on the rag trade and the electrical industry in Australia. It was useless for those industries to continue under a Labor Government in Australia. So they decided to arrange to have their products manufactured off-shore. That is what they did, regrettably for this country. It is difficult for businessmen to plan in advance and to attempt to return those industries to Australia. Confidence does not now back into a country just because of a change in government. Businessmen must make many assessments.

The philosophy of the Australian Labor Party Government was to do away with private industry and that was the philosophy which was stated by the previous speaker. The philosophy of Labor is to do away with the private employer and to make the Government the employer. The thrust behind that action by Labor was to bring about the ruination of the economy of this country. Labor certainly was successful. I have said on a number of occasions that the philosophy of the Labor Party eventually will lead to communism in this community. The economy of this country would be wrecked. Labor would be happy to see that. Labor was most succssful in its period in office in its attempt to bring that situation about. The ability of the Government to assist people in employment or in industry was downgraded enormously. We saw what happened. People who were honest, hardworking, middle-class citizens in our community were faced with the prospect of being brought to their knees by legislation introduced by that socialist government. Does anyone recall the various pieces of legislation?

Senator Gietzelt:

– Give us the names of some of the Bills. Tell us what legislation you are talking about.

Senator WEBSTER:

-Senator Gietzelt asks me to tell what some of those Bills were. He certainly should be able to remember them. As he speaks, Senator Gietzelt casts those memories aside. He does not care to remember some of those things that Labor did in its period in office. I wish to spend some time speaking about what Labor did to rural industry. Senator Gietzelt is now supposedly the Labor Party spokesman on rural industry. How proud he must be of what Labor did and of the fact that his Leader, Senator Wriedt, who initiated this urgency motion debate today was responsible for the greatest damage being done to Australia’s rural industries in the history of this country. How proud Labor was to do that. How proud Labor was of its actions in taking away from rural industry all those benefits that it achieved over many years under the previous Government. Senator Gietzelt will remember very clearly how Labor withdrew the beneficial interest rates at which people in the rural community were able to borrow. He will recall how Labor removed the benefits of taxation concessions for water holes or bores that were established or for the development of fencing in that community. Has the honourable senator forgotten these matters? Is he proud of what Labor did in those days? What Labor did was to wreck the farming community; that damage cannot be repaired and the industry cannot be rebuilt overnight. Of course, the wisdom of the honourable senator is -

Senator Gietzelt:

– What nonsense!

Senator WEBSTER:

– The wisdom of the honourable senator is to laugh at what I have said. But honourable senators opposite know that their Leader in this place who was Minister for Agriculture at that time in the Labor Government led the rural community into the greatest disaster that it could ever have suffered. Senator Gietzelt is aware of that fact. Labor cut financial support and reduced beneficial interest rates. It withdrew taxation benefits. It abolished many bounties including that on superphosphate. Labor withdrew encouragement to production then as it did on a number of occasions. Overseas, Labor did the greatest harm to the traditional allies and friends of Australia by speaking against the true friends of this country. So Labor’s actions harmed our export income.

More than that, Labor senators must know that they destroyed the confidence of ordinary citizens by introducing legislation proposing that unearned income should be taxed at a higher and a different rate from ordinary income. Labor would do that tomorrow if it had the opportunity ever again to be in Government. I say that the Australian community at large has learnt from the experience of a Labor government. The Australian community was beguiled by the policy put forward by the Labor Party in 1 972. But they have learnt, can I say, by another man’s experience, never to do that again. I hope that the Labor Party never sees the treasury benches of this country again as a government in my lifetime.

It is appropriate that we should look at these matters. It is most important that we understand what we were led into. At this time we have the spectacle of a group of men who brought this country to its knees having the audacity to say to the new management that they could do better than it. How true was the message in Pickering’s cartoon recently in which he depicted Mr E. G. Whitlam, the great Leader, standing on a box and saying: ‘We got you into this mess and, by George, we will get you out of it’. How true that is. The same man who brought this country to its knees now stands before us saying that Labor now knows the way to restore the country to what it was.

Senator Gietzelt:

– You mean Labor men and women.

Senator WEBSTER:

-It was men and women who did that. They have the same advice. They are taking the same advice as they received in those days from that outstanding figure, Mr Hawke. He was here every week advising Labor men and women what they should do. How he must be proud of what Labor did. Stepping aside from the advising role that he adopted, he criticised Labor on many occasions. He is still there advising Labor at present.

Because of this Government’s actions, confidence is returning to the people. Confidence is reappearing in the rural community at this time. Confidence is being restored to business as it is to the rural community as demonstrated by the higher rate of investment today. The opportunity is present for the level of employment to increase, and that will be beneficial to the country.

Speaking about the level of unemployment in the community- undoubtedly Labor was pleased to cause the unemployment situation that it created- believe you me, Mr President, I am disappointed at the unemployment rates at present. Not having had any experience in their life of employing men, the group of people who now sit on the Opposition benches did not have any understanding of the employment costs one must face before one starts to consider whether the opporunity exists to engage labour. The demands of Clyde Cameron and others who said to those in employment in the community ‘Go for all the benefits you can. Seek wage increases. Make demands. Strike for benefits’ brought about such things as higher insurance costs, which are an impost on employers at present, and demands for 4 weeks annual leave, maternity benefits, paternity benefits and other benefits that no other advanced community is able to cope with at the present time. That is one of the problems today. Until this community is able by its scientific effort to raise the income producing level of private industry we will not be able to reduce the high unemployment figure that we have today.

The Government has achieved a reduction in the inflation rate that occurred under the Labor Government. We have instituted equitable foreign investment guidelines- not the Labor Government attitude of trying to force investment away from this country. We need foreign investment here for its expertise, for its knowledge and for its ability to employ our people. We are interested in that. Investment retentions worth nearly $7 billion have been reported in the first 12 months of this Government’s term of office. We have created the Department of Finance in an attempt to get a more balanced attitude relating to our Treasury. It will prove of benefit. We have reintroduced the investment allowance to encourage industry and the stock valuation adjustments, which this year will prove so beneficial to the business community. There has been major Budget encouragement; company profits are moving up; the rate of unemployment will commence to come down during this year. I believe that we will see Australia having that which we set out to achieve, that is, a reduced rate of inflation. That is the objective of this Government and it is succeeding at the present time.

Senator WHEELDON:
Western Australia

– It was quite like old times to hear Senator Webster speak again in such a vein. It reminded me of what happened when he was in Opposition and used to accuse the Labor Government of being a communist government. I must confess that I was a little startled, after the most amicable debate that took place last night on foreign policy when nobody accused anybody in the Australian Labor Party of being a communist, that today Senator Webster should revive that old epithet that used to be bandied around the Parliament.

Senator Webster:

– I hold my views strongly.

Senator WHEELDON:

-Senator Webster may hold them strongly, but he does not hold them very clearly. I should have thought that Senator Webster, on his elevation to the Ministry as a sort of latter-day Faraday or Edison as Minister for Science, would have been able to adopt a more scientific approach to the problems of the economy which now beset us; but it appears that he has been so bemused by the difficulties facing us through the depredations of the water hyacinth that he has been unable to apply his mind to these topics and has had to give the same old speech as he used to give in Opposition. I do not want to dwell too much on what Senator Webster said. I commend anyone who is interested in the current philosophy of the National Country Party of Australia to read Senator Webster’s remarks and learn that he is in favour of high tariffs for manufactured goods so that the farmers will be able to pay the maximum possible price to local manufacturers. It is a new development and it is an interesting contribution. It is not one that I understand Senator Webster previously stood for. But I daresay that there are those in the Chamber of Manufactures who will welcome his conversion, although I can well imagine that there would be many in the various farmer organisations who might, if they were aware of it, be somewhat displeased.

I would like to say something about the change that has taken place in the Australian economy over the past few years. The Labor Party was elected to office, but not really to government owing to the fact that it was never able to control the Senate and was constantly under threat- threats that materialised on 2 occasions during the course of the Labor Party’s 3 years in office. We were elected in 1972. When we were elected we discovered that the social welfare system of this country, which once had been the envy of the whole Western word, had degenerated to such an extent that it was well behind the social welfare systems of all of northern and western Europe and that the areas from which previously large numbers of immigrants had come to this country had dried up because working people were not prepared to leave the Netherlands, West Germany, France, Austria, Norway or Sweden to come to this country. The reason was that, despite the fact that they lived in countries where in proportion to the population there was much less wealth than there is in Australia, they were still much better off than they would have been if they had come here, because of the total breakdown of the social welfare system that had occurred in this country during 23 years of Liberal-Country Party government.

During the period for which we were in office we did something to correct the position. We introduced the Medibank scheme, which the present Government, when it was contesting the last election, pledged itself to support but which, as is so often the case with its promises, it promptly forgot once it was elected to office. During the period for which we were in office we raised the standard social security pension by 94 per cent, we raised the war and defence widows pensions by 94 per cent and we increased- just to mention one field with which I happened to be personally connected- the pensions for totally and permanently incapacitated veterans of the armed forces by 54 per cent. That took place at a time when the consumer price index increased by 44.7 per cent- in the period from June 1972 to June 1975. We gave substantial benefits to the people in this country who were most in need of those benefits. In fact, the proportion of the Budget that was spent on social welfare increased from 22.5 per cent in the last full financial year of Liberal-Country Party government to a proposed 34.5 per cent in 1976-77.

That brought with it difficulties, and we acknowledged those difficulties. We were elected on an expectation, which was shared by not only members of the Australian Labor Government but also people throughout the world, that the current prosperity of the Western capitalist world was going to continue. For a variety of reasons, which I do not propose to go into at the present moment, but among them were the problems that occurred with energy supplies, there was a general slowing down throughout the Western capitalist world. Unemployment and inflation increased in every one of those countries, whether it be Australia, the United States of America, Japan or West Germany- the land of the post-war economic miracle, the so-called wirtschaftswunder. All of us suffered the same problems.

We were conscious of the fact that, as a result of this slowing down in business activity and as a result of the increased expenditure that we had found necessary for social welfare, education and other long overdue necessities for the Australian people, we were faced with a very considerable problem. In fact, we as a government acknowledged that. Shortly before we were dismissed from office by the Governor-General, as Minister for Social Security and Minister for Repatriation and Compensation I spoke at a meeting of the Australian Council of Social Service which was held in Canberra on 22 August 1 975. 1 spoke to a group of people who were very critical of the steps that we had proposed in the Budget we had introduced to reduce the rate of public expenditure. I said at that time:

As the Prime Minister recently said, some of our expectations in 1972 were based on the assumption that the prosperity which existed then in most Western countries would continue. This has not been the case. All Western industrial countries are suffering, to a greater or lesser degree, an economic crisis which has resulted in a combination of inflation and high unemployment. The position in Australia at the moment is that unemployment and inflation are running at 4.8 per cent and 1 7 per cent respectively.

That was not a conservative estimate. I was being quite liberal in the estimate that I gave at that time. I went on to say:

It is the view of the Government that the most important and short term evil is inflation.

We can no longer support deficit spending in which 24.6 per cent of the gross domestic product has been spent on the public sector. While the non-productive, non-profitable parts of the public sector are consuming these resources, the private sector employs three-quarters of the work force and we must relieve the pressure on it. The only way to do this is to reduce spending on the public sector.

I went on to say:

The alternative of allowing inflation to develop, giving rise to massive unemployment, would result in the collapse of our monetary system. Our intentions are that the present growth restriction will be only for a short period and once the economic situation has stabilised, we should then be in a strong position to press ahead with new programs.

That is what we proposed. We acknowledged all these difficulties and were preparing to deal with them when we were dismissed. But what happened then? The Government which replaced us is not committed to ideas of social welfare. It is a government which subscribes to the doctrines of Milton Friedman and Ayn Rand- that the only things which ought to function are those which are paid for by somebody out of his own pocket; that you do not even have public education. If you carry these Friedmanesque ideas through to their logical or illogical conclusion, or the ideas of Ayn Rand, you do not have railways, you do not have universities provided by the State; everything is done by private enterprise. These are the notions to which the Prime Minister (Mr Malcolm Fraser) subscribes.

The Government and its supporters accuse us of being idealogues, of being dogmatists, yet nobody could be so ensnared in their own dogma as the people making the economic policies of this present government. Their dogma is a return to the sort of government and the sort of economic order which existed in Britain before the end of the eighteenth century. They seem to have accepted the strange, repudiated doctrines of Milton Friedman and Ayn Rand; they have the idea that somehow or other, to paraphrase the words of Calvin Coolidge who said that America’s business is business, if you leave everything to business everything will turn out all right. We saw what happened to Calvin Coolidge ‘s doctrines and those of Herbert Hoover in 1929. As a result of following those doctrines the capitalist world was faced with one of the greatest depressions in history, an event which threw up nazism and fascism and hastened the spread of communism. They almost caused the total destruction of the system which they said they were supporting.

Those are the doctrines to which this Government subscribes and that is the course on which it is set. But at least it seemed that one could understand what the Government was saying when it was elected. One may have disagreed with it but it appeared that the Government was saying that there was one evil and that one evil stood out above all others and had to be removed; that was the evil of inflation.

I have spoken to many business people. They used to speak to us when we were in government. They did not talk to us for a few months after we were out of government but it is remarkable now how they are coming back to talk to us again. Some of them are people who had not spoken to me for ages. They are being most cordial, most friendly, when they see me of late- not because they believe my manners have improved or that I have grown any younger looking, or more handsome or more charming, but because they know that the government they have been dealing with and which they helped to put in is on the way down the drain, and deservedly so. Perhaps they would like to hedge their bets with the Opposition which they see coming up.

What do these businessmen say? They say what I am saying now- that at least they could understand what the Government said it was doing or trying to do when it said that the main drive of its policy was to get rid of inflation. But once devaluation of the Australian dollar occurred how on earth could the Government ever say that its primary goal was to get rid of inflation? Whatever may be the merits of the devaluation of the Australian dollar, and its subsequent strange revaluations, like a sort of daily double, nobody could argue that devaluation is anything other than inflationary. How can a government say that the most important thing is to fight inflation while at the same time it says that what has to be done is devalue the Australian dollar? That is the single most inflationary step which any government has ever taken. This bewilderment which is consuming the minds of the more intelligent business leaders in Australia is something which we thought may have been cleared up in this debate today but so far we have had no hints whatever from Government spokesmen, either here or in another place, of what the Government proposed to do about it.

I want to turn now to Western Australia. A lot of people seem to be thinking of Western Australia lately. There we see an example of the sort of thing which the Liberal Government’s strange economic policies have done. This present Government is committed in opposition to public spending. This is despite the fact that western economies such as France, with a conservative government, West Germany and Austria with social democratic governments, and Scandinavia, the Netherlands and Belgium with a variety of governments, have understood that one way of curing economic ills and unemployment is by engaging in appropriate public sector activity. But the people comprising the Australian Government are so dogmatic and so doctrinaire that they believe in no public sector activity at all. They have starved various States of funds, particularly Western Australia. The Western Australian Government, led by the unfortunate Sir Charles Court, that hapless, latter-day poor man’s Adam Smith- he would be a poor man’s Adam Smith if he happened to be familiar with his doctrines and had not read the version of them which appears in the Daily News- has been so starved of funds that it has found it necessary not to continue with the public enterprise State electricity operations to provide electrical power to the people of Western Australia. Instead it has had to bring a business partner into the Muja power plant project. The Western Australian Government has been so starved of federal funds that it has had to bring foreign funds into Western Australia. That is much more inflationary than would have been the case if there had been a transfer of funds within Australia. To bring in foreign funds in order to do this is again inflationary. It is inflationary just as the Australian Government’s policy of devaluing the Australian dollar is inflationary. What has Sir Charles Court said? He was reported to have said this:

The Muja plan will mean an increase in electricity charges after 1980, but Sir Charles said that the rise would be marginal.

He has a different view of ‘marginal’ from that which some of us may have. He was reported also to have said:

At most, charges under the new scheme would be 4 per cent to S per cent higher than they would be if the Muja extensions were financed from government loan funds.

There is to be a 4 per cent to 5 per cent increase in electricity charges in Western Australia because of the Federal Government’s policy. This is the policy of the Government which says that it is opposed to inflation, that it is here to fight inflation.

We of the Opposition are waiting for the answers. The people of Australia are waiting for the answers. So are the leaders of the business community. I do not have any great sympathy for the leaders of the business community. I must say that I think that to a very large extent they deserve what they get. Their stupid opposition to modest proposals of ours, such as the establishment of an Australian Government insurance corporation, and their pumping of money into the hands of the incompetents who sit opposite on the Government side, were largely responsible for the mess that they are in now. The fact of the matter is that as long as we have a business community and an economy which is largely a capitalist economy, any sensible government nas to retain the confidence of those people. This Government has completely lost their confidence in the same way that it has lost the confidence of the trade unionists and all the other people of Australia. What we want to know is: What is the Government trying to do? We know that it is not succeeding, whatever it is, but would it at least please tell us what it is trying to do? At the moment we do not know. Nobody else knows. I believe there are very strong grounds for believing that the Government does not know either.

Senator GUILFOYLE:
Minister for Social Security · Victoria · LP

– We are debating an economic matter which originated from the Opposition. As we found when such a debate was originated in the other place earlier this week, the debate is based on a faulty analysis of the economy by the Opposition. There are facts which the Opposition has chosen to ignore. I think there are facts which it would prefer to forget. Some of the matters raised by Senator Cotton, the Minister for Industry and Commerce, when he was replying for the Government, and the many statistics he presented revealed the analysis of the situation as it is, not as the Opposition pretends that it may be. The facts which the Opposition ignored were facts shown by the figures read by Senator Cotton and others. Those figures conclusively show that 1976, by almost all counts, has been a stronger year than 1975. We would expect that the budgeted growth rate for the economy will be exceeded. I am referring to the growth rate set down in the Budget presented by the Government late last year. As was revealed by the figures, the real gross non-farm product has increased in each of the first three quarters of 1976. It is now 7.6 per cent above the level of December 1975. Industrial production has been firming after a growth pause around the middle of last year. Year by year the gains are spreading.

If we look at specific areas of activity, such as motor vehicles, we see that registrations of new motor vehicles rose to 63 200 in December. That was a record monthly level. The 1976 registrations were higher than those of 1975. That was the year when sales tax was reduced substantially to boost the industry. Retail sales, seasonally adjusted, grew by 2.6 per cent in November and 1.2 per cent m December. This reflected increased buoyancy in the retail area as compared with earlier months in the year. In general terms the year 1976 appears to be a year of real growth. Real private investment in dwellings in the 6 months to September was 26 per cent higher than in the same period a year earlier. Senator Cotton referred to company profits. I restate that they increased by 26.2 per cent during the 6 months to December last as compared with almost no change in the 6 months to March 1976. It is these things which lead the Government to say that there is an improvement in Australia ‘s economy.

Many of the things which have been said by Opposition speakers indicate an admission by them of the difficulties which they had when managing the economy throughout their term of office. But they do not show that they have learnt the lessons of that mismanagement. Nor do they show, in the policy which was presented by their shadow Treasurer, that they have any real understanding of the needs of the Australian economy. Nor do they show that they have any interest in a wages policy or many of the things which are quite fundamental to the recovery of the economy of this country. They like to forget the unemployment which was created during their 3 years in office.

It has been stated before- it is a matter of grave concern to Australia- that to have underemployed the human resources of some 300 000 people at this stage is something which is of primary importance to this Government. But it is of importance to us to show that the growth in that unemployment was an inheritance of this Government. As was stated earlier, if we look at the economy which was taken over in 1972 we will see that we had very little unemployment. We have seen how unemployment has rapidly increased during the Labor years and how difficult it is to reconstruct an economy which was weakened so gravely by that mismanagement during the 3-year period. The average rate of unemployment in Australia between 1963 and 1972 was 1.3 per cent of the work force. This figure was hailed throughout the world as being a remarkable feat during those years when we were able to have a fully employed work force in contrast with many other countries which, at that time, suffered severe inflation and employment difficulties.

In December 1972 when the Whitlam Government came into office something less than 2 per cent of the work force was unemployed. Last year when we introduced the Budget the Budget papers made it clear that we did not expect a decline in the level of unemployment until later in the financial year. We are hopeful that those steps which are being taken now and the steadiness which is showing forth in many of those sectors of the economy which have been mentioned, will indicate that employment opportunities are improving and that the difficulties which we are now experiencing will be gradually overcome. When we look at the policies which have been presented by the shadow Treasurer we see that there is no real interest in talking about a wages policy. Honourable senators opposite talk about unemployment and they do not seem to understand that unemployment is directly related to sound sense in a wages policy. I do not know whether they prefer to ignore the difficulties which have been caused through the rapid rises in wages during the 3 years of their Government or whether they are not clear as to what the real difficulties are at this time.

If we are to overcome the real economic difficulties there has to be a realisation that the wages policy is of prime importance. During the period when this Government has pursued its present wages policy, a period in which there have been 2 partial indexation decisions, inflationary pressures have been dampened somewhat and the ratio of consumer spending to disposable income has been increased. In the first 3 quarters of 1976 there was an increase in real private consumption of 4.2 per cent, if we express it as an annual rate. It is true to say that indicators currently available suggest that there is continuing moderate growth in private domestic final demand. So we see that during the period when we have presented to the Conciliation and Arbitration Commission the concern of the Government about the growth in wages in more recent years, through the decisions of the Commission we have been able to show a slight recovery because of the dampening of the rate of increases in wages throughout the more recent months of last year.

But one of the key causes of both business and consumer uncertainty is inflation. I do not think anyone would argue with that. Inflation is the real difficulty in our economy. It is the real difficulty to real recovery, whether we are talking about an investment-led recovery, a consumerled recovery or a recovery in real terms. It is oversimplistic to suggest that reduction in real wage increases will exacerbate consumer uncertainty. There are 3 principal determinants of precautionary savings. I think we have seen real evidence of the precautionary savings of the Australian people. The elements which are important are the current and the expected rate of inflation, the fear of unemployment and the expected trends in real disposable income. They all are of vital importance when we are talking about economic management. There is a certain caution in the Australian people with regard to their disposable income and the savings which they are taking as precautions. It could be argued- perhaps this is the Australian Labor Party argument-that high wage increases may stimulate consumer confidence.

I do not think the people in this country are unrealistic enough to believe that because they are getting more and more wages they are necessarily receiving more and more value on which they can expend those wages. Consumer confidence in the longer term will be generated only through a wages policy which shows growth in real terms and which recognises that wage restraint may be necessary so that the reduction of inflation can be overtaken. The essential prerequisite to a lasting recovery in consumer confidence and, in particular, to sustained economic growth is the realism in terms of the level of wages and the purchasing power which ultimately people have. So the Government’s objective is to have a sustained and balanced recovery. A great deal has been said about jobs and the unemployment position. Often I hear people talking about creating jobs. They ask: ‘Why does not the Government create jobs?’ To me that seems to be an unrealistic proposition if we are talking about real recovery and permanence in employment. We cannot create something out of nothing. If there is no economic growth and stability there will not be the lasting opportunities for permanent and sustained employment.

This is a matter to which we have been directing a great deal of our attention in our manpower policy. Our manpower policy, which is administered through the Department of Employment and Industrial Relations, is conscious of the numbers of people who are unemployed. Our policy is conscious of the fact that when we took office Labor left us an unemployed youth work force of some 152 000 people. We are conscious of the fact that many young people are in the unemployment statistics. It is our desire to have an employment policy which has led us to undertake programs which we believe will be of assistance. When we hear from the Opposition what it feels is wrong in the continuing decline, we hear nothing with regard to a manpower policy except, perhaps, when it talks of reinstituting the Regional Employment and Development schemes which it abandoned when it was in office. If we talk about our manpower policy we can look at the many initiatives which have originated throughout the past year and which will, in many ways, give assistance to those who wish to find employment or to have opportunities for training which will lead to more permanent employment.

I restate that we have completely re-organised the National Employment and Training scheme. This has been a major success of our manpower policy. Now, more than 13 000 persons are trained under the NEAT scheme, over 10 000 of whom are receiving in-plant training while they are engaged in productive employment. As I have said, youth employment is of major significance. A figure worth remembering in relation to the current emphasis on youth employment is that during 1976, which was a difficult labour market year, more than 95 per cent of the previous year’s school leavers managed to get jobs. For the remaining 5 per cent and the buildup of young people who were not in work, the Government has introduced a series of measures which we hope will be of long-term assistance. We have the special youth employment training program, and some 3000 young people are now engaged in the program. There is the completely new apprenticeship scheme, which has had a very favourable reception. The key feature of the scheme is that rebates will be free of Commonwealth tax. Other areas of assistance include the pre-apprenticeship and accelerated training scheme, the relocation assistance scheme, further funds for technical and further education, the recasting of the National Training Council program, the establishment of the inquiry into the Commonwealth Employment Service to see what further efforts can be made to match people with job opportunities and to provide that service to those who are unemployed or to those who are seeking wider opportunities in employment. An inquiry into education and training has been established, as well as a program aimed at assisting secondary school students to make better career choices and to plan for their entry into the world of work. All of those things are important if we are talking about assisting people to get jobs. But as I said earlier, to talk glibly of creating jobs is to talk of the sort of scheme that we had before which was abandoned by the government which introduced it.

A lot has been said about the need to provide incentive through a reduction in income tax. It is very easy to talk at the present time about reducing income tax if one does not understand what that would mean. To talk of introducing cuts in income tax I think is to overlook the personal tax indexation which has been introduced by this Government and which is the single most important reform in the history of the Australian taxation system. It has given for the first time a guaranteed protection to the community against unlegislated tax increases brought about by inflation. Senator Wheeldon referred to the percentage of the Budget which is expended on social security. I wonder whether those people who talk of reductions in personal income tax recognise that some 70.5 per cent of personal income tax collections are spent by my Department. I wonder whether those people who are hoping for a reduction in personal income tax realise that those personal services which are required to be paid for by taxation absorb so much of the present personal income tax collections. It is in those areas of incentives that much needs to be done, and perhaps other Government speakers will comment on such things as the investment allowance, company tax indexation, and other matters which have already been introduced by the Government as incentives either to individuals or to companies.

Senator COLSTON:
Queensland

– I support the motion of the Leader of the Opposition (Senator Wriedt), namely, that the continuing decline in the Australian economy and the failure of the Government to take remedial action is a matter of urgency. In some respects I do not support it with any glee because the decline in the Australian economy is affecting every person in Australia. In considering this matter I think it is important to go back a little way and to look at the 1975 policy speech of the then caretaker Prime Minister. In Mr Fraser ‘s policy speech in November 1975 he set out what he would do for the Australian people. In his opening remarks Mr Fraser said:

Let us all as Australians determine to restore prosperity, defeat inflation and provide jobs for all.

That was stirring rhetoric, as was most of the remainder of the speech. But all Australians are aware that the promises made then have not been backed up by performance. In addition to its dismal failure to honour its promises of prosperity, decreased inflation and jobs for all, the Fraser Government is intent at the moment on lowering the real wages of Australian workers. So much for prosperity.

In looking back at that time, I am reminded of the purported conversation between 2 women who were also looking back. One said to the other ‘This Mr Fraser really knows what he is saying. I can remember speaking to him in the election campaign in 1975 and he said to me, “If you vote for Whitlam you will end up with higher unemployment, higher interest rates and higher inflation.” I voted for Mr Whitlam’, the lady said, ‘Whitlam did not win but Mr Fraser was right. We have higher unemployment, higher interest rates and higher inflation’. There are some people whom I could name who are on the same political side as the present Government and who think the same way about what the Fraser Government has done.

Before I refer to that, however, I would like to mention my own State. The things which are happening in Queensland, the State I represent, present a very dismal picture for the people there. The January employment figures for Queensland released by the Commonwealth Employment Service show that a record level of 6.4 per cent of the work force in that State is unemployed. That is well above the Australian average, which is 5.8 per cent, and I believe that that in itself is an intolerable level of unemployment. Virtually every city and town in Queensland saw a marked increase last month in the number of people out of work. That does not make for a happy economic situation. The unemployment figure for the Brisbane employment district for the month of January showed a rise of 12 per cent over the figure for December 1976. There were 21 843 people registered as unemployed in the Brisbane employment district last month, compared with 19 405 people in the previous month. As I said, there was a 12 per cent increase from one month to the next.

During the parliamentary recess I became aware that many unemployed school leavers were deliberately confused about whether they could register for employment or for unemployment benefits. Many young people came to me and said that they did not know what to do. Some people said that they had been to an agency of the Commonwealth Employment Service and had not been allowed to register. Because that occurred, it is likely that many unemployed school leavers did not register as unemployed during January. That being so, what are the true figures? I am not sure, but I will quote the actual Commonwealth Employment Service figures for Queensland for last month. It should be remembered, too, that the current Government no longer publishes seasonally adjusted figures. That being the case, it is not really possible to look at the figures and compare them with figures for other times of the year. I realise that there are problems in seasonally adjusting figures, but any statistician worth his salt would provide adjustment criteria so that one could look at figures for one month and compare them with the figures for the previous month or for 6 months ago to see what they represent in relative terms. I believe that it is time this Government asked the Statistician to work out a way to provide adequate seasonal adjustments.

I referred before to the increase in the unemployment figures for Queensland from December to January. Let me now deal with some of the employment districts and the percentage increases which occurred from December to January. On the Gold Coast there was an increase of 10 per cent, in Townsville 23 per cent, in Mackay 15 per cent, in Nambour 17 per cent, in Bundaberg 12 per cent, and in Toowoomba, which is one of our largest cities, the increase was 10 per cent. Mount Isa is regarded as a place of fairly low unemployment and there is a cogent reason for this. If one becomes unemployed in Mount Isa one does not stay there but goes to another city to seek employment. However, Mount Isa in January had a 7 per cent increase in the number of unemployed over the figure for December of the previous year. Let me mention some of the smaller areas in Queensland. They are smaller but there are still people there and everyone who is unemployed finds the position difficult. In Gympie there was a 20 per cent increase, in Atherton 38 per cent, in Innisfail 20 per cent, in Ingham 23 per cent and in Ayr 27 per cent. These are not the only places in Queensland where there was an increase but I have mentioned these employment districts simply to give an illustration of what the situation is like in the State which I represent.

I would like to quote from remarks made by 2 people. One is never a Labor supporter and the other is not necessarily a Labor supporter. I noticed in a private communication the other day that Mr Kevin Cairns, the Liberal member for Lilley in the House of Representatives, stated that Mr W. J. Herbert who writes as an economist in the Sunday Mail is a friend of his. Mr Herbert pulled no punches in the Sunday Mail last Sunday. Talking about inflation he said:

Australians will soon get two shocks on inflation in close succession. The December quarter price increase will be announced in the next fortnight -

We were told today that it will be announced next Tuesday at noon.

Senator Keeffe:

– That is after the Western Australian State election.

Senator COLSTON:

-Indeed. It is after the Western Australian State election. Mr Herbert continues:

  1. . and it is likely to be at least a S per cent rise in the Consumer Price Index.

The CPI figure for the March quarter will be announced about mid-April. This is also likely to show a price increase of about 3 per cent. So in 2 months Australians will be told of a 10 per cent rise in prices. They will be shocked. Inflation will have accelerated to a 20 per cent annual rate for the 6 months from October to March.

Mr Fraser ‘s stocks are going to slump- unemployment and inflation getting worse, not better.

Mr Herbert goes on to talk about cuts in Government spending and how in the current economic situation that is ludicrous, but I will not continue with Mr Herbert’s remarks. I mention instead some remarks by a prominent member of the

Liberal Party who similarly pulls no punches when talking about this Government and its lack of planning. On 3 February the Deputy Premier of Queensland, Bill Knox, made a speech at a Liberal Party dinner in Brisbane and among other things he had this to say when talking about inflation:

I do not think that any of us would doubt that the Federal Government has made genuine attempts to reduce the rate of inflation in Australia. Up to the present time it has met with some success, but much of that success is going to be whittled away when the consumer price index figures for the last quarter are released. To a very great extent, the Commonwealth has itself to blame for that- it won’t be able to blame the unions, the States, or industry.

Later he said:

I believe the passage of time will demonstrate that the restructuring of Medibank was poorly timed, and that the imposition of a levy or tax- because that is really what it is- was inappropriate given the prevailing economic conditions.

With regard to unemployment Mr Knox, a Liberal, said:

There can be no doubt that it has been singularly unsuccessful in its attempts to reduce unemployment,

Speaking of restoration of prosperity, something about which I spoke in my opening remarks, Mr Knox said, referring to the Government:

But for my part, I believe that this is the area of greatest concern to us today because every indication which I have received from the leaders of the private sector, and from those who depend upon the private sector for their jobs as well, points to increasing disappointment at the Federal Government ‘s performance in this area.

There are other aspects of Mr Knox’s speech which I think are quite pertinent but let me turn to something which he said at the end of his speech:

But where the action is really needed is in national economic management . . . where positive leadership will boost confidence and help restore growth and prosperity.

For the sake of the very system which we all support, I hope it will not be long in forthcoming.

The whole tenor of Mr Knox’s speech is an attack on this Government for its economic mismanagement. One has to concede that there will be a State election in Queensland this year and it is obvious that Mr Knox is trying to dissociate himself from the mismanagement of this Government. Mr Knox himself should be doing something positive but, not being able to, he has come out and attacked this Government. This document is of such importance that it should be available to everybody. I have had consultations with the President earlier about this document and he said he would be prepared to let it be incorporated in Hansard. I therefore seek leave to have Mr Knox’s speech incorporated in Hansard.

The ACTING DEPUTY PRESIDENT (Senator Young)-Is leave granted.

Senator Sir Magnus Cormack:

– No. I do not see why it should be incorporated in Hansard and I resist the application.

The ACTING DEPUTY PRESIDENTLeave is not granted.

Senator COLSTON:

-That being the case, it is obvious that the Government has something to hide. It is frightened of what the electors will do when they have the opportunity to cast a vote to show what they think of what this Government has done. I accept the fact that I am not able to incorporate the document in Hansard but I give notice that this evening in the adjournment debate I shall read it into Hansard. Every economic indicator shows that in Queensland, the State I represent, there is a worsening situation. It is time that not only this Government but also the Queensland Government took those necessary steps to ensure that the economic situation in that State and throughout the whole of Australia becomes much better. It is a matter of urgency that the Australian economy is continuing to decline and that the Government is failing to take the proper remedial action.

Senator WALTERS:
Tasmania

-The urgency motion before the chamber today is typical of many of the unfounded allegations by the Opposition in the past 12 months. There is never any effort to quote relevant accurate facts because those facts do not suit the Opposition’s cause. Instead we get these blanket statements such as in the urgency motion which states:

The continuing decline in the Australian economy and the failure of the Government to take remedial action.

I would like to look at some of those facts and I want Opposition senators to look at them too. Before devaluation inflation was coming down and coming down rapidly. This was shown in many areas. The consumer price index for 1976 was far more favourable than it was for 1975. In 1975 the rise in the consumer price index for the January to March quarter was 3.6 per cent. In that quarter in 1976 it was 3 per cent. For the April to June quarter it was 3.5 per cent in 1975 and 2.5 per cent in 1976. Then we come to the July-September quarter. I am quite sure the Opposition would agree that the figure for that quarter was artificially low because of Medibank. Medical expenses passed from the private sector to the public purse. The artificially low figure for that quarter was 0.8 per cent. In 1976 the figure for the corresponding quarter was 2.2 per cent. In 1975 the figure for the October to December quarter was 5.6 per cent.

We have not received the figure for the October to December quarter of 1976, but we know that it will be an artificially high figure because of Medibank again, as medical expenses pass from the public sector to the private purse. The figure of 2.2 per cent for the September quarter of 1976 was the lowest since March 1973, excluding the artificially low Medibank quarter. March 1973 was only 3 months after Labor came to power. Other indications, althought not yet across the board, have been numerous and have been cited here today. I should like to add just a few. Home building costs in October rose by 0.5 per cent, the lowest figure since we were in power in November 1972. Other construction costs rose by only 0.4 per cent, again the lowest figure since we were in power in 1972. Business profits rose by 34 per cent in the 9 months between December 1975 and September 1976. As Senator Guilfoyle said, in that 9-month period there was a rise of 7V4 per cent in real non-farm product. ( Quorum formed)

Mr Fraser had repeatedly reported at that time that inflation was coming down. Of course he was proved correct by the subsequent report of the Organisation for Economic Co-operation and Development which fully supported the policies the Government had been adopting. In fact, it estimated that the annual inflation rate would have fallen to 7.5 per cent by the second half of 1977 if it had not been necessary to devalue. Even while the OECD mission was making these estimates- in that very month, in fact-Mr Whitlam was saying in a speech to the Financial Times Economy Seminar in October: It is perfectly obvious that the present Budget strategy is failing’. It was statements such as that and also a statement by the former Treasurer, Mr Hayden- his infamous statement in early September which he repeated in the latter part of that month- that the Government would nave to devalue, that forced devaluation.

The investors who already knew that the Australian dollar was well over-valued gambled that Mr Hayden might be right and withheld their money. Businesses, and therefore jobs, were leaving the country. They were not going just to Asia, as Senator Gietzelt said; they were also going to Europe. I remember that when I was in Sydney, looking over a branch of an international company there, the manager told me that Sydney was the company’s most expensive branch to manufacture in and that the company would have to leave Australia. It was cheaper for it to import its goods.

In September 1976 the Conciliation and Arbitration Commission for the first time in that year gave the full indexation increase according to the consumer price index, so shattering business confidence that only partial wage indexation would continue. All these things were instrumental in forcing the Government to devalue the currency. The alternative to devaluation, as we know, was to borrow $ 1,000m. The Government chose to devalue, which at least would benefit our exports and increase employment opportunities rather than just increase our deficit. The need to improve our export situation was obvious. Our exports had become uncompetitive on the world market. In the past 10 years average weekly earnings in Australia rose by 178.3 per cent, compared to a rise in the United States of America of 72 per cent- over 100 per cent more. In the 3 years from 1972 to 1975 Australian wages rose by 1 5 per cent more than those of our major competitors. In addition, productivity was down. On the waterfront in Hobart- I shall take this example- the current loading rate of apples is 1 5 000 cases per ship per day. In New Zealand the rate is 50 000 cases per ship per day. Is it any wonder that our apple industry was not able to compete with the industry in New Zealand for overseas markets? Our apple industry is only one example of that sort of thing; it applies across the board.

Having made the decision to devalue, Mr Fraser decided to make it a once and for all devaluation of 1 7V4 per cent, which said loud and clear to all potential investors: ‘That is it. There will be no more’. As we know, the investors have responded. When Mr Fraser announced devaluation he stressed that from then on our currency would be on a managed float, the same as the currencies of many other industrial countries in the West such as Japan, Canada, the United States of America and West Germany. We were also told at the time that there would be quite large fluctuations for the first 3 months and that the currency rate would then settle down to a daily rate. This is what has happened. As Senator Wriedt said earlier, there were 2 large revaluations by the Reserve Bank, one of 2 per cent which was followed by another of 1.3 per cent in fairly quick succession. There have been several smaller revaluations since then and now our currency has settled down to the accepted minor fluctuations of the managed float and a rate representing a devaluation of 12.45 per cent.

Even though the Prime Minister had stressed these facts at the time, the Opposition said that the Government did not know what it was doing. Our aim now is to capitalise on the assets that devaluation can give Australia and to control the inflation that could arise if the position is not monitored carefully. As honourable senators can imagine, controlling inflation is an exercise in monetary balance. Too much liquidity creates large demands and if demands exceed growth prices will go up. Hence the importance of keeping overseas borrowings in particular under control. However, the control must not be so strict as to stifle growth and incentive. What we need now is slow, steady growth coupled with slow, steady demand. Of course, this is what the Government is working towards. That is why we have made long term overseas borrowing much more attractive than the short term overseas borrowing of similar amounts under the variable deposit requirement scheme. In fact, there is an emargo on borrowing for less than 2 years on amounts of $100,000. Of course, exemptions to this are the capital investment in the mining and manufacturing industries where we need growth.

There is no credit squeeze. Mr Lynch has denied this every time it has been suggested. It is amazing to me how many people in the business world react to rumour. But I suppose that this is just a direct result of the 3 years when the Labor Government was in power when, just for selfsurvival, these people had to react to the slightest rumour to protect themselves against the various whims of the legislation of that government- the present Opposition. The $850m which the banking system is at the moment required to maintain in the Reserve Bank of Australia will be released in March to meet the seasonal demand of funds. Mr President, does this sound to you like a credit squeeze? Before the Liberal Party came to power we said that the road back would be long and hard. The Opposition admits that it created the disaster we faced when we came into power. Mr Whitlam himself has said recently that he panicked and so did most of Caucus. I believe that the Australian people recognise that it only takes a few minutes for a wild horse to kick down a barn but it takes many days for a skilled carpenter to rebuild it.

Senator James McClelland:
NEW SOUTH WALES · ALP

– I listened with some astonishment to Senator Cotton’s speech earlier in this debate, the message of which seemed to be as summed up in the words of the poet Browning: God’s in his Heaven; all’s right with the world. Senator Cotton said, in effect, that the growth of the economy was up, inflation was coming down and that perhaps there was a little bit of a snag in relation to unemployment. It will be recalled that the alleged justification for the conservatives of this country, including their faithful servant at Yarralumla, tearing up the rules in 1975 was to give the people a chance to elect a government which had the answers to our economic ills. This turned out to be the greatest confidence trick in Australia’s history. The members of the Liberal Party had no economic plan. They merely wanted to get their snouts back into the trough. As a member of the staff of one of the present Ministers said to a member of my staff at the time: ‘You are beginning to look too good; we will have to get rid of you’. I remind the present Government that the threadbare claim that it is taking more time to get the country out of the mess which we are supposed to have created will not hold water much longer with the public as recent gallup polls make quite clear. I point out also that in our last 6 months in office we had reduced the annual inflation rate from 1 7.6 per cent to something like 13 per cent.

Despite what Senator Cotton and Senator Walters attempt to establish in the matter of this Government’s record on inflation, there is no evidence available that this Government has reduced the rate of inflation at all. The only way in which it can manipulate the present annual rate of inflation is by omitting mention of the December consumer price index figures which are being held back deliberately until the Western Australian elections are over. Senator Walters in some odd, almost incomprehensible attempt to manipulate the inflation rate, spoke of the artificially low Medibank quarter when we were in office. When we have the December consumer price index figures- that is after the Western Australian elections- presumably we will hear about the artificially high Medibank figure. But all of these artificial figures are due to governmental policies and governmental actions. There is nothing artificial about them. They are man made. They are a result of the actions of government. I suppose that devaluation was also artificial. Senator Walters sought to exculpate the Government. She and Senator Cotton evidently blame the Australian Labor Party for devaluation. Apparently it was all caused by some statement by Mr Hayden. The gullibility of the community is not such that that sort of misrepresentation will alter the trend of the gallup figures in favour of the Government.

The position is similar in regard to unemployment. I was most amused by the way in which Senator Cotton attempted to manipulate the unemployment figures. He said that in November 1975 when we were in government the percentage of unemployed in the work force was 4.6 per cent. In November 1976 after nearly a year of the coalition Government, that percentage was down to 4.2 per cent. He did not bother to tell us that a month later the unemployment rate had risen to 5.8 per cent. What matters is not the figures for November 1976. What matters is how many people are unemployed at the present time. Mr Malcolm Fraser in his policy statement prior to the election referred to the employment creating incentives of his Government’s policy when it was elected to office. Now any mention of employment creating initiatives is regarded as dangerous, inflationary talk. It is wicked to attempt to stimulate the economy. We are told that this is merely aggravating inflation.

Why was not Mr Fraser honest enough to tell us that before he was elected? The fact is that Mr Fraser and his Government have fallen for the dangerous nonsense of their idol, Milton Friedman, that the fight against inflation necessarily involves a massive increase in unemployment. We need only to point to the performance of the totalitarian government in Chile over the last year which took seriously Milton Friedman’s advice. Certainly, inflation was cut from an annual rate of 340 per cent to 180 per cent. But this was done only at the cost of bringing the country’s economy almost to a standstill. Almost half of the employable people in Chile are now out of work. This action is something like curing an ingrowing toenail by amputating the leg. This is the sort of advice this Government is following in line with the advice and lucubrations of this great modern pundit, Milton Friedman. Similarly, Mr Fraser, when he was talking about wages policy and wooing the electors, said that the Government would support the wage indexation agreement in the present economic circumstances. Now full wage indexation has become a dirty word. Perhaps the alibi is that he was referring to the economic circumstances in which he made his promise. But implicit in his rejection of that promise is an admission that economic circumstances are worse today that they were when we made the promise. Is this due to the fact that we had a Labor Government for 3 years or is it due to the fact that we have an inept successor to the Labor Government?

I recall that I took part during the election campaign in an interview for the Monday Conference program together with the present Minister for Employment and Industrial Relations, Mr Street, on the question of wage indexation. Anybody who reads the transcript will find that we were talking about full wage indexation. The caretaker Government, as it then was, was at pains to persuade the work force that there would be no inroads in to wage indexation. In fact, it was terrified that the success we had in persuading the work force to accept wage indexation would be eroded because there was a great deal of uneasiness in the union movement as to whether merely keeping up with the cost of living constituted wage justice. Mr Street had this to say after I had talked about wage indexation and the difficulty of keeping it because of some of the inequities in it:

I would like to comment on that last statement of the Senator’s because he must know that under the caretaker guidelines of the Government we are prohibited from taking initiatives. Now I discussed this matter with my Department, with his previous Department, within 24 hours of getting into the chair, and I impressed on them that under no circumstances must there be any possibility of wage indexation collapsing during the time of this caretaker Government, but our capacity to initiate, as he knows, is very limited.

Mr Street was asked by the moderator what he thought of the prospect of wage indexation and how long Mr Street thought wage indexation would last. He was asked whether it would last 6 months or a couple of years. His answer was:

I think it will last longer once you have got the other half attached to it, that is the indexation of personal income tax.

There was the present Minister for Employment and Industrial Relations giving a guarantee to the people in the work force of this country that not only would full indexation be maintained but it would become more acceptable to them because they would also get tax indexation. Tax cuts have become dirty words. Anybody who suggests anything about tax cuts is sabotaging the Government’s efforts to get the economy into good order again. Mr Fraser and Mr Lynch indicate that the pressure they are getting for tax cuts from their back benchers amounts almost to sabotage of the Government’s efforts and that any tax cuts that will be forthcoming will be in the sweet bye and bye. I am prepared to predict here and now that not only will there not be tax indexation in the forthcoming Budget but also the abandonment of that promise will be justified on the basis that times have changed.

So all the promises that seemed feasible to the Government before it became a government are now being abandoned. The pretext is being advanced that the reason why the Government cannot do these things is that things are worse than it expected. This merely illustrates that not only did the Government not know anything about the true nature of our economy but also it was making bold, brash promises which it had no chance of fulfilling. It is a government without a plan; it is a government that is staggering from one crisis to another. Its only semblance of a wages policy is to mount a continuing attack on wage indexation and attempt to intimidate the Conciliation and Arbitration Commission which, as anybody who understands the Constitution knows, is not an organ for fixing wages, is not an institution for getting an inept government off the hook, but is an institution charged with settling disputes extending beyond the limits of one State. The Government is indignant because the Conciliation and Arbitration Commission will not do exactly as it wants and, with total regard to the state of industrial peace of the country, will not attempt to make inroads into the standard of living of the work force in this country.

The only policy left to this Government is to attempt to implement a drastic cut in real wages. The people who are to pay for the Government ‘s usurpation of power, the people who are to pay for the Government’s primitive economic doctrines, the people who are to pay for the Government’s total ineptitude are the unionists and the people in the work force of this country. I predict that if the Government goes ahead with the proposals that are in the pipeline at present, namely, the amendment of the Conciliation and Arbitration Act to introduce this fantastic industrial relations bureau and to insert section 45D into the Trade Practices Act, what this country will face is confrontation and chaos. Any prospect of an improvement in the economy will go right out the window.

First of all, let us consider this industrial relations bureau. Those who will not learn from the lessons of history are doomed to repeat them. Anybody who knows anything about industrial affairs is aware that in the chaos of 1969 following the metal trades award when a wholesale attempt was made to use the penalty clauses of the Conciliation and Arbitration Act, the country practically came to a standstill. Finally, the employers recognised that this was a clumsy way of trying to discipline the work force and from then on till today penalties were not availed of by employers. But now we have an attempt by this Government, knowing that the employers will not fall into the trap again, to introduce a third arm of government- this industrial relations bureau, which will take the initiative in imposing penalties. Mr Fraser uses the soft word ‘consequences ‘. But the consequences are just as drastic as any used in the past. They include fines, deregistration and even ultimately the gaoling of union officials. Finally, under amended section 45D of the Trade Practices Amendment Act there will be power to impose a fine of $50,000 on individuals who have the temerity to strike or impose black bans in defence of their standard of living. This is either a gigantic bluff or a diversionary tactic- get yourself a scapegoat and people may not notice what a mess you are making of the economy- or it is a confession of bankruptcy by this Government in its attempt to run the economy. The fact is that these matters will not work. I remind the Government of what happened to the British Government under Mr Heath when he attempted a similar program. In a short time Britain was reduced to a 3-day week and there were fuel shortages and general chaos. This is the road along which this Government of great economic managers is walking. This is the bluff that it pulled on the Australian people in November 1975. Having no plan, having no program, having no clue about how to run the economy, it is now forced into seeking scapegoats and pushing towards a confrontation with one of the most important sectors of the population. This exposes the total fraudulence of the Government’s claims back in November and December 1975. I believe that the Australian people are waking up to the fact that in those months they were sold the greatest confidence trick in Australia’s history. No matter how the spokesmen on the other side of the Chamber have tried to manipulate figures and falsify the position today, their bankruptcy is becoming increasingly clear to the Australian people. One thing Mr Fraser is going to wish as the year progresses is that life had been a little bit easier for him than, as he tells us, it is supposed to be for the rest of us.

Senator MESSNER:
South Australia

– There is one thing on which the Labor Party has always been consistent and that is its continual confusion about the economy. For instance, today we heard Senator James McClelland greatly defending the sorts of wage restraint pressures and policies that this Government seeks in the coming wage case. He made great play of the fact that during his period of office as Minister for Labour and Immigration in 1975, he brought to the attention of the then Government the need to reduce the pressures of inflation on this community. That of course is the key element in this economy and the economic problems we have today. I shall read part of a letter which appeared in the Canberra Times of, I believe, Monday’s date, and which was signed by ‘Chris Hurford, MHR for Adelaide, “Shadow Treasurer” ‘.

Senator Cavanagh:

– No, read the lot of it.

Senator MESSNER:

– It reads:

Sir,

I can sympathise with the criticisms made in the editorial of February 9 on Labor’s alternative economic package. In current circumstances, any set of policies will have dangers as well as benefits. The danger in Labor’s approach is the possibility of intensified pressure of demand leading to further prolonging of inflation.

However, the Labor Parliamentary Executive was well aware of this when preparing the proposals.

I do not know whether Senator Cavanagh wishes me to read the rest of the letter.

Senator MESSNER:

- Mr President, I seek leave to have the document incorporated in Hansard.

The PRESIDENT:

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

The document read as follows-

page 158

ALP ECONOMIC STRATEGY

Sir,

I can sympathise with the criticisms made in the editorial of February 9 on Labor’s alternative economic package. In current circumstances, any set of policies will have dangers as well as benefits. The danger in Labor’s approach is the possibility of intensified pressure of demand leading to further prolonging of inflation.

However, the Labor Parliamentary Executive was well aware of this when preparing the proposals.

It is difficult to see how you could be in a position to judge the amount of analysis involved in preparation of the proposals. It is, therefore, quite unfair to state that the proposals were prepared without analysis. In fact, the proposals are the result of much discussion, close consultation with expert business and academic advisers and as much quantification as inadequate current published data and limited staff permit.

This background work suggests that some relaxation of announced monetary restraints and some selective fiscal changes are possible which would stimulate the economy in particularly depressed regions and industries without significantly increasing inflationary pressure. Some of them, such as the indirect tax cuts you support in your editorial, also reduce the rate of price increase.

These changes need to be ‘moderate and responsible’, as Mr Whitlam said in his press statement on the unemployment figures. This has been the orientation of all Labor’s proposals during the past six months. In stating otherwise, your editorial is inaccurate and therefore misleading.

page 158

CHRIS HURFORD

MHR for Adelaide,

Shadow Treasurer

Parliament House, Canberra

Senator MESSNER:

-Not only is the Labor Party confused in relation to policies; it is confused as to who is its spokesman on economic matters. Mr Hurford, whom we thought was speaking on behalf of the Labor Party, laid down a program in this regard some fortnight ago. A couple of months ago the famous 5-point Whitlam plan was laid down by the Leader of the Opposition (Mr E. G. Whitlam). We have also had the Hayden plan. This on top of the plans of the succession of Treasurers when Labor was in government. As I said earlier, this total confusion is the only consistent thing present throughout Labor’s economic policy.

What are the real problems that we face in the economy at the moment? Certainly one is inflation, and that is recognised by Senator James McClelland. Inflation today is running at a rate of something like 12 per cent to 13 per cent. In the United States that rate is some 5 per cent; in Japan it is about 9 per cent; and in Germany it is about 3.7 per cent. Some justification of Labor’s economic plan as laid down by Mr Hurford has been claimed on the basis that the new President of the United States, President Carter, has decided to adopt a plan involving big spending, the creation of a deficit and tax cuts.

The figures that I have just cited make quite clear the difference in the nature of the problem between the United States and Australia. That country, with an inflation rate of some 5 per cent, is able to cope with the rest of the Western nations in its trading situation. But a country such as Australia because of the enormous disparity between an inflation rate of 5 per cent and an inflation rate of 13 per cent has greater problems in coping with that difficulty. This is on top of the natural disadvantages arising from distance including the problems of freight costs.

Labor is trying to convince the public through a rather determined propaganda exercise that unemployment is somehow related to the election of the Liberal Government on 13 December 1975. The unemployment rate in January 1977 was quoted at 5.8 per cent compared with 5.6 per cent a year before- only slightly up. If one takes into account the Regional Employment Development scheme employees who were still in the work force in January 1976, that difference is even smaller than that fraction of 0.2 per cent. But shadow Treasurer Hurford has tried to indicate differently by claiming recently that the number of jobs which have been created in the Australian economy in the last 12 months have been only approximately 10 000 whereas anybody with half a modicum of commonsense would realise that the school leavers from last year must have been absorbed into the work force to a very large degree if unemployment is still running at about the same level as it was in January 1976.

In fact statistics show that even though unemployment is still at about the same level as it was a year ago 70 000 jobs have been created in the Australian economy and people have been absorbed into the work force. We can read the type of prediction that has been coming from shadow Treasurer Hurford along with other predictions from ex-officio leaders of the Opposition such as

Bob Hawke to the effect that 500 000 will be unemployed by Christmas. That is how good the Labor Party is at predicting future economic events.

Let us look quickly at some of the indicators of improvement in the economy since we came to office on 13 December 1975. Gross non-farm production is up by 7.6 per cent, greater than had been achieved in any time during Labor’s period of office. Retail sales increased in each quarter also. In November they rose by some 2.6 per cent and in December by 1 .2 per cent. The question of retail sales is related very closely also to the problem of inflation. Let me quote from the recent monthly bulletin of the National Bank, dated January 1977, which on this matter said:

It is interesting to note that the resurgence in consumer demand has been most pronounced in those countries where inflation has been contained. This resurgence has been clearly evident in the United States and West Germany where the rates of inflation for the first 9 months of 1976 were 3.9 per cent and 2.9 per cent respectively. In contrast, the continuing high level of inflation in the United Kingdom was accompanied by a reduction in the real level of person consumption spending.

So, again, in the area of retail sales, in order to stimulate a consumption recovery, the need exists first to tackle the problem of inflation.

What has happened in housing? These are the relevant figures in real terms of the investment in housing over the last 4 years. In 1973- the year following Labor’s election to office- using constant dollars, $3 50m was spent. In 1974, the figure was $250m, a drop of $ 100m in that year. In 1975, expenditure rose marginally to $2 70m. In 1976, the first year of the Fraser Government, the figure was $320m. So, in one year we had achieved almost a balance with the 1973 figures. Those statistics are borne out by the figures of housing approvals which show there were 138 000 such approvals in 1976 compared with 118 000 such approvals in 1975. Real private investment in plant and equipment in the period March to September 1976 rose by 4.3 per cent. That compares with a 3.6 per cent decline from September 1975 to March 1976. Yet, Mr Hurford seeks to remove the investment allowance in exactly the way Labor removed the investment allowance when it came to power in 1972.

What has happened in respect of productivity? I refer to the production per employee. In 1973- we must remember that a Liberal Government was in power in 1 972 -there was an increase in productivity of 3 per cent. In 1974 productivity declined by 3 per cent. In 1975, a disastrous year, the decline in productivity per head was 4.5 per head. In 1976 there was a dramatic recovery in productivity. It rose to one per cent above the zero line which represents a change-around from 1975 of 5.5 percent.

We have talked about inflation as being one of the major problems. But most times people talk about the consumer price index. We can use other indicators such as the index of materials and manufacturing industries, which has risen 10.3 per cent only in 1976. The question of inflation is very much tied up in our minds at the moment with the matter of the Medibank levy. Obviously there will be a lump appear in the statistics in this coming announcement of CPI figures. Everyone is aware of that fact. But for the Labor Party to make capital out of that fact as though it were part of a long-term continuing trend is to practice an absolute falsehood. The most important factor is the underlying trend of inflation and, as represented by the figures quoted by my colleagues previously, this is showing a determined trend downwards.

Let us look at another indicator- business profitability. The profit share of gross national income in 1975 was 12.4 per cent whereas in 1974 it was down to approximately 1 1 per cent. This year it has recovered to an annual rate of about 14.5 per cent. This compares with the long-term recognised annual rate of 15 per cent at which business feels it is profitable to invest. Again, we are coming to the point where we can expect increased investment from business as a result of this development. Perhaps we should have some regard also for the changes in our overseas investment situation. In the period 1973-75 when Labor was in office there was this positive zenophobic approach to overseas invest- ment. The total percentage of overseas investment in 1971-72 as a proportion of total investment in manufacturing industry was 39.7 per cent. By 1974 this proportion had declined to 15.2 per cent. It is interesting to note that in that period the percentage of company income being repatriated overseas jumped from 27.3 per cent to 52.7 percent.

I return to the question of inflation because the key factor in encouraging foreign investment in this country is the understanding that foreign investors have as to the future trend of inflation. They want to know that costs in this country are under control and that we are able to compete on world markets. Obviously it is in Australia’s long-term interests to ensure that we encourage foreign investment according to the guidelines which this Government has adopted. It is also important to recognise that during the period to which I have just referred foreign investors obviously were able to invest in those areas that were growing faster than others and consequently were able to obtain a better return on their funds than were Australians. That is an important lesson that Australian investors should take into account and have regard to.

Much also has been made of the illusory credit squeeze that is around the corner for the Australian economy. It is well known in financial circles that such will not be the case. Plenty of scare tactics are being adopted by members of the Opposition to encourage a feeling that funds cannot be raised from banks. That is utterly illusory and totally without foundation. One is reminded of Mr Hurford ‘s remarks in January 1976- over a year ago- when he predicted the same thing for 1976. It did not happen, because of the outstanding ability of the Treasury to manage the treasury bond situation in the latter part of the financial year 1975-76. No doubt the Government has its hands well and truly on the tiller. I reject out of hand the motion before the Senate this afternoon.

Question resolved in the negative.

page 160

PIPELINE AUTHORITY

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– Pursuant to section 45 of the Pipeline Authority Act 1973, I present the annual report of the Pipeline Authority for the year ended 30 June 1 976.

page 160

COMMONWEALTH ELECTORAL AMENDMENT BILL 1977

Motion (by Senator Withers) agreed to:

That leave be given to introduce a Bill for an Act to amend Part III of the Commonwealth Electoral Act 1 9 1 8.

Bill presented, and read a first time.

Standing Orders suspended.

Second Reading

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I move:

That the Bill be now read a second time.

The second reading speech which I am about to deliver covers not only this Bill but also the Census and Statistics Amendment Bill and the Representation Amendment Bill, which I intend to introduce this afternoon. These Bills propose a number of amendments to the Representation Act 1905, the Census and Statistics Act 1905 and the Commonwealth Electoral Act 1918. Most of the proposed amendments arise as a necessary consequence of 2 High Court decisions- that of

December 1975, in what is known as the McKinlay case, and that of February 1977, in what is known as the McKellar case. In the past, the procedures for redistribution of the House of Representatives provided that, on the basis of the 5-yearly census population figures, the Chief Australian Electoral Officer determined, according to a set formula, the representation entitlements of each State. The procedures which followed involved the appointment of distribution commissioners who examined and made recommendations for the electoral boundaries to apply in each State in accordance with the determined representation entitlement. Following the presentation by the Minister of the reports of the distribution commissioners, it was then a matter for Parliament to decide whether to accept those distribution proposals and, as a result, whether the determined representation entitlement for a State would be put into effect.

The High Court has now made a number of very important rulings which have changed this scheme of things and which require new procedures to be introduced as a matter of urgency. In the first place, the Court looked at the constitutional provision in section 24, namely, that the number of members to be chosen in the several States shall be determined ‘whenever necessary’. The Court’s view was that this means that the number of members to be chosen in the several States must be determined in time for each ordinary general election and that such elections must be held in accordance with the entitlements so determined. However, the Court recognised that this mandatory principle would not apply in the case of elections other than ordinary general elections.

The Bills contain provisions designed to ensure that the High Court’s decision is given effect to and ensure that a determination of the representation entitlement of the several States will be made in the twelfth month of the life of a House of Representatives. The Bills also contain provisions designed to ensure that, where the representation entitlement of any State is altered, the redistribution of that State will accordingly be effected. However, although the Parliament has no discretion to decide whether to accept any new representation entitlement in any of the States, it does not follow that it should have no say in the redistribution process. The position in this regard will remain as before.

In the twelfth month of every Parliament, the Chief Australian Electoral Officer, on the basis of the latest available population statistics which he is to obtain from the Australian Statistician, will make a determination as to the number of members of the House of Representatives to be chosen for each State and forward that determination to the Minister. If that determination discloses that there should be an alteration to the number of members of the House of Representatives for any State, then the required redistribution will be proclaimed and distribution commissioners will be appointed. The procedures for the conduct of a redistribution will follow in the same way as they always have done, in accordance with the provisions of the Commonwealth Electoral Act, until the distribution commissioners’ reports have been presented to Parliament. The reports will then be subject to Parliamentary acceptance or rejection. Howeverand this is a most important point to note- in the case of an ordinary general election, if a State has not been divided into the appropriate number of divisions which accords with the determined representation entitlement, then that ordinary general election will be conducted ‘at large’ for that State. This means that the State will be regarded as one division and the members, to the number as determined, will be elected for that one division.

The Government believes that the procedures which I have outlined meet the constitutional requirements as interpreted by the High Court in its McKinlay judgment. The procedures will be given effect to by the proposed amendments to the Commonwealth Electoral Act 1918 and the Representation Act 1905. Additionally, amendments are proposed to the Census and Statistics Act 1905 in order to require the Statistician to conduct quinquennial censuses and to compile quarterly population statistics. Account must also be given to the judgment of the High Court in the McKellar case. In this case the Court ruled invalid that section of the Representation Act relating to what is known as the ‘remainder provision’. Under the Act as it stood, if, in the calculation of the representation entitlement of a State for the purposes of a determination, there was any remainder resulting from the calculation, then one more member was added.

The High Court held invalid and of no effect the 1964 amendment which introduced the ‘any remainder’ formula as it did not comply with the requirements of section 24 of the Constitution relating to the nexus between the House of Representatives and the Senate and the proportional representation of the several States in the House of Representatives. The Court held that the pre- 1964 provisions which reflected the constitutional position were the operative ones.

The Representation Amendment Bill restores those provisions to the Act.

The Representation Amendment Bill also provides that a determination of the representation entitlement of the several States will be made within 30 days of the Bill receiving Royal Assent and further that the next general election for the House of Representatives will be conducted on the basis of the representation entitlement as disclosed by that determination.

The Government is also taking this opportunity to propose to Parliament that there should be a review of the guidelines which distribution commissioners are required to take into account in their consideration of proposed distributions. These guidelines are at present set out in section 19 of the Commonwealth Electoral Act. The problems of geographically large electorates visavis small electorates has long been acknowledged. Given the problems confronting electors and their members in electorates spread over large areas, the Government believes that it would be unreasonable to continue a situation where it is possible for a geographically smaller division to contain fewer electors than a larger division. In proposing that section 19 of the Commonwealth Electoral Act be amended to contain a guideline to distribution commissioners along these lines, the Government has decided to adopt as a general principle the dividing Une used by the Remuneration Tribunal in its 1976 report in relation to members’ allowances, namely, 5000 square kilometres. The proposed amendment is that section 19 of the Commonwealth Electoral Act shall include a provision that distribution commissioners in making any proposed distribution shall ensure that no division with an area of 5000 square kilometres or more shall have at the time of a redistribution an electoral population which is greater than the electoral population of any division with an area of less than 5000 square kilometres.

To assist consideration of the legislation, an explanatory memorandum giving greater detail in respect of the clauses of each Bill will be circulated. I commend the three Bills.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 161

CENSUS AND STATISTICS AMENDMENT BILL 1977

Motion (by Senator Withers) agreed to:

That leave be given to introduce a Bill for an Act relating to the Census and to Statistics.

Bill presented, and read a first time.

Standing Orders suspended.

Second Reading

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I move:

That the Bill be now read a second time.

As honourable senators will recall, the second reading speech for the previous Bill incorporates that for this Bill.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 162

REPRESENTATION AMENDMENT BILL 1977

Motion ( by Senator Withers) agreed to:

That leave be given to introduce a Bill for an Act to amend the Representation Act 1905

Bill presented, and read a first time.

Standing Orders suspended.

Second Reading

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I move:

That the Bill be now read a second time.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 162

QUESTION

ROLE AND COMPOSITION OF SCHOOLS COMMISSION

Senator CARRICK:
New South WalesMinister for Education · LP

– I seek leave to table the text of a letter on the role and composition of the Schools Commission and I ask leave to make a short statement in that regard.

The PRESIDENT:

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

Senator CARRICK:

– For the information of honourable senators, I table the text of a letter I have written to the Chairman of the Schools Commission informing him of decisions taken by the Government on the role and composition of the Schools Commission. I point out to honourable senators that the Government has decided to make no changes to the Schools Commission Act and that the essential functions of the Commission will remain unchanged. The Government has also appointed to the Commission the maximum number of part-time members permitted under the legislation and has preserved the balance of representation of education interest groups. The instructions to the Schools Commission should be seen in the context of the Government’s review of the functions of all 4 education commissions. I have passed a copy of the attached letter to State Ministers for Education, to non-government school authorities at the national level and to national parent and teacher organisations, as well as releasing it publicly.

page 162

INDUSTRIES ASSISTANCE COMMISSION

Senator DURACK:
Western AustraliaMinister for Veterans ‘ Affairs · LP

– For the information of honourable senators I present the interim reports of the Industries Assistance Commission on clothing and certain man-made fibres, yarns and fabrics.

page 162

CONSTITUTION ALTERATION LEGISLATION

Contingent Notice of Motion

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– by leave- I give contingent notice of motion as follows:

That contingent upon messages being received from the House of Representatives transmitting the Constitution Alteration (Simultaneous Elections) Bill 1977, the Constitution Alteration (Senate Casual Vacancies) Bill 1977, the Constitution Alteration (Retirement of Judges) Bill 1977, and the Constitution Alteration (Referendums) Bill 1977 for concurrence I shall move:

That standing order 242 be suspended to enable the third reading of :he Bills to be passed without a call of the Senate.

page 162

DEFENCE 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:

That the Bill be now read a second time.

This Bill seeks to amend the Defence Act by changing the title of the instructions issued by the Chief of the Air Staff under section 9a of that Act from ‘Defence Instructions (Air)’ to ‘Defence Instructions (Air Force)’. This change arises from a proposal made by the Chief of the Air Staff that the term ‘Air’ used within the Royal Australian Air Force organisation be changed to Air Force’. This will mean, for example, that Air Office will now become Air Force Office which is considered to be a more appropriate and a more accurate description to be used within a military organisation such as the Royal Australian Air

Force which does not encompass civil aviation. The Bill provides that Defence Instructions (Air) which are in force immediately before the amendments come into operation are to be preserved and deemed to be Defence Instructions (Air Force). The Bill also makes routine amendments of a drafting nature to the Defence Act. I commend the Bill to the Senate.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– The Opposition has no objection to the Bill passing through all its stages at this time.

Question resolved in the affirmative.

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

page 163

PUBLIC SERVICE AMENDMENT (FIRST DIVISION OFFICERS) 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 Durack) read a first time.

Second Reading

Senator DURACK:
Western AustraliaMinister for Veterans ‘ Affairs · LP

– I move:

One of the most important foundations of the parliamentary system of government is the political neutrality of the Public Service. While public servants, like all other Australians, are entitled to their political opinions, they are expected to serve all governments equally without regard to the political composition of the governments. Any incoming government is entitled to expect that it will be able to deal with the Public Service on a basis of complete confidence in its political impartiality. One of the best safeguards of the political neutrality of the Public Service is a system of appointment- particularly of appointments to senior positions- which minimises the possibility of appointments for purely partisan reasons and increases the chance of making the best possible appointment. A government may, of course, wish for good reason to appoint a person not recommended by due process. The Government believes that if such an appointment is made an incoming administration should not be forced, through permanency, to retain the service of the appointee. In November 1975 the Prime Minister (Mr Malcolm Fraser) announced that a LiberalNational Country Party Government would introduce procedures designed to ensure that due process is followed in the appointment of permanent heads of ministerial departments. The Prime Minister indicated in broad terms what those procedures might be. A detailed study of the matter led ultimately to the scheme incorporated in this Bill. The study also covered procedures for statutory full time civilian appointments. I will return to these a little later.

This Bill is concerned with the principles and procedures to apply in relation to the appointment of persons as permanent heads of ministerial departments. Our approach is that, in conducting its own special role in making appointments, the executive government must give special weight to the integrity of the Service, and in particular to the well-established principle of appointment on merit. In addition, the processes ought to be such that so far as possible, the best available persons are appointed as permanent heads, thereby enhancing the efficiency of the Service as a whole. The new statutory procedures for permanent head appointments place primary responsibility for the competitive nomination in the hands of the Chairman of the Public Service Board and a committee comprising him and at least 2 permanent heads. Since our election to Government, appointments to positions of permanent head have been made in conformity with the principles behind the legislation, although initially formal committees were not set up.

It will be the function of the Chairman and the committee to bring forward, for consideration, the names of persons considered suitable for appointment to particular positions of permanent head. The basic elements of the nomination procedures to be followed by the Chairman and the committee are set out in proposed section 54a. The process will commence, when a vacancy has occurred or is about to occur. The Chairman will convene the committee after consulting with the Prime Minister on the membership. The procedures will also extend to possible consequential vacancies. The procedures will ensure that the names of suitable candidates from within the Public Service are brought to notice, while also enabling the nomination of persons from outside the Service. The Chairman will be authorised to consult- or authorise a person on his behalf to consult- other persons concerning possible suitable candidates. As a normal course, persons consulted would include the Secretary to the Department of the Prime Minister and Cabinet- if he is not a member of the committeeand, as appropriate, the retiring permanent head.

The reports from the Chairman and the committee, including lists of suitable candidates, will be submitted to the Prime Minister and the Minister concerned. If at this point, the Prime Minister so requests- after consultation with the Minister, and conceivably, other Ministers- the Chairman will arrange for the position to be advertised and revised reports submitted in due course. The Prime Minister or the Minister concernedprior to or following advertisementmay also request the Chairman and the committee to reconsider their reports to determine whether any names should be added to the lists. Any such additions will, of course, be entirely at the discretion of the Chairman and the committee. At appropriate stages in the process, the Prime Minister and/or the Minister concerned may interview some or all of the short listed candidates.

I must stress at this point that nothing in the Bill will prevent the appointment, as permanent heads, of persons not nominated as suitable candidates by either the Chairman of the Board or the committee. However, in that eventuality, certain special provisions will apply. Firstly, such an appointment will be for a fixed term not exceeding 5 years, with an eligibility for reappointment. Secondly, the appointment will, in the circumstances outlined in proposed sub-section 54(9)- in effect, in the event of a change of government- be subject to termination by the Governor-General, on the recommendation of the Prime Minister. This approach means that a government will be able to appoint people not short listed by the committee. Where the government chooses an appointee whose nomination has not been endorsed by due process, that government will not be able to place any continuing obligation on an incoming government, and there will have been no.lasting breach of the competitive merit principle on which the career Public Service is based.

The Bill ensures fair treatment for persons appointed for a fixed term when their appointments come to an end, whether through exercise of the termination power, expiration of the period of appointment, or abolition of the particular office of permanent head. The person who was already an officer before being appointed as a permanent head is entitled to be re-appointed to an office in the Public Service or may elect to retire. If he retires his retirement will be deemed involuntary for the purposes of the Superannuation Act and will thereby attract the level of benefits applicable to that situation. The person who was not previously an officer is also deemed to have retired involuntarily for the purposes of the Superannuation Act. If the appointment has ended through exercise of the termination power or abolition of the office, he is also entitled to any compensation previously determined by the Governor-General at the time of his appointment.

Provisions are included in the Bill which will require notification, both to the appointee and on public record, of tenure arrangements concerning particular appointments. Retention of the title, ‘permanent head ‘, could be regarded as inappropriate in view of the fixed term arrangement that will be possible under the Bill. This is something we will be looking at in the context of consideration of the report of the Royal Commission on Australian Government Administration. Any change will be reflected in future legislation. The Bill will not significantly change current arrangements for First Division appointments other than to offices of permanent heads of ministerial departments. The permanent heads of parliamentary departments will continue to be appointed on the recommendation of the Presiding Officers. Other First Division appointments will be in accordance with the advice of the Public Service Board.

When the Prime Minister made the initial announcement in 1975 concerning this legislation, he also stressed the need for positive personnel policies, including movement of permanent heads to different positions so as to open up new challenges for them, an executive development program and a system of succession planning. Introduction of the procedures incorporated in this legislation will assist in the development of such policies. The Public Service Board has recently introduced an executive development scheme directed to men and women in the senior levels of the Third Division who have the capacity to undertake higher administrative duties and who require further experience in practical and theoretical aspects of administration, policy advising and management. There are also relevant recommendations of the Royal Commission on Austraiian Government Administration that are currently under examination.

I mentioned earlier that procedures have also been developed in relation to statutory full time civilian appointments. Whilst these are essentially administrative guidelines, designed to ensure that there is consideration of related appointments across the area of Commonwealth Government civilian administration, they are closely related to the present Bill. I would like to take the opportunity to outline them briefly, thereby putting on public record the procedures which this government will follow. Initiation of action is a matter for the Minister concerned, who would normally consult his permanent head and, as appropriate, the retiring official, as well as any others he wishes to consult. Where the position to be filled by the Government is an executive one responsible to a governing body the Minister will obtain the views of the governing body. The Minister will also ask the Chairman of the Public Service Board whether he wishes to submit any names.

After consultations which would normally include discussions with the Secretary to the Department of the Prime Minister and Cabinet to identify possible candidates from inside and/or outside the Public Service, the Chairman will indicate to the Minister the names of any persons he feels warrant consideration. If he feels it important to overall arrangements he will so inform the Prime Minister. The names suggested could include that of the existing incumbent, subject to his availability for reappointment. If this process does not achieve somebody who is regarded as suitable, the Minister, after consultation with, and approval of, the Prime Minister, could arrange for the position to be advertised. In that event, the Minister will, with the approval of the Prime Minister, convene a committee which will include appropriate officials and outsiders of relevant backgrounds, under the chairmanship of a person approved by the Prime Minister. After interviews as appropriate, the chairman of the committee will submit to the Prime Minister and the Minister concerned on behalf of the committee a short list of suitable candidates. At this stage, or if desired earlier, the Prime Minister and/or the Minister may interview some or all of the candidates; irrespective of advertisement, a committee may be established on the basis previously outlined.

The Government believes that the procedures established by this Bill will further strengthen the operation of the system of parliamentary government in Australia. I commend the Bill to the Senate.

Debate (on motion by Senator Button) adjourned.

page 165

CRIMES (BIOLOGICAL WEAPONS) 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 Durack) read a first time.

Second Reading

Senator DURACK:
Western AustraliaMinister for Veterans ‘ Affairs · LP

– I move :

That the Bill be now read a second time.

This Bill makes provision for Australian ratification of the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction. A copy of the Convention is contained in the Schedule to the Bill. The Geneva Protocol of 1925 for the Prohibition of the Use in War of Asphyxiating, Poisonous or other Gases and of Bacteriological Methods of Warfare, to which Australia became a party on 22 January 1930, prohibits only the use in war of gases and bacteriological (biological) methods of warfare. It does not prohibit the development, production, stockpiling, acquisition or retention of such biological weapons.

The present Convention which is designed to fill this gap was the outcome of difficult and complex negotiations, in the 26-nation Conference of the Committee on Disarmament in Geneva and in the United Nations General Assembly. Resolution 2826 (XXVI) of the United Nations General Assembly, commending the Convention to governments, was co-sponsored by 40 countries, including Australia, and was adopted by 1 10, including Australia, to nil. The Convention which was opened for signature on 10 April 1972 has been signed by over 1 12 countries including Australia and so far 48 of these have ratified it. The Convention is now in force and the three depository States, the United States, the United Kingdom and the Union of Soviet Socialist Republics, are actively encouraging all signatory nations to proceed to ratification.

The objective of the Convention is to eliminate biological weapons. The Convention marks a new and signficant step in the field of disarmament as the first measure aimed at eliminating an entire class of weapons. It will not only prohibit the production of biological weapons but also will oblige states parties to destroy any existing stocks. It should however be noted that the Convention and indeed the Bill now under consideration do not inhibit the use of bacteriological (biological) agents and toxins for prophylactic protective or other peaceful purposes. The quantity of the biological agents or toxins held by researchers will be relevant in determining whether they risk infringing this provision. The Convention is directed primarily towards the obligations of states, but each state which is a party to the Convention is obliged to take measures to prohibit and prevent persons apart from states from engaging in the activities forbidden by the Convention ‘within the territories of such state, under its jurisdiction or under its control anywhere’. Since Australia at present has no statutory provision corresponding to that obligation, this Bill has been introduced to satisfy the requirements of the Convention.

The main purposes of the Bill are to approve the ratification by Australia of the Convention as provided for in clause 7 and to implement the obligations that Australia will assume under the Convention. The Bill could operate in these broad circumstances:

  1. where biological material of a type or quantity that had no justification for peaceful purposes is accumulated; or
  2. weapons, equipment or means of delivery designed to use the material in armed conflict are developed.

The Bill also provides for necessary procedures for forfeiture and seizure, and for expert analysis of any item or substance that may be subject to the provisions of the Bill.

Article IX of the Convention provides that each state party shall take any measures necessary to prohibit and prevent the development, production, acquisition or retention of any of the items or substances referred to in Article I. As the English text of the Convention is set out in the Schedule to the Bill, I need not detail the provisions of Article I or indeed the other requirements of the Convention. It is, I think, sufficient to say that clause 8 of the Bill creates in Australia offences that give effect to Article IV of the Convention and provides penalties that take into account the grave nature of those offences. Clause 9 provides for the forfeiture and seizure of substances or articles developed in contravention of clause 8. Clause 10 contains necessary procedural provisions for the conduct of prosecutions for offences against the Act. All offences under the Act are made indictable offences and no proceedings are to be taken for an offence without the consent of the AttorneyGeneral or his agent.

Clause 1 1 ensures that State courts shall have jurisdiction with respect to these offences in accordance with the Judiciary Act 1903 but, except in the case of trials on indictment for offences committed in a State which by section 80 of the Constitution must be heard in the State where the offence is committed, this clause permits the State courts to exercise jurisdiction without regard to the limitations imposed by the Judiciary Act as to locality of the offence. Clause 12 of the Bill recognises the need, with respect to the type of offence to be created by this legislation, for specialist evidence as to the analysis and examination of substances. The Bill also authorises the making of regulations specifying procedures to be followed in the storage and disposal of articles produced in contravention of the Act and in providing an opportunity for any person charged with an offence to have a sample of a substance for independent analysis.

It should also be noted that the Bill is expressed to have a wide area of operation. It extends to every external territory, as well as to the States and internal territories, as dealt with in clause 4. It will apply to acts done by Australian citizens outside Australia and the external territories, as dealt with in clause S. Clause 6 provides that the Act binds the Crown in right of the Commonwealth or of a State. I suggest to honourable senators that, although it is hoped that the occasions upon which law enforcement agencies will have to resort to this legislation are few, it is indeed a very important development, and a step towards the protection of the Australian community against some of the more frightening potentialities of modern technology.

Debate (on motion by Senator Button) adjourned.

page 166

ROYAL AUSTRALIAN AIR FORCE VETERANS’ RESIDENCES AMENDMENT BILL 1976

Second Reading

Debate resumed from 30 November 1976, on motion by Senator Withers:

That the Bill be now read a second time.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– This Bill receives the support of the Opposition and, whilst it is what one might call a minor Bill, it has had a long and protracted passage through both Houses of Parliament. It was originally introduced into the House of Representatives in August last year, debated there about the middle of November, introduced into the Senate on 30 November in the last sessional period and is now being debated here. The purpose of the Bill is as explained by the Minister for Administrative Services (Senator Withers) in his second reading speech. In short, the amendments proposed by the Bill mean that all former members of the Royal Australian Air Force and its women’s services will be equally eligible for the provision of residences that are provided by the Royal Australian Air Force Veterans’ Residences Trust to people who are in necessitous circumstances and who are former members of the Royal Australian Air Force. The Opposition welcomes the provisions of the Bill and we urge it a speedy passage. My colleague Senator Melzer wishes to amplify one or two matters.

Senator MELZER:
Victoria

-I rise to support the Bill because it gives recognition to what one can call the forgotten women of Australia, those in the Women’s Auxiliary Services who volunteered to defend Australia in the Second World War. In this instance they are the WAAAFs. These women are now approaching the age when they want to make provision for old age and this Bill goes some way to giving them some peace of mind about their lives in the next few years. It provides for women who are in necessitous circumstances. There are in the community women who served in the WAAAFs and want assistance to help themselves and to buy a home. Under this Bill men and women, comrades in war, are equal in receiving help when they are in necessitous circumstances. Widows and children receive help when they are in necessitous circumstances. However, although the same men and women, widows and children and women who are currently in the Services receive assistance by way of loans to buy homes, the women who served in wartime auxiliary Services do not.

Women in the Services now serve beside the men. Women in time of war went even further. In 1944 two-thirds of the defence forces serving in Australia were women. In wartime the musterings, working hours, duties, leave benefits, courses, living conditions and food were the same for men and for women. In wartime the uniform, apart from very obvious parts, was the same. The motif that these women wore on their wartime caps was the RAAF motif. If they were ill they were hospitalised in RAAF hospitals or in repatriation hospitals in exactly the way the men were. They volunteered for service in the women’s Services. They volunteered for service within the Commonwealth and Territories. They were not conscripted, they volunteered. So it was not their choice where they were sent. In fact, in December 1942 a contingent of WAAAFs was issued with full tropical gear and got as far as Townsville on their way to New Guinea when their plane was cancelled. They had no say in where they served.

The women worked hard to gain skills that were strange to them. They did very well in those areas to which they applied themselves. Their male comrades will say that the Services could not have operated the way they did without the unselfish work that these women put into their wartime jobs. This Bill makes provision for exWAAAFs in necessitous circumstances. In time of war, when WAAAFs died through illness or accident their names were recorded on the honour roll in Canberra. However, exWAAAFs who lived get very little honour. If governments acknowledge that women in the Services are now eligible for equal pay, equal opportunity, equal conditions and equal repatriation conditions, including home loans; if ex-servicewomen are eligible for repatriation benefits, for equal assistance when in dire or necessitous circumstances; if ex-servicewomen now are eligible for assistance with home loans; if the widows of ex-servicemen and, one would hope, the widowers of exservicewomen and Service personnel are entitled to repatriation benefits, including home loans, why discriminate against a handful of exservicewomen who seek assistance, not charity, to provide for their old age?

They are asking for loans to help them to buy homes in which they can see out their lives. They are not asking for grants or for Government to give them houses. They want assistance in buying houses- the sort of assistance their male comrades have been able to call on since the end of the last war. There were 40 000 Australia servicewomen during the last war. There are at the moment 280 financial members of the exWAAAFs organisation in Victoria. Those women estimate that 12 to IS of their comrades require a loan and one would expect the same sort of proportion to apply in all other States. So we are not talking about a tremendous number of people or a tremendous amount of money. We are not talking about a grant, we are talking about a loan. There has been no loss in the defence service homes section of the repatriation provisions. It has been very successful and there is no reason to believe that these women would be any less successful than the men and would fall behind in their commitments when their male comrades have not.

It is said in some areas that this will open the floodgates and that all sorts of people will then claim to be eligible. Maybe so. Maybe some of those people will have cases. However, I am not talking about all sorts of people. I am talking about the women who worked in hard circumstances without complaint in Australia to enable men to go overseas to fight in that wretched war. Unless these women had volunteered and left their homes and loved ones there would have been many fewer men able to go overseas. Those civilians in wartime who, it is feared, will flood through the gates and claim these benefits were situated in places to which they freely agreed to go. The WAAAFs were posted, as were the men in the RAAF, and were told where to go. Civilians in wartime were well paid for the dangerous jobs they took on. Nobody can say that the Women’s Auxiliary Services were well paid. So I ask the Government, even though it has presented this Bill which is very good and extends the benefits as they should be extended to the women who served in the Air Force during the war, to remember more than the WAAAFs in necessitous circumstances. I ask it to show that a country grateful in wartime, very good with the purple prose when the war was on, has the grace to show gratitude in peacetime, late though it may be, and provide the means for people who are truly great citizens to finish their lives in dignity.

The funds for the purposes of the Act originated in prize money from the sale of ships captured in war. These women deserve their share of the spoils but they prefer the peace of mind that they gain from looking after themselves in the later years of their lives. I ask the Government to right the injustice that has existed for so long. These women have not had that right before.

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– in reply- Might I firstly thank Senator Douglas McClelland and the Opposition generally for the speedy passage of this Bill. Senator Melzer as usual has made a very thoughtful speech concerning the disadvantaged people in the community, especially those former members of the Women’s Australian Auxiliary Air Force in particular. I will draw the attention of the Munster for Defence (Mr Killen) to the remarks she has made and I thank her for her support of the Bill. I also thank my colleagues.

Question resolved in the affirmative.

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

page 168

CRIMES (BIOLOGICAL WEAPONS) BILL 1976

Second Reading

Debate resumed.

Senator BUTTON:
Victoria

-The Opposition does not oppose this Bill, which had its second reading in the House of Representatives only yesterday. As the Minister for Veterans’ Affairs (Senator Durack) pointed out in his second reading speech, the Bill provides for the ratification by the Government of Australia of an international convention on the prohibition of the development, production and stockpiling of bacteriological and toxin weapons and on their destruction. The Bill contains a Schedule which sets out the Convention in some detail. The Senate will see from the various articles precisely what is proposed. Of course, what the Convention does, in the face of evidence regarding the development and, indeed, use of biological weapons is to try to establish an international order in which biological weapons are not used and in which those which are already in existence are destroyed.

I suppose that in a rather inadequate way the Bill tends by law to cater for the situation in which man’s technological capacity has outgrown his moral capacity to deal with what he creates. I do not think we can have much confidence in conventions of this kind; we can only hope that they will achieve the desired result and that their ratification by countries such as Australia and other signatories such as the United Soviet Socialist Republics and the United Kingdom will go some way towards preventing the use and stockpiling of weapons of this kind. I think they can go no further than that. Legislation and conventions cannot in themselves have the desired effect. We- all of us- can only support the Bill and hope that in our own circumstances it may do something to prevent the situation which the Convention seeks to prevent.

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– in reply- I thank the Opposition for its support of the Bill. I do not wish to delay the Senate or the speedy passage of the Bill any further.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Senator BUTTON:
Victoria

– I take the opportunity at the Committee stage of the Bill to ask the Minister for Veterans’ Affairs (Senator Durack) whether he is aware of any provisions of this legislation which would come into effect immediately in relation to Australia? That is to say, does this country hold biological weapons which would fall within the provisions of the Bill and which would have to be destroyed?

Senator DURACK:
Western AustraliaMinister for Veterans ‘ Affairs · LP

– I have not any advice in regard to that matter. I would expect that the matter would be properly referred to my colleague, the Minister for Defence (Mr Killen). I certainly shall refer that question to the appropriate quarter.

Senator GEORGES:
Queensland

– I am interested in and want to take a little further the question that Senator Button has asked. One of my questions was to have been: Has the Government ensured that all such toxic substances have been destroyed, whether they have been held by the Government or by companies; do such substances remain in Australia; and will we receive information as to where those substances have been held and what is to happen to them? Honourable senators will recall that I got myself into a deal of trouble some 5 or 6 years ago by supporting a proposition that a member of the British Parliament put by way of question. He stated that under a tripartite agreement certain tests of biological weapons were taking place in Australia in a place just outside Ingham m north Queensland. There was quite a deal of publicity at the time concerning a tripartite agreement between Australia, the United Kingdom and Canada for the testing of biological weapons. What has happened to that agreement? What will happen to that agreement under this present Bill? Perhaps I should just leave it at that. I have one or two more questions to ask. Does the Minister want me to ask them at this stage?

Senator Durack:

– Yes.

Senator GEORGES:

– If any of the toxic substances remain in Australia, for what peaceful purposes under the Convention Will they be used? May we have, either now or at a later stage, some details of this? It would be interesting to know whether any international companies which operate in Australia- they are called transnational companies now- produce such toxic substances. I take it that under the legislation they will discontinue doing so. But how can we be assured that the production of these substances is discontinued? The final question I want to ask is: What Government agency will be entrusted with executing the expert analysis of the provisions of the Bill; what tests and experiments of biological substances have been carried out in Australia in the past; and where, and by whom, have they been carried out? That information would be interesting to have on the record.

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– I am afraid that I have not instructions sufficient to answer in detail the questions Senator Georges has raised. I certainly shall pass them on, as I have undertaken to do in regard to Senator Button’s question, to the appropriate Ministers. I point out that all this Bill will do is to implement in Australia a convention and to create in

Australia certain new criminal offences. I refer to the second reading speech, rather than to the Bill, which states in broad terms that the Convention is to apply where biological material of a type or quantity that has no justification for peaceful purposes is accumulated or where there are weapons, equipment or means of delivery designed to be used in armed conflict. Perhaps it would be better to look at the terms of clause 8 of the Bill which deals with the offence that is created. It states:

  1. 1 ) It is unlawful to develop, produce, stockpile or otherwise acquire or retain-

    1. microbial or other biological agents, or toxins whatever their origin or method of production, of types and in quantities that have no justification for prophylactic protective or other peaceful purposes;

It is the purpose for which the stockpile is created which is the offence. There could be- of course, there is necessarily in a good deal of scientific and medical research for perfectly peaceful pur-

Eposes the need to develop certain of these bio.ogical agents or toxins. So the question is whether the purpose for which they are being created is an offence. That is the subject of this Convention and this Bill. The question really involves a good many agencies of government. The Bill itself is concerned no doubt with the Department of Health, the Department of Foreign Affairs and the Department of Defence as well as the Commonwealth police forces. Perhaps many other areas would be concerned. But I will endeavour to obtain more specific answers to the question. Certainly, I will refer them to the appropriate Ministers.

Senator STEELE HALL:
South Australia

– The Minister for Veterans’ Affairs (Senator Durack) would appreciate that there has been little time to study the detail of the Crimes (Biological Weapons) Bill. In fact, there has been hardly any time at all. Could the Minister tell me whether there is any regulatory means by which any international inspections or acknowledgements are made of what other countries may be doing in this regard? Of course, what is contained in this Bill represents a most desirable objective and will bind those nations of good faith. It will bind those nations which have no intention to embark upon biological warfare. But those nations which may have some design on the territory or safety of other nations and which would conduct surprise attacks may very well not feel that they should adhere to the treaty they have signed. Certainly, the history of world treaties is one of the very many broken treaties. Can the Minister tell us whether there will be some international policing of the observance of this treaty by the signatories?

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– I think that Senator Steele Hall should place that question on notice for the Minister for Foreign Affairs (Mr Peacock). It is certainly not a matter upon which I, as Minister representing the AttorneyGeneral (Mr Ellicott), would have any information.

Senator BUTTON:
Victoria

-Senator Hall has raised a point about which I think we all must be concerned. It was raised earlier in the debate. In fact, Senator Hall raised 2 points. The first one was that he did not have very much time to study the legislation. That is a matter of regret. I take these matters very seriously and regard that as an abuse of the procedures of the Senate about which I am very concerned. The second point which the honourable senator raised goes to the heart of the effect of the legislation. I would commend to him a reading of the speech of the honourable member for Mackellar, Mr Wentworth, in the House of Representatives in which he deals with this very point. One of the points which Mr Wentworth makes even about this question of inspection is that biological weapons can be as small as a teaspoonful of a toxic substance and wipe out a whole community. This is the point that casts some doubts on the effectiveness of the legislation.

Senator CAVANAGH:
South Australia

– I want to take up further the point raised by Senator Georges about a tripartite agreement or an international agreement relating to atomic weapons and biological materials. I have been trying to get some information on this subject for a long time. We cannot discover the origin or the history of this agreement. But certain of the facts are disclosed in various papers from the House of Commons in England. I received a reply from the Department of Foreign Affairs on the question of a tripartite agreement dealing with scientific warfare. An agreement was entered into by Australia in 1956. I refer now particularly to a submission that a Dr William Richards from Victoria made to the Fox Environment Inquiry on Uranium. The report is headed ‘Uranium Polities’. After he submitted his report, the secretary of the inquiry called him up and told him that it was a very good and substantial report.

However, he said that he did not think that it came within the terms of reference of the inquiry. Therefore, it was never submitted. Dr Richards was not permitted to submit it to the Fox Inquiry. But Dr Richards gives a history and some proof of the theory that during the investigation of atomic expansion after the Second World War a tripartite agreement was entered into at Quebec between Canada, Great Britain and the United States of America for the exchange of information on atomic energy, chemical and biological warfare and rocketry. This agreement, which is secret, contains conditions whereby one country could establish a security force in another country which was a party to the agreement in order to protect the first country’s interests. The security force operating in that country was not liable to report to the authorities of the country in which it was operating. I believe that the reply I received from the Department on the question of scientific investigation and tripartite agreements admits this right of protection to secret forces. But no mention is made of the fact that things could happen in the host country without its knowing about them. The report goes on:

Australia was not accepted as a party to this agreement because America was doubtful of Australia’s security in its defence establishment. In 1949, when Chifley introduced the security service in Australia (ASIO) under Mr Justice Reed of the South Australian Supreme Court, he established the conditions under which Australia could, and in fact did, become a party to the secret agreement.

I think that that is the agreement Senator Georges tried to find out about. I think that however secret it is politicians have an entitlement to know what is contained in the agreement. Does the Minister know of the existence of such an agreement? If so, what is the agreement?

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– I am rather concerned and certainly very interested that a number of honourable senators are taking a wider interest in the details of this legislation than certainly was indicated during its passage in another place. Indeed, the interest is wider than we expected it might have been in the Senate this afternoon. I think that a number of important questions have been raised. It is the right of the Senate to have more specific answers to them than I am able to give this afternoon. Certainly, there is a little more time left. I suggest that honourable senators who wish to raise other queries might do so now. I propose to move that the Committee report progress and seek leave to sit again. Hopefully, next week we will have time to deal with the matter. We could fit it into the program next week and I would be in a position to answer more specifically some of the questions that have been raised.

Senator GEORGES:
Queensland

– I thank the Minister for Veterans ‘ Affairs (Senator Durack) for that suggestion. It has been indicated by several honourable senators that this is very important and very welcome legislation. It is a step in the right direction of disarmament. I think that on both sides of the chamber we would seek to reduce the level of armament in the world and in particular in some way to limit these horrific weapons that can be developed. The question that Senator Hall raised is a very important one- just what sort of control is envisaged or proposed by those who are signatories to this convention? If we could have some debate on this matter, perhaps some questions and answers might benefit all of us.

Progress reported.

page 171

HOLMES AND BAILEY REPORTS

Ministerial Statement

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– For the information of honourable senators I lay on the table 2 reports: Firstly, the report of the Committee on Care of the Aged and the Infirm and, secondly, the first report of the Task Force on Co-ordination in Welfare and Health entitled Proposals for Change in the Administration and Delivery of Programs and Services. I seek leave to have the statement relating to the reports made in the House of Representatives by the Prime Minister (Mr Malcolm Fraser) incorporated in Hansard.

The PRESIDENT:

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

The statement read as follows-

In June and July 1976 the Government established 2 inquires in the health and welfare fields. The first, the Committee of Inquiry into Care of the Aged and the Infirm, was announced on 6 June and was chaired by Mr A. S. Holmes. The second, the Task Force on Co-ordination in Welfare and Health, chaired by Mr P. H. Bailey, was announced on 23 July. The Holmes Committee was asked to examine and report on:

The effectiveness and efficiency of existing Government programs and arrangements for the care of the aged and the infirm;

The appropriate role of the Commonwealth Government, bearing in mind the responsibility of State and local governments and the activities of voluntary agencies;

The relationship between programs for the aged and the infirm and other health and welfare programs.

Since it is the Government’s objective to provide assistance to those most in need and to encourage self-reliance and local participation the Committee was requested to have particular regard to:

The scope for greater coherence in planning new programs and for the rationalisation of existing arrangements, including the examination of possible new approaches; and

The scope for making economies in expenditure while not compromising desirable longterm arrangements.

The Holmes Committee reports that despite large and rising expenditure, there is a good deal of dissatisfaction with current programs. In the Committee’s view, this is due to a number of causes including:

A lack of co-ordination between various levels of government and between government and non-government sectors;

A concentration on institutional accommodation rather than on developing comprehensive domiciliary services; and

A failure to develop procedures designed to match services to individual requirements.

The report says that there are a multiplicity of programs and delivery agencies and a failure to appreciate the interdependence between programs which leads to confusion, inefficiency and waste. The proposals put forward in the Committee ‘s report involve:

A consolidation of various programs for domiciliary care into a single community care program;

Possible changes in the approach to funding the operating costs of nursing homes. The report for example raises the possibility of including the costs of nursing home care within the health insurance arrangements.

A review of the need for the Commonwealth to subsidise capital outlays on selfcontained accommodation, hostels and nursing homes;

A considerable expansion in the use of assessment and rehabilitation teams; and

The possible negotiation of new cost-sharing arrangements with the States.

Honourable members will recall the decision to establish the Task Force on Co-ordination in Welfare and Health arose out of the Government’s concern at the proliferation, duplication and overlap of Commonwealth programs and services in the health, welfare and community development fields. Against the background of the Government’s federalism policy the Task Force was asked to:

Identify Commonwealth programs which could be better delivered by the States, local government or voluntary agencies and whose administration could be transferred to the States;

Examine the possibilities for consolidating individual programs into broader based ones to enable more efficient and economic delivery.

The Task Force was also asked to propose ways and means of achieving better co-ordination and report on consultative and co-ordinating machinery at the Commonwealth level and between the Commonwealth and the States. This will be done in a second report which will come forward later in the year. In its first report the Task Force claims there is sufficient evidence to warrant changes in existing patterns of administration of programs and delivery of services. The report says that over-lapping has resulted largely from having programs devised on a variety of bases. The report also refers to instances of inadequate information flow, proliferation and overadministration.

The Task Force recommends the consolidation of some 26 existing individual programs into 4 broadly defined program grants. The Task Force believes the Commonwealth should be concerned mainly with national planning, with establishing objectives, priorities and standards, with evaluation and with innovation. It sees the States, with regard to those programs they share with the Commonwealth as developing programs for approval within broad guidelines and carrying out the detailed administration of agreed programs. In the report’s view there should be regular consultation between the States, the Commonwealth, local government bodies and voluntary agencies.

The report also contains a range of other recommendations relating to specific programs including for example, pathology laboratories, rehabilitation centres and the immediate postarrival welfare of migrants.

In proposing various administrative changes, both reports make suggestions as to how the Commonwealth can safeguard the role of local and voluntary agencies delivering health and welfare services in the community. Both reports in their preparation involved extensive consultation with Commonwealth and State officers and local and voluntary bodies.

The Government has given preliminary consideration to the reports. Our view is that these reports raise important issues in the health and welfare fields which merit serious consideration. They should form the basis of discussion, without commitment at this stage, of possible new arrangements with States and others involved in the programs covered by the reports. The Commonwealth itself is examining the reports as presenting options for new administrative arrangements to enhance the efficiency of program delivery without reducing the provision or quality of services. The Commonwealth has no intention of altering the financial balance between the Commonwealth and the States.

It will ensure the continuation of the important activities of local and voluntary bodies. The Government has not taken any firm decisions on the recommendations in the reports. They are being made available to enable honourable members and all others who are interested to have the opportunity to comment on the proposals the reports contain. The views that are expressed about the reports will be taken into account in our continuing examination of the reports. In this regard I have arranged for copies of both reports to be sent to the Premiers. To enable this continuing examination the Government has decided to set up a follow-up group to consult and conduct discussions with relevant Commonwealth departments and the States. The group which will be located in my Department will be led by the Chairman of the Task Force, Mr Peter Bailey. It will include Dr Sidney Sax who was a member of the Committee on Care of the Aged and the Infirm. The group will be assisted by officials from other departments including Treasury, Finance, Health, Social Security, Environment, Housing and Community Development and the Public Service Board.

The broad timetable for handling the reports that the Government has in mind is that the follow-up group will commence its work immediately and proceed to have consultations with the appropriate Commonwealth departments on the reports. Premiers have been asked to provide initial broad reactions or comments by early April so that, as appropriate, discussions may proceed between the follow-up group and State officers between mid-April and early June. There could also be consultation with major voluntary organisations should the need arise. The purpose of those discussions would be to clarify the matters which should be the subject of discussion and decision at ministerial level between the Commonwealth and the States at, for example, a Premiers Conference.

These reports are significant documents warranting close scrutiny and consideration. Measures as wide ranging as those envisaged in the reports require time for examination, reflection and debate. Many of the proposals they contain affect governments at all levels, nongovernment agencies, and the community. They will be of interest to many. The Government’s intention in making the reports available is to provide an opportunity for those interested to give their views so that the Government can take those views into account before taking decisions on any particular proposals in the reports. The Committee on Care of the Aged and the Infirm and the Task Force on Co-ordination in Welfare and Health are commended for their efforts. I table the reports for the information of honourable members.

Senator WITHERS:

-I seek leave to move a motion that the Senate take note of the report.

The PRESIDENT:

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

Senator WITHERS:

-I move:

That the Senate take note of the Papers.

Senator GRIMES:
Tasmania

– I am sorry that I, too, cannot seek leave to incorporate my remarks in Hansard. We in the Opposition are thankful that these reports have been tabled. After months of equivocation and doubt about whether the reports would ever see the light of day, it is gratifying that the efforts of the Opposition to get important reports like these tabled in the Parliament and discussed have been rewarded. It is important that the Opposition, welfare recipient organisations and the various welfare organisations in all States at least now will be able to study both of these reports, discuss their findings, their relevance to the welfare scene in this country, and contribute, we hope, although we sometimes doubt whether we will be able to do so, to the outcome of these reports and the eventual implementation of the recommendations.

I say in passing that this situation is in stark contrast to what happened in the case of the Medibank Review Committee, 2 members of which were on the Holmes Committee on the Care of the Aged and the Infirm. In that case a committee of review obviously was given very strict guidelines and a set task. We did not see the report. No one could discuss the report. In fact it is common knowledge that a report was not written and the Government, in its haste to dismantle Medibank, gave no one any opportunity to discuss the new changes. The results of this sort of procedure are obvious in the community. The dissatisfaction with the changes to Medibank are obvious to all members of this chamber.

We believe that the guidelines that were given to both these committees were unnecessarily narrow and mainly demonstrate the Government’s pre-occupation with finding real or imagined overlaps and duplications in our welfare programs and its obvious desire to foist as many of the social welfare programs as possible on to the States with a resultant reduction in the cost to the Commonwealth. It is notable that despite the very strong words in the statement of the Prime Minister (Mr Malcolm Fraser) relating to duplications and overlaps in the field of social welfare and the implication in the statement that these largely caused the problems about which we all know in our social welfare programs, the Bailey Task Force, at page 24 of its report, states:

We have not found evidence of gross duplication or overlap.

It thinks it has found sufficient evidence to warrant changes in existing programs but it did not find evidence of great overlap or duplication. This finding bears out the submission that the Australian Council of Social Services made to the Bailey Task Force when it said that there was very little evidence of overlap causing inefficiency in the field of social welfare.

In the last 5 years we have had very many valuable reports on welfare in this country. The various Henderson Committee reports are available. A large number of Social Welfare Commission reports and reports put out by voluntary agencies are available. In this Parliament we have talked about the problems concerning the administration, co-ordination and evaluation of those goals and programs. We have talked about them in the context of the overall adequacy of our welfare programs. The reports of these 2 task forces, these 2 committees of review, which had very tight time schedules and terms of reference, will be useful. But the Opposition puts the point that they must be considered in the context of all the other reports and information that have become available. Administrative niceties do not necessarily lead to efficient and effective programs at the level at which they must be effective to be worthwhile, that is, at the level of the recipient or client. Attempts to produce administratively neat programs without evaluating their effectiveness at this very important grass roots level are not always productive. In this field we are dealing with human beings; we are not dealing with figures on a balance sheet. It is very important that this obsession with duplication and overlap- as I said, real or imagined- must not overshadow the findings of all the more detailed, careful, independent and, I suggest, useful inquiries which show that the overwhelming problem in the welfare field or the health field in this country is not duplication and overlap but gaps. There are gaps in finance, gaps in services available to people and, equally as important, gaps in the accessibility of this finance and these services to those who need them.

It is important that we consider what the results of implementing any of the findings in these reports will be. We must consider whether these suggestions will provide basic needs in the social security area for the deprived in our society. We have to decide whether they will improve the access of those services and moneys available to the people who need them. We also have to decide whether these reports provide the necessary flexibility for the changing needs which continually occur in our society and whether they will assist in the prevention of social deprivation, poverty and inadequate care in the fields of housing of the aged, health and all the other areas. Considering the personnel on those committees- not the individual personnel but their association with the government servicethe time schedule and the tight terms of reference that were given to those committees, I believe that they were just intended to be a means whereby the philosophical goals of the present Government of pushing off as much expenditure and responsibility in the welfare field to the States could be adequately fulfilled. We all are concerned that health and welfare programs will be effective and will achieve their aims. For a long time in this country we have approached this area without sufficient information, without sufficient facts and sometimes clouded by various ideological and philosophical prejudices. But the systems have failed in far too many areas. They have left gaps. They have not provided for the involvement of those directly affected in the decision-making processes and the evaluating processes of the various programs that we have.

To transfer the administration and funding of many of the programs to the States as suggested by these reports may put the problems out of sight and out of mind in this Parliament but certainly will not result frequently in increased effectiveness in those programs where that effectiveness is important. To impose the States, which under some of these proposals will control the funds and administration, between the Commonwealth which decides the guidelines and the voluntary bodies and the other groups which at present frequently get direct funds hardly seems to me any guarantee of more efficiency and certainly no guarantee of local involvement.

In this whole field of welfare and health services, Commonwealth-State relations and responsibilities have always been important. I think it is important to recognise the simple and practical fact that in recent years- certainly in the post-war years-social reform and new initiatives in this country in general have come only from Federal governments, with the exception of the State of South Australia. State governments have not been noted for initiatives in this field. In fact, quite frequently State governments have resisted initiatives put forward by Federal governments, and have done so for all sorts of reasons.

The present Minister for Social Security (Senator Guilfoyle) experienced this when she transferred the funding of the women’s refuge and women’s health centre in Brisbane through the States. She found that Queensland wiped out an important service that was appreciated by its own agencies, by the Queensland police force and by all the relevant groups in the Brisbane community. It was wiped out with the stroke of a pen on the ground of ideological and philosophical prejudices. National guidelines in this field are most essential. The Task Force on Co-ordination in Welfare and Health, chaired by Mr Peter Bailey, recognises this at page 46 of its first report where it states:

In summary, we believe the Commonwealth should discharge several important functions in the welfare/health field:

as the national government, be responsible for establishing national policy, maintaining a critical surveillance of the welfare /health field and initiate action to reduce undesirable overlap.

Almost as an afterthought in brackets, the report adds: (or to eliminate ‘gaps ‘)

Perhaps the Bailey Task Force realised what it was supposed to do. The report continues:

  1. as the source of income maintenance payments of various kinds . . .
  2. as the continuing provider of funds for programs which the States are unable or unwilling to finance from their own revenue sources . . .
  3. ) as an initiator of innovative programs, either directly or in consultation with and making use of State or local agencies . . .

It is one thing for the Commonwealth to set out guidelines in this area and then provide the States with block grants hoping that they will follow those guidelines through. All governments in this country have known and know that that is an easy thing to say, but to try to maintain those guidelines with funding indirectly through the States is a very difficult thing to do. The priorities of the States are very different. The political priorities are often very different. It is surely sensible in 1977 that there should be national standards and guidelines in this field. Organisations like the Australian Council for the Rehabilitation of the Disabled and the Australian Council of Social Services continually point out that the initiatives have come from the Federal Government and that they are most concerned that, if the funding does not come from the Federal Government but is in fact channelled through State governments, it might get lost for all sorts of reasons. Sometimes the motives are pure; sometimes not.

Therefore, we in the Opposition urge that the Government not treat these reports as it treated whatever report came out of the Medibank Review Committee and that it provide not only ample consultation with the welfare organisations, with the people who are to receive welfare, but also ample consultation with all other members of the community who are interested in this aspect. We are anxious that there should be proper and critical discussion. We are anxious that these reports be considered in association with the other very important reports and very important studies that have been done in the field of welfare in this country. At least the reports are now public, even if as we believe- in fact, as we are certain- that the Government’s aim in setting up these 2 committees was merely to provide evidence and information so that it could more quickly carry out its misguided policy, called the ‘new federalism’, of foisting responsibilities onto the States.

Even if that was so, now that the reports are public I urge the Government, in view of the fiasco that happened with Medibank, to look seriously at these reports and also to consider seriously the objections and the other suggestions which will inevitably come from many parts of the community. If we allow welfare development in this country to continue to grow like Topsy, as it has done for 77 years, and if we go on adding bits and pieces here in response to some articulate group around election time or out of a desire to do something nice in a Budget the contents of which are otherwise unpleasant, the shambles will get worse. Merely reorganising the funding of welfare programs, shifting them to the States, shifting the responsibilities from one department in the Federal Government to the other and ceasing funding through direct organisations but channelling it through the States is no way to bring decent reform to welfare in this country. If that is all we will do, it will be the equivalent of moving the deck chairs around on the Titanic. The whole thing will go down. It will become a shambles. I ask for leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 5.44 to 8 p.m.

General Business taking precedence of Government Business at 8 p.m.

page 175

QUESTION

REPORT OF COMMITTEE OF PRIVILEGES

Senator WRIGHT:
Tasmania

– I move:

That the Senate endorses the opinions expressed in paragraph B 15 (1 to 7) of the Dissenting Report of Senators Greenwood, Webster and Wright contained in the Report of the Committee of Privileges, tabled in the Senate on 7 October 1975, and relating to matters referred to the Committee by the Senate on 17 July 1975.

I regret that the Parliament should retain such obviously inappropriate language as the word privileges’ in regard to many aspects of its rights and authorities to perform the function of Parliament. Some of my colleagues and I were constituted as a Committee of Privileges to consider the rights of the Senate, as one House of the Parliament, to require information in relation to a most important government transaction- leaving aside whether one upholds it or condemns it- so as to enable this House to form a judgment as to what the public interest required.

It will be remembered in regard to that matter, which concerned a proposal to borrow $4000m overseas by direct government contractual authority, that when the Senate sought to inquire into the matter it resolved by a majority that the government of the day had failed, after a full day’s debate in the House of Representatives and this chamber, to give proper, full and accurate information with regard to that transaction. That was the resolution of the Senate. Consequently, the Senate resolved to call before it 12 persons, who occupied offices of considerable importance and responsibility in the Public Service of this country, who were paid from the public purse and who were amenable to the executive government in the discharge of their duties, to give the Senate information as to the circumstances of that transaction.

The Senate was confronted with an instruction, issuing from the then Prime Minister and other Ministers directing those 12 public servants not to answer any questions or to produce any documents to this House of the Parliament. When an ineffectual and frustrated examination of the witnesses proved to be completely abortive, the Senate resolved- I hope that this will not be submitted for regurgitation or revision; I hope that it will stand as a solemn resolution of the Senate- as follows:

That subject to the determination of all just and proper claims of privilege which may be made by persons summoned, it is the obligation of all such persons to answer questions and produce documents.

The Senate further resolved:

That the fact that a person summoned is an officer of the Public Service, or that a question related to his departmental duties, or that a file is a departmental one does not, of itself, excuse or preclude an officer from answering the question or from producing the file or part of a file.

In the face of that the Prime Minister of the day and his associate Ministers communicated to the President of the Senate a direction to those officers under subpoena to give evidence not to answer any question or produce any file. The direction reads:

In case there should be any misunderstanding of the position that I have directed you to take as a witness before the Senate, I direct that, if the Senate rejects the general claim of privilege made by you, you are to decline to answer any questions addressed to you upon the matters contained in the Resolution of the Senate, and to decline to produce any documents, files or papers relevant to those matters.

I am the first to concede that in the crisis of those times I had sufficient spirit to absorb a sensitivity and an impulse which I hope registered a consciousness of the high level of importance of those events. The Parliament was in a situation of direct confrontation by the Executive and this branch of the Parliament, comprising representatives of the people, thought that it had a duty to be informed, through facts and documents to be revealed, of the circumstances that might justify or condemn public transactions entered into by Ministers of the Crown and their subordinates. It is on that right on the part of one arm of the Parliament to require information upon which to make a judgment that the questions to which I intend to address myself tonight depend. Fortunately I am in the position of advancing this view against the Government that is manned by Ministers who are of the same party as myself. I formed this view against a government manned by Ministers to whom I was in direct and determined opposition in a political sense. The wheel has turned now and the motion that I invite the Senate to adopt will apply equally to the present Government as to the past.

After the then Government had answered to the extent to which it was willing to answer through its Ministers, the Senate resolved that there were many substantial questions unresolved and that the failure of the then Government to establish a royal commission so that a judicial personage instead of parliamentary persons could investigate the matter and report objectively constituted a massive cover-up. I do not wish to be taken to be putting before this chamber tonight the question of whether that was a correct conclusion or not. The majority of the Senate at that time resolved that there had been a massive cover-up. Therefore, Mr President, it was imperative that a chamber of Parliament, with a responsibility in Parliament to be informed, should seek information, documentary and oral, from certain servants of the public, paid by the Crown out of moneys appropriated from the public by the public’s representatives, the public servants.

The question of constitutional rules applicable to that occasion therefore, I think, is of prime importance. The direction of the then Prime Minister and his Ministers that public servants should obey their edict not to give any information to the Senate was based upon a view which sometimes was held in the courts of law with regard to the power of the courts to get evidence from government sources. One of the leading cases occurred in the depths of wartime when the House of Lords decided against an allegation of a widow of a deceased seaman who had been drowned in a submarine. She alleged that his death was due to the faulty design of the submarine. The House of Lords decided, I think in 1942 or 1943, that if a Minister of the Crown certified to the court that the disclosure of that design and the accompanying plans would prejudice public security the court must treat that certificate as conclusive and accord it immunity from disclosure.

The courts went on. In 1968, in peacetime, the courts dealt with the case of, I think, the dismissal of a subordinate police officer and whether there had been a malicious prosecution. The question was whether certain reports from his department should be discovered to the court to enable the court to come to a just conclusion. The House of Lords, in the case of Conway v. Rimmer, decided that Duncan’s case should not be followed. It decided that the certificate of a Minister was not conclusive in precluding a court from discovering the facts. It was held that the courts had a duty to consider the justification claimed by a Minister and if appropriate to inspect the documents themselves. The Minister s claim was examinable by the courts and not conclusive. The ultimate decision as to whether the documents should be produced was for the court not the Minister.

That decision was greatly to my delight, Mr President, because it resurrected to complete authority a previous decision of the Privy Council which, as a very junior member of the bar, I had exalted in when it was declared in 1931 in Robinson’s case. The Privy Council rejected any claim by the Government that documents from a wheat board as to the storage of wheat, a commercial transaction of government, could be concealed from the court. Lord Bland borough’s judgment appealed to my mind because of its sturdy expression. He said:

Its foundation is, that the information cannot be disclosed, without injury to the public interests, and not that the documents are confidential or official, which alone is no reason for their non-production.

So much for the development by the courts of Britain and Australia. I refer to this briefly and, I hope, with a sense of discretion. I invite the attention of honourable senators to the fact that my colleagues and I referred to Wigmore on this subject. I suppose he would be the transcendent exponent of the rules of evidence properly applicable in courts of justice. He said:

A court which abdicates its inherent function of determining the facts, upon which the admissibility of evidence depends, will furnish the bureaucratic officials too ample opportunity for abusing the privilege. The lawful limits of the privilege are extensible beyond any control of its applicability, if it is left to the determination of every official whose interest it may be to shield a wrong-doing under privilege.

Those are the words of Wigmore, the preeminent authority on the rules of evidence in relation to courts of justice. I have referred to that because, of course, courts of justice exercise a most anxious judgment to produce an accurate rule applicable to each situation so that justice according to law will be done in the law courts.

I am seeking to have the Senate accept the opinion of my late revered and most respected colleague Ivor Greenwood, my colleague Senator Webster and myself. I am asking the Senate to distinguish the situation between one House of the Parliament and a court of law. Our report brings forward that distinction with a definiteness and an attempted clarity more poignant than in any document that my research ad discovered. I refer to the distinction between the authority and the right, and therefore the responsibility, of a House of Parliament discharging the tremendously comprehensive responsibilities of public affairs and that of a court of justice which is dealing with the sometimes narrow issues as between litigants and sometimes the Crown and the defendant in criminal cases.

In this development of parliamentary law we were most advantaged by the fact that in the United States of America, that great federal democracy, the constitution of whose Senate might be looked for more than this item of current events, the Senate of the United States and the courts of the United States have had to deal with the problem of transcendent invasion of the integrity of government in that state. Writing in 1974 a learned commentator of that transplanted colony, a revolutionary republic world leader, the American Raoul Berger had this to say:

For the scope of this power we turn to its source. A random sampling of parliamentary records stretching from 1621 to 1792 disclosed that the inquiry power had its inception as a prelude to impeachment, and before long covered the entire spectrum of executive conduct; inquiries into corruption, the conduct of war, the basis for legislation, disbursement of appropriations, conduct of foreign relations, and execution of the laws. Legislative oversight of administration was exercised across the board. No member of the executive branch has ever advanced a pre- 1787 -

After that date America formulated its own history, but the writer is speaking of British precedent up to that date-

  1. . precedent in English history for an executive refusal to turn over information to the legislature.

He then referred to a solitary instance. Later he referred to James Wilson’s tribute to the House of Commons, the Grand Inquest of the Nation, which checked the progress of arbitrary power. He stated that the proudest Ministers of the proudest monarchs had appeared at the Bar of the House to give an account of their conduct. That is an American revolutionary reciting the foundation of British freedom which was insisted upon by a purposeful Parliament. With that authority we then went to what was written by Archibald Cox, a renowned professor at Harvard University who was called into executive responsibility by President Nixon and repudiated by him when he would not serve the interests of those exercising executive power for the time being. Archibald Cox went back to study the law. Unfortunately, due to the fact that he was at Cambridge I was not privileged to get an interview with him when I was in America 1 8 months ago. I was referred to an article he wrote in 1973 when this issue of executive discovery, both to the courts and to the legislature, was at an intensive stage of its consideration. The professor drew this distinction which was a guide to my colleagues and to myself who served on the Committee:

I find marked differences between the questions raised by a claim of executive privilege during a judicial proceeding and those presented by an executive refusal of a congressional demand.

He discussed the difficulty of formulating any rule prescribing the occasions when the withholding of evidence by the executive from a demand of the Senate would be appropriate. He accepted the view that the courts should not have jurisdiction to adjudicate in such cases. He stated that he would be content to leave questions of executive privilege vis-a-vis Congress to the ebb and flow of political power. In other words he would be content to leave the question to the prudent decision of the House of Parliament charged with the responsibility in the circumstances of that day. Therefore, when it comes to the real crunch we find that the whole galaxy of the American government comes into intent and searching disquiet. We know the turmoils of President Nixon in his endeavour to escape parliamentary inquiry and judicial investigation. Cox states:

Public confidence in the integrity of the very processes of government can be secured only by proof that there is capability to discover and punish wrongdoing even at the highest levels of the Executive branch.

Honourable senators will note that Cox states that one discovers before one thinks of punishment so as to form a judgment as to whether great persons are imposing mischief on their country or are working for its benefit. Other American authors are cited in our opinions. They show that discretionary executive privilege by the President is without basis in historical or judicial precedent. They go on to formulate rules which seem good to them to guide. Then followed the decision of the Supreme Court of the United States of 1 974. The most interesting point about that decision is not that it discovered the secrets of the President and compelled his confidential aides to disclose their scandalous conduct but that the decision of the great judicial authority of the United States Supreme Court considered the confluence of 2 streams of authority, one applying to the courts of law and the other applying to the legislature, namely, Congress itself.

Senator Cavanagh:

– The honourable senator has convinced the jury.

Senator WRIGHT:

– The jury, of course, often has handicaps as do Houses of Parliament and some individuals, like Senator Cavanagh, who are impervious both in the Senate and on the jury. But the great majority find a tremendous guide in integrity and common sense. When the Supreme Court of the United States was asked to order the discovery of the President’s confidential diaries- increasingly in the form of tapesdictated by him to his aides and their response, the Court stated that in the absence of a claim of need to protect military, diplomatic or sensitive national security secrets, the confidentiality of the President’s communications is not significantly diminished by producing material for a criminal trial under protected in camera inspection by the court and that the President’s claim for privilege on the ground of a generalised interest in confidentiality- precisely the same ground as put forward by Mr Whitlam when he was Prime Minister and by his learned Ministers -must yield to the exigencies of a criminal trial, and that the tapes should be produced.

It so happened that the Supreme Court was faced by a steadfast assertion of privilege by the President. He demanded, as to confidential conversations between him and his close advisers, that it would be inconsistent with the public interest to produce them. His counsel claimed an absolute privilege of confidentiality for all presidential communications. But the court held that it was not for the President to decide the question of privilege, that that decision was essentially the function of the court. Concurrently with those court proceedings there was a reference before the Congressional committee, and the House Judiciary Committee voted impeachment articles on 3 1 July. The court decision was made on 24 July and the President published the tapes on 5 August and announced his resignation on 9 August. Thus was resurrected a strength in the judicial administration of the United States which redeemed it from the disgrace to which it had descended. Parliament moved not impar congressu Achilles but pari passu and demanded that the Parliament be informed.

That affords us terrifically strong persuasive authority to say that this House should establish the same unqualified right to be informed by public servants as to the conduct of public Ministers. The great tragedy in this case is that the Senate discharged the witnesses not so that they were discharged for all time but in the face of a direction from the incumbent Prime Minister and his Ministers not to answer any question or to disclose any file or part of it, and even if the Senate resolved that that was a breach of privilege they should persist in the refusal. That is the issue upon which we reported. I am glad to say that my colleagues and I, against the most strenuous and devious manoeuvres of the 3 senators who at that time, with the casting majority vote of the chairman, represented the Government, managed to get our report on the record. The Senate managed to bring itself to the stage where the people could decide on the integrity of the Government of the day and the Government changed.

It is for the Senate as now constituted to say whether or not, in the terms in which we recommended, this Senate is going to insist on proper occasions to determine for itself whether or not documents shall be produced or whether it is going to accept a direction from an executive government to forbid the production as conclusive in refusing such production to it. That poignantly presents to the Senate the ever continuing contest for power by the Executive to override the Parliament. In my submission, it would be a gross betrayal of the rights that Parliament has won to exercise supervision, to exercise scrutiny over the conduct of the Executive, if we failed to establish the imperative right of this Parliament to require information from any part of the executive as to public transactions. These considerations apply with much more force to the independent office of the Solicitor-General, into whose particular circumstances it is not very appropriate for me to go tonight.

I want to draw the attention of the Senate to the references we made to Professor Enid Campbell’s book, and to the observations of Professor Wade. He said:

Privilege was frequently claimed under the doctrine of (Duncan s) case on the ground that documents belonged to a class which the public interest required to be withheld from production. This practice was particularly injurious since it enabled privilege to be claimed not because the particular documents were themselves secret but merely because it was thought that all documents of that kind should be confidential. A favourite argument- and one to which courts of law have given approval- was that official reports of many kinds would not be made fearlessly and candidly if there was any possibility that they might later be made public. Once this unsound argument gained currency, free rein was given to the tendency to secrecy which is inherent in the public service. It is not surprising that the Crown, having been given a blank cheque, yielded to the temptation to overdraw.

The proposition I put is that the Senate should endorse what we summarised as our conclusions:

  1. That a Minister’s certificate of privilege for evidence, oral or documentary, sought from public servants has evidentiary value but is not conclusive.
  2. That a Minister’s certificate as to all documents and all questions relating to the matter of overseas loan activities of the Government was clearly unsupportable- and was not acceptable as a claim of privilege unless restricted to particular documents or particular questions or a particular class of documents or questions.
  3. That the directions of the Australian Ministers to claim privilege in respect of investigations by the Senate were misconceived. Such a claim is a claim for a Senate not to require an answer or a document in appropriate cases.
  4. That in practice the Senate would ordinarily refrain from requiring answers to questions as to confidential advisings by public servants.
  5. That there is no practice, nor is it the law, that the simple fact that a witness is a public servant or a file a departmental file gives any privilege. The question is whether a question invades the confidentiality basic to the proper performance by the Public Service of its duty- and if the detriment to the public interest of disclosure by the public servant outweighs the public interest of revealing the facts to the legislature, the legislature ordinarily will not require the question to be answered or a file to be produced.
  6. The ultimate decision as to whether a question must be answered or a document produced is for the Senate and not for the Executive.
  7. That the Solicitor-General- not claiming any privilege on professional ground or self-incrimination- was wrong in claiming that he should join a claim for privilege to the Ministers ‘ claim of privilege, simply because such a claim was made and he was an officer appointed by an Executive.

That is the sole basis upon which he put it-

He erred in not discharging his higher duty to give evidence before a House of Parliament when lawfully required -subject to all proper privilege in respect of any particular question or class of questions- e.g., questions which impaired the confidentiality on which his relationship with an Executive was based.

So whether it be a matter for solemn or sober reflection, it is this day that we seek to establish these principles in this chamber. Whatever be the circumstances on other issues, I ask the Senate, not from a partisan point of view because these are the principles that the Senate will apply to either branch of government this day or next decade, to accept those principles established by those authorities so that the Senate will be armed with a proper authority to inquire and gain any information that is necessary for the discharge of its duty.

Having said that I want to add by way of postscript that everybody would be conscious of the awkwardness and inappropriateness of the examination of witnesses before an assembly of 60 people and it behoves us exercising this right to establish the appropriate procedures whereby the appropriate committee of our members should be entrusted with the responsibility of asking the questions and eliciting the facts in the presence of other members so that all can make a judgment on the matter if and when the future reveals it necessary for us to bring witnesses before the Bar to be examined. Let those who say that it is quite inappropriate revert to the quotation I made that the proudest ministers of the proudest sovereigns have been brought to the Bar of the House of Commons, whose privileges and authorities we represent. It is by the exercise of that power on proper occasions that the parliamentary representatives of the people have made the exercise of parliamentary authority conform to the interests of the people. I seek leave to continue my remarks.

Leave granted; debate adjourned.

page 179

QUESTION

AUSTRALIAN ASSISTANCE PLAN

Senator GRIMES:
Tasmania

– I move:

That the Senate is of the opinion that the Government should introduce legislation to provide for the statutory establishment and funding of the Australian Assistance Plan.

I will not delay the Senate. My proposition is not as long or as complicated as that put forward by Senator Wright. I also will be using the words of some of my senatorial colleagues on the other side of the chamber. However, I will not be accusing them of deceit or devious behaviour. My proposal seeks merely to bring back to life the Australian Assistance Plan, a plan to help people, unlike the previous proposal which sought to introduce political trials into this country. I believe that my motion should get support from both sides of the House. In fact Government members from the time of the introduction of the Australian Assistance Plan have shown enthusiasm for it and should have no difficulty in supporting my motion. Indeed, in the month leading up to the 1975 election then Opposition members all over the country and the then Opposition spokesman on social security were enthusiastic supporters of the Australian Assistance Plan wherever they went. Some of them since that election have remained supporters; others unfortunately have not.

Since the Minister for Social Security (Senator Guilfoyle) announced on 31 May last year that no new grants would be forthcoming for administration or for projects after 30 June 1977 under the Australian Assistance Plan the whole scheme has dropped into a pit of despair. This motion, which I hope will receive bipartisan response, is an attempt to lift it out of the doldrums and out of that pit of despair because when the Australian Assistance Plan was introduced there was considerable enthusiasm for it from both sides of the Senate and universal support for it from both sides. There was no opposition in either House of this Parliament. In going through the files that one has accumulated on the Australian Assistance Plan and in going through the records on the Australian Assistance Plan is it very difficult to find anyone in this country who has criticised the concept or the basic activities of the Australian Assistance Plan. If we exclude the extreme reactionary National Party element in Queensland there is no one who is opposed to the Australian Assistance Plan.

The Plan was introduced in 1973 and, in the words of Mr Hayden when he tabled the report on the Plan and introduced the Plan, it was introduced to bring together these threads: Planning, regionalism, true democratic participation, community development and regular critical evaluation of the performance of programs to ensure their continued relevance and satisfactory operation. Mr Chipp, the shadow Minister at the time, said:

Here is one of the most important social documents laid down in this Parliament for 20 years … It has been Liberal policy for years and we accept it.

I am not suggesting that the Australian Assistance Plan as it was introduced was perfect. It was an experimental plan and we accepted that it would need modification. We would expect any new plan of this type to need modification. Naturally it took some time for State governments, local government authorities, voluntary organisations and individuals who participated in it to learn how to work together and to assess the welfare needs in their own area. It took time and patience to learn how to handle the financial procedures and the restrictions which come with grants from government, both administrative grants and, in some cases, per capita grants. First of all the grants went to a few pilot areas. Some were successful and some were less successful than others.

Senator Devitt:

– Some were highly successful.

Senator GRIMES:

– Some were very successful. There were some difficulties. There were some inter-regional jealousies. There were some people who did not like new ideas. However, in a few months in the development of the regional councils and in the development of the Aus.tralian Assistance Plan good will was produced. Money and services were used in a sensible way and the plans and schemes that were needed in various areas were set up. The regional concept was new and created some difficulties. It was challenged in the High Court of Australia by Victoria and the challenge was rejected by that Court.

Local government overcame its initial resistance and in fact enthusiastically joined the regional council. Anyone who was at the conference held by the regional councils in Canberra last year will remember the frequency with which the delegates were announced as ‘Councillor’ or ‘Alderman’. Community volunteers entered the scheme. Some were organised in groups and some were individuals who were attracted by an invitation to enter a scheme in which they could assist their neighbours and their community. They formed a human resource whose skills could be used to set up welfare plans in those communites which worked efficiently and which would work more efficiently in the future as they became more experienced. What is more important perhaps, one would think, to this Government, is that they would work much more economically than a full government scheme which had to be fully funded and fully controlled.

Many members of Parliament, including members of this House, from the coalition side and from the Opposition side, were at the national conference of the Australian Assistance Plan in April last year. Many of them spoke. No one spoke in opposition or suggested that the

Australian Assistance Plan should be thrown out and not continued. Everyone who was at that meeting was aware that the present Government had a commitment to financial stringency and had no expectations at all that extra millions, or even perhaps as much as was provided before, would be poured into this scheme. But the people who attended that meeting came hoping and expecting to hear that the scheme would be continued as a national program, even if there was not much funding, even if the basis of the funding was different, and even if the plan was changed. Of course, the Minister for Social Security could give no such assurance at that conference. She promised to go away and consider the representations put to her and that the Government would make a decision after she had consulted her State counterparts at the Welfare Minister’s conference which, from memory, was held in Darwin.

I am not privy to what the Government considered or whether the decision had already been made; but what we know for sure is that, before any one of the State Welfare Ministers could open his mouth, put a point of view or even participate in any sort of serious discussion, the Minister read and circulated a statement which had been prepared before the conference and which pulled the rug from under the Australian Assistance Plan. The statement said that Senator Guilfoyle said on 25 May last that the Government was not attempting to demolish the Australian Assistance Plan by transferring it to the States. Whether or not the Government was attempting to demolish the Australian Assistance Plan, that is in fact what has happened. No State has picked up the pieces. No State government has offered to pay the bills for the funded projects which have had to be wound down, for the administrative back-up, for the planning or for any other aspects of the scheme. The Government may well try to blame the States for destroying the AAP, for not taking it up after the Government had thrown them a baby which they could neither clothe nor feed because they were in no position to do so; but in considering that sort of proposition we should look at what the Government has done in its own Territories.

Senator Missen:

- Senator, you are not suggesting that all States have rejected the idea of taking over the plan for creating a plan, are you?

Senator GRIMES:

– If the honourable senator will tell me the State which has funded it, tell me the State which has maintained it or tell me the State which has kept it up on any scale, I shall agree with him.

Senator Missen:

– It was not rejected in Victoria.

Senator GRIMES:

– It is rejected in fact, if not in words. In the Northern Territory there has been no move, to my knowledge, by the Minister for the Northern Territory (Mr Adermann) to assist the regional councils in the manner in which they were assisted before. In the Australian Capital Territory there has been no scheme to continue the AAP in the way it was conceived before, to fund the Regional Council for Social Development. The difficulty in the A.C.T., of course, is that funding for welfare planning which was received by the A.C.T. Council of Social Service also has been cut.

The office of the Minister for Social Security, my office and the offices of all other members of this Parliament, both senators and members, have been flooded by representations from regional councils wishing to continue. They have set up counselling services, operated buses for handicapped persons, and set up handyman services for the aged, women’s shelters, leisure clubs, children’s groups- a vast variety of schemes all over Australia, depending on the needs in the various regions. They have encouraged participation by advertising, by access radio, in novel ways, in new ways, in almost every way. There is no need for me to list the vast variety of schemes which have been established. Unless these people can see that the Government equals them in good faith, people will not easily put in that kind of altruistic work in the future.

No one could suggest that the AAP was a wildly political program. I know, and everybody else knows, that in different areas diverse groups made runs for leadership and to take over, but in the end very few people of strong political persuasion dominated. All gave way to the community voice. It is for this reason that such a wide endorsement has been received by politicians throughout this Parliament and the State parliaments. The AAP began as a bipartisan program. It was established in the same way and there should be a bipartisan effort to save it. In June 1976 Mr Chipp repeated his remark that the AAP was one of Labor’s policies which had been superb and was also Liberal philosophy. In fact it was Liberal policy at the last elections. In June Senator Baume said: ‘I set out to see the Australian Assistance Plan preserved. I believe it is still going to be preserved’. I wonder whether Senator Baume could get up in this Parliament and say that today. Mr Peter Collins, a Liberal MLA in Victoria, also spoke enthusiastically of the plan at the national conference. Last

December Dr Tonkin, the Leader of the Opposition in South Australia, said:

Because of the involvement and help given by voluntary organisations these projects are costing the community far less than they would have if the Department for Community Welfare tried to take them over.

Had the States taken up the Australian Assistance Plan, it would not have been necessary to place this matter on the notice paper; but they never did. I put it to honourable senators, despite Senator Missen ‘s interjections, that they are never likely to do so. They are not given the funds. Apart from the offer of a couple of officers of the Department of Social Security to help move the paper about in the changeover, they were not given any encouragement. In fact the Prime Minister at the same time was telling the States that if they began spending their own money too freely he would give them a sharp lesson in the new federalism. The result was inevitable: The AAP is no longer operating in any way. No regional council, to my knowledge, endorsed the passing of the Australian Assistance Plan to the States. This was for many reasons: Firstly, they valued and they needed the opportunity to be part of a national plan and to participate in the national goals of planning the self-help services and to learn from experience throughout this country. Those regional councils, established in States where neither the State or local government elected members have any experience or interest in the welfare needs of the people, were very apprehensive about the likelihood of their State governments wanting to take up where the Commonwealth had left off. Nor were they reassured by any suggestion from the Minister or the Prime Minister that the States had a closer and more intimate knowledge of local problems.

I remember more than one delegate at the national conference of the Australian Assistance Plan in April last year expressing the view that the State bureaucrats and in some cases State politicians in their capital cities were more remote and had less interest in the problems they were trying to handle and solve than the bureaucrats of Canberra. It was surprising to hear a secretary of a local government organisation who, in fact, was not as keen about the AAP as other delegates at the conference saying that the most centralist governments in this country were the State governments. The much maligned bureaucrats from Canberra- one in particular- were applauded. They assisted the regional councils. They helped them in their planning and administration. They encouraged the whole scheme. But people at that conference and people who have spoken to me and other members of the Parliament do not believe that the centres of Brisbane, Sydney, Perth, Hobart and Melbourne can replace Canberra in this sort of national scheme.

So we are in the situation now in which the last of the money is dribbling out for the last administrative grants. The last of the cheques are dribbling out to pay for the projects which have been promised. Great numbers of petitions have been presented to this Parliament. Regional councils have made their feelings known to everyone here. Every honourable senator and honourable member is aware of the lost opportunities for self-help of the highest order if the Australian Assistance Plan is sunk without trace. Morale has dropped and doors are locked. Administrators and welfare personnel who have become experienced, who have gained skills and brought them into this area, have gone to look for work elsewhere. I think that we can arrest this decline. I think it is worthwhile to do so. It is for this reason that I ask honourable senators from both sides of the chamber for their support for the Australian Assistance Plan by making a request to the Government in the terms of my motion. It is a request to introduce legislation to provide for the statutory establishment and funding of the Australian Assistance Plan. The amount of money spent up to now has not been great. The amount of money needed in the future will not be great. But it has been a Commonwealth responsibility. It was a Commonwealth initiative supported by members on both sides of the Commonwealth Parliament. The program can produce the best results only if it remains national. If the Commonwealth deserts this area and the States fail to take it up, as they will, the most altruistic and helpful people in this community will experience despair and cynicism about this Parliament, and about what government is all about in this country.

It so happens that today there is a visible presence outside this Parliament of one of the casualties due to the demise of the Australian Assistance Plan. I refer to a yellow bus which is run by the kids’ activity group in Newtown. This was originally funded by the Australian Assistance Plan and by the South West Sydney Regional Council for Social Development. It is a mobile school play activity group aimed at catering for children whose families for many reasons, as those who know that area of Sydney will understand, are in need of advice and help and who are lacking facilities to broaden the kids’ experience, to teach the children and to help the children develop fully in the proper sense. Their Australian Assistance Plan grant has finished and the group was encouraged to proceed with an application for a grant through the Office of Child Care. It was learnt yesterday that this grant had been turned down. To add to the confusion the Minister has informed the KAN people concernedthe Kids’ Activity Newtown peoplethat the State should take responsibility. But New South Wales has not accepted responsibility as no other State can because of the difficulty with funding especially in the present atmosphere of uncertain funding from the Commonwealth to the States.

The people have been offered a once-only grant of $5,000 which, in fact, will preclude them from receiving funding from other sources within the Department of Social Security. I personally believe that this is a shabby offer and I believe that further bi-partisan approaches will be made to the Minister by members on both sides of the Parliament who support this scheme and other schemes of this type which were developed through the Australian Assistance Plan. I do not believe that a negative approach helps in many of these areas. Therefore, I am requesting honourable senators on both sides of the chamber to support the motion I have moved that the Senate is of the opinion that the Government should introduce legislation to provide for the statutory establishment and funding of the Australian Assistance Plan.

Debate (on motion by Senator Guilfoyle) adjourned.

page 183

STANDING COMMITTEE ON CONSTITUTIONAL AND LEGAL AFFAIRS

Debate resumed from 3 June 1976, on the motion by Senator Missen:

That the Senate take note of the report.

Senator MISSEN:
Victoria

– I resume the debate on this motion which relates to a report presented unanimously, by the Senate Standing Committee on Constitutional and Legal Affairs. It is headed: Report on the Ordinary Annual Services of the Government. This report, which was presented in June of last year and upon which debate has not resumed since, arises from an instruction which was given to the Committee on 14 November 1974. It arose then out of complaints which had been made by certain Senate Estimates Committees as to the operations of government financial legislation and the extent to which it was then alleged, as was the case in the previous year, that there were certain deviations from the compact which had been entered into in 1965 and which had been the basis upon which there was a distinction between those Bills which related to the ordinary annual services of the Commonwealth, which under the Constitution the Senate cannot amend, and those which related to other items. The Senate Committee was reconstituted and given its further reference after the last election on 2 March 1976. As I said, it then presented its report in June. In that report and the comments which I made to the Senate on the occasion I presented it, I pointed out in very brief terms the significance of the report and the recommendations which we then made.

I think that I should say a little about the report because it is a long time since it was presented to honourable senators. I hope that tonight the debate on it will continue and will be completed. If at the end of this debate the Senate takes note of the report. I shall move a motion which is contained in the body of the report and which is designed to resolve and repeat what was and is the position with regard to the understanding of the Committee and, I think, the understanding of the Senate as to the Senate’s respective powers. The Constitution of this country makes reference to the words ‘the ordinary annual services of the Government’. I shall read a small sentence from section 53 of the Constitution which states:

The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government.

A further reference to this same expression is contained in section 54 of the Constitution. It reads:

The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation.

Over many years there has been some doubt and some dispute as to precisely what is covered by the words ‘ordinary annual services of the Government’. The expression is significant in that it determines those matters which the Senate cannot amend and those which it can amend. The High Court has had occasion to discuss this matter- I think this is set out in the report quite simply- and one could say that the Court, particularly in the case of Osborne v. Commonwealth, has pointed out that it is for Parliament to resolve what are the meanings of these expressions and to determine these matters, and not for the courts to endeavour in any way to define the power of the Parliament.

The report traces the history of the expression in more detail. It shows that from the earliest days there was a division between that Bill which covered the ordinary annual services and other

Bills. However, there was some idea by Mr Deakin, the first Attorney-General, that perhaps it would not be necessary to do so. But that continued to be the case until a problem arose in 1964 when Mr Holt’s Budget of that year amalgamated certain Bills and in fact reduced the amounts in the amendable Bills from $70m to Sim- a very substantial change. It was the cause of complaint and resulted in the appointment of a Senate Government members committee under the chairmanship of Senator Sir Magnus Cormack. That committee investigated the background of the matter and reported on what ought to be the differentiation between these particular powers. Although the report of that committee of government senators was not tabled in the Parliament until 1967, it was made available at an earlier date. It resulted in a statement being made by Mr Holt, who was then Treasurer. I think that statement is generally known as the 1965 compact. The then Treasurer made clear what matters would and would not be considered within the framework of ‘ordinary annual services’. For those honourable senators who do not have a copy of the report before them, page 11 states that Mr Holt’s words are recorded in the May 1965 Hansard at pages 1484-5. He said: the Government has now decided that henceforth there will be a separate Bill . . . subject to amendment by the Senate, containing appropriations for expenditure on -

  1. the construction of public works and buildings;
  2. the acquisition of sites and buildings;
  3. items of plant and equipment which are clearly definable as capital expenditure;
  4. grants to the States under section 96 of the Constitution; and
  5. new policies not authorised by special legislation. Subsequent appropriations for such items will be included in the Appropriations Bill not subject to amendment by the Senate.

The position then was that that compact continued to be observed and those particular items were in the Bill which could be amended until, as I mentioned, 1973 and 1974 when Senate Estimates Committees in each year raised objections. The objections came under paragraph (e) which I have read out- new policies not authorised by special legislation. A number of complaints are detailed in the report. It was suggested that these items were wrongly placed in the Bill; that they did not have special legislation applicable to them; and that this was depriving the Senate of the opportunity to amend the Bills in respect of such items. Having reviewed this aspect of the matter, the Senate Committee, in paragraph 25 of its report, stated:

It is the opinion of this committee that the 196S Compact, considered in the light of the Government Senators Report upon which it was based, does not lend itself to an interpretation that a Government can place any financing for new policies in a non-amendable Bill purely on the basis that the required legislation would be forthcoming at a later date.

The argument was advanced by Ministers that somehow this brought it outside the aspect of new policies. The Senate Committee was certainly satisfied that it did not do so. In the course of the consideration given by the Senate Committee to this matter- not just in relation to new policies but in relation to the application of the whole 1965 compact- there was correspondence between this Committee and the Treasurer (Mr Lynch). On 8 April last year, as chairman of the Committee I wrote to the Treasurer, the Hon. P. R. Lynch, seeking his views as to whether or not the procedure announced by Mr Holt in 1965 in respect of ordinary annual expenditure would be followed in future appropriation legislation. That letter is set out in the appendix to the report. I think the reply which the Treasurer wrote to me is significant and should be read. The reply is dated 4 May 1 976 and reads:

I refer to your letter of 8 April 1976 in which you sought my views on whether or not the procedure announced by the Treasurer in 1965 in respect of ordinary annual expenditure will be followed in future appropriation legislation.

I am aware of the terms of the 1 965 compact and confirm that there is no present intention of seeking a change in its terms, i.e. we propose to follow it in the preparation of future appropriation legislation.

The Committee recommends that in view of the Treasurer’s letter, the Senate should accept the assurance given, that the 1965 compact will continue to operate. The second matter which was referred to the Committee for consideration and report to the Senate was the means by which the constitutional rights of the Senate to amend proposed laws appropriating revenue or moneys for expenditure on matters other than the ordinary annual services of the Government should be preserved. The Committee was of the opinion that the clear statement contained in the Treasurer’s letter was, in the first place, an indication that the procedure was to be preserved. In general, the Committee’s first conclusion, as we see on page 14 of the report, related to the future observance of the procedure. The Committee recommended:

That the Senate continue to be vigilant in scrutinising all Appropriation Bills so as to ensure that Appropriation Bills for the ordinary annual services of the Government only contain appropriations for those services.

There is nothing particularly extraordinary about that. I suppose this continued vigilance is always the duty of this Senate in many other things and should particularly be seen to be applied in this area to ensure that there are not accidental or otherwise departures from the 1965 compact.

Turning to another section of the report, I refer to the resolution that the Committee recommends the Senate should reaffirm. This provides that the 1965 compact should continue. I propose when this debate has concluded to seek leave to move this motion to enable that compact to be continued. The motion is in these terms:

The Senate resolves:

To reaffirm its constitutional right to amend proposed laws appropriating revenue or moneys for expenditure on all matters not involving the ordinary annual services of the Government.

That appropriations for expenditure on:

The construction of public works and buildings;

b ) the acquisition of sites and buildings;

items of plant and equipment which are clearly definable as capital expenditure;

grants to the States under Section 96 of the Constitution; and

new policies not previously authorised by special legislation; are not appropriations for the ordinary annual services of the government and that proposed laws for the appropriation of revenue or moneys for expenditure on the said matters shall be presented to the Senate in a separate Appropriation Bill subject to amendment by the Senate.

As I indicated, I propose to seek leave subsequently to move a motion in those terms. In conclusion may I say that I hope that the report of the Committee will be of assistance and that it will be a record in short form of the history of this matter and further that it will help towards the preservation of what seems to be a highly desirable compact reached by a government in earlier days. Subject to that, I do not propose to say anything further,

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

– This is an interesting matter. I am well aware that it is part of Senate history because, before I became a member of the Senate, I was a friend of many of the people who are currently members of the Senate and those who were previously members of the Senate. I can well remember the late Senator Colin McKellar coming to talk to me at the Sydney Sheep Show and pointing out to me his great concern about this matter and his apprehensions about the possible change in the capacity of the Senate to be the useful body that it has been. He told me that a Committee made up of Senator Sir Magnus Cormack, who is here, Senator Wright, who is here, the late Dame Ivy Wedgwood and himself were working on this problem. As Senator Missen has said the matter has reached a satisfactory solution in the compact between the Senate, this Committee under Sir Magnus Cormack and the then Treasurer, the late Prime Minister, Mr Harold Holt.

This compact is sanctified- I suppose that is the best word- in the correspondence referred to by Senator Missen who, on behalf of the Senate Standing Committee on Constitutional and Legal Affairs, of which he is chairman, wrote to the Treasurer (Mr Lynch) on 8 April 1976 regarding this matter. He has referred to that letter. He had a reply from the Treasurer making it quite clear that the Government and the Treasurer intended to continue to honour the compact entered into in 1965 between the Senate, its Committee and the then Treasurer to the effect that this particular area of expenditure would always be capable of adjustment and capable of amendment within the Senate.

This is an important matter for the Senate itself, quite apart from the political feelings one may have one way or the other. I have always taken the view- and I have expressed myself to this effect here years ago- that the Senate is by no means a chamber without responsibility in economic, monetary and financial matters. The view is held by many people in the other chamber that the Senate has no capacity in this area. That is not the view that I hold. I hold the very clear view that in economic, monetary and financial matters there is a clear separation of the daily event and the long term position. It is in the capital works programs of a nation that the long term trend positions are most to be influenced. I believe, therefore, that the Senate as a chamber of longer membership capacity than the House of Representatives is perhaps able to take a little longer view and has a singular function to perform for the Australian people in the examination of capital works programs.

Accordingly, it is some pleasure to me to be able as a Minister to agree with the remarks of the Committee and to commend the Committee for its reaffirmation of the previous position that was reached in 1965 following on the work of what might be called the ‘Cormack, Wright, Wedgwood, McKellar Committee’ and to say that it is clear from the report how the history of this matter all developed. The compact is clear and the reinforcement by the current Government of its intention to maintain that procedure is equally quite clear. Accordingly it seems to me that I do not need to go any further. The matter has been well covered by Senator Missen. As I said, I really was pleased to be here to express on behalf of the current Government its reaffirmation of its intention to continue to behave in this fashion towards the Senate as a chamber of very great importance.

Senator WRIGHT:
Tasmania

-If I sense the atmosphere aright, there is no great pressure of time. I shall not use that as an excuse to convey that it is necessary to speak for want of leisure. But I feel that the Senate Standing Commitee on Constitutional and Legal Affairs has done a useful purpose in recording confirmation of the 1965 compact and recalling the contention that went before that. It was the subject of a great debate in this chamber. We preserved our right to amend Bills in this extensive area only by the narrowest majority. On one occasion there was one speech from the floor of the House together with one speech from a Minister and another speech from the then Leader of the Opposition.

I did not rise to speak to that point particularly. But I did rise to say that this right, having been recorded by the Committee, will be of use only if it is exercised. Reports by the Auditor General of latter years show a demanding circumstance that public expenditure must be scrutinised much more closely. For my part, let me say that the conventions of the Senate and the practices appropriate for the Senate in the exercise of this right are under continuing examination by a group of us. It is hoped that some proposition can be put before the Senate for consideration in this respect. I am glad to hear Senator Cotton, the Minister at the table tonight, say that he does not regard the Senate as having no authority or responsibility in the area of either economic power or fiscal power. But I stress that government expenditure is in more need of examination by an effective House of Parliament, so as to ensure the integrity of expenditure and the economy of expenditure, than ever before. I maintain that the Senate can pursue and exercise that right with complete respect for the final authority of the Government with regard to fiscal matters. I wish to express pleasure at hearing of the Committee ‘s report and of the fact that the Senate is about to endorse a resolution that will put the result on record.

Question resolved in the affirmative.

Resolution Arising from Report

Motion (by Senator Missen)- by leaveproposed:

The Senate resolves:

To reaffirm its constitutional right to amend proposed laws appropriating revenue or moneys for expenditure on all matters not involving the ordinary annual services of the Government.

That appropriations for expenditure on:

The construction of public works and buildings;

the acquisition of sites and buildings;

items of plant and equipment which are clearly definable as capital expenditure;

grants to the States under Section 96 of the Constitution; and

new policies not previously authorised by special legislation; are not appropriations for the ordinary annual services of the government and that proposed laws for the appropriation of revenue or moneys for expenditure on the said matters shall be presented to the Senate in a separate Appropriation Bill subject to amendment by the Senate.

Senator KEEFFE:
Queensland

– I would like to obtain from Senator Missen a little of the background to the proposed resolution. I take it that it was a unanimous decision of the Senate Standing Committee on Constitutional and Legal Affairs?

Senator Missen:

– Yes.

Senator KEEFFE:

– And that, apart from the first sentence, it is purely a reaffirmation of the existing practice?

Senator Missen:

– That is so.

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

– It might be appropriate, now that the motion has been moved, for me to reassure the Senate on behalf of the Treasurer (Mr Lynch)- I have these assurances from him for this purpose- that within the Department of Finance, which is where the Appropriation Bills are now prepared, every effort will be made to observe the 1965 compact. The officers of that Department have been directed to take special care in the nature of the items that are included in Appropriation Bills Nos 1 and 2. 1 have been assured by that Department, through one of its officers, that in any cases of doubt the advice of the Parliamentary Counsel is sought before the Bills are brought into the Parliament. I have brought that to the attention of the Senate as a matter of record.

Senator KEEFFE ( Queensland )-by leave-I assume from what the Minister for Industry and Commerce (Senator Cotton) has said that this reference applies to all Appropriation Bills at any section of the parliamentary debate, whether it be in the main Budget session or as part of the mini-Budget that we normally have towards the end of each financial year. Perhaps the Minister would like to comment on that.

Senator COTTON (New South WalesMinister for Industry and Commerce)- by leave- I think that that can be taken for granted. It applies to Appropriation Bills Nos 1 and 2, 3 and 4, 5 and 6, or whatever it may be, whether they are total or supplementary. The genuine intent of the Department of Finance, through the Treasurer (Mr Lynch), is to obey the compact, to make it quite clear that it will be obeyed and to make it quite clear that officers have been so instructed.

Question resolved in the affirmative.

page 187

STANDING COMMITTEE ON EDUCATION AND THE ARTS

Debate resumed from 18 August 1976, on motion by Senator Davidson:

That the Senate take note of the report

Senator DAVIDSON:
South Australia

– I am grateful for the opportunity afforded to me to speak on this matter tonight. I am appreciative of the fact that matters of importance and significance have come up for discussion under the heading of General Business. It is understood that the nature of the Senate’s activity means that although -

The lights in the chamber having failed-

The PRESIDENT:

– I suspend the sitting until the restoration of the lighting, when the bells will be rung.

Sitting suspended from 9.34 to 10.15 p.m.

Senator DAVIDSON:

- Mr President, the Senate will recall that we were debating the noting of a report of the Senate Standing Committee on Education and the Arts dealing with the education of isolated school children. The proceedings were interrupted and I am glad to have this opportunity of continuing my remarks. I welcome this opportunity of dealing with general business, that being the consideration of reports of Senate standing committees. Senate standing committees, of which there are quite a number, are engaged on matters of public importance according to references handed down to them by the Senate. Having received a reference they then proceed to make their investigations and inquiries throughout public areas of Australia. They invite submissions and invite witnesses to appear before them and engage in conversations. They make their own inquiries. The result of all this is that there is a very widespread conversation between the Australian community and the Parliament. Leaders of the various disciplines associated with Senate committees take it upon themselves to appear before them, to make submissions and answer questions, and generally to make a contribution as a result of their experience or expertise. Thereby Senate committees are not only enriched in the evidence they receive but also are able to apply that evidence and record it in reports which eventually are presented to the Senate.

I have laboured that point but I did so deliberately because I have a personal concern that the government of the day is not sufficiently aware of the work that Senate committees do. I say that because no sooner does a Senate committee become established with a reference and commence a hearing relating to a particular pub.lic matter, no sooner does it start recording evidence and reaching conclusions, than it almost seems to follow that the government of the day either institutes an inter-departmental inquiry, or by reason of its own knowledge of what is happening within that Senate committee, starts to produce either a series of regulations or institute a series of inquiries on its own or make recommendations as far as policy is concerned.

At the outset I want to make a plea to the Government to remember that back bench Senate standing committees are working extremely hard on their various references. They do so with the intention of bringing in a report and laying down recommendations, not only as far as the Government is concerned but also as far as the Parliament is concerned. They endeavour to reflect, and indeed they do reflect, to the Senate what the public is thinking about a given area, a given issue or a given discipline. I am concerned that work undertaken by Senate standing committees is sometimes being pre-empted because the government of the day, by using the faculties available to it, acquires prior knowledge of what is happening in any given inquiry. It preempts that work either by legislation or by announcement of policy. It would be a better reward to chairmen and members of Senate standing committees if the government of the day waited until a report was submitted because that report is brought down as a result of extensive hearings covering a great number of hours and a great number of days, and a considerable amount of thought and consideration by members of this Senate.

I am very well aware that the reference which the Senate Standing Committee on Education and the Arts undertook in relation to isolated school children afforded the opportunity to representatives of the isolated children’s community to present to the Parliament, and thereby through the Parliament to the Government, a whole range of opinions and a whole range of circumstances and situations in which this section of the Australian community is involved and about which it is concerned so that the Committee could bring down a report.

On 18 August last year the Senate Standing Committee on Education and the Arts presented to the Senate its report on isolated school children and there was put before the Senate a motion that the Senate take note of the report. As the journals of the Senate of that day record, I was in the course of making my remarks and was doing so in my capacity as Chairman of that Senate Standing Committee.

I want to take a moment of the Senate’s time to refer to the terms of reference and to give to the Senate some historical narrative about the work of the Committee. On 13 September 1972 the Senate resolved that this reference on isolated children be referred to the Senate Standing Committee on Education, Science and the Arts. That Committee is now known as the Senate Standing Committee on Education and the Arts. I would like to develop this point but in the meantime I ask leave to continue my remarks.

Leave granted; debate adjourned.

page 188

NEW BUSINESS AFTER 10.30 P.M

Motion (by Senator Withers)- by leaveagreed to:

That standing order No. 68 be suspended to enable new business to be commenced after half past ten p.m. this night.

page 188

QUESTION

STANDING COMMITTEE ON EDUCATION AND THE ARTS

Senator DAVIDSON:
South Australia

– When I asked for leave to continue my remarks I was pointing out to the Senate that the Senate Standing Committee on Education, Science and the Arts had received a reference relating to the education of isolated school children. The report indicates that the reference related to children who, for geographic reasons, have no reasonable daily access to an appropriate school or who cannot be afforded equal education opportunities with other children, or who cannot be provided with an education suitable to their talents and interests to equip them for employment in the occupational field they select. Another part of the reference invited the Committee to investigate the means by which these disabilities can be overcome, by extension and deployment more widely of schools or institutes of tertiary education and the provision of financial aid to isolated children. I draw the attention of the Senate to the fact that this reference was put down in 1972. Honourable senators will recall that the introduction of the then Commonwealth Government’s assistance scheme for isolated school children largely resolved the problem which was referred to in our reference. Previously there were wide variations in the eligibility for financial assistance from State to State. As a result of this the Committee encountered some difficulty in arriving at an appropriate definition of what might be called an isolated school child.

Under the assistance for isolated children scheme which was introduced in 1973 by the government of the day, an isolated child was defined as one who, because of the geographic isolation of his home, did not have reasonable daily access to a government school providing courses of the appropriate level, that is either primary or secondary level. This definition was arrived at as a result of discussion within the Committee. The decision was reached under the influence of a submission which came to us from the Australian Department of Education. When the Senate Standing Committee on Education and the Arts was talking about reasonable daily access, consideration was given to the availability of transport services, and I point to the regulations governing compulsory school attendance. The fact was that the term ‘government school’ did not necessarily include a correspondence school or a school of the air.

I shall take a little time to emphasise this point because when a committee of the Senate is dealing with a matter relating to isolated school children it has to be extremely careful in relation to the definition. I suppose that the moment we start to talk about definitions we have presented to us a whole range of circumstances about which there can be some considerable debate as to what is the correct definition of a group known as isolated school children. So, after some determination, the Committee took account of a number of categories of children in trying to reach what I hope is understood to be a sympathetic and compassionate definition of isolated school children. For example, there were those children who did not have daily access to school facilities because of the remoteness of their homes. There were those children who lived in sparsely populated areas and who could be conveyed to school daily but whose numbers were insufficient to warrant the provision of any educational transportation system. Again, there were those children living in areas where there was no secondary school and whose homes were beyond the transportation range of the nearest secondary school.

We felt that we should never overlook those children attending a small school where one teacher supervised a number of children in different grades. On the other hand, it was taken into account that there were children attending a country high school which did not offer a sufficient number of courses in the senior secondary school. Furthermore, there was the very important matter of children who had to travel excessive distances over unsealed or unformed roads, which imposed personal hardship. Taking the matter a bit further, the Committee took into account those children of itinerant or seasonal workers whose frequent change of residence or domicile rendered it impractical for them to attend school regularly.

Debate interrupted.

page 189

ADJOURNMENT

The PRESIDENT:

-Order! It being 10.30 p.m., under sessional order, I put the question:

That the Senate do now adjourn.

Question resolved in the negative.

page 189

STANDING COMMITTEE ON EDUCATION AND THE ARTS

Senator DAVIDSON:
South Australia

– I seem to be suffering from a number of interruptions, some of whichhave been imposed by the Senate and some of which come from outside sources. I take it I will receive a message in due course. I return to the discussion of the very important report of the Senate Standing Committee on Education and the Arts. I was making the point that the Committee which was dealing with the matter of education for isolated school children had to look very early at defining the meaning of an isolated school child or a group of people known as isolated school children. Honourable senators will recall that I have listed a number of areas which could not be overlooked. I move now to that very important and needy group of children who require remedial instruction and who do not have access to special educational facilities in the region in which they happen to live. We must never overlook those children who suffer from short-term or long-term illness, or physical disabilities, or mental disabilities and who are isolated from the appropriate education facilities which might render them some assistance or opportunity.

In an investigation, if we talk about isolated school children it necessarily and naturally follows that the matter of Aboriginal children comes into consideration. The Committee in its investigations discovered and recognised that children of Aboriginal descent accounted for a large proportion of Australia’s isolated school population. Unique problems related to this section of Australia’s isolated community. The Committee decided that because of the unique problems associated with this group of children it would be preferable to conduct a separate inquiry into Aboriginal education. I point out to the Senate that when the Committee reached that decision it was not opting out of the very important issue relating to Aboriginal education. The Committee was not seeking in any way to escape from the responsibilities which it had, but it did take the opportunity to point out that the matter of Aboriginal education was being considered at that time by the Senate Select Committee on Aborigines and Torres Strait Islanders as part of its inquiry into environmental conditions.

I take leave to point out that the Committee decided to confine the inquiry to pre-school, primary and secondary levels of education, encom- passing the age groups of early childhood to adoescence. The Committee considered that the very important matter of post-secondary education facilities which might serve the inhabitants of isolated areas of Australia could be more effectively examined in a separate inquiry into tertiary education. When we undertook the inquiry we advertised throughout Australia. We received submissions from a wide range of educational, social and other community groups. We contacted education authorities in other countries because we felt that some countries appeared to have similar problems in providing education for children in geographically isolated areas. It is interesting to report to the Senate tonight that information received from these countries indicated that those which had comparable vast and sparsely populated areas approached the problem in a rather different way by providing complex transportation systems and government financial assistance which subsidised children’s boarding expenses.

In the matter of the mechanics of conducting the inquiry I draw the attention of the Senate to the quite complex and detailed arrangements which were necessary in an exercise of this kind. We had to bear in mind the scattered nature of the communities with which we were associated and the scattered nature of education facilities in a country as large as Australia. We initiated a number of public hearings in cities and towns such as Brisbane in Queensland, Perth in Western Australia, Bourke and Cobar in New South Wales- they are far from the metropolitan areaand Canberra. We received submissions from education, social and community organisations. I should also point out to the Senate that the introduction of the Commonwealth Government’s 1973 scheme of assistance for isolated children had an influence on the course of the inquiry. The scheme was introduced specifically to assist parents of children who did not have reasonable access to government school facilities. The matter was suspended in part but in 1975 the Committee decided to continue the inquiry in order to make an assessment of the adequacy and effect of the financial assistance being provided under the Commonwealth Government’s scheme as a means of alleviating the educational disadvantage of isolated children.

When we presented this report in August of last year I spoke briefly to it, as you will recall, Mr President. While dealing with the problems of isolated families and isolated children, I thought it was pertinent to point out to the Senate that there were matters relating to the major purpose of education. After all, we were engaged not only in an educational exercise but also in an inquiry which had social and national implications. We were also very much concerned about the major purpose of education in any society, whether it be an urban society or one removed from the general urban and densely populated areas. I pointed out on that occasion that in my view as Chairman, and the Committee supported the view, the major purpose of education was to provide opportunities for self-fulfilment and personal development. I went on to say that this self-fulfilment was a heritage and it followed that access to the heritage was a basic human right.

It is important to say, and say again, that this basic human right of education should yield satisfaction not only in those years which we regard as being school years but throughout the lifetime. I pointed out that for some considerable time it had been generally felt that free access to education was a powerful instrument in social mobility and that for that reason governments everywhere had given a great deal of attention and a high priority to free public education and had tried to ensure that facilities were equal for all people. This takes on a particular importance when we are dealing with isolated school children. In the report put down in the Senate we pointed out that it seemed to us, from evidence put to the Schools Commission, that unskilled occupations in the community were declining relatively and that the range of occupations requiring a high degree of literacy and mathematical precision were extending. This means that the level of sophistication of our society now makes demands on the capacities of more people in our daily lives. Once upon a time this demand was required of only a few, and I think it is true to say that the balance of all educational spending should be slanted towards those years when children are at school.

Schooling is not a race. Its major objective is not to identify winners and losers but to give maximum assistance to all young people as they grow up. Indeed, it could be described as an intervention which is designed to widen the options, increase the possibilities and experiences open to all children, particularly to those whose options are limited. Therefore, the education of isolated school children is not only an educational matter but also a national matter and a social matter of the greatest possible importance.

The report was set down in the Senate and received, if I may say so, with the greatest appreciation by that group of people who were most affected by it. I am referring to that very splendid nationally oriented community known as the Isolated Children’s Parents Association. Because of my involvement with this Committee over a number of years, I have also been privileged to have an involvement with the Association. I have attended its annual meetings in Bourke in New South Wales and only a few months ago had the very great privilege of opening its annual conference at Broken Hill. I have since received advice of its 1977 annual conference, which is to be held in Perth, Western Australia. I am pleased to note that on this occasion the conference is expected to be opened by our Minister for Education, Senator Carrick. As recently as a few days ago I received a letter from the Association expressing its appreciation of our report and of the recommendations which we put down on that occasion. It expressed further appreciation of the fact that a number of the recommendations in the report about which we are speaking tonight had been accepted by the Government and had been implemented in one way or another.

I take a moment to look at the general recommendations contained in the Senate Standing Committee’s report relating to isolated school children. The first section of the recommendations deals with schools in isolated areas. This laid a very heavy emphasis on the requirement for an upgrading of teaching facilities and of physical facilities in these particular schools. Moving on, we dealt with boarding facilities for isolated school children. Honourable senators will very well appreciate that when one is dealing with any isolated community, especially as far as children are concerned, very sympathetic and practical attention must be given to boarding accommodation. After all, children from these areas are required to spend a great deal of their time in institutions which are away from thenown personal homes. Therefore these institutions, homes or establishments, call them what you will, must provide facilities that are as near as possible to their own home circumstances. The

Committee drew attention to the inadequacies that exist and made recommendations concerning taxation deductions and the disparities between the various State schemes of assistance.

We paid special attention to the matter of education by correspondence. I commend this section of the report to honourable senators because we drew attention to the very great deficiencies, as we saw them, which existed in the correspondence system. Having said that, we paid tribute to the great contribution which the correspondence system had made to education in Australia, particularly in isolated areas. However, from the evidence submitted, it seemed to us that the correspondence system, one way or another, had not made the kind of progress one would have expected in a society like Australia, where progress in technical and other facets of education was moving ahead very rapidly and very efficiently. In the matter of special education, one was very much aware of the number of children in isolated areas who suffer from some disability and who do not have access to special facilities such as those available to children in urban areas, and recommendations have been made along those lines. Naturally, transportation and schools of the air were also dealt with, and I draw the attention of honourable senators to the recommendations relating to those areas set out in our report.

Before concluding, I think it is fair to point out that as a result of the work which the Senate Standing Committee did on this reference there has been a marked response from the Government. In July 1976 the Commonwealth Government appointed an interdepartmental committee to recommend changes in rates and conditions, and indeed any desirable rationalisation in various student schemes. In October 1976, on the basis of the Committee’s recommendations, new education allowances for isolated children were provided and these became effective from 1 January this year. They are set out in a series of figures which I will not take the time of the Senate to read, but they have produced expressions of appreciation from the community affected by these circumstances. The means test applicable to the additional boarding allowance is the same as for tertiary educational allowance schemes except that the abatement rate has not been changed and remains at the figure of $2 for every $ 10 of excess income.

In its July 1976 report on the 1977-1979 rolling triennium, the Schools Commission indicated that there is now sufficient evidence to show that in rural areas account must be taken of the factors which are additional to the socioeconomic ones. Consequently, the Commission allotted $3. 5m to a new element called the Disadvantaged Schools Program for 1977, which has been sub-titled ‘Disadvantaged Country Areas’. There has also been a development of the concept of what is called unlimited schools for isolated children. This is receiving the continuing attention of the Schools Commission and its continuing support. The Commission believes that through what it calls imaginative and radical development of the present correspondence schools and schools of the air, a network of unlimited schools could be developed to provide greater educational opportunities without restriction on age, place of residence, previous education, size of school income and a variety of other characteristics. Thus, while greatly improving educational services to isolated school children, such schools will also perform a wider function and open up a variety of possibilities throughout any given State.

Therefore I am prepared to claim in the Senate tonight that the Senate Standing Committee on Education and the Arts has by its work on the inquiry into this reference relating to isolated school children opened up a range of public interest in education for isolated school children. As I have said during the course of my remarks, our inquiry did not deal only with education but with a range of social, economic and national interests. I am sure that the work which the Committee has done has produced a response from the Minister for Education and from the Government which is widely appreciated. The inquiry has opened up a range of new thought processes so that those people who make their homes and vocations beyond the furthest fences will be able to enjoy the same educational and vocational opportunities as those people who live in urban areas. It has been a great privilege to preside over this important aspect of the Committee’s work and I am grateful to the Senate for receiving this report tonight.

Senator CARRICK:
New South WalesMinister for Education · LP

– I have received and read in detail with great interest the report on isolated children of the Senate Standing Committee on Education and the Arts. I suppose this subject has special meaning and significance for me because I was a member of the former Committee when the reference was initiated and was able to take part in a considerable amount of journeying and taking of evidence throughout Australia. It is only when one is compelled to travel distances to the various remote areas of Australia that one can come to understand what are the grave disadvantages to the families in these areas, not only to the children but also to the parents because the parents of isolated children have 2 major roles, one as educators or local teacher and the other in incurring considerable expense.

I suppose that there could be no more appropriate time to look at this matter than now because the collapse in the price of beef cattle throughout Australia over recent years has imposed upon the grazing communities in the States and in the Territories enormous hardships. Those people who had hoped that they would have sufficient funds to send their children to schools in southern areas have been forced to curtail their activities. One is hopeful that one of the methods of improving education of isolated children, particularly in the Territories, could be the upgrading of high schools in places such as Darwin and Katherine to full matriculation level thus providing wider opportunities so that there would be no need to send student children to places further away thus incurring considerable expense. The distances being less, the school children would be able to return to their homes more frequently than they would otherwise be able to do during the year. I was anxious last year to look at the schools in such areas to see whether we can steadily and progressively upgrade the levels. It is not sufficient simply to ensure that we bring about a year 12 or matriculation level in these schools. It is vitally necessary that we allow for within that matriculation year not only a high quality of teaching but also a large choice of elec.tives so that a student facing matriculation and then college or university will be able to pursue studies to suit the vocation of their choice.

This is a matter heavily upon us. It cannot work out in its entirety and in any case freedom of choice should prevail. In that regard we have been taking a number of steps and working to improve the technical and educational facilities in the School of the Air. We are busy developing a wider facility for the parents and children concerned. There is a variety of ways in which one might achieve this. It is fair to say, of course, that this question is a Federal-State matter, that the role of the States is and remains a significant one, and that the primary responsibility for providing educational facilities within the States in both urban and remote areas is that of the States. It is equally fair to say that the States in general have responded to that responsibility and have developed a number of worthwhile programs designed to assist people in these areas. I was privileged late last year to announce a series of new initiatives and increased allowances that my

Government was able to introduce for isolated children along with a range of allowances affecting some 10 different categories of student children. However, the Government was limited by the economic constraints of the period. It was limited by the present economic climate in its ability to embrace any new initiatives.

I think it is important that the Senate look at what we are doing because the Schools Commission itself has played a significant role in this matter. I pay tribute to the work of the Schools Commission in this regard. It has recognised the very severe educational disadvantage suffered by children in remote country areas. Whilst it recognises the need to provide adequate financial assistance for parents of children who have to leave home to attend school, it takes the view that in the long term the solution to many of the problems facing isolated children lies in upgrading the educational services provided, including the service to those who have to enrol in correspondence schools. I stress as a primary principle the need to upgrade and the insistence that what is being provided now should be looked to and the quality of upgrading achieved close to hand, if we can do so by improving the schools to the quality required.

Senator Davidson:

– You will remember that this was heavily emphasised in the report.

Senator CARRICK:

– Yes. I am happily reminded by the Chairman of the Committee, Senator Davidson, that this is clear in the report. The report does valuable work in highlighting the priorities as to the nature of the problem. Since 1974 funds have been available through the disadvantaged schools program to assist schools declared as disadvantaged schools in both urban and country areas. That in itself is a significant initiative. If I may say so, I pay tribute to the previous Government which developed the concept of disadvantaged schools.

This year the Schools Commission will provide, in addition, an amount of $3. 5m for the country disadvantaged area program. That is a significant new initiative- not over-large in money terms, but a good step forward. I think that would find favour with the Committee. This program is designed to provide funds for government and non-government school systems jointly to initiate pilot programs in designated country areas with a view to finding the best ways of improving educational services for country children. It is fair to say that, with the limited additional scope that the Schools Commission had in this first year of the rolling triennium it gave a priority to a guideline that my Government and I laid down. One of the main guidelines was to look to country areas and to areas of disadantage in the country and to see whether we could develop new initiatives. So, we should take this as being basically a pilot scheme.

The Commission also has made provision in 1 977 for the allocation of funds through the capital grants program for upgrading student accommodation in boarding schools. In the country boarding school area in particular that is significant, because quite frequently a parent in a remote area has faced the need to send a child to the city- distances of thousands of miles- when in an intermediate area there might be a suitable school of good educational quality but without boarding or hostel facilities. I know that the Committee looked at this whole question of boarding schools and hostels because I had the privilege to make some inspections of them myself.

Senator Georges:

– In most cases they were shocking.

Senator CARRICK:

– I agree with the interjection of Senator Georges; they were shocking and the need to upgrade is very much before us all. The special project innovations grants were made available in 1976 to a number of systems and authorities to initiate other pilot projects and feasibility studies relating to the needs of country children. With the indulgence of the Senate, I shall indicate a number. Firstly, there is a grant to the National Council of Independent Schools for a study of boarding schools in the nongovernment area. It is important to understand that, apart from the state schools the nongovernment schools play a significant role in the education of students from isolated areas and a doubly significant role in providing boarding facilities. One of the tragedies of the recent years of inflation has been the growing number of schools that have had to opt out of providing boarding facilities. So the pressure has become very real. We have provided, through the special projects grants, a grant to the National Council of Independent Schools for this study.

A grant has been made to the Tasmanian Education Department for a major study of the Huon Valley area. The Tasmanians will understand fully the significance of such a study in that area. A grant has been made to the South Australian Education Department to establish a countrycity liaison unit designed to link schools in urban and rural areas. Another grant has been made to the Western Australian Education Department to establish a pilot guidance scheme in a remote area. One will appreciate that the Western Aus.tralian community fully understands the needs in terms of distance and remoteness. A grant has been made to the Queensland Education Department to carry out a survey of the provision of residential facilities in hostels and other boarding schools. The S grants made in recent times have been aimed at developing more information and at probing into the real situation. They will be a valuable addition to the Committee’s work. The Committee in its report was. helpful in highlighting for us these matters. I should add that upon receipt of the Committee’s report the report was put under study in detail by my Department and by the Schools Commission. We have benefited by the report and also by the fact that we have had available to us the detailed written submissions which constituted a formidable volume of evidence given to the Committee.

A study of the feasibility of establishing unlimited schools is continuing. Senator Davidson referred to this aspect. A special project grant has been provided for this purpose. The unlimited school project is concerned with devising ways of upgrading the provision of a correspondence service and of expanding this service to cater for the needs of a wider variety of clients. The correspondence service in this situation is of great significance. The majority of the recommendations contained in the report on education of isolated children referred specifically to action that can be taken only by State education authorities. That is not said in any abdication of the Commonwealth’s responsibilities in an overall way. The Schools Commission, however, through special purpose grants and through other programs has sought to indirectly influence State authorities to initiate schemes designed to upgrade services in country regions. We will, of course, be in continuous dialogue with the States on matters such as these.

Senator Davidson:

– The report draws attention to the relationships of the States in this matter.

Senator CARRICK:

– Yes, I acknowledge Senator Davidson’s comments. It is true that the report draws attention to the vital role of the States in this matter and in many cases thencloser relationship to the problem and a closer understanding of it. We acknowledge that.

The honourable senator has referred to the upgrading of allowances in recent times. I remind the Senate that four of the Committee’s recommendations- recommendations 10, 11,21 and 32- deal with allowances payable under the assistance for isolated children scheme. I refer specifically therefore to initiatives that have been taken and which are in parallel with the report. These recommendations are expressed in very general terms as one would expect of the report because it could not quantify. They recommend the continuation of the various allowances and their annual review, and a review of the means test levels to keep pace with inflation. That is thoroughly understandable.

As honourable senators will know, increases were approved by the Government in 1977. I remind honourable senators of some of those increases. In terms of boarding allowances, the basic allowance which was $350 was increased to $500. That represented a $150 increase which one hoped would be helpful. The additional allowance, which was set at a $350 maximum, was increased to a $450 maximum. The special supplementary allowance in respect to senior secondary students had been $450. It was increased to $550. Junior secondary and primary student allowances remained at $450 and $350 respectively. As the Chairman and members of the Committee would fully appreciate, the second home allowance for one child which was $350 was increased to $500. The second home allowance for 2 children, previously $700, was increased to $925. For three or more children the allowance was increased from $1,050 to $1,275. Whilst those sums in isolation are large in terms of amounts that are made available in education allowances in an urban area or a near-urban situation, they nevertheless are of very useful assistance to the parents themselves. I thank the Senate for its indulgence, tolerance and patience with me.

Question resolved in the affirmative.

page 194

BUSINESS OF THE SENATE

Motion (by Senator Withers) proposed;

That Government business take precedence of general business.

Senator WRIGHT:
Tasmania

– I rise to speak upon this motion to place on record my complete sense of shame at the way the Government is conducting itself in the introduction of legislation of great constitutional import. Bills were introduced into another place yesterday and debate on the whole 4 Bills has been concluded tonight. Of course, it is not surprising to see the spirit of co-operation that is evident in the Opposition senators when they see a dismayed and confused government carrying its can of rubbish into the legislature. The Minister for Administrative Services (Senator Withers) is at the table seeking precedence for Government business so that at 11.10 o’clock on Thursday night after the conclusion of ordinary hours of sitting he can bring in 4 constitutional Bills. I find myself embarrassed by a sense of shame seeing the discredit that it is bringing upon the Parliament and particularly this chamber.

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

- Mr President, I will now be closing the debate. I feel a sense of shame that such a speech should be made in the Senate at this hour on this night.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– Do not fight, boys.

Senator WITHERS:

-No, I am not. All I am going to say is that if it had not been for the power failure and the lights going out for some 25 minutes tonight we would not be here at this hour. Surely there is nothing shameful about reasonable arrangements which suit the great bulk of honourable senators in the dispatch of Senate business.

Question resolved in the affirmative.

page 194

CONSTITUTION ALTERATION (SIMULTANEOUS ELECTIONS) BILL 1977

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 Durack) read a first time.

Second Reading

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · 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 Government proposes to introduce four Bills to alter the Constitution. The first proposes an amendment to the Constitution to provide for simultaneous elections of the Senate and the House of Representatives. The second is designed to write into the Constitution the principle that a casual Senate vacancy should be filled by a member of the same political party as the one the former Senator belonged to and for the balance of the term of that Senator. The third proposes to amend the Constitution so as to provide for a maximum retirement age for Justices of the High Court and of other Federal Courts. And the fourth proposes to give electors in the

Australian Capital Territory and the Northern Territory a vote in future referendums.

All these proposals stem from the Hobart meeting of the Australian Constitutional Convention. Following that meeting, the Government gave careful consideration to the resolutions adopted last October. The proceedings at Hobart have given the Government some basis upon which to determine what proposals for constitutional reform have a real likelihood of being approved by the electors. The Government’s view in the light of the Convention is that the four proposals now brought forward should find general support amongst our people.

The purpose of the Constitution Alteration (Simultaneous Elections) Bill is to alter the Constitution to provide for simultaneous elections for the Senate and the House of Representatives.

Leaving aside double dissolutions, there is at present no requirement that the elections of the two Houses be held at the same time and since 1963 they have frequently been held on separate occasions.

The reason for this is that there are different electoral requirements for the two Houses. The House of Representatives is elected for a period of three years subject to earlier dissolution by the Governor-General. The Senate is a continuing body with Senators elected for sue year terms and it cannot be dissolved except in the event of a double dissolution. But the six year terms of Senators are staggered. Half of them retire each three years and elections are needed to choose their replacements.

Under the existing provisions it is theoretically possible to keep the elections for the two Houses in phase by holding elections for the House of Representatives whenever half-Senate elections are due. However, the exigencies of political life are such that synchronisation on this basis is difficult to maintain.

Apart from the special circumstances of the double dissolutions in 1974 and 1975, elections for the Senate and the House of Representatives have been out of phase since 1963. In the nine year period from 1963 to 1972 there were in fact no less than seven separate national elections. If the relevant constitutional requirements are not changed there could be as many as four elections from 1978 to 1981 and as many as 14 elections over the 20 year period from 1 96 1 to 1 98 1 .

This Bill accordingly provides for the Constitution to be amended so as to ensure that the elections for the two Houses will be brought together. It provides for half-Senate elections to be brought into line with elections for the House of Representatives whenever those elections may occur.

Apart from the benefits of public convenience and savings of expenditure the proposal will benefit the Parliament. By ensuring that the people’s will is reflected simultaneously in both Houses, it will provide a more satisfactory electoral basis upon which the government of the country can proceed.

The proposal that is provided for in the Bill is substantially the same as the one that was submitted to referendum by the then Labor Government in 1974, and on that occasion the proposal only narrowly failed to obtain the required support.

The Government believes that it is desirable that the proposal be now submitted to a further referendum.

The proposal is in accord with a unanimous recommendation that was made by the Joint Parliamentary Committee on Constitutional Review in its 1958 and 1959 reports. It is one, moreover, for which substantial support was expressed from both sides of Australian politics at the Hobart meeting of the Australian Constitutional Convention held in October last year.

The Bill proposes that simultaneous elections be achieved by providing for senators to hold office normally for two terms of the House of Representatives instead of for six years as at present. This will, of course, be subject to any earlier double dissolution of both Houses that may take place under section 57 of the Constitution.

The practical operation of the proposed amendments on Senators holding office at the time when the amendments take effect will, subject to a double dissolution, be as follows:

Senators whose terms are due to expire in June 1978 will hold office until the first House of Representatives election after the amendments take effect,

Senators whose terms are due to expire in June 1981 will hold office until the second House of Representatives election after the amendments take effect.

An incidental matter to which I draw attention is that it is proposed that section 9 of the Constitution be amended to empower this Parliament, rather than the State Parliaments, to make laws determining the times and places of electing of Senators. This is a logical consequence of bringing elections for both Houses of the Parliament together.

The proposal will also remedy certain technical deficiencies that have been recognised to exist under the present sections 13 and IS. These were brought to attention by the Joint Parliamentary Committee on Constitutional Review in its 1959 report. More recently they have been under consideration by Standing Committee ‘D’ of the Australian Constitutional Convention which noted that they would be cured by the simultaneous elections proposal.

First there is a doubt as to how, after a double dissolution, the term of service of a person who has been validly chosen as a Senator, but who has died, resigned or become disqualified before the division of Senators into short-term and longterm classes, should be dealt with under section 13. It is doubtful whether such a person can be included in that division.

This will be expressly covered by a specific provision requiring the division to be made as if the place of the Senate had not become vacant. The provision will not, however, alter the existing practice and procedure for determining which Senators should be long-term and which should be short-term.

The other deficiency relates to persons who are elected as Senators, but who have died, resigned or become disqualified before the commencement of their terms of service. Such cases are not likely to happen often and only one case has in fact occurred. But it is doubtful whether the casual vacancy procedures are at present available in such a situation.

This doubt will be removed by the present proposal because under the new provisions a Senator’s term of service will commence on the day of his election, rather than on the first day of July after the election as is at present provided in section 13 of the Constitution.

The proposal in this Bill departs from the earlier proposal in the following minor respects:

The 10 day limit within which writs for Senate elections must be issued will be extended to 14 days to permit greater flexibility without unduly delaying the election;

The 1974 Bill contained a transitional provision to deal with the possibility of an earlier double dissolution. That provision is omitted from the present BUI on the ground that it is unnecessary.

The present Bill contains a provision rendering ineffective provisions in its relating to casual vacancies if the Constitution Alteration (Senate Casual Vavancies) Bill is passed.

The Bill contains a redrafted provision to deal with the position of a Senator holding office at the time the law commences by virtue of a casual vacancy. In substance it is the same as the provision in the earlier proposal.

The earlier Bill contained different provisions for the terms of existing Senators. This appears to have been because of the particular situation which existed with respect to their term when that Bill was proposed. In broad principle however, the Bills are the same in this regard.

I commend the Bill to the Senate.

Debate (on motion by Senator Wriedt) adjourned.

page 196

CONSTITUTION ALTERATION (SENATE CASUAL VACANCIES) BILL 1977

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 Durack) read a first time.

Second Reading

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · 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 provides for the omission of section IS of the Constitution and for the substitution of a new section, comprising 8 paragraphs.

The first paragraph of the new section reproduces, in substance, the first paragraph of the existing section. It enables a casual vacancy in the Senate to be filled by the relevant State Parliament or if that Parliament is not in session when the vacancy is notified, by the Governor of the State. A person chosen to fill a vacancy by a State Parliament is to hold office until the expiration of the term of the Senator whose place has become vacant. Under the existing section a person so chosen would not hold office beyond the next general election of Members of the House of Represenatives or the next election of Senators for his State, whichever first happened. A person appointed by the Governor of a State under the proposed provision will hold office as at present until the expiration of 14 days from the beginning of the next session of the Parliament of the

State or the expiration of the replaced Senator’s term, whichever first happens.

The second paragraph provides for regard to be had to the political party to which the vacating Senator had belonged at the time that he was chosen by the people. If at that time the vacating Senator had been publicly recognized by a particular political party as being an endorsed candidate for that party and had publicly represented himself to be such a candidate, this paragraph will require that a person chosen or appointed in that person’s place must be a member of that party- unless there is no member of the party available to be chosen or appointed. The requirement will apply however the vacancy arises. By referring to a subsequent vacancy or vacancies, the paragraph makes it clear that section IS is applicable to the appointment of a replacement of the replacement Senator.

The third paragraph covers the possibility that a person chosen or appointed in accordance with the foregoing requirements might cease to be a member of the political party of the vacating Senator (for example, by expulsion) before taking his seat. In that event the appointment will be of no effect.

The fourth paragraph reproduces the last paragraph of the existing section 15.

The fifth paragraph provides for a situation in which a vacancy had occurred in the place of a Senator chosen by the people of a State at the last elections and, at the date when the new provision is to take effect, there is no person currently filling that place. Such a situation may exist because no replacement has been chosen or appointed or because a replacement has himself ceased to hold office. In any such situation the paragraph provides that the new section 15 is to apply as if the place of the Senator chosen by the people had become vacant after the commencement of the amendment. The effect of this will be that a person chosen by a State Parliament after the commencement to fill a place that was vacant at the commencement will hold office for the balance of the term of the Senator who had been chosen by the people- instead of being limited as at present until the next general election of Members of the House of Represenatives or the next election of Senators for the State, whichever first happens.

The sixth paragraph provides for the term of office of a replacement Senator who was appointed by the Governor of a State before the proposed amendment takes effect. The paragraph preserves the present position of such a Senator, i.e., he holds office until the expiration of 14 days after the beginning of the next session of the Parliament of the State that commenced or commences after he was appointed. Thereafter the new provisions will govern further replacement action.

The seventh paragraph applies where a State Parliament has chosen a person to fill the vacancy and the person so chosen is holding office as a Senator when the proposed amendment takes effect. In that event the person chosen by the State Parliament is to hold office until the expiration of the term of the Senator who was elected by the people. The present position is that such a replacement Senator would not hold office beyond the next general election of the Members of the House of Representatives or until the next election of Senators for the State, whichever first happened. This paragraph is subject to the last paragraph in the Bill.

The last paragraph will operate if the Constitution Alteration (Simultaneous Elections) Bill 1977 is passed. In that event the term of a Senator who has been chosen by a State Parliament will expire on the date when the term of the Senator he is replacing would have expired under the new simultaneous elections provisions.

The following resolution was adopted at the Hobart meeting of the Australian Constitutional Convention:

  1. That this Convention affirms the principle that a casual vacancy in the Senate which occurs by reason of the death of a senator or the disqualification or resignation of a senator caused by bona fide illness or incapacity should, in order to maintain the principle of proportional representation and the wishes of the people of the State at the relevant Senate election, be filled by a member of the same political party as the senator whose vacancy is to be filled but in reaffirming this principle the Convention recommends that the Constitution be amended to provide that the person elected by the Houses of Parliament of the State should hold office for the balance of the term of the senator whose place he is taking. ‘

Debate (on motion by Senator Wriedt) adjourned.

page 197

CONSTITUTION ALTERATION (RETIREMENT OF JUDGES) BILL 1977

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 Durack) read a first time.

Second Reading

Senator DURACK:
Western AustraliaMinister for Veterans ‘ Affairs · LP

– I move:

That the Bill be now read a second time.

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 amend the Constitution so as to provide for a maximum retirement age for Justices of the High Court and of other Federal Courts.

Section 72 of the Constitution provides for Justices of the High Court and of other courts created by the Parliament to be appointed by the Governor-General in Council and it provides that they are not to be removed except by the Governor-General in Council, on an address from both Houses of the Parliament in the same session, praying for such removal on the ground of proved misbehaviour on incapacity.

As long ago as 1918, the High Court held in Alexander’s Case that section 72 requires that every Justice of the High Court and every Justice of any other court created by the Commonwealth Parliament shall, subject to the power of removal contained in that section, be appointed for life. It has, in consequence, been generally accepted that Justices of the High Court, and other Federal Judges including Magistrates, cannot be required to retire on reaching a specified age.

This is an unsatisfactory situation. There is an almost universal practice that the holders of public offices retire on attaining a maximum retirement age. The reasons for this practice are well known and they do not need to be spelt out here.

In Australia and in similar countries there is a growing acceptance of the need for a maximum retiring age forjudges. In all Australian States a retiring age has been fixed for Supreme Court Judges.

The question of a maximum retiring age has assumed increased significance today when there are many more Federal Judges than in 1918 when Alexander’s Case was decided.

At present there are in all 53 serving Federal Judges. This includes 7 on the High Court, 19 on the Federal Court of Australia and 27 on the Family Court of Australia

When the Family Law Bill was passing through Parliament in 1975 the view was taken that Family Court Judges should be required to retire on attaining the age of sixty-five years. Provisions were in fact included in the Bill to ensure that this is the position in the case of Judges appointed to State Family Courts. But the present constitutional requirements precluded similar provisions being included in relation to Judges appointed to the Family Court of Australia. It is anomalous that this distinction between Federal and State Judges of similar Courts should exist and that the Commonwealth Parliament should be unable to do anything about the matter.

The amendment provided for in this Bill is in accordance with recommendations made in October last year by the Senate Standing Committee on Constitutional and Legal Affairs and by the Hobart meeting of the Australian Constitutional Convention.

The Senate Committee’s recommendation drew a distinction between Justices of the High Court and Judges of other Federal Courts. The Committee considered that the Constitution itself should provide that High Court Justices be required to retire on reaching the age of seventy years and that Parliament should be empowered to fix the maximum retirement ages of other Federal Judges subject to a constitutional limit of seventy years. This is a proposal with which the Government fully agrees.

The Constitutional Convention, by an overwhelming majority, adopted the Senate Committee’s recommendation in its own resolution.

The distinction drawn by the Senate Committee is an important one. In observing this distinction the amendment contained in this Bill recognises the special position of the High Court as the Federal Supreme Court created by the Constitution and vested with the power to interpret the Constitution. It also recognises that the same considerations do not necessarily apply in the case of Judges and Magistrates in courts other than the High Court and that the position in regard to those other courts may well vary from court to court.

There are three important safeguards embodied in the present proposal, all of which were contained in the recommendations of the Senate Committee and the Constitutional Convention.

First, the amendment will have only a prospective operation. That is to say, the existing life tenure of all Federal Judges holding office at the time of commencement of the amendment will be preserved. There can be no suggestion, therefore, that the amendment is directed against any existing Judges, or that those Judges will be prejudiced in any way by the amendment.

An existing Judge will, however, become subject to the retirement requirements of the amendment if, after the amendment takes effect, he accepts appointment to another office of Justice of the same Court having a different status or designation. If, for example, a Justice of a Court were, after the amendment took effect, to accept appointment as Chief Justice of that Court, he would thereafter be subject to the retirement age applicable to any Justice of that Court.

The second safeguard is that, even though under the proposal this Parliament will be authorised to fix the specific retiring age for Judges of Federal Courts other than the High Court, a Judge once appointed will have a constitutionally guaranteed tenure to the retiring age that was applicable to his office at the time of his appointment. In other words, any subsequent changes in the retiring ages will, again, be purely prospective in effect. This will ensure that there can never be even any suggestion that judicial retiring ages are being manipulated. More importantly, however, it will help to secure the independence of the Federal Judiciary, notwithstanding the existence of a procedure for fixing retiring ages.

The third safeguard is that the existing provision in the Constitution that Federal Judges cannot be removed from office except on the grounds of proved misbehaviour or incapacity will be preserved subject only to the provisions relating to retirement. This will remain the formal ultimate guarantee for the independence of the Federal Judiciary.

As I have indicated, the Senate Standing Committee on Constitutional and Legal Affairs and the Hobart meeting of the Australian Constitutional Convention have recommended this proposal. It will provide for Federal Judges to retire at an appropriate age without in any way interfering with the independence of the Judiciary.

I commend the Bill to the Senate.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 199

CONSTITUTION ALTERATION (REFERENDUMS) BILL 1977

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 Durack) read a first time.

Second Reading

Senator DURACK:
Western AustraliaMinister for Veterans ‘ Affairs · 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 give electors in the Australian Capital Territory and the Northern Territory the right to vote in referendums for the alteration of the Constitution. At present a proposed law for the alteration of the Constitution must be submitted in each State for the approval of the electors qualified to vote for the House of Representatives. A proposed amendment is not, however, submitted to electors in the Territories. If a referendum proposal is to succeed it must be passed by what has become known as a ‘double majority’. The proposal must be passed by a majority of all the electors voting in the referendum and it must also be passed by a majority of votes in a majority of States.

The amendment provided for in the Bill will require a proposed law for the alteration of the Constitution to be submitted to all electors qualified to vote for the House of Representatives. It will not matter whether those electors five in a State or a Territory. The amendment will affect the operation of the first of the double majority requirements I have mentioned, that is, the requirement that there be a majority vote of all the electors. That majority will now take account of the votes of electors who are resident in the Australian Capital Territory and the Northern Territory. Any other Territory which in future develops to the stage where it is allowed representation in the House of Representatives will also at that stage be automatically covered by the amendment. The proposed amendment will not, however, affect the second majority requirement I have mentioned, that is the requirement that a proposal for amendment of the Constitution must be passed by a majority vote in a majority of States. That requirement will continue to apply as at present.

Both Territories have repeatedly sought the right to participate in referendums. The former Advisory Council of the Australian Capital Territory passed a series of resolutions between 1965 and 1967 seeking voting rights in referendums and the former Northern Territory Legislative Council passed a similar resolution on 1 1 October 1973. The proposal to give electors in the Australian Capital Territory and the Northern Territory a vote in constitutional referendums was also the first item on the agenda of the meeting of the Australian Constitutional Convention in Hobart last year and was overwhelmingly endorsed by that Convention.

It may come as a surprise to many Australians that electors who are resident in the Territories are not at present entitled to vote in constitutional referendums. The reason for this is to be found in the fact that the Australian Capital Territory and the Northern Territory did not exist when the Constitution was framed. But now that these Territories are rapidly growing communities with representation in both Houses of the Federal Parliament there is no sound reason to exclude them from participating in the process of constitutional reform. When the Australian Capital Territory and the Northern Territory ceased to be parts of the States of New South Wales and South Australia respectively the residents of the Territories were disenfranchised. In the intervening years they have been allowed representation in both Houses. The proposal in this Bill if adopted will redress the situation.

In principle, the proposition that all electors of the Federal Parliament ought to be entitled to vote in referendums cannot be open to challenge. What is involved is a basic democratic right. Electors in the Territories are not second-rate citizens. They, like other Australians, are affected by changes to the Constitution and it is anomalous that they do not, at present, have the right to participatein referendums. Honourable senators will recall that a proposal to give Territory electors referendum voting rights was included in the Constitution Alteration (Mode of Altering the Constitution) Bill that failed at a referendum in 1974. It was then, however, linked with a proposal that section 128 of the Constitution should be amended to allow changes to the Constitution if a majority of voters in only 3 States agreed to the alteration instead of a majority of voters in a majority of States, as the Constitution now provides. The present Bill does not link the proposal with any other proposal.

Although different in terms it is in substance the same as that measure. The indications from the Hobart meeting of the Australian Constitutional Convention are that the proposal that Territory electors should be given a vote in referendums has overwhelming support. The Government believes that the proposal is one which should now be submitted to the people. I commend the Bill to the Senate.

Debate (on motion by Senator Douglas McClelland) adjourned.

page 200

ADJOURNMENT

Incorporation of Document in Hansard

Motion (by Senator Withers) proposed:

That the Senate do now adjourn.

Senator COLSTON:
Queensland

- Mr President, earlier today when we were debating the urgency motion and before I was due to speak, I showed you a copy of a speech and asked you whether it would be satisfactory to have that speech incorporated in Hansard. I did this out of courtesy because last year there was some confusion about whether certain documents should be incorporated in Hansard because of their length. I received a message from you that it would be satisfactory to incorporate this speech in Hansard, provided that the necessary leave was granted. When speaking to the urgency motion during the course of the afternoon, I said:

I have had consultations with the President earlier about this document and he said he would be prepared to let it be incorporated in Hansard. I therefore seek leave to have Mr Knox ‘s speech incorporated in Hansard.

The Acting Deputy President at that stage asked whether leave was granted. Senator Sir Magnus Cormack said:

No. I do not see why it should be incorporated in Hansard and I resist the application.

Of course the Acting Deputy President at that stage quite rightly said: ‘Leave is not granted’. I went on to say that because leave was not granted I would take the opportunity during the adjournment debate tonight to read the speech so that it would be incorporated in Hansard. I thus quote this document. It reads:

page 200

ADDRESS BY THE DEPUTY PREMIER, TREASURER AND LIBERAL LEADER (HON. BILL KNOX, MLA) LIBERAL PARTY DINNER FOR BRISBANE BUSINESSMEN, BRISBANE CLUB, 7.30 P.M. THURSDAY 3 FEBRUARY 1977

Mr Chairman, my parliamentary colleagues Kevin Cairns and Ivan Brown, ladies and gentlemen:

Thank you for accepting the invitation of our supporters to be here tonight

This is a most representative gathering of men and women who are engaged in industry, business and commerce in this city, and it is therefore appropriate that I should speak tonight on the economic position in Australia today, and its particular consequences for our State.

When the Liberal-Country Party Coalition was elected to office in December 1975 it was given a mandate, the magnitude of which was unequalled in our history, to carry out major reforms to the Australian economy.

I do not think that any of us believed that the task of getting the economy back on its feet, and restoring prosperity and progress to the private sector, would be easy.

Because of the magnitude of the problems which were the legacy of 3 years of socialism, it was a task which would take time and tough decisions.

Whenever we speak about the Federal Government’s economic performance, and about our future economic prospects, this background deserves to be kept in mind.

I do not think that any of us would doubt that the Federal Government has made genuine attempts to reduce the rate of inflation in Australia. Up to the present time it has met with some success, but much of that success is going to be whittled away when the consumer price index figures for the last quarter are released.

To a very great extent, the Commonwealth has itself to blame for that- it won’t be able to blame the unions, the States, or industry.

The impact of the Medibank levy must have serious repercussions for the fight against inflation, and the resulting wage demands must pose serious problems for every section of industry and business in Australia.

I believe the passage of time will demonstrate that the restructuring of Medibank was poorly timed, and that the imposition of a levy or tax- because that is really what it is- was inappropriate given the prevailing economic conditions. However, that is for the future, and we must await with both interest and apprehension the release of the CPI figures.

The second task which the newly-elected Government had to undertake was to reduce the level of unemployment in Australia.

There can be no doubt that it has been singularly unsuccessful in its attempts to reduce unemployment, and I want to examine the reasons for that in a minute or two.

The other task which the people gave the new Federal Government was to restore prosperity, progress and confidence in the private sector of the Australian economy- in industry, the rural community, in small business, in mining, in the professions and in commerce.

You are the best judges of whether or not it has met, or is meeting, this task.

But for my part, I believe that this is the area of greatest concern to us today because every indication which I have received from the leaders of the private sector, and from those who depend upon the private sector for their jobs as well, points to increasing disappointment at the Federal Government’s performance in this area.

It distresses me that this should be so, because if our nation is to regain the prosperity and progress which we enjoyed in the pre- Whitlam era then it must be done through a confident and expansive private sector.

And the longer a return to this confidence is delayed, then the more difficult it will be to sustain.

Why is confidence lacking?

I think there is too much uncertainty in the business community, and among people generally, about the wisdom of the economic policies being pursued by the Federal Government.

In so many respects, the evidence available and the record so far justifies that uncertainty.

The decision to devalue the Australian dollar was never adequately explained. Its benefits are generally unknown in the business community, let alone the general community.

The subsequent revaluations, however necessary and however beneficial on paper, contributed significantly to a loss of confidence in the economic policies being pursued in Canberra.

The inconsistency, the lack of cohesion, and the daily confusion created a landslide in private sector confidence- the wrong way.

The failure to adequately explain the Government’s program for economic recovery, not only to the private sector, but to the consumer as well, has only exacerbrated the problem.

Dithering over tax cuts, double-standards over matters such as Fraser Island, and unnecessary interference in the role of the States have had really disastrous consequences for the economic recovery program.

More than anything else, what is needed at this time is a glimmer of evidence that the national economic managers know where they are going and are prepared to take the people into their confidence on the way.

Every survey of the attitudes of business and industry in the last three or four months have pointed to this one great need, a need which is great in magnitude, but I would have thought relatively easy to accomplish.

This lack of confidence extends to the consumer as well . . . and the combination of a lack of business confidence and a lack of consumer confidence has horrifying consequences for a private enterprise-oriented economy such as ours.

Consumer confidence is down for much the same reasons as business confidence is at a low ebb … a growing feeling that our economic managers don’t really know where they are going.

There are, of course, more tangible reasons why the private sector is depressed and why people are apprehensive.

Not the least of these is the fact that interest rates are too high.

This State in December urged the Commonwealth to give a lead to the rest of the community by reducing interest rates without delay. That request was rejected out of hand. It was not even accorded serious consideration.

For the private sector to expand, not only must confidence be restored, but interest rates must come down significantly.

High interest rates must surely be contrary to the kind of economic recovery program which is needed in Australia today.

When interest rates are high, the capacity of the private sector to undertake capital expansion is limited and the ability of consumers to spend is restricted.

High interest rates and a Government-directed tightening of funds available for lending to business and consumers are not what is needed at the present time.

There is another inconsistency in this approach, which I find quite alarming.

The States have been told to cut-back their spending and reduce the size of their bureaucracies. Spending cuts have not been confined to bureaucratic areas, as capital expenditure and loan programs have had to be slashed as well.

The State accepts the need to limit the growth of its Public Service, but we reject completely the concept of major cutbacks in capital works programs, particularly those which are carried out by the private sector building and construction industry.

Senator KEEFFE:
Queensland

-Mr President, I continue the Knox saga:

The apparent justification for this is that reduced activity in the Government sector is a pre-requisite to increased activity in the private sector.

Well, I regret very much to have to say that this is just not happening tor the reasons that I have already outlined- a lack of confidence, high interest rates and a tight money supply.

I believe that Government capital programs that create employment, particularly for the private sector, must be continued at a significant level at least until private sector expansion gets under way.

Mr President, I understand that the olive branch has been waved from the other side of the chamber and that the Government is prepared to allow the incorporation of the balance of the document. I therefore ask for leave to have the balance of the document incorporated.

Senator Withers:

– I make a point that the Government is not allowing anything. The Senate will be giving leave, not the Government.

The PRESIDENT:

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

The document read as follows-

Unless public sector spending in the essential areas such as housing, schools, and roads is maintained, then unemployment will get worse, the standard of services available to the people will deteriorate, and many large and small firms and professional practices in the building and construction industry will go under.

Indeed, this is already happening, as hardly a week goes by without at least one significant employer in the building and construction industry telling me that without Government contracts people will be put out of work, and good Queensland companies will go bankrupt.

Like it or not, the fact remains that ours is a mixed economy, and that the private sector depends to a quite marked extent on Government contracts, large and smalt.

This cannot be transformed overnight, and certainly not while there is a significant lack of confidence in every part of the private sector.

In December, we sought additional loan funds from the Commonwealth to enable us to assist the private sector by letting contracts in employment creating useful areas, such as the construction of schools and hospitals, and the building of dams and bridges.

Similar requests were made by every other State.

Let me stress very strongly that our requests were not based upon any desire to expand our bureaucracy. All we sought was additional funds to help the private sector, at a time when it most obviously needed help.

I do not believe our requests were ever seriously considered by the Commonwealth.

At a futile meeting between the Federal and State Premiers and Treasurers, all that happened was that the States were given a schoolroom-like lecture on how they had to tighten their belts’.

That is not the kind of answer the States wanted or deserved, nor is it one which would re-assure the private sector, or people generally.

I am frankly very concerned about the future of dozens of professional practices, and large and small business undertakings if the present Commonwealth attitude remains unchanged.

Because of this concern, we will continue to press the Commonwealth to make available more funds for shortterm and employment-creating capital works which will be carried out by the private sector, or from which the private sector will benefit.

We don’t want funds to expand the Public Service, but we do want to assist those in the business community who depend upon Government contracts to ride-out the present economic conditions.

Mr Chairman, ladies and gentlemen: As a Liberal, I do not derive any pleasure or satisfaction from having to express views which will inevitably be interpreted as criticism of one ‘s own Party colleagues.

But as a responsible State Leader, and as one who is genuinely concerned about the future of private enterprise in Australia, and in Queensland in particular, it is necessary for my views to be known and understood by our supporters, particularly in the business community.

We are going to do everything within our power to ensure that Queensland remains the most prosperous and the most rapidly-developing State in Australia, but we cannot be completely isolated from the national economic position.

Our potential for development is virtually unlimited, particularly in the mining and associated industries.

But that potential will not be able to be fully harnessed until the national economic position improves.

More than any other State, we have an interest in that improvement taking place without delay, because our State ‘s economy and our people stand to gain most from it.

Mining projects which are currently being planned will provide jobs for thousands of Queenslanders, directly and indirectly.

These projects will begin without delay provided that national economic confidence is in sight, and recovery on the way.

The sooner they begin, the better, because the benefits will be felt throughout Queensland, in reduced unemployment, and increased business activity, not to mention increased revenue for the State.

All we now need is evidence which will boost the confidence of the private sector and really put the nation on the road to economic recovery. When that happens, Queensland will be well-placed to lead the way.

Tonight I have sought to put before you some of the problems which we face, and how they might be overcome.

I am sure you share my earnest hope that they will be overcome without delay, and that the kind of leadership in the economic area which the people want to be given, will be given.

As a State, and as a Party, we are prepared to play our part. That has already been demonstrated on many occasions and in many ways.

But where the action is really needed is in national economic management . . . where positive leadership will boost confidence and help restore growth and prosperity.

For the sake of the very system which we all support, I hope it will not be long in forthcoming.

Senator KEEFFE:

– I will conclude with a few remarks on this matter. When Senator Colston attempted to have this document incorporated in Hansard, leave was refused. The document is of the normal type. There are no offensive 4 letters words in it. There are some 4 letter words that are probably politically offensive, but there are no 4 letter words of the type that usually cause problems when seeking to incorporate a document. What we sought to do was to have this document incorporated. I notice that the gentleman on the Government side of the chamber who refused leave for the incorporation, Senator Sir Magnus Cormack, has not been in this chamber this night. I understand that he went home to bed some considerable time ago when the lights went out.

If there is to be a suppression of information in this chamber- and this could easily have happened tonight- the Opposition must act. There would have been no need for us to waste another 20 minutes or so this evening and be involved in the hassles that we have gone through in the last three or four hours in order to get the document incorporated if leave had been granted. The document is very critical of the Federal Government. The fact that the speech contained in the document was made by the Deputy Premier of Queensland- himself a Liberal Party memberindicates that there is wide dissatisfaction with the Federal Government. We had that indication here tonight when Senator Wright rose and, in the most caustic terms, criticised the Government. Then he too went home to bed, with or without the lights on. I am sorry that we have had to do this. I think it was necessary. Justice, I think, has now been done.

Question resolved in the affirmative.

Senate adjourned at 11.29 p.m.

page 204

ANSWERS TO QUESTIONS

The following answers to questions were circulated:

Education: Research Grants (Question No. 1454)

Senator Keeffe:

asked the Minister for Education, upon notice:

  1. 1 ) Have grants for research been made to organisations and/or individuals from moneys appropriated to the Minister’s Department or appropriated for commissions, agencies or bodies for which the Minister is responsible. If so, to what organisations and /or individuals have such grants been made in each of the past five financial years, including 1976-77.
  2. What was the nature and purpose of the research for which each grant was made.
  3. What information as to the nature of the research to be undertaken and the qualification of the applicants was required from all applicants.
  4. What information was supplied by each applicant (a) who received a grant, and (b) who did not receive a grant.
Senator Carrick:
LP

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

Information in response to the honourable senator’s question is provided in respect of the Department of Education, the Education Research and Development Committee and the Universities Commission. Full information on other areas of my portfolio is not available to me at this stage and I will write to the honourable senator as soon as I have this additional information.

I draw the honourable senator’s attention to House of Representatives Hansard, page 3 1 0 1 of 30 October 1 974, for the answer to parts ( 1 ) and (2 ) of his question for the periods 1971-72 to 1973-74. In relation to ERDC funded projects, the fifth annual report of the Australian Advisory Committee on Research and Development in Education (now the Education Research and Development Committee) and the Sixth Annual Report of the Education Research and Development Committee provide the information for the period 1974-75 to 1975-76. The latter report should be tabled by me during the current session of Parliament. The earlier report was tabled in the Senate on 3 June 1 976.

The attached tables show projects so far approved for ERDC support in 1976-77 together with an estimate of the expenditure to be incurred on each during 1976-77. Further projects may be recommended for ERDC support in 1976-77. Projects which have been supported in previous years have been grouped under the heading ‘Continuing Projects’.

The tables also show a schedule of research reports commissioned by the Research Branch of the Department of Education for the years 1974-75 to 1976-77.

The ERDC requires all applicants to submit an application form providing detailed information on the nature, aims, cost and technical design of the research proposed and personal particulars including academic qualifications and related research publications. In commissioning a project the Research Branch of my Department approaches researchers who have established reputations in the particular area with the aim of securing the services of the most competent available person in the country to undertake the work.

The Universities Commission does not have an established program for the funding of specific research projects.

However, the Universities Commission does provide grants which the universities use, in part, to finance their research programs. Details of the universities expenditure in this area can be obtained from the Commission’s reports which have been tabled in the Parliament.

International School of Chiropractic, Victoria (Question No. 1465)

Senator Rae:
TASMANIA

asked the Minister for Education, upon notice:

  1. Is the International School of Chiropractic, at Bundoora, Victoria, eligible to receive, and has it in fact received, either directly or indirectly, funding from the Commonwealth. If not, why not.
  2. Are students enrolled in the College eligible to receive, and have any in fact received, funding from the Commonwealth, either directly or indirectly, since the College commenced conducting courses. If not, why not.
Senator Carrick:
LP

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

  1. The International College of Chiropractic at Bundoora, Victoria, has not applied for national registration of its courses to the Australian Council of Awards in Advanced Education. In addition the College does not receive assistance under the program of fees assistance for non-State tertiary institutions.
  2. No. Students undertaking courses at the college are not eligible for assistance under the Tertiary Education Assistance Scheme since the courses have not been approved for the purposes of the Scheme. It is not possible to consider the courses for approval unless the college receives official recognition by government medical organisations and advanced education authorities. A committee has been established by the Commonwealth to inquire into the registration of chiropractic, naturopaths and osteopaths but its report has not yet been released.

Cite as: Australia, Senate, Debates, 17 February 1977, viewed 22 October 2017, <http://historichansard.net/senate/1977/19770217_senate_30_s71/>.