Senate
17 September 1980

31st Parliament · 1st Session

  1. Senate
  2. 31st Parliament
  3. 1980

The PRESIDENT (Senator the Hon. Sir Condor Laucke) took the chair at 2. IS p.m., and read prayers.

page 1151

PETITIONS

Social Security Benefits

Senator BONNER:
QUEENSLAND

– I present the following petition from 60 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 there is an urgent need to ensure that the living standard of pensioners will not decline, as indeed, the present level of cash benefits in real terms requires upward adjustment beyond indexation related to the movement of the Consumer Price Index, by this and other means your petitioners urge that action be taken to:

. Adjust all pensions and benefits quarterly to the Consumer Price Index, including the ‘fixed’ 70s rate.

Raise all pensions and benefits to at least 30 per cent of the Average Weekly Earnings.

Taxation relief for pensioners and others on low incomes by:

The present static threshold of $75 per week for taxation purposes be increased to S 1 00 per week.

A substantial reduction in indirect taxation on consumer goods.

And your petitioners as in duty bound will ever pray.

Petition received and read.

National Women’s Advisory Council

Senator MASON:
NEW SOUTH WALES

– I present the following petition from 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 the National Women’s Advisory Council has not been democratically elected by the Women of Australia;

That the National Women’s Advisory Council is not representative of the women of Australia;

That the National Women’s Advisory Council is a discriminatory and sexist imposition on Australian women as Australian men do not have a National Men’s Advisory Council imposed on them.

Your petitioners therefore pray:

That the National Women’s Advisory Council be abolished to ensure that Australian women have equal opportunity with Australian men of having issues of concern to them considered, debated and voted on by their Parliamentary representative without intervention and interference by an unrepresentative ‘Advisory Council’.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Mr Yuri Shukhevych

Senator MESSNER:
SOUTH AUSTRALIA

– I present the following petition from 497 citizens of Australia:

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

Yuri Shukhevych (45), at present serving a term of imprisonment at Christopol Prison in the Tartar region of the USSR, is a prisoner of conscience.

Having expressed his desire on various occasions to emigrate from the USSR, Yuri, Shukhevych ‘s aunt, Stephanie Strokon, has nominated him as a migrant to join her with his wife and two young children in Australia.

Therefore we appeal to the Australian Government on purely humanitarian motives to intervene on his behalf and seek from the Government of the USSR to abolish his unjust sentence.

We petition the Australian Government to approve the nomination for entry and residence in Australia of Yuri Shukhevych and his family as everything in his life points to his becoming a respected and productive citizen of our free country.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Great Barrier Reef

Senator COLSTON:
QUEENSLAND

– I present the following petition from 19 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 off shore oil exploration within the Great Barrier Reef Region constitutes a serious threat to the richest and most varied living system on earth.

Your petitioners most humbly pray that the Senate, in Parliament assembled, will:

. Prohibit oil exploration within the Great Barrier Reef Region.

Declare the entire Great Barrier Reef Region a Marine Park under the Federal Government’s Great Barrier Reef Marine Park Act 1 975.

Provide the Great Barrier Reef Marine Park Authority with the staff and resources for effective management of the Region.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Anti-discrimination Legislation

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– I present the following petition from 1 5 citizens of Australia:

To the Honourable the President and Members of the Senate of the Australian Parliament in Canberra assembled. The petition of certain citizens respectfully showeth:

That the right to work without discrimination on any ground including, inter alia, discrimination on grounds of race, ethnic origin, pregnancy, marital status, sex and/or sexual preference is a fundamental human right; and

That it is both the duty and responsibility of society to fully support those denied work and therefore those who are unemployed as a result of society’s inability to provide full paid employment should be guaranteed an adequate income without discrimination on any ground, including inter alia discrimination on grounds of race, ethnic origin, marital status, sex and/or sexual preference, or pregnancy.

Your petitioners therefore humbly pray:

That appropriate and adequate laws be formulated and passed to outlaw discrimination in Commonwealth employment, in employment of persons by statutory bodies and quasi-governmental organisations, in employment of individuals under federal awards, and in employment of all persons in areas over which Commonwealth and Australian Capital Territory equal opportunity legislation should have jurisdiction; and

That appropriate laws be formulated and passed to outlaw discrimination in the provision of unemployment benefits to all persons without regard to race, ethnic origin, marital status and /or sex.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Metric System

Senator LAJOVIC:
NEW SOUTH WALES

– On behalf of Senator Lewis, I present the following petition from 23 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 objection to the Metric system and request the Government to restore the Imperial system.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Social Security Benefits

Senator MELZER:
VICTORIA

– I present the following petition from 565 citizens of Australia:

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

That there is an urgent need to ensure that the living standard of pensioners will not decline, as indeed, the present level of cash benefits in real terms requires upward adjustment beyond indexation related to the movement of the Consumer Price Index, by this and other means your petitioners urge that action be taken to:

1 ) Adjust all pensions and benefits quarterly to the Consumer Price Index, including the ‘fixed’ 70s rate.

Raise all pensions and benefits to at least 30 per cent of the average weekly earnings.

Taxation relief for pensioners and others on low incomes by:

The present static threshold of $75 per week for taxation purposes be increased to SI 00 per week.

A substantial reduction in indirect taxation on consumer goods.

And your petitioners as in duty bound will ever pray.

Petition received.

Social Security Benefits

Senator COLSTON:

– I present the following petition from 23 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 there is an urgent need to ensure that the living standard of pensioners will not decline, as indeed, the present level of cash benefits in real terms requires upward adjustment beyond indexation related to the movement of the Consumer

Price Index, by this and other means your petitioners urge that action be taken to:

1 ) Adjust all pensions and benefits quarterly to the Consumer Price Index, including the ‘fixed’ 70s rate.

Raise all pensions and benefits to at least 30 per cent of the average weekly earnings.

Taxation relief for pensioners and others on low incomes by:

The present static threshold of $75 per week for taxation purposes be increased to $1 00 per week.

A substantial reduction in indirect taxation on consumer goods.

And your petitioners as in duty bound will ever pray.

Petition received.

The Acting Clerk - Petitions have been lodged for presentation as follows:

Metric System

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

And your petitioners as in duty bound will ever pray, by Senator Rae. Petition received.

National Women’s Advisory Council

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 National Women’s Advisory Council has not been democratically elected by the women of Australia;

That the National Women’s Advisory Council is not representative of the women of Australia;

That the National Women’s Advisory Council is a discriminatory and sexist imposition on Australian women as Australian men do not have a National Men’s Advisory Council imposed on them.

Your petitioners therefore pray:

That the National Women’s Advisory Council be abolished to ensure that Australian women have equal opportunity with Australian men of having issues of concern to them considered, debated and voted on by their Parliamentary representative without intervention and interference by an unrepresentative ‘Advisory Council’.

And your petitioners as in duty bound will ever pray, by Senator Lajovic and Senator Melzer. Petitions received.

Social Security Benefits

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

That there is an urgent need to ensure that the living standard of pensioners will not decline, as indeed, the present level of cash benefits in real terms requires upward adjustment beyond indexation related to the movement of the Consumer Price Index, by this and other means your petitioners urge that action be taken to:

  1. 1 ) Adjust all pensions and benefits quarterly to the Consumer Price Index, including the ‘fixed’ 70s rate.
  2. Raise all pensions and benefits to at least 30 per cent of the Average Weekly Earnings.

  3. Taxation relief for pensioners and others on low incomes by:

    1. The present static threshold of $75 per week for taxation purposes be increased to S 1 00 per week.
    2. A substantial reduction in indirect taxation on consumer goods.

And your petitioners as in duty bound will ever pray, by Senator Mcintosh. Petition received.

page 1153

PARLIAMENTARY TRIANGLE

Notice of Motion

Senator CARRICK:
Vice-President of the Executive Council · New South WalesLeader of the Government in the Senate · LP

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

That, in accordance with section 5 of the Parliament Act 1 974, the Senate approves the following proposals:

Erection of official entrance for the Department of Foreign Affairs at the Administrative building.

Upgrading of external lighting at the National Library of Australia.

page 1153

FRASER GOVERNMENT’S ELECTION PROMISES

Notice of Motion

Senator EVANS:
Victoria

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

That the Senate condemns the Fraser Government’s failure to honour its election promises of 1975 and 1977, in particular the following:

‘Under a Liberal-National Party Government there will be jobs for all who want to work . . .’ made on 27 November 1975;

‘Unemployment will fall in February 1978 and will go on falling . . .’ made in 1 977 Election Speech;

‘We will reduce the tax burden . . .’made in 1975 Election Speech;

‘We will fully index personal income tax for inflation over three years. It will make Government more honest with your money . . .’ made on 27 November 1975;

‘We will reduce country petrol prices to within one cent of city prices, without any increase in city prices as a result . . .’made on 21 November 1977;

‘There will be a 2 per cent reduction in interest rates in the next 12 months . . .’ made on 3 December 1977;

‘Inflation at an annual rate of 5 per cent is within our reach by mid-1979. It will go on falling . . .’made on 12 September 1978;

‘We will maintain Medibank, and ensure that the standard of health care does not decline . . .’ made in 1975 Election Speech;

‘There will be no international safaris by Members of Parliament . . .’made in 1975 Election Speech;

There will be no more jobs for the boys . . .’made in 1 975 Election Speech;

‘The real value of pensions will be preserved . . .’ made in 1975 Election Speech:

1 2) ‘There will be more activity in the area of housing for the aged . . .’made in 1975 Election Speech;

‘We will maintain tertiary assistance allowances at realistic levels . . .’made in 1975 Election Speech;

‘The Australian Assistance Plan will be maintained . . .’made in 1975 Election Speech;

‘We will be generous to those who can’t get a job and want to work . . .’ made in 1975 Election Speech; and

‘We shall ensure that no person is denied legal aid because of lack of means . . .’made in 1975 Election Speech.’

page 1153

NURSING EDUCATION AND TRAINING

Notice of Motion

Senator BUTTON:
Victoria

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

That, in the opinion of the Senate, the Government is to be condemned for its failure to adopt the recommendations of the Sax Committee of Inquiry into nursing education and training, contrary to the wishes of the vast majority of organisations of professional health workers.

page 1153

STUDENT ALLOWANCES AND POST-GRADUATE AWARDS

Notice of Motion

Senator BUTTON:
Victoria

– I give notice that, on the next day of sitting, 1 shall move:

That, in the opinion of the Senate, the Government is to be condemned for its failure to increase student allowances and post-graduate awards sufficiently to restore them to their former value in terms of purchasing power, thus ignoring the basic needs of students and award holders established by various inquiries.

page 1153

QUESTION

QUESTIONS WITHOUT NOTICE

page 1153

QUESTION

NATIONAL SERVICE

Senator WRIEDT:
TASMANIA

– My question is directed to the Minister representing the Prime Minister. Has the Government received a report from the Department of Defence outlining a proposal, code named Manhaul, to reintroduce conscription for males aged 1 8 years to 34 years and for females without children in the same age group? What is the purpose of this report? Will the Minister give an undertaking, as the Prime Minister did last weekend, that this Government has no intention of reintroducing conscription?

Senator CARRICK:
LP

– I gave that undertaking quite clearly and unequivocally yesterday. There will be no reintroduction of conscription. I know nothing of such a report.

page 1154

QUESTION

PETROL PRICES

Senator YOUNG:
SOUTH AUSTRALIA

– Can the Minister for National Development and Energy say how petrol prices in the late 1950s, the late 1960s and the late 1970s compare with today’s prices as a percentage of average weekly earnings?

Senator CARRICK:
LP

– Quite apart from the fact that the price of gasolene in Australia compares more than favourable with that in almost all other countries of the world and certainly in the Organisation for Economic Co-operation and Development countries, the fact is that the Australian motorist on average weekly earnings and buying, shall we say, 40 litres of petrol a week, is now paying a smaller proportion of his income on petrol than he was 10 or 20 years ago. The cost of 40 litres of petrol a week as a percentage of average weekly earnings in 1959 was 7.8 per cent; in 1969, 5.1 per cent; and in 1979, 4.7 per cent.

page 1154

QUESTION

NATIONAL SERVICE

Senator WRIEDT:

– I ask the Minister representing the Minister for Defence the question that I asked Senator Carrick. Can he tell the Senate what he knows of the proposal, code named Manhaul, to reintroduce conscription for both males and females between the ages of 18 years and 34 years?

Senator DURACK:
Attorney-General · WESTERN AUSTRALIA · LP

– I personally do not have any knowledge of the matter referred to by Senator Wriedt. I will refer the question to the Minister for Defence. I simply reaffirm what 1 said in answer to a question in the Senate, I think from Senator Lewis, some time ago, that the Government is certainly not planning to reintroduce conscription.

page 1154

QUESTION

AFGHAN REFUGEES

Senator MISSEN:
VICTORIA

– I refer the Minister representing the Minister for Immigration and Ethnic Affairs to a report in the Age of 12 September which states that Australia could soon, for the first time, take Afghan refugees in its annual refugee program. Will the Minister comment on this article and, in doing so, inform the Senate whether the Government is, as is claimed in the report, conducting a review of its policies on relief and resettlement for the many people who have fled Afghanistan since its invasion by the Soviet Union last December? Does the Minister agree that, in accordance with the Government’s concern for human rights, whatever assistance possible should be given to help relieve the human consequences of the Afghanistan invasion, especially in resettlement? If so, will she assure the Senate that consideration will be given by the Government to the introduction of a resettlement program for Afghan refugees at the earliest possible date?

Senator Mulvihill:

– Mr President, I raise a point of order. I raised this question in the early hours of this morning, way ahead of Senator Missen’s thinking. It has been taken on board. I believe it would be an insult to me if an answer were given in a raw state while I am waiting for a response.

Senator Missen:

– Mr President, I am quite unaware of any matter that may have been raised by Senator Mulvihill.

Senator Mulvihill:

– You should have been in the chamber while I was here.

Senator Missen:

– I do not have to be in the chamber when Senator Mulvihill is here. I am asking this question because I want an answer to it. I see no point of order.

Senator Dame MARGARET GUILFOYLEIt is a fact that Senator Mulvihill raised this subject early this morning when we were dealing with the estimates for the Department of Immigration and Ethnic Affairs. He raised a number of other matters related to immigration. I have undertaken to obtain early answers for him. At that time I also offered the services of officers of the Department to deal with some of the rather urgent matters that he had in his mind.

The matter that has been raised by Senator Missen relates to the refugee situation for people from Afghanistan. I have information to the effect that the United Nations High Commissioner for Refugees is responsible for the legal protection of refugees in this situation. I think it is known that the Australian Government supports the work of the High Commissioner for Refugees. The Government’s understanding of the present position is that the High Commissioner does not consider that there is a pressing need for resettlement of the refugees at this time in third countries. Efforts are being directed to the eventual voluntary repatriation of the refugees to Afghanistan.

The Government supports the work and the view of the High Commissioner. The High Commissioner points out that any individual applications from people from Afghanistan in the refugee position will be considered on refugee status identity and on a case by case merit basis. I will refer the other parts of Senator Missen’s question to the Minister to see whether further information can be given. I will also see what can be done to expedite the answer to Senator Mulvihills question on the same subject.

page 1155

QUESTION

TECHNOLOGICAL CHANGE

Senator BUTTON:

– I ask the Minister representing the Prime Minister whether it is true, as reported in today’s Australian Financial Review, that the Government has deferred the question of income maintenance for people put out of work by technological change and rejected outright other social safety net provisions as recommended in the report of the Myers Committee of Inquiry into Technological Change in Australia. If it is true, does the Government still expect, in the words of the Prime Minister, the cooperation of all sectors of the community in accepting change? Will the Government reconsider this matter and accept that adequate and proper redundancy provisions, including some form of income maintenance, are necessary as a matter of urgency?

Senator CARRICK:
LP

– It ought to be a sound principle for all honourable senators to reject what is not official and what comes from leaks in the Press. Therefore, I do not comment on the Press itself except to give such advice. I understand that Mr Lynch, the Minister for Industry and Commerce in another place, is likely to make a statement on the Myers Committee report before the House gets up. I suggest that honourable senators wait until the substance of that report is known.

page 1155

QUESTION

AUSTRALIAN NATIONAL FLAG

Senator THOMAS:
WESTERN AUSTRALIA

– My question, which is directed to the Minister representing the Minister for Administrative Services, relates to the insignia and heraldry of the Commonwealth and, in particular, the Australian national flag. Can the Minister inform the Senate of the history surrounding the design and dimensions of our flag and the protocol governing its use?

Senator CHANEY:
Minister for Aboriginal Affairs · WESTERN AUSTRALIA · LP

– The information sought by the honourable senator is, in fact, readily available because the Government, through the Department of Administrative Services, has produced a small book called the Australian National Flag which I think most honourable senators and members would be familiar with. The Government has, in fact, been trying to encourage the display of the flag. Again, most honourable senators have taken advantage of the opportunities that now exist to make flags available to a number of organisations. Senator Mcintosh is looking very thoughtful about all the flags he has delivered.

The book points out that the encouragement being given for people to display the flag is in line with the directive made by Mr Menzies in 1941 and repeated by the Prime Minister, Mr Chifley, in 1947. I think it is of value. I will not go through all the matters in the booklet which talks about the history and symbolism of the flag. It is interesting to note that 30,000 Australians and others submitted designs at the time of the birth of the Commonwealth all seeking a prize of £75. The prize was, in fact, divided, according to this book, among five entries that were regarded of equal merit.

However, I think flags are matters about which there is room for a bit of political caution. I note that the Opposition has suggested that it wishes to raise the standard’ as part of its campaign. I was thinking about that in the context of a little anecdote in a book by Lady Antonia Fraser entitled Cromwell Our Chief of Men. Apparently King Charles took the same attitude and set off with his campaign against the Parliament, and decided to raise his standard.’ Unfortunately it was very heavy. It fell on him and he had to get a much smaller flag. He never won a battle subsequently. I can only say to the Opposition that I hope there is not a lesson to be drawn for it in Lady Antonia Fraser’s novel.

page 1155

QUESTION

SYDNEY CITY COUNCIL ELECTION

Senator MASON:

– My question is directed to the Leader of the Government in the Senate. I ask: Is it true that the election for the Sydney City Council next Saturday has been thrown into confusion because of an election pamphlet circulated by the Civic Reform Association of Sydney Ltd telling Sydney people that unless they vote exactly along the lines of a suggested how-to-vote card their vote will be regarded as informal? Is it true that the Civic Reform Association has been ordered to stop circulating this how-to-vote card? Is it also true, however, that so many of these leaflets have already been distributed that they must have seriously and illegally misinformed many thousands of voters? In view of the danger of this kind of abuse, in view of the result of the coming Federal election risking challenge due to the huge and largely uncontrollable issue of party how-to-vote cards - at least some 25 million pieces of party literature - and in view of the monstrously wasteful and pollutant nature of these 181 tonnes of paper being scattered around the length and breadth of Australia largely to reluctant recipients, I ask: Will the Government provide at once for an authorised standard size format how-to-vote chart for each pary to be placed on the walls of each polling booth for this Federal election, and the names of political parties to be placed on ballot papers so citizens can have proper and reasonable information to form the direction of their vote?

Senator CARRICK:
LP

– I read a Press report this morning regarding certain wording on a howtovote card. I read the report with some interest because in decades past opposing parties to my party of political faith have used words of a very similar, if not identical, nature to that. I sought to keep them from being used because 1 believed they were ambiguous. I believe the mote has been in the eye of a considerable number of political party people in the past and the fact that in the past it has been used widely with an ambiguity in it suggests that the particular party itself, the Civic Reform Association, thought in all honesty that it could use it. Certainly other parties of other faiths had thought that in the past. That is not to say that ambiguity is desirable.

I do not know any subject in the electoral field that has had more debate than the subject of registering of political parties, having their names on ballot papers and having their names displayed. This matter has been considered by, I think, every government since Federation and for a variety of reasons. Some of them were very compelling, including grave difficulties about and great opportunities for subterfuge by people using very similar names for parties. This matter has not been proceeded with here or elsewhere. Nevertheless, it is always good to have another look. I have no doubt that the Government, when newly elected, will do exactly that.

page 1156

QUESTION

DEVELOPMENT OF URANIUM

Senator KILGARIFF:
NORTHERN TERRITORY

– I address my question to the Minister representing the Minister for Trade and Resources. There has been considerable development within the uranium province in the Northern Territory in the last few months. Large sums of money are being expended on development, creating employment for many people. As there have been comments that all this development is to no avail because there are no firm commitments or contracts for the sale of uranium, can the Minister indicate the contracts which have been arranged between Australia and overseas clients? What contracts are in the process of being negotiated? What future markets are foreseen? What countries are involved or are negotiating involvement in financing the development of the uranium province in the Northern Territory?

Senator CARRICK:
LP

– The facts are that Australian uranium is being sought and is being sold consistent with the Government’s safeguards policy, which is very well known. Honourable senators may have noted recent announcements by the Minister for Trade and Resources and by industry to the effect that contracts have been concluded for, I think, some 40,000 short tonnes of U308 worth around $2,400m at current prices. The buyers are in the United States, Japan, Germany, Korea, and Finland. German and Japanese utilities have taken an equity interest in Energy Resources of Australia and will contribute to financing the Ranger development. Moreover, as announced last year, Japanese utilities are also providing substantial finance to assist the Nabarlek development in the Northern Territory. This is a strong record and supports the Government’s decision in 1977 to proceed with further development of the Australian uranium industry.

Negotiations for further sales are continuing. The Government is confident that further sales will be announced in the near future. It would not be appropriate for me to divulge potential buyers while negotiations are under way. However, I can add that the likelihood is that there will be buyers in additional countries to those already mentioned. I have no doubt that there is something of a lag time in countries making up their minds to go towards nuclear reactors. I have little doubt that there will be a surge towards their use, as there must be in the absence of a sufficiency of other energy sources, and that the demand for uranium will be an increasing one in the years ahead.

page 1156

QUESTION

CRUDE OIL

Senator GEORGES:
QUEENSLAND

– I direct my question to the Minister for National Development and Energy. I am suprised at his amazing recall from time to time, and I wonder whether he can give me some information concerning the crude oil input to Australian refineries. Can the Minister give the figures for the input of Australian oil in comparison to imported oil for the years 1978 and 1979 and for the five months of 1980? In giving those figures, can the Minister explain why the proportion of Australian crude to imported crude is on the increase? How does he reconcile that trend with the Government’s policy of conserving Australian crude oil?

Senator CARRICK:
LP

– I will get the precise figures for those periods for Senator Georges. In point of fact, the Australian indigenous oil industry provides about 67 per cent of the market. In other words, at this moment from Bass Strait, Barrow Island and Moonie we produce roughly 400,000 barrels a day. That had fallen away to something approximating 380,000 barrels a day in more recent times. We import something of the order of 245,000 barrels a day. The International Energy Agency target for us is much higher. It is of the order of 275,000 to 285,000 barrels a day.

We have kept basically within the production output of Bass Strait. We have not moved substantially in increase it. However, as the demand for oil in Australia has fallen under our conservation and conversion programs, the kinds of products which have fallen away have lent themselves to a distribution which means that we have not needed to import as much oil. Basically, the refineries have not sought to import up to the 260,000 to 270,000 barrels. They stay at about 240,000

The question of conservation of the oil in Bass Strait, which I accept as inherent in the question, is one that is very dear to the Government’s heart. It is a matter which is under constant study. The Government came to office five years ago, and the known reserves in Bass Strait are greater today than they were five years ago. There is an addition of between two and three years of known and stored reserves. Such known reserves are greater than they were when we came to office. The process of ensuring that we have more reserves in Australia is proceeding.

Senator GEORGES:

– 1 ask a supplementary question. I will come directly to the point and give the Minister some figures. For the five months to May 1979 the proportion of local crude used was 68.66 per cent. The proportion of imported crude used was 31.34 per cent. The figures for the five months to May 1980 show the proportion of local crude used to be 70.28 per cent and the proportion of imported crude used to be 29.72 per cent. That indicates a substantial increase in the proportion of Australian crude used compared with imported crude. Does that not mean that the Government’s policy of conservation of Australian crude is failing?

Senator CARRICK:

– I said that I would need to look at the figures. For example, in a period when there is great industrial strife on the coast - as in recent months for example - there can be great variations in the delivery of indigenous or imported crude.

Senator Georges:

– I gave you two five-month periods.

Senator CARRICK:

– I know that. The situation depends on the degree of industrial strife. That is one factor. Let me make that clear. There may be others. I will look at the matter to see whether a trend, other than the ones I have mentioned, has occurred. Sadly enough, along the coast we have constantly had considerable industrial strife that varies the amounts of indigenous or imported crude that are delivered. I will look up the figures. If there is another explanation I will let Senator Georges have it.

page 1157

QUESTION

PROPOSED CRIME COMMISSION

Senator PUPLICK:
NEW SOUTH WALES

– Does the AttorneyGeneral recall repeated requests being made for the Government to consider the establishment of either a Federal royal commission or a Federal crime commission to look into drug related crime in Australia? Has he seen the latest reaction by the Premier of New South Wales, Mr Wran, rejecting the idea of establishing a crime commission in New South Wales? Has he seen the calls made in the latest report of Mr Justice Williams for a series of new bodies to fight drug related crime in Australia and also for bodies such as those to be given access to the taxation records of suspected individuals and to have the right to tap telephones and undertake other surveillance methods?

In the light of those latest developments- both Mr Justice Williams’ lastest report and the decision by the New South Wales Government not to have a crime commission in that State - will the Attorney again press for serious consideration to be given to the establishment of a national crime commission or a Federal royal commission to investigate drug related crime in Australia and the role of organised crime in Australia?

Senator DURACK:
LP

– I am aware of the suggestions that have been made for the establishment of a crimes commission or a royal commission. Senator Puplick asked me a question about it recently and I gave him a detailed answer. I have seen the views expressed by Mr Wran in relation to establishing a royal commission in New South Wales in regard to the matter. I have also seen reports of Mr Justice Williams’ latest report, although I have not seen the full report. Some of the suggestions of Mr Justice Williams already are being considered. The suggestion about widening the powers of telephone interception in drug investigations has already been incorporated in legislation, as the Senate is aware.

Since I answered a question on this matter from Senator Puplick I have given the matter further consideration. I have taken the matter to the Cabinet which has discussed it and made a decision in relation to it. The Prime Minister will be writing to the Premiers shortly conveying the views of the Government. I am not in a position to make a public statement about it as it is a matter which should be raised by the Prime Minister at Premier level in the first place.

page 1157

QUESTION

PETROL PRICES

Senator MCINTOSH:
WESTERN AUSTRALIA

– I refer the Leader of the Government in the Senate to the 1 977 election policy speech of the Prime Minister. Will he agree that the Prime Minister said: ‘Petrol prices in country areas will be reduced to within a cent per litre of the normal city retail price without an increase in city prices as a result’? Did the Minister yesterday, in reply to Senator McClelland, say that the Fraser Government has equalised the wholesale price and that it is fully within the competence of any State government to act in regard to the margin on retail prices? Was the Minister in his answer denying the 1 977 specific undertaking by the Prime Minister, or was he saying that in my State of Western Australia it is the Court Liberal Government which is responsible for the great disparity in the price of petrol in country areas compared with that in Perth?

Senator CARRICK:
LP

– The fundamental reason for differences in the price of any product, city or country, is essentially freight charges. The Government undertook to bring in a freight equalisation scheme for petrol in an effort to produce a minimal gap in price for the product between city and country. That was done in two stages, costing something like $123m a year to the taxpayer, and has in fact produced a gap in the wholesale price of petrol of approximately 0.44c a litre. So that undertaking has been fulfilled. It so happens that it is possible for retail mark-ups in various country areas to vary for particular reasons - maybe because of the lack of competition from discounting, maybe because of hardship in particular areas, or maybe because the throughput of the retailer is smaller and therefore his costs are higher per litre. The New South Wales Government has identified the fact that if it is to control the retail price of the product it has the power and the responsibility to do so through its own price fixing mechanisms. It, of course, has acted, and any State is competent so to act. That, in fact, is the substance of my reply yesterday.

Senator McINTOSH:

– I ask a supplementary question. The Minister referred to retail prices. Again I refer to the statement in which the Prime Minister said that petrol prices in country areas will be reduced to within a cent per litre of the normal city retail price without any increase in any city prices as a result. That was the promise.

Senator CARRICK:

– I have made it perfectly clear that the Commonwealth moved to provide a remedy to the essential factor of difference in price between city and country, that is, the question of freight charges. It has in fact carried out its undertaking to equalise freight charges. If, despite the action of the Government, other factors that affect the retail price of petrol have emerged and if they are factors that are within State constitutional responsibility, it is a matter for the States to act. The Commonwealth has fulfilled its role in overtaking the disability of freight with a freight equalisation scheme that we brought in.

page 1158

QUESTION

TARIFFS

Senator WATSON:
TASMANIA

– My question is directed to the Minister representing the Minister for Business and Consumer Affairs. For the purpose of the Australian tariff, Rumania and Yugoslavia are regarded as developing countries. Does this place these two countries in the same category as the newly independent countries of the Pacific? I further ask: By what criteria are countries classified as developing countries for purposes of exemption from application of the Australian tariff?

Senator DURACK:
LP

– I do not know whether 1 can answer specifically as to the comparison that Senator Watson has drawn between Rumania, Yugoslavia and the Pacific. I have some information in regard to Rumania and Yugoslavia being recognised as developing countries. All major developed countries, including Canada, the European Community, Japan, New Zealand and the United States of America, which operate developing countries schemes, accord that status to those countries. Australia introduced the scheme in 1966. At the time of introduction the DC status was largely a matter of selfnomination. Rumania and Yugoslavia have been accepted since the date of introduction of the scheme. I will refer the specific question relating to the comparison to the Minister for Business and Consumer Affairs and ask him to provide a further answer for Senator Watson.

page 1158

QUESTION

APPOINTMENTS TO THE TRADE PRACTICES TRIBUNAL

Senator GIETZELT:
NEW SOUTH WALES

– My question also is directed to the Minister representing the Minister for Business and Consumer Affairs. I point out to him that on 10 September the Minister for Business and Consumer Affairs announced the appointment of three men to the Trade Practices Tribunal. Does the Minister concede that the Trade Practices Act is concerned primarily with protecting the interests of consumers and small businesses? What qualifications does he believe a previous executive director of Conzinc Riotinto of Australia Ltd, a director of Australian Fluorine Chemicals Pty Ltd, Australian Mining and Smelting Ltd, Comalco Ltd, Hamersley Holdings Ltd, Legal and General Assurance Society Ltd, Mary Kathleen Uranium Ltd and the New Broken Hill Consolidated Ltd, and a previous company secretary to ICI Australia Ltd, would bring to the Tribunal to protect the interests of consumers in the small business sector? Does the Government consider that the selection of representatives who have spent their lifetime in the corporate sector and a top public servant is the balanced way to achieve the aims and objectives of the Trade Practices Act?

Senator DURACK:
LP

– I think Senator Gietzelt perhaps does not quite realise that the appointments to which he seems to be taking objection are to the Trade Practices Tribunal and not to the Trade Practices Commission. The question is hinged on whether the object of the Act is primarily to protect small business. The consumer protection part of the Act - Part V - is an important part of it. Other major parts of the Act deal with Trade Practices Act activities in the business sector. These activities require a great deal of expertise in relation to business practices and so on.

I would have thought that the Trade Practices Commission, not the Tribunal, is the body that has to deal mainly with the consumer part of the Act. Many proceedings are taken in the Federal Court of Australia under Part V of the Act, which contains the consumer protection provisions. The Trade Practices Tribunal is, of course, a body which hears appeals from the Trade Practices Commission. The appeals to that Tribunal - I think I am correct in saying this - are largely in respect of other provisions of the Act rather than the specific consumer protection parts. That is the impression I have. I will have that matter checked to make sure of the details.

Certainly it is necessary to have lay members on the Trade Practices Tribunal, which is presided over by a Federal Court judge. Mr Justice Deane is the President, and Mr Justice Lockhart and Mr Justice Sheppard are the Deputy Presidents of the Tribunal. They are all Federal Court judges. They sit on that Tribunal with two lay members. The appointments to the Tribunal of the lay members were the appointments to which Senator Gietzelt referred. They are, of course, people with very high qualifications, I think, to deal with the sorts of matters that largely they would be called upon to deal with on the Tribunal. However, I will refer the question to the Minister for Business and Consumer Affairs and put to him the specific points raised by Senator Gietzelt. He may wish to add something further to what I have said.

page 1159

QUESTION

TASMANIA: TELEPHONE CONCESSIONS

Senator TOWNLEY:
TASMANIA

– I ask a question of the Minister representing the Minister for Post and Telecommunications, who no doubt is aware that people living in certain areas of Tasmania have complained that they have not been included in the Community Access 80 telephone concession areas. One such area is in the east coast area of

Swansea, in the Glamorgan municipality. Is the Australian Telecommunications Commission examining the possibility of allowing additional areas access to those concessional telephone rates? If so, will the Minister ask that Swansea be included in such area?

Senator CHANEY:
LP

– I think the scheme to which the honourable senator referred in his question is the scheme which was instituted by Telecom - I must say, with the approval of the Government - to ensure that citizens had access to their local centre through a local call. In fact, right around Australia the zones and areas were reclassified to try to ensure that all subscribers had access to a reasonable centre at a local call rate. Needless to say, the decisions made by Telecom and the lines drawn have not received universal approbation of people. There are some areas of dispute. I think that is inevitable, given the size of the country and the fact that there are centres which perhaps are decaying and other centres which are gaining in importance as transport requirements and transport availability change. I am not familar with the facts relating to Swansea, but I will make some inquiries of Telecom through the Minister for Post and Telecommunications and find out whether a review is possible for the people concerned.

page 1159

QUESTION

MR KIM DAE JUNG

Senator GRIMES:
NEW SOUTH WALES

– Is the Minister representing the Minister for Foreign Affairs aware that this day Kim Dae Jung, a democratic socialist politician in South Korea, was sentenced to death by a military court? In view of the fact that in the past Mr Jung has been kidnapped from Japan by the Korean intelligence agency and returned to Korea, kept in custody for long periods without trial, and subjected to what can be described only as a political trial, will the Foreign Minister make a firm and vigorous statement from this Government deploring the action taken by the Government of South Korea, despite the Minister’s concern, expressed last week, I believe it was, that we value our growing relationships with that country and despite the Minister’s undoubted concern for our trade relations with that country?

Senator CARRICK:
LP

– I will refer Senator Grimes’s question to the Minister for Foreign Affairs and ask him to give the matter consideration.

page 1159

QUESTION

FISH QUARANTINE

Senator MacGIBBON:
QUEENSLAND

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

Health. In view of the Government’s recent response to the report on the adequacy of quarantine, what specific administrative steps have been taken to implement recommendations 30, 31, 32 and 40 in relation to fish quarantine? Do these administrative procedures embrace adequate safeguards to prevent the introduction of disease or parasites which cannot be excluded simply by disposing of the water in which fish are imported, ls the Minister aware that frequently fish are subject to parasitic infestation and that not much is known - more accurately, knowledge is very incomplete - on the subject of fish parasitology?

Senator McLaren:

– Read the speech I made on it last week.

Senator Dame MARGARET GUILFOYLEI am afraid I did not hear Senator McLaren’s speech and I do not have very much information on this matter. I am not able to respond to the question raised by Senator MacGibbon, but I will refer it to the Minister for Health for an early reply.

page 1160

QUESTION

ROSS RIVER DAM

Senator COLSTON:

– I direct a question to the Minister for National Development and Energy, but I realise that the question may need to be directed also to the Minister representing the Minister for Housing and Construction. I will ask the question and see which Minister thinks it more appropriate to respond. It relates to the Ross River Dam in the Townsville area, which so far has attracted $4m of Commonwealth funds. In view of the seepage problems which have developed in the dam in recent years and which recently were investigated by the Snowy Mountains Engineering Corporation, can the Minister advise what is the nature of the measures which must be incorporated in stage 2 works to ensure the stability of the dam at the stage 2 level?

Senator CARRICK:
LP

– The question is one that properly comes under my responsibility under the water resources program. I have a considerable amount of information regarding the Ross River and the program of development so far but not on the specific matter that Senator Colston raised. I will seek the information and let him have it as soon as possible.

page 1160

QUESTION

ATTENDANCE AT SENATE VOTES

Senator PETER BAUME:
NEW SOUTH WALES

– My question is directed to you, Mr President, and concerns the votes made in the Senate. It is prompted by an item this morning on the radio program AM in which Senator Chipp asserted: ‘We haven’t missed a day or a vote this session’. Since my perusal of available records from this sessional period suggests that this is an incorrect statement and indicates specifically that one or other Democrats was missing for about 30 per cent of all divisions and that each has missed at least 1 5 per cent of the divisions, will you, Mr President, undertake to have the officers examine the available records, whatever they are, to enable to be placed upon public record the true voting record of the honourable senator who made this assertion on radio this morning?

The PRESIDENT:

– I have a request to have certain statistics taken out by the staff of the Senate. I shall attend to that.

page 1160

QUESTION

AUSTRALIAN AIRLINES SYSTEM

Senator WRIEDT:

– I ask the Minister representing the Minister for Transport whether the Government has a proposal before it which would involve a major re-organisation of the Australian airline system. Does the proposal include the creation of a new privately operated international airline to be known as AnsettInternational? Is it proposed that six jumbo jets be transferred from Qantas Airways Ltd to the new operator? It is also proposed that TransAustralia Airlines will not be permitted any services outside Australia and that certain changes will be effected to both TAA ownership and management?

Senator CHANEY:
LP

– I have no knowledge of a scheme of the sort outlined by the honourable senator. I will refer it to the Minister for Transport.

Senator WRIEDT:

– I wish to ask a supplementary question. Will the Minister give an answer either that the Government has the proposal before it or that it has not? Can he also give an answer before the Parliament rises and an answer as to whether the Government intends to make public the details of the proposal before the election?

Senator CHANEY:

– I will endeavour to do as the honourable senator has requested, but I have no personal knowledge of the matter he raised.

page 1160

QUESTION

FISHING IN BASS STRAIT WATERS

Senator RAE:
TASMANIA

– I ask the Minister representing the Minister for Primary Industry whether his attention has been drawn to claims made by the Tasmanian Minister for Sea Fisheries, Dr Amos, that, firstly, the Commonwealth does not want foreign fishing in the waters of Bass Strait and, secondly, the Commonwealth is hedging over declaring a boundary between Tasmanian and Victorian waters because of its opposition to foreign fishing, particularly squid fishing, in those waters. Are the claims made by the Minister valid and, if not, what is the Commonwealth attitude? Will the Minister seek from her colleague the Minister for Primary Industry an assurance that there will be no attempt by the Commonwealth to have the constitutional, historical, traditional territorial boundary between Victoria and Tasmania - that is, latitude 39 degrees 12 minutes south - changed for any purpose, whether it be fishing, oil exploration, mining or anything else?

Senator Dame MARGARET GUILFOYLEI have some information on the matter that was issued in a Press release on 1 7 September by the Minister for Primary Industry. The Minister referred to the Press release by the Tasmanian Minister for Primary Industry and said that the Tasmanian Minister had made grossly inaccurate statements on development of a squid fishery in south-eastern waters. Dr Amos has been widely reported. The Press release states:

Dr Amos fully knows that these claims are not true. There is no Commonwealth opposition to proposals to establish a joint squid fishing venture in waters off Tasmania.

However, we want to ensure that any joint ventures are genuine, and not merely a disguise for extended operations under feasibility study conditions, which would be more favourable to foreign interests than to Australian participants. In its consideration of joint venture proposals, the Commonwealth will consult with Tasmania, or any other relevant State Government.

The current position is that only one definite proposal has been submitted for consideration, and other interested firms have yet to come up with detailed propositions.

The Press release of the Minister for Primary Industry continued:

What I have told Dr Amos, time and time again, is, simply, that there are no State boundaries between Tasmania and Victoria for fisheries purposes in Commonwealth waters.

Dr Amos has confused the fact that zones were established in waters between Tasmania and Victoria, but only for the purposes of the feasibility fishing studies. They were established to enable the most comprehensive picture possible to be drawn up of the resource and its potential for commercial exploitation.

Foreign companies wishing to enter into joint ventures are free to decide for themselves whether their Australian partner should be a Victorian or a Tasmanian company.

I will need to refer to the Minister for Primary Industry those aspects of Senator Rae’s question with regard to the assurances which were sought.

page 1161

QUESTION

MORTGAGE REPAYMENTS

Senator McLAREN:

– I direct my question to the Minister representing the Treasurer. Is it a fact that monthly mortgage repayments on a typical building society or bank mortgage of $25,000 have risen by $25 in the last two years due to interest rate rises? Is it also a fact that these rises, coupled with other price increases, are causing serious financial stresses to young married couples with children?

Senator CARRICK:
LP

– I have no specific knowledge of what a particular interest rate would mean. The Government’s whole aim is to get all costs down. Specifically, if the Government can get the cost of inflation down, of course it can get the cost of building materials down and in so doing give the greatest relief to home buyers. That is the Government’s primary aim.

Senator McLAREN:

– I ask a supplementary question. Does the Government collect information on such rises? If so, will the Minister supply it to the Senate?

Senator CARRICK:

– I would be happy to get the information for Senator McLaren and the Senate.

page 1161

QUESTION

CARGO THEFTS

Senator ARCHER:
TASMANIA

– I ask a question of the Minister representing the Minister for Transport. In view of the statement reported as coming from Mr Tim Beamish, director of the Victorian Road Transport Association, that organised crime on the theft of Australian National Line Bass Strait cargo had been stepped up, can the Minister ask the Minister whom he represents to follow up these allegations and to take whatever steps may be necessary to ascertain what organisation is referred to and to bring about its elimination? Can the Minister arrange as soon as possible for a report to be made on the allegations and on the nature, extent and cost involved in these thefts?

Senator CHANEY:
LP

– My attention has been drawn to the report to which the honourable senator refers in his question. The report is comparatively recent. I have made some inquiries about it. There is, of course, a very large passage of cargo across Bass Strait. The ANL is very heavily involved in it. It has in fact had relatively small claims for pilferage- for example, to the value of only $3,600 since the beginning of this year, which is lower than claims made in previous years. A regular process of consultation between freight forwarders and the ANL takes place. My advice is that at the last meeting of the Tasmanian. Road Transport Association on 5 August, that Association indicated to the ANL that there had been no upsurge of pilferage across Bass Strait. At an earlier meeting in June with the Victorian Road Transport Association some concern was expressed about pilferage, but there has been no reporting of specific incidents.

Following the complaints received from the Victorian Association, the ANL gave advice as to measures that may be taken for avoiding pilferage of cargoes carried in Tasmanian trades. The view of the Minister is that, given those discussions and the opportunities that there are to bring these matters to the attention of the ANL, it is not for him to take the sort of action which is suggested. If any of the honourable senator’s constituents or others make representations to him on this matter, I am sure that the ANL would be interested in hearing of them. If that does not prove to be a satisfactory approach, of course the Minister will be pleased to receive further representations.

page 1162

QUESTION

TECHNOLOGICAL CHANGE

Senator MULVIHILL:

– I preface my question, which is directed to the Attorney-General, who is also the Minister representing the Minister for Industrial Relations, by saying that I assume that he subscribes to the quaint doctrine to which I subscribe, that, next to governments, oppositions should be the first to receive all available information. It is in sorrow more than in anger that I refer to the information that our comrades of the Fourth Estate appear to have this morning, namely, that whilst the Government has rejected that part of the Myers report which deals with short cuts to trade union amalgamation, it has accepted part of the report. In view of the access of the Fourth Estate, can the Attorney-General tell the Senate how far he is going - he is bending a bit - to facilitate trade union amalgamation?

Senator DURACK:
LP

– The Leader of the Government has already answered a question on the Government’s processing of the Myers committee report. I have nothing further to add to that matter or to the report in the Press this morning. I will refer the specific part of the question relating to trade union amalgamation to the Minister for Industrial Relations to see whether he wishes to add anything.

page 1162

QUESTION

AUSTRALIAN CONSTITUTION

Senator NEAL:
VICTORIA

– Can the Attorney-General comment on the progress that has been made by the committee currently examining the Australian Constitution? What plans does the Government have for updating the Australian Constitution?

Senator DURACK:
LP

– I do not quite know what Senator Neal means by the committee examining the Australian Constitution. There is an Australian Convention which consists of delegates from the Commonwealth and State Parliaments, the Northern Territory and the Australian Capital Territory and also representatives from local government. The Convention last met in plenary session in Perth in July 1978 where a number of important matters were debated. Some further committee work was put in hand. The committee work is being carried out by Standing Committee

D of the convention which was originally established at the Sydney convention in 1973.

That Committee, of which I am the Chairman, has a number of matters under examination, including a new draft of the Perth resolution on ‘the Senate and Supply’, an advisory jurisdiction for the High Court, conventions of the Constitution, a four year parliament and Territorial representation in the Federal Parliament. The Committee has been provided with the assistance of Senator Rae and Senator Evans in its task of preparing a new draft of ‘the Senate and Supply’ resolution. In the performance of its other tasks, the Committee has commissioned some papers from constitutional authorities. One paper, by Dr Cheryl Sanders and Mr Ewart Smith, was recently published. When the Committee has finished its examination of these various references it will be reporting to the Executive of the convention.

No further decision has been taken about the next meeting of the plenary session of the convention. As the Senate would be aware, the Constitution commits to the Federal Parliament the power to initiate referendums to alter the Constitution. Following the 1976 Hobart convention, a number of proposals were put to referendum with limited success. However, after the Perth convention there did not appear to be a very clear consensus. In view of the history of referendums in Australia, I think it is pretty clear that it is not much good putting referendums to the electorate unless there is a wide consensus on a particular matter. That is the up to date position of the Constitutional Convention. I do not think I can add anything further al this stage.

page 1162

QUESTION

AUSTRALIAN LABOR PARTY: PROGRAMS

Senator WALSH:
WESTERN AUSTRALIA

– My question is directed to the Leader of the Government in the Senate. In reply to a question yesterday he said: . . during his reply to the Budget, Mr Hayden said that the cost of his programs had been hidden from no one. He announced that five of the Labor programs and a tax cut in the one year would cost no less than $ 1 ,435m on his own costings.

When asked to table the document from which he was apparently quoting, Senator Carrick said:

By the way, it is a speech by the Prime Minister on Thursday, 28 August, on the Budget.

Since Mr Hayden gave no such figure of $1 ,435m, either in aggregate or disaggregated form, I ask Senator Carrick whether he will apologise for misleading the Senate by purporting to quote from Mr Hayden when he was, in fact, quoting from Mr Fraser.

Senator CARRICK:
LP

– I will, in fact, give chapter and verse from Hansard in support of what I said yesterday. I will make that available to the Senate as soon as possible.

page 1163

QUESTION

CUTS IN TASMANIAN PUBLIC SERVICE

Senator WALTERS:
TASMANIA

– My question is directed to the Leader of the Government in the Senate. Has the attention of the Government been drawn to the campaign by the Tasmanian Labor Government among the public servants suggesting that the need for cuts in the Tasmanian Public Service is because of Federal Government policies. I ask: Is it not a fact that the State Public Service is the responsibility of that State Government? Is it not a fact that under the tax sharing grant, Tasmania will receive an increase of at least 10.5 per cent for the year 1980-81 and that last year, because of our tax sharing policy, the State was able to end the year with a surplus of over $19m? Would it not be reasonable for the State Government to accept its economic responsibility instead of asking for higher grants from the Federal Government while complaining that the rate of taxation is too high?

Senator CARRICK:
LP

– The responsibility for the conditions of the State Public Service, both in relation to its size and dimensions and its pay and conditions, is entirely for the State Labor Government in Tasmania. It is a fact that State governments throughout Australia over the past five years have demonstrated the burgeoning of their finances in a number of ways. For example, although the Federal Government has restrained the total number of its public servants and has even reduced the number, the States have collectively increased their numbers by tens of thousands. That demonstrates that the States had hundreds of millions of dollars extra for expansionary purposes.

Senator Wriedt:

– You are always blaming someone other than yourself. You have never been any different. You are the greatest bunch of whingers.

Senator CARRICK:

– Despite the brain-fever birds around and despite those who are migrating to other places from the Senate, it is a fact that Tasmania has been able to operate at a surplus. It has had the ability to do the jobs. It is trying to establish an alibi for its own failures.

page 1163

QUESTION

DIETHYLSTILBOESTROL

Senator MELZER:

– My question is addressed to the Minister representing the Minister for Health. In preface I remind the Minister that diethylstilboestrol is a drug that has been prescribed to women for problems of pregnancy. It is commonly known as DES. The use of this drug was banned by the Food and Drug Administration of the United States of America on 10

November 1 97 1 and in Canada this year because of reports linking the use of DES with the development of clear cell cancer of the vagina and cervix in daughters of those women. It is also becoming increasingly apparent that the mothers have a higher risk of breast and genital cancer and the sons risk genital tract problems including sterility. Twelve months ago the Minister called for an urgent report from the Australian Drug Evaluation Committee. Will the Minister table the report or, if it has not been presented to him, will he insist on urgent action to produce that report and give consideration to prohibiting the use of the drug? Will the Minister have an immediate search begun of the pharmaceutical benefits records to identify users of DES? Will the Government alert the medical profession to the urgent need for attention to be given to the DES issue, urging the medical profession to notify patients, both past and present, as to the necessity for seeking medical examination and advice?

Senator Dame MARGARET GUILFOYLEI will refer the matters raised by Senator Melzer to the Minister for Health. I will ask him to determine what action he is able to take, if some report has been received by him, and to advise Senator Melzer on the various matters that have been raised.

page 1163

QUESTION

FACILITIES IN NURSING HOMES

Senator JESSOP:
SOUTH AUSTRALIA

– Is the Minister representing the Minister for Health aware of the current concern being expressed by the community at Port Augusta over the lack of adequate nursing home facilities for older citizens in that city? Has she been informed that at present many of these people are being accommodated at the Port Augusta hospital and that this is presenting the hospital board with problems associated with the accommodation of other medical and surgical patients? Has the Minister also been notified that a steering committee has been formed to submit a proposal for the establishment of a nursing home, possibly associated with the Alec Ramsey Village which was opened earlier this year? Will the Government give urgent attention to such a proposition with a view to committing funds at the earliest possible date to enable this necessary facility to be built?

Senator Dame MARGARET GUILFOYLEI am aware of the interest in the provision of nursing home beds in Port Augusta. At present my Department has no outstanding application for nursing beds from the committee to which the honourable senator referred, although I am aware that the South Australian office of the Commonwealth Department of Health has received an application for consideration by the Commonwealth-State Co-ordinating Committee for that State which deals with applications for nursing home beds. I understand that that application will be considered at the meeting of the coordinating committee which is to be held this month. Following that meeting, if there is a favourable consideration of the application, my Department will then be able to give consideration to the funding of the proposal. In the meantime, if the steering committee wishes to have assistance from my Department in the preparation of its proposal, my Department would be happy to provide that assistance. If the honourable senator would like to arrange for contact with my Department, that may be of assistance to it in preparing the proposal for funding by my Department. As I said, we have no application as yet, and the matter cannot be considered by my Department until the Commonwealth-State coordinating committee has considered the application.

page 1164

QUESTION

AUSTRALIAN-IRISH RELATIONS

Senator CARRICK:
LP

– May I make a brief comment arising out of a question asked of me yesterday by Senator Evans on Irish- Australian relations. Senator Evans asked a question about Australian Government assistance to the chair of Australian history at University College, Dublin. The agreement made by Mr Whitlam was to provide $70,000, not $64,000 as stated by Senator Evans, to help University College, Dublin, establish a chair of Australian history. The grant was to be spread over five years, and that period ends on 30 June 1981 . About a year ago it became apparent that the chair was in financial difficulty, and the Minister for Foreign Affairs agreed to provide up to $20,000 extra in each of the financial years 1979-80 and 1980-81.

All concerned agree that in academic terms the chair has been a success and should continue to function. However, there is likely to be a continuing gap between the cost of operating the chair and what the University College can contribute. The question of how to secure the financial future of the chair is currently receiving close attention, but no decision has yet been made. I can assure honourable senators that all those involved hope that a satisfactory conclusion can be found.

page 1164

QUESTION

ABORIGINAL LAND RIGHTS

Senator CHANEY:
LP

– Yesterday Senator Primmer asked me a question about a document signed by the Prime Minister relating to Framlingham. I have sought and obtained from the Prime Minister’s office a photocopy of a document which shows the signature of the Prime Minister and the initials and signature of Mr Clarke. It is in the terms of the statement which has been published in the newspaper. I will table that document for the information of honourable senators.

page 1164

QUESTION

ATTENDANCE AT SENATE VOTES

Senator CHIPP:
Leader of the Australian Democrats · Victoria

– by leave - I did rise, but I was unable to get your call during Question Time, Mr President. I ask whether you would consider, when presenting the figures sought by Senator Baume, simultaneously tabling in the House the number of days on which each Government senator has been absent from the Senate this session, the number of divisions which each Government senator did not attend, and the number of Government senators absent at each division of the Senate this session?

The PRESIDENT:

– Order! Further to the question asked of me by Senator Baume this afternoon relating to the individual voting records of individual senators, my Clerks have given further consideration to this matter. They advise me that, in line with past practice, it would not be proper to involve Senate officers in such an exercise.

Honourable senators:

– Hear, hear!

The PRESIDENT:

– Order! The official record of the Senate is the Journals of the Senate, which contains the records of senators voting on all measures upon which the Senate divided. Those records are public and available to all for any research in which senators or others may wish to engage.

page 1164

FRASER GOVERNMENT: ECONOMIC POLICY

Matter of Urgency

The PRESIDENT:

– I inform the Senate that I have received the following letter, dated 17 September 1980, from Senator Gietzelt:

Dear Mr President,

Pursuant to Sessional Order, I give notice that today I shall move -

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

The failure of the Fraser Government’s economic management.

Yours sincerely,

T. GIETZELT ALP Senator for New South Wales

Is the motion supported?

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

Senator GIETZELT:
New South Wales

– I move:

I will refer to and analyse the 1975 policy speech of the Prime Minister (Mr Malcolm Fraser) and show the abysmal failure of the Fraser Government’s economic management over the last five years. I think it is proper and right that the Parliament should have an opportunity to examine after five years the promises that the Fraser Government made and its strategy. It said that its program required three years. It has been in office for five years and it is now offering itself for reelection. I put it to the Senate that the analysis that will be made in this debate will show that the concept of giving the Fraser Government another three years in office is too terrible to contemplate. In 1975 Mr Fraser said: ‘Australia needs change’. We have certainly had change - for the worse. He said: ‘Australia needs reform’. We have had none. He said: ‘Australia needs idealism’. That, of course, is at a very low ebb. In his policy statement in 1 975 Mr Fraser said:

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

We have a comprehensive strategy to restore prosperity.

We will reduce the tax burden and support wage indexation.

The real value of the pensions will be preserved.

There will be a return to business confidence.

There will be jobs for all who want to work.

Price and wage restraint is an essential element in our strategy, which is designed to bring down the rate of inflation.

We will use funding to overcome the inadequacies in education facilities.

There will be an end to government extravagance and excesses.

There will be no international safaris by members of parliament. Australia does not need a tourist as a Prime Minister.

Getting rid of extravagance will make its own contribution to reducing the deficit.

In addition a growth rate of 6/7 per cent per annum would enable us to reduce the deficit.

The Government’s economic strategy will be designed to bring down the rate of inflation.

We will give the rural community the confidence and certainty it desperately needs.

We will maintain Medibank.

We will ensure that no person shall be denied legal aid because of lack of means.

We will stand by our commitment to abolish the means test.

As I go through every one of the principles which the Prime Minister stated in 1975 - to be repeated in the campaign for the premature election of 1977 - we will see how this Government’s economic policies have completely failed. In an address to the nation on 17 November 1975 he referred to those who were the worst off in our society - the weak and the unorganised, the poor and the retired, the small businessman and the farmer, the school leaver and the family man, who was paying more of his wage in tax than ever before. This has been a government of broken promises. Let us look at the growth rate under Fraserism. In 1976-77 it was 3.1 per cent; in 1977- 78 it had dropped to 0.31 per cent; in 1978- 79 it went to 3.95 per cent and in 1979-80 it was 2.1 per cent. We know that the 1980-81 Budget growth rate is estimated to be similar to that of last year.

Mr Fraser said that Australia would not have a tourist as a Prime Minister. In4½ years he has made 26 separate overseas trips. In Mr Whitlam’s three years of office he made only 13. Mr Fraser’s record is currently about one trip every 10 weeks. That takes into account that Mr Whitlam was not only the Prime Minister but also, for some time, the Foreign Minister. Mr Fraser is on the record as saying: ‘On my visits overseas commercial aircraft will be used as far as possible. The argument that Qantas cannot provide adequate security is specious and false’. This man, at every turn in the last five years, can be shown to have failed the Australian people. He has failed to honour the promises he made to them. He said: ‘We will begin the task of economic management. Our principal objectives will be to control inflation, to get confidence back into the private sector and to set the economy on to a path of full recovery, and we need three years for that program’.

Let us look at the last five years of economic insanity that has laid the ground for one of the gravest crises that the Australian people have had to face in the post-war years. What are the signs of this? The Government was elected on a platform of promised prosperity. It has built on that platform a gallows upon which 427,000 unemployed people stand with their heads in a noose. In October 1975, for example, unemployment stood at 247,000. W. D. Scott and Co., in this month’s edition of its publication Economic Advice to Business predicts the following levels of unemployment: In 1980-81 an increase to 7.5 per cent; 1 98 1 -82, 9.3 per cent; 1 982-83, 9.5 per cent.

We are entitled, therefore, on the basis of the projection from that reputable organisation to ask whether in fact the Government deserves another three years in office. That is the prospect if we face another Fraser Government- a government whose leader, on 18 August 1976 said: ‘A pool of unemployment is not part of our strategy’. It is not a pool; it has become an ocean. Both the Commonwealth Employment Service and the Australian Bureau of Statistics figures for the last three months show that unemployment is higher than for the same months of last year. The ABS figures show 408,000 unemployed and the CES figures show 427,000 unemployed as at June 1980. In June 1979 there were 389,000 unemployed, according to ABS; that is, there are 17,500 more unemployed than at this time last year. Since the Fraser Government came to power the number of unemployed people has increased by 181,500. On the other hand, the number of job vacancies in Australia has decreased by 7,100 in the period February to May of this year. There are now about seven vacancies for every 1,000 jobs. This is the lowest rate since these statistics were first collected. In the three years of the Labor Government the number of private sector civilian employees increased by over 50,000. In the four years of the Fraser Government the number of private sector civilian employees has in fact decreased by the precise figure of 2,000.

The effect on the young in particular is appalling, and yet they are continually bombarded with the idea that their jobless state is their own fault. There are thousands of young people in this predicament. The figures tell only a little part of the tragedy. No wonder the Christian churches are now joining with the trade union movement to try to awaken public conscience about these matters. At the moment 32 per cent of 15-year-olds are jobless, 23.4 per cent of 1 6-year-olds are jobless, and 1 8.7 per cent of 17-year-olds are jobless. More than one out of every five people in this group are trying to survive on $36 a week - they are watching even that small amount, that measly amount, eaten away by inflation which is now in double figures - with little hope for the future while the Fraser Government is running the affairs of this country. No wonder there is a rising incidence of alcholism drug addition, crime, and even suicide. This Government - the Fraser Government - has much to answer for, and the time is fast approaching for that act of judgment. What about inflation, the perennial defence mechanism of every Government member in the national Parliament? Was not this the Government which was to put inflation first? I well remember the day - it was 1 2 September 1978- when the Government said:

  1. . inflation at an annual rate of 5 per cent … by mid 1979. It will go on falling . . .

That was said by Mr Fraser and little Sir Echo, Mr Howard. When that promise was made inflation was 7.8 per cent. It has since continued to rise, and is currently 10.7 per cent. The 1980-81 Budget Papers make it clear that it will not be reduced. In fact, there is every likelihood that it will go considerably higher. It is clear that this Government, in placing inflation ahead of the well-being of pensioners, the unemployed, the sick and the old, is well behind the needs of capital for investment allowances, export subsidies, mining tax concessions, and the unrestricted abilities of those in higher income groups to cheat the public by tax avoidance. Despite all the rhetoric, all the promises and all the legislation the fact is that even the Treasurer (Mr Howard) admits that thousands of millions of dollars are lost to Commonwealth revenue as a result of the 1 5,000 fully paid organisers in the taxation, legal and accountancy fields, who set out with the task of robbing the rest of the Australian community so far as tax avoidance is concerned.

What has been in the last four Budgets of this Government? The Government has reduced the spending power and the living standard of the Australian people by about $4,000m. Major cuts have been made in spending on public health, public education, public housing, welfare programs, services for Aborigines, migrants and the protection of the environment. As a result there is increasing unemployment in this country, increasing poverty and increasing neglect of the basic needs of the overwhelming majority of our people. The last four Budgets of this Government have been used to increase public assistance to large, private, corporate companies. An enormous amount of wealth has been transferred from the ordinary people to that sector under this Administration’s policies. Of course, 1 am referring to the corporate sector. The total value of taxation concessions, additional subsidies and incentives to these companies over the last four years has been in excess of $4,000m. This year we must add at least another $ 1,000m. In terms of receipts forgone the Australian taxpayer will cough up $8 16m for investment allowances to business - a rise of 18 per cent. Specific handouts to the mining sector rose to $240m, a massive rise of 87 per cent. This was all in the vain hope and the false belief that business would respond to these massive handouts of public funds. The Government has taken from the poor to aid the wealthy. This also shows the Government’s preoccupation with the business sector and with the deficit.

Let us look at the deficit. This Government has rearranged Budget expenditures to play a con trick upon the Parliament, upon the Australian people and upon the way in which the expenditures have been organised since Federation. The Government has not reduced the Budget deficit. In fact, it has handed over to Telecom Australia, to other similar public authorities and to the State governments for their infrastructure borrowing, new methods by which they can raise their funds. Therefore, by taking those moneys out of the Budget the Government claims that it has in fact reduced the deficit. We all know what that means in terms of increasing the rate of inflation. In order to defend the Government’s inflationary policies, the Prime Minister resorted to saying:

We’re better off than most.

That has been the catchery of Government senators, usually referring to the Organisation for Economic Co-operation and Development average. This is an average that includes such major trading partners as Iceland whose inflation rate is 62 per cent; the United Kingdom, 18 per cent; Greece, 25 per cent; and not to mention Turkey’s runaway inflation rate of more than 1 00 per cent. Is it any great feat to have a lower inflation rate than these countries? What about one of our major trading partners, Japan, which has an inflation rate of 8.4 per cent? How do we compare with countries such as West Germany with an inflation rate of 6 per cent and Switzerland with an inflation rate of 3.2 per cent? What false consolation is this? What false policies and philosophies do we rely upon? Mr Fraser would be pleased, obviously, if the OECD average hit 20 per cent and Australia’s average hit 1 9 per cent. We would still be better off according to the rhetoric of the Fraser Government.

Even the Treasury sees problems with the Government’s policies, particularly over the impact of his much vaunted and exaggerated resource boom. We get a glimpse of this in Statement No. 2 attached to the Budget Speech. In that statement we are told rather ominously that: . . new problems are emerging which suggest that the capacity of the economy to grow without inducing inflationary pressures may still be more limited than it was in earlier years.

What are these problems? On the next page of the statement we are told:

Foremost among these is the danger that the prospective surge in private business investment and the (in some cases associated) increase in public sector infrastructure investment could result in straining the existing capacity of the economy, leading to an upsurge of wage increases and an acceleration in cost and price inflation.

Yet this Government has the impudence to suggest that all the problems will be solved if, in fact, we allow the resource boom to continue with the assistance of the Fraser Government. At last the Government’s philosophy is out in the open. It admits the problem is capital investment. We say it is too much and that it is in the wrong area. What conclusion does the Treasury come to? It has stated:

Some degree of delay, which is implicit in the discounting of the investment expectations noted above, may not be altogether a bad thing; too rapid a rise in domestic economic activity could quite quickly run up against sectoral capacity constraints and thus generate increased inflationary pressures.

Look at the Budget documents relating to taxes. Budget receipts for 1980-81 will be 26.7 per cent of the gross domestic product - the highest proportion ever recorded in peacetime. Despite the rhetoric of the Fraser Government, every year Budget receipts as a proportion of GDP have exceeded those of the Whitlam Government. The average during that period was 24.4 per cent. Under the five years of Fraserism the average has been 26 per cent. This is the highest tax government in Australia’s history. Of course, the result has been to depress consumption expenditure and increase unemployment. One should look at the $8,000m that has been collected out of the ordinary person’s pocket every week as a result of the levy on crude oil. Under this Government, real household disposable income has fallen by about $15 a week.

Of course, we should also look at the Commonwealth debt. What is Mr Fraser’s record in respect of the public debt which is another means by which he has allegedly reduced the deficit? The total Commonwealth debt which the previous Labor Government had increased by $2 billion stood at $5.9 billion. Mr Fraser and his policies increased this amount by $12 billion to a massive $18.5 billion. That is, on a per capita basis - for each man, woman and child in our countnry - the debt has gone from $440 in 1975 to $1,260 in 1980. If we were to adopt Mr Fraser’s ignorant approach we would be saying that the incoming Labor Government will have to pay ofl” Fraser’s debts. While on the subject of debts we should investigate the Government’s deceitful attitude on interest rates. Firstly, we have the deceits of the past, the false, despicable and dishonest promises made by Mr Fraser on 3 December 1977 when he said:

A 2 per cent reduction in interest rates in the next 12 months is a target that can and will be achieved.

Three days later he said:

Once the election is over, we will start to move to the consummation of a 2 per cent reduction in interest rates.

We all know the hollowness of that promise. The sheer hypocrisy and repetition of that claim need to be exposed. Official interest rates at the end of 1 978 when Mr Fraser made that statement were 8.8 per cent. At the end of 1979 they were 1 1 .2 per cent and now they are up to 1 1 .75 per cent - the highest interest rates ever in this country. We come to another deceit of the Fraser Administration. In the annual report of the Commercial Banking Corporation the managing director yesterday pointed to the fact that this Government has to face up to the fact that interest rates will have to rise even further.

We talk about business confidence. I think it is impossible for this Government to conceal the unfortunate truth that the small business sector is another area affected by this Government’s economic policies. The figures for bankruptcies for the year 1979-80 show that business bankruptcies have risen by 162 per cent since 1975-76 to a high of 4,979 - that is almost 5,000. There has been an inexorable increase in each year that this Government has been in office. Small businesses can hold no hope for the future while such policies are allowed to continue. Bankruptcies are affecting the small businessman and, as such, it is not only the working people of this country and the farmers who Mr Fraser promised to look after who are being affected. Mr Wearing, the Executive Director of the Australian Wheatgrowers’ Federation, has talked about the crude oil levy.

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

Senator GIETZELT:

– He said:

This confirms the often expressed cynicism of farmers that a crude oil levy is nothing more than a crude device to increase government revenue.

Mr President, thank you for your indulgence. I think I have shown in the brief time available to me that the Government has failed the people of Australia over the past five years in the area of economic management.

Senator MESSNER:
South Australia

– Mr Acting Deputy President, I hope that you will be just as indulgent with honourable senators on this side of the House as you were with Senator Gietzelt.

Senator Gietzelt:

– We always are with you.

Senator MESSNER:

– Indeed, he is a very indulgent person. I rise in total disappointment to express my very great concern at the pathetic case that has been made out by Opposition speakers on this matter. They sought to establish that the Fraser Government had failed in the area of economic management. Shortly I will turn to considering some facts in order to establish that that claim is a total falsehood. Before doing so, I note that while Australian Labor Party senators and members of that party such as the Leader of the Opposition, Mr Hayden, dance on the graves of the unemployed, their policies would restrict the job opportunities of vast numbers of people with potential in this country and indeed would inhibit business confidence and restrict foreign investment in the resource sector. In that way, they would ensure that the situation in the future will be the same as it was under the disastrous Whitlam Government.

I turn now to consider a few of the points Senator Gietzelt made. He sought to put the major proposition that the Fraser Government’s economic strategy rested solely on the establishment of a resources boom to solve unemployment problems. That demonstrates quite clearly the fundamental misunderstanding of direction of the Labor Opposition. It again clearly demonstrates to me that there is no hope of their regaining government when they misunderstand the major difficulties of our economy. Time and again for the benefit of the Opposition we have to say that inflation and unemployment are not mutually exclusive economic factors. There is no question that one is derived from the other. In fact the situation is that our major economic difficulties are caused by inflation and increases in costs which cannot be absorbed by the economy, thereby producing imbalances in the economy which lead to unemployment.

If we examine the matter of inflation we will see that the situation is as simple as this: In 1975 Australia was amongst the countries with the highest inflation rates, whereas in 1980 Australia is amongst the countries with the best performance in fighting inflation. That is the fundamental point. While the countries with which we deal, namely the United Kingdom, European countries and, relatively speaking, countries such as Japan and the United States of America, have had rapidly expanding rates of inflation in the last few months, the rate of growth of inflation in Australia has been relatively small. By virtue of that, we have been able to maintain the level of our exports to those countries and even to increase them dramatically.

The essential point about the Australian economy is the smallness of its domestic market and the need for us to improve our total market size in order to develop job opportunities in Australia. In that context, Opposition senators might take note of the fact that last year we had a dramatic rise in the amount of manufactured goods exported from Australia, which created job opportunities widely across Australia. That is a fundamental fact that has come directly from the control of inflation by the Fraser Government, which was not practised by the Whitlam Government. The point about this is quite clear. If we can increase the number of goods that we sell on the world market so we will improve job opportunities for Australians. Another factor which is involved is that if we are as competitive as that we will restrict the number of goods being imported into Australia, which will lead to the displacement of workers in various industries. As an example we can cite what happened in Australia in 1974 and 1975 during the period of the Whitlam Labor Government when industries such as the car industry, the textile industry, the electronics industry and the shipbuilding industry were destroyed by imported goods flowing into this country because those goods were so much cheaper than Australianmanufactured goods.

I leave the Senate with one important statistic in this area. I hope that even the Labor Party might be able to see the significance of it. Taking 1 97 1 as the base year and applying an index of 1 00 to cost competitiveness in that year, by 1974 cost competitiveness in this country had fallen to 83 on that scale. That meant that, as a result of Government policies at that time, we were 17 per cent less competitive than we were in 1 97 1 . In 1 980, on that scale, the index stands at 1 1 7. In other words, we are 1 7 per cent more competitive on the world market today than we were in 1971. We have retrieved magnificently the situation which existed under the Whitlam Government in 1974 and 1975.

The Government, having laid such stress on the need to control inflation, has entered into certain programs in order to expand further job opportunities in Australia through the export sector. One of the key incentives in that area is the provision in this year’s Budget of some $260m for export incentives to Australian exports. Job creation flows directly from this, and it is no accident that in this last financial year 212,000 new jobs were created as a result of this activity. In fact, it is interesting to note that whereas from 1974 to 1975 under the Whitlam Labor Government the total number of jobs available in the Australian community decreased, since 1975 the number of people employed in Australia has increased by some 429,000. Sure, there has been some small increase in unemployment since 1975, but the fact remains that 429,000 Australian people are in work today who were not capable of being absorbed into the work force in 1975. Does that display a failure in economic policy by the Fraser Government? Of course not. It is that which this Government is setting to with a will. Indeed, it is very interesting to acknowledge too that whereas since 1975 there has been a fall in the proportion of people in the work force, in the last year the proportion has risen to a level higher than it has been since 1973-74. That is a very significant factor and one which augurs well for the future.

When considering unemployment it is important to consider certain fundamental social changes that have affected unemployment statistics since 1974. I refer in particular to the very significant events that have occurred, for instance, in South Australia. In that State we have seen the introduction of very substantial workers compensation payments and very substantial benefits in respect of certain worker benefits. People do not necessarily say that, in an affluent country such as Australia, it is bad that such benefits are provided. The problem is that it has led to further effects through increased workers compensation insurance premiums and to increased costs for business. This in turn has forced business to restrict the number of people it is prepared to take on to the payroll except subject to the most stringent circumstances.

I instance the case of the Broken Hill Pty Co Ltd at Whyalla. Workers at the steelworks find it very difficult to get jobs with BHP because they must be 1 00 per cent medically fit, notwithstanding the fact that Whyalla has an unemployment rate approaching 14 per cent. It is an incongruous situation. Mr Acting Deputy President, as you well know, it is a position that requires a great deal of consideration. Given that we have accepted social benefits throughout the community, such as were instituted in the 1973-76 period, we have a new range of people who are virtually unemployable in the sort of work previously available to them. That is not a question that can be dealt with in rhetorical terms in this sort of debate. It is something we need to address our minds to in other ways. That is one aspect to a very important question which this Government is addressing itself to. I will refer to another aspect of the unemployment problem. An atricle appeared in the Adelaide Advertiser yesterday, headed: Firm cannot find skilled tradesmen’. The article reads:

A Rosewater engineering firm with a contract to build five futuristic locomotives is having trouble recruiting enough skilled tradesmen to build them.

The firm, Clyde Engineering (SA) Pty. Ltd. recently signed a contract worth about $6m to build the diesel-electric locos for an iron-ore mining company. Hamersley Holdings Ltd.

That, of course, puts the lie to the point made by Senator Gietzelt that resource-based projects do not create work. The article further states:

Clyde’s (SA) manager, Mr W. W. Cole, said yesterday that the contract with other contracts held by the firm meant the Rosewater plant’s workforce would have to be doubled in the next six months.

This meant about ISO new jobs.

The jobs were mostly for skilled trademen and the company was expecting further difficulty in finding them.

The main tradesmen wanted were boilermakers, welders, mechanical, electrical and pipe fitters and some machinists. The article goes on to make the point that the general manager of the South Australian Chamber of Commerce and Industry very strongly supported those statements. Clearly, there is a very great shortfall in the number of skilled workers available in our community, notwithstanding that these jobs are available today. The Fraser Government is moving to solve those fundamental and deep-seated difficulties in the unemployment market. This demonstrates again the clear commitment of this Government to addressing itself to the right sort of priorities. It is not claiming rhetorical benefit in the community and using vote-winning catchphrases in order to get votes for the election on 1 8 October. We are interested in results, not in rhetoric.

I will put just one or two other matters to rest as well. I noted that Senator Gietzelt in his speech mentioned Commonwealth sector borrowings and the deficit. He was seeking to make the point that the total borrowing by the Commonwealth was some sort of accounting trick, that there was some sort of legerdemain in operation by the Government. I point out that on page 282 of Budget Paper No. 1 under the heading: ‘Public Sector Deficits As a Proportion of GDP’ we see that whereas in 1975 the total deficit for all Commonwealth authorities was 4.1 per cent of the gross domestic product, at the end of the year to June 1 980 the figure was 2.2 per cent. In fact, it had been halved.

Senator Keeffe:

– Oh, magnificient!

Senator MESSNER:

– If Senator Keeffe seeks to make a point perhaps he ought to get the facts right. That is not something for which he is renowned. In money terms the total Commonwealth sector deficit in 1975-76 was $3, 549m. In 1979-80 it was $2,462m. It had fallen in money terms, quite distinct from real terms, by about 50 per cent. Is that the sort of point that Senator Gietzelt wants to make to the community? He should try to get his facts right when he argues such fundamental issues? Apart from the charade that Senator Gietzelt has been making a number of factors ought to be referred to but I am not now going to bore the Senate with a series of arguments against the various points that have been made. I move:

That the question be now put.

The PRESIDENT:

– The question is that the question be now put.

Senator Wriedt:

– Mr President, I take a point of order. It was my clear understanding that the Government had agreed that there would be three speakers on either side in this debate. We have had one speaker on each side and now we are having the gag motion imposed on us. I think that if this was the intention it is up to the Government to explain why the agreement has been broken.

Senator Peter Baume:

– On the point of order, Mr President, there has been no such agreement. The arrangements were made through the usual channels. There is no such agreement and Senator Wriedt is incorrect. A message must have gone wrong somewhere. I gave a clear indication through the usual channels that there would be one speaker a side.

The PRESIDENT:

– There is no point of order involved. 1 cannot accept that as a point of order. The motion has been put by the speaker and is in accordance with the Standing Orders.

Question put:

That the question be now put.

The Senate divided. (The President - Senator the Hon. Sir Condor Laucke)

AYES: 31

NOES: 24

Majority…… 7

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the negative.

page 1171

PERSONAL EXPLANATION

Senator GEORGES:
Queensland

- Mr President, I seek leave to make a personal explanation.

Leave granted.

Senator GEORGES:

– It was unfortunate that I was absent at the meeting of the Joint Committee of Public Accounts on the other side of the building when the urgency debate was brought on. It seems that the Government Whip commented that there was an agreement. It is true that the Government Whip said that he would allow only one senator from each side to speak in that debate. I said that we would oppose that course being followed. The matter was in his hands. There are three speakers on the list that we provided. Is that correct?

Senator Peter Baume:

– That is correct.

Senator GEORGES:

– If that is correct, let there not be any misunderstanding. It being broadcast day the Opposition asked that three honourable senators from each side be permitted to speak in the urgency debate. The Government determined that because of its program for today it would allow only one speaker. We have opposed that course; the Senate has divided on it. If we were feeling a little more aggressive we would move that so much of the Standing Orders be suspended as would prevent Senator Melzer and Senator Wriedt from speaking. I do not think we will do that unless there is a strong opinion on our side of the chamber that we should.

page 1171

JOINT STANDING COMMITTEE ON THE NEW AND PERMANENT PARLIAMENT HOUSE

Report

The PRESIDENT:

– I present the report, together with the minutes of proceedings, of the Joint Standing Committee on the New and Permanent Parliament House relating to the following proposed works:

Administrative Building, official entrance for the Department of Foreign Affairs.

National Library, additional lighting and steps.

page 1171

ESTIMATES COMMITTEES

Estimates Committee A

Senator YOUNG:
South Australia

– I table further additional information received by Estimates Committee A. I seek leave for it to be incorporated in the Hansard record of the Committee’s proceedings.

Leave granted.

Estimates Committee E

Senator ARCHER:
Tasmania

– I table further additional information received by Estimates Committee E. I seek leave for it to be incorporated in the Hansard record of the Committee’s proceedings.

Leave granted.

Estimates Committee F

Senator KILGARIFF:
Northern Territory

– I table further additional information received by Estimates Committee F. I seek leave for it to be incorporated in the Hansard record of the Committee’s proceedings.

Leave granted.

page 1171

STANDING COMMITTEE ON EDUCATION AND THE ARTS

Report on Education and the Workforce

Senator DAVIDSON:
South Australia

– On behalf of the Standing Committee on Education and the Arts I present a report on the Committee’s reference on Education and the Workforce.

Ordered that the report be printed.

Senator DAVIDSON (South Australia)- by leave - This is a progress report on the work of the Senate Standing Committee on Education and the Arts, and its reference on the effectiveness of Australian schools in preparing young people for the work force with particular emphasis on literacy and numeracy. The Senate may recall that this reference was handed to us on 31 May of last year. Following that referral, the committee followed the pattern of receiving submissions and the conducting of public hearings. Nearly three hundred documents and submissions were received. All mainland capitals were visited and the Committee heard from 143 witnesses, who represented some 58 different organisations and associations. This part of our work was completed in May of this year but before deliberations could commence on the preparation of draft reports, the Senate referred an additional matter to our Committee. As honourable senators will recall, this reference related to the Broadcasting and Television Amendment Bill, insofar as it concerned the proposed Independent and Multicultural Broadcasting Corporation.

The Committee was required to complete that inquiry and present a report to the Senate on the first sitting day of August of this year. This direction was carried out, but in order to comply with the terms of reference and to table the report as required, it was necessary for the Committee to lay aside the reference on Education and the Workforce, and devote its attention solely to the new reference. It is only now that the Committee is in a position to give attention to the completion of the literacy and numeracy inquiry. Because of the public interest in this matter, the Committee is of the view that careful consideration must be given to the 2,800 pages of public evidence and the 219 submissions. I wish to assure the Senate that the Committee will work towards the presentation of a final report as early as possible. However, because of the aforementioned requirement, as well as the magnitude and complexity of the evidence taken in relation to the literacy and numeracy inquiry, a delay in tabling a final report is unavoidable. This progress report merely indicates the progress which has been made and assures the Senate that the matter will receive early and appropriate attention.

Report on the Impact of Television on the Development and Learning Behaviour of Children

Senator DAVIDSON (South Australia) -On behalf of the Senate Standing Committee on Education and the Arts I present a progress report on the Committee’s review of the recommendations made in the report on the Impact of Television on the Development and Learning Behaviour of Children.

Ordered that the report be printed.

Senator DAVIDSON (South Australia)- by leave - The purpose of this report is to indicate to the Senate trie progress which the Senate Standing Committee on Education and the Arts has made on its review of the recommendations made in our earlier report on the Impact of Television on the Development and Learning Behaviour of Children. The Senate may recall that we presented a report on the 23 November 1978. On that occasion, as Chairman of the Committee, I said:

Because of the great amount of interest in this inquiry, and likely continued public interest, 1 inform the Senate that we will be looking at the subject of children’s television again in about 18 months. We plan to review the whole question again in the light of developments in the intervening period.

In keeping with this undertaking, the Committee initiated proceedings on a review of its report on children’s television in May of this year. In the conduct of this review the Committee sought responses from members of the community who, in one capacity or another, made contributions to the initial inquiry. This progress report gives a brief account of some of the important developments in the field of children’s television since our report was tabled some 20 months ago.

I would like to mention two matters. Firstly, I refer to the Broadcasting and Television Amendment Bill (No. 2) 1980 which was introduced in the House of Representatives last May and which proposes significant changes in the regulatory role of the Australian Broadcasting Tribunal. These changes could have far reaching implications for Australian television in general and children’s television in particular. Needless to say, the Committee will be particularly interested in the progress of this legislation. The other matter I refer to is our key recommendation relating to a children’s television program unit. We note, with appreciation, that the Government is convening a conference of interested parties and we shall be keenly following this development. We expect to continue this inquiry during the sittings of the next Parliament and hope to report further to the Senate in the later stages of the autumn session. I commend the progress report to the Senate.

Senator Chipp:

– Mr President, I raise a point of order on the basis that y°u are the custodian of senators’ rights in this chamber. I refer to the way in which the Government is capriciously treating the Senate by rearranging the order of business. I have been informed, unofficially through the officers of this Senate, that the Senate is not to proceed when scheduled with the Petroleum Retail Marketing Franchise Bill. Mr President, I appeal to you as the custodian of senators’ rights to ask the Government about its intentions. I ask the Government to pay honourable senators a courtesy now. We are due for a long, hard day and night. Will the Government tell us whether it will stick to the program? Will the program be changed in any way? We ask the Government not to repeat the gross discourtesies that the Government Whip paid to us last night when the Government reintroduced a Bill that was not even on the daily order of business.

The PRESIDENT:

– No point of order is involved.

Senator Peter Baume:

– May I speak on the point of order to clarify the matter for the honourable senator?

The PRESIDENT:

– No point of order is involved.

page 1173

JOINT COMMITTEE ON THE AUSTRALIAN CAPITAL TERRITORY

Report On Energy Use, Distribution and Conservation in the Australian Capital Territory

Senator KNIGHT:
Australian Capital Territory

– On behalf of the Joint Committee on the Australian Capital Territory, I present a report on the Committee’s inquiry into energy use, distribution and conservation in the Australian Capital Territory with extracts from the minutes of proceedings of the Committee.

Ordered that the report be printed.

Senator KNIGHT:

– by leave- The report I have just tabled indicates that the Joint Committee on the Australian Capital Territory has been unable to complete its inquiry into energy use, distribution and conservation in the Australian Capital Territory and recommends that the Joint Committee on the Australian Capital Territory be re-appointed in the next Parliament and that this matter be referred again to the Committee as it is a matter of considerable significance. As indicated in the report, the Committee has already held five public hearings in this inquiry and has received over 60 submissions on its subject matter.

Even though the Committee has not been able to complete the inquiry it is worth noting that there have been a number of relevant developments. One notable matter was the announcement by the Minister for the Capital Territory (Mr Ellicott) on 10 April 1980 of the establishment of a fuels use advisory committee in Canberra. The inquiry has also suggested the need for energy conservation in a number of ways. I regret that it was not possible for the Committee to hold further public hearings. As I indicated yesterday, when a report on the seventy-second series of variations to the plan of Canberra was presented to Parliament, the Joint Committee on the Australian Capital Territory has been very heavily involved during recent times in inquiries into changes to the plan of Canberra and this session has already presented three reports of such variations. I commend the report to the Senate.

page 1173

JOINT PARLIAMENTARY COMMITTEE OF PUBLIC ACCOUNTS

182nd and 183rd Reports

Senator LAJOVIC:
New South Wales

– On behalf of the Joint Parliamentary Committee of Public Accounts I present the one hundred and eighty-second and one hundred and eighty-third reports of the Committee.

Ordered that the reports be printed.

Senator LAJOVIC:

– by leave - These reports are most significant. The one hundred and eightysecond report is our findings on chemists remuneration under the Pharmaceutical Benefits Scheme. The one hundred and eighty-third report details the follow-up action taken on the Committee’s recommendations and conclusions from our investigations of major aspects of computer acquisition and the Public Service Board’s Mandata project. The response to the Committee, in the form of a Department of Finance minute, was prepared by an interdepartmental committee specially created for this purpose and received by the committee only last Thursday - 1 1 September 1980. We are concerned that it took the Public Service Board nearly two years to respond to one report on the acquisition of computer systems, and almost a year for the other on Mandata. These reports were tabled in November 1978 and October 1979 respectively.

Because of the importance of the reports and the interest shown by the computer industry in the outcome of our investigations the Committee decided to table the Department of Finance minute immediately and to report its detailed examination of the minute at a later date with its next report on automatic data processing coordination and control in the Commonwealth public sector.

The 182nd Report

In accordance with its terms of reference, the Public Accounts Committee has investigated not only the circumstances of the excess payments which the Parliament referred to the Public Accounts Committee, but also the general administration of the Pharmaceutical Benefits Scheme and the Repatriation Pharmaceutical Benefits Scheme by the departments of Health and Veterans’ Affairs respectively. The last twenty years has been a period characterised by Commonwealth Government involvement in the retail pharmacy industry and in remuneration of chemists through the Pharmaceutical Benefits Scheme and the Repatriation Pharmaceutical Benefits Scheme. Following its investigations the Committee has reached three general conclusions and has made, throughout the report, a series of detailed recommendations.

Firstly, the Committee found that serious inefficiencies have arisen from the rapid introduction of new computer processing technology. These inefficiencies have been in all aspects of

A DP processing and have led, in this instance, to errors which have resulted in the apparent excess payments to chemists by the Commonwealth Government of up to $253m, and to the inefficient provision of manpower requirements. Secondly, there is a marked lack of co-ordinated, objective analysis and investigation of health matters generally, and health economics in particular. Total expenditure on all health services last financial year was an estimated $9000m of which the Commonwealth Government paid nearly one-third. Yet there appears to be no overview of the various aspects of health care aimed at achieving maximum efficiency in expenditure on health services. To overcome this deficiency, the committee has recommended the establishment of a bureau of health economics. Thirdly, the remuneration of chemists under the Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme has been characterised by an excess of concern by the Commonwealth Government and the Pharmacy Guild of Australia for secrecy in all discussions, especially within the Joint Committee on Pharmaceutical Benefits Pricing Arrangements.

The Public Accounts Committee regards this secrecy as totally counter-productive. It has led to a situation whereby chemists are not aware of many matters affecting the payments they receive under the Pharmaceutical Benefits Scheme, and Repatriation Pharmaceutical Benefits Scheme and this has led to undue criticism by them of the Commonwealth. In addition, it has effectively excluded from the Joint Committee discussions any points of view other than those of the Commonwealth Government or the Pharmacy Guild of Australia. Given that more than $650m per annum is spent on pharmaceuticals in Australia, the Committee considers that it is essential for the well-being of the retail pharmacy industry and individual chemists, that a more open system be developed. The Committee has therefore recommended major changes to the remuneration arrangements to remove the secret and restrictive procedures currently in existence. I now turn to the major findings and recommendations of our inquiry. These are presented at the beginning of our report.

Excess payments

First is the matter of excess payments. The amount cannot be quantified with any certainty. Accordingly, the Committee accepts the estimates of the Minister for Health (Mr MacKellar) and the Minister for Veterans’ Affairs (Mr Adermann) who stated previously that these could be as high as $253m. The Committee has been unanimously advised by the three legal sources, including the Commonwealth Crown Solicitor, that all payments made to chemists under the Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme were valid payments made under determinations and they are not recoverable.

Reasons for the errors

Investigation of the origins of the excess payments disclosed serious deficiencies in the operations of the automatic data processing branch of the Department of Health. The Public Accounts Committee believes that there needs to be a stricter adherence to performance standards in ADP work. In addition, the Committee is not satisfied that adequate provision of staff has been made, particularly for the evaluation of standards and their internal control. Accordingly, the Public Accounts Committee has recommended that these matters be reviewed as a matter of urgency.

Interim basis for remuneration

The Committee’s investigations have established that not once over the past 20 years has the Commonwealth Government and the Pharmacy Guild of Australia been able to agree on a lasting basis for determining chemists’ remuneration. Despite seven separate attempts and an admitted expenditure of well over $2m for the last two surveys, all attempts by the Joint Committee on Pharmaceutical Benefits Pricing Arrangements to establish an objective base have ended in protracted and at times bitter negotiations. The Committee has therefore recommended that the figure of $1.31 agreed in April of this year by the Guild and the Government should be used as a present basis for adjusting fees.

Health fees tribunal

The Committee considers that chemists’ remuneration should be determined by an open and public process accessible to all interested parties, not only the Pharmacy Guild of Australia and the Commonwealth Government. The Public Accounts Committee has therefore recommended that the Commonwealth Government establish a health fees tribunal to determine chemists’ remuneration. Such a tribunal would be accessible to all interested parties, would conduct public hearings, and would give reasons for its decisions. It would be headed by a person with the status of a deputy president of the Australian Conciliation and Arbitration Commission. The Committee envisages that the health fees tribunal’s activities would be expanded to include the determination of all health remunerations, for example for doctors and optometrists.

Bureau of Health Economics

As discussed in my introductory comments, the health industry and the Department of Health have been characterised by a general lack of objective analyses, especially in the field of health economics. Accordingly the Committee has recommended that a bureau of health economics similar to other economic bureaus already existing in the Commonwealth sector, be established. The Committee considers this recommendation is critical to the long term development of efficient health services in Australia and this bureau should be established within 1 2 months.

The Committee sees two major functions for such an organisation. The first is to undertake a continuing analysis of the Government’s expenditure on health to ensure that moneys are being spent wisely. If the bureau of health economics could achieve a one per cent saving in health costs it would enable $80m to be redirected to other pressing needs. Secondly, the bureau of health economics could explore the issues relating not only to central aspects of health care but also those aspects that cross the boundaries between the different areas of health operations.

The retail pharmacy industry

Many witnesses at the Public Accounts Committee’s inquiry indicated that the retail pharmacy industry contained many uneconomic pharmacies and the Committee noted that by international comparisons the industry had an extremely low population to pharmacy ratio. In addition, the Committee noted that previous efforts at establishing lasting objective methods for determining chemists’ remuneration had been unsuccessful and restricted in both their consideration and methods of assessment. The Committee has therefore recommended that the Government establish a public inquiry into the structure of the retail pharmacy industry in Australia, including a specific task to examine methods of determining chemists’ remuneration.

Repatriation pharmaceutical benefits scheme

The Committee has recommended that the Department of Health should be given total responsibility for the administration and claims processing of the Repatriation Pharmaceutical Benefits Scheme, the Department of Veterans’ Affairs retaining policy control for the scheme. By the full integration of Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme administration and processing, the Committee expects that the utmost economy commensurate with sound management and high standards of service will be achieved.

Conclusion

I conclude by mentioning that it is the policy of governments to achieve an efficient retail pharmacy industry that will maintain an adequate level of pharmacy services to all Australians, especially those in isolated areas. We believe that the findings in our report, and our recommendations will preserve and enhance these objectives. I commend the report to honourable senators.

Senator GEORGES:
Queensland

– by leave - I move:

I repeat the remarks which I made yesterday when the Joint Parliamentary Committee of Public Accounts presented another report to the Senate, a report which clearly criticised an authority within the Australian Capital Territory. Today the Committee has put down a report which reveals certain information which must be of tremendous concern not only to the Senate but also to the whole of the community. The members of the Public Accounts Committee are now, unfortunately, becoming familiar with reports from the Auditor-General which show that through some error or some inaccuracy moneys which should not have been paid, or which it was not the intention of the Government to pay, were paid. In the case of the Department of Social Security, overpayments have been continued. The Public Accounts Committee has reported on those overpayments. The latest report of the AuditorGeneral indicates that those over-payments are continuing. It seems to me that because we have entered so rapidly into the age of technology and computerisation as is suggested in this report, it is almost impossible to reverse a trend, a program, which may have been fed into the computer system. In the social security area, if notification is given that a person is no longer entitled to receive a benefit, that benefit continues to flow. In fact, it has been said to me that the only way to stop the cheques coming is to shoot the postman. It is a serious matter which has led to overpayments of $35m in the social security area.

Let us look at this report. The report arose from a reference to the Committee which indicated that pharmacists throughout Australia had been paid - overpaid, paid in excess, one can use whatever terms one likes - $253m more than the Government intended to pay, whether rightly or wrongly.

Senator Gietzelt:

– That is a public scandal.

Senator GEORGES:

– It is scandalous and, if I may say so to the Senate, it is frightening. Is it happening in other departments in other programs? Apparently it is, because we see in the report of the Auditor-General, again for this year, that the Department of Primary Industry has overpaid beef producers an amount of Sim for the first period of the financial year. Surely it must be of frightening concern to us all that that possibility exists. It has actually happened in the Department of Health in the payments to pharmacists.

The Committee did not accept lightly the legal advice given that these payments were made legally, validly, and therefore were irrecoverable. The Committee members felt very strongly on this point. Having in mind certain instances within the Department of Social Security in which certain people had received overpayments, and the Department of Social Security had been aggressive enough to raid even the society accounts of the recipients in order to recover those moneys, the Committee did not lightly accept the proposition that this money was irrecoverable. Unfortunately, we had to accept the legal opinions. Certain determinations were made by a tribunal based on what I believe was wrong information provided by the computer, which had been wrongly programmed. The tribunal determined that these payments should be made and, having determined this, it validated those payments. So we see how the problem has been accentuated. Not only was the error made, not only was the money paid in excess of what was intended, but also there is no chance of recovering it. That does not go down very well. It certainly will not go down well with the community that such an error occurred.

I think we must give credit to Senator Lajovic for bringing down this report. He must be feeling rather grim that he has brought down a series of reports which indicate the failure of the bureaucracy to meet its obligations. This report in particular indicates that the bureaucracy failed to meet its obligations. That obligation and that responsibility must be driven home, and I believe that this report does that. The report does not labour the error. It goes forward and suggests how a remedy can be found and applied. It has made some very valuable suggestions which I recommend that the Senate and the Government should consider and respond to quickly.

Let me get back to the error. I think it is important for us to realise just how the error occurred so that we can ensure that it does not occur again. On page 2 of the statement which has been tabled, the Committee found that serious inefficiencies had arisen from the rapid introduction of new computer processing technology. Might I say that it was not only rapid, it was also careless, and it is the fear of carelessness that remains with us.

Senator Gietzelt:

– Perhaps we could do without the computer; it would be cheaper.

Senator GEORGES:

– We cannot do without this technology, which can be used to our great advantage, but we can certainly do without the errors. If I make a simple error, it may cost a few dollars which can be quickly recovered. It would take me, ten years I would say, to make the same sort of error that this computer managed to make in an instant merely because it was wrongly processed. The caution that has to be exercised is greater because of the sophistication of this technology. In this case the caution exercised was not as great as it should have been. I believe that there was a careless application in the introduction of computer processing technology.

The statement indicates that the error resulted in apparent excess payments. The words ‘apparent’ and ‘excess’ are ones that we argued backwards and forwards with the pharmacists. The pharmacists said that there were no overpayments or excess payments. I argued that there were overpayments. I said that they were overpaid, and they said that they were not overpaid. They argued, validly perhaps, that if they had not received these payments through error, then they would have made subsequent application for what they would term justice in the remuneration for the work they did. They argued, and I think correctly, that for once, through error, they had received what they were entitled to. We could discuss that backwards and forwards, but in the evidence we received from the pharmacists it was fairly obvious that their remuneration is established in an environment of confrontation. As the report indicates, the methods used are questionable, and it recommends that other methods be introduced. The pharmacists said that for once, because of the error, they had received justice. They said that the payments were not overpayments, they were entitled to them. I argued that the intention of the Government was to pay them a certain amount, that they received far more than that amount, and therefore it was an overpayment.

I realise the limitations of time on this debate. One of the problems when reports of this sort are brought down is that we cannot extend ourselves in the way that is necessary and perhaps important. However, I believe that, in the interests of future accuracy and in the hope that this sort of error will not recur, the briefing notes which were given to us by experts in this field should be incorporated in Hansard. I will briefly read the headings and then, seek leave to incorporate the document in Hansard rather than read the whole document. The first heading is ‘Background’ and it refers to the error which had been examined and which occurred in translating a requirement specification which expressed the task to be done and the mathematical notations and specifications for a computer program. It speaks of the allocation by the contractor of seven consultants to the Department of Health. It indicates that the consultants who were supplied by the contractors were not sufficiently qualified, nor were their number sufficient. It goes on further to say that the Department of Health failed in its responsibility to maintain the standard necessary for such a program. It states that the checks that should have been taken to test the program were not taken. It pins the responsibility, where I believe it should be pinned, upon the Department of Health for not carrying out the necessary procedures to maintain the standard that was required. The document I wish to be incorporated is a section of a briefing by consultants to the Committee. I think the document is necessary for the proper understanding of the report when one starts to look at the error. I may over-emphasise the error but it is necessary to understand how and when it occurred so that we can prevent it in the future. The section of the document to which I have referred under the heading ‘Background’ deals with the agreement. It contains the following paragraph:

The Department here appears to be implying that the responsibility for checking that the ratios were correct lay with the Central Statistical Unit or the Secretariat.

I seek leave to incorporate the section in Hansard.

Leave granted.

The document read as follows -

  1. BACKGROUND

The error which we have been examining occurred in translating a requirements specification which expressed the task to be done in mathematical notation, into a specification for a computer program to carry out the required processing. The error was made by a “consultant” on contract to the Department of Health at that time. The agreement with the contractor provides for the: “allocation of seven consultants . . . and such additional consultants as may be requested by the Commonwealth … to assist in the development and implementation of projects within the Automatic Data Processing branch of the Department in Canberra.”

The Agreement goes on to say: “The Department shall be the sole determinant of the activities … to which the Consultant shall be allocated and these activities shall be supervised, managed and controlled by the Department. “Where the Department is of the opinion that any of the consultants does not measure up to the standard of work required by the Department it shall notify [the contractor] to that effect and [the contractor] shall within one week of receipt of the notification withdraw that consultant from providing the services under this Agreement.”

My interpretation of this is that the contractor’s responsibility was to provide the required number of staff with the required qualifications and that what the Department then did with those staff was its own (i.e. the Department’s) business.

The Consultant ‘who made the error’ was not one of the seven consultants named in the Agreement and maybe one of those referred to in Answer A.l (f) - Paragraph 6 of the Department of Health Submission. This answer mentions that towards the end of the period of the agreement consultants with less than five years’ experience were accepted from the Contractor. There were some minor problems in the management of some of them, including the Consultant who made the error, but these “were not considered sufficient at the time to exercise Clause 10 of the Agreement, by which they could be returned to the Consultancy firm and be replaced.”

The error arose in the calculation of the set of numbers used to allocate pharmacy costs over sectors and activities within each pharmacy. The error was such that in testing the programs the sum of allocated costs was found to equal the total pharmacy cost and it was assumed from this that the program was correctly allocating. In fact however, the program was allocating an erroneously high proportion of retail sales staff costs to dispensing activities and the correspondingly low amount of retail sales staff costs to retail activities. This resulted in an overstatement of the proportion of pharmacy costs attributable to dispensing activities though the total of dispensing activities and retail activities was correct.

The error arose in the following way. The program designer (the ‘consultant’) correctly gave directions for calculating a table of allocation ratios (called ‘a labour cost allocation matrix’) to enable the allocation of total pharmacy dispensary staff costs across sectors and activities in the pharmacy. These total pharmacy costs had been collected in the financial/wage questionnaires. The designer should then have gone on to direct the calculation of a corresponding labour cost allocation matrix to allow the allocation of retail staff labour costs by sector and activity. Instead he specified that both retail and dispensing staff costs from the financial questionnaire be allowed according to the one allocation matrix calculated for dispensing staff only.

According to the DOH submission the ‘ratios . . . were not recognised to be critical to the checking procedure by either the Central Statistical Unit or the Secretariat and were not requested to be printed out . . . during design or program development.

However, at a very late stage of checking by the Secretariat it turned out that these ratios would have been of assistance to check the labour cost allocations. Normally, limited programmer resources would have been necessary to complete the necessary changes and re-run the program to print out the ratios but ADP staff involved at the time cannot recall such a request being made. In the extremely tight timeframe available to produce a report to the Joint Committee, it was possibly considered desirable but of low priority. It should be borne in mind also that the results of the Inquiry appeared to be valid and no queries were raised by the Sub-Committee in relation to the labour costs’.

The Department here appears to be implying that the responsibility for checking that the ratios were correct lay with the Central Statistical Unit or Secretariat.

Since the requirements specification correctly stated the procedure of calculating these ratios, it appears to us that the responsibility for correctly translating the requirements specification into programs actually resided with the Department of Health ADP department.

Based on evidence so far read (the answers by the DOH to questions by the PAC and Attachments 10.A, 11, 12, 30-33) it appears that the designer of the FQ processing program simply overlooked the need to recalculate the labour cost allocation matrix for application to retail staff.

Contributing factors to this oversight may have been inadequate supervision, non-adherence to standards, lack of competence on the part of the ‘consultant’, and/or undue haste to meet deadlines.

Senator GEORGES:

– I strongly support the recommendation in the report, that there be a restructuring of the industry. It is fairly obvious that it is very difficult to maintain a fair rate of payment to pharmacists when there are far more than the population requires.

Senator WATSON:
Tasmania

– I think this is the first time that a major matter has been referred by the Government to the Joint Committee of Public Accounts for investigation. 1 take this opportunity to thank the Minister for Health, the honourable Michael MacKellar, for referring to the Committee the problems of the excess payments under the pharmaceutical benefits scheme. All too often such matters are shrouded in the mysteries of the executive branch of government. This report will have tremendous relevance to the future viability of chemists in Australia. It is regretable that in the past 20 years we have seen much public disputation in this area. Unfortunately, the report before us today is but another example of serious inefficiencies in automatic data processing systems in the public sector. The reason for the series of errors that has been reported is but another example which has been demonstrated by the Public Accounts Committee. An earlier example was the Mandata exercise - a complete shambles of sound ADP applications in the public sector. The Public Accounts Committee is therefore most unimpressed with the work to date and the attitude of the Public Service Board in relation to automatic data processing.

It took four years for the Pharmaceutical Benefits Scheme errors to be acknowledged. This is of some concern because substantial sums of taxpayers’ money have been involved through a lack of suitable and adequate ADP standards, procedures and internal control and management methods to ensure an adequate compliance. In the past there has been far too little planning for major computer installations. For example, there has been a lack of quantifiable objectives. There has also been too little study of the impact on employment. Virtually no information has been given to the Parliament on the anticipated costs and - I will not say benefits as losing or transferring jobs is not necessarily a benefit to the community - the savings. There is also a lack of top management involvement because of an abrogation of responsibilities in this area by passing control to what may be a highly mobile technical staff.

There is also an over-reliance on the views of an outmoded interdepartmental committee system. There has also been a virtual absence of proper audit trails in setting the programming procedures. In the past, there has also been an insignificant recognition of internal audit. Had there been a proper system of internal audit in this area these errors would have been detected far earlier. Because of the importance of this report, I seek leave to incorporate in Hansard a summary of the conclusions and recommendations of the one hundred and eighty second report of the Joint Committee of Public Accounts on the Pharmaceutical Benefits Scheme - Chemists Remuneration.

Leave granted.

The document read as follows -

SUMMARY OF THE CONCLUSIONS AND RECOMMENDATIONS

This Report by the Joint Parliamentary Committee of Public Accounts, examines the question of the excess payment of chemists, up to $253 million. Besides reporting on the direct issues relating to this excess payment, the Committee has made recommendations on a number of broader administrative issues which have contributed to inefficiencies within the pharmacy industry in particular, and the health industry in general.

The Committee’s investigations and recommendations have been made bearing in mind total expenditure on health services in Australia in 1979-80 of approximately $9000 million. In 1977-78 (the last year of detailed statistics) the cost was about $7000 million, of which pharmacy sector expenditure was $644 million. Of this, Commonwealth Government expenditure on the pharmacy sector was $256 million.

The Error (Chapters 2 to 6)

Since the inception of the current Pharmaceutical Benefits Scheme in 1960, negotiations as to the level of remuneration paid to chemists by the Commonwealth Government have been exclusive to the Pharmacy Guild of Australia and officers of the Australian Public Service representing the Commonwealth Government. During this 20 year period there has been a complete failure to establish an agreed method for objectively determining the basic level of remuneration to be paid to chemists. Consequently, most efforts to determine levels of remuneration have ended in protracted and at times bitter negotiations between the Government and the Guild.

Over this 20 year period there have been three attempts, using surveys of pharmacy earnings, costs and profits, to determine the cost of dispensing a pharmaceutical benefits scheme prescription. In each case the results of the survey have been unacceptable to one side or the other. The PAC has concluded that fundamental changes are required in the procedures for the determination of chemists’ remuneration and has recommended that the Joint Committee on Pharmaceutical Benefits Pricing Arrangements be abolished, a Health Fees Tribunal be established and that a Bureau of Health

Economics be established. In addition, the PAC has recommended that the Government initiate a major inquiry into the structure of the pharmacy industry which will, as part of its task, examine alternative methodologies for determining chemists’ remuneration.

Question resolved in the affirmative

page 1179

STANDING COMMITTEE ON TRADE AND COMMERCE

Motion (by Senator Sheil) agreed to:

That, if the Senate be not sitting when the Standing Committee on Trade and Commerce has completed its report on Australia’s forestry and forest products industries, the Committee may send its report to the President of the Senate or; if the President is unavailable, to the Deputy President, who is authorised to give directions for its printing and circulation, and in such event the President or Deputy President shall lay the report upon the Table at the next sitting of the Senate.

That the foregoing provision of this resolution, so far as it is inconsistent with the Standing Orders, have effect notwithstanding anything contained in Standing Orders.

page 1179

NITROGENOUS FERTILIZERS SUBSIDY AMENDMENT BILL 1980

Second Reading

Debate resumed from 16 September, on motion by Senator Chaney:

That the Bill be now read a second time.

Senator WALSH:
Western Australia

– The resumption of the debate on this Bill at this stage is yet another example of the Government’s incompetence and inability to manage even the business of the Senate. The Order of Business sheet which was printed only six hours ago shows that two other Bills from the House of Representatives were to have been introduced and debated before this Bill. That has now been changed. The Government cannot plan its own parliamentary program half a day ahead. No wonder the country is in a mess. In this instance, of course, the natural incompetence of the Government has been compounded by its opportunism and its desire to hold the election before 20 October. It knows that it cannot keep the lid on interest rates for very much longer, hence its indecent haste to wind up the Parliament this week. The Government knows very well that by the end of October, if it is still in government, interest rates on small overdrafts and housing loans will go up by between one and two per cent. The market is showing us where interest rates ought to be. They ought to be a couple of percentage points higher than they are now.

Senator Peter Baume:

– Mr President, I take a point of order. The Senate is debating the second reading of the Nitrogenous Fertilizers Subsidy Amendment Bill. Is the honourable senator addressing himself to anything remotely connected to nitrogenous fertilisers?

The PRESIDENT:

– The Bill before the Senate is the Nitrogenous Fertilizers Subsidy Amendment Bill 1980, and the matter to be debated is the subject matter of that Bill.

Senator WALSH:

– Mr President, I was just explaining the reasons for the Government’s indecent haste in closing the Parliament, and hence its inability to plan its own program half a day ahead, which has caused this Bill to be brought on out of the sequence which the Government had established only six hours before. The nitrogenous fertilizer bounty has quite a long and, as far as the Government is concerned, reprehensible or dishonourable history. The starting point for my survey of the matter for the purpose of this debate is April 1974 when a bounty was paid at the rate of $80 per tonne of nitrogenous fertiliser. The then, and recently restored Deputy Leader of the National Country - or Country Party as it called itself in those days- Mr Sinclair, prefaced his remarks in Mackay by a totally false allegation that if the Labor Government was returned in that 1 974 election it would immediately terminate the nitrogenous fertiliser bounty. That was a completely false assertion. He then compounded it by saying:

I can give an unqualified assurance on behalf of the National Country Party, that in Government with the Liberal Party, we will restore the bounty on superphosphate and ensure that the Nitrogenous Fertiliser Bounty continues.

We will ensure and I can give an unqualified assurance’, said the Deputy Leader of the National Country Party, ‘that the nitrogenous fertiliser bounty continues’. His unqualified assurances are as genuine as his signatures. His veracity is equal to that of the Prime Minister (Mr Malcolm Fraser).

Senator Peter Baume:

– I raise a point of order under Standing Order 418. I believe the honourable senator has just made a statement which is not in accordance with that Standing Order and that he has made a gross personal reflection on a member of another place.

Senator WALSH:

– What was it?

The PRESIDENT:

– It was an imputation or a reflection on a person’s character generally.

Senator WALSH:

– I said his veracity is equal to that of the Prime Minister. I suppose that is a reflection on Mr Sinclair’s character, and I withdraw it.

The PRESIDENT:

– Order! Please withdraw.

Senator WALSH:

– Yes. I withdraw that if it is offensive. I leave it to Senator Baume to ascertain whether it is offensive to say that his veracity is equal to that of the Prime Minister.

The PRESIDENT:

– Order! Withdraw, and that is all. You are compounding your offence.

Senator WALSH:

– If Senator Baume finds it offensive I am quite happy to withdraw it.

The PRESIDENT:

– You are now committing another offence in regard to the Prime Minister, by implication, and you realise that. You are trying to be clever, but in the process you are adding to your first offence. Withdraw the implication in regard to honourable members of another place, in accordance with Standing Order 418.

Senator WALSH:

– What was the–

The PRESIDENT:

– The veracity of the two men is involved.

Senator WALSH:

– Very well, I withdraw, Mr President. I just observe in passing that Mr Sinclair gave that unqualified assurance on behalf of the Country Party in 1974 - an unqualified assurance which has not been met. That sits appropriately with some of the unqualified guarantees and promises - in fact virtually all of the unqualified guarantees and promises - made by the Prime Minister himself, such as his promise in February 1978 that unemployment will fall and will go on falling. That is what the Prime Minister said.

The PRESIDENT:

- Senator Walsh, you will discuss the subject matter of this Bill, which is the Nitrogenous Fertilizers Subsidy Amendment Bill. Adhere to the provisions of this Bill which we are debating at present.

Senator WALSH:

– I understand the sensitivity of Government senators in being reminded of such matters as a promise of a 2 per cent reduction in interest rates, a promise that country petrol prices will be-

The PRESIDENT:

– Order! Please adhere to the subject matter of this Bill.

Senator WALSH:

– Yes, Mr President. In addition to that promise given in 1974 by the then and present Deputy Leader of the National Country Party, the Country Party, in its 1975 election policy document, promised to maintain the nitrogenous fertiliser bounty. Within 12 months of getting into government, of course, it reduced the bounty from the pre-existing $80 per tonne to $60 per tonne, lt remained at $60 per tonne in the 1977 Budget. That is significant because the Government was contemplating an election. In the 1977 election campaign the Government, both the Liberal Party and the National Country Party, gave further promises that the bounty would be maintained at $60 per tonne. Having got that election safely out of the way, it then reduced it to $40 per tonne in 1978, and in the notorious mini-Budget of May 1979 reduced it to its present level of $20 per tonne.

Senator Robertson:

– This is the group whose veracity is in question?

Senator WALSH:

– Yes, precisely. I do not think I need to labour the point about its veracity; I just let the record speak for itself. Because this is an election year we again find that the Government has introduced legislation to continue the bounty throughout the calendar year 1981 at the present rate of $20 per tonne. It is perfectly obvious to anyone who has the capacity to learn from history that if this Government is returned the bounty will be discontinued completely as from the end of 1981. This is the last gasp of the nitrogenous fertiliser bounty if the present Government is returned.

I shall make just one more point, and that is the incongruity- the contradiction - between Government policy on this matter, the nitrogenous fertilisers bounty, and Government policy on the superphosphate bounty. The Government has, ever since 1976, clearly followed a policy of phasing out the nitrogenous fertiliser bounty, and it will phase it out completely if it is returned. By contrast, one of the very few promises made in 1 975 and kept by Mr Fraser was his promise to restore the superphosphate bounty. Whatever arguments there are for and against either of these fertiliser subsidies - there are arguments on both sides - they apply with equal force to both the nitrogenous fertiliser bounty and the superphosphate bounty. This raises the question: Why has the Government phased out one and restored the other? I make no imputation as to whether this fact is connected with the other facts, but the Prime Minister himself is a user of superphosphate but is not a user of nitrogen. That opens up a very much wider field for investigation; that is, the question of whether Ministers ought to participate in making decisions from which they themselves are financial beneficiaries.

On 6 March this year I put questions on notice asking whether six Ministers - Messers Fraser, Street, Hunt, Anthony, Nixon and one other whom I cannot recall at the moment - had received any payments under the beef incentives payments scheme of 1977. Three days before I asked an identical question pertaining to the then former Minister for Primary Industry, and 16 days later I got this reply: No, the then former Minister for Primary Industry, Mr Sinclair, had not received any payments. I have not received any answers to the questions six months later. Although it was possible to provide an answer in regard to Mr Sinclair within 16 days, six months later I have still not been advised as to whether the Prime Minister or any of the other five Ministers about whom I asked questions received that payment. It is perfectly clear that this information is readily available in the Department of Primary Industry. Indeed, on behalf of Estimates Committee E a list has been presented in the Senate today of some 300 names of people who were overpaid under that beef incentives payments scheme and who had to refund money.

The PRESIDENT:

– Order! We are not discussing beef; we are discussing the Nitrogenous Fertilizers Subsidy Amendment Bill.

Senator WALSH:

– Yes, Mr President. The point I am making is that the Nitrogenous Fertilizers Bounty Bill, other fertiliser bounty Bills and this beef incentives payments scheme of 1977 all raise the principle of whether Ministers ought to make decisions or to participate in decision making when they are in a position to be beneficiaries from those decisions. I invite the Government, if what I am about to put is not the case, to answer today or tomorrow those questions I asked earlier this year, because the Department of Primary Industry has the information on file. It could be recovered at five minutes’ notice if anyone really wanted to recover it. It appears perfectly clear that six Ministers, including the Prime Minister, received payments under that beef incentives payments scheme. The inconsistency between government policy with respect to this bounty which is being debated now and the superphosphate bounty, in association with the record of the beef incentives payments scheme and the Government’s refusal over six months to answer simple questions for which it has the factual information at its fingertips, clearly indicates that at least some of those Ministers were beneficiaries of that scheme.

The matter opens up, in association with this Bill and others, the very much wider question of ministerial propriety and whether these Minister ought to participate in decisions which put money in their own pockets. I notice that in some of the legislation recently passed - for example, the honey Bills which were passed last night and which contained a request - the Government has inserted clauses pertaining to pecuniary interest. It is about time the Prime Minister and some or all of these five Ministers who have received payments in this way as a result of their own decisions ceased to participate in making those decisions or waived their legal right - it is not a moral right - to receive payments pursuant to those decisions as clearly as they have in the past. The Opposition is not opposing the Bill.

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– in reply - I was waiting for those last few words of Senator Walsh to know the Opposition’s attitude to the Nitrogenous Fertilizers Subsidy Amendment Bill. It was very much of an afterthought that Senator Walsh indicated that the Opposition was not opposing the Bill. Really we have had from Senator Walsh just the usual tirade of personal abuse, irrelevancy and the questioning of people’s motives. He indulged in that sort of language throughout the whole of his contribution to this debate. His contribution appears to have been quite unnecessary and irrelevant because it turns out that the Opposition is not opposing the measure. Indeed, Senator Walsh spent some time talking about the differences between the way in which the Government has dealt with this subsidy and the superphosphate subsidy. However, never at any stage did he bother to tell us what his policy is or what his party’s policy is in relation to these measures. He used this debate as a vehicle to carry on his personal vendetta against the Prime Minister (Mr Malcolm Fraser) and to question the motives of other people.

The Government has, in fact, accepted the recommendations of the Bowen Committee of Inquiry concerning Public Duty and Private Interest. Maybe the question ought to be asked, when speaking about this sort of matter or any other matter, is whether members of Parliament, including Senator Walsh, should disclose their interests. I am glad that the Senate is not opposing the measure. I hope it will have a speedy passage.

Question resolved in the affirmative.

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

page 1181

THE SENATE: PETROLEUM LEGISLATION

Senator GEORGES:
Queensland

– by leave- I wish to speak on a point of procedure. It is a fair comment to say that it is an unreal situation that we should not have copies of the petroleum Bills before us.

Senator Gietzelt:

– Without any explanation.

Senator Peter Baume:

– I will give one quite happily.

Senator GEORGES:

– I think the honourable senator ought to give an explanation because we are now in a position of being ready to debate the petroleum Bills. They appear to be the most substantial Bills to be debated today. A number of speakers are listed to speak on those Bills. We do not have them before us. Last night we made the point that we are too prone in this place to considering the convenience of the other place. It does not consider us one scrap. Those Bills should be here. They should be ready for debate. They are on the program. Why have we failed to receive them?

For instance if we finish the Air Navigation (Charges) Amendment Bill in the next few minutes we ought to go on to debating the Appropriation Bills. Once we go on to debating those Bills the petroleum Bills can wait until tomorrow. I think it is unreasonable for us to be caught in this sort of situation. If the Bills have arrived during this brief intervention, let us get them into the chamber and let us start to debate them. If they have not arrived I suggest to the Government that we debate the next Bill and then go on to the Appropriation Bills. Let the House of Representatives wait until Friday.

Senator PETER BAUME:
New South Wales

– by leave - There are two Bills in the petroleum package of legislation. They had to be checked when they left the other place. It was discovered that there was an error in the printing. At short notice it has been necessary to reprint the Bills. The situation as we understand it is that the first Bill is now back from the Government Printer and is with us. The second Bill is yet to arrive. The question we have to ask is: What will best suit the convenience of the Senate? It seems that the arrival of the second Bill is imminent, probably within the next 30 minutes. The error which occurred in another place has required the reprinting of the Bills. It would be our intention to bring them on as soon as we receive them. We anticipate that will not be a great deal of time from now.

Senator GIETZELT:
New South Wales

– by leave - I appreciate the dilemma in which the Government finds itself, but I think it is treating the Senate discourteously. About half an hour ago you, Mr President, asked whether it was proposed to rearrange the order of business. The next item of Government Business appearing on the Order of Business sheet is the introduction of the Petroleum Retail Marketing Franchise Bill and the Petroleum Retail Marketing Sites Bill.

Senator Peter Baume:

– They don’t appear on the Notice Paper. We don’t have the Bills. They can’t be on the Notice Paper.

Senator GIETZELT:

– I think the Senate is entitled to an explanation. Whilst the Government has tremendous resources at its disposal to deal with these Bills, which I understand were amended late last evening, the Opposition has not had an opportunity to consider the amendments made in the House of Representatives and/or any other matters dealt with concerning mistakes in printing the legislation. It seems to me that if there has been an inordinate delay, which is not the fault of the Senate, at least we should have been told of the necessity to rearrange the order of business and to bring forward debate on the Nitrogenous Fertilizers Subsidy Amendment Bill and the Air Navigation (Charges) Amendment Bill and, following that, to introduce the petroleum legislation with a view to adjourning debate on those Bills until a later hour this day, if in fact it was the Government’s intention to do so.

Senator Georges suggested that it might suit the convenience of the Senate to follow a different course. As we have heard said here many times, Mr President, the Senate operates on the basis of your indicating the procedure to be followed, and that procedure is worked out on the basis of cooperation between honourable senators on both sides of the chamber. Senator Georges suggested that it might suit the convenience of the Senate if we were now to debate the Appropriation Bills to enable the Opposition in the Senate, as distinct from the Executive and the Opposition in the other place, to examine properly what has been done in the House of Representatives with respect to the petroleum legislation. I think it is discourteous of the Government not to have taken the Opposition into its confidence if it is confronted with the sort of dilemma that Senator Baume has outlined. All we ask is that, if changes are to be made to the order of business, the Government should be frank and open about it to enable us to make essential changes to our program. After all, problems which have to be resolved are created for the Opposition as well as for the Government when a spanner is thrown in the works.

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– by leave- The Orders of the Day listed on the Senate Notice Paper commence: 1 Nitrogenous Fertilizers Subsidy Amendment Bill 1980–

We have just dealt with that Bill- 2 Air Navigation (Charges) Amendment Bill 1980–

We are about to deal with that Bill. Then the Appropriation Bills are listed. It is well known to honourable senators on both sides of the chamber that two very important Bills, the Petroleum Retail Marketing Franchise Bill and the Petroleum Retail Marketing Sites Bill, were passed in another place last night and will be introduced in the Senate this afternoon. It was understood that by now the Bills would have been available and debate on them would have commenced. That was in accordance with an arrangement between honourable senators on both sides of the Senate. The further Bills listed on the Notice Paper were to be debated at a later hour this day, and I refer to the Nitrogenous Fertilizers Subsidy Amendment Bill and the Air Navigation (Charges) Amendment Bill. It seems to me that it would be no skin off anybody’s nose to deal with the Bills in any order. The nitrogenous fertilisers and air navigation Bills were to have been dealt with today. It is only a question of whether they are dealt with before the petroleum Bills or–

Senator Georges:

– No; that is quite wrong.

Senator DURACK:

– They are listed on the Notice Paper and on the Order of Business paper. All along it has been the Government’s intention to have the nitrogenous fertilisers and air navigation Bills dealt with today.

Senator Georges:

– I know, but in a particular order.

Senator DURACK:

– We have just dealt with that and explained why the order has been changed. All I am saying in this: What difference does the order make to any honourable senator? I think the Opposition has listed two speakers for the Air Navigation (Charges) Amendment Bill debate. There seems to be no good reason in the wide world for that Bill and the Nitrogenous Fertilizers Subsidy Amendment Bill not being debated now.

page 1183

AIR NAVIGATION (CHARGES) AMENDMENT BILL 1980

Second Reading

Debate resumed from 1 6 September, on motion by Senator Chaney:

That the Bill be now read a second time.

Senator GIETZELT:
New South Wales

– The purpose of the Air Navigation (Charges) Amendment Bill 1980 is to increase by 15 per cent air navigation charges levied by the Department of Transport on airlines in respect of aircraft that operate on our domestic trunk routes. The charges relate to the services provided by the Department of Transport, such as the use of aerodromes, airway facilities, meteorological services, search and rescue services, and the like. The Bill also proposes, firstly, including in the principal Act for the first time, in the table of flights which indicates zone factors for international operations, Norfolk Island, Hobart and Townsville; secondly, including factors for flights over Antarctica which commence and terminate at the same place in Australia; and, thirdly, deleting from the principal Act some routes which the domestic airlines no longer operate. In addition, some new air routes are proposed.

Under the revised allocation principles and the increased charges embodied in this Bill, the Government expects the rate of cost recovery on the domestic trunk routes to reach 100 per cent in 1980-81. That is quite a departure from policies pursued by the conservative governments years ago. Despite the claim by the Minister for Transport, Mr Hunt, that the increased air navigation charges will have a minimal effect on airline costs, the simple fact is that costs will increase and this inevitably will increase the cost of air fares on domestic lines in this country. From information we have been able to gain from the Minister, the following picture of rates of navigation cost recovery has emerged for 1979-80, again calculated on the revised principles contained in the Bill. For example, for international airlines a surplus of $1 1.4m over cost represents, in effect, a recovery rate of 127.7 percent. lt has been stated that the surplus is to be set aside in a special fund for future expenditure on aviation infrastructure, yet in questions in the other place the Minister has been unable to give the Parliament any indication of the specific purpose for which the $11.4m will be used and whether a special trust account will be established. We believe that this is an unsatisfactory and sloppy way of handling public revenue and expenditure. It must be deplored because, given Treasury directions on the recording of public finance and given what Senator Georges and the Government senator, Senator Lajovic have revealed, there is a need for a tightening up of the way in which public funds are handled. It is essential that we have precise accounting of revenue and expenditure of the Department of Transport, particularly once these new areas of infrastructure expenditure have been established. From the Government’s record and from the Minister’s remarks, it is abundantly clear that, if this untrustworthy Government is returned at the coming election, substantial increases in air navigation charges inevitably will be made. They will apply to regional airlines and to general aviation, including commuter services. The effects of those heavily increased charges will be further to force up fares for commuter air services and general aviation services, as well as regional air services.

In the past seven months Ansett Airlines of Australia and Trans-Australia Airlines have been granted three fare increases that in total represent an increase of almost 20 per cent, which is well above the rate of increases in fuel, wages and other costs. The Minister for Transport, again regrettably, in a departure from established ministerial practice, has refused to accept responsibility for the three increases he granted. He has chosen instead to blame the airlines for his action, for the policies of this Government, and for the fare increases. It has to be drawn to the attention of the Senate that since the Fraser Government came to office air transport fares in this country have more than doubled. Of course, that has had a tremendous impact upon the cost of transportation, not only of goods but also of passengers. It has had an impact on the tremendous number of people from business and commerce who use the airlines of this country. When there is a dramatic increase in transport costs these must be absorbed in the prices of goods. That is a significant factor in the every-increasing price spiral of goods in this country.

It must be emphasised that the increased costs experienced by airlines are the direct results of this Government’s economic policies, its failure to arrest inflation - presently at double figures and accelerating - and its decision to increase heavily taxation on aviation fuel. What a disastrous effect it must have on the whole cost of transportation, both ground and air, when this Government has collected over the last few years something in excess of $8,000m as a result of its crude oil levy policy.

The present Minister for Transport (Mr Hunt), like his predecessor, has told us that the terms of the two-airlines agreement are under negotiation with Ansett Airlines of Australia and TransAustralia Airlines. I remind the Senate that a year ago at the beginning of the Budget session the Minister for Transport stated that legislation would be introduced during the session to amend the two-airline policy. A year later, a day before the Parliament is dissolved, that policy has not been negotiated and no enabling legislation has been introduced. At the beginning of the autumn session, in February, and again during the winter recess, the present Minister for Transport repeated that legislation to amend the two-airline policy would be introduced. It has not been introduced. It is another broken promise. Now, in the dying hours of the Parliament, he has told us that the matter is under negotiation between TAA and Ansett. The simple fact is that this Government is committed to placing the interests of these airlines before the interests of the airline passengers. The Government acts as though it is a captive of the airlines and must dance to the tune they call.

I wonder what significance is in the question that Senator Wriedt asked today of the Minister representing the Minister for Transport concerning the rumours that abound in the airline industry that there are to be tremendous advantages placed the way of Ansett to the discomfort, discredit and disadvantage of our government airline, TAA. Of course, these things can be announced once the Parliament finishes its business some time tomorrow evening. In respect of this legislation, the only changes that can be made by a conservative government under the anti-air traveller provisions of the two-airline agreement are those approved by Ansett. Ansett actually has the power to veto if TAA wants to perform a different function or suggests some innovation. If Ansett does not agree, in effect, it has the power to say no to any such changes.

Under the agreements restrictive conditions legislated by earlier conservative governments, the only changes that can be made to the airlines in this country have to have the approval of Ansett. Many of us on both sides of this chamber have questioned - for the whole nine years that I have been a senator - when we are going to break down the parellel departure times of the airlines. What a disadvantage that places on airline travellers. We have seen no change over those long years. Why is this so? Ansett does not want it and it is Ansett Transport Industries that calls the tune.

Senator Mason:

– It is the do-nothing government.

Senator GIETZELT:

– Of course it is a do nothing government. We know, with the changes that are taking place in the Australian economy, how much more clout the corporate big companies have with this Government, how they finance the Government’s election campaigns, how they are trying to buy themselves into the communications media area and how much power and economic muscle they have to exert upon the lickspittle Fraser administration. It is regrettable that this Government which claims to govern on behalf of all the people and claims to have the public interest in the forefront of its attitude and philosophy, nevertheless allows itself to be dictated to by these powerful economic interests. I think that, what has happened to Ansett is an indication that no matter how innovative, proud and strongly motivated an entrepreneur such as Sir Reginald Ansett might be, when the really powerful interests want to make a move they crush even a person of the standing of Sir Reginald. We know that he has lost control of his own airline to even more powerful economic groups. The Government did everything it could to stand in the way of Sir Reginald Ansett and to allow the more powerful groups to become paramount in that struggle.

To return to the Bill, I have said on many occasions that civil aviation was invented and should be developed for the benefit of the travelling public and not for the benefit of the few. Because of the development of our economy and the growing affluence of sections of the economy the few want to get into and become dominant in the airline industry. We saw how the conservative Government and its bureaucracy are prepared to stand idly by while that development takes place.

The major trunk airline services are an essential segment of our whole public passenger transport system. Because of their protected and privileged position, they are in a monopoly situation which has the blessing of the Parliament. The airlines occupy a privileged position in public transport and must be and should be fully accountable to the Parliament and the public for the services provided and for their financial performance. The Australian Labor Party in government is committed to placing the interests of the traveller and the Australian transport industry first and making air travel accessible to as wide a range of people as is possible in the Australian community.

This conservative Government has failed yet again to meet that need. It has achieved little in holding back the influence of private entrepreneurs in the airline industry. It has succeeded in raising, by massive margins, air fares, air navigation charges and fuel costs. All of these increases have occurred as a direct result of the Government’s economic, fuel and aviation policies. For example, since 1975 two Ministers for Transport have established a procedure of rubber stamping applications for air fare increases after what can only be properly described as a brief, partial, inadequate and cursory examination of the applications. There was no public inquiry or public debate in the Parliament or elsewhere, just a rubber stamping of the applications, submitted in the first instance usually by the privately owned airline.

I turn to the increase in air navigation charges detailed in the Bill before us. It must be noted that five increases have been imposed on the major domestic airlines since 11 November 1975. Since that fateful day the airline navigation charges have risen five times. That means that in the five budgets of the Fraser administration there have been increases in air navigation charges. In 1976 an increase of 15 per cent was legislated retrospective to 1 December 1975. So, the Government not only got its cut but made it retrospective. So much for those honourable senators in the Government who always speak very highly and strongly about retrospectivity! The increases in air navigation charges since then are as follows: On 1

December 1 976 there was another 1 5 per cent increase bringing the total cumulative increase to 32.25 per cent. On 1 December 1978 there was a further 15 per cent increase. On 1 December 1979 there was a 25 per cent increase- the highest increase on record - bringing the cumulative increased to 90.1 per cent. On I December this year the legislation which the Senate is now asked to give its assent to will authorise a rise in excess of 1 5 per cent which will bring the total overall increase in air navigation charges in the five years to 1 18.63 per cent. This 1 18.63 per cent increase in air navigation charges has been implemented by a government which when in Opposition had this to say:

Because of the serious and detrimental effect the 80 per cent recovery policy–

That was, of course, the policy of the Whitlam Government - is having on aviation, we will immediately halt the program until proper studies and comparisons of cost recovery with other forms of transport are made.

That policy promise, made in the 1975 election campaign, like a myriad of other promises by the Fraser Government, has been broken. It has been repudiated. Not only has that promise been repudiated, but also costs have been drastically increased. No public examination of aviation cost recovery has been made. No inquiry has been undertaken and no explanation has been given. Instead, the Liberal-National Country Party Government has increased air navigation charges with an unparalleled vengeance at the expense of air travellers. In line with its Budget objective of reducing the so-called deficit, it has handed down to air travellers an additional tax virtually upon their travel costs. The 80 per cent cost recovery objective which was so violently objected to by the Liberal and National Country parties has been superseded by this Government’s 100 per cent cost recovery target. The Treasury is very happy with the objective that this Government has taken on board. TAA and Ansett have constantly objected to that 100 per cent cost recovery target. If time permits, I will refer to that aspect later.

The increased fuel costs arising from this Government’s massive fuel pricing policy have hit the airlines hardest of all. Fuel costs have more than doubled. Ansett and TAA burn up about 2 per cent of Australia’s annual oil consumption, but with that 2 per cent they carry about 10 million passengers annually. No alternative fuel is available for their aircraft. Hence the Government’s policy of massively taxing fuel for airlines simply imposes a heavier burden on airline costs, which is reflected in higher fare levels and which, of course, must increase pressure on costs and raise the inflation level. Five years ago fuel costs accounted for 1 5 per cent to 1 7 per cent of total airline costs. Today they comprise 26 per cent of total costs and almost 40 per cent of the direct operating costs of both the government airline and the private airline, Ansett. I refer to the more fuel efficient Airbus which TAA proposes to buy. The Deputy Prime Minister (Mr Anthony) is currently trying to throw his weight around in Europe by suggesting that TAA will not have the approval of the national Government to make that purchase.

It appears that the Government is rather selective in its approach to these matters. It picks on poor old TAA and says: ‘We will not allow the Airbus to be purchased in Europe because of the European Economic Community’s agricultural policies. The EEC, is now about 1 5 years old. The whole purpose of the establishment of the European Economic Community was to protect the agricultural industries and other imports in that region. It is a little late now to say: ‘We are going to react because it has maintained without question the policy of protecting its own agricultural industries at the expense of all other primary producing countries’. Mr Anthony is in Europe threatening not to give approval to TAA’s proposal to buy the Airbus. The step which Mr Anthony is taking is a regressive one. TAA’s more fuel efficient Airbus will consume about 12 litres of fuel less per passenger on a flight between Sydney and Melbourne than does the Boeing 727 aircraft which is currently in use. In a year each Airbus that TAA proposes to use is expected to save about 5.5 million litres of fuel, worth approximately $1 .3m.

This action is being taken by a Deputy Prime Minister of a government that is supposed to be concerned about fuel conservation. It is just another one of the illogical steps taken by this very miserable, dismal Government that is headed by Prime Minister Fraser. There is so much inconsistency in this Government’s approach to fuel conservation. One would have thought that it would do everything within its power to speed up the delivery and the operation of the Airbus and even to bring some pressure to bear upon Ansett to make it realise what is supposed to be a fuel conservation policy, which has the support of all right-minded people in Australia and every member of the national Parliament who thinks seriously about the problems of energy conservation and energy use.

I wish to return to the comments in the second reading speech of the Minister for Aboriginal

Affairs (Senator Chaney) relating to the negotiations between the Government and the airlines with respect to the projected airlines agreement. At no stage has the Parliament been informed of proposed changes to the Government’s twoairline policy. This, of course, highlights again the attitude of the Fraser Government to freedom of information. We, as members of the national Parliament, are not even told what negotiations are taking place. Honourable senators on the Government side in all sincerity speak from time to time about the need for information to be made available by the Executive to the Parliament and by the Parliament to the community. A very important negotiation is underway and the Minister has refused to inform the Parliament at any stage what negotiations are taking place and what propositions are coming from both the private and public airline authorities.

What seems to be happening to the Government in its dying days? We see many leaks taking place - obviously, inspired leaks by people in the bureaucracy who are appalled by the attitude that is taken by this Government and who therefore try to expose the ineffectiveness of this Government in its day to day administration of this country. I think it is a matter of regret that the Executive has become so powerful that it can even set the pattern for what happens in this chamber. We have seen an example of it this afternoon. We have seen examples of it over the last few weeks. When Mr Fraser cracks the whip Governments senators in this place fall meekly into line. So much for the independence of the Senate about which we heard so much in 1974 and 1975.

Much more could be said about the airline industry. Let it be put on the public record that the Opposition is concerned about what has happened to Ansett- the fact that it has been taken over by bigger economic giants. We are concerned that Ansett is putting the screws on the Government. We are concerned that the future of TAA is under a cloud, that the rumours and the leaks that are coming out of this Government show that our public airline, which is the pride of the country, is being discriminated against. We are concerned that advantages are to be given to the private airline at the expense of the public airline. Recognising the way in which this Government operates, recognising that the only weapon that is at our disposal is a speech here and a speech there, and recognising that the elector is the final arbiter who sits in judgment upon the way in which government policies operate, one can only expect, on the basis of the changes that are taking place in the Australian electorate, that people have begun to see through the superficiality of this Government and that the Fraser Government does not represent the interests of the Australian people. People are beginning to realise that a Labor government deserves to be in power after 18 October. When the Australian electorate is called to make a judgment on the Fraser Government we hope it will understand the need to throw this present government out of office and to put in a government that has some integrity and a philosophical approach of seeking to redress the deficiencies and wrongs that have been so much part of the Fraser Government since it seized power in 1 975. The Opposition does not intend to oppose the Bill.

Senator MASON:
New South Wales

– I wish to enter this debate briefly to talk about the question of air fares. The Minister for Aboriginal Affairs (Senator Chaney) said in his second reading speech that the proposed measures in the Air Navigation (Charges) Amendment Bill mean yet another small but noticeable rise in air fares. The purpose of the Bill is to increase the rate of air navigation charges for the domestic airline sector by 15 per cent as from 1 December 1980. Is it good enough merely to go on tinkering with air fares and adjusting them upwards at the expense of the cohesion of our society? Geoffrey Blainey demonstrated so ably in that excellent book of his entitled Tyranny of Distance that Australia is a big country. He added that phrase to our lexicon of ideas. The ‘tyranny of distance’ is a factor that must constantly be taken into account and, in many ways, should overrule purely financial considerations.

Western Australia is a long way from the eastern States. On behalf of the Australian Democrats in Western Australia and the party generally I suggest that in the interests of national unity and cohesion - I stress those words - special efforts should be made to reduce air fares to Western Australia and not increase them in any way whatsoever. I strongly support that concept. We do not see this as any sort of handout to Western Australians. Far from it. I have looked at the case that good people in Western Australia have been making for some reduction of fares as a matter of national unity. That case is entirely rational and it has our full support. I wish Mr Jack Evans, who will be the Australian Deomocrat senator for Western Australia from 1 July next year, was present. Jack Evans knows the subject and could deal with it so much more ably and eloquently than I could. I have no doubt he will keep pushing it once we welcome him here as a senator next year. I urge the people of Western Australia to get some honest and common-sense matters back into

Federal politics by voting in this honest and common-sense man on 1 8 October. I think that is something that is worth saying in the national interest.

People from the eastern States do not really understand what it means to regularly travel thousands of miles from Western Australia to this side of Australia; our colleauges from the West do. I call on honourable senators on both sides to support me in this matter. Let us put it completely above party politics. For once, let us make it a combined effort of Labor, Liberal and Democrat and get some rationality into the question of air fares to Western Australia. I can hear Senator Georges protesting. My heart does not bleed for him, Victorians, New South Welshmen or even Tasmanians in this matter. Certainly South Australia is not very far away.

Senator Georges:

– You are advocating a vote for Jack Evans. You are not bipartisan.

Senator MASON:

– I really mean it. A tripartisan attempt would be very good. I think we ought to get together.

Senator Georges:

– You were just advocating votes for your own party in Western Australia.

Senator MASON:

– We have got to have Jack Evans here for this idea to succeed. Honourable senators will find that, next year, Jack Evans will make a very good senator. Let us take this matter seriously; it is serious. I do not think the levity of honourable senators on both sides would be appreciated by the people of Western Australia.

It is a very long journey to Perth. Why should it also be expensive? My next point is: Where does the money go to? Far too much of that money, in fact, is going directly back into the pockets of the Federal Government. I think this point has not been made strongly enough. A plane on the Melbourne to Perth flight burns 21,650 litres of fuel. The Government reaps $907 in fuel excise and $ 1 ,7 1 0 in crude oil levy for every flight on this run. The Australian Democrats urge that the crude oil levy element of the fuel costs of airliners to Perth should be reduced or even eliminated to help redress the balance of costs to give the people of Western Australia equality in this matter with people in the eastern States. That is all we ask. The cost factor in Part II of the Schedule to the Bill is $12 for a Melbourne to Perth flight and $91 for a Melbourne to Canberra flight. In fact, an additional $26 for each passenger fare - assuming 100 passengers or a 70 per cent load - is taken by the crude oil levy. It is no wonder that Western Australians feel isolated.

Sitting suspended from 6 to 8 p.m. (Quorum formed).

Senator MASON:

– I would like to sum up and perhaps develop an issue which I was discussing before the suspension of the sitting for dinner. That matter relates to the cost of air fares to Western Australia from other parts of Australia. I made the point that Mr Jack Evans, whom I will welcome as a Democrats senator for Western Australia from 1 July next year, understands this matter much better than I do. I feel I must press this matter on his behalf until he can do so for himself. 1 mentioned the Geoffrey Blainey book entitled Tyranny of Distance. I recommend the book to honourable senators and to the Government so that, in forming policy, it will have a better understanding of the implications of the sheer physical distance in the development of this nation.

The Government will see in Mr Blainey’s book an implication with respect to the future which I believe any responsible government should ignore at its peril. Until it can be appreciated as a political and social fact that we have on this continent, a single country, huge distances to be spanned across areas of desert - they can be spanned with modern means of communication, but only in terms of great expenditure of time and money - I think there can never be an honest and reasonable assessment of this question of air fares. It is within that context that I wish to place the remainder of my remarks. It is a fact of life in this country that Perth is a long way from the eastern States. The Australian Democrats view is it should clearly be a matter of government policy to bring it closer in terms of money, by applying compensating factors and reducing costs of air travel.

There is no way, except through the modern expediency of science and developing better and better aircraft, that we can reduce the distance involved or the time involved. In fact, rising fuel costs have made it necessary to slow down those long nights so the people who have to make them spend longer in the air than they would otherwise have done. On that fact alone a cost is involved. I think any responsible government would realise that the time that these citizens exercise in their necessary pursuits is a charge against the total wealth or productivity of the country. When a firm in Perth wants to export something over here - perhaps a good product- and has to say We cannot go over there. We cannot send you over there this week to attend that meeting because the cost is so high’, then the country loses something. That is a fact that we have to consider. The Australian Democrats regret intensely the rather narrow approach of the Government. Somewhere behind the Government there is a whole team of cost accountants who think they are God. The Budget makes that plain. It is a fact that if A costs more than B we will have B, no matter what the other considerations might be. We deplore that.

The basic point is that there are cost ingredients involved in the fares to Perth from the eastern States which the Federal Government in Canberra could influence if it wanted to recognise this factor of distance and disadvantage for West Australian people. From three taxes - the oil levy, the fuel excise and navigational charges - the Government collects $3,836 a flight, which is an average of $38 a passenger. This assumes an aircraft loading of 70 per cent. Let us say 100 passengers are travelling on an aircraft. Every time somebody flies from Sydney or Melbourne to Perth or everytime somebody flies from Perth to Sydney or Melbourne the Government rakes off $38 which each citizen aboard that aircraft pays for the privilege of going from one part of Australia to another.

I want to drive the fact home to the Federal Government that it has within its power, in spite of all the other rising costs of running aircraft, the ability to reduce the Melbourne-Perth flight or the Sydney-Perth flight, for example, by an amount of $38 to $40 a passenger. We say there are good reasons to do so. We do not say there is any reason for handouts to West Australians. Let us take Tasmania. I have no tears for Tasmanians over air fares. Tasmanian senators will feel differently. I suggest that in all honesty all they have to do is to look at the difference in the distance that people have to travel from Perth to the eastern States and from Tasmania to the mainland States to realise that there is a disadvantage, particularly for West Australians. We ask that this be not regarded as a handout to West Australian people. It is not. It is because their disadvantages are clearly recognisable and are readily demonstrated. Those disadvantages, as I have said, are not only disadvantages in terms of money, as honourable senators from West Australia know only too well, but also are based on the fact that Perth is a hell of a lot further from Canberra than Canberra is from Sydney or Melbourne. We should recognise the difficulities. There again, that is an interesting consideration.

There are other reasons to be considered as to why the Government should be reducing the cost of air fares to Perth. The Government makes a lot of money on the long haul flights, such as the flights to Perth, as does Ansett Airlines of Australia. These long haul flights are very cost efficient in terms of other aircraft costs. The level of efficiency is massively greater than, say, the Sydney-Canberra flight. It may be news to the Government that modern aircraft fly much more cheaply and efficiently when they fly at high altitudes and when they do not have to descend and climb in and out of airports. When we look at the figures, the raw cost of the Sydney-Canberra flight is 3.36c a seat a kilometre. That is something like 3ic. The Sydney to Perth cost is only 1.5c a passenger a kilometre. That is under half as much. Is any consideration given to people living in Perth in relation to that? No, not at all! That is a hidden factor which the Government prefers not to tell them about.

We have an unfair, an unncessary and, as I believe I have shown in what I have said, an unjustifiable situation in which a passenger flying from Perth to Sydney pays $536.20. For that sum of money he could buy an eight-day Club Mediterranee holiday in Kuala Lumpur. A person from Sydney could spend a week in Noumea for that amount of money. One has only to go to a travel agency to find that is the case. We have perpetuated in this country the absurd situation where for a person to fly from one capital city to another, to make an important contribution towards the coherence and integration of our society, that person has to pay the same amount. We talk about irresponsible people in Western Australia.

Senator Georges:

– Why don’t you resign and give him the seat?

Senator MASON:

– There are irresponsible people in Queensland also. People talk about the secession of those States. The secession movement is something which I do not take particularly seriously, but it does exist. Some people in Western Australia believe they would get on a lot better if Western Australia were a separate State - if it were a separate State in the sense that it had complete sovereignty. Undoubtedly they would do better. They could run an air service over here a lot cheaper than Trans-Australia Airlines or Ansett could. They would see that those factors on actual aircraft cost a passenger a kilometre were honestly bestowed. I think it is wrong of the Federal Government, whose job it is to be a Federal government and whose purpose it should be to perpetuate and foster the unity of this country, to carry on with the clearly divisive policy that it has, which if anything will only enhance and encourage factors which tend to isolate Western Australia from the rest of Australia. That is a complete absurdity. I would like now to hear any member of the Government try to justify that one point. Why is it that they want to cut off Western

Australia from the rest of Australia? Why is it that they want to make sure that the people there are ripped off to the largest possible extent in relation to air costs?

Senator TATE:
Tasmania

– In this legislation the Senate is considering now we have embodied yet another rise in air fares, increased charges which will have to be paid eventually by the air traveller. This will be brought about by the direct legislative action of the Government in this chamber tonight. I find it incredible, but it shows just how thick-skinned and insensitive this Government is that in the dying hours of this Parliament it should come into this chamber and ask us to add yet again to the burden which air travellers bear as they make their way around this great nation. This legislative action only supports what the Minister for Transport (Mr Hunt) has been doing for the last five years, that is, rubberstamping every application made by TransAustralia Airlines and Ansett Airlines of Australia for an increase in air fares. The sort of attitude displayed by the Government in this Bill will, I believe, be repudiated very shortly by the Australian people.

I agree with some of the general remarks made by Senator Mason when he emphasised the need for cohesion and unity throughout this nation, which can be fostered by the proper and reasonable availability of air transport. But this Government, with an unreasonable policy of cost recovery, is making that harder and harder for the average person - not only for the small businessman but also for the family man, the person who wants to visit his aged parents or his student children who are studying in another State. This is just another example of the callous disregard for the family that we find emanating from the Government in the dying hours of this Parliament. I make no bones about that. Does the Government have any cost recovery program requiring users of the national highways to pay as they travel over kilometre after kilometre of the national highways? Senator Messner agrees. I heard him say that that is a very good point. The use of the national railways also does not involve any cost recovery program. Air transport is singled out, and that has a particularly deleterious effect on those who live outside the privileged south-east mainland area of Australia.

I was saddened to hear Senator Mason say that he shed no tears for Tasmania. I find that an incredible statement from the Deputy Leader of the Australian Democrats in the Senate. He may shed no tears for Tasmania, but I am sure that every senator in this chamber representing that

State understands the problem faced by Tasmanian families as they try to keep up contacts with other members of their family on the mainland. We in the Australian Labor Party understand those problems. Perhaps members of the Liberal Party partially understand. It is sad that the Australian Democrats have yet to come to that understanding. Senator Mason emphasised the problem of the distances that travellers from Western Australia have to cover in coming to the east, and it is a problem. The Australian Labor Party would allow Qantas Airways Ltd to carry domestic passengers from Perth to Melbourne and Sydney in a way which would halve the present cost of the domestic economy fare. There is a dramatic program by the Labor Party which would help ease the burden of Western Australians as they face the prospect of travelling to the east.

Senator Chipp:

– Not only Qantas; all international flights should be included.

Senator TATE:

– As Senator Chipp says, all international flights should be included. In that we are as one. We have imaginative programs, whereas the Government simply comes in and adds yet another 1 5 per cent to the charges which travellers must bear when they pay for their air tickets. May I emphasise some of the problems which Tasmania faces, because that is my duty as a Tasmanian senator. In order to get from Tasmania to the mainland, we have to travel by air or sea. That is axiomatic. In fact, 92 per cent of passenger travel across Bass Strait is by air. It is to that 92 per cent that we wish to add. The social isolation experienced by Tasmanians who cannot afford the present regime of air fares, exacerbated as it is by the type of legislation before the chamber tonight, requires an imaginative breakthrough by government in order to deal with the disadvantage suffered within the Federation, a disadvantage of geography which as part of the federal deal we expect the rest of the Federation to co-operate with us in solving.

Senator Messner:

– Give us some more statistics. We want some more statistics.

Senator TATE:

– Senator Messner, being a public accountant, wants statistics. I suggest that he pay due regard to the proposal by the Australian Labor Party that compensation be offered to Tasmanian travellers trying to get to the mainland. That would work in this way. The advance purchase excursion fare system which the airlines offer at the moment provides for a 40 per cent reduction in economy air fares. That system operates in a restrictive way. Only a few seats are available on any flight, and one has to make a booking many days in advance of travel. That requires certainty, which is quite impossible in the case of bereavement, or in the case of the aged or the infirm who cannot be quite sure that they will be fit enough to travel on a particular day. We say that that APEX fare ought to be available across the board to enable Tasmanians to break out of that isolation which otherwise can imprison them unfairly within this prosperous Federal nation.

I think Senator Bonner, who is trying to interject, finds some difficulty in grappling with that concept. It is a concept which this Parliament has endorsed in regard to freight. We have a freight equalisation scheme which recognises that because we do not have road and rail links with the mainland, because the sea is the only reasonable means of freighting cargo to and from Tasmania, then the Commonwealth should supplement the revenues of those paying for cargo transport across Bass Stait so that they come to a position roughly comparable to those who use the national highway or railway system over a comparable distance. We say that the very same principle endorsed by this Parliament ought to be applied to passenger air fares. This is nothing new. It is an extension of a principle well understood within this chamber and within the Federation. It is an attractive proposal. As I say, it would make the APEX fare structure available to all Tasmanians who wish to utilise it when travelling to the mainland and back, at least on the TasmaniaMelbourne run.

Senator Watson:

– It would be available to everyone?

Senator TATE:

– It would be available to everyone because of the difficulty of differentiating and discriminating between particular persons according to need. 1 am trying to paint a picture showing that the Labor Party has taken the freight equalisation scheme imaginatively and applied it to passenger air fares. It is a concept which deserves the full commendation of the Tasmanian people, which I am sure it will receive. The Australian Democrats offer no tears on behalf of Tasmanians. The Liberal Party has offered to take away air navigation charges to Tasmania. Perhaps Senator Watson did not know that. I must say that it was a very subdued announcement. Nevertheless, that is what it has offered. Of course, that would reduce air fares by only some 8 to 10 per cent. What Tasmania needs and what Labor promises is that when it is elected to government Tasmanians will have the advantage of APEX fares across the board at all times, without the need for a 40-day waiting period and without the restricted seat availability that presently obtains.

When Senator Wriedt, that great statesman, and his colleagues put this scheme together some weeks ago, we found that Mr Hodgman yapped at his heels and virtually invited Mr Bjelke-Petersen, one of the most reactionary Premiers in Australia- - Sir Charles Court would be fairly close - to open a High Court action to test the constitutionality of this Labor Party proposal. Mr Hodgman in his undergraduate manner suggested that somehow this scheme would be unconstitutional, and he invited Mr Bjelke-Petersen to bring the Labor Party to the High Court to answer for the temerity of putting forward such an imaginative scheme. Any law student would be able to tell Mr Hodgman that under section 96 of the Constitution this scheme is quite constitutional. There is no question about it. Whereas it is true that in revenue raising the Commonwealth cannot discriminate between States, in making grants to States there is no such bar. That was decided in relation to Tasmania in the late 1930s in Moran’s case by a Chief Justice who was quite conservative. Chief Justice Latham. Mr Hodgman, not having the imaginative flair or concern to come up with such a scheme, branded it unconstitutional. I state definitely to this chamber that that is not the case. Not only does the Constitution envisage that such compensatory payments be made to States which are disadvantaged one way or another but also it positively encourages that to be done. It is within that structure that Senator Ken Wriedt and his colleagues devised this program.

As I said, it is unfortunate that air travellers alone are singled out, of all travellers throughout Australia using national facilities such as the Federal highway system or the national railways system, to bear the cost recovery program to a new limit of 100 per cent. 1 believe that the Tasmanian air traveller in particular will regard this further imposition by the Federal Government as yet another charge on the indictment sheet which will come to be judged on 1 8 October. Because we disagree with this legislation root and branch we will not try to amend it or oppose it in any detail. We will not try to reduce the imposition of a further charge of 1 5 per cent by 5 per cent, 3 per cent or anything else. That would be fiddling while Rome burns. Wc register in this debate our abhorrence of this further legislative impost on air travellers in Australia. With that, and having put forward a constructive alternative, we will let the matter rest for the time being.

Senator WALSH:
Western Australia

– I did not intend to speak on the Air Navigation (Charges) Amendment Bill but because of a couple of matters that have been raised I will do so. Firstly, I endorse the observation that has been made before, that air fares in Australia are higher than they need or ought to be. The fundamental reason is the absurd two-airline policy, a creature of the Menzies Government, introduced in 1 952 to protect Ansett Airlines of Australia. The policy is against the public interest. It seems to me to combine the worst features of both socialism and capitalism. The Australian Labor Party has served notice that on becoming the Government this year it will end the two-airline agreement.

The second point I make relates to Western Australia in particular. Whether one follows the belief that market forces should determine charges and their relativity or whether one believes that if people are particularly disadvantaged by the circumstances of their birth or their location they are entitled to some public compensation - in other words whether one believes in laissez-faire capitalism or collective social responsibility - one can see that air fares to Western Australia are unjustifiably high. The long hauls, and overwhelmingly the Western Australian haul, are subsidising the short hauls. If market forces alone determined charges air fares to Western Australia would be lower than they are now. On the basis of market forces, air fares ought to be lower between Perth and the eastern States. On the other hand, on the basis of public compensation for a geographical or other disadvantage, once again air fares to Western Australia ought to be lowered. The fares between Perth and any other capital city are greater by a factor of three than the fares between any other capital cities. In other words, the existing relativity is unjustifiable on any grounds. It discriminates heavily against Western Australia.

The overriding factor is that air fares generally are higher than they ought to be. I have mentioned that the Labor Party has already served notice that when it becomes the Government the two-airline agreement will be terminated. We are also proposing two other reforms which will considerably assist Western Australians. The first, of course, is that the thousand vacant seats a week on Qantas Airways Ltd aircraft in both directions between Perth and the eastern States will be filled. Qantas will be allowed to fill those seats with domestic passengers. It ought to be selfevident even to some of the dimmer Government senators that it is ludicrous to pretend that we are seriously pursuing energy conservation policies when one thousand seats a week are empty in both directions between Perth and Sydney or Perth and Melbourne. The potential saving on filling those Qantas seats is equal to six full 727 flights in both directions each week using 60,000 gallons of avtur or turbine fuel.

The other proposition we are putting forward relates particularly to people in the north of Western Australia in the Pilbara. We will encourage direct flights between the Pilbara and the eastern States, lt is worth noting that 60 per cent of the adult population of the Pilbara was not born in Western Australia. Most people there come from south-eastern Australia and a substantial minority are New Zealanders. These people retain family ties with the south-east and regularly visit friends and relatives in the south-east or in New Zealand. It is equally ludicrous that these people should be forced to travel to Perth on the intrastate air service - incidentally, the cost of a flight on that service from the Pilbara to Perth is almost equal to the cost of a flight from Perth to the eastern States - and then to Sydney, Melbourne, New Zealand or wherever they want to go when the distance from Port Hedland to Sydney is only slightly greater than the distance from Perth to Melbourne. It is another absurdity that that service is not provided. I believe it would be provided if the Government did not intervene so heavily and ineptly in air transport. Labor certainly intends to rectify the situation as a government next year, to the particular benefit of people in the Pilbara region.

Senator RAE:
Tasmania

– 1 am delighted to hear that one of our socialist friends has become a laissez-faire liberal.

Senator Walsh:

– I said that the two-airline policy combines the worst feature of both. Be fair to me.

Senator RAE:

– Not always do people wish to throw acrimony across the chamber. I find no problem in agreeing with many of the things that Senator Walsh said. For instance, we ought to make statutory authorities a little more accountable than they have been. We should clean up some of the rackets that have been going on, not only in the stock exchange and securities industry but also in statutory authorities. I agree that we need to try to develop a little true competition. It concerns me to think that the taxpayers have to bail out Trans-Australia Airlines with $90m which apparently it is not prepared to accept. It wants $40m more to bail itself out of its liabilities in relation to superannuation contributions not provided for during the past seven years of its operations. They would happily claim to have made a profit. It is very easy to make a profit if one does not provide for one’s liabilities or if one selectively excludes those liabilities which have been imposed fairly or unfairly upon one but which one chooses not to provide for. I could not agree more with Senator Walsh when he says: ‘Let us have some real competition in relation to the two airlines and the whole airline industry in Australia. Let us have some accountability in relation to statutory authorities, as we are now requiring in relation to the securities industry’.

We have gone through the first action, which was to try to find out what was wrong with the operation of the capital markets and to identify where the operation of capital formation of the system of securities and exchange in Australia was going wrong. We have identified it, and action has taken place. It has been slower than many of us would like to have seen, but it has taken place. We are now reaching the stage at which something is happening. The National Companies and Securities Commission has been set up. We have agreement about what will be a single companies Act for Australia. We have agreement about what will be a single securities industry Act and the various supporting pieces of legislation. I could only agree with Senator Walsh when he says: ‘Let us make sure that statutory authorities are subject to similar types of restraints, similar types of sanctions, similar types of rules, to ensure that they, too, behave in a way which is acceptable in a society such as ours’.

Senator Watson:

– They do not undercost their product.

Senator RAE:

– They do not undercost their product, they do not engage in false accounting and they do not do things such as using a depreciation allowance, as Trans-Australia Airlines does, which is totally unreal. TAA’s DC9s, I am told, are worth about $80m and on ‘*.s books they are depreciated to nil. One could imagine that one could say–

Senator Tate:

– What is Ansett’s rate of depreciation?

Senator RAE:

– Senator Tate should just wait a moment; let me finish. What TAA has done is to use a rate of depreciation in relation to its aircraft which is far greater than that which Ansett Airlines of Australia Ltd has been able to use. However, I quickly add that when Ansett got into trouble with the $18m loss in relation to Associated Securities Ltd, where did it pick up, for the purposes of its accounts, the capacity to make the books look reasonable for the year? It revalued its aircraft. But TAA has been a somewhat better exponent of that art. It has depreciated its aircraft far more, to a stage at which there are $80m worth of DC9s which are valued on the books, I am told, at nothing. I have said this previously, and no one has attempted to correct me. If I am wrong, I should be delighted to be told by somebody from TAA where I am wrong, but that is the information I have. Its statutory liability for contribution to superannuation is about $1 40m, and on a market capitalisation basis its value is about $30m.

I cannot help but think that what Sentor Walsh described as the worst combination of private enterprise and government enterprise is illustrated by the position in which a lot of very excellent people who are operating an excellent airline find themselves at the moment. TAA, with some of the best pilots that the world has, with some of the best ground staff, particularly those on the technological and engineering sides, with some of the most stringent safety standards and training standards in the world, and with an excellent air safety record, has been mucked up by the fact that we have not come to grips with differentiating between whether we are to run something totally as a public enterprise, or totally as a private enterprise - or whether we should try to blend the two.

When I think of that situation I am reminded of the position in which the Tasmanian Government finds itself at the moment. Today it introduced its Budget in which it was found necessary to tax almost all the small people of Tasmania. No doubt, the Tasmanian Government will try to blame that impost on the Federal Government’s not giving Tasmania enough money.

Senator Gietzelt:

– That would be factual because of the Fraser Government.

Senator RAE:

– Would you wait? Would you be prepared to wait?

Senator Button:

– Get on with your speech; don’t be so arrogant.

Senator RAE:

– I just wonder whether even Senator Button, in his arrogance, is prepared to wait, but I know that he is not. He is just so anxious to take over from Senator Wriedt that the mention of Tasmania triggers off immediately the thought: ‘Aha! I am to be the leader in just a moment’. But he has still to pass the test. I suggest to Senator Button that he wait till the time comes and let me get on dealing with what has happened in relation to the raising of revenue. The Tasmanian Budget, as I understand it, was described today as a great Budget if one is a beer drinking, terminally ill, trucking magnate who has a small staff, likes to bet, does not buy property, does not smoke, does not drive a car, does not buy beer tickets, has no children at school, does not rent a housing commission home, and does not attend adult education classes. One might imagine that these areas of activity are fairly basic to the average person in the community.

Senator Gietzelt:

– What has that got to do with air navigation? Be a little consistent.

The PRESIDENT:

– Order! Please get back to the Bill.

Senator RAE:

- Mr President, I am talking about the Bill. I am talking about air navigation charges and matters related thereto. As an example of matters related thereto we see that today the Tasmanian Government imposed on the Tasmanian taxpayer an amount of $16.06 extra tax per individual man, woman and child in the community. Why did it impose that tax? It did so to pay for its disastrous entry into the mixed economy concept - the idea that the Tasmanian Government to prove a point would buy into the Electrona Carbide Works and pour money into those works at a rate way beyond the capacity of the Tasmanian taxpayer to pay. I think the point was that those works kept a few people in work and therefore the Labor Government was able to get itself re-elected, but that is by the by.

Let me go back to the figures. I am replying to Senator Walsh’s points in relation to air navigation charges, the two-airline policy, and a comparison of a private enterprise approach, a mixed economy approach and a socialist approach. The Tasmanian Government has found it necessary to impose on the Tasmanian taxpayer- man, woman or child- an amount of $16.06 extra tax so that it can pour an amount of $13.93 per individual man, woman and child into the Electrona Carbide Works to make up its losses.

Senator GIETZELT:
NEW SOUTH WALES · ALP

– I reluctantly take a point of order on Senator Rae’s comments. He does not speak very often in the chamber. He must be a candidate in the election to talk about Tasmania in the way in which he has. He is really not addressing himself to the rises in air navigation charges which are the subject matter of this Bill. Whilst I think we have been very tolerant - you, Mr President, have been very tolerant - I think he should be asked to contain his references to the matter before the Senate. I would ask that he accept that discipline.

The PRESIDENT:

– There are very tenuous associations.

Senator Rae:

– Mr President, I wish to speak to the point of order. The suggestion that I speak seldom in the chamber is one which I believe is a politically motivated attack by the honourable senator knowing that I am one of the senators from Tasmania who is standing for election this time. Senator Gietzelt could only have mistaken my record for that of somebody from Tasmania, perhaps somebody like Senator Harradine or some of his own colleagues. I believe any examination of the record would indicate that that was a scandalous attack. There has been persistent activity in relation to a number of areas, particularly in relation to committees and particularly in relation to committees involving Tasmania. I do not accept the criticism which has been made.

The PRESIDENT:

– Order! A point of order was raised on the relevancy of Senator Rae’s comments to the Bill before the House. That was the point of order raised. Senator Rae, 1 would ask you to continue your speech on the Air Navigation (Charges) Amendment Bill.

Senator RAE:

– I reply to Senator Walsh’s speech which was allowed to proceed without objection. He raised the matter of Government intervention in relation to private enterprise operations. I continue by saying that in Tasmania an excellent example can be drawn; that is, when the Government of Tasmania decided to intervene in a situation which ought to have been sorted out on a private enterprise basis, it found itself pouring money down a bottomless pit into the Electrona Carbide Works to maintain a few jobs because it felt that unless it did so it might lose government. Now the Tasmanian people find themselves being taxed, in today’s State Budget, an extra $16.06 per individual. They are paying $13.93 per individual to the carbide works.

Senator Tate:

- Mr President, I take a point of order. It is that Senator Rae is deliberately and provocatively traversing ground which you indicated he ought not. At the very most, in reply to Senator Walsh he may be able to comment on the role of public and private enterprise in the airline industry and perhaps in the transport industry. But to go from that to all sorts of fanciful analogies and to use it as a basis for a political attack on a State Budget brought down in the last few hours is, I believe, to go far outside the parameters which ought to be allowed in debate in this Bill.

The PRESIDENT:

- Senator Rae, you will relate your remarks specifically to the Air Navigation (Charges) Amendment Bill.

Senator RAE:

– -Thank you, Mr President. I shall. 1 am concerned that many people, not just on one side of the chamber but on both sides of the chamber, do not realise the dangers of going down the path of pouring government money and government protection into various types of activities which may be belter run either as a solely government operation or a solely private enterprise operation.

Senator Gietzelt:

– Will you vote against the Budget?

Senator RAE:

– I will vote against the Tasmanian Budget. Let me give an example of the sort of thing that happens when a government starts trying to protect, under a two-airline agreement, an organisation such as TAA which gets massive advantages. Ansett also gets massive advantages. I accept that. I do not want an interruption from Senator Gietzelt asking: What about Ansett? I agree that both airlines get massive advantages out of the two-airline policy. Once government starts to get into that area there is a need to identify clearly what is the impact on the individual. The impact on the individual is best exemplified when one starts to look at what has happened in Tasmania where the Tasmanian Government got involved in propping up a private enterprise operation. We now find that stamp duty on conveyances, loans for credit unions, tobacco tax–

The PRESIDENT:

- Senator Rae, you will adhere strictly to the provisions of the Bill.

Senator RAE:

– Mr President, without wishing to question in any way your ruling, Senator Walsh was able to discuss this subject in relation to this Bill without exception being taken. He was able to discuss the matter of government and private enterprise and the operation of an industry. I am trying to give an example. I find myself being prevented by objection from the Opposition - which is unduly sensitive about this matter - from being able to give what I would regard as an appropriate, contemporary, of-the-day example of what happens when government goes too far down the track of interfering with what ought to be a private enterprise industry. In Tasmania taxes have been imposed in relation to all sorts of things such as stamp duties, tobacco taxes and beer ticket taxes.

The PRESIDENT:

– Order! Senator Rae, I am interested only in the provisions of this Bill at this stage. Please direct your remarks directly to the Bill. Where there is an association to a point you are making, that will be allowed, but the thrust of your remarks must be related to the Air Navigation (Charges) Amendment Bill which is the matter before the chamber now.

Senator RAE:

– I know it is a sensitive matter for the Australian Labor Party Opposition when I refer to some of the consequences of undue interference in relation to matters such as air navigation charges and the Budget consequences for the individual person. Let me relate it in this way, Mr

President. Trans-Australia Airlines is a government agency. Because a Labor government decided to provide that the total ground staff of TAA should be entitled to the benefits of the Commonwealth superannuation scheme, which does not apply to their supposed equal competitor, Ansett, because the amount of the employers’ contribution for superannuation in relation to Ansett is 7.85 per cent of the salary of the employee and because the contribution under the Commonwealth superannuation scheme is inflation-related and has benefits which are far beyond those which apply normally, the estimate of the amount which has to be provided by the employer as his contribution for members of the superannuation scheme is between 25 per cent and 40 per cent as opposed to Ansett’s 7.85 per cent of the salary of each and every employee of the ground staff who is a member of the scheme.

Senator Jessop:

– What is that in money terms?

Senator RAE:

– I am asked: What is that in money terms? In money terms the Commonwealth Government, on behalf of the taxpayer and using taxpayers’ money, has said that it will provide an amount of $90m.

Senator Gietzelt:

– Mr President, I raise a point of order. The Air Navigation Act clearly has not been read by the honourable senator from Tasmania. We are dealing with legislation which seeks to impose charges that have to be paid for the use of facilities, aerodromes, search facilities and infrastructure associated with the airline industry. A tax is being imposed by the Commonwealth Government in respect of the operation of the two airlines. The matter of superannuation, and the way in which TAA and Ansett operate their internal day to day administration, has absolutely nothing to do with the legislation before the Senate. Senator Rae must be either for or against the Government’s proposal, which is a Budget proposal to increase service charges for aspects of the operation of the airline industry in Australia. I think we have been more than tolerant, Mr President, recognising that over the last several days you continually have directed honourable senators on this side of the House to relate their remarks to the Bill under consideration. I do not think we are being unfair in suggesting that Senator Rae is continuing to transgress and in fact is defying the principles and traditions, and your ruling.

The PRESIDENT:

– Order! Senator Rae’s remarks were related to the legislation before the Senate when you interrupted him, Senator Gietzelt. Carry on, Senator Rae.

Senator RAE:

– Thank you, Mr President. I recognise that Opposition senators wish to take up my time because they do not wish to know, in relation to air navigation charges, what is the need of the Commonwealth to recover from one source or another money spent on the airline industry. A very substantial Commonwealth investment has been made in airports and in air navigation services of all sorts. A substantial Commonwealth investment has been made in Trans-Australia Airlines and, to a lesser extent, in Ansett, not only by way of direct capital investment but also by way of government guarantees, which are another form of assistance that a government can give. Quite obviously, the capacity of an operation to get money from the capital market is affected by whether or not the operation has a government guarantee. I put the proposition that there is a question in relation to TAA’s operations and air navigation charges. TAA purports to have produced a profit; in fact it has made a loss. TAA purports to be a successful government operation; in fact it is bankrupt.

Senator Tate:

– You hate TAA.

Senator RAE:

– I do not hate TAA. I worked for it, and I like it. But I do not like the way in which the successive governments have structured it. I do not like the way in which it is not given a chance to operate on a proper basis. What has happened is that TAA has been given virtually no capital - just $15m. It has been given an incredibly high gearing ratio of capital as to debt. It has been allowed to use depreciation policies which are not permitted of any public company with which it could be compared. It has been permitted to avoid making an allocation for its legal liabilities in relation to superannuation to the extent that its market capitalisation at the moment is about $30m, and apparently, from what it has said, its indebtedness is about $1 40m.

Senator Wriedt:

– I take a point of order, Mr President. Consistently during Senator Rae’s remarks you have ruled that he is out of order in not addressing himself to the legislation before the Senate. He continues to flout your ruling. He is using this debate as an opportunity to tell the Parliament his personal views about TAA’s financial arrangements.

Senator RAE:

– No, just some facts.

Senator Wriedt:

– Senator Rae concedes that he is using this debate to make a personal attack on TAA. That has nothing to do with the legislation. Also, we have just listened to him attack the Tasmanian Government on matters completely divorced from this legislation. If that is allowed to continue, I will move that Senator Rae be no longer heard.

The PRESIDENT:

– Order! I call Senator Rae.

Senator RAE:

– Mr President, if I may be permitted, I shall continue to address the subject of air navigation charges, which are very much part and parcel of the Government’s two-airline policy and in relation to which Trans-Australia Airlines is very much part of the Government’s two-airline policy. I should have thought it was reasonably realistic for me to speak also about the operations of TAA and about the figures and facts concerning the accuracy or otherwise of the presentation of those figures and the accounting comparability. If Senator Wriedt, as a farewell to the Senate before he faces Valhalla, decides to move that I be no longer heard, let him do so; otherwise, I propose to continue to address the matter of air navigation charges for as long as I am permitted to do so under the Standing Orders. Mr President, do you wish–

The PRESIDENT:

– I wish you to adhere directly to the Air Navigation (Charges) Amendment Bill.

Senator RAE:

– Air navigation charges are a significant part of the total cost of the operation of the airline industry, but they are not the only costs involved. If I am not permitted to refer to one of the really major significant costs, such as the superannuation provided by TAA, I believe that we will have reached an incredible stage, a stage at which we are not permitted to take into account one part of a cost but we are permitted to take into account another part. TAA is operated as a government statutory authority instead of being operated as a public company wholly owned by the Commonwealth. If it were operated as a public company wholly owned by the Commonwealth that would be fine by me, but let it prepare its account on a basis similar to the basis upon which Ansett prepares its accounts; let it be subject to the same liabilities.

Senator Gietzelt:

– It is always Ansett that wants to put up the fares.

Senator RAE:

- Senator Gietzelt says that it is always Ansett that wants to put up the fares. Other people, maybe they are cynics, say that the airlines take turns in putting up fares. Others call them the ‘heavenly twins’.

Senator Gietzelt:

– It is a two-airline agreement which your Government negotiated.

Senator RAE:

– The two-airline agreement has been kept going by successive Governments over a period. I am not sure that those governments have paid regard to what are some of the costs to the taxpayer of continuing–

The PRESIDENT:

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

Suspension of Standing Orders

Motion (by Senator Townley) proposed:

That so much of the Standing Orders be suspended as would prevent Senator Rae’s continuing for another 10 minutes.

Senator Cavanagh:

– Mr President, on a point of order, does a senator not have to get leave to move a motion? Senator Townley did not seek nor was he granted leave to move a motion.

The PRESIDENT:

– No, not for a motion for the suspension of Standing Orders, Senator Cavanagh.

Senator Cavanagh:

– I could move a motion for the suspension of Standing Orders without first obtaining leave to do so?

The PRESIDENT:

– You can move a motion for the suspension of Standing Orders without first obtaining leave.

Question put.

The Senate divided. (The President - Senator the Hon. Sir Condor Laucke)

AYES: 32

NOES: 20

Majority……. 12

AYES

NOES

Senator Dame MARGARET GUILFOYLE:
Minister for Social Security · Victoria · LP

(9.8) - in reply - The Senate has been debating the Air Navigation (Charges) Amendment Bill 1980. As has been said on a number of occasions, the purpose of the Bill is to increase the rate of air navigation charges for the domestic trunk airline sector by 15 per cent as from 1 December 1980. The Bill also deals with matters such as the inclusion in the Table of Flights for Flights Between Certain Places in Australia in Schedule 1, zone factors for international operations to and from Norfolk Island, Hobart and Townsville. The Bill also provides for the inclusion in Schedule 1 of factors for flights over Antarctica commencing or ending at either Sydney or Melbourne. The Bill deletes from and includes in the Table of Flights, Parts I and II, flights between certain places in Australia. Additions have been made to Schedule 1 for route factors for flights.

There has been some debate on the purpose of the Bill and on the matter of increases in air navigation charges. It is recognised that airlines are facing continuous cost increases due to a number of factors such as fuel and wage rises and other factors that tend to increase costs. Airlines are attempting to keep increases to a minimum by absorbing costs wherever this is possible. Detailed cost investigations of applications for increases take into account growth and productivity factors. This will continue to be the case whether or not changes in fare reviews are introduced. Air navigation charges have been increased only to achieve recovery of costs of providing aviation facilities. I think that fact has been mentioned throughout this second reading debate. The air navigation charges make up about 5 per cent of the total costs of the two airlines, Ansett Airlines of Australia and Trans-Australia Airlines. If we take into account that air navigation charges constitute about 5 per cent of total costs we see that they obviously have not had a significantly large effect on the level of air fare increases.

Senator Mason made some reference to air fares to and from Western Australia. I do not want to traverse all of the areas that have been covered in the speeches made by honourable senators but perhaps I should point out that fares on the national network operated by TAA and Ansett are established by means of a nationwide formula. This formula consists of a flag fall rate and a distance rate - currently $21 .80 plus 7.888c per kilometre for economy domestic fares, with a reduction in the distance rate of 1 5 per cent after 2,200 kilometres on the Perth-Melbourne, PerthSydney, Darwin-Adelaide and Darwin-Brisbane routes. This is a reflection of lower operating costs on the long distance routes. The aim of the air fare formula is to produce fares which closely reflect average passenger cost. I think if we relate that to the matters raised by Senator Mason we have some explanation of the way in which the fares are established by means of a nationwide formula.

Senator Tate referred to cost recovery. The only comment I make in this context is that the Commonwealth Government for its part applies cost recovery to all modes of travel, not just travel by air. For example, shipping pays light dues and a pollution levy and recovers cost of navigation aids for marine activities and pollution clean-ups respectively. With regard to rail services the Commonwealth is moving to make the Australian National Railways self-sufficient. The present deficit is a result of the takeover of the Tasmanian and South Australian rail systems in about 1975. There is some movement to cost recovery not only in air travel but also in other modes of travel such as ship or rail.

A number of other matters were raised in the second reading debate on this Bill. The purpose of the Bill is to amend air navigation charges, which was announced by the Government in its 1980-81 Budget. The Government’s intention, as was announced in this year’s Budget Speech, is to increase air navigation charges by 15 per cent. I commend the Bill to the Senate.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Senator TATE:
Tasmania

– I wish very briefly to answer one point that was made by the Minister for Social Security (Senator Dame Margaret Guilfoyle) in her reply to the second reading debate. She said that all modes of transport have some sort of cost recovery program or procedure applied to them. Her actual illustrations qualify that statement in that she could demonstrate some sort of recovery only in relation to the very miniscule navigation charges for sea transport and the fact that there is some attempt to make the national railways system pay. As far as road transport users are concerned, no cost recovery program is maintained or operated by the Government.

The whole of the proposal that I put forward on behalf of the Australian Labor Party to ameliorate the lot of Tasmanian air passengers was designed to bring them into a situation of equality with those who use the national highway system on the mainland. What we are saying is that the advance purchase excursion fare ought to be available across the board to those travelling to and from Tasmania in order to bring them, by that 40 per cent reduction, into a position of equality with those who use the national road-highway system. As I have said, the Government applies no cost recovery imposts to the user of those roads by implementing, for example, a toll system on the highways. I just clarify that point to make it clear that the isolation suffered by those in Tasmaniaand perhaps in Western Australia; as Senator Mason pointed out, a different solution may be required in the case of Western Australia- is felt all the more keenly in the context of the knowledge that those on the mainland travelling between the great centres, whether for commercial, social or recreational purposes, have this subsidy by the taxpayer incorporated in their transport costs in that they make use of those highways without making any particular payment to the Commonwealth.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator Dame Margaret Guilfoyle) read a third time.

page 1198

PETROLEUM RETAIL MARKETING SITES BILL 1980

Bill received from the House of Representatives.

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

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

Second Reading

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– I move:

That the Bill be now read a second time. 1 seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows -

The purpose of this Bill is to effect a reduction in the number of retail petrol stations operated by major oil companies in Australia: a reduction of about 50 per cent compared with the number operated as at 30 May 1980, disregarding certain types of special purpose sites. This Bill forms part of an integrated policy for the petroleum retail marketing industry. In my speech on the Petroleum Retail Marketing Franchise Bill I will explain in some detail the background to the Government’s policies and the reasons that have led the Government to take these initiatives.

There has in recent years been an increasing trend on the part of some oil companies, to move away from marketing motor fuel through independent service station operators, in favour of direct selling of motor fuel to the public. Generally these stations are operated for the oil company by a commission agent. This trend has been accelerating over recent months. Figures provided to the Government indicate that total company operated site numbers increased from 578 at 30 June 1978, to 670 at 30 June 1979, and to over 800 - not counting special purpose sites - at 30 May 1980. In the same period total service station numbers excluding independents declined from 14,281 to 12,411. Company operated sites, moreover, are more significant in the market than their numbers would indicate. On June 1979 figures their market share was over 17 per cent, from only about 5 per cent of total site numbers. This trend has caused concern in the community because of its effect on independent small business in the industry, and has given rise to claims that it provides a means of unfair competition, and fears that, if the trend continues and other oil companies join in adopting this technique, the increased vertical integration which results will have long term, anti-competitive effects.

The Government believes that, in the particular and unique circumstances of this industry, the time has come to call a halt to vertical integration, and to reduce it. A combination of factors has created a unique situation in the industry - a proliferation of sites; the impact of significant and frequent rises in the cost of crude oil; the effects of new technology and changes in consumer preference; fall in consumer demand; and resulting from all these, the need for substantia] rationalisation in the industry. Three of the major oil companies which operate in Australia have indicated that they would support total divorcement’ - a complete ban on major oil companies engaging in direct retailing - as a solution to the problem of the industry, whilst two others have proposed some reduction in the number of theirs and other companies’ direct operated sites. The Government considers that total divorcement is not necessary to achieve its objectives in this area. It believes that a reduction of about 50 per cent in the number of sites will be adequate. A reduction of this extent takes proper account of the commitment which some companies have made to this form of marketing.

The Government is also conscious that a possible, although in the Government’s view unjustified, reaction on the part of some oil companies to the Petroleum Retail Marketing Franchise Bill could be to seek to increase vertical integration.

As I have said, the Government’s current information is that at 31 May 1980 there were, disregarding special purpose sites, just over 800 company operated service stations in Australia. The Bill will achieve a reduction to 401. This reduction will be phased in over a period of two years.

The Bill implements the Government’s objectives by prohibiting, by clause 10, the operation by certain corporations of sites for the retail sale of motor fuel to motorists, except in accordance with the Bill. The corporations subject to the prohibition are those listed in the Schedule to the Bill- the holding companies of the nine integrated oil company groups in Australia, and any company associated with the companies listed in the Schedule. The Bill, through the combined operation of clause 10 and the definition of a prescribed corporation in clause 3, also provides for a prohibition on any other corporation which refines petroleum, and its associated corporations. The listed corporations are given a quota of site numbers. Each of these corporations - or other corporations in the same corporate group as defined in the Bill - will be entitled to operate up to the number of retail sites allocated to it.

As I mentioned earlier, there will be a phase-in period of two years. Companies which now operate less than their quota number of sites will be able to operate up to that number immediately. Companies now operating more than their quota number will have two years to reduce their sites to that number. They may not increase operation over their present number during that period and must reach an interim quota - as provided for in the Schedule to the Bill- by the end of the first year after the commencement of the Act. The quotas allocated must to some extent be arbitrary. In view of the proposals by some of the companies that agreement on a partial divorcement formula could be possible within the industry. The Minister for Business and Consumer Affairs (Mr Garland) held consultations with the companies to see whether agreement could be reached with them on a 50 per cent divorcement formula. The Government believed this was the fairest and most reasonable approach to take and could result in a less arbitrary allocation. As it turned out, agreement was not possible partly because of concern on the part of some companies at the implications of an agreement under the laws of other countries, even though the agreement would have been embodied in Australian legislation.

The Government has therefore had to devise an allocation formula. This allocation seeks to be equitable. It recognises the role of each company in the market, the needs of smaller companies, and the needs, at least in the short term, of those companies which are at present heavily committed to direct retail site operation. The Government intends to review and, if appropriate, to revise the allocation as between companies after the Act has been in force for five years. If a company elects not to operate its full quota entitlement in that five years it will not thereby suffer a reduction in its quota. I emphasise that failure fully to use a quota will not lead to a reduction in that quota.

The information on which the Government has calculated the allocation formula was provided by the oil companies. I am confident that the oil companies provided these figures in good faith. Nevertheless, some errors in the figures initially provided were noted and were corrected. If it should eventuate that there were any other inaccuracies in the figures the Government will take such action as may be appropriate to amend the allocation - which can be effected by regulation. Certain special purpose sites are not subject to the prohibition on company operation in clause 10. Each group of corporations will be able, in addition to its quota, to operate up to one training site in each State or Territory and up to one market research site in each State. Diesel fuel sites are not subject to the prohibition. These are sites which are principally used for the sale of diesel fuel for trucks. Provision is also made in clause 8 of the Bill for temporary operation of sites in special circumstances for a period not exceeding 90 days.

The Government is aware that a number of commission agents were formerly lessees of the sites they now operate as agents, and in some cases were most reluctant to change to agency operation. Under clause 16 of the Bill these people will be given a first option of a franchise where the site they operate on behalf of the company is converted back to lessee operation within the twoyear phase in period. If in that period an oil company proposes to convert a site from company operation then, unless it decides to sell it or to lease it for a use other than the retail sale of motor fuel, it must first offer a franchise on reasonable terms to the agent. It may not enter into a franchise agreement with another person on terms more favourable than the terms on which it was offered to the agent. Under clause 1 1 of the Bill, returns providing details of site operation will be required in order to facilitate enforcement and monitoring of the operation of the legislation. Prescribed corporations are required to lodge a return within 30 days of the commencement of the Act. When there is a change these returns must be up-dated, on a monthly basis.

Clause 12 provides that the Minister or any other person, may seek an order from the court to restrain contravention of the prohibition on retail site operation. Mr President, these Bills before the Senate provide a means to assist the continuance of a viable, vigorous and competitive small business sector in the petroleum retail industry. They will lead to greater fairness and ensure that future rationalisation in the industry, having regard to the history of that industry, will take place on a more equitable basis. At the same time, by encouraging diversity at the retail level they will promote competition both in the long and short term.

Senator Gietzelt:

– Mr President, is it proposed to move directly into the debate on this Bill? Can I move that the debate be adjourned and made an order of the day for a later hour this day?

Senator Chipp:

– Before you resolve this matter, Mr President, can I get an indication from the people running this chamber of when this Bill is to be debated? I think that would be a fair question in the circumstances.

Senator Durack:

– I am just about to move that the debate be made an order of the day for a later hour this day. I wish to present the Petroleum Retail Marketing Franchise Bill. I will then propose that we debate both Bills cognately. I hope that the Senate will pass both Bills tonight.

Debate (on motion by Senator Gietzelt) adjourned.

page 1200

PETROLEUM RETAIL MARKETING FRANCHISE BILL 1980

Bill received from the House of Representatives.

Motion (by Senator Durack) proposed:

That the Bill be taken through all its stages without delay.

Senator McLAREN:
South Australia

– I want to place on record the serious situation which the Senate now finds itself in. The Attorney-General (Senator Durack) who is in charge of the petroleum Bills has not read the second reading speeches. We were told earlier today that there was a holdup in these Bills because of some mistake in their printing. Honourable senators on this side of the chamber have just had the Bills put in front of them. The Senate is supposed to be a House of review. How can it be a House of review when there had been a mistake in the printing of the Bills? The Attorney-General said a few moments ago that he intends to move straight into the second reading of the Bills and have them passed here tonight. That again gives the answer to the claim that has already been made that the Senate is a House of review. It is nothing of the sort. As I have said many times, when the Liberal Party is in government, the Senate is just a rubber stamp for the other place.

Senator JESSOP:
South Australia

– I would like to make reference to the comments that were made by Senator McLaren. I suggest that every member in this chamber has read the second speeches as a result of the introduction of the petroleum Bills in the House of Representatives. I find it incredible that Senator McLaren is so uninterested in the measures that he has not read the speeches.

Senator CAVANAGH:
South Australia

– This is not a question of interest; it is a question of Senator McLaren’s being a more studious and industrious senator than Senator Jessop. Senator McLaren has had no time to read the second reading speeches. He has been in here every day this week looking after the welfare of Australia. He was here till nearly two o’clock this morning. When is he expected to read the second reading speeches? Those who do not care about the welfare of Australia - the non-statesmen and the politicians of this place - have plenty of time to read speeches because they are rarely in the chamber. That accusation cannot be levelled at Senator McLaren. It is well recognised in South Australia that few politicians have the devotion and dedication to duty of Senator McLaren. Senator McLaren is unable to keep up with Senator Jessop because he attends to this House and all the Bills before it. There is no room for critism by an idle man who has had time to read the speeches.

Question resolved in the affirmative.

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

Second Reading

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– I move:

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

The PRESIDENT:

– Is leave granted?

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– No. In view of what Senator Jessop has said, leave is not granted.

Senator DURACK:

– I am wondering whether Senator McClelland would like to reflect on that. He agreed to the other second reading speech being incorporated in Hansard.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– In view of the castigatory remarks by Senator Jessop against my colleague Senator McLaren, I still say no.

Senator Chipp:

– May I seek the indulgence of the chamber to make a very brief statement?

The PRESIDENT:

– Is leave granted.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– No.

Senator Chipp:

– I raise a point of order. May I plead with Senator McClelland on this point? I agree entirely with him and Senator McLaren.

The PRESIDENT:

– You cannot intrude now. You can do so later.

Senator Chipp:

– I am trying to help the situation. This useless exercise is wasting the Senate’s time. The Opposition’s point has been well made. I believe Senator Jessop was totally indiscreet. Can we not settle down and give leave so that we can proceed with the business of the Senate?

The PRESIDENT:

– I cannot accept the point of order.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– If Senator Jessop withdraws the remarks he made about my colleague Senator McLaren I am prepared to withdraw my objection.

Senator Jessop:

– I would be happy to do so in the interests of expediency.

The PRESIDENT:

– Is leave granted for the incorporation of the second reading speech in Hansard?

Leave granted.

The speech read as follows -

The purpose of this Bill and its companion Bill, the Petroleum Retail Marketing Sites Bill is to implement the legislative elements, three in all, of the Government’s policies for the petroleum retail marketing industry. First, this Bill, the Petroleum Retail Marketing Franchise Bill, provides certain basic protection of tenure for lessee service station operators - called franchisees in the Bill - and requires disclosures of relevant information by oil companies to prospective franchisees. Secondly, the Bill prohibits, except in limited circumstances, discrimination in price in the sale of motor fuel by oil companies to their franchisees. Third, the companion Bill provides for a reduction of about 50 per cent in the number of oil company operated retail sites.

The fourth element of the Government’s policies is an inquiry by the Prices Justification Tribunal. This inquiry now forms part of a more wide-ranging reference into wholesale petrol pricing, which, on behalf of the Government, the Minister for Business and Consumer Affairs (Mr Garland) has recently given to the Tribunal. The Tribunal has been asked in particular to advise whether the maximum wholesale price of petrol now includes a component compensating oil companies for investment in service stations, to establish the amount of any such component and to advise whether it should continue to be included in wholesale prices.

The measures in this Bill, the companion sites Bill, and the inquiry by the PJT constitute an integrated policy which the Government has developed to deal with the serious problems that have arisen in the petroleum retail marketing industry over a number of years. These problems have not appeared overnight. There has been a long history of discontent and a great deal of criticism of certain practices in the industry.

Following the highlighting of serious problems in the industry by the Royal Commission on Petroleum, as stated in its fourth report in 1 976, the Government, while rejecting the Royal Commission’s recommendations to establish a regulatory agency, was not unconcerned at many of the facts uncovered by the Royal Commission. It believed, however, that it was primarily for interested groups, within the industry, to develop practical solutions to the industry’s problems. The Government was prepared to assist parties to find solutions rather than to impose solutions on the industry.

Following continued sustained criticism of marketing practices the Government established the Oil Industry Marketing Consultative Committee which comprised representatives of all sectors of the industry. The purpose of the Committee was to provide the Government with a source of information on the marketing aspects of the industry. Subsequently the Prime Minister (Mr Malcom Fraser) announced in November 1 977 that he would take steps to bring suppliers and retailers together in conference under the auspices of the Government to examine how more equitable distribution and marketing policies could be developed. This Conference, the National Oil Industry Conference, had a far broader representation than the Consultative Committee and was asked to focus its attention on possible industry solutions to problems. The Government sought to help the industry to solve its own difficulties.

When announcng the first meeting of the Oil Industry Conference, on 1 December 1977, the Prime Minister drew attention to the seriousness which the Government attached to the problems in this most important industry. He reminded the parties that if agreed solutions could not be arrived at through the Conference mechanism the Government could legislate to achieve a fair solution. Meetings of the Conference highlighted the problems of the industry and served to crystallise some of the issues. Some of the problems and issues had emerged or changed in degree since the Royal Commission’s report but unfortunately there was very little agreement between participants at the Conference. The Conference failed to find an agreed industry solution. The difficulties which were freely acknowledged within the industry and outlined in the final Conference report related particularly to alleged unfair price discrimination, vertical integration and allegations of unfair leasing arrangements between the oil companies and their lessee dealers.

The Minister for Business and Consumer Affairs when introducing these Bills in the other place acknowledged the tireless and valuable work of his predecessor and colleague, the honourable Wal Fife, M.P., now Minister for Education. He had throughout a close interest in these problems. He chaired sessions of the Conference, and followed up with discussions and correspondence with all interested parties, including representatives of dealer groups, oil companies, independent wholesalers and other transport and consumer organisations. As a result, on 30 October 1978 he announced a package of possible measures which it was thought might overcome the industry’s problems. Following further detailed examinations, this Bill and the Petroleum Retail Marketing Sites Bill are largely based on that package. Other suggested solutions have been subject to thorough analysis but found to be inadequate.

During the period of policy formation the Government actively sought views and comments on the October 1978 proposals. In addition the Government commissioned a study group, led by the Honourable Sir Robert Cotton, K.C.M.G., Australian Consul-General in New York to examine and report on retail petroleum marketing in the United States of America. Whilst there are many differences between the United States and the Australian situation the Report provided valuable comparative information.

For the purpose of obtaining further information on some aspects the Government then decided, in October 1979, first to have the Trade Practices Commission conduct a survey into price discrimination in the industry, and secondly to expose for public comment a draft Bill dealing with the franchising element of the package. In February of this year the Government released the draft Petroleum Retail Marketing Franchise Bill for public comment and discussion. An invitation was issued to all interested persons to submit their views. On 30 May 1980 the Government received the Trade Practices Commission report which covered the period October 1979 to May 1980. This was tabled in this Parliament on 21 August 1980. The Government’s decision has followed a period of extensive and painstaking examination of the industry and its ills. There has been, over a period of almost three years, extensive discussions with organisations having an interest in the matter.

This Government is opposed to unnecessary regulation of business. It believes that if there is a private way of fairly and properly dealing with a situation, and if there are no overriding public interest considerations requiring another course, industry should have every opportunity of finding such a way. But this Government is not a laissez faire government. Where there are serious ills which the parties themselves cannot, or will not, resolve the Government has intervened and will intervene. In the petroleum retailing industry the Government has found it necessary to intervene to correct certain marketing practices and to maintain fair competition. The measures are necessary to maintain a vigorous and effective small business sector and for the long term competitiveness of the industry as a whole.

There is widespread support for action to deal with marketing practices and franchise relationships in this industry. Numerous representations have been received from both Government and Opposition senators and members. Strong support for legislation has also come from Ministers of State governments. Some State governments have indicated that should the Commonwealth not see fit to legislate they would consider taking unilateral action to deal with the industry in their respective States. Many individuals and business groups, from both within and outside the industry, have written to support legislation broadly along these lines. The Government’s policies contain certain modifications and refinements of the 1978 proposals which were, of course, put forward as an outline only.

The Bill I now introduce is, in general terms, similar to the draft Bill circulated earlier this year on the major issues of disclosure of relevant information and the grounds for termination and nonrenewal. There are, however, a number of substantial amendments and many amendments of a drafting or technical nature. This Bill takes account of submissions received on the draft Bill and of further consideration of the issues, including legal issues. The amendments which have been made could not have been achieved without a great deal of co-operation from the industry and from interested parties, and the Government wishes to thank all those who prepared submissions and were willing to give their valuable time to discuss the draft Bill.

I would like to deal at this stage with two criticisms that have been made of this Bill and of the Government’s decisions. First, I have heard it is said that there are doubts about the constitutionality of this Bill. Of course anyone who says that has not yet seen the Bill. The Bill is constitutionally well based. The second criticism is that the Government’s decisions seem contrary to the findings of the Trade Practices Commission. The Commission was asked to and did provide valuable information on price discrimination and on pricing practices in the industry. Its report gave a picture of the market over a particular period. It is a matter of inference and opinion as to how the market got that way, and the views of the Commission that price discrimination was not the problem in the industry are not inconsistent with the Government’s decisions. The Bill does not prohibit all price discrimination. Because franchisees are in a special relationship with their oil company suppliers the Bill seeks a prohibition to prevent the possibility of unjustified price discrimination between the franchisees of an oil company. Having gone through the process I have outlined, the Government believes the Bills should become law without delay.

I now turn to some of the more important provisions of the Bill. The Bill applies, notwithstanding anything in a particular agreement, to agreements which contain all of the following three elements: Firstly, a provision by which a corporation, the franchisor, permits another party, the franchisee, to use in connection with the retail sale of motor fuel an identifying or commonly associated mark or symbol; secondly, a provision by which the franchisor permits the franchisee to possess, occupy or use premises for the retail sak of motor fuel; and, thirdly, a provision by which the franchisor agrees to supply motor fuel to the franchisee for retail sale by the franchisee or whereby the franchisee agrees with the franchisor to acquire motor fuel for retail sale from another person. It is not necessary that all elements be included in the one agreement. Pursuant to clause 6 the Bill will apply where several agreements together contain these elements.

The Bill provides in clause 3 for reasonable security of tenure for franchisees. Unless the franchisee breaches a condition of the franchise agreement, or otherwise engages in conduct which would constitute, under the Bill, a ground for termination of the agreement, the minimum term of an agreement is to be three years. The franchisee would in most circumstances be entitled to renewals of the franchise agreement up to a total period - the original agreement plus renewals- of not less than nine years. A franchisor may grant however an interim agreement, for a period up to one year, which does not carry renewal rights. An interim agreement may be granted where the prospective franchisee does not meet the experience qualifications prescribed in the Bill.

The Government has reluctantly decided that these Bills are only to operate from the date of royal assent. Although the Government indicated in the October 1978 package that if it decided to enact any measures they would be retrospective to that date, it is now considered that if the provisions of the Bill were to operate retrospectively, they would give rise to uncertainty and likely undesirable consequences in the legal relationships between dealers and oil companies, particularly in the light of the 1979 High Court decision in Trade Practices Commission v. Tooths & Co. Ltd. which was decided after the Government’s statement. The provisions limiting terminations of franchises will pursuant to clause 6 apply only to agreements, including renewals, entered into after commencement of the Act; most importantly however, a franchisee under an existing agreement will become entitled to a renewal on the expiration of his current agreement. At the end of each three-year period, under clause 17, the franchisor will have the option of not renewing an agreement if it wishes to sell the site or to lease it for a purpose other than the retail sale of motor fuel. In the case of a sale of a site, the franchisee will have an opportunity to buy it.

The Bill is not intended to stop, and will not stop, the process of rationalisation in the industry which all parties agree is necessary. Oil companies will be able to close a site at the end of each franchise period, or with the consent of the franchisee at any time, just like any other lessor of commercial premises. The intention of the Bill is that the operation of the industry, including rationalisation, should take place on a more equitable basis. The Bill provides, in clause 1 1 , a statutory right to assign the franchise. It is likely that the combination of these provisions will encourage franchisees to look to developing greater efficiencies in their business operations. A franchisee will be encouraged to invest in his site in the knowledge that he will be able to recover his investment, in the usual circumstances, over a period of 9 years and that should the franchisor decide to dispose of the site he will have an opportunity to buy it. The right to assign will similarly encourage investment to achieve maximum efficiency as the franchisee who improves the efficiency of his site should be better able to recover his investment on assignment. Importantly, clause 1 5 of the Bill will require disclosure to a prospective franchisee of information known to the franchisor or related corporation which is material and relevant to the operation and profitability of the site.

The Bill provides private rights for franchisees to bring actions for compensation to challenge a purported termination and to prevent a contravention of the Bill- for example, clauses 21, 22 and 17. I emphasise that the Government has deliberately chosen not to set up a regulatory agency. It believes the best course is to provide rights as between the parties and to provide machinery for parties to protect those rights.

One of the areas in which complaints have been received over a long period of time is that of alleged discrimination in supply in terms of supply shortage or following an industrial dispute which has disrupted normal supply patterns. Clause 10 of this Bill requires the franchisor, subject to the operation of any emergency law, to supply the franchisee with his reasonable requirements of motor fuel, provided of course the franchisee complies with the terms of the agreement as to payment.

The draft Bill exposed in February 1980 included a rigid formula to determine allocation of supplies to franchisees in times of shortage. The Government recognises that a rigid formula can be inefficient and in particular situations counterproductive. What is needed in times of shortage or disruption to distribution is for each oil company, in good faith and in the circumstances of the particular situation, to allocate and distribute supplies in a fair and efficient manner, having regard to the needs of its customers, including franchisees, and the public. In times of shortage of supplies, an industrial dispute or circumstances beyond its control under sub-clause 10(5), the franchisor will be required to use its best endeavours to allocate available supplies fairly as between franchisees, and between franchisees and other customers.

The Government understands that oil companies have taken steps to devise and operate fair and efficient allocation systems to apply when normal supplies can not be maintained. It is also understood that some companies have invited dealer representatives to observe allocations following industrial disputes and that the dealer representatives have been satisfied as to the fairness of these operations. The Government welcomes these developments, however, should problems re-emerge in this area then it may be necessary for the legislation to be amended and for a rigid formula, with all its difficulties, to be imposed.

The Bill prohibits, in clause 20, certain forms of price discrimination. Some pricing practices and price differences in this industry have long been a source of complaint. Clause 20 prohibits a franchisor discriminating between its franchisees in the price of motor fuel which it supplies to them, or in any discounts, allowances, rebates or credits given or allowed to franchisees in respect of such fuel. The prohibition will not apply where the discrimination makes only reasonable allowances for differences in cost of raw materials, refining, distribution, sale or delivery; is done in good faith to meet a price or benefit offered by a competitor of the franchisor; or is done in good faith to assist a franchisee to meet a price or benefit offered by a competitor of the franchisee.

The first exception recognises that there may be circumstances in which a lower price can be justified in terms of actual cost savings. The second exception recognises the need for a franchisor to be able to meet competition from another supplier who has offered to supply at a lower price to the franchisee. Other exceptions recognise the need in some market conditions for oil companies to give price support to their franchisees to enable them to meet retail competition and that some States or Territories may fix maximum wholesale prices for sales within their jurisdictions. In addition the prohibition does not apply to sales of motor fuel to franchisees for bulk retail sales. This provision recognises the special relationship that exists between a franchisor and its franchisees, and the need for a franchisor to act fairly as between its franchisees. It attacks the favouring of one franchisee to the detriment of others without any fair justification. These provisions will not impede competition at the retail or wholesale levels.

It has been claimed in some quarters that price discrimination provisions are not required because there is no price discrimination in the industry and the Trade Practices Commission’s report is cited as evidence. The short answer to this criticism is that if there is no price discrimination then no oil company will have any problems with the legislation.

The Government has no desire to arrest free and fair competition at any level in the petroleum industry, this Bill in no way does so. It does however give effect to a separate marketing policy for the oil industry and is not a matter of general competition law. What is of concern is that, particularly having regard to the further rationalisation that will take place in the industry, franchisees should succeed or fail according to their own efforts, and not due to a possibly arbitrary or mistaken action on the part of the franchisor on whom they are so dependent.

The Government believes that this Bill will go a long way towards providing better long term relationships between oil companies and franchisees in this troubled industry, will provide greater security and independence for small business in the industry and will promote fair and effective competition.

Senator DURACK:

– I now suggest that we proceed with the second reading and have a cognate debate on the Petroleum Retail Marketing Franchise Bill and the Petroleum Retail Marketing Sites Bill.

The PRESIDENT:

– Is leave granted? There being no objection, I will allow that course to be followed.

Senator GIETZELT:
New South Wales

– It has to be agreed that Government senators are in a state of disarray this evening as a result of the election jitters that are obviously sweeping their ranks. Be that as it may, we are concerned about the Petroleum Retail Marketing Franchise Bill and the Petroleum Retail Marketing Sites Bill. This legislation represents massive Government intervention into the petroleum industry in Australia. Whilst the Opposition will be moving two amendments dealing with the various aspects of the two Bills, the Government, has the general support of the Opposition in respect of the proposals which are before the Senate. However, it has to be said that the major oil companies, most of which are foreign owned, have robbed Australians in post-war times of billions of dollars and have set about in a carefully calculated way to take over not only the import and the refining but also the retailing of all petroleum products in our country.

The two Bills we have before us can be put into the category of being too little too late. The petroleum retail marketing Bills were pushed through the House of Representatives only yesterday. As we have seen tonight, they have been put before the Senate for consideration so that the Government can at least claim some credit for them during the coming election campaign. These Bills were first promised before the last election, which is nearly three years ago. Of course, we know that this government of broken promises has been forced to the barrier in respect of these two pieces of legislation. The Government is obviously panicking and trying to reduce the number of unfulfilled and broken promises which increasing numbers in the electorate are waking up to.

There is nothing courageous in the action taken by the Government. For several thousand service station operators and their staff the legislation is far too late. They have packed their bags or, should I say, they have had their bags packed by the multinational oil companies, while the Government has dithered and danced before the dictates of big oil for the last two or three years. Only the prospect of an electoral backlash and a small businessman’s strike has prompted the belated and inadequate response that we are now debating in these two Bills today. It took the 12,000 service station proprietors of this country to threaten to go on strike, to turn every service station into an outpost of protest and to make every service station a centre of resistance to change the do-nothing attitude of this government. Because the Government could see the electoral repercussions of the action of the small business sector of our society the Government finally crumbled. Some of the people who will be listening to this debate will know how impossible it has been to get the Government to move on the propositions which were agreed to by the Government two years ago.

What are the facts of this industry? The fundamental fact is that the petroleum industry in Australia at all levels, from crude oil production right through to petrol retailing, is dominated by nine big oil companies. About 75 per cent of all petrol retailed in Australia is sold through sites owned by owner-dealers under a single brand name of one of these companies. Over half of the market is held by three companies, Shell Co. of Australia Ltd, BP Australia Ltd and Mobil Oil Australia Ltd. Two of these major direct operators are in the retail market. About 83 per cent of the retail market is supplied by multinational oil companies, of which 47 per cent are European and 36 per cent American.

This industry has become monopoly owned, controlled and influenced. It has become highly vertically integrated so that systems of transfer pricing enable the companies to take their profits at any point which suits their interest, whether it be in oil production, transport, refining, wholesaling or retailing. Because there are fewer opportunities to exploit at the crude oil production end of the process the companies have devoted more attention to the downstream activities in recent times. These are subject to a significantly lesser degree of regulation by the Government. The changes which are contained in the Bills which are before us have been made at the expense of the big oil companies. Of course, the proposals that are encompassed in this legislation have been forced upon the Government, as 1 say, because of the instances - there are hundreds of them - where the small businessmen in the retailing outlets have been forced into a period of great instability, great pressure and, in many cases, bankruptcy.

Those of us who are motorists must surely recognise that what we have seen happening in every part of our Commonwealth over the last 10 or 15 years is the constant shift in ownership of our retail outlets. We formed a relationship with the owner, the lessee of the service station, or the person who was acting as an agent. That person became a friend. He looked after us in times of petrol shortages. He looked after our vehicles and gave us service. There was a continuing good relationship between the consumer, the customer, and the small business owner. This did not suit the aims or the avariciousness of the big oil companies. They set about changing that system. The records of the courts throughout Australia are full of hundreds of instances where the oil companies have sought to dictate to and drive out of the industry thousands of small businessmen who had previously been able to operate in a free enterprise society.

It sickens me to hear the sort of laissez-faire approach to so-called free enterprise that we hear from Government senators, particularly that which we heard recently from Senator Rae, ignoring the basic facts of what is happening in the small business sector in Australia. This is the only piece of legislation that this Government has been prepared to take action on to protect the small business sector from the rapaciousness, and the avariciousness of the big companies - in this case, the oil companies. Of course they have dictated the tune to such an extent that governments are forced to intervene. I remember the years when I was in local government when, if a council gave approval for the opening of a service station, we were flooded with applications from all the other oil companies for other service station sites in the remaining areas on the main road. What happened? The service station proprietors were not responsible for this. The big oil companies forced State governments to break the previously competitive way in which petrol was retailed in this country.

If we go back in time we remember that a service station sold each of the brands of petrol on one service station site. The State governments were forced into a single brand, so-called competitive, situation where each service station was allowed to retail only one brand and all the products that flowed from that oil company. I can recall, during the years I spent in local government, the force of the influence that the oil companies had. By using local public opinion and by offering exorbitant prices for corner sites where petrol could possibly be an outlet, we were forced to break town planning principles and procedures to enable the oil companies to go on their mad merry way which ended in a situation of there being too many petrol station outlets.

What has happened since that period when the barrier was broken and this great multiplicity of outlets was established? They set about attacking the owners of the sites or the agents who were operating them. The Government is now turning petrol stations into petrol shops. They are not service stations. In fact, they will become just retail outlets. The wonderful relationship that once existed between the motorist and the proprietor is fast disappearing. There is no longer that important relationship. As a result we will have just a petrol shop rather than a service station. There will no longer be the concern of the proprietor. We will just drive up in our cars, fill up with petrol, often from a self-service pump, and drive away without any of the personal and intimate relationships which were the case.

What has happened as a result of this trend within the industry? The companies have made tremendous profits at the expense of the Australian motorist. The profits of the nine companies which I have referred to and which operate in Australia last year were of the order of $300m after tax. We know that some of these profits find their way, through donations, into the coffers of some political parties. All I can say is they do not find their way into the coffers of the Australian Labor Party. Another use of the money has been the waging of a defensive propaganda campaign to maintain the current system of petrol marketing in Australia which is so clearly beneficial only to the oil companies. These profits do not come from the blue sky. They come from other people’s pockets - most importantly, from the pockets of the hard pressed Australian consumer and from the equally hard pressed small business service station dealers in this country. Those small service station proprietors have been driven to the wall. That is the reason for their militancy, their representation and their demand for some compensation and assistance from government.

For the past five years the Government and the oil companies have shared a very nice ride on the backs of the Australian public. The Australian small business community has also been ridden to the ground by these same oil companies. Everexpanding income taxes have reaped thousands of millions of dollars from the Australian community. This rip-off is not about to end under this legislation. We do not believe it goes far enough.

We do not believe it will work. Because the service station proprietors and their associations believe it is a step in the right direction, we will be giving some muted support to that point of view. We believe they will come to realise that this Government is not sincere in helping them in their problem of survival against the big oil companies.

The Opposition, therefore, will support the passage of these Bills, with some amendments, because they are better than nothing at all. With two days of the Parliament remaining we cannot possibly improve the situation in this session. As a responsible government, however, after the election we will be doing much more about the situation to improve it. It is scandalous that we face this situation late in 1980. This issue was faced by the Whitlam Government and by Australian governments for more than a decade. The last Labor Government became cognisant of the changes that were taking place in marketing in Australia and, therefore, established the Royal Commission on Petroleum in 1973. The fourth report from Commissioner Collins was made available in April 1976. It was bad luck for the service station owners that the report came down in 1976 because that was the first year of the Fraser Government. If it had come down in 1975, many service station proprietors who suffered, who went to the wall, may well have been saved. We then had, after 1975, a government that was not prepared to act immediately on that report, as it should have done. What were the findings of that Royal Commission? They were not inconsequential; they were very important. I will list just a few of the criticisms made by the Commission. It said:

There are far too many service stations. In the last couple of years we have seen a rationalisation of the service stations, most of which were owned by the oil companies. The Commission also said:

Motor spirit and other petroleum products are overpriced; both wholesale and retail margins are excessively high . . .

There are too many oil company marketers; the petroleum market in Australia is irrationally fragmented. The market is sometimes chaotic and often not price competitive . . .

Unfair competition and especially discriminatory pricing practices are rife . . .

The ‘tiers’ of price and the pricing structure generally are archaic and irrational . . .

Dealers are sometimes dealt with oppressively . . .

That is what Commissioner Collins said some four long years ago. Those of us who have suffered from petrol shortages for a whole variety of reasons in recent years will appreciate that we are not involved in free competition at all because there is no difference in the quality of the petrol. It is the same product. We do not need nine petrol companies selling nine different brands of petrol. We do not need thousands and thousands of petrol stations or petrol shops or service stations to sell the same article. No one is suggesting that when we have petrol shortages we do not drive into the Shell service station because we believe that Mobil is better in terms of quality. We drive into the Shell service station because of availability of the product.

With the price discrimination that has taken place in recent times, in which the oil companies have taken steps to create an unfair competitive position in the retail pricing of petrol, we often see that one petrol station is selling petrol at 31.4 cents a litre while across the road it is being sold at 33.9 cents a litre, ls it suggested that the motorist should go across the road and buy petrol at 33.9 cents because that particular brand of petrol is of superior quality to the petrol he can buy at 31.4 cents on the other side of the road? Of course not. The absurdity of the petroleum industry in Australia is not even dealt with in this legislation.

We have the scandalous situation that the Royal Commission brought down its recommendations in 1976, and precisely because it was a Royal Commission established during the period of the Whitlam Government, the Fraser Government has refused to act upon the problem in the belief that, by not dealing with it, the problem would not be recognised by the average Australian motorist. But the Government has not been able to fool those people involved in the retail side of this product. The organisation that these people has established is to their credit. It is an organisation with resources, determination, and a desire not only to maintain a position in the community but also to provide services and petrol to the motorists in our country.

Three months after the Royal Commission report was presented, a Government back bench committee released another report on the state of the industry. That report, as I understand it, is called the Cadman report. But still the Government failed to act. Still the Government ignored its own back bench attitudes, as indeed it ignored the Collins report. Late in 1977- that is three years ago - during another Fraser early election the infamous promises were rolled out. The Prime Minister said that he would do something about the garage operators. We all know what he meant. We waited and we waited. Twelve months later, in October 1978, we received a Press release on the belated Fife proposals. It appears that Mr Fife wanted to do something, and substantially his propositions were acceptable to the service station proprietors and would have been acceptable to the Opposition, because they related to price discrimination, the divorcement of the oil companies from direct retailing, and a new fair franchise law. I ask honourable senators opposite to note that date. It was October 1978, virtually two years ago, and here we are in the last hours of this Parliament being asked to give consideration to this legislation.

The Government did not commit itself to any of these proposals, but acknowledged that a package of policies would be needed, and promised that the final package would be back dated. Is it? Of course it is not. Has it been made retrospective to October 1978. Of course not. Once again, nothing happened. Six months later we had the Cotton report on petrol marketing in the United States of America. Twelve months after that, it was announced that legislation would be prepared. That was 12 months ago, and again we have waited 1 2 months. Then a draft report was released in February of this year, and here we are debating it in September. Throughout this history of procrastination and broken promises, thousands of service station operators have gone to the wall. They have been subjected to undue pressures. They have been subjected to the sort of behaviour that is becoming commonplace in the Australian economy, in which the big kick the poor, the powerful try to stand over the powerless. That is exactly what has happened in the petroleum industry, as indeed it is happening in many other sectors of the Australian economy.

The number of sites has fallen by nearly 4,000, and many more businessmen and their workers have left the industry. If my memory is correct, when I spoke to service station proprietors in New South Wales earlier this year, I was told that something like 3,000-odd workers have left the industry as a precise result of the activities of the oil companies. No longer can they afford to employ people in the industry of selling petrol and they have also had to cut back on mechanics and their other responsibilities in the industry. That is what is happening under a government that claims it wants to provide jobs for those who want to work. If that story is repeated throughout Australia, we are probably talking about 10,000 to 15,000 persons that the industry has lost for all time because the Shell Oil Company of Australia and some of the other moguls in the oil industry decided to introduce self-service to sell their products. Businessmen and their workforce have left the industry, but meanwhile petrol prices and oil company profits have gone through the ceiling.

Let me turn now to the provisions of the Bill before us. First of all, let me deal with the Petroleum Retail Marketing Sites Bill 1980. Two arguments favour the full or partial divorcement of the oil companies from directly operating service stations, that is, through commission agents. Firstly, direct retailing involves the full vertical integration of the petroleum industry and so has anti-competitive effects. Secondly, unfair advantages accrue to oil company-operated sites. Their market power enables unfair practices to be pursued to the detriment of small business leasees and independents.

This Bill will only partially affect each of these concerns. For the first 1 2 months there will be virtually no change because under the Bill no company is obliged to reduce the number of sites. There will be little change until after the first 1 2 months. After two years a completely anomalous situation will prevail. The Bill provides for a permanently discriminatory market structure, helping some companies at the expense of others, to prevail for the oil companies. The total number of sites allowed after two years will be 401, but 272 of these sites, or 68 per cent, will be operated by just three companies, Shell Oil Company of Australia, BP Australia Ltd, and Ampol Petroleum Ltd, with three of those main companies presently operating their own sites.

There can be no doubt that this situation will prove intolerable, particularly if the franchise law proves to be at all effective. The Government’s intention to review the legislation after five years is ludicrous. Frankly, I would be surprised if it survived two years in its present form. I doubt that it should. I foreshadowed an amendment to the motion for the second reading of the Petroleum Retail Marketing Sites Bill. The amendment proposes that a review should occur within 1 8 months to see whether we can make it a much more effective piece of legislation. It must also be recognised that changes in the technologies of petrol retailing will soon render this Bill ineffective. The Opposition will move the following amendment:

  1. notes with concern that the maximum number of sites which may be operated by the major oil companies need not be reduced until one year has elapsed from the commencement of this Bill;

In other words, in theory no change need take place for 12 months. The amendment continues:

  1. expresses its view that the price charged by the major oil companies for petroleum products marketed through sites which they operate should be regulated by a regulatory agency for the petroleum industry, as recommended by the Collins Royal Commission and,
  2. calls upon the Government to review the legislation within 18 months of the commencement of the Act with a view to deciding upon a further reduction of the number of sites operated by the major oil companies.

I now turn to the Petroleum Retail Marketing Franchise Bill which puts into effect two of the elements of the Government’s policy for petroleum retailing: Firstly, a law to regulate franchise agreements and, secondly, a law ostensibly to prohibit price discrimination. In respect of the franchise provisions the Opposition has no particular quarrel with the Government. We believe it is worthwhile legislation and we support it. However, we have two general objections which I will now outline to the Senate. The first relates to retrospectivity which is made difficult by the provisions of the Constitution. Consequently, in relation to the motion for the second reading of the Petroleum Retail Marketing Franchise Bill, I move:

In the minute or two left to me in which to speak I refer, as the Labor Party’s spokesman on consumer affairs, to our belief that unless more urgent steps are taken in relation to the whole industry the consumers will ultimately be the losers in the struggle for survival of the small business sector and a decent pricing policy in the light of the activities of the oil companies themselves. An article in Probe, the official publication of the Consumer’s Association of South Australia Inc., states that there is concern about selective wholesaling, price manipulation, enforced leasing terms, persuasion, harassment and invasion of privacy - methods used by big oil companies to dominate the market. The article states:

Motorists may sometimes wonder what goes on behind the scene in the highly publicised struggle between oil companies and petrol retailers.

What appears to be a healthy discount war is, in fact, a well staged use of massive oil company profits to create that impression.

Big oil maintains that a reduction of their influence over retail outlets will result in higher prices. Retailers vigorously deny this claim.

To the public the service station proprietor may seem like a profiteer, as it is his premises which display the price of petrol.

But these people are amongst the most competitive businessmen you will meet, willing to undercut their nearest rival for that extra market share. They do not want protection, what they do want is a truly free competitive marketplace where their opposition are their peers - not their suppliers.

Insofar as it is possible to do so, they will fight to lower wholesale prices by using their freedom to choose their suppliers. But more than anything else they believe that a service station is not merely a primitive ‘tap’ for the switching on and off of petrol at prices dictated by oil companies, but that it also must offer the kind of service which motorists have come to regard as essential to their comfort and convenience.

The PRESIDENT:

– Order! The honourable member’s time has expired. Is the amendment seconded?

Senator Mcintosh:

– I second the amendment.

Senator JESSOP:
South Australia

– I support the two Bills before the Senate, the Petroleum Retail Marketing Franchise Bill and the Petroleum Retail Marketing Sites Bill. I never cease to be amazed by the incredible speeches made in this place by Senator Gietzelt. Tonight’s speech was a classic. For a socialist left representative to talk about massive government intervention in the petroleum industry, I believe, is incredible. He questioned the role of the multinationals, forgetting, of course, that the Labor Party in Britain took over the British Petroleum Company. If the Labor Party in Australia had its way it would take over the whole petroleum industry. For Senator Gietzelt to talk about government intervention in a hypocritical way is incredible. Undoubtedly he would support Bill Hartley and the Arabs. He would probably anticipate sumptuous breakfasts with Yasser Arafat.

Senator Gietzelt:

– Madam Acting Deputy President, I take a point of order. The Labor Party does not support Mr Hartley. I do not support him. That statement has nothing to do with this legislation. I ask for a withdrawal of the accusation.

The ACTING DEPUTY PRESIDENT (Senator Melzer) - There is no point of order but I ask Senator Jessop to keep to the Bills under discussion.

Senator JESSOP:

- Senator Gietzelt talked about small businesses being put out of existence by the intrusion of oil companies. Yet ACTUSolo Enterprises Pty Ltd has gone into the market. It discounts petrol around the country. It has been responsible for putting small businesses out of existence. Senator Gietzelt has a two-faced attitude to the Bills that we are discussing. I need not say more than that. I have already discredited the points that he was trying to make.

I also have some concern about this matter. Senator Messner, the honourable member for Kingston, Mr Chapman, and I have been anxious to accommodate the petrol retailers, particularly in South Australia. We have a considerable interest in the petrol retailing industry in Australia. The Minister for Business and Consumer Affairs (Mr Garland) stated in his second reading speech that there is widespread support for action dealing with marketing practices and franchise relationships in the industry. Numerous representations have been received from Government and Opposition senators and members. Strong support for such legislation has also come from State Ministers. I pay a tribute to the work that has been done by Mr Grant Chapman. He has taken a lead in this matter. He has been one of the strongest advocates for the industry in South Australia. I recall a few weeks ago attending a well organised meeting in the Adelaide Town Hall at which there were present representatives of petrol resellers from the whole of Australia.

There were about 800 people present. My colleague, Senator Messner, and other senators were unable to be present, but I was there in company with Grant Chapman. We were prepared to front up to discuss this matter with them, but I did not see any Australian Labor Party representative there. I did not see any senators from South Australia who were prepared to go along to talk to these people about this matter, but I had the courage to do so. I was glad that I did, because they were pleased to see Mr Chapman and me there, that we were prepared to listen to them, and that we were prepared to carry their arguments forward. We did so with some degree of success, although perhaps not as successfully as I should like to have seen. Nevertheless, it is a step in the right direction, and a step that has been taken by the Fraser Government. I believe that the Minister for Business and Consumer Affairs, Mr Garland, well deserves the praise of the Parliament for the work that he has done.

I pay some tribute also to the work that his predecessor did. His particular measures - the Fife package - of course seemed to be the ultimate answer to the industry’s problems. But these measures give effect to the Government’s undertaking to take action with respect to petrol franchising in Australia and also to deal with petrol marketing sites. I think the fact that the Bill will mean that the oil companies will retreat from 50 per cent of the present sites in Australia will help the industry to quite an extent.

I have attended meetings of petrol resellers in country areas. I recall attending a meeting at Mount Gambier a few weeks ago during the winter recess. A large number of resellers were there to put forward their points of view with respect to the proposals that the Government had in train. I was able to give them the assurance of the Prime Minister (Mr Malcolm Fraser) who sent me a very short telegram which indicated that Cabinet was actively considering proposals and that some statement would be made within a month - and that happened. That may confuse the Opposition. However, at that meeting I was concerned because one petrol reseller from a country area outside Mount Gambier reported to me that the company with which he deals compelled him to purchase his petrol from Mount Gambier at a cost of 3c a litre more than the price at which he was able to purchase it from the company’s agent in the town in which he lived. That worried me -

Senator Gietzelt:

– I hope it would.

Senator JESSOP:

– This is a matter on which I agree with Senator Gietzelt. (Quorum formed). Before the quorum was called for I was attempting to agree, to some extent, with Senator Gietzelt. Having said before that he was a supporter of the Arabs and of the socialist left and probably, from what he said, was anticipating enjoying a sumptuous breakfast with Yasser Arafat, I now say that I have some concern - I think this is a mutual concern between Senator Gietzelf and me - with respect to the pricing policies of the oil companies of Australia. I imagine that that would include ACTU-Solo Enterprises Pty Ltd, which has been responsible for forcing many small businesses to the wall. But this case I was referring to was that of a reseller in the southeast of South Australia. I attended a meeting of these people to listen to their problems. I did not see any Labour members there.

Senator Primmer:

– This is a tedious repetition, Senator. You told us that five minutes ago.

Senator Gietzelt:

– Go on. You told us that five minutes ago.

Senator JESSOP:

– I can understand that, but I wish to illustrate my point. The honourable senator interrupted me, and I want to reemphasise what I was saying. I was concerned that this oil company which supplied this agent–

Senator Archer:

– Get on with it. We have had this bit.

Senator JESSOP:

– All right. He was forced to pay 3c a litre more for his petrol by purchasing it at Mount Gambier than he was required to pay in the town in which he lived. I think that is bad. I think the oil companies ought to review that sort of discriminatory pricing practice.

I can illustrate in another way the case of the reseller in Adelaide who was recently forced out of business. He was paying 30.5c a litre for petrol from an oil company. He attempted to stay in business. I was paying him 35c a litre, and 1 happily did it because he gave me special services. I believe he went out of his way to give service, which I think is very important. Many of these resellers who are undercutting others perhaps do not always give the service that the consumers require. He went out of business a week or two ago, and the person who took over the business is now selling petrol at 30.4c a litre - less than the price at which the previous owner was able to buy it. 1 ask: What is going on here? Honourable senators will -recall that earlier this year 1 questioned the reasons behind the oil companies going to the Prices Justification Tribunal and requesting increases in the price of oil and of liquefied petroleum gas on the one hand, while on the other hand they were conducting discounting practices throughout Australia. I think the measures that we are considering here will help to overcome that problem. Perhaps we ought to go further; I do not know. At least this is a step in the right direction. I worry also about the plight of people in country areas who depend very extensively on their motor vehicles, and I cannot see any reason why we in the city areas should not pay, say, 32c a litre for petrol. I cannot see any reason why country people should pay more than, say, 33c or 34c.

Senator Gietzelt:

– They are paying 39c and 40c, some of them.

Senator JESSOP:

– That is right. I know. The Opposition criticises us about this matter, but the Whitlam Government destroyed the petrol equalisation scheme. We reintroduced it and we are now paying, with the taxpayers’ money, $123m to offset freight to country areas. I believe that is a considerable concession to the country people. I worry very much why this has to be. I would suggest that there is a dichotomy of interest in this matter. The Federal Government has done its part. We have provided $123m for freight subsidy which was taken away by the Whitlam Government. We are now doing what we can, in the measures that are before the Senate tonight, to repair the damage. I believe they will be reflected in the medium term in a better deal for petrol resellers and consumers. I suggest that the dichotomy of interest is quite often forgotten. People blame the Federal Government consistently for this matter.

Senator Primmer:

– Fair enough.

Senator Gietzelt:

– So they should.

Senator Walsh:

– You are talking about millions of dollars of the taxpayers’ money.

Senator JESSOP:

– Fair enough. These gentlemen are obviously getting concerned about it because they are confused, as the people of Australia are confused. The Federal Government has a responsibility on the one hand and the State governments have a responsibility on the other. Mr Tonkin recognised this. He made a statement. I hope we will see some evidence of a continuation of his thoughts in this regard. He said that he thought the answer to the problem was in the Fife package which we all know about. That involved the total divorcement of the petroleum companies from the retail marketing area. We have gone a step halfway. What about the State governments having some interest in this matter? I have not seen any evidence of interest from Neville Wran in New South Wales in this matter.

Senator Gietzelt:

– Don’t you read the newspapers to see what Syd Einfeld has been doing?

Senator JESSOP:

– I may be corrected.

Senator Gietzelt:

– You want to be careful what you say.

Senator JESSOP:

– All right. The honourable senator is not very careful in what he says.

Senator Gietzelt:

– Yes, I am. I am very careful.

Senator JESSOP:

– The honourable senator was very careless in what he said in his speech tonight. I point out to the community at large the incredible hypocrisy of what he said. I believe the State governments have a responsibility in the retailing area. I think all State governments ought to take stock of themselves and support the interest the Commonwealth Government has taken. Without that support we will find it impossible to provide a reasonable deal for people in country areas. We in Australia are very fortunate with respect to the cost of fuel.

Senator Primmer:

– Huh.

Senator JESSOP:

– The honourable senator says ‘Huh’. What an ignorant utterance to make. He knows full well that in Australia we are paying about half the average price of fuel. In the United Kingdom people are paying SI a litre for petrol. In countries such as France people are paying 73c a litre for super grade petrol. People in Japan are paying 66c a litre. In the United States of America people are paying 31c a litre which is about the same as we are paying. In Canada people are paying 19c to 20c a litre. They are unenlightened because the Government of Canada is subsidising petrol prices to the tune of $3 billion. The Labor Party, being the generous, irresponsible party that it is, would probably say: ‘Right. We will halve the cost of petrol’ and would let people buy it for 20c a litre. But the Labor Party would not worry about the cost of petrol in the country. No fear, it would remove the benefits from the country people. I would be ashamed to be a member of the Labor Party talking on this measure tonight. I find myself constantly confused by the arguments that come forward from members of the Labor Party because they are so inconsistent, so typical and so confused.

Senator Melzer:

– Well, don’t you worry your head about it.

Senator JESSOP:

– I have a great regard for Senator Melzer. I am sure that what she says in this situation is inspired by some fervent loyalty and some sort of fervent hope. I will not reply to her because she is a friendly person. I finish by saying that this Government has demonstrated its good faith in the petrol resellers of Australia. I hope that the oil companies would have a second thought about their pricing policies which are discriminatory. The person with whom I deal has a policy which I understand.

Senator Walsh:

– You have now admitted it. They practise wholesale price discrimination and this Bill does nothing about it.

The PRESIDENT:

– Order, Senator Walsh! You will be called on as the next speaker. Desist from interjecting.

Senator JESSOP:

– I will not be quite as friendly with Senator Walsh as I would be with Senator Melzer. I will not dignify Senator Walsh’s interjection with a reply. The Government has demonstrated its good faith in the petrol resellers of Australia. I pay tribute to Mr Rick Pearce and Mr Ray Smith of an organisation in South Australia who drew our attention to their problems in a very objective and very effective way at the demonstration at the Adelaide Town Hall. It was a peaceful demonstration, not like some demonstrations we witness unhappily in Australia today. The demonstration was done with some responsibility and it was effective because the Government has taken notice of it.

Senator WALSH:
Western Australia

– Listening to Senator Jessop’s apologia for the Government’s oil pricing policy - he justifies it on the ground that one can find more expensive petrol somewhere else in the world; therefore, his line of argument seems to be that the Government’s policy is the best of all policies - I am reminded of the Government’s attitude to inflation. A few years ago, from the safety of Opposition, members of the present Government said that high inflation rates certainly could not be tolerated - certainly not double figure inflation. Now that we have double figure inflation again as a direct consequence of the Government’s oil pricing policy the attitude is that as long as we can find some other country with a higher rate of inflation than Australia, we are doing all right. As one of Australia’s better cartoonists satirised the Government’s position in the Press recently, the main thrust of the Government’s anti-inflationary policies is sitting around waiting for the Organisation for Economic Co-operation and Development average to go up.

In 1976 the report of the Collins Royal Commission on Petroleum was released. It identified numerous malpractices within petroleum distribution and marketing instigated and practised by the oil companies. Chief among those malpractices was wholesale price discrimination without any commercial justification. Senator Jessop inadvertently admitted just before he finished his speech, the wholesale price discrimination persists, and neither of these Bills takes any effective action against that wholesale price discrimination. I thought it was more than a little inept of Senator Jessop to boast of the $123m which he correctly identified as taxpayers’ money and which is being handed over to the oil companies ostensibly as a freight subsidy on transport to country areas. Simultaneously, the gap between city and country petrol prices is greater than it ever has been. As much as SI 23m of taxpayers’ money is being paid to the oil companies, and, I repeat, the gap between city and country petrol prices is greater than it ever has been. We recall the 1977 election promise of the Prime Minister (Mr Malcolm Fraser), which was published in the Liberal Party documents released at the time, in which he said:

Petrol prices in all country areas will be reduced to within one cent a litre of the normal city retail price.

I stress the words ‘retail price’. In 1977 Malcolm Fraser promised to bring country petrol prices down to within lc a litre of city retail prices. He also costed the freight subsidy at $30m in a full year, a figure which I knew was false from the time he stated it. In fact, in the first full year in which the scheme operated the freight subsidy cost $43m. That is a fair indication of how much authority we can place on prime ministerial costings of his own or anyone else’s programs. At the time the public record contained ample empirical evidence of the cost of a similar scheme in previous times. Anyone could have calculated on the back of an envelope that the cost of the subsidy at that time would have been at least $40m. I did calculate the cost, and I published my calculations at the time. But Malcolm Fraser said that the scheme would cost $30m. It is not conceivable that he did not get accurate advice from the bureaucracy on the correct costing of that promise when he made it. He deliberately wrote down the cost to $30m.

Since then, of course, there has been some modification of that. Transport costs have risen and the cost of the subsidy has increased to $123m. That is an enormous amount of money ostensibly being paid out to reduce country petrol prices vis-a-vis the city petrol prices, whereas in fact the gap between city and country prices is greater now than it ever has been. None of Malcolm Fraser’s promises has been more reprehensibly dishonoured than his promise to reduce country petrol prices to within lc a litre of normal city retail prices. Of course, when the Government is reminded of the Prime Minister’s 1 977 promise to bring country petrol prices down to within lc a litre of city retail prices, Government spokesmen such as the Minister for National Development and Energy, Senator Carrick, obfuscate. They try to blow away the historical record with ‘their characteristic windy rhetoric. But Malcolm Fraser said that he would reduce country petrol prices to within lc a litre of city retail prices.

The Government now says: ‘Well, of course, we did not mean retail prices’- that obviously begs the question that if that is not what they meant why did they say it - ‘because the Commonwealth Government does not have the power to control retail prices’. If the Prime Minister did not realise that the Commonwealth Government did not have power to control retail prices at the time he made that promise in 1977, quite clearly he is unfit to be Prime Minister. I suggest that he did know that he did not have the power to control retail prices but that he has as much interest in the deliverability of his promise on that issue as he had on any of his other promises. It was a good indication of prime ministerial veracity. It is one of some couple of dozen instances of prime ministerial veracity which have unfolded before us in the last couple of years.

Whilst it is true that the Commonwealth Government has no constitutional power to fix retail prices in the States, under the Trade Practices Act the Commonwealth Government does have the power to end the wholesale price discrimination by oil companies to which Senator Jessop referred, which Senator Jessop acknowledged exists and which the Collins Royal Commission on Petroleum identified and recommended should be outlawed by the establishment of an authority to control petroleum distribution and marketing. The Australian Labor Party has accepted as policy that recommendation of the Collins Royal Commission. The Government has rejected it.

There are legitimate and illegitimate reasons for country petrol prices being higher than city petrol prices. Of the two legitimate reasons, the obvious one is freight. The Government is paying $123m ostensibly to subsidise away the freight costs, so that one no longer exists. The other legitimate reason is that many country outlets have low throughput, therefore high unit costs, and therefore a real need to impose higher retail margins than high volume city outlets, or high volume country outlets for that matter. The illegitimate reason for the record differential between city and country petrol prices is the wholesale price discrimination practised by oil companies, which 1 repeat was acknowledged by Senator Jessop. What the Labor Party will do in government is remove the illegitimate reason for that record price differential between city and country petrol prices.

Senator Messner:

– How?

Senator WALSH:

– We will establish an authority which will ensure that wholesale price discrimination is terminated, that companies sell wholesale at the same price to all outlets unless there is a legitimate commercial reason for not doing so.

Senator Messner:

– That is price control.

Senator WALSH:

– It is not price control. That is using the powers vested under the Trade Practices Act which the Government could exercise but which it deliberately has refused to exercise. The Royal Commission recommended that such an authority should be established. Next year a Labor government will establish such an authority to ensure that wholesale price discrimination is terminated. There will still be some differential between city and country prices for the legitimate reasons that I stated earlier; that is, that many country outlets have low throughput, high unit costs and, therefore, a need for higher retail margins. But the record price differential which exists now in spite of the enormous subsidy - this enormous infusion of public money, taxpayers’ money - will be substantially reduced. In most cases I expect it will be reduced to something like half its present level. I want to make that quite clear. I want to place on the record very clearly that that is the Labor Party policy on this issue.

Contrary to what Senator Carrick in one of his hallucinatory moments asserted, we are not saying that there will be complete uniformity of petrol pricing. What we are saying is that the present differential, which normally is 6c to 7c a litre and which frequently rises as high as 1 2c a litre, will be ended. We are saying that the differential will be reduced to that which is legitimate. In most cases I expect that that will be around 2c to 3c a litre. Perhaps in some extreme cases it will be 5c or 6c a litre as in the case of very small throughput country outlets in isolated areas. Of course, the Government paid out the $123m, quite dishonestly costed by the Prime Minister at the time the scheme was announced, and until very recently, when it was subjected to a great deal of pressure from retail outlets - from service station proprietors - the Government stated that it had no more interest or concern in the matter. The Government, having paid out the $123m, Pontius Pilate-like washed its hands of the matter. I suggest that it is not entirely coincidental that at the very time the Government paid out that $123m to the oil companies- ostensibly as a freight subsidy - oil company profits roughly doubled. In other words, the Government is paying out what Senator Jessop conceded is an enormous amount of taxpayers’ money, without ensuring that the benefits of that huge expenditure are passed on to the people for whom it was ostensibly intended.

The other thing which has quite clearly been happening with petrol pricing - that was implicitly recognised in the latest ministerial directive to the Prices Justification Tribunal to investigate - is that retailing activities of the oil companies have been cross-subsidised in the wholesale price. I will explain that a little more clearly. The PJT was instructed by the Minister for Business and Consumer Affairs (Mr Garland) to determine the degree, if any, to which the PJT approved wholesale price incorporated an allowance to amortise the capital investment of the companies in retailing. Obviously a Minister will not issue a directive like that unless he knows that the previous PJT approved price incorporated such an allowance for amortisation of the capital investment of the companies in retailing. There is absolutely no rational justification for any allowance in the wholesale price for amortisation of capital invested in retailing. If such an allowance has been made in the past, as clearly it has, and is made still, the retailing activities of oil companies are being cross-subsidised by the wholesale price. There is no other logical conclusion. Clearly that has been happening. It reflects very badly on the PJT that it has been sufficiently gullible to allow such a component to be incorporated into the wholesale price. That is one of the malpractices which currently exists and against which this legislation will take no effective action.

The other area of malpractice which has been rampant in recent months is associated with the oil companies’ desire to maintain their market share and therefore their future entitlement to allocations of Australian crude oil. If this has not been in a physical sense it at least has been in a notional, fiscal sense. Despite all the bold affirmations of belief in import parity pricing we do not, in fact, normally have import parity pricing. Normally, Australian oil is arbitrarily priced by the Government at a level substantially below, certainly, the marginal cost of imported oil, and even the average cost of imported oil. In other words, the oil companies’ long term interests would be advantaged by maintaining or increasing their market share at this period during which they qualify for future allocations of relatively cheap Australian crude oil.

There appears to be little doubt that this is precisely what has been happening for the last five or six months. In an endeavour to maintain or increase their market shares, the companies in some areas have been engaged in a price war, principally of course in the capital cities and in particular areas of individual capital cities. They have been engaged in a price war in an attempt to maintain or increase their market shares because they believe it is in their long term interests to do so. It is conceivable that the companies have actually incurred short term losses with some of the wholesale discounts they have offered in order to maintain their market shares. I am talking about wholesale cut prices and not retail prices. In other words, the cut prices have been cross-subsidised by other urban outlets which have not received the same wholesale price discounts or any wholesale discounts at all, and virtually every country outlet which has not received wholesale price discounts. That sort of cross-subsidisation, of course, is quite indefensible even by those who believe in market forces and competition, as Government members occasionally claim they do, although we see little evidence of it in practice. They pay lipservice to their rusty ideology. But, whether they believe in market forces or in some sort of regulatory agency which ensures a fair go, either way that practice is indefensible. Again, this legislation will take no effective action against it.

Of course, the Labor Party is proposing an authority to ensure that this unjustifiable wholesale price discrimination comes to an end as was recommended in the Collins Royal Commission report released four year ago. Some people - to some extent this view seems to have been rather innocently endorsed by the Trade Practices Commission in its report released in May - doubt whether in fact there is significant wholesale price discrimination. I will repeat that of which I have direct knowledge. Anyone who cares to make a few inquiries could produce similar evidence from any capital city in Australia with the possible exception of Hobart where there does not seem to be too much price discounting. At the time in Perth when the PJT approved wholesale price for Shell petrol was 31.6c a litre, in round figurs, within half a mile of my office in Fremantle two Shell service stations were retailing petrol for less than 30c a litre. In other words, they were retailing petrol, pumping it out and putting it in tanks, at two cents a litre less than the PJT approved wholesale price. Other operators within the Perth metropolitan area were being charged the full wholesale price. Ludicrous though it obviously is, it would have been cheaper for those operators- and I am talking about operators within the Shell company though similar figures could have been produced for other companies - to go to a Shell service station in Fremantle, fill up tankers at the bowsers and take it back to their service stations in the central city or Midland or wherever, than to buy it at the wholesale price from the Shell company.

Senator McLaren:

– It is the same in Murray Bridge in South Australia.

Senator Melzer:

– It is the same in Victoria.

Senator WALSH:

– I had said that anyone who wanted to make a few inquiries could discover, if not identical cases, very similar cases. I am a little surprised that it is happening in Murray Bridge because it has not happened to any great extent - from the information I have been able to determine - in country towns, especially in not particularly large country towns such as Murray Bridge. I repeat: Whether one believes in a regulated economy or in market forces, one can give absolutely no justification for that sort of wholesale price discrimination. The authority proposed by the Labor Party, which this Government has refused to take on board, will terminate that unjustifiable wholesale price discrimination. I wish to make two more points before I close my remarks. On 9 June this year the Minister for Business and Consumer Affairs, in response to a statement by Mr Hayden in which was outlined the type of authority the Labor Party proposed and which has since been refined, said:

Mr Hayden ‘s sweeping oil industry policy, announced on Sunday, is a set of proposals to enforce government control on all aspects of the oil industry. It is highly ideological and is only half a step from nationalisation of the whole oil industry.

That was supposed to be a reverse buzzword. The word ‘nationalisation’ is supposed to send bad vibes through all law abiding, middle class citizens. I notice that, ironically, in fact, the oil industry in the Kimberleys in Western Australia has been nationalised by none other than Charles Court. I have not heard any complaints from Mr

Garland about that. In the same statement he went on to say:

There are a number of problems in the oil industry and the Government is well aware of them.

It might be aware of them but it does not do anything about them. He continued:

We propose to act reponsibly-

Oh, naturally; that is another buzzword– and with well thought out proposals.

I presume the type of well thought out proposal that the Minister had in mind was the liquefied petroleum gas subsidy which was announced on 28 April, opportunistically, in response to political pressures. It was the type of well thought out policy which says: The Government’s objective is to restrict as far as possible the consumption of LPG in end uses for which it has a premium value- to wit, LPG feedstock and automotive fuel. That is what the Government says its objective is. But what its pricing policy actually does, of course, is to charge $252 a tonne ex-refinery for LPG as a petrochemical feedstock and $125 a tonne for the crudest of all possible uses - space heating. To oversimplify the matter slightly, the Government says that its objective is to discourage the use of LPG for anything other than petrochemical feedstock and that, pursuant to that objective, it will charge twice as much for LPG as petrochemical feedstock as it charges for crude space heating. That, I imagine, is the sort of well thought out proposal with respect to the oil industry to which Mr Garland was referring. He continued:

We are working for detailed policies which will get practical results. Labor’s policy would make matters much worse.

He spoke of practical results, detailed policies and so on. The legislation which is before the Senate tonight and to which Senator Gietzelt has moved amendments, whilst it has some merit, is a purely opportunistic political response to significant political pressures from people who are in a position to influence public opinion. It will do nothing, however- it can do nothing - towards removing the fundamental malpractice in oil distribution in Australia; that is, price discrimination at wholesale level.

The Government has the power under the Trade Practices Act to end price discrimination at wholesale level. It does not have the power, certainly, to set retail prices. This is something of which the Prime Minister (Mr Malcolm Fraser) should have been well aware when he promised in 1977 that petrol prices in the country would be reduced to within one cent a litre of the normal city retail price. That promise was not credible at the time it was given. To compound the reprehensibility,.it was dishonestly costed. It was to cost $30m, according to Mr Fraser, when in fact the cost in the first year was $43m. I could calculate on the back of an envelope from information that I carried around in my head that it had to cost at least $40m in that year. I do not believe that the Commonwealth bureaucracy is so inept and so innumerate that it could not have calculated that the cost of that freight subsidy promised at the time was something more than $40m a year. Of course, the Commonwealth bureaucracy did advise the Prime Minister of the day that the subsidy would cost something over $40m a year. In fact, it probably got closer to the cost than that. It probably got within about 2 per cent or within Sim of the actual cost. But, of course, having got the truthful figure from the Commonwealth bureaucracy, the Prime Minister, in characteristic fashion, for purely political reasons, then proceeded to doctor it, to tamper with it and to reduce it by almost one third. Costing, Fraser-style, consists of doubling the cost of undertakings entered into by the Labor Party and halving the cost of undertakings - in this case he did not quite halve it - entered into by his Government.

The Opposition is not opposing the Bills outright. The amendments proposed by Senator Gietzelt draw attention to some of their defects. This legislation will do nothing and can do nothing to end the fundamental malpractice in petroleum distribution in Australia - price discrimination at wholesale level.

Senator PUPLICK:
New South Wales

– It gives me great pleasure to rise to support the two Bills before the Senate this evening - the Petroleum Retail Marketing Franchise Bill and the Petroleum Retail Marketing Sites Bill. I wish to turn my attention to the first Bill. I shall outline the precise nature and objectives of the Bill. Firstly, this Bill provides certain basic protection of tenure for lessee service station operators, who are referred to as franchisees in the Bill, and requires disclosure of relevant information by oil companies to prospective franchisees. Secondly, the Bill prohibits, except in limited circumstances, discrimination in price in the sale of motor fuel by oil companies to their franchisees. Thirdly, this Bill and its companion, the Petroleum Retail Marketing Sites Bill, provide for reduction of about 50 per cent in the number of oil company operated retail sites. To that one has to add a fourth element, namely the Government’s directive to the Prices Justification Tribunal to undertake certain further inquiries. The present reference forms part of a more wide ranging inquiry into wholesale petrol pricing. It is the reference which on behalf of the Government the Minister for Business and Consumer Affairs (Mr Garland) has recently given to the Tribunal.

I wish to pause for a moment to say something about a more philosophical approach to this Bill. The philosophy behind the legislation has been criticised on a number of occasions. A number of people have sought to draw attention to what they believe to be some departure from what they see as Liberal philosophy. I admit that I might have a somewhat idiosyncratic view of Liberal philosophy; nevertheless, I intend to put it as I see it in relation to this Bill. The Attorney-General (Senator Durack) in his second reading speech made it quite clear and quite apparent that he did not equate the idea of the Liberal philosophy with a purely laissez-faire philosophy. Indeed, Liberal philosophy, particularly in this country, has always been an interventionist philosophy. It has always sought to intervene from the days of Alfred Deakin onwards, in what it saw as the public or national interest. This legislation is a further reflection of that. The Liberal philosophy in Australia has never been of a totally laissez-faire nature.

The private ownership and free competition which comprise two of the basic pillars of Liberalism and Liberal philosophy are in fact not touched by this Bill. We do not do anything in this Bill that seeks to discourage free competition. Indeed, the aim of the Bill is to stimulate free competition. We do not do anything which amounts to an acquisition of property because that is prohibited except in the terms as provided for in section 51 of the Constitution. In terms of our desire to intervene in the market, this was clearly indicated in the case of Mr Leon Laidely when further interventions in the operations of the market place were undertaken by this Government as it saw it, to protect the rights of an individual operator against both corporate and union blackmail.

Support for individual enterprise, free enterprise and small business has been a characteristic of this Government. Much, I am sure, to the distress of many of our political opponents, this Government has not caved in to the pressure applied to it by oil companies or by vested interests. Anybody who is aware of the details of the representations that have been made to the Government by the oil companies know that their attempts to have this Bill postponed indefinitely or substantially modified in such a way that their position would not have been affected have been rejected. Clear warnings were given some years ago by Mr Fife that if the companies themselves were not prepared to put their house in order as far as this matter was concerned the Government would have no hesitation in intervening to do so for them and to do so in the public benefit.

Before going on to discuss the history and the specific details of the legislation I pause to pay tribute to a large number of people who have been involved in making representations to members of parliament both in New South Wales and in other States and to say that the role of people like Mr Alf Parker, Mr Brian Marks and Mr Ken Taylor who have made representations to me indicates the extent to which people who are prepared to organise and to advocate a point of view in which they strongly believe and present a responsible and justifiable case to senators, members and governments will find sympathetic governments prepared to act decisively to assist them.

I turn to a brief summary of the history of this legislation because, as honourable senators have mentioned, it goes back in a large part to the announcement by Mr Howard, the then Minister for Business and Consumer Affairs, on 3 1 May 1 977 that the government was not prepared to accept the recommendations of Mr Justice Collins in the fourth report of the Royal Commission into Petroleum. From that numerous representations were received mainly in the course of 1977 and 1 978 from lessee and licensee service station operators claiming problems of price discrimination, oil company competition at retail level and inequitable lease and licence terms. This, in turn, led to the establishment of the Oil Industry Marketing Consultative Committee which first met in November 1977, its purpose being to advise the Minister for Business and Consumer Affairs on aspects of petroleum marketing. Further discussions were held with representatives of the Oil Industry Conference which was established in December 1977.

The Prime Minister (Mr Malcolm Fraser) then indicated in a media release on 1 December 1 977 that should parties to the Conference be unable to agree on a solution the Government would be prepared to legislate. The Conference concluded in March 1978 without significant agreement. I am bound to say that the failure to achieve significant agreement on that occasion was due largely to the intransigence of the oil companies which thought that all they had to do was maintain their position and everything would continue as it had before. This led, in October 1 978, as honourable senators would know, to the announcement of the Fife package of which there were four elements. The first was the prohibition of price discrimination between the lessee and licensed dealers; the second was that the oil companies would be able to continue to price to independents as they wished subject to existing law; the third was that oil companies would be prohibited from direct retailing; and the fourth was that equitable lease and licence term franchise measures were to be agreed upon.

There were two parts to the Fife package. One was its retrospectivity and the other was its commitment to total functional divorcement. I regret that for a number of reasons it has not been possible to achieve either. I believe that had we had the legal power and the constitutional power this legislation should have been made retrospective to that date. I believe and I hope, that eventually I will see total divorcement of the oil companies from direct retailing of petroleum products. I will work towards that end. I regret that the Bill at this stage has not gone so far. I think that there is scope in the future for the Bill to be taken further. I would certainly like to see it taken further and I would like to see oil companies removed entirely from the business of retailing petroleum products.

To a certain extent I suppose some of these attitudes on the part of the Government and some of the uncertainties about the future of the legislation and about how it will actually operate in practice arose from the report on the operation of the Maryland legislation which was presented to Mr Fife, the then Minister, on 30 October 1978 by the United States study group under the leadership of the Honourable Sir Robert Cotton, the Consul-General in New York. The fact, as is mentioned in the report, that a number of other States are considering the adoption of legislation much along the Maryland lines is, in some ways, very inconclusive. It really does not tell us very much about how the Maryland statute actually operates in practice or, indeed, what its likely effects are to be. To a certain extent I suppose there has not been a full amount of time to assess the Maryland situation. Secondly, there are not altogether comparable circumstances between Maryland and Australia as far as this is concerned, and, thirdly, I think the report itself is somewhat tentative about making a number of conclusions which perhaps it still could have drawn on the basis of the evidence then available to it.

I wish to turn therefore to discuss some of the alternatives that have been canvassed publicly both by royal commissions and by the Labor Party in its amendment as to the way in which one could handle some of the problems that have been identified in the industry. As my starting point I ought to take the specific recommendations made by Mr Justice Collins in the fourth Royal Commission report. I seek leave at this stage to incorporate in Hansard a section on page 365 to 367 of Mr

Justice Collins’ report outlining his specific proposals.

Leave granted.

The document read as follows -

The Commission is only concerned with the oil industry but it seems likely that the functions it has in mind with respect to the industry could well be undertaken by an Agency exercising overall supervision with respect to energy.

There are many precedents for the type of body to be established. Following these precedents it would be a body corporate with a Chairman and stipulated number of members appointed by the Governor-General with regard to qualifications and experience in the industry. It would be staffed in such a way as to enable people to build up a knowledge of the industry which, with time, would be available for the benefit of the agency. In the United States of America, the Federal Energy Administration has drawn a part of its staff from the industry. Furthermore, it encourages interchange between its staff and staffs of other similar organisations in other countries.

The function of collecting and disseminating information is only the starting point. The oil industry, Australia-wide, is in need of reform in areas which have been described elsewhere in this Report. They may be summarised as follows:

. A re-structuring of the pricing system;

A rationalisation of retail outlets with a consequent reduction in numbers;

Regulation of dealer company relationships;

A program of crude oil conservation.

In all these areas, the Commission recommends that a system of public administration should be introduced at a national level. In all of them there is a body of opinion in favour of such intervention. In the area of service station rationalisation, it is generally acknowledged that a program must be adopted and it is recognised by some of the oil companies themselves that this can only be done under government supervision.

Some of the functions which the Commission suggests the Agency should undertake are quite new. These are:

The establishment, regulation and enforcement of a rationalisation system to achieve the goals proposed in this Report.

The licensing of all refineries, terminals, depots, service stations and other market outlets.

The re-structuring of the pricing system.

The monitoring of landed costs and transfer prices.

The standardisation of the lease agreements between oil companies and their dealers, and the establishment of a suitable degree of contractual independence for dealers.

The establishment of a conservation program.

The provision of conciliation and arbitration services contemplated by the proposed company dealer contracts and leases.

The determination of prices of all petroleum products.

Senator PUPLICK:

– I thank the Senate. The one thing that perhaps more than anything else people like myself find disturbing about Mr Justice Collins’ recommendation was that the agency that he sought to establish would, in fact, have total control over all aspects of the oil industry in Australia. As reported at page 366, one of the functions which the Commission suggested that the agency should take over was:

  1. The licensing of all refineries, terminals, depots, service stations and other market outlets.

While one might draw different arguments about the licensing of all oil refineries, terminals or depots I think one is getting into quite a different situation when one is talking about a national agency such as that proposed by His Honour which would have the responsibility for the licensing of individual service stations and other market outlets. The development from there of the Labor Party’s proposal of an Australian hydrocarbons corporation is, to a large extent, based on the recommendations of Mr Justice Collins and on the evidence as read from the Royal Commission. There is no doubt that the national oil corporation which the Opposition wishes to establish is something that it believes in very sincerely. In a debate that took place in the House of Representatives, Mr West, leading in a debate for the Opposition, made it quite clear when he said:

Australia needs a national oil corporation and Labor will fulfill that need by setting up an Australian hydrocarbon corporation.

Clause (c) of the amendment moved this evening by Senate Gietzelt reads:

The Senate -

Calls upon the Government immediately to establish a regulatory agency for the petroleum industry as recommended by the Collins Royal Commission on Petroleum to monitor, review and regulate the pricing policies and market conduct of the major companies in the industry, and to ensure that petroleum prices are fairly determined for the benefit of consumers.

One is tempted to ask whether the commitment of the Collins Royal Commission to the licensing by a regulatory body of the individual service stations outlets is, in fact, what is meant by the third part of the amendment which Senator Gietzelt has moved this evening. Because it goes so far and takes us so deeply into that intrusion into the market place and to the regulation of the fine details I find the Collins Royal Commission report and, indeed, the Labor Party’s amendment arising from tonight’s debate to be unacceptable.

I turn now to the question of price discrimination and the behaviour of the oil companies in this area. When we come to discuss the Committee stage of the Bill and in particular clause 20 of this Bill I shall be saying something more about the question of the companies and their veracity concerning discounting and as price discrimination. One can certainly agree with that part of the report of Mr Justice Collins on page 370 where he indicated that one of the principal problems of the industry as he saw it was, to use his words, ‘unfair competion’ and especially discriminatory pricing practices which he described as being rife. Therefore, it must come as a bit of a shock to people who understood something about this industry or, indeed, who were interested in this particular aspect of the industry to find the fairly weak-kneed and inconclusive report of the Trade Practices Commission which investigated and reported on price discrimination in the petroleum retailing industry. On page 23 it made this comment:

The present problems of some operators are not exaggerated, but they would appear to result from competition and from a restructuring of retail markets, which is in the interests of consumers, rather than simply from differences in wholesale prices or from the operations of those oil companies using commission agents.

It seems to me that those people familiar with the industry would have been pretty surprised that, given the evidence of Mr Justice Collins and given the evidence which would have been available to them had they interviewed more people and consulted more widely the Commission should come up with that conclusion.

Debate interrupted.

page 1219

ADJOURNMENT

The PRESIDENT:

– It being 11 p.m., under sessional order I put the question:

That the Senate do now adjourn.

Question resolved in the negative.

page 1219

PETROLEUM RETAIL MARKETING FRANCHISE BILL 1980

Second Reading

Debate resumed.

Senator PUPLICK:

– The attitude that this Government has taken is largely based on a rejection of the recommendations and findings which the Trade Practices Commission has put to the Government. I would turn now to make a further point which arises by and large from some of the remarks made by Senator Walsh, that is, undoubtedly one of the significant elements in this whole discussion about the industry, about the way in which it is structured, its pricing policies and the behaviour of the oil companies is the confusing debate - I admit that I found the debate very confusing - about precisely what is understood by the hidden rental component which the oil companies have built into their financial agreements with the service stations in which they seek to build into a rent certain economic advantages to themselves or certain off-setting advantages to themselves which eventually are passed on to consumers. Mr Garland, in his Press statement on petroleum Marketing reforms which was issued on 22 July and in a further statement which he made regarding the Prices Justification Tribunal inquiry into petroleum product prices which he made on 21 August, drew attention to this matter. The Press release stated:

Mr Garland said that he had also asked the PJT to examine in the course of its inquiry whether maximum wholesale prices of petroleum products include a component which represents a return on investment in retail sites, or recovery of the costs of operating such sites, and whether any such component should continue to be included in wholesale pricing.

With the consent of the Senate I seek leave to incorporate those statements in Hansard.

Leave granted.

The statements read as follows -

Minister for Business and Consumer Affairs

80/115

PJT INQUIRY INTO PETROLEUM PRODUCT PRICES

The Minister for Business & Consumer Affairs, the Hon. R. V. Garland, M.P., today announced that he had directed the Prices Justification Tribunal to undertake a wide-ranging inquiry which will examine the basis of Petroleum Product Prices and provide an opportunity to all interested parties to make submissions to the PJT about the justification of these prices.

Mr Garland said that he had also asked the PJT to examine in the course of its inquiry whether maximum wholesale prices of petroleum products include a component which represents a return on investment in retail sites, or recovery of the costs of operating such sites, and whether any such component should continue to be included in wholesale pricing. The inquiry will also examine price increases which the oil companies have proposed or intend to propose as a result of increased costs due to refining, marketing and distribution since the PJT last examined these matters at public inquiry in late 1978/early 1979.

The Minister recalled that since the establishment of the PJT it has held twelve public inquiries into the oil industry and has examined issues associated with the structure of prices at those inquiries. This particular inquiry will allow the PJT to focus more directly upon all the issues relevant to the basis of product pricing. As a result, there will be scope for comment on those issues to be made by all interested parties.

Mr Garland said that the Government sees the inquiry as providing significant opportunities to look afresh at all aspects of oil pricing.

CANBERRA, A.C.T.

21 August 1980

Media Release BACA

Minister for Business and Consumer Affairs

80/97

PETROLEUM MARKETING REFORMS

The Minister for Business and Consumer Affairs, the Hon. R. V. Garland, M.P., today announced decisions taken by the Government on retail petroleum marketing. The Government would be taking action on franchisee protection, pricing and price discrimination and the involvement of major oil companies in direct retailing operations. Mr Garland said the Government’s policies would provide a sound and secure base for fair competition and a vigorous small business sector in the industry.

The Minister recalled that in October 1978 his predecessor, the Hon. Wal Fife, M.P., had announced a package of possible measures to deal with problems in the industry and had sought comment from the industry and other interested persons.

Following careful examination of submissions received and of recent changes in the industry and in marketing methods, extensive consultation with representatives of dealer organisations and oil companies and consideration of legal issues, the Government had circulated for public comment a draft Petroleum Retail Marketing Franchise Bill and had requested the Trade Practices Commission to conduct a survey into price discrimination in the industry. The Commission had reported to the Government the results of its survey on 30 May 1 980.

The Minister said that the Government had decided to enact franchise legislation for the industry to protect the position of lessee and licensee dealers. The legislation would be based on the draft Bill that had been circulated, but would contain improvements arising from submissions made to the Government and from further consideration by the Government, including a detailed legal and Constitutional examination.

The Bill would also include provisions to prohibit predatory price discrimination in sales to lessee dealers.

Also on pricing, Mr Garland added that the Government would be asking the Prices Justification Tribunal to inquire whether the maximum wholesale price of petrol now included a component compensating oil companies for investment in service stations, to establish the amount of any such element, and to advise the Government on the implications of removing it from wholesale price computations. The Minister noted that the question of existence of a component for retail investment in the wholesale price had been a major concern to dealers and dealer organisations.

The Government was concerned also at the increasing level of vertical integration in the oil industry, with the development over recent years of oil companies selling directly to the public through company operated service stations and proposes that measures be adopted to achieve a substantial reduction in the total number of company operated sites. Representatives of the major oil companies were being asked to attend a series of meetings with the Minister. The Government’s policy on vertical integration would be explained at these meetings. The meetings would also deal with the problems the Government saw in this area and with the development of a formula to implement the Government’s policy.

The Minister added that the legislation necessary to implement the Government’s policies, including the reduction in vertical integration, will be introduced and passed in the coming Budget session of Parliament.

Canberra, A.C.T. 22 July 1980.

Senator PUPLICK:

– I thank the Senate. The issue that arises is that this is yet another inquiry which the PJT will have to undertake, into the behaviour of the oil companies. One thing that the public of Australia is entitled to have a great deal more information about is the behaviour of the oil companies and the way in which they conceal the prices which they are passing on and which they are taking out of the pockets of the Australian public. At the moment part of our problem is that simply we do not know, as individuals and even as members of parliament, precisely the behaviour and the economics of that section of the industry. I hope the PJT inquiry will help us to grapple with that problem.

Some questions have been raised again, principally by certain oil companies, that the introduction of this legislation by the Government will result in higher pricing of petroleum products to consumers. Apart from the statements of the companies I have found only one particularly learned discussion about that which would tend to support that point of view. In an article in Management Forum in December 1979 by Mr Fred Guilhaus of the South Australian Institute of Technology entitled ‘Petroleum marketing in Australia: An illustration of some issues in multioutlet franchising’ he came to the conclusion that the proposals per divorcement along these lines may - he did not say ‘will’ - lead to certain things. He said:

In the short term there would be significant structural dislocation to a large body of lessee dealers, while the long term effect of a rack pricing system-

I do not think there is time to explain that- may lead to retail price stability and a generally higher retail price for petrol.

That view, I think, is certainly not shared by people who are immediately involved in the industry in Australia. A telegram which I received from Mr Ken Taylor, the Chairman of the Shell Proprietors Association of New South Wales, concluded, after discussing the latest price rise that Shell had managed to slip in while everybody else was in the middle of a petrol shortage, stated:

These moves by Shell prove that the public would indeed be better off with implementation of the Government’s proposed divorcement legislation.

Because there was prior argument about that I would seek leave to have that fairly short telegram incorporated in Hansard.

Leave granted.

The telegram read as follows -

As of September 4 the Shell Co. instructed its Sydney commission agents to price at full retail that is 33.1c per litre for super. On the ABC AM program this morning and on page 2 of Financial Review Mr Tony Adair, Public Relations Officer for Shell stated it was the company’s policy to charge maximum retail whenever possible. I am sure you are aware the oil companies argued that if they were divorced from retail and the sites leased to dealers the latter would force price up to the detriment of the consumer. These moves by Shell prove that the public would indeed be better off with implementation of the Government’s proposed divorcement legislation. Ken Taylor Chairman Shell Proprietors Association of New South Wales.

Senator PUPLICK:

– I thank the Senate. Similarly, when Mr Fife made a statement on 31

October 1978 he touched upon these matters and said, inter alia:

Petrol discounting in Australia will not be adversely affected by possible government measures in the retail petrol market. If anything, implementation of these measures could widen the scope for such discounting.

He went on to say:

This will ensure that the independent buying chains will continue to be able to buy petrol at cheap prices and pass the savings on to the consumer. Oil companies would, if the Government decides to implement the announced package, be forced also to supply petrol to their own dealers at more competitive rates - to ensure their continuance in the market on competitive terms with independent buyers.

However, oil companies would not be able to discriminate in price between their dealers except where the discrimination is cost justified or is engaged in only to meet competition of a competitor of the oil company.

A statement made on 12 May 1980 by Mr John Collins, the Executive Director of the Australian Automobile Chamber of Commerce, made the point that the allegations that automatically the introduction of this legislation would lead to an increase in prices to consumers were false. In view of the statement being fairly short I would seek leave to have it incorporated in Hansard.

Leave granted.

The statement read as follows -

The Executive Director of the Australian Automobile Chamber of Commerce, Mr John Collins today strongly disputed the assertion in a Sydney Sunday newspaper that a Government move to prohibit oil companies from retailing petrol would mean the end of discounting and cheaper petrol. “The proposals reported to be put forward by the Minister for Business and Consumer Affairs, Mr Garland, merely implement the Fife Package announced on October 30th 1978 aimed at bringing equity in the petrol retail market area and cheaper petrol to all motorists not just a favoured few,” Mr Collins stated. “Implementation of the Fife Package will ensure vigorous, wholesale competition where none exists today, and competition at the retail level between service station proprietors as strong as ever”. “Under the new conditions the owning of service station premises could well be, for the first time in a quarter of a century, a viable employment of private capital, thus increasing the competition once more.” “Free market forces in the true sense of the word will prevail as distinct from the current situation where there is no free market, only a market controlled by the large oil companies,” Mr Collins said. “The marketing ploys currently employed by the oil industry are so blatantly against all common sense and fairness in business that the Government is indeed forced to act to ensure the survival of the small businessman,” Mr Collins said. “The oil companies on the one hand keep applying on a continuing basis to the Prices Justification Tribunal for increases in the wholesale price of petrol. This wholesale price is charged to everybody and anybody at the oil companies’ whim and usually the country people are most disadvantaged by this action”. “On the other hand, the oil companies through their own commission agent operated self service stations set a retail price, which is significantly below, in most instances, the justified wholesale price.” “The purpose is clear”, Mr Collins says. “As soon as all truly Australian competition has been eliminated by this predatory pricing, the Australian motorist will be confronted with the oil oligopoly increasing the petrol pump prices at will.” “Sharp increases in the prices at the company controlled stations under the pretext of the Iranian crisis and lately the petrol emergency in Victoria, are classic examples of this arbitrary manipulation,” Mr Collins states.

There is no Prices Justification Tribunal surveillance over the retail prices set by the oil companies at their own stations.

The AACC believes that when the Government, even though belatedly, does act and provide tenancy protection to the ordinary service station proprietor and prohibits the oil companies from the retail marketplace, a much more healthy and competitive situation will prevail.

Service station proprietors will be able to make supplying companies compete on price and conditions of supply.

The activities of the minor companies in the wholesale area, such as ACTU Solo, Southern Cross, etc., will be a vital integral part of the competition.

At present the average service station proprietor is at the mercy of his landlord supplier in relation to price and every other condition of his tenancy.

The simple Government regulation that is proposed has been well thought out over several years by the Government, and the service station proprietors of Australia and A.A.C.C. have no doubt that the Government will act speedily.

For further information contact: John Collins, AACC Melbourne (03)26 1641.

Senator PUPLICK:

– 1 turn now to some broad aspects of the legislation. As I have said, I would like to discuss clause 20 of the Bill when we reach the Committee stage of the Bill. I wish to say something about two areas that have been raised with me. One is a concern on the part of a number of people which I understand and sympathise with, that somehow we are moving into a government acquisition of sites of property that belong to somebody else. In this case it belongs to the oil companies. I think the matter ought best be laid to rest by drawing attention, as did the Minister in his second reading speech, to the effects on this legislation and the Government generally of the decision of the High Court of Australia in the case of the Trade Practices Commission and another v. Tooth and Co. and another in which the matter being discussed was the renewal of licences for tied houses in a brewery situation. The section in question was section 47(9) of the Trade Practices Act. His Honour Mr Justice Gibbs, when discussing this matter and other matters, stated:

A law of the Commonwealth requiring one person to grant a lease to another on other than just terms would, generally speaking be invalid.

That is to say, on other than just terms. He continued:

However, not every compulsory divesting of property is an acquisition within s 51 (xxxi).

If one reads the whole of the judge’s decisions in that case one can see that in fact we are not getting into the business of acquisition in the sense of a government or anybody else acquiring in a compulsory and unfair sense some property that belongs to somebody else and seeking to vest it in a third or fourth party; we are dealing with the protection of the independent operation and with a situation in which the companies will be required on fair terms to undertake certain things. Where an acquisition is in any way touched upon, the legislation indicates that acquisition and the just terms that must be provided in relation to that acquisition have precisely the same meaning as they do under the terms of section 5 1 of the Constitution. I have already said that I regret this Bill does not have retrospective application. I accept the assurance of the Minister that that arises only from the Government’s interpetation of what the High Court said in that case. I very much regret both the delay and the fact that that retrospectivity could not be achieved.

I wish to make two important points in conclusion. Firstly, I turn to the question of the number of retail sites which are permitted to be owned by the companies. The Minister, Mr Garland, in his second reading speech stated:

Figures provided to the Government indicate that total company operated site numbers increased from 578 at 30 June 1978, to 670 at 30 June 1979, and to over 800- not counting special purpose sites- at 30 May 1980. In the same period total service station numbers excluding independents declined from 14,281 to 1 2,41 1. Company operated sites moreover are more significant in the market than their numbers would indicate. On June 1979 figures their market share was over 17 per cent from only about 5 per cent of total site numbers.

As we know the Minister said that there were about 800 sites concerned at the moment. This legislation, through the Schedule appended to the Petroleum Retail Marketing Sites Bill, will provide for a reduction to approximately 401 over a phase period of two years. I seek leave to have incorporated in Hansard the table which is the Schedule of the sites Bill, which shows the number of sites and their progressive divorcement.

Leave granted.

The table read as follows -

Senator PUPLICK:

– I very much welcome that. I believe that the aims 1 enunciated at the beginning of my speech, and which the Minister has clearly enunciated as being the aims of this legislation, will be achieved by this Bill and by the provisions of the sites Bill in terms of the number of sites which the oil companies will be permitted to operate themselves. 1 shall conclude by saying something that relates directly to the question of small business. A great deal of accusation has been bandied about the Chamber by Senator Gietzelt, Senator Walsh and others, who have said that this does not really do anything for small business; it does not really do anything for the motorist; and it does not really do anything for the consumer. I must say that in the Australian Financial Review of 28 July 1980, over a most handsome picture of Mr Alf Parker, an advertisement was inserted under the heading Federal Government Action Aids Motorists and Supports Small Business’. The whole thrust of the Government has been to achieve that assistance for motorists and for small business operators as best it can. I think it went about it in the most orderly fashion. It had information before it. lt proposed consultations. It brought the parties together. It gave them the opportunity to consult and to discuss. But it warned them that the bottom line was that if they did not come up with a solution through their own discussions, then a solution would be imposed by legislation, by a government which is not an exclusively laissez faire government but is prepared to intervene in the market place for what it sees as the benefit of individuals in the community or in terms of the public interest generally.

The statement of Mr Parker, the whole philosophy and thrust of the Bill, the fact that we gave the parties time to work this out between themselves and they did not, largely because of the intransigence of the oil companies - with all their screaming and all the telegrams that are flying around the country, much to the delight of Australia Post or Telecom or whoever it is who is getting the revenue from these things - does not in any way alter the fact that had the oil companies taken seriously the determination of this Government to act on behalf of motorists and small business and the community generally, they would have come to a rational reasonable solution without the need for the Government to legislate. Their failure to do so has brought on this legislation.

I support the legislation. As I have said, I. wish that it had retrospective application. I hope that eventually it will be taken one step further to a position of total functional divorcement. I believe that this is a most worthwhile and significant step which the Government is taking and I am very pleased to give both of the Bills my sincere support.

Senator CHIPP:
Leader of the Australian Democrats · Victoria

– The Australian Democrats welcome the Petroleum Retail Marketing Franchise Bill. We want it to go through promptly. I am sure that many small service station operators in Western Australia and South Australia will also welcome the Bill because in those two States the operators have been savaged ruthlessly by oil companies, most of them multinational oil companies, over the last two or three years. The Bill will be somewhat ironical for the 1 ,000 small operators who have been forced out of business by the oil companies because of lack of Government action over the last two or three years.

We welcome this Bill and commend the Government for bringing it in. It will provide a measure of protection and a security of tenure for lessee service station operators. Their lease or franchise is protected from unreasonable termination by the oil company, unless they breach their contract or engage in specific forms of misconduct. This will prevent the type of arbitrary and unfair practices by which oil companies have simply been putting lessee dealers out of business. A franchise agreement will now be for a minimum of three years, with the option for the franchisee or lessee to renew for two further periods, making nine years in all.

I hope that one day someone will write a book on the combined villainy of the various oil companies in this country as far as the small independent Australian operators are concerned. Some of the stories are hair-raising - one company forcing lessees to leave blank cheques on their petrol bowsers during the evening when the company tanker calls, otherwise they will not get supplies; agreements being terminated with notice of a week or two. The amount of personal tragedy and the number of bankruptcies they have left in their wake is something to be condemned.

There is also a provision to ensure that oil companies do not discriminate when supplying petrol in times of short supply, whether that be a real short supply or an alleged short supply. We know that another favourite trick of the oil companies is to concoct a false sense of short supply. This should eliminate many of the abuses which have occurred. I refer especially to the case of the Southern Cross group in South Australia, who were threatened with having their supplies cut off about two years ago. Price discrimination by a supplier between its lessees is prohibited except in certain circumstances, and this should deal with another widespread cause for complaint. Lessees find that the self-service directlyowned outlet across the road is retailing at the same price or even lower than they have to pay for the petrol wholesale. Naturally it has been hard to stay in business against such unfair competition. These provisions in the Bill fulfil to a great extent the promise of the Fife package in 1978, and we welcome them.

There is also an apparent bonus in this Bill, that is, an extra measure that was not promised in the Fife package, which we welcome. The Prices Justification Tribunal has been instructed, when setting the maximum wholesale price in future, to take into account the question of the cost of service stations as a component of the cost. In future the PJT will have to take into account the fact that oil companies are also retailers, and that some of their costs cannot legitimately be included in wholesale prices. This is something about which I have been complaining for a long time.

However, I do have a few criticisms. I speak firstly about the fuel prices equalisation Act. Oil companies in Australia have been flagrantly and wilfully disobeying an Act of this Federal Parliament. They have been disobeying the intention of the Prime Minister (Mr Malcolm Fraser) in 1977, when he promised country people - I believe in good faith, although foolishly, because he did not understand the constitutional position - that nowhere in Australia would the retail price of petrol be more than lc a litre above the capital city price. As we know, the Government brought in a fuel price equalisation Bill, which this Parliament passed. That legislation ensured that all the freight costs to oil companies would be paid so that the wholesale price of petrol in any remote area should be no more than 0.44c a litre above the city price. That was commendable legislation. I appreciate the constitutional difficulty explained by the Minister for National Development and Energy (Senator Carrick) at Question Time, and by Senator Walsh in his speech. The Federal Government essentially has jurisdiction over wholesale pricing, while the retail pricing is essentially a matter for the States. As I understand it, there is only one State, New South Wales, which does have price fixing at retail level. That was the case in South Australia. I am not persuaded that it is working properly, but I do know from my travels that the price of petrol in out of the way places in New South Wales is essentially lower, on a comparison of capital city prices, than it is in other States. 1 conclude that the price fixing in New South Wales is working to some extent.

Let me take a classic case, which I do not think can be argued against, of oil companies flagrantly and overtly abusing an Act of this Parliament and getting away with it with impunity. I take the example of Mt Tom Price in Western Australia. Here we have a remote area where there is one service station, one outlet selling petrol, and it is owned by an oil company. One would assume, after reading the Act, that because there is no competition that outlet should be able to sell a litre of petrol in conformity with the Government’s wishes and legislation at no more than 0.44c above the wholesale price listed in the city. Yet in this remote area that oil company - I believe it is the Shell company - overtly charges 4c to 5c per litre above the Perth city price. To me that reeks of a wilful, unashamed rip-off of people in a remote area.

We have some queries about the Government’s import parity pricing of oil. We believe there is an argument for import parity to apply to new oil which is found. It is unreasonable to expect overseas companies and Australian investors to risk capital in such a risky venture unless it is guaranteed that if they strike oil they will be given the import parity price. However, we cannot see the same justification being used for the massive excise being charged on old oil. After all, it has already been found, lt is being exploited and marketed. We believe that this is an excuse by the Government for receiving over $3,000m a year in extra income to balance the Budget. I have sympathy with the Government’s view that petrol is a scarce resource. One way to induce people to buy smaller cars and to use less petrol is to raise the price. 1 concede that there is respectability in that argument. However, the Democrats do not agree that the Government has to go all the way to import parity to achieve that end.

We are very critical of what the Government does with the $3,000m it gets in excise from motorists. I know that everybody has a view as to what can be done with the super-profits the Government gets from excise. Everybody in the chamber has a different view of what we could spend it on. I submit that an unanswerable case can be made out for spending a certain amount on research and development into alternative sources of energy other than fossil fuels. Most of the money now being spent on research and development on alternative sources of energy is going to organisations and companies looking for those alternative sources from existing fossil fuels.

The Democrats have been saying for three years that there is another source of fuel from crops that can be grown in Australia and renewed every year. I am a great admirer of the National Farmer. One of its editors, Julian Cribb, who has done a great deal of research with agricultural scientists, has carried out a detailed study to indicate that we would provide 60 per cent of Australian’s petrol needs by growing crops such as peanuts, sugar cane, cassava, sugar beet and many others. At the same time 120,000 jobs in rural Australia could be provided. We submit that that source of petrol would be renewable each year, non-polluting and would provide jobs in rural Australia, lt is a viable proposition yet the Government is giving virtually no encouragement to it. Those of us who saw a Four Corners program a couple of months ago were disgusted to find that the Australian scientists pioneering research on this alternative source of fuel from crops and through other methods are getting virtually no help from the Federal Government.

We are also concerned about country users of petrol. It is like saying night follows day to say that country people use more petrol than city people. Of course they do. They travel greater distances. Often, subsidised public transport is not available to country people. Therefore, they have to travel greater distances by car. The Australian Democrats estimate from the surveys we have taken that on average people living in the country travel five times more by car than their counterparts in the city. If they travel five times more, obviously they have to use five times more petrol and therefore their costs are higher. Why should country people be penalised by paying the extra excise? They are paying five times more excise visavis the city person because of the unfortunate geographical accident that they happen to live in rural Australia. The Australian Democrats strongly believe that there should be a direct subsidy, a rebate, to people in the country. It should be a rebate not on the cost of the petrol they use but on the excise. It should be proportionate to the five times greater amount of excise they pay.

We are also critical of the long delay in introducing these Bills. We were promised the Fife package in October 1978- two years ago. These Bills have been introduced just in time for an election. It is just as well for people such as Senator Puplick, who professes to be interested in the small businessman and who has been singularly inactive in the last two years since his Minister made this promise, to know that because of the delay 1,000 small businessmen have been sent bankrupt overtly and wilfully by the oil companies.

Senator Puplick:

– How do you know how active I have been in the last two years on this matter?

Senator CHIPP:

– The honourable senator has not introduced any private member’s Bills. I have had no response to my well-publicised statement that I would introduce a private member’s Bill incorporating the Fife package. There has been a thunderous silence from Senator Puplick on this matter. We would prefer complete divorcement but a reduction of direct outlets by half is at least a move in the right direction. The oil companies have been given two years to divest themselves of the excess number of direct outlets. We consider that one year would be sufficient for them to do this. The Petroleum Retail Marketing Franchise Bill is not retrospective except that it freezes the number of direct outlets as at 30 May 1980.

We accept the argument of the Minister for Business and Consumer Affairs (Mr Garland) that a 1979 High Court decision makes it impossible to fulfil the retrospectivity promises made by Mr Fife but if the Government had acted earlier that excuse would not have needed to be given. We are sad that nothing can be done to help those lessee dealers who have been put out of business since 1978 by the kinds of unfair practices now being prohibited by this Bill. It is very sad that no form of compensation can be given to the people who, if this legislation had existed earlier, would still be in business and would still be viable. There is still a long fight ahead for service station operators to ensure that this legislation is enforced. 1 urge the Government to be on the alert for any loopholes, defects or unintended side effects which may appear when the legislation is proved in operation. We know from the past that the multinational oil companies have unlimited funds to spend on the most able and astute company lawyers who can find loopholes in any legislation, notwithstanding how sincere it may be. The Australian Democrats commend the Bills.

Senator LEWIS:
Victoria

– Mr Deputy President- (Quorum formed).

The Senate is debating the Petroleum Retail Marketing Franchise Bill and the Petroleum Retail Marketing Sites Bill. 1 am glad that Senator McLaren saw fit to call a quorum, because Senator Chipp had emptied the chamber and many of my colleagues wanted to come in to hear my speech on this subject, notwithstanding the fact that it is half past eleven at night. Senator McLaren did not really give me a chance to get started to enable my friends to come in to listen to my speech. We have been listening to Senator Chipp again putting forward the Australian Democrats version of the solution to all the world’s problems, which solution he wants the people of Australia to believe would occur if only his party could be given the balance of power in the Senate at the next election.

Of course, once again Senator Chipp violently attacked senators and members on this side of the Parliament who have worked valiantly for some three years to protect small businessmen in the community. He failed to acknowledged the work that was put in by the back bench committees of government, which he should know about as a former Liberal. He should understand the work that goes on. To say to my colleague Senator Puplick ‘Where is your private member’s Bill?’ is a lot of nonsense. Where is Senator Chipp’s private member’s Bill in relation to this matter? Senator Puplick has put an enormous amount of work into this matter. I see that Senator Chipp has now been joined by his colleague, Senator

Mason, who earlier this evening solved the problem of air travel around Australia by suggesting that we should reduce the distance between Perth and the eastern States. I suppose if we could shift Melbourne across to Adelaide that would solve many problems for the airlines. That is about the standard of the Democrats in Australia. It would be beyond me to consider the proposition that anyone who has been listening to this debate might give the Australian Democrats the balance of power in the Senate.

These Bills contain three basic legislative elements. The first is the protection of tenure of the franchisee, the second is a prohibition on price discrimination among the franchisees, and the third is a reduction by 50 per cent of oil company retail sites. The fourth element, which is not legislative but which is an element of the Government’s proposals in relation to petroleum retail marketing, is the establishment of a wide ranging inquiry into petrol pricing by the Prices Justification Tribunal. There is some history of discontent and criticism of practice in this industry. It is quite distressing, actually, to look at the discontent that has been in this industry for many years. I hear senators opposite complaining, but one wonders what the Australian Labor Party did during its years of office to solve the problems of this industry. (Quorum formed).

The Government has shown quite clearly its philosophy as being one of attempting to assist the parties in this industry to come to a solution rather than one of imposing solutions on the industry. I think the Government is to be praised for adopting this philosophy in regard to any industry in Australia. But let there be no doubt, the giant oil corporations have made it perfectly clear that they have not been prepared to find a solution and so three years of hard negotiation and hard bargaining went by to no avail. One wonders whether these giant oil corporations have in fact not been taking the Government on to see how far it would be prepared to go to protect the small businessman. This legislative package that has come into the Senate this day is a clear indication that the Government is fair dinkum. Right up to the introduction of this legislation into the House of Representatives these giant oil companies were protesting violently about this legislative package, but now that it has passed through the House of Representatives and into this chamber at long last, they have acknowledged that the Government is fair dinkum and that it will protect the small businessman in this community and in this industry.

The people who run these giant oil companies recognise that our philosophy is to oppose unnecessary regulation of business. Contrary to the Labor Party, which always seems to believe that it knows more about running anything than anybody else, that Canberra is the fount of all wisdom and that whenever there is a problem the Government should introduce some legislative solution, our party fully recognises that the people who are out in the field earning a quid, who understand what the market forces are doing in society are the people who know what is going on in business; it is not the academics who give advice, and certainly not members of parliament who seem to think that the solution to anything is to introduce a piece of legislation.

This Government believes in small government and that if there is any private way of fairly and properly dealing with a situation with no overriding public interest considerations, then Parliament ought to leave it to the industry to solve its own problems. On the other hand, when there are massive giant corporations such us those in the oil industry which are not prepared to take reasonable steps to act in an Australian manner in relation to business but wish to implement their decisions in relation to an industry, it is necessary for this party to interfere, and that is what this legislation is all about. The Government has clearly demonstrated that it is prepared to act when measures are necessary to maintain a vigorous and effective small business sector and long term competitiveness of an industry as a whole, such as this oil industry.

The other day I spoke in support of multinational capital development in Australia. I openly acknowledged that we welcome multinationals in Australia. They provide the risk capital which, in many cases, Australians seem unprepared to provide. I say this openly to multinationals: They must fit into our way of life. This industry has perhaps the worst record in Australia. There is no wonder in my mind why oil companies are frequently the first multinationals which are taken over in Third World countries. The oil companies in Australia have clearly demonstrated that they have not been prepared to play the game. They have used their strength to break small businessmen. They have developed a vertical integration in this industry to cause bankruptcy and to create difficulties. They have thrown out of an occupation, in order to enforce their will, businessmen who have spent their money and their life savings. The Government has endeavoured to bring them together to achieve a solution, but to no avail.

We expect multinational corporations in Australia to behave in accordance with Australian standards. I say openly that if multinationals behave like, say, militant trade unions, we have to treat them like militant trade unions. I emphasise that in this legislation the Government has not chosen to set up a regulatory agency. I suppose that if the Labor Party had been in power this week no doubt we would have had another quasi-autonomous non-governmental organisation established or we would have had some set of detailed regulations established to control this industry. This Government has a philosophy of creating rights between parties and machinery for parties to protect those rights and of allowing them to resolve their own differences. That is the sort of legislation which is contained in these Bills. These Bills deal only with franchisees and not with, for example, owner-operators. I hope oil companies have learnt enough of a lesson over this legislation to treat all of their dealers fairly.

I think of a close friend of my family who has been serving people in north Richmond for 25 years as a dealer for the Shell Co. of Australia Ltd. I know of the problems that he has faced. He worked hard in the early stages immediately after the Second World War and was able to earn enough to buy his own site. Having been on that site for some 20 years, he discovered that the Shell oil company had bought a site just around the corner from him where it opened up a business and proceeded to sell petrol at a price less than it was selling petrol to him. Clearly, without the engineering skills which he brought for the benefit of his customers he would not have been able to remain on that site thanks to the action of the Shell oil company. I hope that company has learnt its lesson from the nature of this legislation we have introduced.

In this legislation there remains a need for good faith on the part of the oil companies. For example, in times of shortages or disruption to supplies, each oil company, in good faith and in the circumstances of the situation, will need to allocate and distribute supplies in a fair and efficient manner with due regard to the needs of the customers, including franchisees, and with due regard to the needs of the public. The Government has not chosen to regulate what should happen in those circumstances but has left it to the companies to devise and operate a fair and efficient allocation system. I for one will be watching to see whether the oil companies adopt a fair and efficient allocation system when those problems arise. The conduct of the oil companies in the past three years has generated a great deal of ill-will among the public. That ill-will has been reflected among Government members. We shall be watching them carefully to see whether they have learnt their lessons over this period.

It would seem that one of the major problems in our society today is the continued growth and power being exercised by giant corporations, including giant qangos - statutory authorities - and the growth and power being exercised by militant trade unions. I think we could tie those two factors together. The growth and power of giant corporations extend beyond national boundaries. They seem to me to be contemptuous of governments in those countries in which they are operating, contemptuous of the people living in those countries and frequently contemptuous of the communities in which they are flourishing and making much money. A problem seems to me to be the cynical and frequently insensitive exercise of the powers of these giant corporations without regard to the needs of the public.

It may be that we as Liberals need to develop a philosophy which pits like against like so that big business competes with big business and not against small business or does not drag small business into its battles by way of some vertical integration. In other words, it may be that we have to develop a philosophy which enables us to confine areas of competition. Perhaps we should exclude oil companies completely from the retail market. We shall be watching to see whether that should be our decision.

Senator BONNER:
Queensland

– I support the two Bills before the Senate this evening, the Petroleum Retail Marketing Sites Bill 1980 and the Petroleum Retail Marketing Franchise Bill 1 980. 1 do so with a great sense of relief. I am happy to support them as I know that many of the service station proprietors throughout this nation will be very relieved when these Bills become law. I do not want to take up a great deal of the Senate’s time this evening because I would only be repetitious. I believe my two colleagues, Senator Puplick and Senator Lewis, have covered all the points I would have wished to raise in this chamber tonight. Suffice to say that the oil companies certainly, as Senator Lewis has just said, have nothing to be proud of in their dealings with the service station proprietors, particularly over the last two or three years. I realise that this situation has been coming for a long time, but particularly over the last two years they have squeezed- I emphasise the word ‘squeezed’- the service station proprietors to the extent that quite a number have become bankrupt. Others have lost their livelihood. They have gone out of the business because of what the oil companies have been doing, and more particularly so since they knew that this Bill would be coming before the Parliament.

I have had contact from some of the people with whom I have been dealing over the last couple of years in relation to this problem. Like many of my colleagues on this side of the chamber I have made representations on their behalf to the Government and to Ministers to pressure the Government to introduce this kind of legislation a lot earlier than it has. These people have told me that while they are happy that the Bills are now before the Parliament, they have some concern about one of the Bills, that is, the Petroleum Retail Marketing Franchise Bill and about clause 6 of that Bill. Until this evening I thought I would be prepared to move an amendment to that clause. In that clause I would like the word ‘and’ changed to the word ‘or’ in two places. Because of the time, and as it is important that these petroleum Bills pass through the chamber this evening so that they can be returned to the House of Representatives and become law as soon as is humanly possible, I do not intend to move such a motion tonight.

What I will do and what I am sure my colleagues on this side of the chamber will do is watch this legislation very closely as it is implemented and as it unfolds. If in the course of time I find that there is a need for such an amendment because of what the oil companies continue to do, I will have no hesitation whatsoever in coming into this chamber and moving an amendment in support of the people I represent in this Parliament. I am quite certain that I will have the support of Senator Puplick, Senator Lewis, and many other honourable senators on this side of the chamber because we are concerned about this problem. I assure the Senate, the people with whom I have been working, and all the people who have been affected by what the oil companies have done in the past, that I will have no hesitation in doing that. I said that I was relieved and happy to see this legislation finally come before the Senate. I hope that within a matter of days it will become law. This afternoon I received a telegram from Mr Merv Vining, Executive Director of the Queensland Motor Industry Association Ltd. It is a short message so I will read it. He said:

Dear Senator,

Require your urgent assistance in pushing through Senate today petroleum Bills to eliminate bankruptcy of dealers and massive unemployment of staff.

That indicates to me, and I am sure it must indicate to all honourable senators here, that the industry is happy that this legislation finally has come before us and will become law. I have received also rather a long telex from Mr John E.

Collins of the Australian Automobile Chamber of Commerce. I seek leave of the Senate to have the telex incorporated in Hansard rather than my taking up the time of the Senate and reading it into the Hansard record.

Leave granted.

The document read as follows -

Vauto AA35994 9.9.80

Attention: Chief of Staff/News Editor

PETROL LEGISLATION

Petrol Retailers Praise Government Legislation

Australia’s 10,000 petrol retailers were collectively sighing with relief last night following the Federal Government’s introducing legislation protecting them from oppressive oil company tactics.

The Minister for Business and Consumer Affairs, Mr Eric Garland, introduced Bills into Parliament last night which give effective tenancy protection for lessee dealers attacks the worst elements of price discrimination and will cause oil companies to divorce themselves from the direct or agent operation of a large number of their company owned sites.

The retailers have been fighting a tough political battle for the last 2 years in a bid to get government protection against oil company practices which have put many of them out of business.

In spite of intense political lobbying pressure by oil companies, the Federal Government is enacting legislation effectively transferring the operation of approximately SO per cent of their company owned and operated sites into the hands of either lessees or freeholders.

The Australian Automobile Chamber of Commerce, and its affiliated State associations representing the service station proprietors of Australia have fully supported the whole thrust of the Government proposals right from the beginning.

VACC executive director John Collins, who is also AACC executive director, applauded the government’s moves and said it was ‘a great satisfaction for small petrol resellers to observe the government’s courageous and far sighted action’.

The government, and Mr Garland in particular, have shown great integrity, perseverance and determination to push through this most vital legislation’, Mr Collins said.

Although AACC would have preferred 100 per cent divorcement of the major oil companies from retailing, partial divorcement of around SO per cent will at least halt the hitherto accelerating march towards total integration of the retail petrol industry’, Mr Collins said.

The sites left undivorced will still remain an influential force in the newly structured market place, but the bulk of other retailers in direct competition with these sites, because of the other provisions of the Garland proposals, will be able to compete far more equitably than previously’, Mr Collins said.

AACC believes that if Mr Garland had not moved to bring rationality to the industry, the Australian motoring public would have been faced with an almost fully integrated industry within 2 or 3 years’.

This would have led to even greater price manipulation than is currently the case’. Mr Collins said the new franchsing or lease agreements would allow competition for product supply at the wholesale level for the first time. lt will also allow retailers commercially and morally just lease terms and conditions’.

For the first time a lessee retailer will be able to purchase at least SO per cent of his fuel supply from an alternative source if he feels he is not getting a competitive deal from his traditional oil company supplier’.

The only sad note in this whole exercise’, Mr Collins said, is that out of the many thousands of service station proprietors represented on a united front by AACC one or two have been manipulated and induced by their oil company master to endeavour to give an appearance of disunity. Fortunately, the pathetic bleating of these stooges has been totally inaudible against the resounding support of the 99.99 per cent majority’.

Over-all we believe the government’s legislation will mean cheaper petrol for a greater number of Australians than before, and a return to greater competitiveness and better service to the motorist’, Mr Collins said.

For further information contract Mr John Collins, VACC (03)26 1641 or after 7 p.m. (03) 26 1613.

Senator BONNER:

– I thank you, Mr President, and I thank the Senate for its courtesy. I have said as much as I want to say on this matter tonight. Again, I assure the service stations proprietors and the industry generally that in the ensuing months, when this legislation has been implemented, I certainly will watch it unfold. If I find it is not serving the purpose for which it was designed and is not protecting the industry as it should be protecting it, I certainly will raise my voice on behalf of the industry.

Senator McLAREN:
South Australia

– It was not my intention to speak to the motion for the second reading of the Petroleum Retail Marketing Franchise Bill, but in view of the remarks made by Senator Bonner I feel I should say a few words. Tonight Senator Bonner came into the chamber and said that he wanted to amend this legislation but that, because of the shortage of time, he did not intend to do so. He then gave warning to the Government that he will watch very carefully the effect this legislation has and how the oil companies treat the retailers. He gave the Government warning that if the oil companies do not perform as he thinks they ought to perform he will move an amendment to the legislation. What a pious statement. In all the time he has been here he has never seen fit to move an amendment to any legislation. He is like a lot of senators on the Government side of the chamber: Outside the Parliament they criticise the Government and the Prime Minister (Mr Malcolm Fraser) and make all the threats in the world; but when they come in here they are like little puppy dogs. They are not game to do anything against the Government. Yet we have to sit here at five minutes to twelve in the evening and listen to a statement such as the one just made by Senator Bonner.

Earlier when Senator Chipp was speaking we heard Senator Lewis interject and criticise, asking

Senator Chipp why he did not introduce a private member’s Bill. Then Senator Bonner came into the chamber and made all the threats under the sun. He said that he would do this and he would do that. He will do absolutely nothing. Senator Jessop, when speaking earlier tonight, told us what one of his colleagues had done in an attempt to solve the problem. I think it should be put on record what happened to Senator Messner and Mr Shipton when they tried to do something as Senator Jessop said they had done. The following was stated in an article headed ‘Oil talks proposal rejected’, which appeared in the Canberra Times of 29 May 1980:

Melbourne: The Australian Automobile Chamber of Commerce rejected yesterday a call to sit down at a conference table with the oil companies in an attempt to resolve differences and establish a voluntary code of conduct.

The invitation was made yesterday by Federal Liberal backbenchers Mr Shipton of Victoria and South Australian Senator Tony Messner in the wake of statements by independent service station owners that they were being subjected to standover tactics’ by oil companies.

Senator Gietzelt:

– lt would have meant nothing.

Senator McLAREN:

– Of course it would have meant nothing. It would have meant about as much as Senator Bonner’s statement tonight meant. That is what the independent oil companies thought of Senator Messner and Mr Shipton. The matter covered by that article got far broader publicity in the Adelaide Advertiser. Unfortunately, I was not able to get from the Parliamentary Library tonight a copy of the article which appeared in that newspaper. However, what was stated in the Canberra Times is similar to what was stated in the Adelaide Advertiser. As my colleague Senator Gietzelt said, the statements made by Senator Messner and Mr Shipton about holding a conference meant as much as Senator Bonner’s statement here tonight meantabsolutely nothing.

I recall Senator Jessop saying that he received a telegram from the Prime Minister, that he promised certain things. That telegram would have been as worthless as the telegram about which Senator Jessop made great play in 1977, prior to the general election, when he promised the people in the western part of South Australia that they would receive television services if Fraser were re-elected. When that promise was not honoured, what did Senator Jessop do? He said: ‘I cannot be held responsible because the promise was made in a telegram from the Minister for Post and Telecommunications. It meant nothing. They are not my words, they are the Minister’s’. We heard him speaking again tonight while the proceedings of the Senate were being broadcast. I am sure that he did not convince anybody, and particularly the service station owners in the western part of South Australia. They well know that the statements made by Senator Jessop are about as worthless as the invitation for people to sit down and talk about the matter that was issued by Mr Shipton and Senator Messner and the threat issued here tonight by Senator Bonner.

Senator DURACK:
Attorney-General · Western Australia · LP

– The measures which have been introduced in the Senate and debated this evening are most important. I am very pleased that the Senate has agreed to support the measures, despite criticism of one kind or another from Opposition honourable senators and from Senator Chipp. Basically, the measures are supported. On behalf of the Opposition Senator Gietzelt moved an amendment to the motion that the Petroleum Retail Marketing Franchise Bill be read a second time, expressing the Opposition’s criticisms of the measures. I believe that the matters raised in criticism have been very clearly and forcibly answered by honourable senators on this side of the chamber who spoke in support of the Government. I do not single out any of those honourable senators; I think all who spoke from this side of the chamber gave their strong support to the measures and refuted the criticisms embodied in the amendment moved by the Opposition. For that reason, I hope that the Senate will reject the Opposition’s amendment and give the Bills a speedy passage.

Question put:

That the words proposed to be added (Senator Gietzelt’s amendment) be added.

The Senate divided. (The President - Senator the Hon. Sir Condor Laucke)

AYES: 23

NOES: 31

Majority……. 8

AYES

NOES

Question so resolved in the negative.

Original question resolved in the affirmative.

Bill read a second time.

Thursday, 18 September 1980

In Committee

The Bill.

Senator PUPLICK:
New South Wales

– I want to make some remarks on clause 20 of the Petroleum Retail Marketing Franchise Bill 1980. To facilitate understanding I seek to have the terms of clause 20 incorporated in Hansard.

Leave granted.

The clause read as follows -

Price discrimination in sales of motor fuel to franchisees

( 1 ) A franchisor shall not, in relation to motor fuel supplied or to be supplied by it, discriminate between its franchisees in relation to -

the amounts payable by the franchisees in respect of the fuel; or

any discounts, allowances, rebates or credits given or allowed to the franchisees in respect of the fuel.

Sub-section ( 1 ) does not apply in relation to a discrimination if -

the discrimination makes only reasonable allowance for differences in the cost or likely cost of raw materials, refining, distribution, sale or delivery resulting from the differing places to which, methods by which or quantities in which the motor fuel is supplied to the franchisees; or

the discrimination is constituted by the doing of an act in good faith -

to meet a price or benefit offered by a competitor of the franchisor; or

to assist a franchisee to meet a price or benefit offered by a competitor of the franchisee.

In any proceedings, the onus of establishing that subsection ( 1 ) does not apply in relation to a discrimination by reason of sub-section (2) is on the person asserting that fact.

Senator PUPLICK:

– The explanatory memorandum to clause 20 of the Bill reads:

  1. A franchisor is not to discriminate between its franchisees in the price of motor fuel which it supplies to them, or in any discounts, allowances, rebates or credits given or allowed to franchisees in respect of such fuel.
  2. The prohibition will not apply where the discrimination - makes only reasonable allowances for differences in costs of raw materials, refining, distribution, sale or delivery; is done in good faith to meet a price or benefit offered by a competitor of the franchisor; or is done in good faith to assist a franchisee to meet a price or benefit offered by a competitor of the franchisee.
  3. Where a person seeks to rely on one of the exceptions the onus of establishing that the prohibition does not apply is on that person.

Basically, that clause is introduced to prevent discrimination between the franchisees by the oil companies. It was not in any way intended to be a blanket clause which would prevent the oil companies from granting either general rebates or discounts or additional assistance to their franchisees, nor in fact would it prevent their making special exceptions where the pressure of competition was such that it fell within one of the three categories prescirbed in paragraphs (a), (b) and (c) of sub-clause (2) of clause 20. Despite that, on 1 1 December 1 980 the Amoco company through Mr Markovitch, the New South Wales branch manager, made an attempt to lean on all Amoco service stations and on all Amoco dealers by indicating that Amoco had received certain advice, allegedly from the Department of Business and Consumer Affairs. Amoco wrote to its dealers, in part stating: . . that rebates granted under our dealer trading agreements which took effect from July 1 , 1 980, must be withdrawn as from the date the Bill is proclaimed as an Act.

It went on to say:

The net effect of the rebate withdrawal will be a substantial reduction of income to dealers.

Amoco has consistently maintained that this is on the basis of advice received from the Department of Business and Consumer Affairs. On the following day, 12 September, the Minister for Business and Consumer Affairs (Mr Garland) put out a Press release stating inter alia:

The Minister said that he had been assured that his Department had not given any such advice to Amoco.

The Press release went on to explain in terms of clause 20 of the Bill that:

This did not prevent any oil company giving rebates to its lessee dealers off the wholesale price provided it did so in accordance with the Bill. These provisions had been explained to Amoco.

The Press release concluded that:

Mr Garland deplored that Amoco had attributed to the Department an opinion which it had not given.

I seek leave to have the letter from Mr Markovitch and the Minister’s statement in reply incorporated in Hansard.

Leave granted.

The documents read as follows -

September 11, 1980

Amoco Building 701-709 Pacific Highway, North Sydney P.O. Box 949, North Sydney 2080 Phone (02) 923 7109 Cables: Amocaus Telex: 20691

TO ALL AMOCO DEALERS

Reference Section 20 of the Petroleum Retail Marketing Franchise Bill introduced in the Federal Parliament on Tuesday, September 10, 1980.

We have now been advised by Business and Consumer Affairs Minister Garland’s Department, that rebates granted under our Dealer Trading Agreements which took effect from July 1, 1980, must be withdrawn as from the date the Bill is proclaimed as an Act. All other provisions of the Trading Agreement will remain in effect.

The net effect of the rebate withdrawal will be a substantial reduction of income to Dealers. It also removes a worthwhile incentive for Dealers to increase their profit by increasing sales volume. We have increased our rents to an economic level in line with previous Government enquiries and the recommendations of the State Dealer Organisations.

It is felt that in view of the foregoing, you should immediately contact by telegram, your Local Member, State Senators and the Honourable R. V. Garland, M.P., Minister for Business and Consumer Affairs, Parliament House, Canberra, A.C.T. 2600, requesting that this section of the Bill be amended to allow you to continue to receive your Trading Agreement rebates. The best course of action is to send telegrams direct to Local Members and Mr Garland care of Parliament House, Canberra, as the Bill could be enacted this week and rebates would then have to be withdrawn.

Yours faithfully, R. I. Markovitch, N.S.W. Branch Manager.

Media Release BACA

Minister for Business and Consumer Affairs

PETROLEUM RETAIL MARKETING FRANCHISE BILL

The Minister for Business and Consumer Affairs, the Hon. R. V. Garland, M.P., said today that he was concerned that Amoco dealers could be misled by a letter sent to them by Amoco about the Government’s Petroleum Retail Marketing Franchise Bill.

Mr Garland said that he had been shown the text of a letter from Amoco to its dealers which said that Amoco had been advised by the Department of Business and Consumer Affairs that “rebates granted under our dealer trading agreements which took effect from July 1, 1980 must be withdrawn from the date the Bill is proclaimed as an Act”. The Minister said that he had been assured that his Department had not given any such advice to Amoco.

The Minister explained that section 20 of the Bill prohibited an oil company discriminating in the price of fuel that it sold to its lessee dealers except to reflect genuine cost differences, to meet competition at the wholesale level from another oil company, or to help a dealer to meet retail competition. This did not prevent any oil company giving rebates to its lessee dealers off the wholesale price provided it did so in accordance with the Bill. These provisions had been explained to Amoco. Mr Garland said that section 20 was intended to ensure that lessees were treated fairly by their oil companies and that oil companies did not engage in unfair and unjustified price discrimination between their lessee dealers.

Amoco had contacted the Department of Business and Consumer Affairs on several occasions recently to seek advice on the intended operation of several provisions of the Bill. Mr Garland deplored that Amoco had attributed to the Department an opinion which it had not given. 12 September 1980

Senator PUPLICK:

– I thank the Committee. I raise this matter because it makes the point that there has been, as can be illustrated by the particular circular letter of Amoco, a deliberate attempt to distort the provisions of this Bill. There has been a deliberate attempt to use scare tactics on dealers, to say to them: ‘This legislation, if enacted in its current form, will send you to the wall. The way in which we have been assisting you the rebates and the discounts that we have been trying to provide you with’- of course, that is only being done out of the generosity of their hearts - ‘will no longer be available to you’.

It has been necessary for the Minister not only repeatedly to issue statements saying that the effects of clause 20 were not as Amoco and certain other companies have been claiming, but also to explain time and time again that this is a prohibition against picking off specific service stations operators and making them the vicitims of a discriminatory pricing policy on the part of the company to suit whatever happened to be company ends.

The Bill provides that these rebates can be given, provided they are given to everybody. It provides that special rebates can be given if those qualifications mentioned in sub-clause (2) of clause 20 are fulfilled to assist dealers to meet particular problems in particular areas as far as their ability to withstand competition is concerned. I think it is an unfortunate situation. I asked a question of the Attorney-General (Senator Durack) the other day in which I described it as misleading and dishonest for Amoco to be attempting to pressure its dealers as a result of this into sending telegrams all around the country, trying to get the legislation further deferred or substantially amended.

I rise on this occasion only to put into the record of the Senate the clear statement of the Minister about the impact of clause 20, to refute on the public record the claims that have been made by Amoco and other companies and to indicate that the effect of clause 20 is quite simply one of protecting individual operators against particular acts of discrimination. It does not have the sorts of effects which the company has tried to make out that it has; rather it has to be looked at in the way in which the Minister describes it in his Press release and as an integral and significant part of this piece of legislation.

Senator GIETZELT:
New South Wales

– In response to the points raised by Senator Puplick, I think it is fair to say that the oil companies will not look very kindly on this legislation and therefore will take whatever steps they can to create confusion in the minds of dealers and, for that matter, the general public. I am sure that they will take steps to try to suggest that any increase in the price of petrol will flow from this piece of legislation. The Government and the Parliament itself is responsible for protecting the interests of the consumers. I think it is significant that the representatives of the oil companies were not stayers. They give it away long before the legislation got to the Committee stage, whereas we still have the representatives of the service station proprietors with us. That is an indication of the staying power and understanding of the determination of the Parliament to bring about some order into the petroleum industry.

I am encouraged, and I am sure my party is encouraged, by some of the comments that have been made this evening in the second reading debate about the need for the oil companies to apply themselves to the Autralian environment. If they do not do that, whatever the result of the election, if the optimism I hold about 18 October is proved correct, a Labor government will certainly be pursuing them. If that situation does not eventuate I trust that the sentiments that have been expressed by Government senators tonight will be translated into the sort of action that will let the oil companies know that we do not intend to stand idly by as Parliament in a bipartisan way, but that we will be working to get into the oil industry in this country some sort of regularity that will be to the benefit of the operators at the dealer level and also in the interests of consumers.

The points that Sentor Puplick raised will certainly have the support of the Opposition. Let it be known far and wide that we are not going to stand idly by and allow the oil industry to be dictated to by the oil companies.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator Durack) read a third time.

page 1233

PETROLEUM RETAIL MARKETING SITES BILL 1980

Second Reading

Debate resumed.

Senator GIETZELT:
New South Wales

– As foreshadowed during the second reading debate, I move:

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Senator RAE:
Tasmania

– I wish to pay tribute to Mr Phil Jelli and a number of other people whose dedication to a particular cause has brought about the situation in which this piece of legislation is being passed through the Senate tonight apparently, as it appeared a moment ago, almost without an honourable senator wishing to speak on it. One of the things which amazes me is the number of people who have suddenly found the cause - a cause which years ago Phil Jelli and others took up. I refer to the cause of small business. The people of the private enterprise cause felt that the private enterprise government was not quite looking after them. I am delighted to find that we have some sudden and recently acquired adherents, such as Senator Puplick who has found out that it is a good cause, to add to the voices of people such as Mr Phil Jell and the others who started the Council of Small Business Organisations of Australia- COSBO - which some years ago decided that small business in Australia was not exactly getting a fair go, in between the union movement–

Senator McLaren:

– Is this a second reading speech?

Senator RAE:

- Senator McLaren may take it as he wishes.

Senator McLaren:

– I am seeking guidance from the Temporary Chairman.

Senator RAE:

– We are in the Committee stage of the debate. If Senator McLaren is not familiar with the Committee stage after the years that he has been a member of this Parliament, that proves that my opinion of him is correct.

The TEMPORARY CHAIRMAN (Senator Jessop:
SOUTH AUSTRALIA

– Senator Rae, it might be helpful if you would direct your attention to an aspect of the Bill. We are taking the Bill as a whole.

Senator RAE:

– I am speaking to the Bill as a whole, Mr Temporary Chairman. I was answering an interjection from one of the people who give the impression that this place provides an opportunity for them to aggrandise without sense. I leave the matter at that.

I pay tribute to people like Phil Jelli and the whole organisation that was behind the people who, almost without fail, kept in touch with members of parliament over a period of four or five years, providing information, arguments and an insurance that one day a Liberal government would become liberal and introduce legislation such as this. We have introduced this legislation. I support it. I pay tribute to people such as Phil Jell who are behind its introduction.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator Durack) read a third time.

page 1234

STATES GRANTS (CAPITAL ASSISTANCE) BILL 1980

Bill received from the House of Representatives.

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

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

Second Reading

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– I move

That the Bill be now read a second time.

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

Leave granted.

The speech read as follows -

The purpose of this Bill is to authorise the payment of capital grants totalling $435,750,000 to the States in 1980-81. This amount represents the grant component of the Loan Council program for State governments in 1980-81 and is one-third of the total program of $1,307. 25m agreed at the June 1980 Loan Council meeting. The Bill also provides for the payment of capital grants in the first six months of 1981-82 up to an amount equal to one-half of the 1980-81 amount, pending passage of legislation to authorise grants in 1981-82. Consistent with past practice, payments authorised under this Bill may be made from the Consolidated Revenue Fund or from the Loan Fund, and appropriate borrowing authority is included.

These proposed grants represent a continuation of arrangements initiated by the Liberal-Country Party Government in June 1970, which provide that portion of the State Governments’ Loan Council program should take the form of interestfree non-repayable grants in lieu of what would otherwise be interest-bearing borrowings by the States. The effect of the grants is to relieve the States of debt charges - interest payments and sinking fund contributions - which they would otherwise have to pay, and the grants accordingly have a substantial beneficial effect on the State’s financial positions. The States are entirely free to apply these grants as they choose and no terms or conditions are attached to them.

I turn now to the general context in which this Bill is being introduced. As I have mentioned, the grants which are subject to this Bill comprise onethird of the States’ Loan Council borrowing programs in 1980-81. That program has been increased by 5 per cent - or some $63m - on the program for 1979-80. Funds to the States from the Commonwealth Budget are estimated to total $ 12,265m in 1980-81, an increase of 10.3 per cent. This represents about one-third of estimated Commonwealth Budget outlays this year. Although they are not included in Commonwealth Budget outlays, a full consideration of State financing should also take account of the State authorities’ borrowings. If these are added, the estimated total figure is $ 1 4,7 1 7m, an increase of 10.8 percent.

The general revenue assistance component of payments to the States, essentially comprising the tax sharing entitlements, is estimated at $6,027m this year, an increase of 1 1 per cent. These funds, may, of course, be spent by the States however they see fit, including on capital works projects. Overall Commonwealth general purpose payments to the States, which can be allocated by the States themselves between recurrent and capital expenditure, and of which the grants proposed in this Bill form a part, are estimated to increase by 9.9 per cent to $7, 334m. The other major payments to the States, specific purpose payments, are estimated to increase by about 1 1 per cent in 1980-81 compared with last year. Some critics of our decisions on individual specific purpose programs seem to assume that the funds the Commonwealth provides are all that are available for expenditure on the particular programs and projects. Let me remind honourable senators that States are at liberty to supplement spending on these purposes from their own resources, including from general purpose payments from the Commonwealth.

One particular specific purpose payment of relevance is the local government tax sharing entitlement which is passed on to local authorities as general purpose funds. As in the case of States’ tax sharing entitlements these funds may be spent as local governments see fit. The local government share of the previous year’s net personal income tax collections has been increased to 2 per cent as from 1 980-8 1 . The States will receive some $300m for this purpose, a dramatic increase of about 35 per cent.

State authorities’ borrowings are a further important source of funds for the States and their level has implications for the market for Commonwealth bonds and the extent of Commonwealth support needed for the State Government borrowing programs, which are underwritten by the Commonwealth. A prime element of these borrowings is the special increases to State authorities’ programs in the form of infrastructure financing for selected major developmental projects. First supported in the Loan Council by the Commonwealth in 1978, the infrastructure category of borrowings was very considerably increased by the Loan Council at its June 1980 meeting. In all, the indicative borrowing programs for State authorities under the infrastructure arrangements are of the order of $4.8 billion over ten years, with some $632m approved for 1980-81 - an increase of no less than 58 per cent on 1979-80.

It is significant to bear in mind that in recent years the States generally have been able to achieve balanced budgets - some have maintained budget surpluses - despite the fact that at the same time they have been reducing or abolishing certain State taxes. This is hardly evidence of State governments suffering unduly from repressive financial constraints. The package of funds to the States in 1980-81, including their Loan Council programs, has been designed carefully with a view to giving the States flexibility in managing their own affairs within the constraints of the Commonwealth’s continuing policy of responsible containment of public sector spending. This Bill provides one-third of the State governments’ Loan Council programs by way of an interest-free grant. It is an important measure in the overall arrangements for Commonwealth assistance to the States. I commend it to honourable senators.

Debate (on motion by Senator Gietzelt) adjourned.

page 1235

QUEENSLAND GRANT (SPECIAL ASSISTANCE) BILL 1980

Bill received from the House of Representatives.

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

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

Second Reading

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– I move:

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

Leave granted.

The speech read as follows -

The purpose of this Bill is to authorise the payment to Queensland of $6. 7m in 1980-81 as a special grant. The payment of this amount is in accordance with the recommendations of the Commonwealth Grants Commission contained in its Forty-seventh Report on Special Assistance for the States which was tabled recently. It has been the practice of successive Commonwealth governments from time to time, on the recommendations of the Commonwealth Grants Commission following applications by States, to provide special financial assistance to the less populous States to compensate them for such factors as lower capacity to raise revenue and higher costs of providing government services of a standard comparable to that provided by the financially stronger States.

Since self-government, the Northern Territory has also had access to the Commonwealth Grants Commission on the same basis as a claimant State. When special grants were first paid they constituted the only regular form of general revenue assistance to the less populous States for this purpose. However, for many years now, the main way in which special compensatory assistance has been provided to these States has been through the payment of higher per capita amounts of other general revenue funds. This situation is reflected today in the fact that personal income tax sharing entitlements paid to Queensland, South Australia, Western Australia and Tasmania are higher, in per capita terms, than the entitlements paid to New South Wales and Victoria.

Under the personal income tax sharing arrangements, the less populous States continue to be free to apply for special financial assistance on the recommendation of the Commonwealth Grants Commission. This is one of the explicit understandings between the Commonwealth and State governments in relation to the tax sharing arrangements. Such special grants supplement a State’s entitlement under the tax sharing arrangements in the same way as they formerly supplemented the financial assistance grants.

Queensland has been the only claimant State in recent years. It has applied for and received special assistance in each year since 1971-72. Queensland’s estimated entitlement in respect of 1980-81 under the personal income tax sharing arrangements is $1 ,079.5m, representing approximately $481 per head of population, compared with an estimated average of approximately $352 per head for New South Wales and Victoria. Accordingly, the assistance provided to Queensland by way of the special grant should be seen as supplementing the special compensatory assistance of $129 per head, or some $290m, provided to Queensland by way of its tax sharing entitlement.

The Commonwealth Grants Commission, in arriving at its recommendations in relation to State claims for special assistance, makes an assessment of the financial needs of a claimant State. In making such assessments, the Commission compares in detail the finances of the claimant State with those of the standard States. The Commission has regarded New South Wales and Victoria as standard States since 1959-60. Normally, special grants recommended by the Commission consist of two parts. One part is based on a preliminary assessment of the financial need of the claimant State in the current financial year, and is an advance payment subject to adjustment two years later when the Commission has compared in detail the finances of the claimant State and standard States for that year. The other part of the special grant represents the final adjustment to the advance payment made two years earlier and is known as the completion payment. This adjustment might be positive or negative and therefore might result in the final grant in respect of the year being higher or lower than the advance payment for that year.

The payment to Queensland in 1980-81 of $6.7m provided for by this Bill consists solely of a completion payment in respect of 1978-79. The completion payment in respect of 1978-79, when added to the $16m advance grant paid to Queensland in that year, brings the final grant in respect of 1978-79 to $22.7m, which is $7.3m above the corresponding figure for 1977-78.

The Commission has made no recommendation with respect to an advance grant for 1980-81. This is because although Queensland has applied for a special grant in respect of 1980-81, it has indicated to the Commission it is not seeking an advance grant. Queensland’s decision not to seek an advance grant is based on possible implications for methodology adopted for assessing special grants of the review by a special division of the Grants Commission of the tax sharing relativities of all the States. This review is due for completion before the Commission makes its final detailed assessment regarding Queensland’s application for a special grant with respect to 1980-81 .

The Commission’s recommendations in relation to the special grants arrangements have been adopted by the Parliament since the Commission’s inception and the Government considers that they should be accepted on this occasion. I commend the Bill to the Senate.

Debate (on motion by Senator Gietzelt) adjourned.

page 1236

INTERNATIONAL MONETARY AGREEMENTS (QUOTA INCREASE) BILL 1980

Bill received from the House of Representatives.

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

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

Second Reading

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– I move:

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

Leave granted.

The speech read as follows -

The purpose of this brief and simple Bill is to allow Australia to consent to an increase in its quota’ in the International Monetary Fund, and to make the consequent payment. A country’s quota in the IMF determines its subscription to the Fund, its rights to draw from the Fund, its voting power in the Fund, and its share in allocations of special drawing rights- SDRs - by the Fund. From time to time the Fund reviews the levels of quotas in the light of developments in particular economies, the world economy and the international monetary system. The seventh general review of quotas was approved by the Fund’s Board of Governors in December 1978 and provided for a 50 per cent increase in the quotas of all Fund members and additional increases for eleven rapidly growing member countries. This followed a period when Fund quota increases had lagged behind growth in world trade and international reserves and Australia voted in favour of the resolution which provided for the increase. The increase will come into effect when members accounting for 75 per cent of existing quotas have consented to the increase. As at 29 August 1980 members holding 50.67 per cent of total Fund quotas had consented to the increase, which is expected to become effective by early 1981. Once the increase does come into effect, members will have a limited period in which to consent to the increases in their quotas and to pay the additional amount to the Fund. It is thus appropriate for Parliament to consider the matter now.

The increase in Australia’s quota proposed under the review is from SDR790 million to SDR1 185 million, an increase of 50 per cent, and section 4 of the Bill approves consent to this increase. Section 5 allows part of the quota subscription to be paid in the form of a nonnegotiable, non-interest bearing security as provided in section 7 of the principal Act. As provided for in the Fund’s articles of agreement, the additional quota subscription will be paid 25 per cent in SDRs and the remaining 75 per cent in the form of a non-interest bearing, non-negotiable promissory note. The SDRs will be purchased from the Reserve Bank under the standing appropriation of section 5 (6) of the principal Act. Provision for this purchase has been made in the Budget Estimates, but it is a ‘below-the-line’ transaction and does not affect the Budget deficit. The issue of the promissory note has no effect on the Consolidated Revenue Fund until such time as the Fund’s use of Australian dollars exceeds its current holdings of Australian dollars.

The increase under the seventh general review of quotas will augment the financial resources available to the Fund to carry out its functions - basically, the provision of temporary assistance to countries facing balance of payments difficulties and promoting a stable international monetary system. From Australia’s point of view, it will increase our drawing rights and our entitlement to allocations of SDRs, as well as sustaining our voting power in the Fund. I commend the Bill to honourable senators.

Debate (on motion by Senator Giezelt) adjourned.

page 1237

CUSTOMS TARIFF VALIDATION BILL (No. 2) 1980

Bill received from the House of Representatives.

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

First Reading

Motion (by Senator Durack) proposed:

That the Bill be now read a first time.

Debate (on motion by Senator McLaren) adjourned.

page 1237

EXCISE TARIFF VALIDATION BILL 1980

Bill received from the House of Representatives.

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

First Reading

Motion (by Senator Durack) proposed:

That the Bill be now read a first time.

Debate (on motion by Senator McLaren) adjourned.

page 1237

HONEY EXPORT CHARGE AMENDMENT BILL 1980

Bill returned from the House of Representatives with a message intimating that it had made the amendment requested by the Senate to this Bill.

Third Reading

Bill (on motion by Senator Durack) read a third time.

page 1237

HONEY LEVY (No. 1) AMENDMENT BILL 1980

Bill returned from the House of Representatives with a message intimating that it had made the amendment requested by the Senate to this Bill.

Third Reading

Bill (on motion by Senator Durack) read a third time.

page 1237

HONEY LEVY (No. 2) AMENDMENT BILL 1980

Bill returned from the House of Representatives with a message intimating that it had made the amendment requested by the Senate to this Bill.

Third Reading

Bill (on motion by Senator Durack) read a third time.

page 1238

HONEY RESEARCH BILL 1980

Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to this Bill.

page 1238

HONEY INDUSTRY AMENDMENT BILL 1980

Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to this Bill.

page 1238

BROADCASTING AND TELEVISION AMENDMENT BILL 1980

Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to this Bill.

page 1238

APPROPRIATION BILL (No. 1) 1980-81

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– Last night during the Committee stage of Appropriation Bill (No. 1) 1980-81 the Minister for Social Security (Senator Dame Margaret Gulifoyle) gave an undertaking to Senator Grimes to have a table showing the breakdown of the Children’s Services Program - by major service types - incorporated in Hansard. As arranged with Senator Grimes, I now seek leave on behalf of Senator Dame Margaret Guilfoyle to have that table incorporated in Hansard.

Leave granted.

The table read as follows -

page 1238

ADJOURNMENT

Aboriginal Affairs - Ansett Airlines Pilot Motion (by Senator Durack) proposed:

That the Senate do now adjourn.

Senator BONNER:
Queensland

– I draw to the attention of the Senate tonight a matter which I am quite sure all members of this chamber would be well aware of. It has made the headlines throughout this nation and has been on the tip of many tongues. I refer to the matter of Noonkanbah in Western Australia. I have with me this evening a number of copies of Press statements that have been published throughout this nation in all leading papers of the Commonwealth. A few are of a critical nature.

There are editorials and a number of random quotes or public opinions in support of Noonkanbah.

Before I deal with that - I believe it is relevant to what I have to say as far as Noonkanbah and the Aboriginal people of Western Australia are concerned- I pay a tribute to the present Minister for Aboriginal Affairs, Senator Chaney. Last week a matter of public importance which was brought on in the Senate by the Opposition was rather critical of the Minister. I worked with Senator Chaney long before he became a Minister. When he was a back bencher in this Parliament he took a very deep and concerned interest in Aboriginal affairs. His interest in Aboriginal affairs goes further back than that. When he was a young man living in Perth, Western Australia, he became involved in the Aboriginal Legal Service. He got to know the Aboriginal people. He got to know their problems. He now has an empathy for, a sympathy with and an understanding of the Aboriginal people. In my opinion - I say this without any fear at all - he has done more in the short time that he has been Minister for Aboriginal Affairs than has any other person who has represented the Aboriginal people in this or any other chamber. I would like it to be placed on record that I have the greatest faith in and the greatest admiration for Senator Chaney in his handling of his portfolio and the people who come under the responsibility of it. So much for what the Opposition had to say about him last week.

I now turn to the subject that I want to raise this evening as far as Noonkanbah is concerned. I have a number of Press articles with me. I will not read them all out. It is sufficient for me to read the headings of the articles. I will take the ones which are critical of Aboriginal affairs firstly. One of the headlines is ‘Court’s panzers roll in the West’. Another headline is ‘Disband the ALS, urges Grayden’. Mr Grayden, as the West Australian Minister for Cultural Affairs, has the responsibility for Aboriginal affairs. The articles stated:

The minister for Cultural Affairs, Mr Grayden, last night called for the disbanding of the Aboriginal Legal Service.

The only reason he did that was that the Aboriginal Legal Service had taken up the cause of the people of Noonkanbah in their fight for justice in Western Australia. A letter to the West Australian from Douglas Blythe was published under the heading ‘ “Nonsense” on sacred sites’. In the course of my speech tonight I will answer some of the criticisms that these people aim at the aboriginal people in their seeking to having sacred sites protected, not only in West Australia, but also the rest of Australia. I believe there is a need for the protection of sacred sites throughout this entire nation where the Aborigines are still able to identify them. The Sydney Morning Herald featured an article under the heading ‘WA Minister answers critics’. This goes on in newspaper after newspaper. I would like to read into the Hansard record this evening some of the good things which have been said. The Age newspaper under the heading ‘Victory at Noonkanbah’ stated:

Sir Charles Court, the Premier of Western Australia, has won a famous victory at Noonkanbah, upholding the sovereignty of the Western Australian Government and the sacred rights of miners. Now let us count the costs. The first casualties have been the Yungngora community, and trust. At a further remove, the Australian nation will - or should - suffer from having Noonkanbah on its conscience.

The article stated further:

Professor Berndt said the site was actually within a ritual area and directly within the influence of Pea Hill. Whether Sir Charles and Amax like it or not, the drilling site is an area of importance to the Yungngora community.

The article stated further: . . both men and women, who are vitally concerned with the area now being drilled. And the links are not confined to geneological descent. There are wide-ranging mythological and ritual ties that bind people to each other and to Pea Hill, including those who live a considerable distance from the sacred site. Sacred sites and their influence areas do not exist simply as isolated dots on the Aboriginal landscape. They are linked by a network of dreaming tracks that involve people in ritual and practical obligations. It is incorrect to present Pea Hill and the influence area as Mr Mulamula’s private concern. It is also incorrect to present the ‘Walmadjeri as migratory intruders. That is much less than half the story. They did begin moving to all the pastoral stations as early as the 1 920’s. But a detailed map of traditional societies shows the Walmadjeri country stretching to the boundary of the country of other groupings at what is now Noonkanbah. They were adjacent groups - so close that there would have been considerable intermarriage and ritual and mythological ties.

Another article in the West Australian of Saturday, 9 August 1980, under the heading ‘A sorry day’ stated:

The convoy of trucks and police cars heading for Noonkanbah bears sorry testimony to insensitive authority. Despite the unquestioned legitimacy of the move, it is an unnecessarily tough response to what has been clearly established as a complex human problem.

Another editorial in the Adelaide Advertiser under the heading ‘Price of arrogance’ stated:

The preference of the WA Government for the steel fist in its dealings with the Aboriginal people is being portrayed for the nation and the world to see in the confrontation over oil drilling at Noonkanbah station. As the 32-vehicle convoy carrying exploration equipment snakes its way north from Perth to the Aboriginal-operated Noonkanbah pastoral lease, 100 kilometres south-west of Fitzroy Crossing, the risk of violence grows. So far the police escort has outnumbered demonstrators. But at the drilling site they will not and fuses by then no doubt will be very short.

An article in the Melbourne Herald under the heading ‘The law of the land’ stated:

Of all the things the white man took from the Aboriginal, dignity is probably the most precious.

Only now, after 200 years, is the Aboriginal beginning to feel himself something more than just a knock-about stockman or a roustabout station hand liable to go walkabout at any moment.

So the editorials go on. In The Age: ‘Reprieve for the Goanna’. I do not think the Australian Financial Review has been one of the newspapers that has always supported the Aboriginal people, but here we have the Australian Financial Review of Tuesday 26 August 1 980, stating:

The righteous road to Noonkanbah. Zealous righteousness was not one of the vices of the eminently sensible and humane Captain James Cook, but it is a legacy which his contact with this island-continent seems to have burned into the lives of its inhabitants.

From the very dawn of white settlement in Australia righteousness has been a weapon to be used by those with authority - whether supported by arms, votes or religious conviction - against the weak or the rebellious.

The brutality of authority to white convicts, the thundering sermons of the early clergy, the smug superiority of white newcomers to Aborigines and the uncomprehending character of efforts to ‘civilise’ the continent’s existing inhabitants all reflected an earlier obsession with righteousness rather than humanity.

It is a legacy which is alive and well today, from Aurukun to Noonkanbah - from Redfern to Darwin.

In the Age of Tuesday, 26 August 1980, under the heading ‘Now Noonkanbah moves to Geneva’ it tells of the small delegation that went to Geneva. And so we go on. I will not go through all the editorials. I have a number of quotes from people supporting the Aboriginal people - ‘Aborigines opinions’, ‘Noonkanbah row’- and the following comment by the Reverend L. Lloyd Semple, Executive Director, Western Australian division, United Nations Association of Australia:

My conscience will not allow me to remain silent on the Noonkanbah confrontation. It raises issues relating to the Charter of the United Nations and the U.N. Declaration on Human Rights which Australia has accepted as a member of the U.N. family.

It is deplorable that so many seem to be trying to make political gain out of the situation.

There is no doubt that the overwhelming opinion of Aborigines, irrespective of any outside pressure, is firmly that great injustices are being, and have been, inflicted on them.

The article goes on in support of the Aboriginal people. That is only a very small part of what the Reverend Lloyd Semple had to say. In the Westralian on Monday 25 August 1980, under the heading ‘Facts Lay in the Dust at Noonkanbah’, Paul Murray states:

Everyone knows that there is a lot of bulldust in the Kimberleys. lt covers the biggest potholes in the dirt roads and blows in orange clouds across the plains. But the Noonkanbah controversy has stirred another type of dust in the North.

It has obscured the nature of the pastoral enterprise which the station community has been trying to build there.

Here is a selection of the comments - stated with all the fervour that conviction can muster - that are regularly stated in the Kimberleys about Noonkanbah:

The Aborigines out there are eating all the cattle on the station’.

All the horses have run off and they won’t be able to muster’.

Everybody out there is on the dole’.

It was the best station in the Kimberleys when they took it over and now it is ruined’.

They have even picked up some of the less enlightened comments that originated in Perth, including one claiming that the station is a ‘holiday camp’ costing taxpayers $2 million a year.

However, the facts on Noonkanbah are not hard to uncover.

The article covers a whole range of criticisms that are not supported by that writer, I suppose one of the worst articles, when we look at criticisms of Aboriginal people in relation to their sacred sites, is the article that appeared in the Bulletin of 16 September 1980. David McNicoll, who is one of our so-called top journalists, is read quite widely throughout the nation. I suppose that many people would take as gospel what David McNicoll says. Let me read what he has had to say in relation to Aboriginal people and their sacred sites. After I have read it, I will have something further to say. He said:

I would like to nominate a date in the near future - say October 1 -as CDFSS Day.

CDFSS?’ you ask. Yes, it stands for Closing Day For Sacred Sites.

It will be cut-off day, the last day for our black brothers–

At least he calls us brothers. I suppose he says that with tongue in cheek too–

To discover sacred sites. Sacred sites brought to the attention of the authorities after that date will be disallowed.

The amount of distorted publicity given to this business of so-called sacred sites is getting ridiculous. Now we have the parsons who, having spent years trying to bring the poor Aborigine into the Christian religion, are spouting nonsense about the necessity to let the blacks worship the Great Goanna which lies deep under any promising oil or gold prospects.

Can we expect the parsons, as the logical next step, to give up their missions, and hand over to the local witch doctors and soothsayers?

The letter printed in The Sydney Morning Herald from W. L. Grayden, West Australian Minister for Cultural Affairs, was excellent and devastating to the plaintive do-gooders who have been condemning the West Australian Government without knowing the facts on Noonkanbah.

The letter pointed out that only 1 SO Aborigines lived in the area; they had agreed to the drilling; the drill was l.S kilometres from the “sacred site”; the drill camp was fenced in, and no liquor or firearms were allowed on the rig site. And, most importantly, agreement on the drilling had been reached before any work was undertaken.

Now we have Nugget Coombs sticking his little bib in and firing off a cable to B’Nai B’rith suggesting that they are wrong in giving an award to Malcolm Fraser. He seems to have overlooked the fact that, however it ultimately turns out, Fraser was one of the architects of the settlement in Rhodesia.

Bully for Mr Fraser if he was the architect of that! He certainly has not been the architect of a settlement of the dispute at Noonkanbah. To continue:

Unfortunately there are a lot of mischievous little people in and out of Australia who are going to attempt to categorise our country as oppressive to the Aborigines, when in fact the average Australian has great sympathy for the blacks, and recent governments have lavished largesse on them.

I will have more to say about that in a few moments. I refer now to an article headed ‘The meaning of Noonkanbah’ by Noel Hawken in Melbourne, it states:

Noonkanbah re-introduces us to a situation we prefer to ignore.

To make it as vivid as possible, for the purposes of illustration, I’ll put it this way:

The conflict between the white Western Australian Government and the Aboriginals of the north-west has a basic similarity to the conflict between the US Government and Iran.

How come? How can those Tehran mobs be linked with Aboriginals fighting for their lands and sites with such dignity?

The answer is that both sides, in both cases, represent opposed concepts of the world’s reality.

The Islamic and Aboriginal views of reality are religious. Ours, like America’s is secular.

Theirs is mystical; ours is materialist. That is the gulf. Successful crossings either way are only too rare.

In our 1 92 years of occupation, we have either ignored the Aboriginals, insisted that they cross to our side, or thrown up our hands in exasperation at their “impossibility”.

It has been even harder for them to cross to us, they being the defeated ones, held off by our policies, acts and racism. Millions of dollars in expenditure have done little in the end; we remain apart.

When the Americans try to deal with the Iranians they meet up with the fact that, for the devout Iranian, every aspect of the world, and every aspect of human and other organic life within it, is the business of Allah, and only Allah.

If the instruction of the Ayatollah Khomeiny as the voice of Allah - in line of succession from Mohammed - is to do something completely insane from the West’s point of view (such as bringing down the country in a suicidal blaze) the devout Iranian will do it.

With this “irrationality” (a purley religious reasoning) America has to learn to cope, however painfully.

Similarly with us and the Aboriginals. We are unable to come to terms with their religious analysis of the world, and what they have experienced of it over 30,000 to 50,000 years, non-aggressive as this analysis is.

Unspoilt, they are one with Nature, and every living thing. This one-ness they have expressed in words, music, art and knowledge that together form the greatest imaginative achievement of this continent.

From the Dreamtime they draw the reasons for all existence, including their individual own. Even when depraved by white civilisation they yearn for this.

Whatever deprives them of, or damages the one-ness damages their souls. And the Great Damage, of course, has been, and is, the white man.

I have quoted two non-Aboriginal people writing on the same subject. One was endeavouring to understand and spell out what the Aboriginal people are righting for at Noonkanbah. The other has a typical non-Aboriginal, racist attitude. He wrote an article denigrating the Aboriginal people. What are we talking about when we talk about sacred sites? We hear much criticism. When Aboriginal people declare now that something is sacred and of deep spiritual significance the first thing said is: ‘Oh, there are minerals there. Now the Aborigines have found a sacred site’. According to the learned anthropologist, not Aboriginal anthropologists but white anthropoligists, the Aboriginal people have been in occupation of this nation, so far as they can ascertain, for 50,000 years. The sacred sites have been there for more than 50,000 years. They have been there longer than the Aboriginal people. The whole source of our existence comes from those sacred sites. That is what they are to us. They were there. We came from them. We are part of them. They are us. That is what sacred sites are. They are of deep spiritual significance, as churches and cathedrals are to the non-Aboriginal Christian people.

When we try to explain to non-Aboriginal people the deep spiritual beliefs we have that we are part of the land and are related to the birds, trees, animals, rocks, rivers, streams and waterholes, the white men throw up their hands in despair and say: ‘How can it be? It is witchcraft. It is only some fantasy in the minds of the Aboriginal people. You cannot sell that to us’. Mr President, let me put it to you that when the Christian goes into his church and attends communion on Sunday morning, or whenever it might be, the priest or minister who administers the communion tells him that he is repeating the Lord’s Last Supper. He said to his disciples when He passed the wine: ‘Drink this, for this is my blood’. When He broke the bread and handed it to them He said: ‘Eat this, this is my flesh. Do this as oft as you may in remembrance of me’. The white man believes that; I believe it. I do not scoff at it. The priest, the minister, has the power given by God to transform wine into blood and bread into flesh. He does it every Sunday. But when Aborigines talk about their spiritual beliefs it is only foolishness; it cannot be. People do not believe it. We are expected to believe the white man’s belief.

White people going into our sacred sites, Mr President, is like my going into your cathedral, marching down the aisle up to the altar, kicking it to pieces, getting the communion wine and spilling it all over the floor, getting the wafers and throwing them up in the air and stamping on them. That is what white people are doing when they are desecrating Aboriginal sacred sites. When they are drilling, digging or walking on an Aboriginal sacred site, that is what white people are doing to the Aboriginal people, except perhaps a little more so.

I do not want to say that people do not really and truly believe their faith. Of course they do. But I think it goes much deeper with Aboriginal people. If I destroy a cathedral, I may be hanged or tarred and feathered. But when it is being done to the Aboriginal places where the Aboriginal tribal traditional people are it is killing them. They will die within. They may as well be shot; it would be much kinder. It is because they die within. People throw up their hands in despair when Aboriginal people who have come through this and have seen this happen to them do not conform with the standards that people want them to. The Aboriginal people go and hang around the pubs, and drink. They become alcoholics; they become drunken no-hopers, as they are called. It is because that is part of their dying. What have they got to live for when that which is so important to them is destroyed?

Let me come back to the criticism that only now are sacred sites being discovered - according to the critics, the mining companies and those who would denigrate the Aboriginal people. The sacred sites, as I have said before, are there. They have been there for 50,000 years. Why have they not been identified before? They have not been identified before because those that were identified were vandalised and desecrated. So the tribal elders, the traditional owners, the traditional people, have not now for many years been prepared to identify those sites. They do not want to go out and identify them and show people where they are because they know what will happen to them. In many cases, according to our customs and beliefs, we are not allowed to do that anyway. But, when minerals are discovered the Aboriginal people know that people will go to their sacred sites in their exploration for minerals and in desperation they finally have to say: ‘Look, it is a sacred site. That is a sacred site. Please don’t touch it; don’t destroy it’. That is why when minerals are discovered in some areas all of a sudden the Aboriginal traditional owners are identifying their secret sacred sites - their sites of deep spiritual significance. Previously there was no need to identify them. More importantly, once nonAboriginal people knew of sacred sites they would go there and want to take photographs. They would want to cut pieces off the sacred sites. They would want to dig parts of them up and do all sorts of things. That is the reason why the Aboriginal people have not identified them. So it is so much nonsense to suggest that only now, when minerals are being discovered, are Aborigines coming up and pinpointing the sites and saying that they are sacred sites. I hope that sanity will eventually prevail at Noonkanbah. I hope that the Minister for Aboriginal Affairs, Senator Chaney, with his way of handling these kinds of situations - he is prepared to handle them by way of consultation rather than confrontation - will eventually win for the people of Noonkanbah.

The Noonkanbah situation is now being watched by people throughout the world. It has now made world news. Australia is in the eyes of the world in regard to this matter. I hope that the

Western Australian Government, the Premier of Western Australia, and the Minister for Cultural Affairs, Mr Grayden, will see that what they are doing is wrong. I hope that they can come to a situation in which they can really genuinely sit down with the traditional people and talk, understand and work out a solution which can be beneficial to all concerned. That is my plea tonight, through the Parliament, to the Government of Western Australia. I have said harsh things before and I will probably say them again, but I hope that common sense will prevail and that we will see a solution that will be beneficial, first and foremost, to the traditional owners of that area, to the traditional people, to the mining companies, and to all people concerned.

Senator KEEFFE:
Queensland

– I propose to take up the time of the Senate for a very brief period. I regret that I have to do it again at this hour of the morning, but it is obvious that the Parliament, in a panic-stricken way, will be closed down, that legislation will be guillotined through probably tomorrow or Friday, and that many of the things that we ought to talk about will not be talked about in the mad panic to go to the election. I wish to make reference to a long serving pilot of Ansett Airlines of Australia Ltd who has been sacked and who is now in a position in which the company is taking advantage of him and is obviously hoping that it does not have to pay the full superannuation entitlement.

I preface my statement with this question: Is it true that Ansett Airlines of Australia is refusing to pay full superannuation benefits to all retired pilots? I hope that the Government will take a good, close look at this problem because it could apply to many other people. With your assistance, Mr President, and with the co-operation of the Senate, a number of documents will be incorporated in Hansard in order to set out fairly clearly the problems of this ex-pilot of the company. At this point I seek incorporation of a document in regard to the matter.

Leave granted.

The document read as follows - 31 Craigholm Street, Sylvania Heights. N.S.W. 2224. 28th July 1980

Sir Peter Abeles, Joint Managing Director, Ansett Airlines of Australia, SYDNEY. N.S.W.

Dear Sir Peter,

I first joined Ansett Airlines in 1941 and after two years service joined the Air Force. I rejoined the company as a pilot during I95S and some eight years later was promoted to the rank of Captain.

In late 1974 I injured my back whilst operating a company DC9 aircraft and was allowed recuperation on full pay by the company for the following twelve months.

On 21st September, 1979 I injured my back whilst undertaking a six monthly compulsory Flying Licence renewal exercise in the T.A.A. DC9 Simulator al Essendon, Victoria. I endeavoured to recuperate in Melbourne but later flew to Sydney on a stretcher so that I could continue my recuperation at my place of domicile.

In due course the insurers commenced Workers’ Compensation payment and the company ‘made up’ the difference for 26 weeks. After further discussion the company adopted what I was informed was its policy and continued ‘make up’ for a total of 39 weeks which expired on the 22nd June.

I have been advised by the company that I will now receive a weekly Workers’ Compensation payment of $129.30 only.

You will appreciate that I am concerned that I do not suffer any prejudice under the company’s superannuation scheme.

I have advised the Company that I have failed my D.O.T. medical examination, however the Company is seeking written confirmation of this from the D.O.T. and other supportive medical advice. 1 seek your assistance in achieving the maximum benefits. I also seek an appointment with you at your earliest convenience.

Yours faithfully, Capt. 1. A. Cameron.

Senator KEEFFE:

– I wish to make a brief preface to the next document which deals with the virtual advertising of a vacant position for a pilot in the company, as far back as early May 1980. In fact, the gentleman concerned did not finish with the company until the end of August this year, so there was a case of sweet anticipation in filling that vacancy. It appears that this company subscribes to a private superannuation fund run by an insurance company. There may be a need to have a fairly intensive examination of what happens in private insurance companies because there are obviously unsatisfactory aspects concerning this case. Again, this matter might apply across the board, not only in regard to Ansett Airlines of Australia but also in regard to other private organisations which rest their superannuation funds with private insurance companies. I seek the incorporation in Hansard of two paragraphs, plus the heading and ending of that document.

Leave granted.

The document read as follows -

Ref: FOA: 30/P1 7th May, 1980.

Captain I. A. Cameron, 3 1 Craigholm Street, Sylvania, N.S.W. 2224.

Dear Captain Cameron,

Re: Workers Compensation Payments

Further to my memo dated 10th April and your discussions with the writer on 23rd April last, I am advised that the Company regards your current injury as a re-occurrence of a previous injury which involved you in an extended absence from flying duties in 1975.

As advised during our discussion, your Melbourne equipment assignment has been advertised in accordance with S39 B 3h and it will be necessary for you to confer with the A.F.A.P. on the rules which will apply should you again be successful in meeting the required medical standards. If and when this situation does arise, would you forward to D.O.T. Melbourne a medical certificate which meets the requirements of ANR 58, and favour us with a copy.

Yours faithfully, ANSETT AIRLINES OF AUSTRALIA

D. DANIELL MANAGER FLIGHT ADMINISTRATION.

RDD: jb (6/5)

Senator KEEFFE:

– The next document deals with a letter which has been signed by Mr R. D. Daniell, the manager of flight administration, in which he makes reference to this pilot. He stated:

In my view, you are reaching a ‘frustration of contract ‘situation. If I am correct, it means the Company’s responsibility re continuation of employment is minimal.

That is the general tenor of that document. I seek to have the heading, the first two paragraphs and the ending of that document incorporated in Hansard.

Leave granted.

The document read as follows -

Ref: FOA: 30/P 29th May, 1980.

Captain I. A. Cameron, 31 Craigholm Street, Sylvania Heights, N.S.W. 2224.

Dear Sir,

Your communication dated 23rd May re pay has been received. The letter is specific on matters of pay but it gives no indication as to when you intend presenting yourself for a medical examination or any other information which might lead us to anticipate when you might resume flying duties.

In my view, you are reaching a “frustration of contract” situation. If I am correct, it means the Company’s responsibility re continuation of employment is minimal. I believe you have an obligation to take some action or to provide some advice which would lead us to believe you may one day return to the service of the Company. Would you give this matter consideration and provide this office with as much detail as possible by letter no later than 22nd June, 1980.

Yours faithfully, ANSETT AIRLINES OF AUSTRALIA

D. DANIELL MANAGER FLIGHT ADMINISTRATION.

RDD: jb (49/5)

Senator KEEFFE:

– The next three or four letters include a letter from the Director of Aviation Medicine advising the pilot, Captain Ian Cameron, that he failed to meet the required medical standards. The second letter is from Mr

  1. Catterall, the Personnel Manager of Ansett Airlines of Australia. It encloses a letter from Captain Cameron. They are procedural documents. There are four letters in this category. I seek leave to have them incorporated in Hansard.

Leave granted.

The documents read as follows -

COMMONWEALTH OF AUSTRALIA

Department of Transport 188 Queen Street

Melbourne

Please address reply to

Director of Aviation Medicine 5 August 1980

Dear Mr Cameron,

After careful consideration of your medical reports, I am sorry to advise you that you fail to meet the required medical standards.

If you have made an application, you will shortly receive a more detailed letter from the regional office.

Yours sincerely, for Director of Aviation Medicine

From: Dr.D. Lewis

Mr. I. A. Cameron, 31 Craigholm St.,

Sylvania Heights, N.S.W. 2224 31 Craigholm Street,

Sylvania Heights, N.S.W. 2224. 18th August, 1980.

Mr. V. Catterall,

Personnel Manager,

Ansett Airlines of Australia, 489 Swanston Street,

MELBOURNE, VIC. 3000.

Dear Mr Catterall,

Attached hereto is a copy of a letter dated5th August, 1980, from Dr. Lewis of the Department of Transport advising that I ‘fail to meet the requried medical standards’.

I have already forwarded the Trustees a copy of a letter from Dr. Lewis and I am not making ‘an application’.

Yours sincerely,

Ian Cameron,

ANSETT AIRLINES OF AUSTRALIA

Registered Office 489 Swanston Street, Melbourne, Victoria, 3000, Australia 15 August 1980

Captain I. A. Cameron 31 Craigholm Street

Sylvania Heights 2224

Dear Captain Cameron,

Receipt is acknowledged of your cheque for $806.82 covering contributions to the Pilots Superannuation Scheme for the month of August 1980.

When the Department of Transport makes a decision on your licence renewal- I understand this is communicated direct to you the licence holder, the trustees of the fund will require a copy of this document before calculating your benefits under the scheme. 1 would appreciate your early advice.

Yours faithfully

CATTERALL

Personnel Manager 31 Craigholm Street,

Sylvania Heights,

N.S.W. 2224

11th August, 1980

The Trustees,

Ansett Transport Industries (Operations) Pty Ltd.,

Pilots’ Superannuation Scheme, 489 Swanston Street,

MELBOURNE. Vic. 3000

Attention: Mr F. Pascoe, OBE

Dear Sir. re: Superannuation Scheme

Thank you for your advice that my superannuation entitlements for July 1980 have been maintained. (Mr Catterall’s letter of 1 August, 1980, which I received today). I am desirous of maintaining my Superannuation entitlements for the month of August and in response to your proposal I am enclosing a cheque for $806.82 being the Company’s contribution.

Yours faithfully,

Capt. I. A. Cameron

Senator KEEFFE:

– I thank the Senate. I feel that this gentleman whom I have known for quite a long time has been seriously disadvantaged by the actions of the company. A leading neurosurgeon - for ethical reasons I will not mention his name- has given an opinion in relation to this matter. The document is now in the possession of Ansett Airlines of Australia. I understand that it indicates that the pilot concerned is virtually permanently incapacitated not only as a pilot but also virtually for every other position. It appears to me that he is getting a very raw deal.

The next letter to which I refer is from the Personnel Officer of Ansett Airlines of Australia and is addressed to Captain Cameron. I understand that the pilot concerned was advised that he would be paid at the total disablement rate in accordance with medical reports which had been supplied to the company. The company apparently is now looking for a cheaper way out. In a paragraph of another document, Mr Catterall suggested to Captain Cameron that he ought to resign. This would save the company a lot of money. I was very critical of Sir Reginald Ansett and the way he used to run his company. I thought that with the change of ownership, there would be some improvements. But it appears that Sir Peter Abeles and Mr Rupert Murdoch, together with the family holding of the Ansett company, have not only made the company harder to work for but also have made it much harder for many of their employees. This pilot, of course, is a typical example. I seek leave to incorporate in Hansard a letter from Mr Catterall to Captain Cameron.

Leave granted. 25 August 1980

Captain I. Cameron 31 Craigholm Street Sylvania Heights 2224

Dear Captain Cameron,

Following your discussions with the General Staff Manager, Mr R. J. Reay, it is advised that arrangements are now being made to finalise your employment with this Company on medical grounds with effect from Sunday 31 August 1980.

By mutual consent, the period of notice required by the contract has been waived.

All papers have been forwarded to the Superannuation Department requesting them to finalise your superannuation entitlement based upon termination for medical reasons, effective 31 August 1980.

Your concessional travel privileges on retirement will be based on 25 years service.

The Flight Department and Superannuation Department have been requested to forward all monies due to you as soon as possible.

Yours faithfully V. CATTERALL Personnel Manager

Senator KEEFFE:

– This pilot was asked to resign. He is a very experienced pilot. He started off with Ansett in the middle of World War II. He served in the Royal Australian Air Force and then went back to Ansett as a full time civilian pilot. He is a person of great experience. But it does appear that there are a number of unsatisfactory factors involved in this case. On 21 August 1980 he received a telephone call from Mr Bob Reay advising that he would be paid disablement benefits and requesting that he go to Melbourne during the following week to discuss the matter. The story goes on. Mr Reay agreed that he met all the disablement requirements of the superannuation scheme. This comes into three categories. The disablement scheme, of course, carries the highest compensation payment. It is regrettable that the company did not see fit to pursue that and to give him his entitlement.

On 27 August 1980, Mr Jack Faye told the pilot concerned that his cheque could be paid into a bank or picked up by him on Friday afternoon, 29 August 1 980. On that day he went to see Mr Jack Faye whose secretary said that he was at a meeting and that the cheque was not available. He then saw Mr Reay who said that the cheque for long service leave and annual leave had been sent to Sydney. He also said that Mr John Hope was now handling the superannuation matter. It does appear that this man who has serious disabilities has been shoved from pillar to post while this company, which apparently can still show good profits, is able to try to crib on people to remove the entitlements which they have earned over many years.

I pose these questions: Is it true that the President of the Air Pilots Guild of Australia, Captain Ian Cameron, who has been an Ansett pilot for 25 years and who recently retired as a result of an injury suffered while on duty, has been refused full benefits? In my view he has been refused full benefits. I believe it is a situation in which the Government ought to intervene and make some active investigation. I also believe that part of this attempt to take away the just entitlements of Captain Cameron have been caused by this man’s consistent refusals to fly aircraft that he considers dangerous. He has been suspended in the past for refusing to fly, I think, from memory, a DC9 aircraft which he felt was not airworthy. He is a man who is totally dedicated to air safety and one of the best pilots this country has produced. Obviously, of course, some of this matter could be a retaliation for the fact that he believes the planes should land on the ground in one piece and that passengers should get there alive.

Senator Rae:

– Has there ever been a DC9 aircraft accident in Australia?

Senator KEEFFE:

– Of course there has not been a DC9 accident.

Senator Rae:

– How long have they been flying here?

Senator KEEFFE:

– I heard Senator Rae say this once about Viscounts when there was an accident involving a Viscount. Planes should not be kept in the air for too long. I complained in this place many years ago, and Senator Rae would know this—

Senator Rae:

– You’re a liar.

Senator KEEFFE:

– That the Viscounts had reached the stage–

Senator Rae:

– You are a liar–

Senator KEEFFE:

– Where they should not be still flying.

Senator Rae:

– You are a liar.

Senator KEEFFE:

– I seek a withdrawal. Senator Rae interjected one day when I raised the matter.

The PRESIDENT:

– Order! Senator Rae, withdraw that word ‘liar’.

Senator Rae:

– I will withdraw the word ‘liar’ in the same sense that the Opposition has withdrawn the word ‘liar’ over the past few weeks.

Senator KEEFFE:

– That is a condition. I am not happy about it.

The PRESIDENT:

– Just withdraw, Senator Rae.

Senator KEEFFE:

– Obviously the honourable senator is rather sleepy. He has been working for many nights in a row. He is quite confused and if he wants to persist in using that sort of epithet–

Senator Rae:

– I know you are a liar.

Senator KEEFFE:

– 1 am quite happy for him to insist on using it.

The PRESIDENT:

– Withdraw, Senator Rae.

Senator Rae:

– I withdraw.

The PRESIDENT:

- Senator Rae has withdrawn. I call Senator Keeffe.

Senator KEEFFE:

– Many people complained about the safety of Viscounts, but it was Senator Rae and people such as Senator Rae who were hanging on to private enterprise who wanted to see the profits coming out of the operation of those planes. It was not until three of them crashed killing every passenger and crew member that Senator Rae and his friends decided that they might not be safe. DC9s are rapidly approaching the stage where they are no longer safe to fly. They are getting too old and they are starting to get dangerous. It is people involved in private enterprise - and I hope Senator Rae is not in the first one that crashes - who want to keep them in the air because they want to make profits from them. So let us be quite factual about this matter.

Senator Rae:

– It is Trans-Australia Airlines which wants to keep the DC9.

Senator KEEFFE:

– Senator Rae is in no state tonight to debate the situation. I suggest that he keep quiet and read Hansard tomorrow. He can write me a letter during the recess, particularly as he will no longer be a Government member. There are problems concerning the superannuation fund for pilots in addition to the problems we have talked about in relation to aeroplane safety. The pilot I mentioned is one of a number of pilots in Australia who are more concerned about air safety than their own jobs. The private superannuation funds conducted in this country very often leave much to be desired. I hope this man’s stand will not be manipulated against him on this occasion. I now ask the final question: What action will the Government take to ensure not only that this pilot but also that other people involved in this type of situation under these circumstances are not discriminated against, that they are given a fair go and that they receive the justice to which they are rightly entitled?

Senator RAE:
Tasmania

– I wish to add a little to what Senator Keeffe has said. I accept that there is a probability that a degree of what Senator Keeffe has said, as quite often happens, is accurate.

Senator Keeffe:

– Hear, hear! Thank you for the credit.

Senator RAE:

– Thank you. As opposed to that, usually a degree of exaggeration tends to take place. I just wish to refute any suggestion that at any time in the history of this Parliament, this Senate or this country I was responsible for saying that the Viscount - I have flown one - was an aircraft which should have been kept on at a time when there were questions as to its airworthiness. I have also flown a large number of other aircraft. Senator Keeffe’s throw-away remarks tonight were typical of what can happen in the inter-party business when we get carried away with mutual insult. I interjected when the honourable senator started to say that honourable senators on this side of the chamber all insisted on the retention of the Viscount aircraft and that this led to the deaths of Australians. I remember Senator Keeffe saying many years ago that those members of this chamber who sat on this side of the House were all murderers.

Senator Keeffe:

– You were in Vietnam.

Senator RAE:

– The honourable senator has just repeated it. I wish to do no more than to say that Senator Keeffe, as all honourable senators know, tends to get a little carried away at times in the spirit almost of thanksgiving towards the end of the session when we can go off and have it all out on the hustings. I simply say to Senator Keeffe that I refute what he said.

Senator KEEFFE (Queensland) - I seek leave to make a personal explanation.

Leave granted.

Senator KEEFFE:

– I appreciate what Senator Rae has said. I was probably inspired in my reply when he asked, ‘What DC9 has crashed?’ We do not have to wait until these aircraft crash. We want to stop this sort of thing. This country has a very good record in airline safety. I appreciate the fact that I probably provoked the honourable senator a little. I am not given to emotion but I hope that in the spirit in which this chamber is closing down- no doubt in a rush of guillotines tomorrow- if Senator Rae is back in this chamber at any time in the future I still will have a drink with him.

Senator DURACK:
AttorneyGeneralWestern Australia · LP

– I will bring the matter raised by Senator Keeffe to the attention of the Minister for Transport.

Question resolved in the affirmative.

Senate adjourned at 1.17 a.m. (Thursday) PAPERS

The following papers were presented, pursuant to statute:

Australian Bureau of Statistics Act - Proposals of 1980 -

No. 8 - Supplementary survey of manufacturing industry, 1979-80.

No. 9 - Supplementary survey of the mining industry, 1978-79.

No. 10 - New topics to be included in the population survey, October 1980.

Seat of Government (Administration) Act- Variation of the Plan of Layout of the City of Canberra and its environs (Seventy-second Series), dated 16 September 1980.

page 1248

ANSWERS TO QUESTIONS

The following answers to questions were circulated:

Soldiers’ Settlers Scheme: Kangaroo Island (Question No. 2675)

Senator Cavanagh:

asked the Minister representing the Minister for Primary Industry, upon notice, on 1 5 April 1 980:

  1. What is the cost to the Australian Government of the soldiers’ settlers scheme on Kangaroo Island.
  2. What is the total debt owed by the settlers to the Australian Government.
Senator Dame Margaret Guilfoyle:
LP

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

  1. 59,638,606.
  2. $1,073,515.

Administration of Orana Park and Yallambee Reserves in Mount Isa (Question No. 2969)

Senator Keeffe:

asked the Minister for Aboriginal Affairs, upon notice, on 23 May 1980:

  1. 1 ) Is the Minister for Aboriginal Affairs aware of an agreement between the Queensland Government and the Mount Isa City Council concerning the administration of the Orana Park and Yallambee reserves in Mount Isa, as reported in the North West Star dated 3 April 1980.
  2. Was the Minister for Aboriginal Affairs asked to participate in discussions between the Mount Isa Council and the Queensland Government on this matter; if so, did the Minister participate in such discussions; and if not, why not.
  3. Has the Minister for Aboriginal Affairs received petitions from the residents of these two areas seeking Commonwealth management.
  4. What action, if any, will the Minister take to ensure that the needs and wishes of the Aboriginal people will be considered and consulted in these cases.
Senator Chaney:
LP

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

  1. Yes.
  2. The Town Clerk of the Mount Isa City Council suggested to me on 3 1 March that 1 might attend a meeting on 2 April between the Council and Mr Porter. I informed the Council on 1 April that I felt that the appropriate course of action was for the local government authority first to meet with the State Government to try and resolve the situation.
  3. I have received two letters dated 7 and 24 March 1980 from residents of Orana Park and Yallambee, requesting my intervention to obtain Commonwealth control of the areas.
  4. I intend to continue providing every possible assistance to those living at Orana Park and Yallambee. My Department will be examining, in consultation with the communities and State authorities, ways in which the Commonwealth might help further. The Queensland Minister for Aboriginal and Island Affairs has told me that he has taken steps to ensure that essential services to the reserves will not be interrupted and that any change to social welfare programs and activities affecting these areas will only be implemented in consultation with Aboriginals.

Australian National Line Vessels: Major Repairs (Question No. 2986)

Senator Mulvihill:

asked the Minister representing the Minister for Transport, upon notice, on 19 August 1980:

  1. Are major ship repairs on Australian National Line vessels currently effected at South Korean shipyards.
  2. Were arrangements made for a $2.3 million refit to be effected on the cargo vessel Lysaght Endeavour at the Hyundai Dockyards in South Korea.
  3. Was the prime purpose of the refit to stretch the length of the vessel, but following refit it was determined to be 9 inches too short.
  4. Were important steel strengtheners in the new section of the hull warped horizontally and vertically by the dockyard efforts to rejoin the sections of the ship.
  5. Was the ballast system, following refit, only able to be operated by manual turning of valves in the bilges.
  6. Were automatic soundings which reveal the amount of water or fuel in the ships tanks also inoperative after the refit.
  7. Was a crane valued at $40,000 positioned wrongly on the vessel and not able to be operated.
  8. Was the badly eroded rudder of the vessel recommended for replacement by Lloyds of London, merely given minor repairs, and was corroded paint work not sandblasted but simply painted over.
  9. Was a ruptured dividing wall between the fresh water and the ballast not repaired according to specifications, causing fresh water to be tainted with dirty oil-filmed water from the ballast.
  10. What subsequent repairs had to be effected in Australian waters, and where were they effected.
  11. Was the account for the Hyundai dockyards refit paid in full or were any deductions made for inferior workmanship.
  12. What was the total sum paid to the shipyard in question.
  13. Does Australian National Line still intend using this foreign shipyard for Australian National Line fleet refits.
Senator Chaney:
LP

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

  1. 1 ) The Hyundai Mipo Dockyard, Ulsan, South Korea, has carried out work on ANL vessels trading in the immediate area.
  2. Yes.
  3. Yes. The prime purpose of the refit was to lengthen the vessel. Hyundai was contracted to incorporate a 28.7 metre section in the vessel. This was done.
  4. The shipyard had a minor alignment problem at the after starboard join of the midbody over a small area. This was corrected to the satisfaction of the Lloyds of London surveyor and ANL’s repair superintendent during the joining procedure. (5), (6) and (10) The ballast system indicator panel and pneumercator system were not Tully operational at departure of the vessel from Korea. This being a minor adjustment, a commercial decision was taken to sail the vessel on schedule. It in no way affected the safety of the ship as the ballast valves could be operated manually and alternative means existed for sounding the tank. These were corrected after arrival in Port Kembla and have been accepted as a guarantee claim by Hyundai.
  5. No. It was correctly fitted in accordance with the contract.
  6. Lloyds of London did not recommend replacement of the rudder. The rudder had some cavitation erosion which was repaired by welding. This repair was supervised and passed by Lloyds surveyor at the refit. The ship was extensively grit-blasted and painted including all underwater surfaces. Not all areas of the hull above the waterline and superstructure were grit-blasted but conventional surface preparation and painting was carried out.
  7. No. There has been no leakage between freshwater and ballast tanks since refit.
  8. The account was paid in full.
  9. 1 2) The total amount paid was $2.46 million.
  10. Yes. The yard is fully capable of carrying out this type of work.

National Training Council Journal: ‘Training Talkback’ (Question No. 2991)

Senator Colston:

asked the Minister representing the Minister for Employment and Youth Affairs, upon notice, on 20 August 1980:

  1. What is the cost of producing and distributing the National Training Council’s journal Training Talkback.
  2. How many copies are printed.
  3. To whom is the journal distributed.
Senator Durack:
LP

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

  1. The cost of producing and distributing the magazine which is intended to be a quarterly publication, is usually approximately $7,000.00. The cost of the last issue (July 1980) was as follows:
  1. 11,000.
  2. The journal is distributed to the following: Members of the National Training Council, National and State Industry Training Committees, Educational Institutions (Tertiary and Secondary), Employer and Employee Associations, State and Federal Members of Parliament, Professinal Associations, General and trade media, Training and Managerial personnel within companies.

Veterans’ Recreation and Transport Allowance (Question No. 3000)

Senator Teague:
SOUTH AUSTRALIA

asked the Minister representing the Minister for Veterans’ Affairs, upon notice, on 19 August 1980:

  1. 1 ) What are the criteria for eligibility for the veterans’ recreation and transport allowance.
  2. How many veterans are in receipt of the allowance.
  3. How many veterans resident in South Australia are in receipt of the allowance.
  4. What is the amount of the allowance.
  5. What was the total amount expended on this allowance in the most recent financial year for which figures are available, and what portion of this amount was paid to veterans resident in South Australia.
Senator Dame Margaret Guilfoyle:
LP

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

  1. Payment of Recreation Transport Allowance is provided for under regulation 104a of the Repatriation Regulations which provides as follows: “104a. ( 1 ) For the purpose of providing recreation for members within the classes of members specified in this regulation, a Deputy Commissioner may, subject to the directions of the Commission, pay allowances in accordance with this regulation in respect of the cost of transport of those members for recreation. “(2) An allowance at a rate of $40 in any one month shall be payable in the case of a member who, due to war service -

    1. has lost both legs above the knees;
    2. is totally and permanently incapacitated, his powers of locomotion being negligible and not capable of operation for more than short distances with the aid of crutches or walking sticks; or
    3. is handicapped with regard to locomotion to a degree that, in the opinion of the Commission, renders the effect of his incapacity similar to that of the classes of members specified in paragraphs (a) and (b) of this sub-regulation. “(3) An allowance at a rate of $20 in any one month is payable in the case of a member who, due to war service -
    4. has lost both arms at or above the wrist;
    5. has lost both legs below the knee;
    6. has lost one leg above the knee and the other leg below the knee;
    7. has lost one leg above or below the knee and one arm below the elbow; (da) has been blinded; or
    8. is incapacitated to an extent that, in the opinion of the Commission, is at least similar in effect or in severity to an incapacity specified in one of the preceding paragraphs of this sub-regulation. “(4) For the purpose of this regulation -
    9. a leg which has been rendered permanently and wholly useless above or below the knee shall be deemed to have been lost above or below the knee, as the case may be;
    10. an arm which has been rendered permanently and wholly useless above the wrist or below the elbow shall be deemed to have been lost above the wrist or below the elbow, as the case may be; and
    11. a member shall be deemed to have been blinded if his eyesight is, in the opinion of the Commission, so defective that he has no useful sight.”
  2. At 30 June 1980, there were 1 , 688 recipients of this allowance at the higher rate and 796 recipients at the lower rate in Australia.
  3. At 30 June 1980, there were 1 1 9 recipients at the higher rate and 42 recipients at the lower rate in South Australia.
  4. The present rates are - higher rate $40 per month; lower rate $20 per month.

From 1 November 1 980, the rates will be- higher rate $44 per month; lower rate $22 per month.

  1. The total amount expended on this allowance for the financial year 1979-80 was $828,013 and, of this amount, $49,6 1 0 was expended on recipients in South Australia.

New and Permanent Parliament House (Question No. 3005)

Senator Chipp:

asked the Minister representing the Minister for the Capital Territory, upon notice, on 19 August 1980:

Can the Minister give an assurance that, in the construction of the new parliament house, Australian consultants in construction engineering, as well as architects and draftsmen, will be used as much as possible.

Senator Durack:
LP

– The Minister for the Capital Territory has provided the following answer to the honourable member’s question:

I am informed by the Parliament House Construction Authority as follows:

The competition conditions required that the ‘competition winner establishes an office in Canberra and agrees to undertake all design and documentation thereat’.

For the purposes of the parliament house project, a new firm to be known as Mitchell/Giurgola & Thorp will be established and will operate from offices in Canberra. While this firm will be staffed by certain key people from the parent firm in the USA, it is anticipated that by far the majority of professional, technical and administrative staff will be recruited from within Australia.

Discussions are currently taking place with the architect regarding the nomination of other specialist consultants. It is expected that the work of the consultants will be carried out by firms currently established in Australia or by overseas firms with the majority of staff recruited in Australia.

The Construction Authority has engaged construction consultants covering construction management, cost planning and program planning. These are all Australian based firms, staffed by people currently resident in Australia.

Imported Citrus Juice Concentrate (Question No. 3022)

Senator Walsh:

asked the Minister representing the Minister for Business and Consumer Affairs, upon notice, on 20 August 1980:

What testing procedures are used to determine ‘single strength’ equivalent of imported citrus juice concentrate.

Senator Durack:
LP

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

Where it is necessary to sample shipments of imported citrus juice concentrates, the samples are forwarded to the Australian Government Analytical Laboratories for analysis.

I am advised that the method of analysis used by the Laboratories is that prescribed in the ‘Recommended International Standard for Orange, Grapefruit and Lemon Juices Preserved Exclusively by Physical Means’ (CAC/RS 45/47-1971) and published by the Joint FAO/WHO Codex Alimentarius Commission. The prescribed refractometric method is Method 8B, 1968, ‘Estimation of Soluble Solids (Indirect Determination)’, published by the International Federation of Fruit Juice Producers, and the results are expressed as the percentage of mass by mass of sucrose.

Mr John Sinclair (Question No. 3070)

Senator Colston:

asked the Attorney-General, upon notice, on 20 August 1980:

Did the Government receive an application for financial assistance from Mr John Sinclair for his defence against a defamation suit brought by Murphyores Holdings Limited; if so, (a) when was the application received; and (b) when was a decision made on the application and was Mr Sinclair advised of that decision.

Senator Durack:
LP

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

Yes.

An application was received on 27 March 1979. There was subsequent communication between my Department and Mr Sinclair and his solicitors in relation to the matter.

A decision was made on 7 July 1980 and Mr Sinclair was advised of the decision by letter dated 1 5 July 1 980.

Subsidy on Domestic Liquid Petroleum Gas (Question No. 3072)

Senator Colston:

asked the Minister representing the Minister for Business and Consumer Affairs, upon notice, on 20 August 1980:

  1. Has the Department distributed the necessary registration forms to retail LPG suppliers for the $80 a tonne subsidy on domestic liquid petroleum gas; if so have any subsidy payments been made to suppliers, and what are the details.
  2. Has the subsidy resulted in a reduction of the retail price of LPG.
  3. Is the subsidy to be paid retrospectively from 28 March, this year; if so, how will this help consumers who have purchased LPG since 28 March at the higher non-subsidised rate.
  4. Is it a requirement of registration that an undertaking be given to the Government that the full benefit of the subsidy will be passed on to consumers; if so, how does the Government intend to ensure that the undertaking is honoured.
Senator Durack:
LP

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

  1. 1 ) Applications for registration were sent to all known distributors during the week commencing 7 July 1 980.

Details of approvals for payment as at 1 September 1980 are:

  1. Yes. Where the LPG has been sold for eligible use and the registered distributors have made claims for the payment of the subsidy.
  2. Yes. Registered distributors, where practicable, have made retrospective adjustments by issue of credit notes or adjustment to accounts for deliveries made since 28 March 1980 at the higher non-subsidised rate.
  3. Yes. Registered distributors are required to produce documentary evidence to support claims for the payment of the subsidy. Officers of the Department of Business and Consumer Affairs verify from distributors records that claims cover only LPG eligible for the subsidy and that the benefits of the subsidy are passed on to the purchaser.

Qantas Airways Ltd (Question No. 3076)

Senator Colston:

asked the Minister representing the Minister for Transport, upon notice, on 19 August 1980:

Does Qantas provide information about South African flight arrivals through its 24-hour telephone service; if so, does the Government consider this Qantas service to be consistent with its anti-apartheid policy.

Senator Chaney:
LP

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

Under the long standing commercial arrangement, Qantas provides ground handling and general sales agency services for South African Airways in Australia. Current Government policy allows for the conduct of commercial arrangements to continue between Australia and South African companies.

Standing Task Force on Youth Affairs: Accommodation Needs of Young People (Question No. 3086)

Senator Grimes:

asked the Minister representing the Minister for Employment and Youth Affairs, upon notice, on 20 August 1 980:

  1. How often has the Standing Task Force on Youth Affairs met in connection with its examination of the accommodation needs of young people, particularly the homeless.
  2. When will it report to the Minister.
  3. When will it report to Parliament.
  4. Does it concur with the findings of the Victorian Council on Social Development that the demonstrated need was for 30 per cent emergency accommodation and 70 per cent normal accommodation.
  5. Will the report make recommendation in regard to normal accommodation.
Senator Durack:
LP

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

The Task Group is an interdepartmental committee established to advise the Government on youth matters and does not report to Parliament. Details of its activities and policy advice to Government are not public.

Freedom of Information Bill 1978 (Question No. 3099)

Senator Mason:

asked the Attorney-General, upon notice, on 21 August 1980:

Does the Government intend to proceed with the Freedom of Information Bill 1978 in the Budget Session of this Parliament; if not, why not.

Senator Durack:
LP

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

I refer the honourable senator to the statement I made in the Senate on this matter on 1 1 September 1 980.

Royalties on Records (Question No. 3130)

Senator Chipp:

asked the Attorney-General, upon notice, on 27 August 1980:

Has the Australian Record Industry Association criticised the method used by the Copyright Tribunal Report dated May 1980, in arriving at its recommended increase in royalties payable on records; if so, is this criticism justified.

Senator Durack:
LP

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

The Copyright Tribunal inquired at my request into the statutory royalty payable to copyright owners for the use of their musical works in commercial sound recordings. Its report was tabled and published as a Parliamentary Paper last June.

Record companies, on the one hand, and music publishers and composers, on the other, were represented before the Tribunal. Both have subsequently made competing submissions to me concerning the findings and recommendations of the Tribunal. I have met representatives of each side to discuss its submission and each has been given an opportunity to comment on the other’s submission.

My Department is presently examining the report and the submissions which are quite substantial.

Heroin Smuggling (Question No. 3134)

Senator Georges:

asked the Attorney-General the following question, upon notice, on 9 September 1980:

  1. 1 ) Has the Attorney-General’s attention been drawn to an article in ‘The Australian’ dated 16 August 1980 in which it was claimed that an undercover Customs agent knew details of a S 1 m heroin smuggling deal, but was called off the case and the matter was dropped after the officer informed his seniors in the Department of Business and Consumer Affairs.
  2. Has the Government any information on this matter, and will the Attorney-General agree to an independent inquiry into the allegations as requested by the Secretary of the

Customs Officers’ Association of New South Wales, Mr Spanswick.

Senator Durack:
LP

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

  1. Yes.
  2. I have referred this part of the question to my colleague, the Minister for Business and Consumer Affairs.

Queensland Mines Limited (Question No. 3141)

Senator Robertson:

asked the Minister for Aboriginal Affairs, upon notice, on 9 September 198Q:

  1. 1 ) Who is the Administrative Officer in charge of uranium matters within the Northern Land Council (NLC).
  2. Was he appointed by the NLC Council or executive following public advertisement of the position; if so, how many applicants were there for the position; if not, how was he appointed, by whom and for how long.
  3. Did the Aboriginal Council at Oenpelli write to the Minister for Aboriginal Affairs in July 1980 complaining about non-consultation by the said Administrative Officer on matters relating to the use of the Oenpelli Road by Queensland Mines Limited; if so, what was the nature of the complaint.
  4. Have any other complaints been registered with the Minister on the attitude of the NLC’s Administrative Officer.
  5. Has Mr David Rourke, a Field Officer with the NLC, been dismissed by the NLC; if so, what reasons were given for this dismissal.
  6. Was Mr Rourke appointed initially at the request of the Aboriginal people at Narbarlek.
  7. Were the Aboriginal people at Narbarlek consulted before Mr Rouke was dismissed.
  8. Were the Aboriginal people at Oenpelli consulted about Mr Rourke ‘s dismissal.
  9. What has been the Aboriginal people’s reaction to the dismissal.
Senator Chaney:
LP

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

  1. 1 ) Mr Anthony John Roberts.
  2. I am informed that Mr Roberts was appointed to act in the position temporarily following public advertisement, and that there were 1 3 applicants. I understand however that the NLC has not yet made a final decision in respect of permanent appointment to the position.
  3. No.
  4. On 7 July 1980 I received two separate representations from the Gunbalanya Council alleging inadequate consultation by Mr Roberts concerning the distribution of money received from Queensland Mines for uranium mining at Nabarlek.
  5. I am advised that Mr David Rourke was employed on a probationary basis and the Northern Land Council decided not to continue with his employment on the completion of an extended probationary period.
  6. I understand that Mr Rourke applied for an advertised vacancy and that Aboriginal people at Nabarlek later supported his application which influenced the decision to offer him probationary appointment.
  7. -(9) I am informed that Northern Land Council Manager, Mr Lanhupuy, took the decision not to extend Mr

Rourke’s probationary appointment; that the decision was not discussed with either the Nabarlek or Oenpelli communities; and that the Northern Land Council ratified the Manager’s decision at a meeting on 28 August at which representatives of the Oenpelli community were present.

National Park: Tasmania (Question No. 3182)

Senator Chipp:

asked the Minister representing the Minister for Science and the Environment, upon notice, on 1 1 September 1980:

  1. What form would the assistance take which was referred to by the Prime Minister in his statement of 20 June which offered to provide practical assistance to the Tasmanian Government for the establishment of a National Park in south-west Tasmania.
  2. Would it extend to providing financial assistance to enable the whole remaining area of south-west Tasmania to be left free of developments, especially the Olga River.
Senator Chaney:
LP

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

  1. and (2) When the South- West Tasmania Resources Survey is completed and the Tasmanian Government has been able to consider its implications, the Government is prepared to consider requests for assistance for specific proposals associated with the protection of the region.

The form and extent of assistance will depend on the nature of the request.

Omega Navigation Station

Senator Chaney:
LP

– On 21 August 1980 (Hansard, page 209) Senator Lewis asked me the following question without notice:

My question is directed to the Minister representing the Minister for Transport and also to the Minister representing the Minister for Industrial Relations. The question is about the construction of the Omega navigation station in Gippsland, which I understand to be the last link needed for the worldwide Omega navigation system. I ask: Is it a fact that construction has been held up now for some four months because of an alleged demarcation dispute on the site? Can the Minister say whether there is political motivation in the dispute? Can the Minister tell us whether the Government intends to take any action to ensure completion of this construction as soon as possible?

The Minister for Transport, in consultation with the Minister for Industrial Relations, has provided the following answer to the honourable senator’s question:

Work on the construction of the Omega navigational aid station was halted on 1 1 April 1980 owing to a demarcation dispute between the Australian Building Construction Employees and Builders’ Labourers’ Federation (BLF) and the Federated Ironworkers’ Association of Australia (FIA). Electric Power Transmission Pty Ltd, the contractor constructing the tower, employs FIA labour. The BLF claimed that the work should be done by its members and on 12 March 1980 placed pickets on the site in support of its claims. The pickets severely affected the flow of supplies to the site and turned away contractors’ vehicles.

Mr Justice Marks of the Conciliation and Arbitration Commission on 22 July gave exclusive coverage of the employees of Electric Power Transmissions Pty Ltd, to the FIA to the exclusion of the BLF. The BLF appealed against this decision and the matter is presently being dealt with in the Conciliation and Arbitration Commission.

There is no evidence to suggest that this dispute is politically motivated. The BLF demands in respect of rigging work on towers have not been confined to the Omega site. It has also claimed extensive coverage of rigging work on other major projects, in support of its demand for work on wireless communication towers.

However the Government is most concerned with the delay in completing the construction of the Omega station and with the continued presence of the BLF pickets. The dispute is before the Conciliation and Arbitration Commission and the Government is hoping for an early resolution of the matter.

Cite as: Australia, Senate, Debates, 17 September 1980, viewed 22 October 2017, <http://historichansard.net/senate/1980/19800917_senate_31_s86/>.

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