Senate
12 October 1978
31st Parliament · 1st Session
- PETITIONS
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- DISTINGUISHED VISITORS
- QUESTION
- QUESTION
- CRIMINAL INVESTIGATION BILL
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- AUSTRALIA COUNCIL
- JOINT SELECT COMMITTEE ON THE FAMILY LAW ACT
- JOINT COMMITTEE ON FOREIGN AFFAIRS AND DEFENCE
- INCOME TAX ASSESSMENT AMENDMENT BILL (No. 2) 1978
- ADJOURNMENT
- ANSWERS TO QUESTIONS
The PRESIDENT (Senator the Hon. Condor Laucke) took the chair at 10.30 a.m., and read prayers.
page 1257
PETITIONS
Human Rights in the USSR
Senator PETER BAUME:
NEW SOUTH WALES
– I present the following petition from 26 1 citizens of Australia:
To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of the Commonwealth respectfully showeth:
In the Soviet occupied Lithuania, Viktoras Petkus, a member of the group to monitor Soviet compliance with the Helinski agreement, was sentenced to a severe punishment at the same time as other Soviet dissidents, Shcharansky and Ginzburg.
Since Viktoras Petkus, and the group he is a member of, conducted their activities openly, believing that the Soviet constitution granted them some rights not only in word but also in fact, this severe punishment is a blatant denial of human rights recognized even by the Soviet constitution.
We ask the Australian Government to make representations to the United Nations to adopt a resolution condemning Soviet violations of human rights, and to request the Soviet Government to release the unjustly incarcerated Viktoras Petkus.
And your petitioners as in duty bound will ever pray.
Petition received and read.
Uranium Mining
Senator KILGARIFF:
NORTHERN TERRITORY
– I present the following petition from 292 citizens of Australia:
The President and Members of the Senate in Parliament Assembled. The Petition of the Undersigned Citizens of Australia respectfully showeth that we are gravely concerned over the extreme weakness shown by our Prime Minister and his Government in his handling of the uranium mining situation in the Northern Territory.
While The Parliament allows a small group of antigovernment advisers to Aboriginal organisations to delay the commencement of mining the great majority of Citizens and business people are being caused financial loss, and being denied the right to participate in a legitimate business.
Your petitioners therefore humbly pray that permission be given- and not again withdrawn- for mining to commence immediately.
Petition received and read.
Australian Broadcasting Commission
Senator PETER BAUME:
– I present the following petition from 16 citizens of Australia:
To the Honourable the President and members of the Senate in Parliament assembled.
The petition of the undersigned citizens of Australia respect.fuly showeth that the term of the current staff Elected Commissioner expires on the 22nd October 1978. We pray the Government will direct that this position should continue, and that the Minister will authorise the Commonwealth
Electoral Officer to proceed with an election, by all ABC staff, of a new commissioner, and your petitioners as in duty bound will ever pray.
Petition received and read.
Pensions
Senator ROBERTSON:
NORTHERN TERRITORY
-On behalf of Senator Gietzelt, I present the following petition from 296 citizens of Australia:
To the Honourable the President and Members of the Senate in Parliament assembled. The Petition of the undersigned citizens of Australia respectfully showeth:
That whereas the Fraser Government was elected in December 197S after promising that pensions would be adjusted instantly and automatically in relation to quarterly Consumer Price Index figures; and whereas that Government subsequently announced that pension adjustments should properly be made half yearly each May and November; it is the current intention of the same Government to legislate for pensions to be adjusted only once a year, and this constitutes a serious breach of generally accepted ethics of democratic government and also deprives many needy pensioners of increases that are essential to their subsistence-
The foregoing facts impel the undersigned petitioners to request the Australian Government to uphold the principle that the trustworthiness of governments should at all times be above question, and to appeal to the Parliament to prevent the imposition of further economic hardship upon Australian pensioners by rejecting any Bill which has for its aim the introduction of annual adjustments of pension rates.
And your petitioners in duty bound will ever pray.
Petition received and read.
Budget 1978-79: Pensioners
Senator BUTTON:
VICTORIA
-On behalf of Senator Grimes, I present the following petition from 24 citizens of Australia:
To the Honourable the President and Members of the Senate assembled. The petition of the undersigned citizens of Australia respectfully showeth:
That the people of Australia having taken part in the government of Australia through universal suffrage in December 1975 and again in December 1977; and
That on the basis of their expressed choice at the ballot box the people of Australia gave authority to the LiberalNational Country Party Coalition to form a federal government to bring into effect specific policies promulgated throughout the length and breadth of Australia by the said Coalition; and
That, whereas by virtue of being elected through universal suffrage, the Government members now sitting in the House of Representatives were authorised to implement their stated objectives by legislation and that such authority did not extend to acting otherwise or to enact legislation not previously submitted to the will of the people, namely:-
Revoking the legislation for twice-yearly pension payments.
Imposing a freeze on the free-of-means-test pension.
Unemployed divided into those with dependents and those without.
Imposing income tax on pensions under age pension age- invalid and repatriation service pensions; rehabilitation allowances and incentives; sheltered employment and allowances for tuberculosis suffers (civilian and service) and any other impositions.
Your petitioners submit that all or any of the foregoing proposed legislation of the Lower House, if implemented, will greatly disadvantage many thousands of citizens as either against their expressed will or not submitted to universal vote as the democratic right of the Australian people.
Therefore your petitioners call on the Senate as the House of Review to take appropriate action to release these persons from burdens unfairly placed in order to finance a deficit not of their making.
And your petitioners in duty bound will ever pray.
Petition received.
Budget 1978-79: Pensioners
Senator WALTERS:
TASMANIA
– I present the following petition from 60 citizens of Australia:
To the Honourable the President and Members of the Senate assembled. The petition of the undersigned citizens of Australia respectfully showeth:
That the people of Australia having taken part in the government of Australia through universal suffrage in December 1 975 and again in December 1 977; and
That on the basis of their expressed choice at the ballot box the people of Australia gave authority to the LiberalNational Country Party Coalition to form a federal government to bring into effect specific policies promulgated throughout the length and breadth of Australia by the said Coalition; and
That, whereas by virtue of being elected through universal suffrage, the Government members now sitting in the House of Representatives were authorised to implement their state objectives by legislation and that such authority did not extend to acting otherwise or to enact legislation not previously submitted to the will of the people, namely:-
Revoking the legislation for twice-yearly pension payments.
Imposing a freeze on the free-of-means-test pension.
Unemployed divided into those with dependents and those without.
Imposing income tax on pensions under age pension age- invalid and repatriation service pensions; rehabilitation allowances and incentives; sheltered employment and allowances for tuberculosis suffers (civilian and service) and any other impositions.
Your petitioners submit that all or any of the foregoing proposed legislation of the Lower House, if implemented, will greatly disadvantage many thousands of citizens as either against their expressed will or not submitted to universal vote as the democratic right of the Australian people.
Therefore, your petitioners call on the Senate as the House of Review to take appropriate action to release these persons from burdens unfairly placed in order to finance a deficit not of their making.
And your petitioners in duty bound will ever pray.
Petition received.
Pensions
Senator WALTERS:
– I present the following petition from 1 9 citizens of Australia:
To the Honourable the President and Members of the Senate, in Parliament Assembled. The Petition of the undersigned citizens of Australia, respectfully showeth:
That whereas the Fraser Government was elected in December 1975 after promising that pensions would be adjusted instantly and automatically in relation to quarterly Consumer Price Index Figures;
And whereas that Government subsequently announced that pension adjustments should properly be made half yearly each May and November;
It is the current intention of the same Government to Legislate for pensions to be adjusted only once a year, and this constitutes a serious breach of generally accepted ethics, of Democratic Government, and also deprives many needy pensioners of increases that are essential to their Subsistence-
The foregoing facts impel the under-signed petitioners to request the Australian Government to uphold the principle that trustworthiness of Governments should at all times be above question, and to appeal to the Parliament to prevent the imposition of further economic hardship upon Australian Pensioners, by rejecting any Bill which has for its aim the introduction of annual adjustments of pension rates.
And your pensioners in duty bound will ever pray.
Petition received.
The Acting Clerk- Petitions have been lodged for presentation as follows:
Abortion: Medical Benefits
To the Honourable the President and Members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth:
That the provision of payments for abortion through items of the Medical Benefits Schedule is an unacceptable endorsement of abortion, which has now reached the levels of a national tragedy with at least 60,000 unborn babies being killed in 1977.
Your petitioners therefore humbly pray that the Government will so amend the Medical Benefits Schedule as to preclude the payment of any benefit for abortion.
And your petitioners as in duty bound will ever pray. by Senator Missen, Senator Jessop and Senator Primmer.
Petitions received.
Budget 1978-79: Pensioners
To the Honourable the President and Members of the Senate assembled, the petition of the undersigned citizens of Australia respectfully showeth:
That the people of Australia having taken part in the government of Australia through universal suffrage in December 1975 and again in December 1977; and
That on the basis of their expressed choice at the ballot box the people of Australia gave authority to the LiberalNational Country Party Coalition to form a federal government to bring into effect specific policies promulgated throughout the length and breadth of Australia by the said Coalition; and
That, whereas by virtue of being elected through universal suffrage the Government Members now sitting in the House of Representatives were authorised to implement their state objectives by legislation and that such authority did not extend to acting otherwise or to enact legislation not previously submitted to the will of the people, namely:-
Revoking the legislation for twice-yearly pension payments.
Imposing a freeze on the free-of-means-test pension.
Unemployed divided into those with dependents and those without.
Imposing income tax on pensions under age pension age- invalied and repatriation service pensions; rehabilitation allowances and incentives; sheltered employment and allowances for tuberculosis suffers (civilian and service ) and any other impositions.
Your petitioners submit that all or any of the foregoing proposed legislation of the Lower House, if implemented, will greatly disadvantage many thousands of citizens as either against their expressed will or not submitted to universal vote as the democratic right of the Australian people.
Therefore, your petitioners call on the Senate as the House of Review to take appropriate action to release these persons from burdens unfairly placed in order to finance a deficit not of their making.
An your petitioners in duty bound will ever pray. by Senators Jessop, Missen, Evans, Archer, Guilfoyle and Rae.
Petitions received.
Pensions: Lone Parents
To the Honourable the President and Members of the Senate in Parliament assembled.
The humble petition of the undersigned citizens of Australia respectfully sayeth that we are concerned about the discrimination which exists against the children of those parents who are in receipt of the Supporting Parents Benefit in comparison with children of Single Parents who receive the Widows Pension. Your petitioners therefore humbly pray that Parliament take immediate steps to ensure that this year’s budget allow for Lone Parents to be given the right to receive a pension with the same benefits as are given with the Widows Pension, and we also request that Parliament take immediate steps to instigate one (1 ) category of Lone Parent Pensions to eliminate the discrimination currently experienced.
And your petitioners as in duty bound will every pray. by Senator Puplick.
Petition received.
Pensions
To the Honourable the President and Members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth:
That whereas the Fraser Government was elected in December 1975 after promising that pensions would be adjusted instantly and automatically in relation to quarterly Consumer Price Index figures; and whereas that Government subsequently announced that pension adjustments should properly be made half yearly each May and November; it is the current intention of the same Government to legislate for pensions to be adjusted only once a year, and this constitutes a serious breach of generally accepted ethics of democratic government and also deprives many needy pensioners of increases that are essential to their subsistence-
The foregoing facts impel the undersignedpetitioners to request the Australian Government to uphold the principle that the trustworthiness of governments should at all time be above question, and to appeal to the Parliament to prevent the imposition of further economic hardship upon the Australian pensioner by rejecting any Bill which has for its aim the introduction of annual adjustments of pension rates.
And your petitioners in duty bound will ever pray. by Senators Carrick, Lajovic, Webster, Jessop, Peter Baume, Wriedt, Missen, Rae, Kilgariff and Guilfoyle.
Petitions received.
page 1259
QUESTION
QUESTIONS WITHOUT NOTICE
page 1259
QUESTION
GOLLIN HOLDINGS LTD
Senator BUTTON:
-I ask the AttorneyGeneral whether his Department has taken any interest, by way of watching brief or otherwise, in the prosecution of two directors of Gollin Holdings Ltd, in respect of misappropriation of funds. If so, has the Department considered the evidence in which it was alleged that $25,000 of misappropriated funds was given to the Liberal Party of Australia? Has the Minister satisfied himself whether that allegation is correct?
Senator DURACK:
Attorney-General · WESTERN AUSTRALIA · LP
– I am not aware whether there is any interest by my Department in the proceedings against the Gollin directors. Whether there is or ought to be interest is a matter which I will look into.
page 1259
QUESTION
OLYMPIC GAMES: MOSCOW
Senator LAJOVIC:
NEW SOUTH WALES
– Has the Minister representing the Minister for Foreign Affairs noted alleged remarks reported in yesterday’s Sydney Morning Herald by Mr Vladimir Koval, vice-president of the Olympic Games organising committee in Moscow who is at present visiting Australia? He is reported as saying, firstly, that many Australians may be allowed to remain in Moscow for only a week of a two week stay and, secondly, that a delegation led by Mr Koval gave a warning that the Soviet Government would not tolerate any nation using the Games to gain political advantage. Could the Minister inform the Senate whether the action as foreshadowed by Mr Koval threatens discrimination against Australian visitors to the Games and the direct political intimidation of the visitors to the Olympic Games? Are there any previous examples of similar action taken by any host country staging the Olympic Games? Does the Commonwealth Government intend to make any representation to the Soviet Government to ensure that such threats against Australian visitors are not carried out?
Senator CARRICK:
Vice-President of the Executive Council · NEW SOUTH WALES · LP
– My advice is that three officials from the Soviet Olympic Games organising committee have been visiting Australia to discuss with the Australian Olympic Federation matters relating to the staging of the 1980 Moscow Olympics. I am aware that in the Press yesterday Mr Vladimir Koval the vice-president of the Soviet organising committee, was reported as warning other countries against attempting to use the Olympic Games to political advantage and foreshadowing possible restrictions on overseas visitors to the Games. I have no knowledge whether the report in itself is factual. If it is factual, one can only regret that Mr Koval or his officials should have seen it necessary to make such statements. The whole question is highly sensitive and many people would very much regret the implications of such a statement if it is true. I will check the basis of the statement and let the honourable senator know.
The question of Australian participation in the Games is of course strictly one for the Australian Olympic Federation. The Government has not sought to take a position on the matter although it is on balance inclined to the view that there is a more beneficial influence by taking part in the Games. In any event the debate on the merits of participation in the Olympics clearly will continue. In the meantime, I think the whole spirit of international and national sport is ill served if indeed statements of the nature reported are made.
page 1260
QUESTION
POST GRADUATE SCHOLARSHIPS
Senator RYAN:
ACT
– My question is directed to the Minister for Education. It refers to the decision by the Government to tax post graduate scholarships. I remind honourable senators that the basic scholarship allowance is $4,200 per annum. Is the Minister aware that this decision will result in a drop in income of an average of 1 5 per cent for post graduate scholars? Is this decision an attempt by the Government to force more students out of universities on to the oversaturated job market in order to develop some sort of justification for its failure to maintain funding for growth at a minimum of two per cent as promised by the Minister at the outset of the rolling triennium of 1 976?
Senator CARRICK:
LP
– It is strange that Senator Ryan, emerging from the Australian Labor Party which froze post-graduate awards during its period in office and, therefore, greatly reduced their real value and in fact kept people on a subsistence allowance, should ask that question. It is also strange since Senator Ryan, was part of the Labor Government which set aside triennial funding. Having said both those things let me put the matter in perspective: I am proud to be able to say that my Government very substantially increased post-graduate awards during the period 1976 to 1978 and, in fact, has increased their value. It is self-evident that the kind of assertions made by Senator Ryan are notably untrue. I repeat what needs to be repeated: The only government which cut education funding was the Labor Government; the only government which seriously set back the funds flowing to education as a whole was the Labor Government. The fact is that there has been a substantial increase in expenditure at all levels of education. It is a matter of principle in the debate on legislation which is now before the Parliament whether certain sources of income should be subject to taxation, and that is a principle which needs to be looked at. The separate question of what the levels of allowance should be involves another principle. All I can say is that the present Government nas substantially increased those allowances. The present Opposition when in government froze them and reduced them in value. We have encouraged expansion of education.
Senator Button:
– That is not true and you know it.
Senator CARRICK:
– For Senator Button’s edification, I will arrange in due course for details to be given to the Senate of the rates of allowance during the Whitlam Government’s time in office and the very substantial increases in those rates which have been made by us.
page 1260
QUESTION
FIGHTING IN INDOCHINA
Senator SIM:
WESTERN AUSTRALIA
– I direct my question to the Minister representing the Minister for Foreign Affairs and I refer to a recent report that Vietnamese and Laotian Government forces are using poison gas against the fiercely independent Meo tribesmen. This report came from a French doctor who, it is alleged, is treating these unfortunate people. It is also alleged that communist forces have destroyed the crops and livestock of these people and have poisoned their wells after artillery, aircraft and napalm had failed to subjugate them. Has the Government any confirmation of this report? If not, will the Minister seek to obtain the facts and report them to the Parliament?
Senator CARRICK:
LP
– All honourable senators will be appalled by the reports that are coming out of the general area of what was known as Indo-China- from Laos, Cambodia and Vietnam- of what amounts to bloody murder and destruction of physical resources as well as the loss of lives. As to the specific allegations and their factual basis, I have no information but I will seek it out and let the honourable senator know.
page 1261
DISTINGUISHED VISITORS
The PRESIDENT:
– I draw to the attention of honourable senators the presence in the Gallery of delegates attending the Fourth Australian Parliamentary Seminar. On behalf of all honourable senators I tender to Miss Levy and to the honourable gentlemen a warm welcome and hope that their stay in Canberra is pleasurable and of value to them.
page 1261
QUESTION
SUGAR INDUSTRY
Senator KEEFFE:
QUEENSLAND
– I ask the Minister representing the Minister for Primary Industry whether the report of the Industries Assistance Commission into the sugar industry has been completed. Is it a fact that the report will not be made public? If the report is not to become a public document will this be the result of pressure applied to the Australian Government by either the Queensland Government or a section of the sugar industry? If the latter, which section of the sugar industry was involved?
Senator WEBSTER:
Minister for Science · VICTORIA · NCP/NP
-The Minister whom I represent, the Minister for Primary Industry, answered a question on this matter in another place, I believe within the last day or two. He dealt with the matter comprehensively then. I do not think it is worth my reiterating the answer. My understanding is that the inquiry covered a wider range of matters than the Minister intends to be made public. The details can be read in the Minister’s answer to a question in the House of Representatives.
Senator KEEFFE:
-Mr President, I ask a supplementary question. I appreciate the fact that a question on the substance of this matter has been partly answered but I ask the Minister again: If the report is not to be made public who is suppressing it- the Queensland Government or a section of the sugar industry? If it is the latter, which section is it?
Senator WEBSTER:
– I am afraid that I am unable to answer the honourable senator’s question as to whether anybody is pressing that the report should not be made public. My understanding is that there are reasons for its confidentiality because some of the matters that were to be investigated went beyond what the parties who sought the investigation wished to be made public.
page 1261
QUESTION
CIGARETTE SMOKING
Senator HAMER:
VICTORIA
– My question is addressed to Senator Guilfoyle in her capacities as Minister for Social Security and Minister representing the Minister for Health. Does the Minister’s Department have to pay out very large sums in pensions to people suffering from the effects of cigarette smoking? Has the Minister seen allegations of misleading propaganda by the cigarette industry about the dangers of smoking? I ask whether the Minister is aware that the cigarette industry is using questions such as: If cigarette smoking is dangerous why is cancer of the larynx much less common than lung cancer? Does this question conceal that cancer of the larynx is seven times more common among smokers than among nonsmokers? Is the cigarette industry trying to divert attention from the fact that the statistical connection between smoking and cancer, respiratory diseases and heart diseases is proved beyond reasonable doubt? Finally, does the Minister agree that, though legally cigarette purveyors are completely in the clear, socially they are more dangerous than marihuana pushers?
Senator GUILFOYLE:
Minister for Social Security · NEW SOUTH WALES · LP
– The early part of Senator Hamer’s question referred to my Department’s payment of pensions to people who have illnesses resulting from the smoking of cigarettes. I am unable to state the amount of payments related to people receiving pensions because of illnesses arising from this source; but it would be understood that there are people who receive invalid pensions arising from this cause. I regret that I am unable to put any figure on the amount involved. As to the other part of the question which related to the Minister for Health, the Minister for Health advises me that he is aware that from time to time the cigarette industry resorts to misleading comment aimed at rebutting the proven association between ill health and smoking. The Minister knows that a similar point of view was put forward recently by Dr A. J. McMichael in the journal of the Doctors Reform Society. He pointed out, as an example of invalid conclusions reached by the tobacco industry, that there was a significantly greater incidence of cancer of the larynx in smokers than in non-smokers. The Minister for Health believes that the occasion warrants a restatement of a conclusion reached by the Senate Standing Committee on Social Welfare in its report ‘Drug Problems in Australia- an intoxicated society?’, which states:
We have studied the evidence for and against the case that tobacco is causally related to a number of illnesses. On balance, the Committee rejects the Australian Cigarette Manufacturers’ main conclusions. It supports the view of the Commonwealth Depanment of Health, the United States
Surgeon General, the Royal College of Physicians and the World Health Organisation that there is an undoubted association between smoking and a wide range of significant diseases.
The Minister for Health further states that there is an overwhelming weight of evidence, statistical and clinical, that smoking is dangerous to health. It is regrettable that the cigarette industry continues to argue against this great body of evidence and to seize upon isolated studies and opinions of doubtful validity in order to bolster its argument.
The Minister for Health does not wish to comment on the legal position of marketing cigarettes as compared with marihuana. At present three judicial inquiries pertaining to illicit drugs are taking place- a Federal inquiry and two separate State inquiries. The Minister considers the question of the marketing of marihuana to be sub judice.
page 1262
CRIMINAL INVESTIGATION BILL
Senator EVANS:
VICTORIA
– I address my question to the Attorney-General. Following the recent moves to amalgamate the Commonwealth and Australian Capital Territory police forces into an enlarged new federal agency, what precisely are the Government’s intentions now with respect to the reintroduction of the Criminal Investigation Bill, which the Minister will recall as originally proposed by the Whitlam Labor Government was intended to define and delimit the powers of just such a new national police agency? I remind the Minister that in answer to a question without notice from my learned friend Senator Missen on 9 June this year the Minister said that he ‘hoped to give this legislation some attention as soon as the session ended’, and that was over four months ago.
Senator DURACK:
LP
– I refer honourable senators to the answer which I gave Senator Missen on 9 June this year. I have made some reference to this matter in speeches made outside the Senate from time to time. I have given the matter considerable attention during that period, as I indicated I would be doing. The matter involves consultation, as Senator Evans would understand, with a number of government agencies, in particular the Commonwealth and Australian Capital Territory police. The matter is in the process of consultation. I am still hopeful that I will be able to make some early recommendation to the Government in regard to this matter.
page 1262
QUESTION
UNEMPLOYMENT: SUMMIT CONFERENCE OF NATIONAL LEADERS
Senator MAUNSELL:
QUEENSLAND
– My question is directed to the Minister representing the Minister for Employment and Industrial Relations. In view of the widespread concern over the unemployment problem and the calling of a summit conference of national leaders to discuss the matter, can the Minister say whether the effect that penalty rates have on employment, particularly in the tourist industry, will be discussed at this meeting?
Senator DURACK:
LP
– I will refer that question to the Minister for Employment and Industrial Relations and endeavour to obtain an early answer.
page 1262
QUESTION
THAI RADIO STATION
Senator HARRADINE:
TASMANIA
– Has the attention of the Minister for Administrative Services been drawn to two items on AM on Tuesday and Wednesday of this week in which an Australian citizen admitted to doing broadcasts for the clandestine radio station operated by the Thai Communist Party with the admitted aim of supporting the violent overthrow of the Thai Government by the forces of that party? Has the Minister studied those items to determine whether action is indicated under the Crimes (Foreign Incursions and Recruitment) Act or the Crimes Act?
Senator CHANEY:
Minister Assisting the Minister for Education · WESTERN AUSTRALIA · LP
– I have not studied the matters referred to by the honourable senator. I do not think the Acts mentioned come within my responsibility. I will certainly examine the matter. If it is not within my authority I will refer the question to the appropriate Minister.
page 1262
QUESTION
FRASER ISLAND
Senator MISSEN:
VICTORIA
– My question is directed to the Leader of the Government in the Senate in his capacity as either the Minister representing the Prime Minister or as Minister for Education. My question is related to the Commonwealth Government ‘s decision not to allow sand mining on Fraser Island but instead to preserve that island’s natural environment. Is the Minister aware that the individual who championed the Fraser Island cause, Mr John Sinclair, has been placed under significant political pressure by the Queensland Government for the action he has taken as President of the Fraser Island Defence Organisation? Has it been brought to the Minister’s attention that Mr Sinclair, who works for the State Education Department, for no apparent reason has had his job transferred away from the vicinity of Fraser Island to Brisbane? Will the Minister inform the Senate whether any steps can be taken to stop the Queensland Government’s persecution of Mr Sinclair who is being politically attacked simply because he sought to conserve an island that has been recognised as part of the world ‘s heritage?
Senator CARRICK:
LP
– I am aware of Mr John Sinclair’s involvement in the Fraser Island issue as I think all Australians are. I also am aware of some reports in the Press concerning subsequent events in relation to his employment. In particular, my attention has been drawn to a recent article that appeared in, I think, the National Times concerning Mr Sinclair.
Senator Button:
– I asked you a question about it nine months ago.
Senator CARRICK:
– I am further advised that this matter is one entirely for the Queensland Government.
Senator Georges:
– It isn’t quite, is it?
Senator CARRICK:
– I acknowledge with gratitude the intended help of the Australian Labor Party in answers to these questions. I am not sure whether honourable senators opposite are sympathising with Mr Sinclair or inveighing against him. The simple fact of the matter is that the Fraser Government acted in a particular envirnomental way in relation to Fraser Island. The Fraser Government believes that that was the right thing to do. It happens that Mr Sinclair was a leader in environmental thinking. Matters have arisen from that. The fact is that Mr Sinclair is an employee of the State Department of Education. This is a matter for the Queensland Government which of course, has the right to appoint, to transfer or even to dismiss Queensland public servants subject to normal rights of appeal and conditions of employment. In view of the concern expressed by Senator Missen I will certainly draw this question and the article in the National Times to the attention of the Prime Minister and seek for Senator Missen any further information that might be available.
page 1263
QUESTION
AUSTRALIAN NATIONAL RAILWAYS COMMISSION: RETRENCHMENTS
Senator McLAREN:
SOUTH AUSTRALIA
– I ask the Minister representing the Minister for Transport: Is it a fact that the Australian National Railways Commission has compiled a list of employees over the age of 55 years for the purpose of retrenchment? If this is a fact, will the Minister give full details of the methods to be applied in carrying out the retrenchments and the amount of compensation, if any, that will be paid to the employees because of early retrenchments?
Senator CHANEY:
LP
– I will refer that question to the Minister for Transport and seek a reply for the honourable senator.
page 1263
QUESTION
TASMANIA: FLU EPIDEMIC
Senator TOWNLEY:
TASMANIA
– My question which is directed to the Minister for Science relates to the serious flu epidemic which is presently raging throughout Tasmania and causing schools to be closed and a great many people to be absent from work. If I had any sense that is where I would be- absent from work. Does the Minister recall seeing an article in the New Scientist by Sir Fred Hoyle and one other person dated 28 September headed: ‘Influenza from Outer Space?’. Does the Minister agree with Sir Fred Hoyle that the new strains of influenza viruses are falling as it were as manna from heaven? Is the Commonwealth Scientific and Industrial Research Organisation investigating Sir Fred ‘s allegation? Or does the Minister subscribe to the view that the recent sunspot activity and the associated southern auroras which have been seen recently in Tasmania are the real culprits behind this most recent serious flu epidemic?
Senator WEBSTER:
NCP/NP
– My attention has been drawn to the article in the New Scientist of 28 September of 1978. Neither my Department nor the Commonwealth Scientific and Industrial Research Organisation have carried out any investigation into the comments made by Sir Fred Hoyle in that particular article. I am unaware of the situation in Tasmania at the moment or how sunspot activity may affect that particular problem. I think the matter is one for the Minister for Health. I will see that this question is drawn to his attention.
page 1263
QUESTION
MANUFACTURE AND USE OF HERBICIDES
Senator MASON:
NEW SOUTH WALES
– My question is directed to the Minister for Science. Its subject is the current methods of manufacture and use of the herbicides 2,4-D and 2,4,5-T. I am prompted to raise this matter because of recent reports in Victoria of further cases of human foetus deformities claimed to be associated with exposure of the mother to 2,4-D or 2,4,5-T during early pregnancy, the subsequent re-opening of a Victorian inquiry into the matter and the total ban on the use of the herbicides by the Sale City Council. I ask the Minister whether he will now arrange for a national inquiry into the manufacture and use of 2,4-D and 2,4,5-T in Australia which is open to the media and the public and which: (1) ensures it receives evidence or depositions from scientists outside Australia, especially from the United States of America, Sweden and Holland; (2) considers the implications of the volatile bases on which these herbicides are manufactured, which permits the spray mist to remain in the air for long periods and to drift many miles in some circumstances; (3) considers the desirability of larger spray nozzle aperture sizes or other methods of use that might reduce air retention and spray drift; (4) considers the desirability of banning the use of herbicides in urban areas or within one kilometre of a dwelling place, as is the practice in some European countries; (5) considers the current practice of packagers of printing directions for use on packages in very fine type; and (6) considers the desirability of an indefinite delay in conversion of instructions for use on such herbicide packets to metric measurements.
Senator WEBSTER:
NCP/NP
-The honourable senator refers to a subject which in recent months has certainly aroused significant publicity in the media. I must admit that so far as the Department of Science and the Commonwealth Scientific and Industrial Research Organisation are concerned investigation as to the effects upon humans of these particular herbicides has not been a matter of study. This is a matter for the Minister for Health. I believe that on a number of occasions he has replied appropriately on this matter. I have given some facts to the Senate on this matter previously. Perhaps I could repeat some of the points that have been made.
Senator Cavanagh:
– No, refer us to the page in Hansard.
Senator WEBSTER:
-The honourable senator might learn from them, although that would be doubtful. The use of these substances as herbicides was introduced into the United States of America and Australia in the 1940s. The current practice with the use of these herbicides is based on something in excess of 30 years of worldwide experience. There is a huge body of supplementary scientific evidence related to the use of these herbicides. For instance, I have recently received four bibliography listings of some 2,200 scientific publications on these herbicides and their effects on animals and the ecology. This gives some indication of the extent and the depth of investigation into the background of the use of these items. A number of investigations and surveys of the two substances which the honourable senator mentions have taken place in recent years. Obviously he has noted that international investigations have been conducted by the World Health Organisation. I am aware of a New Zealand report relating to this matter. The National Health and Medical Research Council has conducted investigations; recently there has been a Victorian study; and recently the South Australian Government has completed a study on the effects of these two herbicides.
I imagine that the honourable senator will have noted from the newspapers in the last day or so that the man who alerted the world to the tragedy of thalidomide, Dr McBride, has now concluded an independent series of tests on the effect of feeding 2,4,5-T to rabbits and mice. In actual fact he gives a clearance to these substances. I think the Senate should be alert to the fact that the substance 2,4-D cannot contain the residue dioxin. It is 2,4,5-T which may give off dioxin under sophisticated laboratory conditions, although 2,4-D has been blamed for some of the problems in Victoria. The Minister for Health in Victoria recently commented in relation to the work that was carried out in Sale. The honourable senator mentioned the action of the Sale City Council. He referred to the spraying of the sports field which was indicated in the report. It should be noted that the spray in question was 2,4-D which contains no dioxin.
The honourable senator raised two further points. One related to its use in suburbs. I am unable to comment on that matter. I think it has little relevance to the point. The Minister for Health has said that he sees no reason to have a further national survey of this matter. The honourable senator referred to the conversion of labels to the metric system. The use of metrication in the area of health is perhaps far greater than in any other area of public use. I will refer the honourable senator’s question to the Minister for Health. I see little reason to follow the honourable senator’s advice.
page 1264
QUESTION
ATTITUDE OF ABORIGINES TO URANIUM MINING
Senator PETER BAUME:
-My question is directed to the Minister representing the Minister for Aboriginal Affairs. Did a meeting take place yesterday at Oenpelli in Arnhem Land? At the meeting did the traditional owners refuse to endorse the decision to sign the Ranger agreement? If so, is the Minister able to indicate to the Senate the Government’s position in relation to the next step in this situation in order to resolve the problems which now arise in introducing uranium mining.
Senator GUILFOYLE:
LP
– I understand that a meeting took place yesterday at Oenpelli. The Government is keeping a close watch on the situation. The Minister for Aboriginal Affairs is awaiting a full report of yesterday’s meeting. The consent of the traditional owners is required before the Northern Land Council can agree to the terms and conditions of the proposed Ranger agreement. The Northern Land Council is negotiating on that basis. Honourable senators may be interested to know that the Government now has proof of the Labor Party’s involvement in attempts to manipulate the Northern Land Council. I have a telex from the Chairman of the Northern Land Council.
Senator Keeffe:
– I take a point of order. I object to the terms in which the Minister is replying to this question when she cannot give information about where a member of the Liberal Party was last week.
The PRESIDENT:
– I call the Minister to continue.
Senator GUILFOYLE:
– I have a telex signed by the Chairman of the Northern Land Council. I also have a letter which was written by Dr Doug Everingham M.P. to the Chairman of the Northern Land Council. I seek leave to have both these documents incorporated in Hansard.
Leave not granted.
Senator GUILFOYLE:
-If leave is not granted for the incorporation of these documents in answer to the question by Senator Peter Baume, I will read the telex which has been received from the Chairman of the Northern Land Council by the Minister for Aboriginal Affairs. The telex, dated 12 October, reads:
In view of the continued attempts by Labor interests to interfere in the affairs of this Council and to manipulate Aboriginal people I am prepared to authorise you to use in any way that you see fit the letter from Mr Doug Everingham, M.P. to myself which letter was dated 21 September 1978 and referred to the use of Aboriginals by the ALP for ALP purposes.
The letter from Dr Everingham to the Chairman of the Northern Land Council reads -
Senator Keeffe:
– You are misinterpreting the letter.
The PRESIDENT:
– Order !
Senator GUILFOYLE:
– I will read the letter. It states:
I can understand your feeling that the ALP may be using Aborigines for their own vested interests. It is true that some people, most of them on the Labor side of politics, care more about stopping uranium mining or changing the Government in Darwin or Canberra than they do about Aborigines or land rights. I am not one of them. I hope my speech in the House on 20 September 1978 and on TDT (southern States) will help to persuade you of this.
I have heard that many Aborigines have a mind to remove you on 21 September 1978 from your Chairman ,-/ , /- been thrown out of a job as Health Minister and Parliamentarian in 1975 by a Governor-General and an election and so I guess I know the son of feeling this could bring about. So in case it happens to you I want to tell you how it affected me.
I was depressed that I had not been able to persuade people of my hard work- the hardest I’ve ever done- my capacities and my good intentions.
Slowly I came to be thankful for the rest. I took a (part time working) holiday for 6 months away from phones with my wife. Some of our (adult) children joined us for part of this time while they were on holidays. I got through half a roomful of papers I’d collected ‘to look at later’ for 30 years. I did a refresher course and worked for a few doctors in my old job. Finally I went back to campaigning and acting like a local representative, at the end opening an office with my local State member to help local people with Federal problems as Federal members do.
I ‘m sure I ‘m doing better work and happier with it as a result of the break, and I believe if I ‘d missed on re-election I would still feel that way in some other job. I’m nearly twice your age, so you will do better than I did in adjusting to whatever you have to do.
If you are in real trouble- I don’t mean just like the drinking charge I read about a few months back, but something that your own people can’t help with- something which might be helped by a white man interested in hearing blackfeller secrets if they want to tell him and willing to tell whitefeller secrets if people want to hear them- then I would like you to think of me as a former family doctor who had a large following of Aboriginal patients years ago, who took time to explain things to them and who would like to be thought of as your friend whether our politics is the same or not.
I look forward to seeing you whenever I’m in the Territory.
With warm regards,
Yours sincerely DOUG EVERINGHAM M.P.
page 1265
QUESTION
ATTITUDE OF ABORIGINES TO URANIUM MINING
Senator GEORGES:
– I ask the Minister representing the Minister for Aboriginal Affairs: What point was Senator Baume endeavouring to make by asking such a question and what point was the Minister endeavouring to make by endeavouring to have that letter incorporated in Hansard? Why did she decide to use a letter of such a personal nature in such a way?
Senator GUILFOYLE:
LP
- Senator Baume sought from me information on the result of a meeting held at Oenpelli yesterday.
Senator Gietzelt:
– Quite accidentally you had the letter available.
Senator GUILFOYLE:
– I have information from the Minister for Aboriginal Affairs to deal with the very topical matter of the meeting held at Oenpelli yesterday, which was reported on this morning. The Government is keeping a close watch on the situation and is endeavouring to obtain the full facts. The Minister for Aboriginal Affairs wished to make it clear that considerable pressure had been put on the Northern Land Council by members of the Australian Labor Party. The letter, which was written to the Chairman of the Northern Land Council and signed and sent by Dr Doug Everingham, a Labor member, reveals the pressure that has been put on the Chairman of the Northern Land Council by members of the ALP. I repeat the words of Dr Doug Everingham:
It is true that some people, most of them on the Labor side of politics, care more about stopping uranium mining or changing the Government in Darwin or Canberra than they do about Aborigines or land rights.
I believe that that is information which should be given to the Senate and I believe that that information, which I sought to have incorporated in Hansard but was refused leave to have incorporated, is information -
Senator Georges:
– The reading of that letter in this place was an invasion of privacy of the worst type.
The PRESIDENT:
– Order! The Minister is replying.
Senator GUILFOYLE:
– The Chairman of the Northern Land Council has given the Minister for Aboriginal Affairs approval to reveal and to use in any way he thinks fit the letter which was sent to him by Dr Doug Everingham, a Labor MP.
Senator Gietzelt:
– Quite accidentally you had it here. Why don’t we get answers to questions of which notice is not given?
Senator GUILFOYLE:
-I sought to give a brief answer to the question. I sought leave to have the documents incorporated in Hansard. Labor Party senators show some sensitivity about the documents. I am not suprised, in view of the sentiments that were expressed in the letter by Dr Doug Everingham, a Labor MP.
page 1266
QUESTION
URANIUM
Senator YOUNG:
SOUTH AUSTRALIA
-I ask the Minister representing the Minister for National Development whether he has seen reports that President Carter has now reversed his previous views with regard to expenditure on research into and development of fast breeder reactors; that over the next three years $ 1,550m will be spent to enable the United States of America to keep up with western European countries, and Russia, in the development of and research into fast breeder reactors. I ask also whether the delays in uranium mining in the Northern Territory that have been caused by the indecision of the Northern Land Council will encourage further research into and development of fast breeder reactors throughout the world and encourage other countries to turn to other suppliers of uranium, which in turn could mean, if the trend continued, that Aboriginals in the Northern Territory would miss out completely on royalties and monetary benefits from the sale of uranium.
Senator Georges:
– I take a point of order. Might I make one final appeal to you, Mr President, to restore some semblance of order to Question Time. There was a ridiculous question by Senator Townley which was answered in an absurd way by the Minister for Science. Then we had a completely serious question by Senator Mason, which was reduced to absurdity by the Minister in his lengthy answer.
The PRESIDENT:
– What is the point of order?
Senator Georges:
– The point of order is this: The question that is now being asked by Senator Young is giving far too much information, is making all sorts of comments and is expressing all sorts of opinions. I ask that something be done to bring Question Time back within the realm of the Standing Orders, which clearly provide that a question should be precise and give only such information as is needed to make it intelligible. Unless we adhere to that requirement and have Ministers answering in a reasonable way, we ought to dispense with Question Time altogether and put all of our questions on notice.
Senator Cavanagh:
– I wish to raise another point of order on the question. In the main, the question seeks the Minister’s opinion as to whether the Aboriginals will miss out on royalties. Seeking an opinion is contrary to Standing Order 99.
The PRESIDENT:
– It is true that opinions must not be sought; merely factual information. Also, questions should not give information. I call the Attorney-General.
Senator DURACK:
LP
– The Opposition’s reaction to this question is very interesting. It is consistent with the attitude it expressed when my colleague Senator Guilfoyle was giving an answer. Obviously, Opposition senators are very sensitive to their activities, and the repercussions of their activities, in relation to the development of uranium mining in the Northern Territory. One can speculate as to why that should be the case.
Senator Young’s question sought information on several important matters of fact. He asked, firstly, whether the Minister for National Development, whom I represent, is aware of reports that President Carter has reversed his views on fast breeder reactors. This is a most important issue and one in which I would have thought the Senate would be most interested, as I certainly am. As a matter of fact, I have not heard of this report, but it is a matter of considerable interest and I will make it my business to ascertain as soon as possible and provide to the Senate information on the policy of the United States Government in relation to the development of fast breeder reactors.
The other matter that Senator Young raisedagain it is a matter of fact- is in relation to delays that may occur and the consequences of such delays in the development of uranium mining in the Northern Territory. Again that is also a question of the Government’s attitude and concern in relation to this matter. I must put down the concern that the Government clearly has in relation to delays occurring in this matter. As I said in answer to a question yesterday, the Government is hopeful that these delays will not be excessive and that decisions will be made as soon as possible by the Aboriginal communities and the traditional owners in relation to this agreement to enable the development work on the Ranger project to commence as soon as possible. It is obviously a matter of fact that if there are such delays there will be very serious consequences and losses to the Aborigines and the people of this nation.
page 1267
QUESTION
LAW COURTS LTD
Senator MULVIHILL:
NEW SOUTH WALES
– My question, which stresses the key word ‘delays’, is addressed to the Attorney-General. It refers to promises given three years ago to employees of Law Courts Limited which is a joint Commonwealth-New South Wales agency and which operates the new Law Courts building in Sydney. I ask the AttorneyGeneral: When will those white collar workers get justice with regard to superannuation? I emphasise that there has been a three-year delay.
Senator DURACK:
LP
-The directors of Law Courts Limited, which is the company which runs the joint Commonwealth-New South Wales law courts building in Sydney, have, on a number of occasions, discussed the action which the company should take to provide an appropriate superannuation scheme. The directors are agreed that the company should have an appropriate superannuation scheme and that the scheme, if possible, should be a government scheme operated by either the Commonwealth Government or the New South Wales Government. The directors have considered three possible schemes but they have been unable to reach a unanimous decision, which is required in such a question as this under article 52 of the company’s articles of association. The matter was referred to the Minister of Justice in New South Wales and me by a letter from the directors dated 8 December. I have considered the question and I wrote to the New South Wales
Minister of Justice on 12 July 1978. 1 have not yet received any reply from him.
page 1267
QUESTION
SPORT: FUNDING
Senator MacGIBBON:
QUEENSLAND
– My question is directed to the Minister representing the Minister for Environment, Housing and Community Development. Did the Minister receive in his mail this morning a release from the Department of Environment, Housing and Community Development listing government funding for sport in 1978-79? How was the distribution of funds arrived at for the various sports and pseudo sports? Having thought about the list and, even allowing for the fact that international meetings are involved in some cases, the gross disparity in the sums awarded to the various sports demands some explanation. How is it that such a technically advanced and high cost sport such as that represented by the Gliding Federation of Australia is entitled to only $1,500; yet the Basketball Association will get nearly $50,000 and the Trampoline Association which, at its most charitable, could only be described as a pastime activity, will get $ 1 5,750?
Senator CHANEY:
LP
– I have often heard people in this place claim not to read newspapers. I would not wish to claim never to read my mail but I really do not know whether the document to which the honourable senator has referred came in my mail this morning. I will have to seek the views of the appropriate Minister on the matters that the honourable senator has raised. I must say that the figures that he has quoted appear to be self-explanatory. He referred to the technical and expensive sport of gliding as getting $ 1,500 and certain other sports which are of a less technical nature getting larger sums. In particular he mentioned basketball $50,000 and trampolining $15,750. I can only suggest to the honourable senator that those sums may bear some relation to the number of people in the Australian community who participate in those respective sports.
page 1267
QUESTION
SHORTER WORKING WEEK
Senator McINTOSH:
WESTERN AUSTRALIA
– My question is directed to the Minister representing the Minister for Employment and Industrial Relations. I am sure that all honourable senators will be aware of the action contemplated by the Australian bank employees union to achieve the introduction of a 30-hour week. It seems to me that this application for a 30-hour week is a logical reaction to the ever-increasing unemployment caused to a large extent by the introduction of computerisation and compounded by this Government’s inability or unwillingness or both to come to grips with the disease that is destroying the youth of this country. Will the Government guarantee not to oppose this application and, further, will it support the principle of a shorter working week without loss of living standards?
Senator DURACK:
LP
-I think that the Minister for Employment and Industrial Relations would be particularly concerned about this proposal. I will refer the question to him and will get a comment from him as soon as possible.
page 1268
QUESTION
REDCLIFF PETROCHEMICAL PROJECT
Senator TEAGUE:
SOUTH AUSTRALIA
– I direct my question to the Minister representing the Treasurer and refer to the petrochemical industry proposed for Redcliff in South Australia at an establishment cost of $900m. Is the Minister aware that both Government and Opposition members in this Parliament and in the State Parliament regard the Redcliff project as a vital development of very great importance to our nation and to the people of South Australia? For this project to proceed, South Australia’s loan application for $186m to cover infrastructure costs needs the approval of the Loan Council. This approval has now become very urgent because several months have passed since the application was made and unavoidable deadlines are involved. When will the Loan Council decision be made? When will the go ahead be given to the Redcliff project?
Senator CARRICK:
LP
-I am well aware of the interest of the people of South Australia in attracting major industries to that State. I am aware of the significant disadvantage that South Australia suffers in the employment field and the need to get labour intensive industries established there, if it is humanly possible. Therefore, I am aware too of the keen interest in the Dow Chemical (Australia) Ltd project that is foreshadowed and argued for Redcliff, and that the working party’s report about which Senator Teague talks has now been completed and is currently under study. Any decision on any of the proposals dealt with in the report- my advice is that there are some 12 proposals in all amounting to a very great deal of money- will need to be made by the Loan Council. It is anticipated that the Loan Council will meet shortly to consider the proposal and no doubt a statement will be made on this matter at the conclusion of its meeting. Infrastructure financing is a pioneering initiative within the capital works field. The Government itself pioneered it and will continue to encourage it.
page 1268
QUESTION
MEDIBANK EMPLOYEES IN HOBART
Senator WRIEDT:
TASMANIA
-Can the Minister representing the Minister for Health inform the Senate how many employees of Medibank in Hobart will be made redundant as a result of the Government’s intention to transfer the processing of health benefit claims of pensioners and disadvantaged persons from the Hobart office to Melbourne as from 1 November? Has the Government taken into account the very great difficulty that Medibank staff in Hobart will have in finding alternative employment? What steps does the Government propose to take to protect these people?
Senator GUILFOYLE:
LP
– I answered a question from Senator Walters yesterday seeking similar information but I do not know that I then had the number of employees who would be affected by changes to Medibank. I was able to say that because the employees in Hobart would be required to perform additional duties there would be an increase in staff employed in that city. I will seek specific information on how many staff are affected by the changes. But if the honourable senator refers to the answer given yesterday it will be seen that additional duties are to be given to those who are presently employed. This could result in an increase in staff being required.
page 1268
QUESTION
URANIUM MINING
Senator KILGARIFF:
– I ask the Minister representing the Prime Minister: In the light of the media report today that members of the NLC at Oenpelli have decided not to sign the Ranger agreement, not on the grounds as stated before of not wishing to disturb Aboriginal ground or of possible dangers in mining but that more money is demanded, will the Government take note of the petitions I have lodged this week in the Senate signed by over 5,000 people mainly from the Darwin area which call for the Government to take a realistic attitude to the mining of uranium and the development of the North?
Senator CARRICK:
LP
– The answer is yes, I will direct the attention of the Government to Senator Kilgariff’s focussing of the viewpoint of a large number of people in the Territory to this matter. I think it is important. My ministerial colleagues today have amplified that this discussion, as reported from Oenpelli, has not concerned the environmental aspects of uranium at all but the financial circumstances of the situation. I think the question is important and I will direct the Government’s attention to it.
page 1269
QUESTION
DARWIN COMMUNITY COLLEGE
Senator ROBERTSON:
-Is the Minister for Education aware that students at the Darwin Community College are concerned about the future of the College when responsibility for education is transferred to the Northern Territory Legislative Assembly in July 1979? Will responsibility for the college be transferred to the Assembly or will it remain with the Commonwealth? I further ask the Minister to reassure the students that their accreditation will not be affected regardless of who has responsibility for the College.
Senator CARRICK:
LP
– I am deeply interested in the future of the Darwin Community College in all its aspects including its subsidiary at Alice Springs. A post-secondary development or a further education development in the Northern Territory is of vital importance, particularly in the technical and further education field. In the first instance the Community College will be part of the responsibility of a Minister in the Northern Territory Legislative Assembly and will become an integrated part of the education responsibility of the Director of Education. Advice on its financing will be of interest to the Advanced Education Council of the Tertiary Education Commission and therefore to me as Minister for Education and to the Federal Government. In its capacity as a post-secondary education institution it will remain a continuing and significant interest of the Commonwealth Government. Senator Robertson may know that only last week I spent considerable time in the Northern Territory, amongst other things discussing these aspects with the Darwin Community College and the department. As to accreditation, this is of significance to an institution. Firm grounds for accreditation are profoundly important, as Senator Robertson would know. We will make sure that there is not threat or hazard to that at all.
page 1269
QUESTION
POST GRADUATE SCHOLARSHIPS
Senator CARRICK:
LP
– During Question Time this morning Senator Ryan asked me a question about post-graduate awards. During the course of my answer I indicated that I would provide information as to the monetary nature of the awards over recent years. I pointed out the major difference in the financial value of those awards during the terms of the previous Government and the existing one. In the course of my answer there was an interjection that suggested that what I had said was not true. I refer to the situation of a man with a wife and two children and give figures for the past five years. In 1974, a man with a wife and two children received under Commonwealth post-graduate awards some $3,986; in 1975, some $4,394; in 1976, some $4,758; and in 1977-the first impact of the Fraser Government- some $6,288. 1 repeat that the increase from 1976 to 1977 was $4,758 to $6,288- a first initiative of the Fraser Government. In the following year the amount rose to $6,612.80. Because honourable senators expressed an interest in this matter, I seek leave to have a table setting out benefits under these awards incorporated in Hansard.
Leave granted.
The table read as follows-
page 1270
AUSTRALIA COUNCIL
Senator WEBSTER:
Minister for Science · Victoria · NCP/NP
– For the information of honourable senators, I present a review of the Australia Council’s activities for the year ended 30 June 1978.
page 1270
JOINT SELECT COMMITTEE ON THE FAMILY LAW ACT
The PRESIDENT:
– I have received letters from the Prime Minister and the Leader of the Opposition nominating Mr Lionel Bowen, Mr John Brown, Mr Kevin Cairns, Mr Falconer, Mr Holding, Mr Katter, Mr Lusher, Mr Martyr, Mr Ruddock and Mr Stewart to be members of the Joint Select Committee on the Family Law Act pursuant to the resolutions agreed to by both Houses.
page 1270
JOINT COMMITTEE ON FOREIGN AFFAIRS AND DEFENCE
The PRESIDENT:
– I also inform the Senate that, pursuant to the resolutions agreed to by both Houses, the Prime Minister has nominated Mr Lusher to be a member of the Joint Committee on Foreign Affairs and Defence in the place of Mr Thomson.
page 1270
INCOME TAX ASSESSMENT AMENDMENT BILL (No. 2) 1978
In Committee
Consideration resumed from 1 1 October.
Income Tax Assessment Amendment Bill (No. 2) 1978
Clauses 1 to 4- by leave- taken together.
Senator COLSTON:
Queensland
– I should like the Minister for Administrative Services (Senator Chaney) to confirm that clause 3 is the clause which deals with post-graduate awards.
Senator Chaney:
– The position is quite clear. The Opposition has suggested that we deal with clauses 1 to 4 together. I do not know whether
Senator Colston is objecting to that, but I think he should have the call to indicate what he is concerned about.
Senator Cavanagh:
– He wants to speak to clause 3.
Senator Chaney:
– That is all right.
Senator COLSTON:
– I intended to speak to clause 3; but, being the first speaker, I wanted to be sure that I was on the right Bill because we have so many in front of us. I just wanted the Minister to confirm that clause 3 deals with postgraduate awards and, if he did, I would know that I was speaking to the correct Bill. I presume that I am.
Senator Chaney:
– Yes.
Senator COLSTON:
-I want to make some fairly lengthy comments about clause 3- lengthy in relation to the time that is at my disposal this morning. Currently there are three types of postgraduate awards. The first one is the postgraduate research award, which is the oldest award that has been available under this scheme. It was introduced in 1959. The post-graduate research award is for full time post-graduate research normally leading to a degree of master and /or a degree of doctor of philosophy. Postgraduate course awards- the second type of award- were introduced in 1971. They are for full time study in approved courses leading to a degree of master or course work at Australian universities. There is also a third category of award- post-graduate awards at colleges of advanced education. These were introduced in 1974. They are for full time study in courses leading to a degree of master by either course work or research at colleges of advanced education.
A number of benefits are payable under each of these awards. The benefits include these allowances: Living allowance, dependant’s allowance, travelling allowance, establishment allowance, thesis allowance and incidentals allowance. Until 1975 there was another allowance which was called a grant-in-aid. It was payable to universities to offset costs of post-graduate research students. The measure that we have before us in this Bill will lead to people with these awards receiving a lower rate of allowance. The question which has to be asked when we are taking action to decrease the allowances that these people will receive- to decrease them in terms of the take home allowance- is whether the allowance now will be more than adequate. If it is not more than adequate, it will be inadequate when amounts are taken from these awards due to taxation being levied upon them.
A fair amount was said this morning about the allowances that were payable under the postgraduate awards scheme. In fact during Question Time I thought I heard the Minister for Education (Senator Carrick) say that while the Labor Government was in power there was no increase in the amounts payable under this scheme.
Senator Button:
– He said that we reduced them.
Senator COLSTON:
– He may have said that we reduced them. If he did say either of those two things, what he said was patently incorrect. In 1973, 1974, 1975 and 1976 there was an increase in the amounts payable under the postgraduate awards scheme. We must remember that in 1976 we were working under the Budget which was introduced by a Labor Government. I will seek shortly to incorporate figures which show that what the Minister outlined at Question Time this morning about not increasing the amounts or alternatively, as has been suggested to me, about reducing the amounts payable under these awards was incorrect. It is interesting to look at the history of the amount payable under this scheme since the scheme was introduced. This will show us that if a tax is levied on these amounts the allowance payable will be nowhere near what it was in previous years. I have shown to the Minister for Administrative Services a table headed ‘Post-Graduate Awards- Living Allowance’. I believe that the Minister has no objection to this table being incorporated in Hansard if that is the will of the Committee. Therefore I seek leave to incorporate this table in Hansard.
Senator Chaney:
– There is no objection to that being done. If the honourable senator could simply give me the source of the document I would be grateful. There is no objection to leave being granted.
Senator COLSTON:
– There are two sources for this document. One is the Parliamentary Research Service and the other is my own calculations. So it is a table jointly prepared by the Parliamentary Research Service and Colston.
Leave granted.
The table read as follows-
Senator COLSTON:
-If we inspect this table and refer to 1959 when post-graduate awards were first introduced we see that the single person ‘s allowance then was $1,400 a year. The allowance was the same for a married person with a dependent spouse and one child. I have chosen to use a married person with a dependent spouse and one child as a convenient example to show what a married person would receive. When the Minister gave figures about post-graduate awards this morning he used the example of a married person with a dependent spouse and two children. I think there is probably little difference for the purposes of illustration between my example and the example the Minister used this morning.
Also listed in this table are the average weekly earnings for the particular years. In 1959 both the single person and the married person with a dependent spouse and one child received 65.4 per cent of average weekly earnings when they received their post-graduate awards. If we follow this through from 1959 to 1978 we see that there has been a gradual decline in the percentage received as a proportion of average weekly earnings. The rate of decline has not been constant. There have been times when there has been a slight increase but a decrease invariably follows. In 1978 we have now reached the stage where the single person’s allowance is $4,200 a year and a married person who has a dependent spouse and one child receives an allowance of $6,222.80 a year. As a proportion of average weekly earnings that amount is now 37.5 per cent for the single person and 55.5 per cent for the married person with a dependent spouse and one child. I invite honourable senators to inspect this table to see how there has been a gradual decline in the worth of the allowance in relation to average weekly earnings since it was introduced in 1959.
It is evident from these figures that the allowance is not as generous as it once was. There appears to me to be no justification to reduce it even further. With the cutback in the number of awards in 1957 and the reduction in the value of awards by taxation it is obvious that a lesser emphasis is being placed on excellence of attainment by this Government. I am realistic enough to know that despite my argument the proposal we have before us in this Bill will probably become law. Nevertheless, I invite attention to an aspect of the legislation which has the potential to be grossly unfair because if a certain approach is adopted in relation to deductions an injustice will be done to many of the people who are receiving these awards.
As I outlined previously, all awards have a thesis allowance and an incidentals allowance. The thesis allowance is payable to assist with costs associated with the presentation of a thesis. The current maximum for a master’s degree is $250. For a doctorate it is $400. The allowance is payable once only during the time that the award is held. The incidentals allowance is to assist students in meeting fees for student councils, unions and sports. The current rate for studies at universities is $ 100 a year. For studies at colleges of advanced education it is $70 a year.
From the Minister’s statement to the Estimates Committee last Tuesday it appears that thesis and incidentals allowances will be taxable. The Minister suggested that amounts expended could be claimed as a taxation deduction. I hold that this could be misleading. The Minister suggested that a deduction of up to $250 for selfeducation expenses could be claimed under concessional expenditure and that the remainder could be claimed in other ways. Firstly, I point to the fact that it could be a total waste of time for some students to list the $250 as a taxation deduction under concessional expenditure. Unless the student has other deductions under concessional expenditure exceeding a total of $1,590, the deduction of $250 will not count for anything. He will receive the same taxation deduction as though he had total concessional expenditure of $1,590.
The types of expenses that can be claimed under concessional expenditure are education expenses for dependants- most students would not have these- rates and taxes, life insurance premiums and so on. Most students who have post-graduate awards would have very few expenses that they could list under concessional expenditure. Thus the $250 they might list for self-education expenses would not amount to anything and they would not be able to deduct this amount. It seems to me that there is the potential for an injustice. We should try to make sure that thesis allowances and incidental allowances are not taxable. There is probably an easy way out. I will not move an amendment but I think that an amendment along those lines would be better than the amendment proposed in the Bill. Clause 3(c) states:
- . income derived under a Post-graduate Award . . .
We could have an amendment which reads as follows: or (iv) an amount received as living allowance under a post graduate award granted under the Student Assistance Act 1973.
If such an amendment were accepted it would mean that just the living allowance was taxable. I do not agree that the living allowance should be taxable, but being realistic and knowing that it probably will be taxable I suggest that if we were to amend this Bill along the lines I have suggested it would make sure that only the living allowance was taxable. Then the incidentals allowance which is to be used for some other purpose and the thesis allowance which is to be used for some other purpose would not be taxable. I invite the Minister to examine what I have said in relation to this possible injustice to see whether we can avoid its occurrence.
Senator BUTTON:
Victoria
– I wish to raise one or two matters on the same topic. The first relates to an answer that the Minister for Education, Senator Carrick, gave this morning in the Senate. As he is accustomed to doing, he dealt somewhat lightly with the truth in relation to the figures which have now been put before the Senate. I refer the Minister for Administrative Services (Senator Chaney) particularly to the suggestion made by Senator Carrick that between 1972 and 1975 the amount for post graduate award allowances in fact was reduced. I ask the Minister for Administrative Services: Is it not a fact that since 1960 the amount for post graduate awards in fact has eroded and that the value of the post graduate award in terms of a percentage of average weekly earnings had been drastically reduced by the present Government?
I also noted with interest that Senator Carrick quoted the figures for the post graduate award holder who is married and has one child, but he omitted to quote the far more important figure for the single post graduate award holder, for which the discrepancy in the figures is considerably different. Will the Minister tell us also what was the total number of post graduate award holders in the last year of the Labor Government and what is the total number of post graduate award holders now in 1978?
Senator CAVANAGH:
South Australia
– A question on clause 3 comes to mind as a result of a letter I received from post graduate students at the Flinders University in South Australia. They asked, I think pertinently: How can money that is voted for research be used to pay taxation to the Treasury? If money is voted for research purposes that is the purpose to which it should be applied. In future when we vote a sum of money for research and that money is paid in the form of post graduate fellowships we must recognise that in effect the amount that is applied to research is a much smaller amount than we voted for that purpose.
Some of the money will be applied to research and some of it will be in the form of a loan to the students which they will pay back in income tax. It is hard to understand how money that is voted for research can be used for any other purpose. It seems a lie to say that we are voting a certain amount for research when in effect a portion of that money is paid on the condition that it will be paid back to the Treasury.
Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP
– Dealing first with the point raised by Senator Cavanagh, it seems to me that his is the sort of argument that could be used in a variety of situations but really to no good effect. For example, we could say that money devoted to education is in fact squandered on salaries for teachers and that in turn part of that is a loan that the teachers pay back to the Government in tax. With the acceptance of, for example, the taxation of other income maintenance payments I think we are simply adopting the principle that people in the community get their income in a variety of ways- some by personal exertion, some by transfer payments from government and all the rest. But in general one can say that, however a person gets his income, he ought to bear a fair share of the tax which is levied on the whole community. In logic I find it hard to distinguish between income which is received from government and income which is received from personal exertion. I do not really think that the point which Senator Cavanagh has made is valid. Wherever government grants money for a purpose which includes the payment of salaries the same argument applies. I believe that it really does not advance the case.
I am not able to give Senator Button the figures he has requested. I do not have them available to me at the moment. I can only say to him that I will seek those figures and let him have them. If he wants them put in the Hansard record at a later time I will do so.
Senator Button:
– I would like that to be done.
Senator CHANEY:
– Unfortunately the figures which Senator Colston incorporated in Hansard are not before me, but I do have some figures on recent trends in these post graduate awards. What is quite clear is that over the past couple of years some reasonable increases have been made to the amounts which are paid, although an increase has not been made in the current year. The basic rates of benefit have been quoted already, but I do have details of the recent changes. The entitlements under the award were not increased this year but there were increases in both 1977 and 1978. The basic stipend went up from $3,250 to $4,000 in 1977 and to $4,200 in 1978. Since 1976 substantial increases have been made in the dependant allowances, with the allowance for a dependent spouse being increased from $780 to $1,508 in 1977 and to $1,632 in 1978.
The other point which needs to be borne in mind with respect to these awards is that they are essentially simply another method of providing income for people who are not earning income for an obvious reason; in this case, because they are pursuing post graduate studies. I can see no reason in logic for treating that income any differently from income received from any other source, be it by personal exertion or otherwise. I suppose the important point is that if income tax is imposed on these awards that becomes relevant in determining the proper level at which the award should be set. In making any future examination of the appropriate level of post graduate awards, clearly it will have to be taken into account that the effect of the tax provision is to reduce the value of the award for some or all of the holders. I indicate to Senator Colston and to the Senate generally that with respect to the current year it is unlikely that very many of these awards will be subject to tax because it is the amount of the award which is received from 1 November to 30 June that is taken into account and it seems likely that most of these students will receive an amount below the tax threshold in the current financial year.
I think there is some logic in the point which Senator Colston raised about the thesis allowance. That is a matter which I will certainly take back to the Government for examination. Senator Colston made the point that the first $250 is to be dealt with under the self-education provision and that when a student is within the general rebate he in fact gets no financial benefit from that $250 deduction. I think that is the point that Senator Colston makes. On the other hand an expenditure of more than $250 will reduce the assessable income. I accept that there is a little oddity in that situation and I will take it up with the Government to see whether it ought to be reviewed for the future. I do not think for the reason I have indicated that it is of great significance for the current financial year. Because we are only looking at the portion of the awards that is received from November to June the impact of taxation is likely to be fairly slight.
Senator COLSTON:
Queensland
-I would like to comment on a number of points that have been made since I last spoke. I could read into Hansard figures in relation to the number of awards that have been offered. Those numbers did peak at 900 a year but for 1977 were reduced by 100 to 800, the level which prevailed in 1971. Therefore, with 800 awards offered per annum we have gone back to the level that prevailed seven years ago. Although awards will be taxable as from November of this year only, Treasury officials seem to have calculated that a fair amount of revenue would be derived therefrom. If I recall correctly, savings of $0.6m this year, and $ Im in a full year, were projected. If $0.6m is to be saved this year, a sizable amount of taxation must be imposed upon these students.
I would like to comment on the latter point again. The Minister for Administrative Services (Senator Chaney) said that he would take my suggestion back to the Government. I appreciate that the only time when a student would be able to claim in respect of the excess of $250 would be in his final year, when he received his thesis allowance. In other years he would receive $ 100 incidental allowance, if at a university, or $70 a year if at a college of advanced education. So each year, except for the final year, he will be taxed on that amount and not be able to benefit from a taxation reduction in respect of an excess; he simply will not have an amount in excess. Only in his final year, when he receives the thesis allowance, might he be able to receive a reduction in respect of an excess.
I note that the Minister said that he would take the matter back to the Government. Does that mean that, if the Government views my comments favourably, we might see an amendment such that only the living allowance, not the thesis and incidental allowances will be subject to taxation?
Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP
– I would not like to mislead Senator Colston in any sense. I am saying that I will take the matter back to the Government for examination in the context of the following year; that, for the reasons I have outlined, I do not believe in the current year it will be particularly relevant to many students. Again referring to the present situation in the current year there might be a substantial tax saving, not in respect of the student who is solely reliant on the allowance, but rather in respect of the student who has additional income where the two sets of income would be aggregated. As a matter of social justice, which I think is the aspect with which the honourable senator is concerned, that does not worry me as much. Obviously, if one has additional income one’s general welfare status is much better. It will affect students who, in the current financial year, have incomes additional to these allowances.
Clauses agreed to.
Clause 5.
After section 26ab of the Principal Act the following sections are inserted: 26ac. (1) This section applies to any amount paid after 15 August 1978 (whether voluntarily, by agreement or by compulsion of law) to a taxpayer in a lump sum in consequence of the retirement of the taxpayer after that date from any office or employment or in consequence of the termination after that date of any office or employment of the taxpayer, being an amount that is paid in respect of unused annual leave or in respect of unused annual leave and a bonus, loading or other additional payment relating to that leave.
- Where an amount to which this section applies is paid to a taxpayer in a year of income, that amount shall be included in the assessable income of the taxpayer of the year of income.
- The reference in sub-section (1) to the payment to a taxpayer in consequence of the retirement of the taxpayer from any office or employment or in consequence of the termination of any office or employment of the taxpayer of a lump sum in respect of unused annual leave shall be read as including a reference to the payment to the taxpayer in consequence of that retirement or termination, as the case may be, of an amount in respect of, or an amount calculated directly or indirectly by reference to, annual leave, or annual leave and a bonus, loading or other additional payment relating to annual leave, to which the taxpayer was not entitled immediately before that retirement or termination, as the case may be, but to which the taxpayer would have become entitled, or that would ordinarily have been granted to the taxpayer, at a later time if the taxpayer had continued in that office or employment for a period after the time of the retirement or termination, as the case may be.
-
In this section, ‘annual leave’ means-
- leave described as annual leave, recreation leave or annual holidays, being leave to which a person has an entitlement by virtue of a law of the Commonwealth or of a State or Territory, an award, determination or industrial agreement in force under any such law, a contract of employment or the terms of appointment to an office;
- leave described otherwise than as annual leave, recreation leave or annual holidays, being leave to which a person has an entitlement by virtue of such a law, award, determination, industrial agreement or contract or by virtue of the terms of appointment to an office and the entitlement to which is determined by reference to matters similar to matters by reference to which entitlement to leave referred to in paragraph (a) is ordinarily determined; or
- leave that may be made available to a person as a privilege, being leave the availability of which is ordinarily determined by reference to matters similar to matters by reference to which entitlement to leave referred to in paragraph (a) or (b) is ordinarily determined.
Senator TOWNLEY:
Tasmania
-As I indicated yesterday, I feel that certain aspects of this Bill, to which this clause in particular relates, should be re-examined by the Government. I have had drafted certain amendments which have been circulated and which I propose to move in a moment. As honourable senators know, amendments on such a technically complicated Bill must be compiled by those who are expert in the field. I have adopted that course and would ask the Minister for Administrative Services (Senator Chaney) to thank those officers who yesterday prepared the amendments for me so rapidly. I am very grateful for their help, without which the Minister would not have the problems that he may have in a moment or two.
The effect of the amendment, although quite lengthy, is to leave out all of present section 26ac. Effectively, it puts annual leave in the same boat as long service leave. In other words, only 5 per cent of the lump sum payment for annual leave accumulated prior to the presentation of the Budget, unless used during the remaining working life of the person involved, will at the end of his employment, be included for taxation purposes. Any annual leave that accrues after Budget day will be subject to the 32-33 ]A per cent figure, depending on the ruling rate at the time.
The amendment would remove any doubt that any of us may have about retrospectivity or unfairness that may inadvertently have crept in. It would cost the Treasury a minimal sum in terms of revenue, and politically would be extremely wise. The action of the Government in this matter affects only a few people who, quite rightly, had certain expectations, and its acceptance of the amendment would be wise.
I would also thank the Minister for the information that he gave me last night in correcting some advice that I had been given about what would happen if someone obtained a certain amount of income, purely as a result of an annual leave payment, early in the financial year- to the effect that he would get all of that tax back. That brings me to another point. Many people will now opt to retire early in a financial year. They will take the lump sum for annual leave and pay the 32 per cent taxation rate. They will virtually lend it to the Government for 12 months interest free and will get it back when they put in their income tax return at the end of that financial year. Really, the Government will not derive a great deal of revenue from this provision. I went over most of these points yesterday. I do not think this case is as unwise as was the proposed tax on children’s income, or the intention to tax invalid pensioners but it is one that, in good conscience, I must try to correct. I therefore move:
Leave out proposed section 26aC, insert the following sections: 26aC. ( 1 ) This section applies to any amount paid after 1 5 August 1978 (whether voluntarily, by agreement or by compulsion of law) to a taxpayer in a lump sum in consequence of the retirement of the taxpayer after that date from any office or employment or in consequence of the termination after that date of any office or employment of the taxpayer, being an amount that is paid in respect of unused annual leave or in respect of unused annual leave and a bonus, loading or other additional payment relating to that leave.
Where- ,
an amount to which this section applies is paid to a taxpayer in a year of income in respect of unused annual leave or in respect of unused annual leave and a bonus, loading or other additional payment relating to that leave; and
the eligible service period in relation to that unused annual leave commenced after 15 August 1978, the assessable income of the taxpayer of the year of income shall include the amount of the payment. (3)Where-
an amount to which this section applies (in this subsection referred to as the ‘lump sum amount’) is paid to a taxpayer in a year of income in respect of unused annual leave or in respect of unused annual leave and a bonus, loading or other additional payment relating to that leave;
the eligible service period in relation to that unused annual leave commenced on or before 15 August 1 978 and ended after that date; and
the employment or service of the taxpayer was on a full-time basis during the whole of the eligible service period or was on a part-time basis during the whole of the eligible service period, the assessable income of the taxpayer of the year of income shall include an amount ascertained in accordance with the formula
where-
A is the lump sum amount;
B is the number of whole days of annual leave included in the unused annual leave in respect of which the lump sum amount was paid;
C is the number of whole days in the eligible service period that occurred after 1 5 August 1978;
D is the number of whole days of annual leave that accrued in respect of the eligible service period and were used by the taxpayer before the retirement date;
E is the number of whole days in the eligible service period; and
Fis-
- in a case where the number of whole days of annual leave that accrued in respect of the eligible service period and were used by the taxpayer after 1 5 August 1978 exceeds the number (in this paragraph referred to as the ‘relevant number’) that bears to the number of whole days of annual leave that accrued in respect of the eligible service period (including days of annual leave that were used by the taxpayer before the retirement date) the same proportion as the number of whole days in the eligible service period that occurred after 15 August 1978 bears to the number of whole days in the eligible service periodthe relevant number; and
-
in any other case- the number of whole days of annual leave that accrued in respect of the eligible service period and were used by the taxpayer after 1 5 August 1978.
- Where-
- an amount to which this section applies is paid to a taxpayer in a year of income in respect of unused annual leave or in respect of unused annual leave and a bonus, loading or other additional payment relating to that leave;
- the eligible service period in relation to that unused annual leave commenced on or before 15 August 1978 and ended after that date; and
- the employment or service of the taxpayer during the eligible service period was partly on a full-time basis and partly on a part-time basis, the assessable income of the taxpayer of the year of income shall include an amount equal to the sum of-
-
the amount that would be calculated in accordance with the formula in sub-section (3) if-
- the reference in that sub-section to the lump sum amount were a reference to so much of the lump sum amount as was paid in respect of unused annual leave that accrued in respect of the employment or service of the taxpayer on a fulltime basis;
- a reference in that sub-section to whole days of annual leave were a reference to whole days of annual leave that accrued in respect of the employment or service of the taxpayer on a fulltime basis; and
- a reference in that sub-section to whole days in the eligible service period were a reference to whole days in the eligible service period during which the employment or service of the taxpayer was on a full-time basis; and
-
the amount that would be calculated in accordance with the formula in sub-section (3) if-
- the reference in that sub-section to the lump sum amount were a reference to so much of the lump sum amount as was paid in respect of unused annual leave that accrued in respect of the employment or service of the taxpayer on a parttime basis;
- a reference in that sub-section to whole days of annual leave were a reference to whole days of annual leave that accrued in respect of the employment or service of the taxpayer on a parttime basis; and
- a reference in that sub-section to whole days in the eligible service period were a reference to whole days in the eligible service period during which the employment or service of the taxpayer was on a part-time basis.
- Where-
- an amount to which this section applies (in this subsection referred to as the ‘lump sum amount’) is paid to a taxpayer in a year of income in respect of unused annual leave or in respect of unused annual leave and a bonus, loading or other additional payment relating to that leave; and
-
the eligible service period in relation to that unused annual leave commenced on or before 15 August 1978, the assessable income of the taxpayer of the year of income shall include, in addition to any amount included in that assessable income by the application of sub-section (3) or (4) in relation to the lump sum amount, an amount equal to 5 per cent of the amount remaining after deducting from the lump sum amount any amount included in that assessable income by the application of sub-section (3) or (4) in relation to the lump sum amount.
- A reference in this section to the payment to a taxpayer in consequence of the retirement of the taxpayer from any office or employment or in consequence of the termination of any office or employment of the taxpayer of a lump sum in respect of unused annual leave shall be read as including a reference to the payment to the taxpayer in consequence of that retirement or termination, as the case may be, of an amount in respect of, or an amount calculated directly or indirectly by reference to, annual leave, or annual leave and a bonus, loading or other additional payment relating to annual leave (which annual leave is in this sub-section referred to as the ‘relevant annual leave’) to which the taxpayer was not entitled immediately before that retirement or termination, as the case may be, but to which the taxpayer would have become entitled, or that would ordinarily have been granted to the taxpayer, at a later time if the taxpayer had continued in that office or employment for a period after the time of the retirement or termination, as the case may be, and, for the purposes of the application of this section in relation to the taxpayer, a reference to the number of whole days of annual leave that accrued in respect of the eligible service period shall be read as a reference to the sum of the number of whole days of annual leave that actually accrued in respect of the eligible service period and the number of whole days included in the relevant annual leave.
- For the purposes of the application of this section in relation to an amount (in this sub-section referred to as the lump sum amount’) paid to a taxpayer in consequence of the retirement of the taxpayer from any office or employment or in consequence of the termination of any office or employment of the taxpayer, being an amount paid in respect of unused annual leave or in respect of unused annual leave and a bonus, loading or other additional payment relating to that leave- eligible service period ‘ means-
- where the taxpayer had not, before the retirement date, used any annual leave to which he became entitled in respect of any office or employment in respect of which the lump sum amount was paidthe period by reference to which the lump sum amount was determined; and
- where the taxpayer had, before the retirement date, used annual leave to which he became entitled in respect of any office or employment in respect of which the lump sum amount was paid- the period by reference to which-
-
the entitlement of the taxpayer to the annual leave that was so used by the taxpayer; and
- the lump sum amount, was determined; retirement date ‘ means the date on which the taxpayer retired from the office or employment or on which the office or employment of the taxpayer was terminated, as the case may be.
- In this section, ‘annual leave’ means-
- leave described as annual leave, recreation leave or annual holidays, being leave to which a person has an entitlement by virtue of a law of the Commonwealth or of a State or Territory, an award, determination or industrial agreement in force under any such law, a contract of employment or the terms of appointment to an office;
- leave described otherwise than as annual leave, recreation leave or annual holidays, being leave to which a person has an entitlement by virtue of such a law, award, determination, industrial agreement or contract or by virtue of the terms of appointment to an office and the entitlement to which is determined by reference to matters similar to matters by reference to which entitlement to leave referred to in paragraph (a) is ordinarily determined; or
-
leave that may be made available to a person as a privilege, being leave the availability of which is ordinarily determined by reference to matters similar to matters by reference to which entitlement to leave referred to in paragraph (a) or (b) is ordinarily determined.
- A reference in sub-section (3), in relation to a taxpayer, to a number of whole days of annual leave shall be read as a reference to a number of whole days of annual leave in respect of which the taxpayer was paid or was entitled to be paid full or ordinary pay.
- For the purposes of sub-section (3) as affected by sub-section (9), where a taxpayer used a number (in this sub-section referred to as the ‘relevant number’) of days of annual leave and was paid or entitled to be paid in respect of that annual leave at a rate (in this sub-section referred to as the ‘reduced rate’) of pay that was less than the rate (in this sub-section referred to as the ‘ordinary rate’) of full or ordinary pay, the taxpayer shall be deemed to have used a number (disregarding fractions) of days of annual leave that bears to the relevant number the same proportion as the reduced rate bears to the ordinary rate and to have been paid full or ordinary pay in respect of the days of annual leave deemed to have been used. ‘.
Senator WRIEDT:
Tasmania
(12.19)- I would first indicate on behalf of the Opposition that it will support the amendment that has been moved by Senator Townley. During the second reading debate yesterday, the wrongs of the Government’s proposals were advanced by many speakers on the Opposition side. It came as a great surprise to the majority of Australians that a government should have reached the stage where it felt that it had to effect proposals of this nature, which interfere with accrued annual and holiday leave of employees right across the nation.
I disagree with Senator Townley ‘s statement that not many people are affected, even by his amendment. It seems that precise figures on how much the Government will save as a result of these measures are not available. I have heard the figure of $ 100m mentioned as the saving over a full financial year, but I have no idea how accurate that figure would be. I think it would be correct to say that many thousands of Australian employees- not just white collar workers but also people in the industrial area- will be affected adversely by these proposals. Even though the amendment does not alter in substance what the Government is proposing to do, at least it gives some protection to those people who would be affected adversely by the retrospectivity clause. For that reason the Opposition will support the amendment.
While we are dealing with clause 5 I point out to the Minister for Administrative Services (Senator Chaney) what appears to be a drafting error. I just draw it to the attention of him and his advisers. On page 4 where the explanation of the formula appears it states:
Fis-
. . .
. . .
It seems that (d) and (e) are being carried down from (b) and (c) above it but they are not related to it. I would have thought that it should read: ‘F is- (i) . . . and (ii) . . .’ I think it is quite confusing. It could be a subject of dispute, I imagine, should the provisions of this Bill ever be required to be tested in a court I put that to the Minister. It seems to me to be incorrect. It is up to him whether he wishes to act upon it.
The only other matter that I wish to raise under clause S is the explanation of B in the formula, that is:
- . where . . . B is the number of whole days of long service leave included in the unused long service leave in respect of which the lump sum amount was paid;
I am not clear as to what that means. I would have assumed that the total long service leave would exceed the unused long service leave. My reading of it may be incorrect but I would have thought that those words should be round the other way. The Minister might explain during the Committee stage what B really is intended to mean.
Senator SIM:
Western Australia
– I wish to express my sympathy with the amendment moved by Senator Townley because I believe that what he hopes to achieve is desirable. I am not voting for the amendment, but I believe that I should express publicly my attitude to taxation legislation which has within it degrees of retrospectivity. Having done that, I would feel free in the future to take whatever action I decided to take.
Senator McLaren:
– That is a great statement.
Senator SIM:
– Let the honourable senator make a statement such as that when he is in government. I wish to declare my position instead of just sitting down. Honourable senators on the Opposition side only ever do what Caucus tells them. They would never stand up.
Senator McLaren:
– Why don’t you say straight out that you agree with it and have done with it?
Senator SIM:
– I wish to make it quite clear to the Government that in future it must not take for granted my support for taxation legislation which has within it degrees of retrospectivity.
Senator Evans:
– Why don’t you state it now? It is a very brave statement for the future.
Senator SIM:
– I will make my own judgment, thanks very much. I believe that, despite denials, there is retrospectivity in this legislation. My concern is- I hope that the Government will still look at this matter- for those people who, through no conscious effort of their own, are being affected adversely. Senator Townley, Senator Martin and others gave instances. I want to give one instance. I will do it very quickly because of the time factor involved. It concerns a former officer of the Australian Taxation Office who was due to retire at the end of this year. Before his retirement he would have used up all of his accumulated leave. Because of ill health he had to retire earlier this year. In expectation of having a certain sum of money, he made certain financial commitments which, had he known that he was to be taxed not on the basis of 5 per cent but at the rate of 33te per cent, he would not have made. His action in retiring with accumulated leave was not a conscious one; it was forced upon him.
I believe that there should be some degree of discretion- as much as the Senate has been opposed to giving Ministers or officers discretionary powers- in these genuine cases. Other cases have been given of people- many people- who, because of commitments to their employers, have not been able to take annual leave and have accumulated a quite significant amount of it. I believe that this legislation quite unfairly affects these people directly. I make a plea to the Government, even now, to look at how it can alleviate these unfair hardships which are being suffered by people. Let me make it clear, despite the scoffing of members of the Opposition, that in future- I hope the Government will note this- my support for legislation of this kind should not be taken for granted.
Senator EVANS:
Victoria
– I join Senator Wriedt in congratulating Senator Townley on bringing forward this amendment. I warmly endorse the sentiments which he expressed in support of it, both today and yesterday. The Minister for Administrative Services (Senator Chaney) will recall that in fact numerous speakers on both sides of the chamber have given vigorous voice to their dissent from this provision. I hope that he will take that into account in giving his reply. I hope that he also will recall that many of the people who have spoken on this provision have been concerned not simply with getting rid of its retrospectivity but also with taking account of the fact that, even if it were made to operate prospectively, it has built into it a degree of very considerable unfairness at least so far as particular categories of workers are concerned. Yesterday Senator Wriedt instanced people who work for small businesses and who, because of the nature of those businesses, are just unable to take off more than perhaps a couple of weeks annually and hitherto have been compensated for their sacrifices to the continued operation of those businesses by being able to accumulate their leave and being taxed on it at a lower rate.
Senator Button gave instances in the building industry. I hope that the Minister will recall the particular category within the building industry to which I gave expression at some considerable length yesterday, that is, civil engineering construction sites around the country. I remind him in particular of what I said yesterday when I gave as a particular illustration the situation of workers at the Dartmouth Dam in Victoria. This is a constantly recurring situation where the work practices of these sites are such as to make it thoroughly inconvenient and very difficult to operate otherwise than on an accumulation of leave basis. I specifically ask the Minister to respond directly to these kinds of criticism- not just the criticism about retrospectivity- which have been made of this provision and to give some indication that the Government will reconsider seriously and sympathetically the operation of this legislation so far as it concerns particular classes of workers who, for one reason or another, can make out a specific case to justify continuing to receive the benefit of the system as it has operated previously.
Senator Chaney:
– Does that example include the worker who has a job which comes to an end and who then might have a period of unemployment?
Senator EVANS:
-That definitely is one of the situations that I have in mind because it certainly arises classically on these civil engineering projects where people work for a substantial period and rely on the accumulated holiday pay to tide them over until their next employment; but that is by no means the limit of the classes of workers in these cases to which I have referred.
Senator CHIPP:
Leader of the Australian Democrats · Victoria
– I also compliment Senator Townley on bringing forward this amendment. The Australian Democrats will be pleased to support it. We object very strenuously to the retrospectivity of the Bill but, more than that, we are a little angry about the weak and feeble attempt in the second reading speech of the Minister for Education (Senator Carrick) to justify or to deny retrospectivity. I find in the second reading speech a quite extraordinary use of the English language in trying to justify it. He raises the Aunt Sally and then tries to knock it over. In the second reading speech he states: it is incorrect to claim- as some have- that the Budget decision is a retrospective change to the law.
Then he went on to say:
Such a change is one which back dates a change to the law and retrospectively alters a previously enjoyed right.
With great respect to the Minister, that is precisely what this clause does. Then came the most extraordinary part of the Treasury’s explanation. The Minister said:
In no case will the decision affect a lump sum payment made before IS August 1978 -
Of course, we agree with that but then comes this incredible piece of logic: although as the Treasurer has acknowledged it will result in persons who had accumulated annual leave prior to the Budget paying a higher rate of tax when the lump sum is received than they might have anticipated at the time the accumulation took place.
To me, that is the most exquisite description of retrospective legislation I have read, yet it is put forward by the Government as justification of its claim that the legislation is not retrospective.
Senator Evans:
– It would make a Jesuit blush.
Senator CHIPP:
-I do not think I would flatter it by including it even in the art of casuistry. As Senator Evans said, it would make a Jesuit blush. I see absolutely no justification for it. I raised this matter yesterday in a question I asked and gave the Minister an opportunity of explaining the rationale behind it and justifying retrospectivity. He said: ‘Turn to the second reading speech’, and I have but I am afraid that I have received little satisfaction from it.
I have received many representations from many professions but the employees for whom I feel particularly sorry, and perhaps it is because their reputations have been better than the reputations of other employees, are the Victorian railway workers, men who have dedicated their lives for 30 or 40 years as stationmasters or whatever in rather remote country towns and who have not been able to take their leave. Their leave has accumulated and now under this retrospective legislation they will, to use the words of the Treasurer (Mr Howard), have to pay a higher rate of tax than they might have anticipated. This seems to be a classic case of a tax on loyalty, a tax on fidelity and a tax on people in the work place who show dedication and loyalty to their employers. For that reason the Australian Democrats will support the amendment.
Senator JESSOP:
South Australia
– I rise to express some concern about this measure, particularly as it affects people who have to accumulate leave through no fault of their own, although they would number few when one takes into consideration the number of people employed in Australia. I believe that the majority of people should take advantage of leave entitlements and not accumulate leave and I can see the dangers in allowing the present system to continue. It could encourage people to avoid tax by deliberately accumulating leave and that is the aspect of the Bill to which I believe we should be directing our attention. I have demonstrated previously my views with respect to retrospectivity. In fact, I voted with several of my colleagues against retrospectivity when the Curran scheme legislation was introduced into this place.
Senator Evans:
– Will we have the pleasure of your company on this occasion?
Senator JESSOP:
– No, you will not because I regard this legislation as being in a slightly different category. I did not see any honourable senators opposite supporting my stand against retrospectivity on that earlier occasion. I do not think that Senator Chipp joined us on that occasion either.
Senator Chipp:
– I was not in the Senate.
Senator JESSOP:
– I rise only to suggest to the Government that it ought to look at the proposition I am about to advance. People who are caught up in this legislation through no fault of their own, whether because of illness or the circumstances which have been described by Senator Wriedt in relation to small businesses, should be given the right of appeal so that in some way their difficulty could be overcome.
Senator ELSTOB:
South Australia
– Probably the worst aspect of this legislation is the unfairness to employees who have worked for long periods and, through no fault of their own, have been forced to accrue annual leave. I have some tables here from which I will read later on. Often it is the case that employers have coerced, encouraged or begged employees to forgo taking their annual leave and in many industries this is what happens. From 1 5 August the tax payable on long service leave lump sum payments will be at the rate of 33½ per cent whereas previously tax was paid on only five per cent of the amount received. Such long service leave payments received before 15 August will still be taxed in respect of only five per cent of the amount received, but after that date will be taxed at the rate of 33½ per cent. Tax payable on annual leave payments will be at the rate of33½ per cent. The taxation of payments for unused annual leave is estimated to produce a gain to revenue of $70m in 1978-79 and $100m in a full year. The change in the method of taxing long service leave payments is expected to result in a revenue gain of $6m in 1978-79.
The accumulation of annual leave and long service leave in many cases owes its existence not to any intention on the part of a worker not to take his long service leave but to pressures placed on him not to take it. Many employees have not been able to take their long service leave because their employers have asked them not to, and this occurs in quite a number of industries. A survey of annual leave by the Australian Bureau of Statistics in 1974- they were the only statistics I could come up with- revealed that workers employed in the construction, wholesale, retail, recreation, hotel, restaurant and agricultural industries were particularly hard hit in respect of taking leave. Of the 4.8m employees in those industries in 1974, 40 per cent had not taken any leave between August 1973 and July 1974. Later I will ask that this table be incorporated in Hansard; I have asked Senator Carrick about it. It is a table prepared by the Australian Bureau of Statistics at August 1974 and shows the percentage of people in various industries who did not take leave in the year surveyed. The survey revealed that 71.5 per cent of all people employed in the agricultural, forestry and fishing industries in that year did not take annual leave. In the entertainment, recreation, restaurant, hotel and personal service industries 64 per cent of employees did not take their leave. The survey also showed that 42 per cent of people in the construction industry, 46 per cent of employees in the wholesale and retail industries, 47.7 per cent of employees in the transport and storage industries, and 32 per cent of employees in the communications industry did not take leave.
It is worthwhile looking at the reasons why people did not take their leave. I believe that people should take their annual leave- it is necessary and right that they do- but in some industries it is impossible for them to do it because of the conditions that prevail in those industries. I refer to people working in the agricultural industries. Undoubtedly farmers employ people who at certain times of the year would find it impossible to go on leave simply because a crop may have to be saved, there may be a bush fire or there may be all sorts of reasons. In the hotel industry all of a sudden after a slack period there may be a large booking for a convention or a show. The manager or the owner of that establishment would ask his employees to defer their leave. It is not entirely a worker’s fault that he did not take his leave. What happens to a person who has stored up his annual leave because at times it was virtually impossible for him to take it? Before I go any further I seek leave to incorporate in Hansard the table to which I referred.
Leave granted.
The document read as follows-
Senator ELSTOB:
-I thank the Committee. What happens to the person who has not taken his annual leave for four years? If he gets four weeks’ annual leave he would accrue 16 weeks’ leave. Senator Chaney answered Senator Townley on this point yesterday, but this point is rather unclear in the Bill. If a person retires in July 1979 with 16 weeks’ annual leave owing to him, if he were earning $200 a week, he would have a lump sum of $3,200 coming to him. If he retired, got the sack or for some reason finished working for his employer three weeks after 1 July he would have $3,800 owing to him in the 1979-80 financial year. That amount is $94 less than the sum at which a single person begins to pay taxation. At what stage would he have to pay 33V4 per cent on that income?
Senator Townley:
– He would pay it and then get it back.
Senator ELSTOB:
-That is unclear. That would be on a pay-as-you-earn basis. I cannot see this provision in the Bill. As I see it, the Commissioner of Taxation will tax the man on his accrued annual leave at the rate of 33¥i per cent.
Senator Chaney:
– He will get it back.
Senator ELSTOB:
– I cannot see that set out. I think there is in this clause some doubt that should be entirely cleared up. This provision is unjust. A person works for a lifetime and in the last, say, 10 years of his working life he may accrue his long service leave and annual leave. In the past many people have done this simply because in all their working lives they have never had the opportunity to enjoy, say, an overseas trip or some particular thing that they have wanted to do. I think that this Bill has done much damage. A lot of Government senators have said that they have not received any opposition to it. I can assure them that I have had some opposition. I think that there will be a great deal of opposition after the legislation comes into effect. This is an unjust measure. It is mean and miserable. We should be encouraging people who have worked a lifetime in industries. A lot of young people are looking at what is going on today and asking: ‘Why should I work? Why should I enter this rat race?’ We give no encouragement to the people who should work, but we should.
The Government criticised the Commonwealth Conciliation and Arbitration Commission because it grants pay rises following cost of living increases. All that this will do is to force unions to go outside the Commission to increase the incomes of their workers. It will cause a whole rush of things. I believe that this measure is unjust and the Government should have a serious look at its ramifications.
Senator RAE:
Tasmania
-We are discussing the question of the introduction by a Liberal-National Country Party government of a provision in relation to accumulated annual leave and the taxation applicable which some people believe will be retrospective in its operation. The Liberal Party’s platform- as was made evident during a debate on, I think, the last income tax amendment Bill that was before this chamber- states that it is contrary to Liberal Party policy that there should be any retrospective tax amendments. That is a view to which I adhere strongly. When that previous matter was before this chamber I moved an amendment to eliminate the aspect of retrospectivity. If I believe that there are clear elements of retrospectivity in future amendments to income tax law I will do the same. In this case I do not agree with those who claim that this measure is retrospective within the proper definition of what is retrospective tax legislation. It may well be, as some have described it, unfair. It may be politically unwise. I think that both of those terms could well apply to this action. I express a considerable sympathy for people such as those about whom Senator Elstob has just been talking. I do not think that it is the Senate’s function to take over totally the role of government and to substitute its own judgment of what is politically wise.
Senator McLaren:
– You did in 1975.
Senator RAE:
– I knew that Senator McLaren could not possibly resist. I deliberately waited to give him time to come in. May I say: Come in spinner. Senator McLaren can never resist. If I may continue without being diverted to other things, I do not believe that it is proper for a House of review to be substituting its political judgment in cases such as this. It can be that it is appropriate in exceptional cases but if we were to vote against everything which we did not like in particular proposals we would probably find an extraordinary situation. I think the review function does not extend that far, but I do think that we ought to be considering, because of the nature of this debate, another question which was adverted to earlier this year, which requires further consideration and about which this chamber can do something. That is the question of whether a referendum proposal should be put to the people of Australia to amend the Constitution to provide, as happens in the United States of America, that there shall be no retrospectivity in any law which imposes a penalty. I believe that such a referendum is called for. I am frightened by the Australian Labor Party’s policy, which has been declared in this chamber, of backdating to 1 July of the preceding year all taxation legislation correcting a loophole. I am frightened by what appears to be a growing practice within the present Government of being near the borderline, if not over the borderline, in relation to retrospectivity. I hope at some appropriate time that we can give further consideration to the question of a constitutional amendment. I think this proposal might be far more worth while than some of the questions that have been put up in recent years.
I do not believe this measure is retrospective. The right to which we are referring is a right to annual leave; it is not an absolute right to a payment of money. There has been no payment of money. What happens is that at a period of time after a person for one reason or another has not taken his annual leave, there is the possibility that he can receive a payment. The payments are to be taxed only as from 15 August of this year. I can understand honourable senators, particularly Senator Townley, expressing concern for people who have planned their lives on the basis of having a reasonable expectation of receiving an annual leave payment which will be taxed at 5 per cent. People who did not take their leave entitlements because they wished to convert them into cash will be unfairly treated by this proposal. It is not retrospective tax legislation. The tax is imposed in a way which is rather similar to that in contracts where excise duties, for instance, apply. Changes in excise duties or other similar revenue laws affect contracts which already have been made between people. These are not regarded as being retrospective taxation measures.
I refer now to an interesting matter that was raised twice by Senator Evans. In a number of industries, particularly the large construction industries, it has become the accepted practice that people do not take leave but accumulate it and expect to be relieved of some portion at the end of the period by having to pay only five per cent tax. He said that that was part of the inducement for people to work through their annual leave and so more quickly complete large construction jobs and so on. I do not see that as being a reason for opposing this measure. Probably the appropriate thing is that the general body of taxpayers should not have to pay that amount. That really is what is happening.
Senator Evans:
– Well, it will to the extent that the Government has to pay increased costs to support these programs or projects.
Senator RAE:
– Well, the particular project ought to bear the proper costs. It does not matter whether the funds come from private enterprise or from public sources. There is no reason why the taxpayers should have to bear these costs in the roundabout way that they have in the past. I do not think that that is a justifiable argument. I express sympathy for the people who have been adversely affected. I join with others who have asked the Government to be a lot more considerate on future occasions about such matters and to even reconsider this proposal. I do not propose to vote in support of Senator Townley’s amendment. I do not believe that this proposal is retrospective. Therefore I do not think it is a proper function for the Committee to override the Government’s decision however unwise that decision may be.
Senator McLAREN:
South Australia
– The debate on clause 5 of the Bill and on Senator Townley’s amendment has brought forward some extraordinary statements from honourable senators on the Government side. Each honourable senator opposite who has spoken so far has expressed great sympathy for people who will be affected by this legislation. However, honourable senators then say that they will vote for it. They are having two bob each way. Senator Rae said that he deliberately set out to bait me.
Senator Rae:
– No, I just caught you readily.
Senator McLAREN:
– I am always ready. Honourable senators on the Government side always have to be rebutted when they make statements about the use of the chamber. Sometimes they use the chamber to suit their own ends; at other times they uphold the principle that it is a House of review. I think that Senator Rae qualified his remarks by saying that in some instances he changes his mind. Of course, such an instance was in 1975 when he interfered with the proper purpose of a duly and democratically elected government. He was quite prepared on that occasion to interfere and to do something opposite to the very principle he has just stated.
I will deal firstly with the remarks of Senator Sim. He expressed great sympathy for the people who will be caught by this legislation, but he will not vote for the amendment. He served warning on the Government that if it brings in measures similar to this in the future he might criticise it again. All honourable senators can rest assured that that is as far as he will go. He will criticise the Government but he will not vote against legislation. Senator Jessop made an extraordinary speech in which he expressed sympathy and said that he was opposed to retrospective tax laws. He said that he had crossed the floor in opposition to the legislation dealing with the Curran scheme. In answer to an interjector who asked him whether he would do the same thing in relation to this legislation he said that he would not. Why not? I interjected and said that the Curran scheme was throwing a net around the wealthy people who were evading taxation. This legislation is throwing a net around people who can ill afford to pay the extra taxation, people who are on the lower wage structure. He is not concerned about those people. His real concern is for the wealthy section.
Senator Evans:
– It is selective indignation.
Senator McLAREN:
– Of course, it is selective indignation. When this Government of which Senator Jessop is a member sets out to throw a net around the people who are using the expertise of highly skilled lawyers to whom they pay a high premium to evade tax, he hotly opposes such action. When the Government tries to take away a certain amount of money from the wage earner he is quite in agreement, although he expresses some sympathy. That sympathy will not go down too well with the people who live in Whyalla, Port Pirie and Port Augusta. Senator Jessop is always telling the people in those places how he sympathises with them, but when the crunch comes in this chamber that is the end of his sympathy. When he is put to the test what does he do? He votes for the very thing he is complaining about. Senator Rae said, in referring to the remarks made by Senator Evans, that he felt that the taxpayers as a whole should not have to subsidise people because they do not take their annual leave.
Senator Rae:
– I was talking about the specific proposition that it is part of the expectation in relation to big construction jobs. I was not talking generally.
Senator McLAREN:
-That is right. Why does Senator Rae not have some sympathy with taxpayers as a whole when people set up family trusts to avoid taxation?
Senator Rae:
– 1 have.
Senator McLAREN:
– I am pleased to hear the honourable senator say that. Many honourable senators on the Government side do not have that sympathy. They have done nothing to curb those loopholes. As a matter of fact one of the Treasurers lost his job because he had family trusts. Government members in this chamber are vitally divided on an issue of whether the average taxpayer has to subsidise certain people in the community. The Government seems to adopt the view that the average worker can go hang. It is not concerned about him at all. Let us get down to what Senator Martin said. I intend to quote from the remarks she made last night when she was dealing with this clause of the Bill. Last night Senator McAuliffe interjected and asked her what was her attitude to this clause of the Bill. She said:
I said for 1 3 minutes what my attitude is on the taxation on annual leave payments . . . If he likes to read my speech in Hansard tomorrow he will find out what my attitude is. I am sorry that he was not listening when I indicated what it was.
After some interjections by myself and Senator McAuliffe she went on to say:
Honourable senators will find out in my speech; they will not have to wait until a division is called.
When the division was called Senator Martin voted for the Bills as a whole. I am pleased to see that Senator Martin has come into the chamber. If Senator Martin were sincere in her remarks last night I think we can take it that she will cross the floor and vote for the amendment put up by her Party colleague Senator Townley. There is no doubt about that. Perhaps Senator Jessop, having heard what I have had to say, might even now change his mind at this late stage, be consistent and put his vote where his mouth is. That is what we would expect to see him do.
Much has been said about how much money will be accrued. Senator Wriedt said that he had heard it stated that about $100m would be brought into the Government’s coffers. That has been spelt out in definite terms in the Budget. Last night I referred to it. Part of the Budget Speech stated:
The change to the taxation payments for unused annual leave entitlements is estimated to produce a gain to revenue of $70m in 1978-79 and $11Om in.a full year . . .
The Government admits that this year it will get $70m from taxation on accrued annual leave. In a full year it is expected that the amount will exceed $1 10m. The working men or women of this country, for various reasons which have been pointed out by speakers on this side, and most forcibly by Senator Evans yesterday and again by Senator Elstob today- Senator Rae said that he had some agreement with Senator Elstob ‘s remarks- will suffer to the tune of $ 1 10m in a full year. They can least afford it. As has been pointed out time and again many people for certain reasons cannot take their accrued annual leave. Many people, for other reasons, do not work in industries which have superannuation schemes. During the last two or three years prior to retirement these people do not take their annual leave. They hope that they will be taxed only on five per cent of their entitlement. They believe that this will give them a little nest egg. As I said yesterday, this will enable them to go on a holiday or to pay a deposit on a car. Now, if they have three months leave coming to them they will get only two months pay because of the clause in this Bill.
I hope that many honourable senators opposite, in view of what they have said, will support Senator Townley ‘s amendment on this occasion. We expect to see honourable senators opposite, who have said that they are not bound by party policy and who have expressed their regret at the legislation, supporting the amendment. So we expect that this amendment which has been moved by Senator Townley will be carried in this chamber.
Sitting suspended from 1 to 2.15 p.m.
Senator MARTIN:
QUEENSLAND · LP
– I do not wish to prolong unnecessarily consideration of these Bills. I just rise for a couple of minutes to set the record straight in relation to my attitude and how it was represented here earlier today by Senator McLaren. Last night when I spoke to the Bill which relates to taxation on holiday pay I said that whilst I did not particularly like the policy nevertheless I was persuaded that it was not a retrospective tax and for that reason I would not be voting against it. Senator Rae had quite a bit to say in here this morning on that subject. I think his views pretty well sum up my view on that aspect. I would not like it to remain on the record unchallenged that Senator McLaren has been able to assert that I stated I was against something but that I would not vote against it. I made it very clear when I spoke that I was critical of the measure. I said that I was sorry that the Government had not seen fit to treat holiday pay and long service leave in the same way. I was not persuaded to vote against it on the ground that it was a retrospective tax.
I think it is always open to honourable senators here to indicate their opinions of certain policies but because they are critical of them or perhaps not as happy as they might be with some aspects of the policies it does not oblige them to cross the floor. Of course, it ill behoves Senator McLaren or any honourable senator on the other side of the chamber- as honourable senators opposite did last night persistently during my speech- to say that not to vote against the matter was going against what I had said. At least honourable senators on this side of the chamber can indicate that we would have preferred that different courses of action be taken. But we are prepared to support Government policy and accept that it is part of the overall Budget strategy. I say that just to set the record straight about what I actually did say last night and my reasons for speaking and acting as I did.
Senator MULVIHILL:
New South Wales
– I enter the debate only briefly to reinforce the arguments that were put forward by my South Australian colleague, Senator Elstob, and to comment on the points raised in a question by Senator Chipp yesterday. Quite apart from the realm of financial policy, the fact is that all honourable senators, particularly those opposite, have their own ideas. Honourable senators opposite have been crying out for better industrial relations. Reforms have been achieved in annual and long service leave entitlements. Generally employees clear their leave as a result of an understanding with their employers. This applies particularly with workers involved in the transport industry. In the past employees have been prepared to bend a little when it came to taking their annual leave. If it has not been convenient because of job requirements they have taken their leave a little later. But that will not happen now.
I have listened to all the arguments that have been put forward in this debate and I relate them to Senator Hamer ‘s speech during the Budget debate. He spoke of the role of this Senate. I would dearly love to have the Minister for Employment and Industrial Relations, Mr Street, or Mr Linehan from the Industrial Relations Bureau before this Senate so that I could ask them about industrial disputes and the difficulties that will emerge from now on with rostering to enable employees to clear various types of leave. It could be argued that people should take their leave at a set time but if there have been mutual agreements, for different motives of course, between employees and employers vast amounts of leave can accumulate. It is a different ball game now. If honourable senators opposite relate the problems that will be created to trade unions and political strikes I do not know what redress there can be under this legislation. In fact, I venture to suggest that the Government will find that unofficial methods of circumventing this legislation will be devised. Certain incentives will be offered to people to work for longer periodsperhaps even 52 weeks straight. This may apply to rostering for railway operations, for instance. I do not believe that the Government will get the type of co-operation that is sought.
Honourable senators should study the history of the metal trades industry from September 1 939 to about 1 94 1 . That could be a parallel situation with what may well happen. If honourable senators read the memoirs of the then Treasurer- he later became Sir Arthur Faddenthey will find that agreement had to be reached on certain aspects of the taxation of overtime. I have in my possession a copy of the August edition of Maritime Worker and also a copy of Railroad. I attended the State conference of the Australian Railways Union. Shunters in Dubbo and outlying areas of the western districts of New South Wales already are making sacrifices by forgoing leave. I assure honourable senators that this was one aspect of the Budget that hurt them very much. This fact was espoused eloquently by Senator Townley. The Government may have its way today but if there is an intensification of industrial disputation, particularly in relation to rostering, it will spring from this legislation.
I repeat, I would like to know the views of the Minister for Employment and Industrial Relations, Mr Street, and, for that matter, the Minister for Productivity, Mr Macphee. If the Government believes in co-partnership in industry- I refer particularly to the rostered deployment of the work force- it is going completely the wrong way about achieving that result. I say without any hesitation that the Government is establishing a new area for industrial disputation. Believe me, if the Government wants a stable and contented work force it will not get it by means of this particular clause. It is not too late for a lot of back bench Liberal senators, who have consistently lectured us on better industrial relations, to support this amendment. This clause will impose certain limitations on a give and take policy with respect to rostering and the taking of leave. I emphasise again that if Mr Linehan were here I would question him. When he appears before the Estimates Committee I will ask him his views on this area of industrial disputation. I await his reponse with interest. I will then be able to say that a decision of the Senate this day will be the cause of further discontent.
Senator WALTERS:
Tasmania
-I have no intention of lecturing Senator Mulvihill about industrial relations. Far be it from me to do that. However, let us look at what Senator Mulvihill was talking about. What is the purpose of annual leave? The unions have made it very clear- I could not be more in agreement with them- that annual leave is a right and a necessity for everyone in the work force. As a matter of fact this has been underlined with a 17½ per cent loading on holiday pay. It is considered a right and a necessity each year that people take their annual leave. This underlines part of the Government’s Bill. If this right to annual leave that the unions, and everyone else I presume, consider and believe is a necessity is waived and people are persuaded by their employers not to take it for the benefit of the employer, the health of the employees will suffer. Persons could be employed for the whole 52 weeks of the year. They will be persuaded to go without this recuperative period, which I believe is very important for their health, by the employers virtually holding a carrot under their noses and saying: ‘If you accumulate your leave, you will not have to pay so much tax’. I believe that is a bad principle to adopt. I do not believe that it will do their health any good if they go without leave for five or six years. Some people have approached honourable senators on this side of the chamber and said that they have not taken annual leave for a certain period of time and that, because of this proposal, they will be down the drain by so many dollars.
Senator Mulvihill:
– If the unions apply an overtime ban will you support it?
Senator WALTERS:
– I have just tried to explain to Senator Mulvihill why I believe that everybody is not only entitled to annual leave but also should take it.
Senator Primmer:
– Should be allowed to take it.
Senator WALTERS:
-Everybody should be allowed to take their annual leave. In point of fact if they care to take it, they are entitled to take it and can take it. Senator Primmer knows that as well as I do. The employers should not be able to hold a carrot under the noses of the employees by saying: ‘Do not take your annual leave and you will have to pay tax on only 5 per cent of what you receive’. I believe that practice is entirely wrong. I do not believe that it should assist the employer or the employee when it is done on a voluntary basis. The average taxpayer should not have to bear the burden. This Government has set about overcoming a tremendous number of the tax avoidance schemes that have been operating in this country.
Senator McLaren has been talking about family trusts. Because he does that so often, I would like to ask him what his Party did in the three years it was in government to rule out family trusts. If he thinks they are so unjust- he espouses that view vehemently so frequently in this chamber- why did not the Government of which he was a supporter rule out family trusts? It is an interesting question. The Labor Party put up many Bills in this chamber that were not passed. Why did he not have a go at the family trusts? He knows that they are very legitimate forms of trusts. That is the reason why he did not do that. He should ask his leaders why they did not do that in those three years. He should ask that question. Why did not the Labor Government rule out Curran schemes? Why did it not do all the things that this Government has been doing? It had plenty of time. We have taken action in the two years we have been in office. Why did not the Opposition do this in the three years during which it was in office? Mr Chairman, I rose only to point out that the purpose of annual leave is backed by the union movement and that people do not just have a right to take their annual leave but in fact should take it.
Senator BUTTON:
Victoria
– I rise to participate very briefly in the debate on this matter in order to point out to Senator Walters that there are different functions of government. The question of when people take their annual leave is a question of industrial relations. It is a question of the employer-employee relationship and it is a question of the health and welfare of workers in industry. That is a matter which is appropriately dealt with by the arbitration system. If I might tender a word of advice, the Government, which is now so concerned about this principle, should perhaps have considered going to the Conciliation and Arbitration Commission if it was so worried about this matter and pointing out to it what unions have pointed out consistently over many years- indeed over decadesand what the Commission has itself decided in terms of annual leave and when it should be taken. The Government should have considered pointing out that the purposes of annual leave are as I have said. But it is not in the view of the Opposition an appropriate function of government to interfere with industrial relations by virtue of its taxation policy. Of course what this taxation policy is clearly about is raising additional revenue from people who may for example if they want -
Senator Walters:
– It is to stop tax avoidance.
Senator BUTTON:
-I am talking about annual leave. It has nothing to do with tax avoidance.
Senator Walters:
– Of course it has.
Senator BUTTON:
– If the honourable senator can point a finger at any worker on average weekly earnings who is involved in tax avoidance in relation to his annual leave, I would be delighted to hear about it. But the honourable senator did not do that. She should look at the justification given for this measure by the Government which she supports. She should read the Budget Speech. She should read the explanatory notes to this Bill. They say quite clearly that the Government is perturbed that people do not take their annual leave when they should take it. It thinks that is a bad thing for the worker concerned. That is what is said.
Senator Walters:
– Because it is avoiding tax.
Senator BUTTON:
– That is an industrial matter. It is not a subject which is appropriately a matter for taxation policy. The problem which the Government gets itself into all the time is trying to solve these problems in this very ad hoc and flippant way. This is another example of such problems- there are a number in this package of legislation- which arises from the recent Budget. There is a very real difference between the justification of this measure and the actual reality of it. That is a matter about which the Opposition is concerned and about which Senator Walters seems to have no understanding whatsoever.
Senator MISSEN:
Victoria
-I am drawn into this debate because I find myself not entirely in agreement with either Senator Walters or Senator Button about this matter. I make it clear that I will certainly be supporting this Bill.
Senator Walters:
– That sounds like a lawyer.
Senator MISSEN:
– It does not sound at all like a lawyer. I am not speaking as a lawyer. I have received many representations on this matter and I am somewhat critical of this provision. I know very little about income tax law. I was never a lawyer who practised in it and I would not go to myself for advice on income tax law if it were to save myself. Nonetheless I believe that I can recognise some of the simple propositions that are put up to me and some of the things that are said about this provision. I regret that the Government has drawn up this provision in such a simplistic fashion. I think the two arguments that we have just heard -about the matter were quite simplistic. I do not think it is just a matter of industrial relations and I do not think it is just a matter of tax avoidance. I think that the Government is endeavouring to catch with this proposal some definite pieces of tax avoidance in the sense that some people have quite deliberately allowed their holiday pay and so forth to accummulate because of the tax advantages involved. Insofar as the Government does that I think that it is desirable. But on the other hand -
Senator Button:
– It is totally in the hands of the employer whether that is done.
Senator MISSEN:
-I do not think it is totally in the hands -
Senator Button:
– Yes, it is.
Senator MISSEN:
-I do not agree at all with the honourable senator. It is not totally in the hands of the employer. The employer would have no particular influence on that. A number of cases have been brought to my attention where, indeed, the employee has not been able to take his holiday pay. In fact, there are circumstances- I think some examples occurred in the railways and there are other such situations- where people have stayed on instead of retiring and now find themselves -
Senator Bishop:
– That will not change, will it? The question of working in the railways and energy generation during annual leave is going to obtain just the same in the future. There is a requirement to have skilled men there.
Senator MISSEN:
– Yes, it is going to continue. The honourable senator misunderstands me. I am saying that there is a number of situations at the moment where people cannot be blamed for not having taken their holiday pay. In fact they have stayed on, sometimes probably to the benefit of a firm which is in some difficulty, sometimes because there is a shortage of people to replace them and for other reasons and it has delayed their holidays. It has not been for tax avoidance purposes at all. I feel it is a pity that the Government has not found a more complex solution to this problem in the sense of distinguishing aspects of tax avoidance. I am all for picking up the areas of tax avoidance. I applaud most warmly what the Treasurer (Mr Howard) has been doing in regard to this matter. I think that insofar as he is doing that it is ensuring that the people shall pay in justice their taxation and that the tricky ones will not get away with tax avoidance. Insofar as he does that I applaud him. I have spoken to the Treasurer about this, as have other honourable senators, and I regret that the Government has not found a complex method whereby there is a way in which people who could not take their holiday pay would not have to suffer this particular disadvantage. It is a pity that the Government has not done so. I would not vote against such a proposal. I am not going to vote against Budget Bills and Budget proposals. The Government makes its decision on these things and -
Senator McLaren:
– What about the decision we made?
Senator MISSEN:
– There is a package. I have never voted down a Budget or Supply Bill and I never will.
Senator McLaren:
– Did you vote at all?
Senator MISSEN:
-I voted, but I will never vote down such Bills. The fact is that I never have. The fact is that I find in this Budget what one finds in every budget- some regrettable features, something upon which one wishes one did not have the judgment. Senator Chaney nods his head very wisely. Perhaps it has come loose; I do not know: I am sorry if my logic is having that effect. I say sincerely that I am sorry this matter was not looked at in a more complex way to cover the different people. Some people have suffered I think because of this. Whether the measure is retrospective or not in a strict sense they have had reasonable expectations. Perhaps their expectations are mistaken because they have carried on a job and not taken leave but nonetheless I think one must accept this as a general proposition. Therefore I support the clause but I hope that the Government will look at the matter again next year and perhaps try to find a more just solution.
Senator McLAREN:
South Australia
– If the debate on this clause has done nothing else it has at least brought people out into the open to let everyone in the community see where they stand. Every honourable senator on the opposite side is expressing regrets at the ramifications of this clause. Yet to a man they are saying that they will support it. Senator Martin came into the chamber a while ago today and said that she wanted to put the record straight. I want to refer the Committee to what Senator Martin actually said last night. I quote from page 1235 of the Senate Hansard. She said:
However, I regret that the Government has deemed it necessary to pursue the course it has pursued in this particular case. I accept, however, that the Government has the right to pursue the course it has taken. I regret that the Government did not choose to pursue the same course with unused annual leave as it did with unused long service leave in relation to taxation.
She said this afternoon that she was using as the basis for her right not to support the amendment put forward by Senator Townley the fact that she had been convinced that this is not retrospective taxation. Why did she last night express regret about the ramifications of this clause and today say that she is now convinced that this is not a retrospective measure? Senator Martin and Senator Missen will have a hard job convincing people who take, say, three years annual leave as a lump sum payment and have to refund a third of that payment to the Government that this is not retrospective taxation.
If the Government had been honest and had wanted to force employers and employees into taking their annual leave each 12 months as they should, it would have given warning in this Budget that, as from this financial year if annual leave is not taken it will be taxed at the rate of 33 te per cent. Why tax the people who, in all honesty, believed that they would pay very little tax? The Government made great play in its policy speech on the claim that as from 1 February it would reduce taxation. No warning was given to those unfortunate people of what it would do in the Budget. If it was good enough to hoodwink people into believing that the Government would reduce taxation, why was it not good enough to be honest with them and tell them that this year it would raise $78m, taken out of their pockets, to try to balance the Budget or to bring about some decrease in the massive deficit? The Government has done this by an underhand method. It was all very well for Senator Martin to say last night that the Labor Government did things by stealth. I will have more to say about that.
It is no good honourable senators opposite trying to extricate themselves from the position in which they now find themselves by saying that they are convinced that this is not a retrospective taxation measure. It is nothing else. The people who will have to pay the tax will know about it when they get their holiday pay, whenever that may be. In fact, the measure is retrospective and honourable senators opposite have to live with that. If we on this side wanted to be really political we could thank the Government for doing this, because it will cost the Government hundreds of thousands of votes.
Senator YOUNG:
South Australia
– In listening to a good deal of this debate one thing that amuses me is that some Opposition senators have seen their way clear to criticise honourable senators on this side of the chamber because they have the honesty and courage to question parts of Government legislation. The challenge comes from the Opposition senators: Where is your courage? You will not cross the floor’. I remind honourable senators opposite that on numerous occasions honourable senators on this side have crossed the floor if they have felt strongly enough about something. I have yet to see one Labor Party senator have the courage to cross the floor. Opposition senators are not game to cross the floor, because they know that they will be excommunicated immediately from their party if they do so. They have signed their lives away to their political party. I have crossed the floor in this place in relation to probate duty on numerous occasions. I firmly believe, and I have believed all my life, that it is iniquitous to individuals. I stood by my convictions and my party did not fire me. Do honourable senators opposite mean to tell me that they agree with everything that their party propounds and that they never feel so strongly about an issue that they wish they could cross the floor but do not have the courage to do it? Let us have no more of that drivel from them. The challenge that they have been throwing to this side of the chamber is a very tired argument. Not one of them has the courage to do it himself. I do not intend to cross the floor on this issue because I support the policy the Government has propounded. I make that very clear.
I accept that many innocent people will be affected by this measure, but for years a great number of people have had a benefit over their work mates. People who have not taken their annual leave in a particular year have avoided tax. They have done so legally, but their work mates have not done so because they have taken their annual leave. Some people say how unfortunate this measure is for the worker. I make it clear that annual leave is an entitlement by law of each and every worker in this country. The great majority of workers in this country have taken their annual leave and have paid tax accordingly. Many people, for reasons of their own, have deferred their annual leave. They have accumulated it in the hope that when they retire they will be able to take it as a lump sum. The only people who are affected are those who retire. They pay tax on merely 5 per cent of their deferred income.
Some of those people also had the ability to realise that they were hedging against inflation. Let us go back four years to when inflation was running at 16 per cent. I will not play politics; I am giving facts. At that stage people sought to obtain an escalation in wages. Over the last four years there has been a great escalation in wages in this country. Many people have been able to hedge against inflation. At the same time, they have saved themselves a lot of taxation by deferring their annual leave, while the great majority of workers have taken it and have paid tax on it. That is the reason I support the Government’s legislation. I repeat, however, what I said earlier: Many people will be affected through their innocence. But many people through a businesslike approach were hoping that they would avoid a large amount of taxation which their work mates had to pay because they took their leave annually. I support this measure. I hope that the Government will continue to look at kinds of tax avoidance other than this kind.
We also hear the argument that some people in senior executive positions have not had annual leave for four or five years and those people will pay a lot of taxation this year. I can only say that any business or enterprise that allows any of its senior personnel to go without annual leave for four years will have some pretty tired people in its administration. I doubt that very many people fall into this category. If they do, I would like to see the system under which they operate. Perhaps they get four or five days break after a conference. What are the reasons?
Senator Robertson:
– Have a look at the staff ceilings in the Public Service.
Senator YOUNG:
– I cannot understand how any man under extreme pressure would not need, for physical and mental reasons, at least some break during a year. How any individual can go for four years without any annual leave- I have heard this stated- surprises me. I support the Government’s legislation, for the reasons I have given. I repeat that, unfortunately, some people will be affected. When we throw out the net we often have to catch a few small fish too.
Senator KEEFFE:
Queensland
-I wish to make a brief comment. After listening to that dissertation by Senator Young, one would think that not only is Mr Lynch ‘s Cabinet post going to be declared vacant but also a post in this chamber is about to be declared vacant. His speech was one of total subservience to the Government. I think it is time that the Government was frank about what it is doing. This is a revenue raising exercise.
Senator Bishop:
– Only.
Senator KEEFFE:
– Yes, it is nothing else. The Government is doing nothing about catching up with tax avoidance. It is penalising people in the community who cannot take annual leave when they want to take it. As my colleague Senator Robertson interjected, the Government should look at the Public Service staff ceilings and see how many people have had their leave deferred. Now the Government will catch up with those people and make them pay twice. They will pay once because they are not able to take their leave at the time they want to take it. Secondly, they will pay additional tax. The matter has been feathered all the way through the debate by speakers from the Government side. Either in the chamber or in my office I have listened to most of the debate on this Bill and some shocking statements have been made. Honourable senators on the other side of the chamber continue to attempt to live in the past. As soon as any criticism is uttered they say: ‘What about the Whitlam years; what went wrong then?’
Senator Walters:
– Tell us what did happen.
Senator KEEFFE:
-Senator Walters can start to cook her apples in a minute; she should just hang on. In 1975 this Government said it would repair all the damage in six months. Mr Fraser is on record as having said that. The rate of inflation was going to be brought back to the normal rate of four per cent or whatever, the level of unemployment was going to be reduced to the original one point something per cent, increases in the consumer price index were going to flow regularly to wages and the Government was going to introduce quarterly indexation for pensions. The unemployment rate was the thing that the Government harped about most. Yet, goodness gracious me, every time we criticise some aspect of where this Government has totally fallen down- it has totally fallen down in the almost three years; one month from today on 1 1 November will be the end of this Government’s third year in office- what happens? What do we see after this almost three years in office?
Senator Primmer:
– Chaos.
Senator KEEFFE:
– Yes, chaos sums it up pretty well. First of all we see this penny pinching method of taxing the paper boys. The Government did not quite get away with that because of revolts in its own area. I am amazed that amongst Government senators there are not more who are disturbed, as Senator Townley obviously was when he moved an amendment, about what the Government is doing in other areas too. I suppose that the results of the byelection at Werriwa were an indication of a vast change in the attitude of the public. Within the electorate people are revolting -
Senator Missen:
– Be careful.
Senator KEEFFE:
-They are in rebellion because of the revolting practices of this Government- how does that suit the honourable senator, if he wants to be pedantic and to have grammatical purity? Grammatical purity in this chamber is more often the breach than otherwise, particularly when people get a bit emotional. The Government had its answer again last Saturday when we saw a massive swing towards the Australian Labor Party. If the Government does not believe that that had something to do with its fiscal policies, it should look at the situation at Earlwood where, in a matter of a few weeks, there has been a swing not of 10 per cent but of almost 17 per cent. We will see this happen again when the by-election for Ballarat in Victoria is held on 28 October.
Senator Missen:
– You will be very disappointed.
Senator KEEFFE:
– It is your State.
Senator Wheeldon:
- Senator Missen says that Ballarat doesn’t matter.
Senator KEEFFE:
-Oh, Ballarat is not important to him. I am sure that the man who makes it happen in Victoria would love to hear one of his senior Senate colleagues say: ‘If you lose Ballarat it doesn’t matter’. I suppose that, considering the mess the Liberal Party is in in Victoria at the moment, if it loses government in Victoria Senator Missen will be absolutely delighted.
Senator Missen:
- Mr Chairman-
Senator KEEFFE:
– What is Senator Missen doing, taking a point of order or making a speech?
Senator Missen:
- Mr Chairman, Senator Keeffe is saying that I said that the loss of Ballarat did not matter. That is a total untruth and I ask for a withdrawal of the remark.
Senator KEEFFE:
-Mr Chairman, Senator Missen has the right to make a personal explanation when I finish speaking. I am not quite sure what he was doing; I assume he was making a contribution to my speech. Senator Missen is now saying that he thinks that they had better hang on to Ballarat. Okay, let him have two opinions about the matter; it does not worry me. What I am annoyed about is the fact that the Government is developing two policies. It is trying to raise extra revenue in all the sneaky little ways it can. This legislation represents just another sneaky way. If the Government can get away with this and there is not a revolt within the Government parties, there will be a revolt within the electorate, whether the Government likes it or not. If the Government keeps on going this way it will be only a matter of time before it will become unstable; it will divide in the same way as the Queensland Government is dividing at the moment; and almost certainly it will have to go to the people long before it has reached its allotted span of another two years and one month.
The lady from Tasmania, Senator Walters, who is attempting to interject, makes many quite inept suggestions and interjections. As I think I said here on a previous occasion, the recipe that she once gave this chamber for mixing apple strudel was not effective either. I believe that when it was broadcast on the radio that night someone wrote it down and tried it and the strudel was a failure. I suggest to her that if her political arts are no better than her culinary arts she would be much better off staying silent instead of getting her Government into further trouble. I have outlined the situation as I see it, and I hope that the amendment will be carried.
Senator TOWNLEY:
Tasmania
-I would like to cover three points. The first relates to what Senator Missen said when he said that I was voting against a Budget measure. I am not voting specifically against a Budget measure at all. I did not vote against the second reading of these Bills. I claim that the amendment I have moved is one that the Government should seriously consider and one that will improve the Bill involved. Secondly, I am not quite sure whether the Minister for Administrative Services (Senator Chaney) understood what Senator Elstob was getting at just before the sitting was suspended for lunch when he said that somebody might retire and get a lump sum of $3,000 early in the financial year. I would like the Minister to look at the situation in which somebody is retrenched, gets quite a sizeable lump sum, is faced with having no job, yet has to give the Government perhaps a third of that lump sum and, I understand, is not able to get that back from the Government for 15 months. Does the Commissioner of Taxation have any discretion in the handling of such a situation? I believe that the position was not quite as serious when only five per cent of the amount received was included for tax purposes.
Finally, I would like to take up what Senator Rae said when he suggested that perhaps it was time that we amended the Constitution with respect to retrospective taxation. I would like to let the Minister know that I have in my hand a draft of a Bill for an Act to alter the Constitution to prohibit the retrospective imposition of tax. At the right time I intend to take this draft to the party room and to have discussions about it. I am not suggesting that at this stage I want to put the people of Australia to a specific referendum on this matter, but I would like this matter to be discussed, be it in this chamber, in the party room or wherever. That shows how seriously I have viewed this matter of retrospective taxation. I received this draft from the office of the Parliamentary Counsel on 1 1 July this year, following the discussions we had here on the Curran scheme. I think that we all have to look at this matter. Then we will see just where the Australian Labor Party stands on this matter of retrospectivity.
Senator McLAREN (South Australia). (2.53 )-Mr Chairman-
Senator Peter Baume:
– Spare us!
Senator McLAREN:
– I hear some sighs from the other side of the chamber because I have risen to speak again, but I am provoked to do so by the remarks made by Senator Young and an interjection made by Senator Walters. Senator Young in his speech and Senator Walters in her interjection accused the people who did not take their annual leave at the time it was due of indulging in tax avoidance. Senator Young went on to say that of course they were doing it legally. He has no consideration for a man who is entitled to his annual leave; makes arrangements to take his family away on holiday; pays a deposit on the air fare or accommodation for his wife, himself and his family; and, at the last minute, is told by his employer that due to unforeseen circumstances he cannot go. In that situation he has to stay and his family goes away. He has had to pay for the holiday, but he has not been able to avail himself of the break to recuperate, as Senator Walters put it. So he has lost out. That is most unfortunate, but people in that sort of situation are not getting any sympathy from Senator Walters or Senator Young.
Senator Young was very emphatic when he looked across here and said that the Australian Labor Party senators would not cross the floor on any issue. I interjected and said that before we bring measures into the Parliament we analyse them thoroughly. We are not ostracised by the Cabinet, as is his colleague, Mr Giles, who said in a recent statement published in the Murray Pioneer that as far as the Budget is concerned, Government supporters are not privy to anything that the Cabinet decides; that they do not know until it comes down what the Government will do.
Senator Bishop:
– Who said that?
Senator McLAREN:
-Mr Giles. He is on record as saying that in a Press release that he put out a couple of weeks ago, and that appeared in the Murray Pioneer. He was complaining about the excise on brandy and stating all the things he was going to do. He was the chairman of the Party’s rural committee. He would see that relief would be given to the grapegrowers. But when the reverse happened he said, ‘We are not privy to anything that the Government does. ‘ I tell Senator Young that we on this side of the chamber are privy to decisions that are taken by the Parliamentary Labor Party. We have a series of committees. Senator Young said that he had crossed the floor but had not been sacked. I remind him that in 1975 two well-respected senators of long-standing, Senator Bessell and Senator Marriott, would have crossed the floor if Senator Young and his colleagues had had the courage to put the Budget to the vote; but they would not do that. It was well known that those two gentlemen did not support the Country and Liberal parties attitude and they were sacked. They were not even put on the ticket.
Some time afterwards I spoke to Senator Marriott and sympathised with him. He said: ‘I could not speak out against my Party. I am loyal.’ I give him credit for that, but those senators suffered the axe. They could see the terrible things that were about to happen as a result of the actions taken by their colleagues. So Senator Young should not be boasting about what he has done. He ought to be talking about what he did not have the courage to do and that was let the Budget, 1975, go to a vote so that his colleagues could show their independence. He did not have the courage to do that. I saw
Senator Withers in the chamber a while ago. It is unfortunate that I do not have with me a statement that he put out. I will get it later.
Senator Bishop:
– What did he say?
Senator McLAREN:
– Some years ago he wrote to the Australian and said that all members of the Liberal Party were bound by Party policy and that he expected them to support it. I must bring that statement into the Parliament and use it. Senator Withers said that. We know where he is now. He is sitting on the back bench alongside Senator Townley. Even Senator Townley has some reservations now. Although our leader has said that we will support the honourable senator’s amendment, I am beginning to have reservations about whether we are doing the right thing. Senator Townley, by his most recent remarks on the subject, has weakened his position on his amendment. I believe that he is adopting an attitude similar to that adopted by some of his colleagues in the other place on the apple and pear legislation. They were great Tasmanians. Senator Townley will find difficulty getting on to the Liberal Party ticket for the next Senate election, so he is preparing to run as an independent again, as he did when he first came to this chamber.
I think I have answered the puns that have been thrown across the chamber by Senator Walters and Senator Young. They ought to take some notice of what I have said. They should put their votes where their mouth is. They have the opportunity on this amendment which was moved by Senator Townley of doing just that.
Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP
– I may not need to answer honourable senators for as long as might have been expected from the length of the debate. According to my notes, Senator Rae answered Senators Chipp and Townley. Senator McLaren answered all the Liberal Party supporters not once but three or four times. Senator Button answered Senator Evans and Senator Missen answered both himself and Senators Walters and Button. I would never have been game enough to have been as rude to Senator Missen as he was to himself. I can only note his abject ignorance of tax law and thank him for that contribution.
The Senate has before it an amendment moved by Senator Townley. I remind the Senate of that because in recent speeches the debate has ranged somewhat off the Committee’s consideration of the Bill. The real thrust of what Senator Townley has put to the chamber is that the clause that he wishes to replace affects the expectations of a number of people. Indeed, that is the way in which he expressed it both last night and today. Last night he said:
I contend the second person -
That is a person who retired after the critical date- legally and rightly expected that he would have certain money in the bank because he had decided or had been asked, or whatever, not to take his holidays over the past year.
Again this afternoon Senator Townley used the expression that this legislation affected expectations. Those words are worth noting carefully because, as Senator Rae outlined, they form the proper basis for saying that this is not retrospective legislation. Whilst Senator Chipp quoted the second reading speech with some bemusement, stating that he found it very difficult to understand, and indeed he heaped some ridicule on it, I think that careful examination of that speech will show that what is affected here is not a previously enjoyed right but an expectation. That is the worst that can be said for this legislation. It certainly does not represent retrospectivity. So I do not believe that an issue of principle arises.
I respect the sincerity with which Senator Townley has put this amendment forward. I certainly accept- I am sure the Government does also- that there will be people in the community whose expectations have been affected. But that is not to say that any vested right which they have has been retrospectively interfered with. For that reason, the Government does not accept the argument in principle. There is no basis on that technical argument, in my view, for considering the amendment.
Senator Townley raised a number of questions in his second contribution and I will advert to them specifically. The Government does not propose to accept his amendment. That is basically the answer to the first question that he asked. Secondly, he raised the difficulty that might be experienced by a retrenched worker. The germ of the proper answer to that is contained in the contribution that was made by Senator Button. Really, the issue that was raised by Senator Evans, by Senator Elstob and by Senator Townley in his second contribution concerned a worker whose job comes to an end and who experiences a delay in regaining employment. People in the construction industry were referred to and so on.
Properly, that question ought to be considered as being within the normal area of government that is concerned with income security. I do not believe that it is a function of the tax law to provide income security in that sense. It is quite inefficient to have a tax law that makes provision for such people but, in addition, enables a lot of other people who are not in that position to get a tax-free benefit.
It is somewhat surprising that in this debatenot in view of the politics but of the rationalehonourable senators opposite, and indeed some on this side of the chamber, should in any sense object to the proposition that tax ought to be paid on all income. I would have thought that in general one should be looking for a tax system which falls evenly and fairly on the community. Having a lot of ad hoc provisions which exempt certain incomes and enable people in many instances to arrange their affairs so as to escape income tax, would not be socially just. The whole basis of the legislation is sound and ought to be supported by all parties.
The qualification that is in the minds of those of my colleagues who have spoken, and in the minds of many honourable senators opposite, concerns the problems of expectations and of wreaking some hardship. Senator Sim cited the case of the person who had committed himself on the basis of his expectations. There are some hard cases, but I do not think that they justify continuing what I see to be a bad law.
Senator Wriedt also raised a number of technical questions. In particular, he queried the meaning of proposed new section 26AD, subsection (3) (c) B which refers to the number of whole days of long service leave that are to be included. I am advised- indeed this reading of it makes sense- that what is referred to is simply the number of days. The word ‘whole’ is being used to avoid any question arising of fractions of days to which there might be an entitlement. If we look at the formula which applies to the lump sum amount we see that it is divided by the number of days of long service and that clearly is the meaning of the provision. Senator Wriedt raised the matter of the definition of F and he pointed out that the sub-paragraphs have been lettered (d) and (e). Whilst I agree with him that there is some appearance of confusion in that (d) and (e) in fact do not follow (a), (b) and (c) as a series of sub-paragraphs, I think it would have been even more confusing to use (a) and (b) again in that context. I do not believe that it will give rise to difficulties of interpretation. I have checked that matter also.
Senator Wriedt:
– I suggested that (i) and (ii) be used; not (a) and (b).
Senator CHANEY:
– Fair enough. One could have used some other form of lettering or notation. I do not think it is critical and the Government does not propose to make any further amendment. Senator Sim raised the possibility of some discretionary provision being included. Whilst I am not privy to the fact as to whether the Government gave that matter some consideration, I can say that I gave it some consideration and came to the conclusion that it would give rise to an absolute can of worms situation. I could not imagine a formula which would not involve a discretionary power being given to the Commissioner in an area where it would be almost impossible to prove facts. I simply do not think that it would be possible to follow the course that was suggested by Senator Sim.
With respect to Senator Evans’s suggestion, I have already commented that I do not believe that it is a function of the tax system to provide the sort of income security which he has put forward. I commend to him the study of Senator Button’s comments in response to Senator Walters in which he put fairly well, I think, the segregation of policy point that I try to make in response to Senator Evans. A matter was also raised by Senator Elstob. It is probably at this point that I should, to some extent, qualify what I said earlier in response to Senator Townley. Senator Elstob raised the question of what would happen if somebody received $3,200 when he retired a couple of weeks after 1 July. The honourable senator commented on the fact that I had responded to Senator Townley that if a person had no other income in that year, that amount would not be taxable. If tax was deducted he would subsequently be able to get a refund although there is also a provision in the Income Tax Assessment Act, section 221d, which would permit him to apply to the Commissioner to not have the deduction taken out at all. It has since been pointed out to me- I think very properlythat it would be unusual for somebody to receive money and have no further income for the balance of the year. For example, a person who has retired might receive superannuation or the old age pension. In that case the aggregation of income would very likely mean that tax would be payable on at least some of that income. If a person retired and had no other income, the position would be as I outlined. If he then received a retirement income certainly there would be aggregation and only the first $3,800 or $3,900- whatever is the amount that is now tax free- would be free of tax. Of course I adopt the comments made by Senator Rae who set out my views and I think the Government’s views on the retrospectivity of this matter. He was supported by Senator Martin.
In closing my comments, I commend Senator Keeffe on his incredible perspicacity in this matter. He has obviously examined the Bill extremely carefully. He has identified it as a revenue raising measure. He pronounced that point at the beginning of his comments as being something which branded this legislation in some way. I can only assure the chamber that in bringing forward a Bill for an Act which is labelled the Income Tax Assessment Act the Government had no intention of sneaking up on Senator Keeffe or any other honourable senator. It accepts that this is indeed a revenue raising measure.
Question put:
That the words proposed to be left out (Senator Townley’s amendment) be left out.
The Committee divided. (The Chairman- Senator D. B. Scott)
AYES: 24
NOES: 30
Majority…… 6
AYES
NOES
Question so resolved in the negative.
Clause agreed to.
Remainder of Bill- by leave- taken as a whole.
Senator BUTTON:
Victoria
– I would be grateful if the Minister for Administrative Services (Senator Chaney) could tell me as a preliminary matter whether the tax deductibility for the World Wildlife Fund falls within the provisions of this Bill.
Senator Chaney:
– Yes.
Senator BUTTON:
-Is the Minister in a position to explain to the Senate why the World Wildlife Fund was singled out of all the charitable organisations which might have received this tax deductibility? If the Minister could provide that information for a start if would be of help to me.
Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP
– I suppose that there is always an element of ad hockery involved in the selection of bodies that are entitled to tax deductibility because not all bodies are. I suppose that the only unusual thing about this particular body is that it has some overseas aspect about it, and that that matter was raised in the debate in the other place. There is a variety of bodies which receive tax deductibility status in respect of donations made to them and this is but one. I can only say that it obviously appears to the Government to be a body worth fostering in an area which is important. The Prime Minister (Mr Malcolm Fraser) has indicated that he sees an important role for Australian business in the taking of practical action through support for this fund to achieve wildlife conservation and that is the basis for this decision.
Senator BUTTON:
Victoria
-Would it be unfair to ask the Minister for Administrative Services (Senator Chaney) to tell the Senate at a later stage whether, for example, donations to the United Nations Children’s Fund are tax deductible for the purposes of the Act and, if not, why the Government’s priorities are directed towards wildlife rather than children. I do not want to make a sentimental issue of this but it does seem to be an important question of priority. I also ask whether it is not a fact that the patron of the World Wildlife Fund is the Duke of Edinburgh and the chairman is Mr David Ogilvy, the Madison Avenue advertising executive. Madison Avenue was his former address; he now lives in Paris. Is it a fact that Mr Ogilvy visited Australia earlier this year to lobby on behalf of the World Wildlife Fund and was that a factor in the Government coming to its decision on this matter? I agree with the Minister’s observations about ad hockery- I hesitate to use that expression- and I wonder whether this was wild ad hockery as distinct from the normal ad hockery in which the Government engages.
Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP
– I have now been shown the section under which the various bodies which have tax deductible status are listed. It is quite proper for Senator Button to query the priorities given to children and wildlife.
Senator Missen:
– They have something in common.
Senator CHANEY:
– I will ignore the irreverent interjection from Senator Missen. Senator Button will be pleased to know, as I am, that under section 78 one of the bodies which has this benefit is the United Nations Appeal for Children, so there is another example of the bodies which are selected for tax deductible status. There is a great variety of such bodies, including the Council for Christian Education in Schools, the various national trusts of the States and the Sydney Myer Music Bowl Trust. One might well ask why the latter organisation was singled out when it benefits Melbourne in particular. Although the expression ‘ad hoc’ might be objected to by some, there is a very great mixture of bodies which have this tax status.
I would have thought, given the current considerable interest in wildlife conservation, that it was not at all peculiar for this body to receive the status that it has. Even Brigitte Bardot seems to have devoted a massive amount of her attention over the last few years to the preservation of dying species. Members of the Australian Labor Party might take great heart from that because she may even direct some of her attention to them. All that tends to demonstrate that many people are taking interest in this area. The fact that the Australian Government also is taking an interest I would have thought would have been welcomed. That somebody as distinguished as the Duke of Edinburgh is the patron of this fund simply underlines its broad public acceptability. I have not noticed that he becomes patron of things which do not have that character and I do not see that fact as being in any sense something which ought to be questioned.
Senator BUTTON:
Victoria
– I am not seeking to make a partisan point. All governments get into difficulties with this sort of thing but there may be some thought given in future to the priorities which we give to these matters. Perhaps it can be discussed at a later stage as a general principle rather than as a matter of detail.
Senator PRIMMER:
Victoria
– Following on the point raised by my colleague, Senator Button, the action which has been taken in respect of a body such as this raises some questions in my mind. Quite frankly, there are other areas to which priority for tax deductibility could have been given rather than to this area. That is not to say that we are not all concerned about the conservation of wildlife around the world. I wonder whether the Minister for Administrative Services (Senator Chaney) would be able to give the Senate some figures which show the type and amount of donations made by Australians in the past to this cause.
Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP
– I do not have the information to hand but my understanding is that the Australian branch of this fund has only recently commenced operations. I think it commenced operations as recently as June. It is a newcomer to the Australian scene and I do not think that there would be very much useful information of the sort that you require.
Senator Primmer:
– I may ask a question in 12 months time.
Senator CHANEY:
Senator EVANS:
Victoria
– I rise to make a serious point with respect to clause 22 of this Bill. I hope that the Minister for Administrative Services (Senator Chaney) will be in a position to give it a both thoughtful and informed response. I refer to the aspect of the Bill which relates to the calculation of provisional tax in the light of the 1 1/2 per cent surcharge and the rates that are to prevail in the 1978-79 financial year. The point I make is one that I made at considerably greater length in the second reading debate. I trust that the Minister is familiar with what I said.
The point in short is that it appears from the text of clause 22 as it presently stands that provisional tax for the current financial year is to be calculated by reference to a figure which is derived as follows: The starting point is the composite or average rate which prevailed over the whole of the previous financial year 1977-78. Added to that is a figure arrived at by taking 1 1/2 per cent of income actually received in 1977-78 over a specified minimum sum. The point about these two calculations- which as I said in my speech in the second reading debate on the face of it is a somewhat eccentric, idiosyncratic provision obviously bearing no direct relationship to anything else in the Bill- is that it varies substantially and significantly from the figure that will be paid by everyone paying actual tax rates this year. The actual tax rate this year is a figure which is derived roughly by taking the tax rate which prevailed at the end of 1977-78 and adding to that the Vh per cent surcharge at the appropriate level.
I appreciate that I am raising a somewhat complex matter but the point is that there is a difference between the rate set here for the calculation of provisional tax and the ordinary rate which is to be applicable generally. This difference means that in the case, for example, of a provisional tax payer- as I mentioned in my speech in the second reading debate- at the bottom of the range earning beteen $3,750 and $3,893 a year such a person will pay this year in provisional tax something like 30 per cent more than the actual rate that is applicable for this year. A taxpayer in the middling range of $12,532 to $16,000 a year will pay extra tax at 7.6 per cent. People at the top of the scale on $32,000 to $33,000 will pay an additional tax factor of 1 6 per cent to 1 7 per cent.
The question raised by all this is: Why on earth has the Government done this? It is clear that any extra tax that is paid by way of provisional tax over and above the standard applicable rate will have to be credited to the taxpayer in question in next year’s provisional tax calculation. That is clear. The Government will not make a permanent gain. The only rationale that I can see for this step is that this is a way of artificially inflating this year’s revenue to conceal or to disguise the true extent of the deficit. While I have not been in a position to make the overall calculation there can be no doubt that not only hun.derds and thousands of dollars are involved for individual taxpayers but also clearly some millions of dollars of additional revenue will be derived as a result of this measure over and above what would have been the case had the standard rate been applicable to provisional taxpayers. It is an important point that I raise. As I said, I seek what I hope will be an informed reply from the Minister.
Senator CHANEY (Western Australia) Minister for Administrative Services) (3.28)- There was a hint of admonition in Senator Evans’s final and indeed his opening remarks. I shall be as formal as possible in the light of his injunction. He can have the satisfaction of having the words of my advisers straight from my mouth. They have pointed out to me that, although what Senator
Evans put is correct, it is not necessarily a position that has to be accepted by the taxpayer. I will simply read from the notes so that Senator Evans has the advice in a formal manner.
Senator Evans’s view is based on the fact that the composite rates of tax for 1 977-78 are to be used in calculating provisional tax for 1978-79 rather than the standard rates applicable for 1978-79 plus the 1½ per cent additional tax. This view overlooks the fact that the base income used for provisional tax is also 1977-78 income. If 1978-79 rates were to be used, it would be necessary to increase the base 1977-78 income by a factor for inflation so as to get an amount for provisional tax which could reasonably approximate the tax payable for 1978-79. Calculations show that the method used generally achieves this result.
This is covering the situation where a person, having assessed his true income for last year, then bases his provisional tax simply on the fact that he is likely to earn the same amount in the following year. This is the normal method of computation of the Taxation Office. That fails to take into account the fact that incomes generally are shifting upwards. That has been the case for a long time in Australia. While 1 978-79 rates are used in calculating tax instalment deductions, these rates are applied to the current higher 1978-79 levels of income. It would be unfair and not in accordance with the pay-as-you-earn system if provisional taxpayers were to get the benefit of the new rates applied to their generally lower incomes of last year. The system used is set out clearly at page 159 of Budget Statement No. 4 of 1978-79.
Having said that, the taxpayer who is disadvantaged by that situation- who I assume can be only the taxpayer whose income is for some reason reduced in 1978-79- does have an out. As is indicated in that statement, the law gives an opportunity to provisional taxpayers to have the 1978-79 rates applied if they elect to self-assess; that is, if they provide an estimate of taxable income for the 1978-79 year. That is the position which in fact has applied certainly since last year and is no different. My own experience as a provisional taxpayer was that one always made an estimate of what one’s actual income was going to be just in case one’s income had fallen. One would then get a revision of provisional tax. For the great bulk of provisional tax earners that is something which it is possible to do.
Senator EVANS:
Victoria
-The answer that I have just been given certainly goes some of the distance towards resolving my problem. Is this an innovatory provision? Has it been the case in the past that there has been a differential tax rate applicable to cover the effects of inflation which after all have been with us, as the Minister for Administrative Services (Senator Chaney) keeps telling us, for a number of years now? I take it that this is an innovatory provision and not one which has been applicable in the past.
Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP
– My advice is that this is the position that has applied in the past. For example, last year the same provision applied. So this provision is not unique or new.
Remainder of Bill agreed to.
Income Tax (Rates) Amendment Bill (No. 2) 1978
Income Tax (Individuals) Bill 1978
Income Tax (Companies and Superannuation Funds) Bill 1978
Health Insurance Levy Bill 1978
The CHAIRMAN (Senator Scott:
NEW SOUTH WALES
-Is it the wish of the Committee that the remaining four Bills be taken together as a whole?
Senator Wriedt:
– I do not see any reason to object provided there is no restriction on any stage of any Bill by the Minister for Administrative Services (Senator Chaney). I presume that that would be acceptable to the Minister.
Senator Chaney:
– Yes.
The CHAIRMAN:
– There being no objection, that course will be followed. The question now is that the four Bills be agreed to.
Senator McLAREN:
South Australia
– I have a few remarks to make on the Income Tax (Rates) Amendment Bill 1978 [No. 2] which provides for the so-called temporary increase of1½ per cent in income tax rates. I refer to some words which were uttered last night by Senator Chaney when he said:
It does appear that at least a number of members of the Opposition suddenly have become converts to the idea that people should be taxed less.
He was referring to speeches by people on this side during the second reading debate. Members of the Australian Labor Party have always been of the view that people should not have to pay unfair rates of tax.
I agree that there should be a fair taxation system. The wealthy section of the community should not be able to use the many loopholes to avoid paying tax while the wage earner has no avenues at all to get himself off the hook with his taxation payments. Senator Chaney went on to say:
But the fact is that a number of Opposition senators have mounted an attack on the Government mainly on the basis that it has, in this Budget, chosen to increase personal income tax on a temporary basis by one and a half per cent. That has been attacked as a going back on election promises which related to the lowering of taxation. Quite frankly, I find it a little ludicrous to hear out of the mouths of honourable senators opposite complaints about the levels of taxation under this Government when the statistics are so clear that tax collections under their own Government increased so mightily. These facts are well known and well established. I will put some statistics before the Senate shortly to demonstrate that fact.
Senator Chaney had some tables incorporated in Hansard. They are very revealing. I am indebted to him for having them incorporated. They clearly show that under the Labor Government taxation was progressively coming down. I get that information from the tables he incorporated. The Labor Party has never made any promises during election time, as his leader has, that it will reduce taxes. The main thrust of our complaint has been that there was an election promise that taxation would be reduced, but in the very next Budget the Government increased taxation. We are complaining that the electors at large were misled by these false promises.
I would like to ask Senator Chaney one question about the tables which he had incorporated in Hansard. Perhaps he could clarify one point before I continue my speech. I refer to the tables which state that they compare the tax payable on Selected Incomes from the 1952-53 income year. Is the income year 1952-53 the base, or is it a misprint? Should the year concerned be 1972-73?
Senator Chaney:
– I am sorry; it should read 1972-73’.
Senator McLAREN:
– I see. It is an error. I thank the Minister for clearing it up. The first figures in the first table relate to the McMahon Budget that was presented in 1972 before the Liberal-Country Party Government was defeated. The taxation rates were set for that year by the McMahon Government. The Labor Government used those rates in the next year; we did not alter them. Likewise, when we brought down our Budget in 1973, according to this schedule the taxation rates remained the same as they were under the McMahon Government. Let me look now at the figures for 1975 which would relate to the Budget that we presented in 1974. For a person with a yearly income of $2,500 the tax in 1974 was $19 1.69, whereas in 1975, under our Budget, it was $4.40. In 1976-these figures apply to the 1 975 Budget- no tax at all was payable. The figures for 1975 show a progressive decrease in tax until a yearly income of $50,000 is reached, at which point there is an increase of not quite $1.
I do not want to take the time of the Committee by reading all the figures in the tables. Senator Chaney, in reply, might be able to prove that what I am saying is incorrect. He said that we were a high taxation government and that we were progressively increasing taxation. From the figures given one finds that taxation up to an income level of $50,000 actually decreased in 1975 compared with 1974. The same applies to the 1976 figures which were a result of the Hayden Budget which was brought into this Parliament and on which the then Opposition refused to vote. However, the present Government used that Budget. Taxation in that year again came down dramatically. I am not saying that in the succeeding Budgets it did not come down again. That is not the argument. The argument relates to Senator Chaney saying that taxation increased under the Labor Government. It did not increase. The whole thrust of our point is that the Government promised in 1977 that it would decrease taxation; but, in fact, it has increased taxation. That is what we are debating here today. Let us look at the remarks made by Mr Hayden in the other place earlier this week. He was the Treasurer who brought in the last Labor Budget. He said:
There are a few other matters I wish to raise in the limited time available which are highly germane.
He was talking about taxes. He continued:
This is a high tax government, contrary to what the Prime Minister has said. Budget receipts as a proportion of gross domestic product on average for the three Labor Budgets were 24.8 per cent and for the three coalition Budgets 26.1 per cent; that is, the community is paying 1.3 per cent of GDP more in various forms of taxes both direct and indirect as a result of the consciously imposed measures of this Government. That is not the result of policies honestly applied, given the firm undertakings of the Government that they would reduce the total burden of revenue raisings imposed on the community. What does that mean in monetary terms? It means that the community is paying SI, 300m more in revenue on average this year than was the case on average for the three years of the Labor Government. It means that on average taxpayers in this country are paying more than $200 each as a result of the high taxation policies of this Government, or something like $4 a week.
Of course, the Treasurer (Mr Howard) did not reply. The Government saw fit to gag the debate and not to allow the Bills to be debated at the Committee stage, when these matters could have been explored further. If what Mr Hayden said is incorrect no doubt we will hear from Senator Chaney. We were not able in the other place to get a reply to the claim that Mr Hayden made, namely, that this Government is a higher taxation government, on average over its years in office, than was the Labor Government in its three years in office. For the time being I leave my remarks at that. I will wait and see whether I can get an answer to the claims I have made.
Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP
– The tables referred to by Senator McLaren are on pages 1249 and 1250 of Hansard for all to see. They show a series of reductions right through the life of this Government when compared with the tax rates under the Labor Government. Certainly the Hayden Budget introduced some tax reductions. I acknowledge that. I suggest that Senator McLaren also look at the table on personal income tax collections which was incorporated at page 125 1 of Hansard and which shows the very substantial percentage increase in income tax collections under that government. On the other matters to which Senator McLaren referred I have no detailed comment with which to respond.
Senator McLAREN:
South Australia
– Senator Chaney has referred me to the table on personal income tax collections. What he did not say is that the Labor Government endeavoured to give wage earners a fair share of income. Wages were very low when we came into office. We set about giving some equality. That is why the table shows a greater percentage collection. I am pleased to hear the honourable senator admit that according to the other tables individual taxation under Labor was coming down on the given rates of income. That is shown perfectly clearly in the table. The only reason for arguing that a percentage increase occurred is that people were getting a bigger share of the money that was available in the community. The Government is reversing the trend at a rapid rate. Not only is it increasing taxation scales in this Budget but also it is throwing more people out of work. I suspect that when the gross income tax figures come out they will be much less, because fewer people will be paying tax.
Senator Wriedt:
– And an increase in indirect taxes.
Senator McLAREN:
-That is right. Indirect taxes will increase at a great rate. We need to look only at petrol, a matter which we cannot debate under this Bill but which we will debate on the excise Bills. Last year the Government increased the price of petrol by 11c a gallon. This year the increase will be 16c a gallon. The Government has imposed all these indirect taxes which the wage earners have to pay. The personal income tax collections cannot be used to verify claims that the Labor Government was a high taxation government. I think the Government’s own tables dispute that. The figures given by Mr Hayden when he spoke on this Bill in the other place yesterday prove that the Labor Government was not a high taxation government.
Bills agreed to.
Bills reported without amendment or requests; report adopted.
Third Readings
Motion (by Senator Chaney) proposed:
That the Bills be now read a third time.
Senator McLAREN:
South Australia
– I would like to make a few brief comments and to compliment the Minister for Administrative Services, Senator Chaney, on the manner in which he has taken these Bills through the Senate. It has been quite a pleasure to have in charge of a Bill a Minister who has adopted the jovial attitude that Senator Chaney has adopted. When dealing with Bills of this nature in the last three years we have been used to Ministers being very antagonistic. I would like to say how pleased I am at the attitude that Senator Chaney has adopted. He has endeavoured to give answers when he could. He did not give me an answer to my last question because I think I had him stumped. I appreciate his attitude, and I hope it continues while he is on the front bench.
Question resolved in the affirmative.
Bills read a third time.
page 1299
ADJOURNMENT
Senator Bonner: Illness
Motion (by Senator Chaney) proposed:
That the Senate do now adjourn.
Senator MISSEN:
Victoria
-I should like to comment briefly on one matter. Early this morning during Question Time interjections were made by honourable senators opposite about Senator Bonner. Some remarks were made that Senator Bonner was in the Northern Territory and was not allowed to come back. I have no doubt that they were probably good natured interjections and not intended entirely to be serious. I just want to say that it is known to honourable senators on this side of the House that Senator Bonner has not been well for about 10 days. He came back from the Northern Territory about 10 days ago. He has had some very painful back trouble. He has been under constant treatment and, therefore, has been confined to bed. He has not been in the Northern Territory or anywhere like that, so there was nothing to the suggestions that were made by my colleagues opposite. I think it should be pointed out that Senator Bonner, whom I expect will be back next week was not suffering from us but was suffering from another illness this week. I am sure that even so, he will come bravely back to face the Senate as soon as he can.
Senator KEEFFE:
Queensland
-As I was probably one of those making interjections from this side of the chamber about the whereabouts of Senator Bonner, I indicate that I am sorry to hear that he is ill. I wish him a speedy return to this place. I think the Minister for Social Security (Senator Guilfoyle) could have cleared up the whole matter by replying to the question that I asked on Tuesday of this week. There would have been no doubt about Senator Bonner’s whereabouts if that question had been replied to promptly. We would have known then that Senator Bonner, on behalf of the Government, attended only the meeting of the Northern Land Council and that he has not been well since and has been at home. Probably that also could have been clarified this morning if the Government Whip had made a rejoinder by saying that Senator Bonner was paired and away because he was ill. That would have clarified the situation. I am sorry if I have caused any further pain to Senator Bonner. I think that most of the interjections were good natured. They were based on curiosity as to whether Senator Bonner was still operating in the Northern Territory or whether he was back in that other country, Queensland.
Question resolved in the affirmative.
The PRESIDENT:
– The Senate stands adjourned until Tuesday next at 2.30 p.m. Senate Estimates Committee D will meet in the Senate chamber, Senate Estimates Committee E will meet in Senate Committee Room No. 1, and Senate Estimates Committee F will meet in Senate Committee Room No. 5. The bells will be rung for two minutes prior to the meetings of the Committees. I remind honourable senators that Senate Estimates Committees A, B and F will meet tomorrow at 10 a.m., and that Senate Estimates Committees C, D and E will meet on Monday, 16 October at 10 o’clock in the morning.
Senate adjourned at 3.51 p.m.
page 1301
ANSWERS TO QUESTIONS
The following answers to questions were circulated:
Interdepartmental Committees: Reports on Museums, National Collections and Public Libraries (Question No. 325)
Senator Missen:
asked the Minister representing the Minister for Home Affairs, upon notice, on 4 April 1978:
- 1 ) Did the Minister for Administrative Services refuse, on 16 August 1977, to make public reports from the interdepartmental committees inquiring into museums, national collections and public libraries; if so, why?
- 2 ) Will the Minister reconsider the decision?
- How does the Minister reconcile this apparent failure to provide information with the Government’s public commitment to freedom of information?
Senator Webster:
NCP/NP
– The Minister for Home Affairs has provided the following answer to the honourable senator’s question:
- 1 ) I am advised that the former Minister for Administrative Services, in reply to a letter of 10 August 1977 from Mr J. McMillan, Lecturer in Law at the University of New South Wales, seeking access to the interdepartmental reports referred to in the Question, advised Mr McMillan that the reports were confidential documents prepared for his consideration and therefore he could not agree to Mr McMillan’s request.
- and (3) The responsibility for the matters referred to in the Question now falls within my portfolio as Minister for Home Affairs. I have considered the question of the release of the reports in the light of the Government’s policies as provided in the Freedom of Information Bill. In the case of the two reports referred to in the Question, I consider that it would be in accordance with normal and proper administrative practice to defer access to them while the Government completes its consideration of the policy issues with which the reports are concerned, and accordingly I do not propose to make the reports available before that has been done. I will upon request when the Government’s consideration has been completed consider further whether access to the documents should then be given.
Uranium (Question No. 347)
Senator Missen:
asked the Minister representing the Minister for Environment, Housing and Community Development, upon notice, on 4 April 1978:
- 1 ) Did the Minister refuse, on 13 October 1977, to make public the reports that had been compiled as part of his Department ‘s efforts to monitor the debate on uranium; if so, why?
- Will the Minister reconsider the decision?
- How does the Minister reconcile this apparent failure to provide information with the Government’s public commitment to freedom of information.
Senator Carrick:
LP
– The Minister for Environment, Housing and Community Development has provided the following answer to the honourable senator’s question:
- Yes. The then Minister, in response to a request by Mr J. McMillan, Lecturer in Law at the University of New South Wales, declined to make the reports referred to in the Question public because they were considered confidential at that stage of the Government’s consideration of the action it should take in response to the findings and recommendations of the Ranger Uranium Environment Inquiry.
- and (3) Yes, the Minister for Environment, Housing and Community Development considered the final overview report of 14 July 1977 can now be made public. It summarises early reports. The basic material on which the report was based was taken from the open press. The final report is as follows:
AN ATTEMPT AT AN OVERVIEW OF THE URANIUM DEBATE
It is now 8 months since the release of the first report of the Ranger Inquiry and a month since the release of the second report. During this time there has been widespread discussion of the uranium issue in the media, particularly over the last month. However, the community is still deeply divided in its attitude and the second report has not helped, by not providing a clear policy directive. In fact the Commission’s recommendations have been used by all lobby groups to support their respective positions.
The Uranium Developers believe that the report signals the go-ahead, however there has been disagreement with the recommendation for sequential development. Alternatively, the Movement Against Uranium Mining has stated that the report does not give the ‘green light’ and that if the requirements of the report are implemented in full this would amount to an effective moratorium.
A recent gallup poll conducted since the release of the second report has indicated that a slight majority (51 per cent) are in favour of the sale of Australia ‘s uranium overseas. This figure has increased by only 1 per cent over the past year compared with an increase of 8 per cent in the number of people (37 per cent) wanting to discourage uranium mining. 12 per cent are still undecided. The nature of this change is interesting to note in view of the $600,000 media campaign conducted by the Uranium Producers ‘ Forum over the past few months.
The scientific community is still divided on the issue with eminent scientists expressing both support of and opposition to the mining and export of uranium. A number of nuclear scientists (e.g. Sir Ernest Titterton and Sir Philip Baxter) form the backbone of the pro-mining lobby. However, they have been supported by other scientists and technicians, notably 300 who signed a written declaration prepared by the Uranium Producers’ Forum. A large number of scientists have opposed the mining and export of uranium and have also signed a declaration. The medical community is similarly divided. A statement supporting uranium mining and prepared by the Uranium Producers’ Forum has been signed by a group of doctors (representing 2 per cent of the Australian medical community). More than 75 per cent of doctors and scientists working in nuclear medicine have however, urged the government to adopt caution and to have a “full and public debate”.
Church groups have continued to voice their opposition and have been pressing for a moratorium on uranium mining. The conservation groups and the umbrella organization- Movement Against Uranium Mining (MAUM)- a growing national coalition of trade unions, environmental, women’s, church, peace and other community groups have continued to urge for a 5-year moratorium, claiming that this is in concurrence with the recommendations of the second Fox report.
The Australian Labor Party at its recent National Conference has decided in favour of an indefinite moratorium on uranium mining and treatment in Australia. This is said to allow reasonable time for full public debate on, and consideration of the issues, and to enable the Australian Labor Party to be satisfied that the problems have been solved. This decision may influence the attitudes of some of the Australian community and is likely to be a very significant influence on the decision to be taken by the ACTU at their annual conference.
Most of the unions who have voiced their opinion on the issue have voted against uranium mining and have called for moratoriums of varying lengths. However some, and in particular, the Australian Workers’ Union believe that uranium should be mined, provided adequate safeguards are taken.
In conclusion, it seems as if those who are taking a stand on the uranium issue are aware of the purported problems. However, some view them very seriously and regard them as insoluble whereas others have more faith that any problems can and will be resolved. Also, some people seem to be interested primarily in the economic considerations whilst others tend to be more concerned with the social and ethical questions. These differing philosophies do make it hard for a consensus to be reached. If a moratorium took place and the doubts about uranium mining were dispelled during that time it is possible that the community may become less divided in its attitudes.
Even if the government decides against any moratorium and makes a decision now, the debate is still likely to continue, as both sides are deeply committed to achieving their respective goals.’
Health: Amniocentesis Tests (Question No. 783)
Senator Ryan:
asked the Minister representing the Minister for Health, upon notice, on 13 September 1978.
- Are amniocentesis tests available to all pregnant women who wish to have them, or are there guidelines which restrict eligibility for the tests; if so, what are the guidelines.
- What are the criteria under which pregnant women may claim the cost of amniocentesis tests from the various health insurance schemes.
- How many hospitals and clinics are equipped to provide amniocentesis tests, and where are they situated.
Senator Guilfoyle:
LP
– The Minister for Health has provided the following answer to the honourable senator’s question:
- 1 ) Amniocentesis tests are offered to all pregnant women of 40 years and over and younger women with previous or family histories of birth defects. The National Health and Medical Research Council recently endorsed a report prepared following a joint meeting of the Council’s Antenatal Diagnosis of Congenital Abnormalities Working Party and State representatives. This report noted that diagnostic amniocentesis facilities currently available could cope with the present demand from the 40 and over age group and certain suspect cases in younger women. However, the existing facilities are insufficient for this service to be offered to other younger women. It also noted that all State representatives indicated the need for firm guidelines on how, by whom and where amniocentesis should be carried out.
The Council has therefore recommended that (a) in future intrauterine diagnostic procedures should comprise a part of genetic counselling services and should be intergrated with those services in each State and Territory; (b) laboratory facilities should be expanded to allow genetic diagnostic services to be offered to all pregnant women in the 35-39 age group and (c) because of the complexity of the procedures, amniocentesis in early pregnancy and foetoscopy should only be performed by obstetricians associated with the State co-ordinated intrauterine diagnostic and genetic counselling services.
- Medical benefits for amniocentesis tests are currently available under item 290 of the Medical Benefits Schedule. Also set out in the Schedule are benefits for other procedures associated with the investigation of antenatal diagnosis of congenital abnormalities.
- There are currently 15 hospitals in Australia which are equipped to provide amniocentesis tests. These are situated in Sydney (4), Melbourne (3), Brisbane (2), Adelaide (4), Perth (1)and Hobart ( 1)
Cape Flattery: Customs Facilities (Question No. 799)
Senator Keeffe:
asked the Minister representing the Minister for Business and Consumer Affairs, upon notice, on 19 September 1978:
Are any customs checks carried out on ships calling at Cape Flattery to remove sand, or is Cape Flattery virtually an illegal port and does smuggling take place frequently.
Senator Durack:
LP
– The Minister for Business and Consumer Affairs has provided the following answer to the honourable senator’s question:
All vessels entering Cape Flattery are boarded by Customs officers. There is no evidence of any smuggling at Cape Flattery.
Technical and Further Education (Question No. 806)
Senator Button:
asked the Minister for Education, upon notice, on 14 September 1978:
- 1 ) What was the percentage of technical and further education students enrolled in each of the following academic streams: (a) professional) (b) para-professional; (c) trades; (d) other skilled; (e) preparatory; and ( f) adult education, in each year from 1974 to 1978.
- What was the percentage of full-time teaching staff, classified by salary and nature of duties for each academic stream in each of these years.
- What percentage of recurrent technical and further education expenditure was spent on each academic stream in each of these years.
Senator Carrick:
LP
– The answer to the honourable senator’s question is as follows:
- The table below provides the information sought for the years 1 974 to 1 977 in respect of courses conducted by the major government authorities for technical and further education in the States. Comprehensive statistics for this period are not available in respect of other technical and further education authorities. Statistics for 1978 are expected to become available in the early part of 1979. The data shown in the following table relate to gross enrolment registrations only, no adjustment being possible for students enrolled in more than one course or at more than one institution during a year.
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Statistics in the form requested have not been collected since 1974. The following tables show the percentage distributions, for each of the years 1 974 to 1 977, of:
- duties undertaken by full-time teachers, classified by nature of duties and by stream of teaching duties, and
- full-time teachers by salary classification, in respect of the major government authorities for technical and further education in the States. See also comments relating to other authorities and 1978 statistics in answer to ( 1 ) above. Both tables include data in respect of teachers who are employed full-time by the authority concerned but are engaged only part-time on technical and further education duties.
- Details are not available of the distribution of recurrent expenditure on technical and further education by stream of study.
Cite as: Australia, Senate, Debates, 12 October 1978, viewed 22 October 2017, <http://historichansard.net/senate/1978/19781012_senate_31_s78/>.