24th Parliament · 1st Session
Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.
Mr. WHITLAM presented a petition from certain citizens of Australia praying that the Government remove section 127, and the words discriminating against aborigines in section 51, of the Commonwealth Constitution, by the holding of a referendum at an early date.
Petition received and read.
Similar petitions were presented by Mr. Erwin, Mr. Cairns, Mr. Davis and Mr. Benson.
Petitions severally received.
Mr. NELSON presented a petition from the aboriginal people of Yirrkala praying that (1) the House will appoint a committee, accompanied by competent interpreters, to hear the views of the people of Yirrkala before permitting the excision of any land from the Aboriginal Reserve in Arnhem Land, and (2) no arrangements be entered into with any company which will destroy the livelihood and independence of the Yirrkala people.
Petition received and read.
A similar petition was presented by Mr. Wentworth.
Mr. CLEAVER presented a petition from certain electors of the Commonwealth praying that the Government (1) support the United Nations resolution for a nuclear test ban treaty, (2) ensure that foreign bases are not permitted on Australian soil, and (3) in response to the call of the United Nations, declare Australia’s willingness to enter into an agreement not to manufacture, test, station or acquire nuclear weapons.
A similar petition was presented by Mr. Snedden.
Mr. FULTON presented a petition from certain electors of the Commonwealth praying that the Government ease the financial position of age, invalid and widow pensioners by providing (1) a pension rate equivalent to half the basic wage and subject to future basic wage adjustments, and (2) an allocation of additional finance to enable the State Housing Commission to build lowrental houses and units for pensioners and elderly people.
Petition received and read.
Similar petitions were presented by Mr. Beaton, Mr. Crean, Mr. Peters and Mr. Lindsay.
Petitions severally received.
– I ask the Prime Minister whether he has noticed statements made by the Deputy Prime Minister during his absence overseas directing attention to what he regards as the serious problems and grave dangers of Australia’s present reliance on overseas investment. Do these views represent the views of the Government? Does the Prime Minister propose to introduce legislation to give effect to the sound views of the Deputy Prime Minister in order to satisfy the well-justified anxieties of his colleagues on this very important question?
– It is not the common practice to answer questions on matters of policy, but I am very interested to hear what the Leader of the Opposition says now, and I understand that I may look forward to the pleasure of hearing more from him to-morrow. If that is so, I think, perhaps, I should wait to see how he reconciles his views to-morrow with the views of the Labour Premier of the State of New South Wales. As far as the Cabinet is concerned, he need not worry about our reconciling our views. We reconcile them very well indeed. I hear the voice of Newcastle interjecting. I take the opportunity of saying that I look forward very keenly to hearing my friend to-morrow give another acrobatic performance on these matters. On that occasion no doubt he will receive a completely effective answer from the Government.
– My question is directed to the Prime Minister. By way of preface I wish to remind him of his warm personal interest in the human problems of the people in the flood-devastated areas of New South Wales. I ask: Has he had the opportunity of seeing the flood mitigation proposals of the Government of New South Wales, incorporating the submissions of five or six local government authorities? Has he been able to note the painstaking care with which this important case has been prepared, associated with the arduous technical work of the new science of water engineering?
– I am extremely conscious of the problem referred to by the honorable member. I was at Casino some little time ago and views were put to me on the spot. As the honorable member knows, I have since had urgent views on this matter put to me by him and by the honorable members for Richmond and Lyne.
– What about our views?
– I know perfectly well the views of the honorable member for Cowper, who put them to me when 1 was on the spot. This is not an affair for discrimination. Tt is a problem which concerns the honorable member for Paterson and the honorable member for Hunter, and I think I understand what their views are, like those of the honorable member for Macarthur himself. I have also had representations, I think, from Senator McKellar. I do not regard this matter in a partisan light.
This is a very serious problem. When I was at Casino and had some occasion to speak about it, T pointed out that this was not a problem which ought to be discussed in the abstract but that, on the contrary, a good deal of work would have to be done in a practical way to produce practical ideas for flood mitigation - or whatever the remedy might turn out to be. I further pointed out that, after such work had been done, it would no doubt be presented, in the first instance, to the Government of New South Wales, which has a particular responsibility, and that I had little doubt that in due course something might come up to the Commonwealth Government.
A great deal of work has been done. Very elaborate papers have been prepared and the Government of New South Wales has considered them. I have received communications from the Acting Premier of New South Wales and at this moment the matter is under close study, because it is a complicated affair, in the related departments. I can assure the honorable member for Macarthur and all honorable members who are concerned about this question that these matters will receive our most earnest consideration. We will give them the most prompt consideration that we can.
– I ask the Prime Minister a question. In April last, the Premier of Queensland announced that he was communicating with the Premier of Western Australia with a view to having the two States make a joint approach to the Commonwealth Government for the establishment of a north Australia development authority by the three governments. I ask the Prime Minister: Has this joint approach been made to his Government? Has the Government decided to join with the State governments in the formation of such an authority? If the joint approach has not yet been formally made, has the Government given the matter any consideration? If it has, what is the present position and what is the intention of the Government in regard to this matter? Does the Government propose to adopt this portion of the Labour Party’s policy?
– I am not aware, with any precision, of the present state of the correspondence on this matter. I would not like to say, offhand, whether a letter has been received from both Premiers or from one of them. The problem, of course, is important and the honorable member may be quite certain that when the requests have been received they will be studied and we will put ourselves in a position to formulate some attitude towards them.
– My question to the Minister for Air relates to the acquisition of a new bomber aircraft for the Royal Australian
Air Force. Following the return of the Hancock mission, will the Government give this matter close consideration in the near future? If the Air Force experts regard the choice of a new bomber as a manysided and somewhat complex question, will the Minister consult another authority, who, if correctly reported, already knows nearly all the answers? I refer to the Leader of the Opposition.
– This question relates to a matter of Government policy. The House will recall that the Prime Minister, ia his statement on defence in May of this year, said that the future of the Canberra bomber was under active consideration and that the Government intended to send overseas a committee headed by the Chief of the Air Staff to make the necessary inquiries regarding a replacement for the Canberra. That committee duly went overseas and inspected five different aircraft which were, or would be, available - the French Mirage IV., the British TSR2, the American A3J or Vigilante, the F4H or Phantom, and the TFX. The Chief of the Air Staff returned on Monday and is now compiling his report. The Government will announce in due course the action it proposes to take.
T have read the remarks of the Leader of the Opposition and have noted that he would require no technical assistance to enable him to make up his mind on this matter, but I would be more interested to hear his views on the retention of our squadrons in the Commonwealth Strategic Reserve in Malaya.
– Has the Minister for Social Services considered increasing the permissible income of £2 a week which invalid pensioners may earn? The present amount has remained unchanged for some time and it is felt generally that the amount should be increased.
– The honorable member will know that the whole question of social services was considered recently by Cabinet and that certain decisions were reached. The honorable member’s question relates to an increase in the amount which invalid pensioners may earn. He knows, of course, that to qualify for an invalid pension the disability, on medical assessment, must be 85 per cent. As a consequence, there are certain physical factors, apart from other considerations, which would limit the income that could be earned by invalid pensioners.
– My question to the Prime Minister on flood mitigation is supplementary to that asked by the honorable member for Macarthur, and I preface it by stating that I am fully aware of the need for a complete investigation of the report which has been presented to the Prime Minister, in view of the detailed programming and planning which will be necessary. If it appears that the investigation will take a considerable time, will the Prime Minister consider making an interim report so that steps can be taken by the councils concerned?
– It would not be very easy to give an interim reply to an application which involved matters of great moment. That would be like the famous expedient which I have heard of in my time - having something approved in principle. That is always a rather disastrous state of affairs. I think I should tell the honorable member and other honorable members who are interested in this matter that the letter from the Acting Premier of New South Wales arrived, I think, a week ago. I am not complaining about that, because the New South Wales Government itself had to consider a mass of information or reports. It will necessarily take a little time for the material to be examined by those departments of the Commonwealth that are concerned with these matters from either the expert or the administrative point of view. However, I can assure the honorable member that there will be no waste of time. I am not contemplating some long, formal inquiry. It will be a highly informal but, I hope, precise and careful investigation of what has been put forward. I do not expect a long delay. I must say quite frankly that I would expect the investigation to take a matter of weeks. I would not want it to take a matter of months.
– My question, Mr. Speaker, which is addressed to the Minister for the Interior, refers to action being taken by the Commonwealth to evict from flats in Canberra occupants who have secured tenancies after having had their names on the waiting list for periods much shorter than the normal waiting time. I now address the Minister, Recognizing that there could be incontrovertible proof of malpractice or wrongdoing by some of those who are now to be evicted, will the Minister consider that those who continue to protest their innocence should be given some opportunity to come before an independent tribunal, so that they can then not only state their cases but also be crossexamined on what they have to say?
– No tenant, at any rate until the present time, has been charged with any offence. Certain tenants have been evicted, or have had their tenancies determined, for being in flats after having had their names on the waiting list for less than the normal waiting time. It was thought - and I think the honorable member for the Australian Capital Territory agrees with this proposition - that it was quite unfair that such persons should remain in possession of premises when they had obtained occupancy by some means or other - and we do not argue this question - ahead of others whose names preceded theirs on the waiting list. Whether these persons did right or wrong themselves does not arise in this situation. They merely obtained a higher priority than that to which they were entitled. The question of protestation of innocence does ‘ not remain to be considered. These people can be assured that their names will go back on the waiting list and that they will, as it were, be credited with proper time on the waiting list. They will obtain houses or flats in due course.
– My question is directed to the Postmaster-General. It concerns the hearing, shortly to commence in Melbourne, of applicants for a second commercial television licence in Western Australia. The Minister will realize that counsel and witnesses will have to be brought from Perth at great expense. Would it be possible, therefore, to arrange for the board .conducting the investigation to have the hearing in Perth?
– This is a matter that has come up from time to time in connexion with the numerous inquiries that the Australian Broadcasting Control Board has conducted over several years into applications for licences. These inquiries take up a considerable time, and it has been thought desirable for the full board, as often as possible, to conduct the inquiries. As the honorable member would know, there are three full-time members and two part-time members of the board, and it has been thought desirable to conduct the investigations in Melbourne because of the considerable amount of travel involved if the inquiries were held in other centres. During the hearings the board is also required to deal with other matters that come before it, which means that it must have its records in Melbourne available for reference. For these reasons it has been decided, in the main, that it is desirable for the inquiries to be held in Melbourne. I would point out, too, that the practice that has developed has been for counsel assisting the board, and also the barristers representing the applicants, to be drawn from the Melbourne bar. All the evidence so far has been in favour of retaining the principle that the hearings be held in Melbourne. But I am quite prepared to give some attention and further consideration to the representations made by the honorable member and to see whether it is desirable to depart from that procedure.
– I ask the Prime Minister the following question: In view of the unique honour - that of the Thistle - conferred on him by Her Majesty the Queen, will he consider paying to all social service pensioners an additional royal, or even a crown, thereby making the names of such coins more popular than they are at present?
– I am very grateful to my friend for his reference to the conferring upon me of the Order of the Thistle. My pleasure at that event is tinged by one note of melancholy. I wish there were an order of the shamrock. If there were, I would warmly recommend that the honorable member have it. I will take the rest of his question into consideration,
– My question is addressed to the Minister for Trade. It is asked without notice but with trepidation. In October last year the Minister said in this House -
Obviously the Tariff Board, in effectively carrying out its advisory duties, must keep within its sights the objectives of Government’ policy - the objectives I have outlined to-day and as given in Government statements from time to time.
Have any such statements been made by the Government between the time when the Minister made that statement and now? If so, will he tell me on what dates they were made and what their subjects were?
– I realize that the honorable member, holding certain views, has savoured those few words that I am on the record as having used, and has rolled them around his tongue quite a few times. My statement was never intended to be construed to mean that the Government would make particular statements of policy directed to the Tariff Board. If the Government ever wished to express a view to the Tariff Board, it would do so directly and certainly not secretly. What I had in mind was that the Tariff Board is an instrumentality of the Government that does not operate in a vacuum and that the board, the Government would expect, would have an awareness of the total overall policy objectives of the Government. Statements have been made. The Prime Minister has made a statement; the Treasurer has made a statement; and, although I cannot think of them, probably I have made statements. These- are the kinds of statements made by senior Ministers of the Government who have as part of their functions aspects of the economic policy of the Government that were in mind when a statement was made.
– My question is addressed to tha Postmaster-General. I should like to know whether he can now tell the House which methods or equipment will be used for the purpose of extending television to the districts of Kalgoorlie and Geraldton. If he cannot, can he say when he will be able to supply us with that information? Is it correct to say that he is now confident that television will be extended to those districts within twelve months? If that is not correct, can he say with any degree of certainty when television will be made available to those districts?
– The honorable member for Kalgoorlie has referred to a matter on which representations have been made to me by a number of representatives in both chambers on behalf of Western Australia; that is the provision of both radio and television services in the areas to which he has referred, namely, Kalgoorlie and Geraldton. I understood the honorable member to say that I had made a statement to the effect that those services would be made available within this year. I know of no such statement. I said that certain radio services would be provided in some of these areas quite shortly, but I did not refer to television services. I will have a further look at the honorable member’s question - which I did not hear clearly - and give him a detailed reply. It is correct, as I have said previously, that considerable attention has been given to the improvement of radio services. The provision of television services is a much more lengthy matter.
– I direct a question to the Minister for Primary Industry. There appears to be a difference of opinion amongst wool-growers and wool-growers’ organizations in relation to the increased wool levy requested by the chairman of the Australian Wool Board. I ask the Minister whether he is in a position to inform the House, first, of the part that the Australian Wool Industry Conference will play in deciding the matter, and secondly, of the alternative open to an organization if it disagreed with the decision of that conference.
– The Australian Wool Board has made a decision and has made certain recommendations to the Wool Industry Conference. The conference will make recommendations to me as Minister - if I am still Minister in January when the conference will be considering this matter. There is a division of opinion, and I think the industry is facing the problem quite realistically. The chairman of the Australian Wool Board is going from one end of the country to the other to inform woolgrowers of the issues involved and of what the board recommends as the requirements in respect of finance to meet the costs of wool promotion.
– He is being egged on by some of the wool-growers!
– The Prime Minister is right. If the decision of the Wool Industry Conference is not to accept the recommendation of the board, the position will remain as it is at present, namely, the levy, authorized by legislation, of 10s. a bale, will remain effective until the end of June, 1964.
– The Treasurer recently gave details of subscriptions to the last Commonwealth cash loan, but, departing from his practice after previous loans, he did not give information on subscriptions to special bonds. I ask why he did not give that information on the last occasion and when he proposes to give it.
– I can assure the Deputy Leader of the Opposition that if there was any departure from past practice, it was not by design on my part. I shall go into this question. I believe that in the statement I issued - certainly I did so in the Budget speech last night - I referred to the fact that there had been a much better response to special bonds in the last loan campaign than in any previous comparable campaign in recent times. It was a very satisfactory response. I will be only too glad to let the honorable member have the details.
– I ask the Minister for the Interior whether the Government has given consideration to a recent suggestion from an official source that a new Weather reporting station should be established on a coral island east of Rockhampton, to give early warning of cyclones bearing down on the south Queensland coast.
– The Bureau of Meteorology has given consideration to the establishment of another automatic weather station somewhere in the Coral Sea. No official conclusions have been reached as yet, and quite a considerable time will be required for investigation. This consideration has been prompted by the success of the automatic weather station established on Ashmore Island.
– I ask the
Postmaster-General whether he is aware that the applicant for a commercial television licence for the Cooma-Bega area has withdrawn his application because he is no longer able to proceed with confidence. Also, is the Minister aware that there is now no applicant for a commercial television licence for that area and that the national television station is unlikely to be established until 1966-67? If these are facts will the Minister again direct his mind to the lamentable situation in which the 10,000 people of Cooma and district find themselves not yet able to obtain even Australian Broadcasting Commission radio news and music without interference and of a quality that may be enjoyed by the community? As Cooma and district is not to have television for many years to come, will the Minister take urgent steps to ensure that the area at least enjoys good A.B.C. radio reception?
– I must concede with some regret that what the honorable member has said about the withdrawal of the application for a commercial television licence for the Cooma-Bega area is true. I have only recently been advised of this fact because the applications associated with the fourth phase of television have only recently been heard. The plan for the establishment of a national station in the area concerned is not affected by the withdrawal of the application for a commercial station licence but, naturally, as the honorable member has said, it will be some time before a national station can be established. As the honorable member well knows, reception, particularly broadcasting reception, in this area has been given a very considerable amount of attention by officers of my department and of the Australian Broadcasting Control Board. In view of recent developments I will ask my officers to make further inquiries into this matter to see whether any improvements, even of a temporary kind, may be effected.
– I ask a question of the Minister for Repatriation concerning geriatrics. I understand that a number of honorable members have been informed that again this year a week will be set aside during which interested bodies will study problems associated with aged persons in the community. Do facilities exist in the Minister’s department for the training of nurses in geriatrics? If not, is it proposed to introduce this type of training?
– I am pleased to inform the House that the Repatriation Department is playing a leading part in the medical field of geriatrics treatment. Facilities for this purpose are now available in all States. In addition we have recently introduced a postgraduate course of nursing training in geriatrics. That course will be undertaken over a period of six months at the Concord Repatriation General Hospital in Sydney. Ten nursing sisters from New South Wales and Victoria are taking part in the course at present. We have two wards and a day centre suitably equipped and suitable patients are participating in the course. When the course is concluded a full evaluation will be made of the results with a view to extending this type of post-graduate training to all other States.
– Is the Minister for External Affairs aware of the detail or substance of any agreement, or whatever it may be called, recently entered into by the leaders of the three governments of Indonesia, Malaya and the Philippines in relation to Malaysia? If so, will he inform the House about this agreement? In particular, did the three leaders agree “ to abstain from using arrangements for collective defence to serve the particular interests of any of the big powers “? If that proposition is contained in the agreement, what are its consequences for the existing military arrangements in Malaya, particularly insofar as they relate to Australian forces in that country?
– I have the text of the agreement and I shall place it on the table in the Library. I think that will be the most convenient way to make it available to honorable members. The clause mentioned by the honorable member refers to the use of bases for the particular purposes of any of the great powers. Already, the two nations that have bases in their areas - Malaya, which has British bases, and the Philippines, which has American bases - have assured those respective great powers that this agreement does not in any way impinge on the agreed use of those bases and that the arrangements with respect to the bases are not to be amended or abrogated without the consent of the United Kingdom Government and the United States Government respectively.
– Who has given that assurance?
Foreign Minister in the case of the Philippines and Tunku Abdul Rahman in the case of Malaya.
– I wish to direct to the Minister for Territories a question based on a joint statement by the Minister for National Development and the Minister for Territories in April, 1962, which informed us that the first discovery on the mainland of Australia of deposits of high-grade phosphate rock had been made near Rum Jungle in the Northern Territory. The statement also announced that approval had been given for a further search programme by the Bureau of Mineral Resources during 1962. Has a preliminary assessment of the extent and the grade of the new deposits been made? If so, is there ground for Australian primary producers to expect what I think we could describe to-day as still cheaper superphosphate in the future?
– A preliminary assessment of the deposits of phosphate-bearing rock in the Rum Jungle area has been made. I can say, without giving any detail, that, broadly speaking, the assessment of the extent and the nature of the deposits has been rather disappointing. The extent is not sufficient to hold out prospects of early economic working of the deposits, and the nature of the occurrence df the phosphate is such that there will be some problems of extraction. So I cannot hold out to the honorable member and the House hope that this source will yield in the near future a cheap supply of phosphate material for the making of superphosphate.
– I present the following paper: -
Statement for the year 1962-63 of Heads of Expenditure and the amounts charged thereto pursuant to Section 36a of the Audit Act 1901-1962 (Advance to the Treasurer).
That the statement be taken into consideration in Committee of the whole House at the next sitting.
– by leave - On 20th April, 1961, I presented to the House an outline of the work of the Native Welfare Conference held at Parliament House, Canberra, in January, 1961, and indicated that a further conference would take place in 1963. I now lay on the table of the House the reports of a conference held in Darwin on 11th and 12th July, under my chairmanship. It was attended by representatives of each State Government and I was assisted by two Federal Ministers - the Minister for Social Services (Mr. Roberton) and the Minister for Health (Senator Wade.) The conference reaffirmed the policy of assimilation and the statement of methods of achieving it. As defined by the conference, the policy of assimilation aims at ensuring that “ all aborigines and part-aborigines will attain the same manner of living as other Australians and live as members of a single Australian community enjoying the same rights and privileges, accepting the same responsibilities, observing the same customs and influenced by the same beliefs, hopes and loyalties as other Australians “. Under this policy “ any special measures taken for aborigines and part-aborigines are regarded as temporary measures, not based on race, but intended to meet their need for special care and assistance, to protect them from any ill effects of sudden change and to assist them to make the transition from one stage to another in such a way as will be favorable to their social, economic and political advancement “.
It is obvious, Sir, that if this policy of assimilation is to be achieved the cooperation and understanding of the whole Aus tralian community are needed. For this reason the widespread public interest which is being taken in the welfare of the aborigines is welcomed. Ministers at the conference expressed concern, however, that this co-operation is being damaged by a campaign of misrepresentation that is being carried on throughout Australia and overseas on matters affecting aborigines. I do not wish to appear to cast any reflections on those devoted and sincere people throughout Australia who have done so much to advance the welfare of the aborigines; but all of those engaged in advancing the welfare of the aborigines have to guard against the activities of those who are trying deliberately to worsen race relationships for political purposes and who are trying to disrupt efforts to bring the aborigines to full equality with all other Australians.
The Darwin conference noted the significant contributions made by voluntary organizations with such objectives as assistance in education, including scholarships, and the development of pre-school and adult educational services; the provision of welfare services; and the sponsoring of holiday camps - and above all in promoting the acceptance by the community of the aborigines. It is believed that such organizations can increase the understanding of government policy and programmes and can inform the community of what is being done by all agencies working in this field, thus assisting the community to make its own judgment on aboriginal affairs. Moreover, because of their close personal relationships and contacts with groups of aboriginal people, the members of such organizations are sometimes in a special position to exercise a beneficial influence on attitudes to assimilation. They can do much to assist the aborigines in facing the problems and accepting the responsibilities inseparable from full participation in the Australian community. Out of much firsthand knowledge and work on behalf of aborigines will come, too, the stimulus of searching and constructive criticism and the close and accurate analysis of policy.
The conference reviewed action taken to repeal legislation applying only to aborigines. I informed the conference, on behalf of the Commonwealth, that my department was engaged in reviewing the legislation of the Northern Territory to see to what extent the few remaining special provisions in
Northern Territory ordinances which are either restrictive or protective can be removed. The trend throughout Australia is now clearly towards ending any special legislative provision for aborigines. We are working towards the objective of the removal of such restriction and protection. It needs to be recognized, however, that some special legislation confers privileges or benefits which are still of value to aborigines in some parts of Australia. The Darwin conference was informed that in Victoria all restrictive legislation had been repealed some years ago and that this had recently also been done in New South Wales. No provisions of this kind exist in Tasmanian legislation. Queensland and Western Australia, like the Northern Territory, are reviewing their special legislation.
This clear tendency to dispense with any special laws affecting aborigines only is directly relevant to the case that is sometimes urged for the amendment of the Constitution to enable the Commonwealth Parliament to pass special laws for the people of the aboriginal race. The train of our thought is that aborigines should not be made the subject of special laws and that consequently a power in this Parliament to pass laws concerning aborigines only would be largely unnecessary. Let them come within the laws made for all Australians.
The House will be aware that aborigines are now entitled to enrolment for voting at Commonwealth elections and that they receive social service benefits the same as other Australians.
The question of the supply of alcohol to aborigines was considered by the Darwin conference. It was noted that in New South Wales, Victoria and Tasmania there is no special legislation affecting the consumption of alcoholic liquor by aborigines; and that in Queensland, South Australia, Western Australia and the Northern Territory consideration is being given to reducing restrictions. It was recognized in regard to the four last-mentioned jurisdictions that there were wide differences in the circumstances under which various groups of aborigines lived and that it might be necessary during a transitional period to retain some restraints. It was agreed that in principle it would be preferable that any such restraints during a transitional period should be applied to areas and not to groups of people, and that such restraints should preferably have general application throughout such areas in respect of the manufacture and disposal of liquor. It was agreed that this was not a question of liquor reform in the usual sense of the term; it was essentially a question of removing discrimination against the aborigines.
Another matter discussed at the Darwin conference was the question of assumption by the Commonwealth of additional responsibilities in respect of the aborigines. It was agreed at the Darwin conference that, in view of the widely varying conditions in different States of the federation and of the fact that so many aspects of aboriginal welfare come within State governmental responsibility in fields such as health, education, lands and settlement, it would not be in the best interests of the aborigines to have uniform Commonwealth legislation or uniform administration.
With regard to the question as to whether the Commonwealth should provide financial aid for aboriginal welfare, the Ministers noted that the burden falls very unevenly on the different States and that the question of ensuring that adequate finance was available to all States might be referred to the Premiers’ Conference by any State which considered this desirable. Queensland stressed its special financial needs for housing and it was agreed that this would be an appropriate matter for Queensland to raise at the Premiers’ Conference.
Many questions of practical administration were also examined. In the discussions on housing it was apparent that notable advances had been made throughout Australia. In education there has been a general placement of part-aboriginal children in the customary State schools and increasing numbers are passing on to secondary and tertiary education. Progress is being made towards the objective of bringing every aboriginal child in the Northern Territory into school by the end of next year.
The conference was informed that a consultative committee of officers of the welfare authorities of South Australia, Western Australia and the Northern Territory and of the Department of Supply had met regularly since 1961 to consider the special problems of nomadic and semi-nomadic aborigines moving between the two States and the Northern Territory. The conference noted with satisfaction the co-operation which is taking place between the Governments of South Australia, Western Australia and the Administration of the Northern Territory and the Department of Supply in respect of the central Australian reserves.
The Commonwealth Minister for Health reported on leprosy control. It was also reported that the National Health and Medical Research Council had accepted the proposal of the 1961 conference and had begun a series of fact-finding surveys into aboriginal health and nutrition.
In addition to the matters I have traversed the conference of Ministers examined several other items of particular administrative concern.
The conference decided that the purposes of Commonwealth and State co-operation on aboriginal welfare matters would be met by a meeting every two years, as now, of the Ministers responsible for aboriginal welfare; an annual meeting of the officers’ standing committee; and the establishment of sub-committees as may be deemed by the Ministers to be desirable. The conference accepted the invitation of the Minister for Aboriginal Affairs for South Australia, the Honorable G. G. Pearson, to have the 1965 conference in Adelaide and agreed that the next meeting of the standing committee of officers would be in Canberra in 1964.
I will lay on the table of the House for the information of honorable members the statement of policy approved by the conference and the text of the resolutions of the conference. In doing so I should like to express appreciation of the ready cooperation of all governments in Australia in helping each other to achieve the high purpose we hold for the advancement of all these Australians of the aboriginal race.
Mr. Speaker, I present the following paper
Aboriginal Welfare - Conference of Commonwealth and State Ministers held in Darwin, July, 1963.
Statement of Policy;
Resolutions of the Conference;
Ministerial Statement, 14th August, 1963. and move -
That the House take note of the paper.
.- The Minister for Territories (Mr. Hasluck) was kind enough to supply the Opposition some time ago with a copy of the decisions’ of the Commonwealth and State Ministers. The Minister, in the course of his speech, has referred to the misunderstanding by people of section 51, paragraph (xxvi.), of the Commonwealth Constitution, which says that the Commonwealth shall have power to make laws for the people of any race, other than the aboriginal people of any State, for whom it is deemed necessary to make special laws.
The Minister should remember that people ask for the removal of this provision because for 55 years the Commonwealth has misinterpreted it. The provision was used to deprive aborigines of social service benefits. Until the present AttorneyGeneral (Sir Garfield Barwick) was given this portfolio, it was held that if the Commonwealth made social services available to aborigines it was somehow passing a special law. However, there was a very late reversal of this interpretation - the reversal vindicated the role of Sir John Forrest in the framing of the Constitution - when the present Attorney-General directed attention to the fact that if aborigines were deprived of something, that was making a special law, but if they were included in social services legislation designed for the community as a whole, that was not making a special law but was merely passing a social services law. The aboriginal people, I think, will be forever indebted to the Attorney-General for his perception.
– He accepted a view that I personally had been urging for years.
– I am grateful to hear that. When section 51, as originally drafted, was suggested for the Constitution, it was originally intended that it should merely refer to the Commonwealth having power to make “ special laws for the people of any race for whom it was deemed necessary to make special laws “. What the convention had in mind was the deportation of kanaka labour. Sir John Forrest, who was grateful to the aborigines for helping him as an explorer and who was not very happy about any sweeping Commonwealth power anyhow, directed attention to the position of the aborigines and the qualification safeguarding aborigines was included. Forrest intended to protect the aborigines, and it has been since 1955 only that that section of the Constitution has been interpreted protectively to ensure aboriginal rights. But when people are asking by way of petition for the removal of section 51, paragraph (xxvi.), from the Commonwealth Constitution they are doing so because the section has an unjustifiably bad name because of the wrong way in which it was interpreted for more than 50 years. Many of us were sorry to see that the Commonwealth and State Ministers had made a statement about citizenship. I do not think 1 can speak for all the members of the Select Committee on the Voting Rights of Aborigines, but certainly if there was one word that most of us did not want to hear at the end of our 21.000 miles of travel it was this word “ citizenship “ as applied to aborigines. Citizenship, in point of fact, is a concept entirely foreign to the Constitution of the Commonwealth of Australia. In fact, at constitutional convention after convention, after repeated attempts had been made to define the word “ citizenship “ it was deliberately struck out. The concept of the Constitution is not of a status of citizenship with implied defined rights - that is the republican concept - but of subjecthood, and subjecthood implies nothing but an obligation of allegiance to the sovereign within whose realm one is born. The Commonwealth Constitution is monarchical, not republican. Look at the situation which existed in 1901, when the Commonwealth came into being. The situation in four States out of the six was that women - women of European race - although they were British subjects, did not have a vote, while aboriginal men had an entitlement to the vote. South Australia, Victoria, New South Wales and Tasmania were the States concerned. An attempt was made to define “ citizenship “ in the Constitution. The first attempt was made by Mr. Barton, whose definition was seconded by Mr. Wise, but the proposal was defeated. Then Mr. Wise himself moved an amendment, which had been suggested by the Tasmanian House of Assembly, designed to incorporate in the Constitution of the Commonwealth the Fourteenth Amendment of the Constitution of the United States of America - the amendment which President Kennedy is now invoking when he uses armed forces in a State to compel it to give negroes American citizenship rights.
That attempt on the part of Mr. Wise was defeated at the convention. Doctor John Quick made an attempt to have citizenship included in section 51 as ono of the legislative powers of the Common* wealth Parliament, but that proposal was also defeated. Then he attempted to define “Federal citizenship” and he was again defeated. All that is left of these efforts is section 117 of the Constitution which refers to the rights of subjects of the Queen in each State without defining any rights. The fathers of federation went through the 1891 draft Constitution with a fine toothcomb and struck out the word “citizenship “ wherever it occurred. Although we now use the word “ citizenship “ freely it conveys no legal or social rights at all.
I sat down and tried to work out what were the intrinsic rights of Australian citizenship and I had for a moment decided that they referred to the right to reside in Australia, but then it occurred to me that natives of Papua are Australian citizens and they may not reside in Australia. There is, therefore, no intrinsic right attached to Australian citizenship at all. When you say that an aboriginal is a citizen of Australia all that you really say is that he is a subject of the Queen living within the limits of the Commonwealth of Australia and, just as was the case in connexion with voting rights for women, any additional rights have to be superimposed on that basic status by deliberate legislation. We are only confusing people when we speak about a status for the aborigines known as “ citizenship “. In Western Australia, State citizenship gives the aboriginal man drinking rights and practically nothing else. “ Citizenship “ is a word which, as a member of the select committee, I thought merely created confusion everywhere. Our basic status is feudal - subjects of the Queen, owing allegiance, bom in the sovereign realm.
You have the odd situation that although the Ministers have declared that the aborigines are born Australian citizens, and the strange statement is made that that started with the Citizenship Act of 1948, the fact is that in three or four States they had been voting at Commonwealth elections for nearly 48 years before that. Although all Ministers subscribed to that statement implying that some rights have been conferred on aborigines, they still may not vote at State elections in the State of Queensland. Unlike the United States Government, the Commonwealth Government may not reach into the State of Queensland and insist that, because they are citizens of the Australian Commonwealth, they must enjoy the rights of citizens of the Australian Commonwealth. The reason for that is that there is no bill of rights in the Australian Constitution, and there are no intrinsic citizen rights conferred by the Commonwealth Constitution.
Think of the status of people of European origin, called since 1948 Australian citizens. Many of them cannot vote at legislative council elections in some State elections. They lack property qualifications. In the United States of America such a state of affairs would be absolutely unthinkable. Such a state of affairs would be a violation of the Fourteenth Amendment of the Constitution of the United States of America. The United States Constitution is a consistently republican constitution in which “ citizenship “ has a definite meaning. We are using the word “ citizenship “ when the real concept of our Constitution is merely subjecthood. What the aborigines are born with is nothing more or less than the obligation of allegiance, and any rights that they are given have to be deliberately given to them. “ Assimilation “ is also a word which, although the Minister for Territories himself has always given it a precise meaning, was consistently misused by many State welfare officers who came before the select committee to give evidence in the course of its journey around Australia. Its meaning was also misunderstood by many aborigines, some of whom thought it meant what biological assimilation would mean - the process of breeding out. We on this side are not quite so sure as the Minister that there is not a need for special laws for the aborigines. There are many categories of Australian citizens who are beneficiaries under special laws. For instance, the whole structure of our repatriation system is designed to give consideration for the man who has been wounded in war. There is no difference in his status as a citizen from that of the man who is not eligible for repatriation benefits, but we recognize that there is a vast difference in his need. I think it is quite consistent to say that the status of all Australians, whether of the aboriginal race or of the European race, is the same, and at the same time to recognize that the people of the aboriginal race have special needs. While I agree with the Minister that what we propose will have a temporary significance in the sense that the need will pass, I think that legislation directed to meeting their special needs is important for the present and for many years to come.
Other countries in the world have had to face this problem. For instance, the United States of America had to deal with the status of Red Indians. There the title of Red Indians to reserves was recognized. By this special law for Red Indians the Americans do not give a title to reserves to people of Norwegian or other national descent; they merely give it to people of Red Indian descent. That is a very sensible law. It recognizes the real historical circumstances that existed and obligations arising from dispossession. These Red Indians were the first occupants of the land. The Americans realize that their rights have been curtailed and that something must be guaranteed to them. We feel that a definition of the rights of people of the aboriginal race, especially those in the Northern Territory, with relation to some kind of title to reserves, is very important.
The only thing that worries me about this word “ assimilation “ - and here I am more concerned about the Northern Territory than anywhere else - is what the aborigines are to be assimilated to. The people whom I met at Yirrkala were people who lived by the sale of their art and artifacts and by hunting. They did not want to move into Darwin. If they did move into Darwin, there would be no work for them there. In the Northern Territory we have a European community of only quite small proportions. The industries in the Territory certainly cannot employ all the people of the aboriginal race. So, the prospects of assimilation, in the sense of living within the European community as Europeans, are relatively meagre and are likely to remain so for some considerable period in that Territory yet. If you look at the actual distribution of population in the Northern Territory you will find that only the minority of aborigines have any contact at all with any Europeans other than missionaries, welfare officers, officials and, sometimes, station owners. They have certainly no contact, unless we consider a few hundred living at Bagot, with such a town as Darwin, nor do they particularly wish to live in contact with a town like Darwin at the present time.
What disturbs me about assimilation is this: Assimilation always seems to be interpreted as taking something away from aborigines around the Commonwealth. The State of Western Australia set up two hostels for aboriginal students, one for girls and one for boys, in Perth. These aboriginal students, studying at technical schools and high schools around the city, having hostels of their own, came to be considered as “ segregated “. That is to say, they lived in an aboriginal community at night. This is contrary to a change in ideas on the part of State authorities, so the hostels were closed down. What disturbs me is that nobody consulted the aboriginal students or the aboriginal parents as to whether they liked that hostel arrangement. At one time the State Government had the idea that it was a good thing to set up these hostels. Everybody testifies that the aboriginal students were very happy there. Later, we Europeans got a new idea of what should be done with the aborigines and we changed the previous policy without consultation with them.
I feel that the same thing was done in Papua and New Guinea on the drinking question. Although we are setting up a new parliament there, we have not waited to get its opinion on drinking rights. Having denied these rights before, we have now granted them, although there was considerable opposition by some of the natives. It might have been a good idea for us to wait to ascertain what the new parliament thought of these rights and hold a referendum. It was also stated, in conformity with our idea, that this change would lead to a new association of the races. But all that has happened is that the Europeans of Papua and New Guinea have left their bars and do their drinking in the clubs and the natives of the place now go into the bars. So the idea that this change was one of the ways in which there would be a new sort of integration - because it was our idea and not theirs - did not work out. I am afraid of changes of policy and definitions of policy on this question, which represent merely our ideas, without consulting with the people of the aboriginal race.
The Minister for Territories (Mr. Hasluck) has many things to his credit and I have tried, whenever I have spoken publicly, to pay tribute to him. There is a new confidence expressed in the aboriginal race population trend in the Northern Territory. The aborigines are a very young people. I have given examples of this in speeches. For instance, at Yirrkala 28.4 per cent, of the population is under five years of age and 52 per cent, is under fifteen years of age and at Groote Eylandt 54 per cent, is under fifteen. There are many places with similar figures. Although all that is true, nevertheless, as they are beginning to congregate new disturbing features are developing out of the mere fact of their congregation. The most disturbing feature is the heavy incidence of respiratory diseases and gastroenteritis among aboriginal children and this is leading to a rising infant mortality. For the five years 1952-1956 aboriginal infant mortality averaged 87 per 1.000; in the five years 1957-61 it rose to 103 per 1,000; and in the latter part of that quinquennium it was higher than in the early part. It compares with 22 per 1,000 among Europeans.
We believe that if some definite objectives were adopted by the Commonwealth it would be a discipline on the Commonwealth itself, because definite objectives are measurable and you know whether you are achieving them. Assimilation is remote and vague, but if we said it was our aim to reduce infant mortality to the European level and to reduce neo-natal and child mortality to the European level those would be clear objectives. It would be a good thing if, in aboriginal communities in the Northern Territory and elsewhere, we committed ourselves to providing permanent resident doctors. At Yirrkala, for instance, there is an aboriginal community of 500, but if there was a European community of 500 in the Northern Territory it would have a doctor. To put resident medical officers in all these settlements would be an important achievement.
If all around the Commonwealth - and this is directed less at the Commonwealth than at some of the States - we had as an objective to ensure primary school education for every aboriginal child, it would be a measurable objective. I also believe in the United Nations Educational, Scientific and Cultural Organization’s objective of educating the whole family. The Merredin Shire Council in Western Australia, if the matter is justly reported in the press - I put a qualification to that because I do not know - appears to object to the presence of aborigines who are coming into houses on the grounds that they would not know how to look after houses. Surely the answer lies in the domestic science training for aboriginal women. The second objection in Merredin is that the Government of Western Australia is accused of aiming to put up houses at a cost of £1.700 and the Merredin council raises the objection that in that locality the minimum value of a house is £4,500. This means that what ought to be an issue of advancement of a people becomes confused with a different issue - the issue of local standards of housing.
It seems to me, as a matter of simple honesty, that when we are under international scrutiny, as we are in regard to the mandate over Nauru, we behave very differently from the way in which we behave towards our aboriginal people, when we think we are not under international scrutiny. The people leaving Nauru are being given houses worth £4,500. They were recognized as having the ultimate title to all the phosphate that was taken from Nauru. But if resources are found in aboriginal reserves - although greatly to the Minister’s credit he has moved to the position that there are now special royalties from which aborigines benefit - we do not acknowledge any aboriginal title to them and we do not acknowledge the need to help them over the disability that when they are moved from the tribal or primitive state to live in European communities they come without a background of capital or experience in home-making. There is a case for treating them generously, with the same kind of housing and the same kind of consideration as are being given to the people of Nauru.
Finally, I believe it is unreal to speak about assimilation where we will not give equality of wages. The armed services of the Commonwealth are employing aborigines in the Northern Territory at less than half the wages of Europeans. When you speak to some of these aboriginal men you find that they are bitter about it. The service officers tell you that the men do not work well, but they do not face the fact that these men do not work because they are bitter about the difference between their status and pay and the status and pay accorded to Europeans working with them. I believe that, if we say that our objective is to have them live in a manner similar to Europeans without equality of income, it is unreal. It is completely unreal if their income is one-third or one-half - or less than that fraction - of what is paid to Europeans. I do believe that we ought to start adopting some of these aspects of an assimilation policy which will cost us something - such as equality in pay and improvement in housing.
Debate (on motion by Mr. Howson) adjourned.
Bill presented by Mr. Harold Holt, and read a first time.
– I move -
That the bill be now read a second time.
Since 1941, special provision has been made, as an act of grace, for the dependants of a person who is killed or injured in an air accident whilst travelling as a passenger on Commonwealth business or at Commonwealth expense. With the passage of the Civil Aviation (Carriers’ Liability) Act 1959, the need for special cover ceased in respect of persons travelling on Commonwealth business by interstate airline, but similar cover is not necessarily available in the case of other flights. For that reason the ex gratia scheme of cover administered by the Treasury has been continued in respect of persons travelling as passengers for the purposes of the Commonwealth or a Commonwealth authority on flights to which the provisions of the Civil Aviation (Carriers’ Liability) Act 1959-62 do not apply.
Some time ago the Attorney-General’s Department expressed doubts about the validity of the existing ex gratia provision and suggested that statutory approval for payments to the dependants of air travellers was desirable. There have been cases, too, in which associations of Commonwealth employees and persons other than employees of the Commonwealth, such as members of trade missions, have expressed concern that the cover for persons travelling as passengers by air on Commonwealth business was not more clearly defined. After careful consideration the Government decided that the existing ex gratia scheme of air travel cover should be replaced by a legislative scheme and that is the purpose of this bill.
There are, of course, certain administrative advantages in the greater elasticity of an ex gratia scheme and there have been many difficulties to be resolved in the course of preparing the bill.
Apart from some rather intricate legal aspects which have been carefully examined by the Attorney-General and his officers, consideration has been given to the views and interests of a number of other departments, particularly the Department of Civil Aviation, the service departments, the Public Service Board and the Department of External Affairs.
I now propose to outline the principles adopted by the Government for the legislation. AH persons travelling as passengers by air in the service of, or for the purposes of, the Commonwealth and authorities of the Commonwealth will have a uniform cover against death or injury, whether they are Commonwealth employees or not, whether they are travelling in Australia or abroad and whether in commercial aircraft or in aircraft owned by the Commonwealth. The cover will be the equivalent of that applicable to interstate passengers under the Civil Aviation (Carriers’ Liability) Act 1959-1962, namely, damages up to £7,500 for all accidents, whether due to negligence in the operation of the aircraft or not.
Careful consideration was given to the change which the bill will make in the liability of the Commonwealth as an operator of aircraft. At present the amount of the liability is unlimited but arises only where an accident can be shown to have been caused by the negligence of the Commonwealth or its servants or agents. It is unfortunately true of modern aircraft accidents that it is seldom possible to determine the cause conclusively. Bearing that in mind, it was decided that the liability of the Commonwealth under the bill should be alined with that of a commercial airline operator, against whom it is not necessary to prove negligence, and that, with the extension of liability beyond cases of negligence, it would be reasonable to limit the amount in all cases to £7,500 per passenger, as in the case of the 1959 act. This will also avoid a distinction between persons travelling as passengers on Commonwealth business according to whether they fly in a Commonwealth aircraft or by commercial airline. I might add that the limitation of liability in relation to negligence will apply only to negligence in connexion with the actual operation or maintenance of the aircraft.
The Commonwealth may also be subject to liability for negligence or breach of statutory duty in relation to certain other matters affecting the safety of its own aircraft, such as the provision of air navigation facilities, air traffic control services and aerodromes, just as it might be liable to ordinary passengers on privately operated aircraft. The liability of the Commonwealth in connexion with such matters will continue without limitation.
In the case of persons travelling in aircraft not operated by the Commonwealth or a Commonwealth authority, the Commonwealth will provide cover to the extent that it is not available from other sources, that is to say, the Commonwealth will assume liability insofar as the rights, if any, existing against the operator of the aircraft or his servants or agents fall short of the rights that would exist had the flight been made by interstate airline. The deficiency in the rights against the operator of the aircraft could arise by reason of contracting out by the airline, the necessity to prove negligence, the existence of certain defences even under the international conventions or the existence of limits of liability below those fixed by the 1959 act in relation to interstate airline flights. For example, the limits under the original Warsaw Convention, which will still apply in relation to some flights, are only about half the limits for interstate flights. And, as the Commonwealth liability is intended only to supplement the liability of the carrier, provision is made in the bill to ensure that remedies against the carrier are pursued and that the Commonwealth is not prejudiced by an unreasonable settlement out of court of the carrier’s liability.
The Government considers it fundamental, and consistent with the provisions of the Civil Aviation (Carriers’ Liability) Act that the cover provided by the bill should be confined to those travelling as passengers and should not extend to members of the crew of the aircraft. However, some difficulties arose in determining where to draw the line between passengers and crew because there are some civil employees, members of the services and employees of others who, although not normally regarded as crew, are required to perform duties in flight, and thus cannot properly be regarded as passengers. To quote a few examples, there is the scientist engaged in rain-making operations, air evacuation nurses in the services or the employee of a private contractor performing, for his employer, an airborne check of equipment supplied by the contractor to the Commonwealth. It has been decided that, as a matter of principle, all persons flying other than for the purpose of transport from place to place should be excluded from the provisions of the bill. If the duties of a person include flying, other than as a passenger, that should have been taken into account in fixing the remuneration for the position. In the case of any Commonwealth employee whose remuneration has not been so fixed, consideration will be given to the provision of an allowance for the purpose of insurance. Such an allowance is already being paid in a number of cases.
Provision is also made in the bill to exclude members of the services travelling as passengers by air on active service during war or, when engaged in warlike operations such as the Korean and Malayan operations. In such cases the person involved in the accident, or his dependants, would be entitled to a repatriation pension and, presumably, other benefits provided under repatriation legislation.
Subject to those exclusions, the bill extends cover to all authorized passengers on Commonwealth operated aircraft. In other words, the Commonwealth, as an operator of aircraft, will accept liability similar to that relating to accidents to passengers on commercial interstate airlines both in respect of its own employees and others, for example, a sick person carried in a service aircraft on a mercy flight or an overseas visitor travelling by V.I.P. aircraft. The cover thus given to all passengers will be adequate also to cover the Commonwealth’s responsibilities, as an employer, to such of the passengers as are in the service of the Commonwealth. An employee’s rights under the Commonwealth Employees’ Compensation Act will remain but will not be cumulative with his rights under the bill.
Again subject to the exclusions mentioned earlier, cover will be provided in respect of flights on aircraft not operated by the Commonwealth in the case of an employee who is travelling in the course of his employment, any person properly travelling at Commonwealth expense, whether on Commonwealth business or not, and any person travelling by air for the purposes of the Commonwealth. The second category would include, for example, members of Parliament and their wives and children and persons visiting Australia at the invitation and expense of the Commonwealth, while the third category would cover a few cases such as a diplomatic head of mission or a member of Parliament on an overseas mission travelling free in an aircraft provided by a foreign government.
I expect that most claims arising out of the legislation will be settled out of court but, in the event of dispute as to the amount of damages, within the limit of £7,500, the injured person, or his dependants, will have a right of action in the courts against the Commonwealth or the Commonwealth authority concerned.
I commend the bill to honorable members.
Debate (on motion by Mr. Whitlam) adjourned.
Bill presented by Sir Garfield Barwick, and read a first time.
– I move -
That the bill be now read a second time.
This bill has been prepared in consultation with my colleague, the Minister for Civil Aviation (Senator Paltridge). A number of happenings in recent years, both in Australia and overseas, have shown that special provisions are needed to deal with legal problems that can arise out of the commission of crimes on board aircraft. Also, special provisions are needed to protect the safety of passengers and crews and the safety of aircraft themselves, both on the ground and in the air.
The bill contains two principal parts - Part II, which is concerned with the criminal character and consequence of acts done on board aircraft while in flight, and Part III, which deals with crimes affecting the aircraft themselves. The bill makes special provision relating to those matters, so far as concerns flights which are not wholly and exclusively intra-state flights. So far as aircraft engaged in such flights are concerned, it is proposed to ask the States to pass complementary legislation.
I will deal first with Part II. of the bill which, as I have said, is concerned with crimes committed on board aircraft in flight. The basic principle of law is that where an aircraft is flying above the territory of any particular country the law applicable to events occurring on board is the law in that country, that is, in the country immediately below the aircraft at the time. So that if one passenger in an aircraft assaults another whilst the aircraft is flying, for example, above Victoria, he is guilty of an offence against the laws of that State dealing with assaults: and this is so regardless of the nationality of the aircraft. That position remains the same even though the aircraft simply flies over Victoria without, on that particular flight, either landing or taking off in Victoria. This bill does not attempt to alter that position. The powers of the States to deal with offences committed in the air space above their respective territories will remain unaffected.
There is a need, however, for legislation, to deal with crimes that may be committed in aircraft flying within Australia and committed in such circumstances that it is difficult or impossible to determine exactly where the acts constituting an offence were committed. This situation can arise particularly when the aircraft is at the time close to a border between two States. There is also a need for legislation to deal with crimes that may be committed over foreign countries or over the high seas in Australian and certain other aircraft engaged in overseas flights.
Clause 7 of the bill, in effect, will put in force on board aircraft engaged in any of these flights the criminal law of the Australian Capital Territory. It does this b.y providing that if a person does something or omits to do something whilst on board an aircraft, and the act or omission would, if it took place in, or in a public place in, the Australian Capital Territory, be an offence against that criminal law, then the person is guilty of an offence against this act and is punishable by the same penalty as would have been incurred by him if the act had taken place in the Territory. The criminal law of the Territory is, for this purpose, confined to the following: -
South Wales, as applied to the Territory and as amended in the Territory from time to time; and
In applying these laws of the Australian Capital Territory, clause 7 will apply them as they stand from time to time, that is, future amendments of those laws will automatically apply on board aircraft to which Part II. of the bill applies. I do not think that this need give rise to concern, as any amendments of any law of the Commonwealth in force in the Territory would, of course, be made only by this Parliament, and any amendments of the laws of the Territory to which I have referred would be made only under the statutory authority granted by this Parliament, and the amendments themselves would be subject to scrutiny, and, if necessary, disallowance by the Parliament.
I should explain here the provisions of the bill in relation to certain aircraft flying outside Australia. These are principally aircraft which are registered in Australia or which are foreign aircraft on their way to or from Australia. So far as aircraft registered in Australia are concerned, the bill adopts the view that Australian laws are in force on board such aircraft whilst they are outside Australia, even if the law of some other country is, by virtue of the aircraft’s presence in or over that country, also in force on board. Australian law applies on board foreign aircraft, of course, while they are within Australia, but the bill goes further and applies Australian law to them while they are outside Australia when their flights begin or end in Australia.
So far as flights beginning in Australia are concerned, it is felt that if there is any doubt which law is to be applied - this situation might well arise, for instance, over the high seas - if no other law is applicable or if the authorities administering another applicable law are not willing, or feel themselves unable, to enforce it, there should be an Australian law ready to be applied. It may well be, of course, that the efficacy of our law will depend on finding the offender within Australian territory.
So far as flights ending in Australia are concerned, a person who commits an offence whilst on board the aircraft might very well need to be dealt with in Australia, in the first instance at any rate, and legal provisions to enable this to be done are needed.
I come now to Part III. of the bill, which deals with crimes affecting aircraft. The application of this part is set out in detail in clause 10. Briefly, it will apply to all Australian aircraft that are used principally for certain flights or are actually engaged in those flights. These flights include interstate flights, flights within or to or from a territory and flights outside Australia. It will also apply to any foreign aircraft that is in Australia or is outside Australia on a flight that began in Australia or is intended to end in Australia.
I will mention briefly the crimes created by this part of the bill. First there is the taking control of an aircraft, without lawful excuse. Then there is the crime of seizing control of an aircraft while there are persons on board or, in other words, the crime of aircraft piracy. This is a crime which has caused particular concern in recent years in the United States and clause 11 (3) of the bill was suggested by a provision dealing with the crime in a 1958 amendment of the United States Federal Aviation Act.
Clauses 1 2 and 1 3 deal with the crime of destroying an aircraft. Attempts to destroy will also automatically be covered by reason of standing provisions of the Crimes Act. Where there are persons on board the aircraft which is destroyed or attempted to be destroyed, the offence will be capital, it being in substance murder or attempted murder.
I mention here that although the question of the retention of the death penalty is a controversial one, it is still retained by the Commonwealth, in the Crimes Act and in certain other Commonwealth laws, and it is retained in all the Commonwealth’s Territories. The inclusion of the death penalty in this bill is in line with existing Commonwealth and Territory provisions. It has seemed inappropriate to deal with the general question of the retention of capital punishment, which, it seems to me, can be reserved for some occasion of general revision of the criminal law. I mention, however, that of the States, only Queensland has abolished the death penalty completely, although it has virtually been abolished in New South Wales.
Clauses 14 and 15 deal with acts prejudicing the safe operation of aircraft. The penalty is a term of imprisonment, but if the act is done with intent to cause death, or with reckless indifference to the safety of life, the offence is punishable by death.
Clauses 17 and 18 deal with a number of offences which, because they relate to the safety of aircraft, either on the ground or in the air, need to be made the subject of special provision or to carry special penalties.
Clause 19 deals with the problem of what might be called bomb hoaxes. Anonymous messages, particularly telephone messages, to the effect that a bomb has been placed on an aircraft have caused a good deal of trouble in Australia in recent years. They not only cause expensive inconvenience to aircraft operators and passengers, but give rise to anxiety and apprehension, which can reach quite grievous proportions both in the case of passengers and of their relatives and friends. Various steps are being taken to cope with the situation, but it is felt that there should be a sharp increase in the penalty for this type of offence. It is probable that the only offence at present committed by the perpetrator of one of these hoaxes, and then only if a telephone is used, is an offence against the Telephone Regulations, for which the maximum penalty is £50. Clause 19 provides a maximum penalty of two years imprisonment.
Part IV. of the bill contains a number of miscellaneous provisions of a procedural nature which are considered necessary for the proper working of the legislation. I would propose to explain these provisions in more detail in the committee stages of the bill.
I commend this bill to honorable members.
Debate (on motion by Mr. Whitlam) adjourned.
Bill presented by Mr. Adermann, and read a first time.
– I move -
That the bill be now read a second time.
This bill provides for the raising of loan moneys amounting to £4,255,000 for war service land settlement in the States of Western Australia, South Australia and Tasmania during the 1963-64 financial year. Honorable members will recall that the Commonwealth is responsible for the provision of the whole of the capital moneys required for the scheme in those three States. It is anticipated that the money will be made available in the following amounts: -
In presenting similar bills to Parliament in previous years - the last in 1959 - it has always been made explicit that the amount to be authorized by way of loan was a net figure and this would be supplemented by capital moneys received through repayments of advances by settlers, State and Commonwealth contributions to the excess of cost over valuations placed on holdings and sales of surplus land. These total receipts were re-used in capital expenditure. As the scheme has progressed, receipts have increased, reducing the amount of new money required each year. It is expected that the receipts under the items just mentioned will be greater than the anticipated expenditure on the scheme during 1963-64.
However, a change has been made in accounting procedures and all moneys received from 1st July, 1963, will be paid to the Consolidated Revenue Fund to which only revenue moneys such as rent and interest were previously credited. As honorable members will appreciate, this change is procedural only, and the net cost to the Commonwealth of the scheme will not be affected; but it does mean that the Commonwealth, as from this year, will need to appropriate the gross amount required for grants under the States Grants (War Service Land Settlement) Act 1952-53. The amount for this financial year is £4,225,000.
In 1959, I gave this House a summary of the scheme at that time and honorable members may be interested to know the present position in the States to which this bill refers. In Western Australia, 1,260 farms have been provided at a cost to 30th June, 1963, of £23,204,000. All interested and classified applicants in Western Australia have been allotted farms. The work remaining to be done relates to the consolidation of development to raise the productivity of some later developed farms to the level necessary for settlers to operate efficiently on their own account and meet their commitments under the scheme.
In South Australia, 1,024 farms have been provided at a cost to 30th June, 1963, of £15,977,000. In addition the Commonwealth has financed the establishment of irrigation headworks for the new Loxton Irrigation Area which was opened up for soldier settlement at a cost to date of £1,280,000, as well as a comprehensive drainage scheme for the area which, although originally estimated to cost £1,310,000, will be completed at a much lower cost. Expenditure to 30th June, 1963, on the drainage scheme is £625,000 and the only work still to be done is the backfilling of some trenches in which pipes have been laid and the construction of the levee bank around the evaporation basin. Some work still remains to be done on farms developed from virgin lands in the Hundred of Gosse on Kangaroo Island and the funds to be provided this year are expected to substantially complete this final phase of war service land settlement development on this island. I regret to inform honorable members that, due to the difficulty of obtaining sufficient areas of suitable land in South Australia, all classified applicants did not obtain farms. However, those unsatisfied were offered the opportunity of applying for farms developed in Western Australia and Tasmania but the response indicated that these ex-servicemen were, in general, not sufficiently interested in settlement on the land to leave their home State.
In Tasmania, development is still proceeding, mainly on King Island, Flinders Island and Montagu Swamp projects. These projects have taken longer to complete than originally estimated, due to a number of factors such as excessively wet seasons, problems in the control of re-growth and rushes, or pasture failures requiring some research to find the answers. To date 523 farms have been allotted and approximately 56 farms are approaching the allotment stage. Many of the settlers on King Island and Flinders Island were originally domiciled in New South Wales and Victoria but were unable to obtain farms in their home States. Expenditure to 30th June, 1963, in Tasmania on the acquisition and development of land was £17,841,000.
As honorable members are, no doubt, aware, ex-servicemen eligible to participate in the War Service Land Settlement Scheme were not debarred due to lack of private capital. Consequently most of those exservicemen allotted farms have had to be provided with advances for all the capital necessary to equip and operate them. With the less favorable cost-price relationship which has existed over more recent years settlers, particularly those who occupied their farms comparatively recently, have had some difficulty in meeting their commitments on such a heavy debt structure. Some arrears have accumulated due to causes accepted as being outside the control of the settlers and “ad hoc “ measures to assist settlers are being introduced as required; for example, by the extension of time in which to make principle repayments on advances made for the purchase of stock.
The amount advanced to settlers under the credit facilities arrangements in Western Australia, South Australia and Tasmania from inception to 30th June, 1963, totalled £35,855,000, of which £19,949,000 or slightly over 55 per cent, has been repaid. An amount of £219,000 has been written off as debts irrecoverable. This amount written off is a little over one half of 1 per cent. - actually 0.61 per cent. - of the total advanced. I have these figures in tabular form and, with the concurrence of honor able members, I incorporate them in “Hansard”. They are-
A significant feature of the War Service Land Settlement Scheme has been the development of approximately 1,000,000 acres of land which previously contributed nothing, or very little, to the national income. In addition, 253 new irrigated horticultural and viticultural farms have been developed at Loxton in South Australia from land previously used mainly for extensive grazing.
There will be some fairly heavy writing down of the cost of providing the war service land settlement farms, particularly those developed later from virgin land, to comply with the principles laid down. This will be shared between the Commonwealth and the States on the basis of three-fifths and two-fifths respectively. The total amount of write-off involved cannot be defined precisely at the present time but it is confidently expected that it will not be unreasonable having regard to the liberal conditions to which the governments have agreed for the re-establishment of ex-servicemen on the land and to the gross additional annual amount which the farms will contribute to the national income over the years.
I am confident that the farms provided under this scheme are capable of achieving the objective of the scheme; that is, to enable the settlers to earn a reasonable labour income and by efficiency, diligence and thrift to build up some equity for themselves. I commend the bill to honorable members.
Debate (on motion by Mr. Pollard) adjourned.
In committee (Consideration of Senate’s amendments):
Sections one, two and three of the Principal Act are repealed and the following sections inserted in their stead: -
“3, In this Act, unless the contrary intention appears - “ suit “ means any suit, action or original proceedings between parties or in rem, but does not include -
Senate’s amendment No. 1 -
Clause 3, in paragraph (b) of definition of “ suit “, after “ (b) “ insert “ except in Part IV,”.
After Part IV. of the Principal Act thefollowing Part is inserted: - “ Part IVa. - Enforcement of Fines Imposed by Courts of Summary Jurisdiction. “26a.-…… “26g. - (1.) A person against whom an order of committal is made under the last preceding section may apply to a Judge of the Supreme Court of the State or Territory in which the person was apprehended, sitting in chambers, for a review of the order, and the Judge may review the order.
Senate’s amendment No. 2 -
Clause 11, proposed section 26g. (I.), leave out “A person against whom an order of committal is made under the last preceding section”, insert “Where any person is aggrieved by any order or by the exercise of any power under the last preceding section, such person”.
– There being no objection, the amendments will be considered together.
Sir GARFIELD BARWICK (Parramatta - Minister for External Affairs and returned this bill with two amendments. The Government is prepared to accept the amendments, and I shall presently move that the committee should agree to them.
The first of the amendments involves no question of principle. It will preserve the status quo in respect of interstate enforcement in maintenance proceedings. A maintenance order strictly so called is not now, and under the amendment will not be, enforceable under the Service and Execution of Process Act. But the amendment will permit the continued interstate enforcement under the act of certain incidental orders in maintenance proceedings, such as an order for costs. As the bill left this chamber, such incidental orders would have been left to be enforced under the same reciprocal State and Territories legislation as maintenance orders proper. Whatever might be thought as to the desirability of leaving all enforcement in this field to that legislation, I do not think the point at issue warrants further debate, and I think the House can properly accept the amendment.
The second amendment extends to all orders, in addition to orders for committal - which were covered in the original bill - the right of appeal conferred by the provisions dealing with the interstate enforcement of fines. I do not think there will, in practice, be many appeals from orders under section 26f. The amendment also gives a right of appeal to the Crown against any order. In general, I hold the view that we should not lightly include the Crown in any right of appeal in areas where the liberty of the person is involved. If I thought that this amendment had any great practical consequence, I would not be inclined to recommend its acceptance. But I can see little practical scope for its use, and think no harm is likely to come from its acceptance.
If the committee will bear with me a little longer, I will take this opportunity of explaining in rather more detail the position as to maintenance proceedings, and the changes that are at the moment in progress. Some such explanation is I think called for, because in the course of the Senate debates on the bill two suggestions were made that additional provisions should be added on some later occasion to the act, in order to make it possible to enforce maintenance orders under it, I make clear that the Government does not propose to accept these suggestions. There is already in existence a method of enforcing in one State a maintenance order made in another State, and the Government does not contemplate the establishment of an alternative method under the Service and Execution of Process Act.
The enforcement of a maintenance order made in another State is provided for under reciprocal State and Territory legislation, that has two special features. It provides a system of officers - called Collectors - whose function it is to assist the deserted wife who has obtained a maintenance order to enforce it against her husband in another State or Territory. In the second place, except in Tasmania, it contains provisions whereby the process of review of the order following an application for a variation can, subject to certain safeguards, be commenced in the State where the order falls for enforcement although the order was not made in that State.
A number of problems in the execution of this reciprocal legislation had been met in practice, and the State governments were not unaware of the problems. On my suggestion, and following the improved enforcement procedures provided by this Parliament in the Matrimonial Causes Act, the Standing Committee ot Commonwealth and State Attorneys-General undertook the task of modernizing and streamlining the law of maintenance generally and, in particular, the reciprocal State and Territory enforcement legislation. For over a year now, a committee of Commonwealth and State officers has been working under the direction of the Standing Committee of Attorneys-General preparing new legislation for introduction in a uniform form by the States and the Territories. That legislation is almost complete and, when I introduced this present bill. I thought, and I still think, that it was proper not to have alternative methods of enforcement of maintenance orders interstate, and that the uniform reciprocal State and Territory legislation, with its provisions for the assistance to wives by State officers and for the provisional variation of orders by the enforcing court would, in its improved form, satisfy the need for a simple and effective method of enforcement.
Returning now to the proposals made in the Senate, I think they may fairly be described as follows: -
I do not think that it would be satisfactory to provide under Commonwealth legislation a scheme of enforcement of arrears under a maintenance order without any provision for variation of the order, I believe that it is an important and sensible feature of the reciprocal State and Territory legislation that a husband can apply to the enforcing court - that is to a court in the State where he is resident - for a provisional variation, or for suspension or discharge of the order. The advantage of this is that it relieves him from the time and expense of going to the court where the order was originally made to apply for a variation. In particular, it allows a court called upon to enforce the order to do justice to both parties by accommodating the amount of the order and of the arrears to the actual earnings of the respondent during the period which has elapsed since the order was made. To have to go back to the original court to seek such a variation could well force the husband to give up his job, or at least to lose a certain amount of pay, and this, of course, benefits neither husband nor wife.
Turning to the second suggestion, I think that it is at least doubtful whether the Commonwealth has the necessary legislative power to enact a scheme similar to the reciprocal State and Territory legislation. To provide for a variation of the substance of the order, thus altering its obligation, both retrospectively and prospectively, would appear to go beyond the execution of the order itself, and thus beyond the power conferred by section 51 (xxii.) of the Constitution. It is at best very doubtful if section 51 (xxii.) - divorce and matrimonial causes - would authorize such a law; hither- to, this Parliament has acted on the basis that it does not.
The purpose of Commonwealth legislation would be to effect a scheme exactly similar to the proposed streamlined reciprocal State and Territory legislation. I cannot see any advantage to the individual in having the scheme operating as Commonwealth law, and I can see a disadvantage in the distinct risk of a successful attack on the constitutional validity of Commonwealth provisions. If, when the full terms of the draft reciprocal legislation are announced, any improvements can be suggested, I am sure that they will be considered as readily by the Standing Committee of Commonwealth and State Attorneys-General as they would be by the Commonwealth.
I move -
That the amendments be agreed to.
.- This relatively technical bill must be setting something of a record. When it was before the House last March the Opposition moved a couple of amendments which were accepted by the Minister assisting the AttorneyGeneral (Mr. Freeth). When the bill was in the other place in May further amendments were carried and now they have been accepted by the Attorney-General (Sir Garfield Barwick).
The second of the two amendments - the one moved in the other place by Senator Murphy - restores the first paragraph of the proposed new clause which I circulated when the bill was before us in March. Later, the Minister assisting the AttorneyGeneral circulated another form of this new clause. In it the first paragraph was altered in the way in which it appeared when the bill went to the Senate, the fifth and sixth clauses were made more precise than in the version I had circulated, and a seventh clause was added to the version I had circulated. In the circumstances I was happy to accept the amendment which the Minister moved in substitution for the one I had circulated. I, too, would not think as the Attorney-General has said, that it is in general desirable to give a right of appeal to the Crown. I also would agree that it is not likely that there will be many such appeals. Needless to say, we accept the amendment, which restores the original version that I had circulated and which was moved by my colleague, Senator Murphy, in another place and passed there.
The first amendment concerns a matter which was npt brought before our notice when the bill was before us in March. In the other place, however, after a very full debate and a sturdy resistance, the amendment was moved by Senator Wright and carried. It is quite a significant amendment. In introducing the bill the AttorneyGeneral had said that the amendment to section 3 of the act, introducing a new definition of the word “ suit “, was necessary in order to remove the doubts raised by some State supreme court decisions that a maintenance summons under the deserted wives and children acts was a process for the service of which section 4 of the act applied and not section 15. The amendment was introduced to make it quite clear that section 15 of the act applies to such proceedings. It was overlooked, however, that section 20 also refers to suits, and the amendment which was being made in the definition of “suit” meant that, whilst we were clarifying the method of service of maintenance summonses under the deserted wives and children acts, we were abdicating such power as there was for the enforcement of orders made by children’s courts under those acts. There have been supreme court decisions that the most common orders made under those acts, being continuing and variable orders, were not final and certain and therefore were not ones that could be registered and enforced under this act. There are, however, other orders made under the deserted wives and children acts which are final and which are and have been registered in the Australian Registry of Judgments provided under this act. The Attorney-General has instanced orders for costs. Another instance would be orders for preliminary expenses in affiliation proceedings. It was said in the other place that it was wrong for the Commonwealth to abdicate its responsibility in this field. It may be a field where the Commonwealth has exercised very little responsibility hitherto, but it had exercised some. If the new definition of “ suit “ had gone through as it was introduced here, the Commonwealth would in fact have abdicated the small responsibility that it previously accepted. Accordingly, in the other place it was resolved that the present situation had to be maintained. That is why the amendment was passed in the other place and that is presumably why it has now been accepted here.
I am moved to speak a little longer on this matter because the Attorney-General himself made some further remarks about the Senate proposals. I feel that he was a little less than just to the attitude expressed by some of his colleagues, as well as mine, in the other place. The Attorney-General puts it that the proposal was that Commonwealth legislation should provide for the enforcement of arrears of maintenance without any provision for variation and that this scheme could be exclusive of or supplementary to State legislation. Sir, I do not believe that any of his colleagues, or mine, in fact proposed that there should be no provision for variation. They thought it would be possible for legislation to be passed bv this Parliament with provision for variation. In the very bill with which we are dealing there is provision for variation of road fines in the enforcing State. That is a clear instance where we did assert and assume that under paragraph (xxiv.) of section 51 of the Constitution we were able to vary orders made in the issuing State and that those variations could be made in the enforcing State.
The more general attitude, which was expressed in the other place, flowed from the two paragraphs of section 51 of the Constitution to which the Attorney-General has referred. Paragraph (xxiv.) of section 51 of the Constitution reads -
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:- (xxiv.) The service and execution throughout the Commonwealth of the civil and criminal process and the judgments of the courts of the States:
The attitude expressed in the other place - this is an attitude which would certainly be expressed on my side of this chamber - is that this is a power which the Commonwealth should exercise. It was one of the great reasons for forming the federation. It was the reason for the Federal Council of Australasia being formed fifteen years before the federation itself was formed This was among the very few powers given to that Federal Council. It was one of the first powers chosen for the new federation. It is true that in Australia we have always exercised, and not least in respect to main tenance and affiliation proceedings, the power to pass laws concerning the service of process. The contention in the other place was that we have not to a sufficient degree passed laws providing for the execution of process. It is a contention for which honorable members on this side in this committee would strive no less.
Paragraph (xxii.) of section 51 of the Constitution provides that this Parliament shall have power to make laws with respect to-
– Order! The honorable member’s time has expired.
– With the concurrence of the committee, I shall take my second period now. I thank honorable members for their courtesy.
Paragraph (xxii.) of section 51 of the Constitution provides that this Parliament shall have power to make laws with respect to -
Divorce and matrimonial causes; and in relation thereto, parental rights, and the custody and guardianship of infants.
It was suggested in the other place that this Parliament may have power itself to pass laws concerning maintenance and affiliation proceedings. Under that paragraph of the Constitution, there has never been a judgment or an obiter dictum that this Parliament had not such power. There have been many suggestions that the words “ matrimonial causes” refer to disputes between husbands and wives such as arise under the Deserted Wives and Children Act or the Interstate Destitute Persons Relief Act. The other provisions for the custody and guardianship of infants, therefore, may well concern ancillary remedies provided in maintenance and affiliation proceedings. It is true that this matter is not without doubt. It can never be put beyond doubt unless this Parliament passes an act and that act is challenged.
It is not to be assumed that the High Court of Australia would be swift to rule such an act invalid. All of us in this place have been encouraged in the last few months by the fact that the High Court - quite boldly, some people may think - ruled as valid Part VI. - the legitimation provisions - of the Marriage Act 1961. That is an instance of a tendency which we have frequently observed. The High Court is not as loath to invalidate Commonwealth legislation in the social field as it is in the economic field, at least where the interests of employers and investors are concerned. In the economic field, where employees are concerned under the Conciliation and Arbitration Act, the High Court has made the most remarkable extensions of Commonwealth legislative power.
In view of the decision concerning the legitimation provisions of the Marriage Act, it is not to be assumed that the High Court would hold that matrimonial causes did not cover the subject-matter of the Deserted Wives and Children Act and the Interstate Destitute Persons Relief Act. If there were to be a challenge, that challenge would have come, it would seem, just as probably from the States as from any aggrieved individual. It was a State - Victoria - which challenged Part VI. of the Marriage Act 1961. There was no cost to individuals, therefore. The matter was promptly determined on the initiative of a State government and at the cost of that government.
Accordingly, Sir, I feel that it is only fair to the learned gentlemen on both sides who spoke in the other place to point out that they have not in fact proposed the restriction on execution of process which the Attorney-General attributes to them. Rather, they have merely asserted that the Commonwealth, under, its matrimonial causes and execution of process powers, had the responsibility to act as boldly and as beneficially as it has acted on the initiative of the present Attorney-General under the Matrimonial Causes Act and the Marriage Act. Modern transport is so efficient that persons who are concerned in matrimonial causes can very readily proceed from one jurisdiction to another. It is altogether likely that in such disputes in the future there will be more rather than less resort to the act with which we are dealing. There is, in addition, the likelihood that once the Government has acted in the matter there will be more resort to international proceedings.
Until the Parliament passed the Matrimonial Causes Act 1959 and the Marriage Act 1961, which were introduced by the present Attorney-General, the Government used to take the attitude that the 1956 United Nations Convention on the Recovery Abroad of Maintenance Obligations was not a convention that Australia ought to ratify. On 25th October last, the AttorneyGeneral, in his capacity as Minister for External Affairs, told me that the Commonwealth was in fact then considering the ratification of this convention. I was disappointed, however, to learn that he proposed to consider it in the Standing Committee of Commonwealth and State AttorneysGeneral. Surely this is a matter on which the Commonwealth can legislate under its external affairs power and possibly under its matrimonial causes power. This is not a matter on which it is necessary or, I submit, proper to consult with the States. The Commonwealth Government is the only government in Australia which can participate in international treaty-making. The States have no international status. They are still British colonies. They would not be heard at any international gathering. They cannot sign international instruments. The Commonwealth Parliament - and the Commonwealth Parliament alone - is the legislature of this country in international matters.
The ratification of the 1956 convention is becoming more urgent. It has not been suggested that the Commonwealth has not power to ratify it. There are now in Australia many migrants from countries which have ratified or acceded to this convention. Some are disadvantaged - others are advantaged, of course - by the fact that Australia has not ratified it. Insofar as we are becoming a more united nation and also more cosmopolitan, this Parliament ought to take the same complete steps in respect to maintenance and affiliation proceedings as it has already taken, on the initiative of the Attorney-General, in respect of marriage and matrimonial causes under the Marriage Act and the Matrimonial Causes Act.
The Attorney-General has referred, not in this context alone, to the good work of the Standing Committee of Commonwealth and State Attorneys-General. State maintenance laws owe such similarities as they have to their having been copied from English acts. As we have found under the proposals for uniform company legislation, uniform reforms are achieved only as quickly as the slowest of the eleven Houses that comprise the State legislatures will move and only as far as the most backward of those eleven chambers will advance. On this basis, progress towards uniformity will always be rather unsatisfactory. There is probably no excuse for proceeding in this way in the present subject-matter.
I have made these remarks on this general subject, Sir, because the AttorneyGeneral himself referred to such matters in the consideration of these amendments made in the other place. Returning now to the amendments, I say that we onthis side of the committee accept them. We compliment the Attorney-General on the good grace with which he has accepted them.
Question resolved in the affirmative.
Resolution reported; report adopted.
.- I move- [Customs Tariff Amendment (No. 79).]
[Customs Tariff Amendment (No. 80).]
[Customs Tariff Amendment (No. 81).]
[Customs Tariff Amendment (No. 82).]
[Customs Tariff Amendment (No. 83).]
[Customs Tariff Amendment (No. 84).]
[Customs Tariff (New Zealand Preference) Amendment (No. 16).]
[Customs Tariff (New Zealand Preference) Amendment (No. 17).]
Of the six Customs Tariff Proposals I have just tabled, Customs Tariff Proposals Nos. 80 to 83 relate to tariff alterations which have been made by “ Gazette “ notice since Parliament rose in May. In the main they arise following consideration by the Government of recommendations by the Tariff Board and reports of a special advisory authority. In accordance with section 273ea of the Customs Act, notices of proposals were published in the Commonwealth “ Gazette “ and copies of the notices together with press statements by my colleagues, the Minister or Acting Minister for Trade, were circulated to honorable members at the time.
Customs Tariff Proposals No. 80 provide for amendments on -
Iron and steel chain,
Penicillins and streptomycin.
On drafting machines increased protective duties now apply to a greater range of instruments than previously. The new rates on iron and steel chain are somewhat lower than the combined ordinary and temporary duties formerly in operation in respect of most sizes and types. Higher duties are imposed on penicillins and streptomycin in place of the temporary quantitative restrictions which had applied pending receipt of the Tariff Board’s report and consideration of its recommendations.
Proposals No. 81 implement the Tariff Board’s recommendations for increased protection on towels and towelling of types made in Australia, and on fabrics of terry, huckaback and honeycomb weaves. Other types, including tea towels and towelling may qualify for admission at non-protective rates.
Proposals No. 82 provide for tariff changes arising out of reports by the Tariff Board and a special advisory authority on -
Screens and sieves for ore processing and similar equipment,
Narrow woven fabrics, and
Processed polyamide and polyester yarns.
On wedged wire screens and sieves for ore processing, some reduction in the protective duties has been made. Other changes made include a reduction in the mostfavourednation duties on certain other sieves and screens to comply with a commitment entered into during international negotiations. Pins, carpenters’ woodworking planes, wholly or principally of metal, and plane irons have become dutiable at higher protective rates of duty.
The Customs Tariff is being amended to make waterwaved ribbons dutiable at rates similar to those applying to ordinary ribbons. This follows the Tariff Board’s finding that imports of waterwaved ribbons are competing against ordinary ribbons of Australian manufacture.
Processed continuous filament nylon and terylene yarns are made subject to a temporary duty of 25 per cent, ad valorem following recommendations by a special advisory authority. The temporary duty is additional to the former rates of free British preferential tariff and 12i per cent. most-favoured-nation.
Proposals No. 83 provide for a temporary duty, following a report by a special advisory authority, of ls. per lb. on plasticcoated fibre-glass yarn with provision, under by-law, at the existing rates of duty, for the importation of 1 lb. of imported yarn for every 2 lb. purchased from local production.
Proposals No. 84 impose new duties to operate from to-morrow morning consequent upon acceptance by the Government of reports by the Tariff Board on -
Phthalic anhydride, and
Vinyl chloride polymers and copolymers.
On phthalic anhydride the new duties are higher than the existing ordinary duties but lower than the combined ordinary and tem porary duties. Vinyl chloride polymers and copolymers specially prepared for the manufacture of sound reproduction discs become dutiable at 6d. per lb. British preferential tariff and 73/4d. per lb. mostfavourednation, whilst other goods under reference continue to be dutiable at the level operating prior to the introduction of the temporary duties. In addition to import duties, however, it is proposed to assist the Australian production of uncompounded vinyl chloride polymers by means of a bounty of 4d. per lb. pending a review of the industry by the Tariff Board in three years’ time. The necessary legislation to provide for the payment of a bounty of 4d. per lb., operative from to-morrow, will be introduced later this session.
Proposals No. 79 are of a formal nature and are introduced mainly to correct some doubtful English in the heading to item 336 relating to paper and paperboard. The paper items were proposed to be amended by Tariff Proposals No. 74 which were tabled in this committee on 17th April, 1963.
The other proposals which I have just tabled, namely New Zealand Preference Proposals Nos. 16 and 17, are complementary to the main proposals and are necessary to maintain preferential margins and similarity of wording. I commend the proposals to honorable members.
Reports on Items.
– I present reports by the Tariff Board on the following subjects: -
G.M.C. motor coaches.
Iron and steel chain.
Narrow woven fabrics.
Penicillins and streptomycin.
Screens and sieves for ore processing machines. Towels, towelling, &c, and interim report under the general textile reference on towels, towelling, &c.
Vinyl chloride polymers and copolymers (including copies of correspondence between the Minister for Trade and the chairman of the board).
I also lay on the table of the House reports by special advisory authorities on the following subjects: -
Plastic coated fibre-glass yarn.
Processed (thrown) polyamide and polyester yarns.
Ordered to be printed.
– Is leave granted?
– At this stage, might I inquire from the Minister what proposals he intends to proceed with if the request for leave is granted? Does he intend to proceed with proposals relating to items upon which he has just tabled reports?
– All the proposals with which we propose to proceed under this bill were either tabled in this House during the last sittings or were dealt with during the recess and the papers covering them were circulated to honorable members. We do not propose to deal with any new material of which the House has not had previous notice.
– Is it not a fact that this is the first time you have tabled reports in connexion with the matters with which you have just dealt?
– All the papers have been circulated to honorable members.
– But this is the first time the reports have been tabled in this House?
– That is true. They have been validated by legislation. The course I am adopting is normal procedure, and, as I say, we do not propose to debate any new matters.
– It may be normal procedure, but the Minister is expecting the House to debate proposals on which he has just tabled reports for the first time. It does not necessarily follow that what might have been normal procedure weeks ago or years ago will be normal procedure to-day or to-morrow.
– Order! Is leave granted?
– We had proposed to put these bills before the House in two groups, but to amalgamate them for the purpose of debate. As the honorable gentleman has not given me leave to propose the motion I sought to submit, I propose to delete reference to Customs Tariff Bill (No. 3) 1963, and Customs Tariff (New Zealand Preference) Bill (No. 3) 1963. This will remove from the debate at this time that series of proposals which was circulated during the parliamentary recess and we shall be dealing only with the items which were presented to this House during the last sittings and of which every honorable member has knowledge. In the circumstances I ask for leave to submit a motion to facilitate the passage of several tariff bills.
Motion (by Mr. Fairhall) agreed to -
That so much of the Standing Orders be suspended as would prevent four customs tariff bills and an excise tariff bill -
being presented and read a first time together and one motion being moved without delay and one question being put in regard to, respectively, the second readings, the committee’s report stage, and the third readings, of all of the bills together, and
the consideration of the bills in one Committee of the whole.
Customs Tariff Bill (No. 2) 1963.
Customs Tariff (Canada Preference) Bill (No. 2) 1963.
Customs Tariff (New Zealand Preference) Bill (No. 2) 1963.
Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Bill 1963.
Excise Tariff Bill 1963.
Bills presented by Mr. Fairhall, and read a first time.
– I move -
That the bills be now read a second time.
The House has before it for discussion a bill to amend the Customs Tariff 1933-1963 and three complementary preference bills, together with one associated Excise Tariff Bill. These bills will enact the customs tariff proposals which are now before the Committee of Ways and Means. They are Customs Tariff Proposals Nos. 70 to 79. Customs Tariff (Canada Preference) Proposal No. 9, Customs Tariff (New Zealand Preference) Proposals Nos. 14 to 16. Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Proposal No. 2 and Excise Tariff Proposal No. 2. This procedure is in accordance with the new Standing Orders which provide that tariff matters shall be dealt with by a bill instead of on a motion in committee as heretofore. Under the committee procedure, some general debate was almost unavoidable. Under the new procedure the second reading will give wider scope for dealing with tariff matters generally relating to the bills. During the committee stage it will be for the committee itself to decide how the debate will be conducted to give honorable members the same access to individual items as before. Honorable members will recall that full documentation was distributed at the time the proposals were tabled, but additional copies of the documents are available from the floor of the chamber if required. I commend the bills to honorable members.
.- I had hoped that the new procedure would streamline these debates which, to me, have been very difficult to follow. I feel sure that after this unfortunate contretemps the debate will proceed more smoothly on the next occasion.
I wish to discuss a report that was published by a committee of the Australian Industries Development Association in April of this year entitled “ Protection in the Australian Economy “. It gives an outline of the general concept of the association’s thinking on tariff procedures and how tariffs should work. I think it proper that this report be dealt with at this stage. Among the members of the committee to which I have referred were Mr. Anderson. Director of the Associated Chambers of Manufactures, Mr. Beattie of Australian Paper Manufacturers Limited, Mr. McGrath of Repco Limited, Mr. Rigg of International Harvester Company of Australia Proprietary Limited, Mr. Ross of Ogden Industries Proprietary Limited, Mr. Rowden of Felt and Textiles of Australia Limited, Mr. Sorensen of Imperial Chemi cal Industries of Australia and New Zealand Limited, and Mr. Wiltshire of the Wiltshire File Company Proprietary Limited. The secretary was Mr. Thorpe. Two other members of the committee were Mr. Holder, the economist attached to the Bank of New South Wales, and Dr. Perkins, senior lecturer in economics at the University of Melbourne.
When the report was published, a great deal of interest was shown in it. It was received with loud acclaim by the Chambers of Manufactures, and the rather extreme views expressed in it were held to be justified largely because of the presence on the committee of two recognized economists - Mr. Holder and Dr. Perkins. I read the report with raised eyebrows, because it bristled with naked and undisguised pleading and contained many serious misstatements of fact. I could not understand how people of the known quality of Holder and Perkins could be associated with such a document. So I wrote to them, expressing my surprise. Their replies were interesting. I quote, first, from Mr. Holder’s letter, which states -
Please do not think I have become a rabid protectionist. I got drawn into this “ committee “ in an unfortunate and perhaps careless way as someone for the authors - the secretariat of A.I.D.A.- to consult, and my only contact was about one hour’s discussion several months ago with a member of their staff. A draft report was sent to me in my absence recently, and my own Department sent off some searching criticisms. That was my only participation before I read the account of the report in the press. I believe that our principles of tariff-making need overhauling, but I would certainly not go along with many of the assumptions made by the manufacturers’ bloc.
That was Mr. Holder’s reply, and Dr. Perkins’s reply is no less interesting. It reads as follows: -
Thank you for your letter. I am glad of the chance to assure you that I agree with your view of the A.I.D.A. report. I was a “ co-author “ only in the very limited sense that I gave them a very detailed and hard-hitting criticism of the first draft, making, as I believe, the basic points that you (or my academic colleagues) would wish to see made.
I did not know how much or how little amendment would be made to the final draft in the light of these, but on small marginal matters I believe I have had some effect. My reasons for agreeing to help were the hope that I might do something to make it a less fallacious document - and I don’t regret the decision to help. However, I had considerable doubts about allowing my name to be used, and did so on the undertaking that the foreword would make it clear that the individual members of the committee did not necessarily share the views in the report. I was not given to understand that the foreword would suggest that the views of members did not vary “ on the general principles expressed”; for that certainly gives rise to the sort of conclusion that you drew.
However, I can only hope that people who know anything about me, and about the subject, will realize that a good deal of what the report said, said it in spite of my criticisms rather than with my approval.
Perhaps I might also make it clear that I received no sort of remuneration for my work on the committee. Finally-
I hope, sir, that you do not mind me including this passage, as it may seem to be a personal plug - may I say that I have followed with interest and admiration your campaign (and I do hope you don’t mind my calling it that) in the Federal Parliament on the subject of tariffs. Yours sincerely.”
That pretty effectively disposes of the aura of respectability which the report has gathered to itself by associating the names of these two economists with the documents. Now let us have a look at the report. I will not go through it all in detail but I think it is fitting, at the secondreading stage of the debate on these tariff bills, to expose some of the silly stuff. Before doing that, I wish to discuss one fundamental admission or omission which I regard not as silly, but only as tragic. At page 6, the report states -
There are three basic national aims which have received such general acceptance that they transcend political parties or particular groups.
The committee then spells them out and they are unexceptionable. They are, 1, Rapid Population Growth aided by Immigration; 2, Full Employment; and 3, A Rising Standard of Living. As I say, no one can object to these three being included, but the omission of national survival as the first and most important is tragic. How long can we survive, isolated as we are on the edge of Asia, with our standard of living continually rising while the gap between it and that of our neighbours continues to widen? I defy any one to walk through Calcutta at night and see the people sleeping in the streets and not to feel a little uneasiness at the fact that the economic part of our national policy is not doing anything to help to solve this kind of problem. Do we fondly imagine that these people will sleep in the streets for ever? Any of us who has travelled in Asia knows that there is a ferment working there that will one day sweep us away unless we adjust our policies in this matter. We are proud to be sitting on top of the world, but that can be a dangerous place to be sitting when an explosion occurs. The report pays desultory lip service to this problem. At page 17, it states -
Thus the world is divided more or less into two types of markets. On the one hand, there are the commercial markets - namely, the well-fed, industrialized countries. On the other hand, there are the markets of the under-fed developing countries, with two-thirds of the world’s population, which are unable to buy sufficient food and other goods to meet essential needs. The latter are mainly only potential markets at present, and to enable them to buy, their economies must be developed.
So their economies must be developed, but we pass by on the other side. For instance, India has few natural advantages, but she produces cheap cotton and has cheap labour and so is ideally suited to produce cheap cotton textiles. But what do we do when she starts to export them here. We slap on them a duty that makes it very difficult for them to get in. Is this helping her economy to develop? And what about towelling from Hong Kong and handkerchiefs from China? You could argue the case for helping our poorer neighbours, by trading with them, from many angles. Our reputedly Christianity could be invoked, or it could be done for sweet charity’s sake, or the cold economic arguments of buying from them to enable them to buy from us could be used. Those arguments do not mean much to an affluent democracy, avid for more motor cars and more television sets than we can afford. But the argument that, if we keep trying to live to ourselves as the committee suggests, by so doing we will make an explosion inevitable, is perhaps one that we can understand.
South Africa is not the only country that is hoping that it can hold shut the valve of the pressure-cooker forever. We do it more remotely and more politely, but we do it just the same. And the sooner we, as a people, realize that we have a responsibility in this matter that goes beyond making flowery speeches, the better it will be for the world in general and for our Asian neighbours in particular. But chiefly it will be better for us and for our children and our children’s children.
To find this stark question of national survival absent from the catalogue of our national aims and protective policy is, in my opinion, tragic. It is not solely the committee’s fault because it is absent from our national thinking, also.
But let us leave that aspect, come down from that lofty plane and have a look at some of the serious statements made in this report. On pages 11 and 12 of the report appears the following statement: -
A large percentage of these farm costs is made up of charges which bear on all businesses to a greater or lesser degree. These are costs of labour, freight, insurance, interest, rent, taxes, depreciation, marketing and fuel. Then there are specific items like seed, fodder and fertilizer.
The items in these two categories are determined not by a protective tariff but by the general price structure of the economy.
They can amount to 90 per cent, of total costs. The remaining elements of cost which may be higher as a result of the tariff, in these cases, would amount to 10 per cent, of total cost. Items within this group would be subject to varying rates of duty, but, applying the national average rate of 12 per cent., the increase in cost brought about by protection is little more than 1 per cent.
Really, any high school student of economics would know that farmers’ costs are increased not only by an increase in the cost of the things he buys - the 1 per cent, referred to - but also by an increase in the general cost of wages. For instance, a farmer’s direct costs may not be increased greatly by a duty on cotton textiles. He may not buy many sheets a year, but surely the additional cost of sheets caused by the duty is built into the wage cost, which in turn increases fertilizer costs, insurance costs, transport costs and so on. Of course, the committee would know this. If it does not know, it exposes itself to a charge of criminal ignorance. But to know this and still to make such a statement exposes the committee to the derision of any thinking person and to the charge of dangerous, selfish and special pleading casuistry.
There is another obvious weakness in the paragraph from which I have read - the statement that the national average of our tariff is 12 per cent. That figure is derived from the table on page 33 which claims to show the average tariff duties of various countries. It shows, of course, nothing of the kind. It shows the average of the duties paid by various countries. There is a vital difference. If a prohibitive duty is put on a product which effectively prevents the entry of the product into Australia, obviously that product pays no duty at all, because it does not enter Australia. So in that case the rate of duty imposed could not affect the rate of duty paid, even if it is 100 per cent. I am not sure whether the committee knew this. If it did not know, it should have known. If it did know, it should be ashamed of itself for using the figure in the way it did.
But let us continue. I hope my Country Party colleagues will listen to the statement appearing on page 18 of the report, which I shall read. It states -
Practically every Australian primary industry receives support of one kind or another. If production and export sales are to be maintained these supports will need to be continued. However, in some cases there is need for greater selectiveness to ensure protected industries are efficient.
Leaving aside the obvious retort that evidently it is expected that selectivity shall apply only to primary industry and not to secondary industry, let us examine the statement that practically every primary industry receives support in one way or another.
– No, they do not.
– But that is what the committee states. What about wool, barley, oats, peas, pork, bacon, mutton, beef, eggs, fresh fruit, green vegetables and so on? I suggest that the committee tell the farmers about the supports that they are receiving. I would like to be a fly on the wall at that meeting. Wheat is singled out for particular attention but the committee knows - if it does not know it should know - that until recent years the wheat producer subsidized the Australian consumer of flour to the tune of £190,000,000. Now, I admit, we are getting a little of our own back, but the committee relegates us to the status of a supported industry.
Let us turn to some other statements made by the committee. On page 52 it discusses the use of quota tariffs in this way -
Under this system a small percentage of total market requirements is admitted at a low rate of duty and quantities in excess of this quota at a substantially higher rate of duty. The objective is to keep the price and quality of the imported product down to the consumer and so help to prevent unreasonable price increases, or inferior quality, by local producers. This system is used extensively in the U.S.A. and appears to be extremely effective in preserving a greater part of the domestic market for home producers.
When ] read that statement I was so interested, and indeed alarmed, that I wrote to the American Embassy for confirmation of it. The Embassy expressed surprise and wrote to Washington. It now appears that the tariff quota system is used for cattle of a certain weight, for certain types of fish, for white potatoes, cream, stainless steel, table flatware and certain types of walnuts. This does not seem to me to be an extensive use of the system. Since publishing the report the Australian Industries Development Association has had the grace to admit that the word “ extensively “ was perhaps an exaggeration. In my opinion, that is putting it mildly. The system is hardly used at all and to make such a statement without first checking the facts is both foolish and dangerous.
I shall not weary the House by going right through the report. I could go on for hours picking holes in what I regard as a shoddy report, but let us leave the sorry story there. The only statement that I found refreshing was the admission that the system of quota restrictions is full of danger and should be used with caution. Most of the report I found to be distressingly inadequate. I realize that pressure groups have a right to submit their case to the public and to the Government, but I would have expected a more polished performance than this.
.- If ve accepted all the comments made by the honorable member for Wakefield (Mr. Kelly), every member of the committee would resign on the spot. But let us come back from the realms of fancy. I wish to refer to the Tariff Board’s report on fine papers and paperboard because it concerns Associated Pulp and Paper Mills Limited in Burnie, Tasmania, and its subsidiary in Ballarat, Victoria. The industry applied to the Special Advisory Authority in April of 1961 for some protection. This was granted in September of 1961 because of the crisis which developed for the company from the effects of the credit squeeze and the dumping in Australia of paper from overseas countries. The industry’s request was approved and an emergency tariff of £10 per ton was imposed in September, 1961. This special temporary protective assistance on top of the then existing protection brought the tariff to £26 6s. 8d. per ton. Once the matter had been referred to the
Special Advisory Authority the industry had to go before the Tariff Board for a review of its long-term needs. In the case of fine paper, this review has taken about eighteen months and the board has recommended an increase of £6 6s. 8d. per ton over the emergency rate of £26 6s. 8d., bringing the protection to £32 13s. 4d. per ton. Associated Pulp and Paper Mills had sought a tariff of £42 per ton or 40 per cent, ad valorem. While we are pleased with the increase granted, we maintain that it does not go far enough.
One redeeming feature is that the board took notice of the industry’s application relating to dumping. In its report on this aspect the Tariff Board stated -
Some of this evidence neither proves nor disproves dumping at prices which have caused injury to the Australian industry. On balance, the Board has concluded that the evidence available does not establish that overseas countries, with the exception of Britain, are selling fine papers to Australia at export prices which are less than their fair market values and which have caused or are threatening injury to the Australian industry. Nevertheless, the evidence on imports of Swedish origin is sufficiently doubtful for the Board to conclude that the administering department should keep these imports under surveillance.
There is prima facie evidence that at least one large British exporter to Australia sells fine papers at prices which are below the comparable domestic prices. The Board has therefore concluded that British fine papers and paperboards are being sold to a person in Australia at export prices which are less than their fair market values and that imports of these papers and paperboards are threatening injury to an Australian industry.
The report then refers to evidence of the dumping of paper of British and Swedish origin - this is the first time, I believe, that such a reference has been made in any report - and recommends that these imports be kept under scrutiny. Earlier this year, in this House, the Minister for Supply (Mr. Fairhall) outlined plans to counter this dumping. He said -
It is proposed that all types of paper and paperboard be covered by “ Gazette “ notice but that, initially, dumping duties be collected only m respect of types specified by the board. The Department of Customs and Excise will watch the position with regard to other types of paper and paperboard and the collection of dumping duties will be extended if necessary.
The industry had pointed out that this dumping was brought about by exporting paper to Australia at special prices; that is, selling at discounts of up to 10 per cent, on domestic prices of paper in the country of origin. However, importers are running a great risk now that the board has directed attention to this practice. If caught, the importer is obliged to pay the difference in price, and already there have been suggestions that the Government has started to collect dumping duties from at least one overseas supplier of fine paper. The Minister for Supply (Mr. Fairhall), who is now at the table, may be able to tell us whether that is correct.
The Tariff Board is to be congratulated on directing attention to this matter. The fact that it has done so will at least have a salutary effect on merchants who, by their trading methods, undermine this great Australian industry which has suffered enough by the credit squeeze imposed by this Government without having also to put up with dumping by overseas exporters. Ordinary imports are dangerous enough in themselves, and for this reason I maintain that Associated Pulp and Paper Mills should have received the higher rate of protection that it asked for. During 1959-60 imports of fine papers directly affecting Associated Pulp and Paper Mills were running at the rate of 1,631 tons a month. In 1960-61 this rate rose to 2,737 tons a month. It fell to 1,733 tons a month in 1961-62 due to a depressed market, but it rose again to 2,247 tons a month during the last half of last year. The figures for this year are most revealing. Imports for January reached almost an all-time record of 3,005 tons. In February the figure was 2,407 tons, in March 2,225 tons, in April there was a considerable increase to 2,659 tons, and the figure for May was again very high, reaching 2,838 tons.
As I have said, these figures cover only imports of fine papers that are in direct competition with the products of Associated Pulp and Paper Mills, Burnie, Tasmania, and its subsidiary at Ballarat in Victoria. The company’s production includes fine writing and printing papers, duplicating and blotting papers and magazine printing paper. The company also manufactures base papers for coating by its subsidiary at Ballarat. For these the Tariff Board has recommended a rate of 30 per cent, ad valorem. Another subsidiary, Papermakers Limited, of Burnie, manufactures greaseproof paper, glassine and vegetable parchments. For greaseproof papers the protective rate has been raised by approximately 50 per cent, to about £22 a ton, or 15 per cent, ad valorem. The company had requested £45 a ton. For glassine the rise has been from about £21 a ton to about £32 a ton, which also represents a duty of 15 per cent, ad valorem.
Coated papers made at Ballarat had been very hard hit by imports under the old duty rate of £18 10s., and even the special duty of another £20 granted in April, 1961, failed to prevent dumping, especially by the Japanese. The people in Japan are very shrewd competitors. When they were asked the price of this line in Japan, so that it could be ascertained whether they were selling in Australia at less than the domestic price, they replied that there was no domestic price in Japan as this line of paper was made especially for the Australian market. At the time of the granting of the special duty about half of the mill’s employees had been dismissed. The work-force had decreased from 358 to 206 and the plant was operating at one-third capacity. At the inquiry which is covered by the report we are now considering the company asked for a tariff of £88 a ton or 50 per cent, ad valorem, but it received about £50 a ton or 30 per cent, ad valorem, which means an increase of more than two and a half times1 the old duty, or an increase of about onequarter above the emergency level.
The board stresses in its report that the sharp increase in imports was the principal single cause of the difficulties in 1961 of Associated Pulp and Paper Mills. When import licensing was in vogue records were kept of the quantities of competitive goods coming into this country, and these records were available to the industry, which then had a chance to take steps, if it so desired, to protect itself. To-day we have no prior knowledge of likely imports. Nothing is known of imports until they have actually arrived. I believe that the Government should have some means of obtaining prior information for the benefit of Australian industry. Here we are in mid-August, and the latest figures available of imports of fine papers in direct competition with the products of Associated Pulp and Paper Mills are those for May. There is a lag of two and a half months - and honorable members should bear in mind that imports in May were running at the high level of 2,838 tons. When millions of pounds of capital investment and the livelihood of thousands of Australians are at stake surely the industry is entitled to know what pressure it is likely to experience through excessive imports.
Everything must be done to prevent a recurrence of the conditions of 1961 when in the Burnie mill 400 employees lost their jobs and 1,297 were working short-time. This mill is the life blood of the north-west coast of Tasmania, and its well-being is of paramount importance in the economic life of the State. The Tariff Board recognizes that it is one of the largest fine paper mills in the world. As I have stated before in this House, the company started production in 1938 with one machine. It now has nine machines capable of producing 100,000 tons of paper a year. At present 2,862 persons are employed in the mill itself. When you add to this figure those engaged in the timber mill, the pulpwood cutters in the bush and the workers at Ballarat, the total exceeds 3,500, and of course there are many thousands more who receive employment indirectly as a result of this enterprise.
An efficient industry such as this is surely entitled to protection. There has been no rise in the price of its products since 1956 despite the fact that costs have risen since that time. The cost level of the activities of Associated Pulp and Paper Mills has been kept stable because of the increased volume of production that I previously mentioned. Any sharp increase in imports, and loss of sales as a result, means an inevitable reduction in production and a consequent loss to the company. During its recent difficulties it had to change its fuel from coal to oil to effect a saving of £200,000 a year. This the company was reluctant to do because it meant reduced employment opportunities for the coalminers in the Fingal valley in Tasmania. We want to see this industry expand and so provide more employment opportunities for Australian workmen. A new particle board mill was opened recently at Wesley Vale in Tasmania, and further plant extensions are planned for the Papermakers Limited mill at Burnie that produces greaseproof, glassine and vegetable parchment papers. It is also possible that there will be expansion at Ballarat.
This all indicates renewed confidence in Associated Pulp and Paper Mills Limited.
That confidence has been engendered by the board’s higher duty proposals in the report under consideration and by its reference to government action to curb dumping activities in this industry. In this regard I believe that the Tariff Board has done a great service to the fine paper industry. I hope that the Department of Customs and Excise will keep its eyes open and be on the lookout for any further dumping of paper in this country to the detriment of our great industry.
.- The House should be very grateful to the honorable member for Wakefield (Mr. Kelly) for one reference that he made in his speech. He directed attention to a comment in a publication by the pseudo experts about the extent to which tariff imposts have an effect upon the primary industries. Every member of the Australian Country Party and every primary producer will agree wholeheartedly with his statement that the impression that that book conveys - namely that the figure is only about 1 per cent. - is altogether fallacious. Every protective duty that is placed on an article means increased costs for the primary producers. The whole of the wealth of this country, apart from that derived from the sea, springs from the soil. Every crop grown, every mineral, and every piece of timber hewn come from the soil. The soil produces the only wealth that we have. It is tremendously important that the people who are saying constantly that tariffs do not represent as big a cost to the primary industries as those industries make out should understand that every tariff impost on an article has an indirect cost effect on the primary producers.
I carry that further and say that the effect is greatest in the States that are mainly primary-producing States, such as Western Australia, South Australia to a lesser degree, and Queensland. We in Western Australia have protested for years and years at the impost placed on that State because of the tariff protection afforded to industries on the eastern side of the continent. People talk about having a national outlook; but, funnily enough, it is always the people on the eastern side, the industrialists, who say that primary producers should have a national outlook. As long as they have a hand in the other fellow’s pocket, they will tell him to have a national outlook; but the moment he asks them for some help, the position is different.
I wish to refer to another aspect of the activities of the Tariff Board. I would be very much happier if every report of the Tariff Board contained an assurance and an indication of the extent to which the Tariff Board had inquired not merely into the efficiency of the industry seeking protection but also into the methods adopted by that industry in connexion with its costs. I have mentioned in this chamber before that secondary industries are carrying on a practice that was introduced in government contracting in wartime, namely, the cost-plus system. They have made no attempt to revert to the system that applied in pre-war days. In those times, the moment an industry had to meet an additional cost, investigations were made of how it could meet that additional cost without increasing the price charged to the consumer of its goods. I am not satisfied that secondary industries are doing that to-day. In fact, I am sure that they are not doing so. The Tariff Board should ask an industry, “Are you merely passing on additional costs which are being imposed on you, or are you attempting vigorously and honestly to find ways and means of maintaining the existing selling price of your product and competing with the overseas manufacturers by adjusting your business to meet the new circumstances? “ I believe that adjustment could be done more effectively than it is being done to-day. It is the duty of the Tariff Board to make certain that that is done. If we are to continue this tariff rat-race, before long our primary industries will be in a very sorry state.
You, Mr. Deputy Speaker, represent a rural electorate, and you well know how true this statement is: The only people in this country who are penalized by their own efficiency are the primary producers. The more efficient they become and the greater the wealth they produce for this country, the more they are penalized.
– What roti
– It is all very well for you to say that. The basic wage increase awarded by the Commonwealth Conciliation and Arbitration Commission recently was based on one thing; that was that the prosperity of the country could stand the increase. What was that prosperity due to7 It was due to the fact that the primary producers, in order to meet the pressure of costs on them, had to increase their production and become more efficient. But the primary producer could not go along to the commission and say, “ I am now producing more goods than I have ever produced; therefore I should receive a greater return “. He cannot do that in his own country and, of course, he cannot do it in respect of his products that are exported because he has to take whatever prices the overseas countries give him. The prosperity has not been due to increased prices that the primary producers have received. In spite of a lowering of overseas prices, prosperity has come because of the efforts of primary producers and their efficiency in production. Yet they are penalized because they are efficient, because they produce more and because they believe that their country is worth working for. The primary producer is the one who has the added cost put on to him every time.
During my time in this Parliament, two basic wage awards have been made on the basis of the prosperity of the country. One was made on the basis of prosperity in the wool industry. When the bottom fell out of the wool market the commission did not say, “ The country is not as well off as it was, so we will take £1 off the basic wage “. In making the recent award the commission said that the country .vas prosperous enough to bear a basic wage increase. That prosperity was based on the efficiency of one section of the community which is penalized because another section of the community - the secondary industries - constantly runs along to the Tariff Board for protection. Many of those secondary industries do not measure up to the requirements by producing as cheaply as they possibly can and providing the maximum value to the people who consume their goods. I am speaking particularly of the capital goods that are required for primary production.
In this morning’s capital city newspapers, and the “Canberra Times”, a very big advertisement of Tariff Board inquiries appeared. It announced dates of hearings and sitting places at which the Tariff Board would take evidence in connexion with an inquiry ordered by the Minister for Trade (Mr. McEwen) - very necessarily and very wisely - into a comprehensive list of goods, in order to ascertain whether the protective duties on these imported goods - I will not read out the list of them - are too high and could stand reduction. This inquiry has been long overdue. I know that it is to be conducted in connexion with some international trade negotiations, but it is long overdue. It is related to the remarks I have made. I believe that there is a need for a complete examination to see whether we can reduce tariffs. That is a fundamental requirement. I welcome this forthcoming inquiry, as, I am sure, do a tremendous number of people who are consumers and who have to pay protective duties, relying upon the honesty, shall I say, of the manufacturers and producers engaged in secondary industries to face up to their responsibilities in this connexion. I commend the Minister for instigating this inquiry. It is my hope that eventually the inquiry will be extended to cover the whole of our protective tariff system with a view to ascertaining whether the duties, prohibitions and restrictions imposed upon our overseas trade are really no higher than are required in order to maintain the secondary industries of this country.
I am not saying for one moment that we do not need to protect our industries. I appreciate that we must have a greater population and I also appreciate that secondary industries will provide the jobs needed for the extra people. The farmer, by his efficiency, is reducing the amount of labour he requires on his farm. Therefore, we must look largely to the development of secondary industries to provide opportunities for employment for an increasing population. But do we require the present degree of protection to enable our secondary industries to expand and provide these employment opportunities?
I believe that the inquiry is very necessary, but it is most disappointing to me to find that, as with nearly all Tariff Board proceedings, it will be conducted entirely in two capital cities - Melbourne and Sydney.
– What is wrong with that?
– What is wrong with it? It shows the truth of what I am saying all the lime. One-third of this continent never gets a look in when it comes to matters like this. I am speaking now for Western Australia, which is principally a primaryproducing State, producing, per head of population, more export income than any other State. There is to be an inquiry into the tariffs imposed upon a whole group of items of agricultural machinery and agricultural implements. It is obvious that the primary producers in my State will want to hear the evidence that is given on this subject, and will want to give evidence themselves. Some people have the idea that the duties on agricultural machinery and implements are the only imposts borne by the primary producers in relation to protective duties. I repeat that the matter goes well beyond that, and that every protective duty imposed has an effect on people engaged in primary industry. These duties represent a heavy drain on their resources. We have the position that if anybody from Western Australia wishes to give evidence before the Tariff Board on this vital question, he will be required to undertake the cost of travelling to the eastern States - to Melbourne or Sydney - in order to give evidence from the Western Australian viewpoint. I suggest that the Tariff Board should give some consideration to the position of Western Australia in this respect.
Sitting suspended from 6 to 8 p.m.
– Prior to the suspension of the sitting I was referring to the very comprehensive investigations that are carried out in respect of the many items that are subject to tariff protection. I referred to the fact that those investigations and inquiries will be made by the Tariff Board only in Sydney or Melbourne. States other than New South Wales and Victoria do not have the advantage of a tariff board inquiry being held in their capital cities. In this regard I direct particular attention to the plight of Western Australia, which suffers most from the national protection policy that has been applied. It is important that the board’s hearings be held in as many States as possible so that people in every State who are severely affected by the national protection policy may have an opportunity to hear the evidence given and to submit their case without incurring the heavy expense of having to travel across the continent to do so. It may be that the board’s forthcoming inquiry will lead to a change in Australia’s protection policy. That change may mean that the producer, who is called upon to bear the burden of Australia’s protection policy, will be more adversely affected. In view of the likelihood of the board’s inquiry having those results, the board should go to each of the States.
The economics of the board’s inquiry make it possible for the board to sit in each State. First the board announces, as it has done in recent full-page newspaper advertisements, that it proposes to conduct an inquiry into certain matters. The advertisement states that anybody wishing to give public evidence must submit to the board six copies of the proposed evidence. The inquiry is conducted in two stages. Stage one is held in Sydney and Melbourne on dates that are announced in the advertisement. Stage two will be held at times and places to be advertised later. At the first inquiry the board examines the evidence submitted by the applicants. Other interested parties may attend the inquiry and, if they wish, cross-examine the witnesses. At the conclusion of stage one other interested parties are given an opportunity to examine the evidence given at the inquiry and they may later appear before the board to rebut that evidence or to support it. The hearings at the second stage are in public. The second stage hearings are very necessary and I suggest that either the first stage or the second stage hearings should be in Western Australia. It is not good enough that interested persons in Western Australia, who are so severely affected by the national economic policy, should be denied the opportunity of presenting their case without incurring heavy expenses. The Tariff Board or the Minister concerned should consider this aspect that I have raised before the matter goes any further. The first hearings about which I have been speaking will not take place until 23rd September so there is plenty of time for the board to arrange its sittings, particularly in the second stage of its inquiry, to ensure that the people of Western Australia have an adequate opportunity to present their case. It is not just the producers who are affected; a considerable number of secondary industries have been developed in Western Australia and they are interested also in a degree of protection. They need protection from competing industries in the eastern States, but it may not be lawful under the Constitution to do anything about that.
– You are parochial.
– I am not. When I try to protect the interests of my home State 1 am accused of being parochial but it is a different matter when the interests of the eastern States are being protected. Funnily enough we are always told to be nationalistic in our attitude. It is time the eastern States realized that they are not the only States of this Commonwealth. I make a simple request. Surely it would not be too difficult for the Minister or for the Tariff Board to consider holding some of the board’s inquiries in States other than New South Wales and Victoria in order that the primary and secondary industries of those other States may have an opportunity to present their case and feel that they are getting a reasonable hearing.
.- The series of matters now before the Parliament for discussion involves a wide range of Australian products and, having regard to the matters of a similar nature dealt with in the last sessional period and those matters dealt with under the Special Advisory Authority legislation during the recess, indicates very clearly that the economy, so far as Australian industry is concerned, is not as stable as it should be. Costs of production are constantly rising. Industries are finding it increasingly difficult to compete satisfactorily in the world’s^ markets. I think I can say with justification that this state of affairs is due largely to this Government’s economic policy. If the economy had been stable over the last twelve years it would not be necessary for industries to seek increased tariff protection, but over the last twelve or fifteen years the cost of production of a wide range of Australian products, including primary products, has increased two, three and, in some cases, four times. Now we have the spectacle of a secondary industry approaching the Tariff Board and, following investigations by the board, receiving protection against outside industries. On the other hand we have primary industries, with no Tariff Board protection at their disposal, seeking from time to time justifiable price guarantees and, in many cases, relief payments and subsidies. Those are the only weapons that the primary industries can use to protect themselves.
Fortunately, the Tariff Board’s reports are generally favorable to the protection of secondary industry, but this Government is not as ready to give adequate protection to our most important primary industries, which, by their export earnings, provide the wherewithal that enables many secondary industries in this country to carry on. We recognize the importance of secondary industry, first, as an employing agency, in which capacity it out-classes the primary industries a hundredfold. I almost said “ a thousandfold”, but we do not want to exaggerate unduly. Yet, as an earner of export income, secondary industry is in an early stage of development and of only minor importance at present. We wish to see it expand its export activities, but this cannot be done unless the present Government takes more practical steps to assist secondary industry more readily.
At some later time, I shall have something to say, as will my colleague, the honorable member for Bendigo (Mr. Beaton), about a number of rural industries that are now in dire distress indeed. They have found it necessary to send telegrams about their plight to State Premiers and to Federal Ministers. They have no Tariff Board available to inquire into their problems, and they seldom get from Premiers, Prime Ministers and Federal Ministers the sympathetic hearing to which they are entitled. Secondary industry, on the other hand, more readily gets the ear of governments and government departments.
– It certainly gets the ear of the Australian Labour. Party.
– It gets the ear of the Australian Labour Party, of course. I remind the honorable member that the Labour Party has never denied that it stands strong and staunch for the effective protection of primary industries. In my lifetime, the party has never had within its ranks a strong free-trade section, as the honorable member’s party and the party allied with it have had.
The Opposition supports the measures now before the House. I notice that, unfortunately, some of the inquiries by the Tariff Board have not resulted in increased tariff protection. In those instances, possibly the Tariff Board is correct in considering, in the light of the results of its investigations, that additional protection is not warranted. We have been told that a bill is later to be introduced to provide for a bounty on superphosphate. Overall, the measures at present before us are desirable. As I have said, Mr. Speaker, the Opposition supports them and is prepared to give them a ready passage.
Question resolved in the affirmative.
Bills read a second time.
– The first bill for consideration is the Customs Tariff Bill (No. 2) 1963.
.- Mr. Chairman, I shall devote my remarks to that portion of the First Schedule that relates to phthalic esters. On 10th May last year, the Special Advisory Authority recommended special emergency protection on phthalic anhydride. This proposal was discussed in this chamber on 10th October of last year, and during that discussion I pointed out how dangerous it is to place a duty on a material that is the raw material for other industries. It seems that my uneasiness was justified, because, on 22nd March this year, the Special Advisory Authority recommended emergency protection on phthalic esters, which are made from phthalic anhydride. These esters are used mainly in the manufacture of plastics to impart properties of flexibility and softness to a number of synthetic resins that would otherwise be brittle, inflexible and unsuitable for certain uses. For instance, the esters are used in conjunction with polyvinyl chloride, the material commonly known as P.V.C., in the manufacture of electric cables to ensure that the cable will be flexible and easily worked. One cannot blame the manufacturers of phthalic esters for feeling the need of a duty. Surely the blame rests with the manufacturers of the raw material, phthalic anhydride.
There are two manufacturers of phthalic anhydride. The first is the Newcastle Chemical Company Proprietary Limited, which is owned jointly by the Broken Hill Proprietary Company Limited and Imperial Chemical Industries of Australia and New Zealand Limited. This company makes phthalic anhydride as a by-product of steelmaking. One would think that as a byproduct of the steel industry it could be sold at lower prices without great difficulty. Particularly is this so when one considers the size of the companies that are the joint owners of the Newcastle Chemical Company. The other company that makes phthalic anhydride is Reichhold Chemicals Incorporated (Australia) Proprietary Limited, which manufactures the product from naphthalene that is imported duty free. It is interesting to see that the trend overseas is to make phthalic anhydride from naphthalene by the petro-chemical process, which seems a great deal cheaper than the steel works process used in Australia. The modern trend all over the world except in Australia is to use the petro-chemical process. Obviously, we cannot expect giants like the I.C.I, and B.H.P. companies to conform to competitive practices adopted overseas when they are able to have high duties imposed on imported phthalic anhydride and so keep their prices high by world standards. This has made more difficult the competitive position of those who use phthalic anhydride to make phthalic esters.
The rate of duty imposed on the esters as a result of the Tariff Board’s report is not high. In fact, at an f.o.b. price of £175 a ton, the ad valorem rate works out at only 14 per cent. However, phthalic esters are important in the manufacture of P.V.C. products. For instance, 1 lb. of the ester is used to every 2 lb. of P.V.C. in a great many processes. This means that the manufacturers of P.V.C. materials will have their costs increased by this duty and will probably be looking for even more protection. Of course, they have had a particularly difficult time recently with such high protection being accorded to the manufacture of P.V.C. granules, particularly through this emergency system that we have now.
I cannot help being sorry for the industries that use this product. Take the case of the manufacturers of electric cables. They seem to me to have a particularly hard row to hoe. The P.V.C. granules that they have to buy are protected by a very high duty, and the price of phthalic esters is now to be increased by the duty imposed on them. Duty is paid on the synthetic rubber used in the manufacture of electric cables and in the paper wrapped round the cable. I am not sure, but I think that duty is paid on the copper cable also. What hope has the poor manufacturer of electric cable in a situation like this? This set of circumstances is probably the reason why Olympic Cables Proprietary Limited has recently lost to Japan a large government contract. This contract has been lost not because the company is not good at making cable but because its costs are continually increased in this way.
I am continually amazed at the docility of the small manufacturers in these circumstances. I presume that they are members of the Associated Chambers of Manufactures of Australia. Have they not complained to this body, or is the mutter of their complaint lost in the roar made by the larger corporations? Or does the size of the subscription of the large corporation give the large members dominating positions in the organization? Whatever the reason, one thing is certain. The interests of the small secondary manufacturer seem to take a very unimportant place alongside those of the big company. If I were such a man, I would be getting slightly querulous about the activities of the Associated Chambers of Manufactures of Australia in recent years. The competitive position of the small manufacturer of P.V.C. products is made more difficult by the imposition of emergency protection on the esters, which was made almost inevitable by the imposition of emergency protection on phthalic anhydride. That was put on to protect the company made up of Broken Hill Proprietary Company Limited and the I.C.I, organization together. This company insisted on using an out-of-date method which has been discarded by others. If others are not discarding it, those companies still using it recognize that this is a by-product process and are willing to reduce their prices to compete with the cheaper naphthalene process.
As I mentioned when we were debating the protection for phthalic anhydride, it is dangerous to place a duty on a product that lies at the basis of an industry. In the base chemical industries, protection has been given with a lavish hand. Although this may have served to strengthen the monopoly position of large industries and to assure their shareholders of profits that seem to me to have reached unusual levels, it has placed in jeopardy the profitability and employing capacity of the user industries. I would like again to enter an emphatic protest about this careless method of protection.
Schedule agreed to.
Second Schedule agreed to.
- Mr. Chairman, I wish to discuss certain items under this schedule separately.
.- This item deals with protection granted by the Tariff Board to manufacturers of air-cooled petrol engines under 10 horse-power.This industry cannot claim to have been neglected. There was a full Tariff Board report on the subject in April, 1961, in which the most-favoured-nation rates recommended were £6 10s. per engine or 42i per cent., whichever was the higher. This was followed by an emergency hearing in October, 1961, and the protection which had recently been awarded was increased. In June, 1962, there was another emergency hearing and protection was again increased. Then we have this last report, signed in December, 1962, which reduces the duty to what it was before the emergency hearings. Now I understand that sections of the industry are asking for yet another emergency hearing. If this is granted, there will be no hope of achieving any kind of stability in our tariff system.
The 1961 duties, which were later increased twice and which now are being put back, were £6 10s. per engine or 42i per cent., whichever duty was the higher. On an engine with an f.o.b. value of £15 10s., the ad valorem duty is 42i per cent.; on a £13 engine, it is 50 per cent.; and on a £10 engine it is 65 per cent. In other words, the duty works out at 42½per cent, for all engines with an f.o.b. value of £15 10s. or more, while the ad valorem rate rises as the price drops below £15 10s. This seems pretty good protection. Whatit means is that if I want to buy a stationary engine which costs £13 in the United States f America, I would pay £19 10s. and then I would have to pay the freight on it. On a larger engine costing £30 in the United States of America, I would pay nearly £13 extra. I realize that protection is the settled policy of the country and because of this I realize that I must expect to pay a reasonable cost for this national policy. But to expect me to pay more than a reasonable cost is intolerable. I am assailed on all sides with exhortations to cut my costs of production. Some perfectly splendid speeches are made on the subject. But it is difficult for me to do this when the price of essential tools of trade is pushed higher and higher. So it was with real relief that I saw the temporary duties taken off. In my opinion, they should never have been imposed.
There are several lessons in the sorry history of this industry, with duties going up and down like a yo-yo. The first is that, if the price is’ kept too high by imposing high duties, the demand is limited. When I discussed the imposition of the temporary duties last year, I mentioned that I had on my farm six engines of the type referred to. I now have three. I have found that, with the high price of engines, it pays me either to use electric motors or to shift an engine from one machine to another. One lesson we should learn from the history of this industry is that the problem of an industry is not solved just by putting on a duty.
The second lesson is that high protection has other dangers for the industry receiving the protection. If protection is too high, other firms are tempted to come into the industry, and this creates the risk of having much more plant capacity than the demand will justify. This position is made worse because demand tends to shrink as the price rises when duty is imposed. There is a clear example of this happening here. Since the grim round of increased protection started, Pope Products Limited has started making four-stroke engines and James N. Kirby Proprietary Limited has stepped up production in a big way. The result is that there is far more plant capacity than the market can justify. The Tariff Board calculated that there is a total demand in Australia for 280,000 engines, either imported or locally made. Yet the installed capacity in Australia at present is enough to make 850,000 engines. If no engines at all were imported, only 33 per cent. of the present plant capacity would be occupied, with the inevitable increase in costs that such unused overheads entail.
– The honorable member for Ballaarat says, “Rubbish”. My authority for this is the Tariff Board’s report, which I trust he has read.
What should be our policy in a situation such as this? Should we increase duties yet again so that production is profitable? Is this not a direct invitation to companies to come in and install excess capacity in the sure and certain knowledge that excess costs so incurred will be met by increased duties? This, of course, is economic madness. It would be a direct encouragement to have plant standing idle. I believe that it should be made clear to all those in the industry that if they install more plant capacity than the market can justify, it should not be the function of the tariff to make it possible for prices to be raised high enough to pay the overhead on the unused capacity. To refuse to do this is deliberately to encourage the installation of unused capacity, which, as I say, is economic foolishness.
The third lesson is that a tariff does not necessarily protect a company from the results of its own inefficiency. The Villiers people were making engines at Ballarat for many years. Perhaps it would be more correct to say that they were assembling engines because in some cases 90 per cent. of the components of the engines was made up of purchased materials, about 40 per cent. of which were imported from the parent company in Great Britain. Then came a new development in engine manufacture when cast aluminium alloy began to be used freely in the United States of America. Evidently Villiers refused to adopt the new technique, but James N. Kirby Manufacturing Proprietary Limited saw the opening and took out a licence to make the American Lauson engine and really set sail after the market. It is only recently that Villiers have seen the writing on the wall and have adopted the new technique. In the meantime, Kirbys have got the market by the throat.The trouble that the Villiers people are in is not the result of a too-low protection; it is the result of failure by private enterprise to be enterprising. We should realize that the law of the jungle under which the weak ones go to the wall can operate inside the tariff wall as well as outside it. It is well that this should be so, but to try to salve the wounds of those injured in the contest by making the wall higher is a hopeless answer.
The fourth lesson to be learned from the report to which I have referred is that if the tariff is fixed so high that imports are stopped completely new techniques are prevented from being introduced into Australia. If the new American manufactured aluminium alloy engines had not been allowed in at all there would have been no incentive for Kirbys to adopt the new technique. It was only when Kirbys found that there was an overwhelming demand for a light, cheaper engine that they set out to use the new methods. The import figures for four-cycle engines are interesting. They disclose a large increase in 1960-61 because of the switch from the two-stroke to the light aluminium alloy four-stroke engines. It was then that Kirbys adopted the new technique, and the next year it appears they won back the market. But if imports had been prohibited we would still be using the cast iron engines which are heavier and which cost more. The lesson to be learned is that it pays to let in enough imports to ensure that local firms are encouraged to adopt new techniques. I think that is a reasonable argument.
– No, it is not.
– There is a fifth lesson to be learned from this report. Ronaldson Brothers and Tippett Limited, another Ballarat firm, is a very well-respected firm which concentrates on the manufacture of large engines. Although its marketing methods have received considerable criticism, Ronaldson Brothers and Tippett Limited is recognized as being good at making engines. It has a capacity to make 8,000 engines a year while the market for the type of engine they make is less than 4,000 a year. The Tariff Board has calculated that Ronaldson Brothers and Tippett Limited would need a duty of at least 100 per cent, to enable the company to compete with imported engines. I doubt if even the honorable member for Ballaarat (Mr. Erwin), who has championed the cause of his Ballarat constituents so often and so well in this direction, would ask the users of larger engines to carry such an impost. Even if a 100 per cent. duty were imposed, it would mean that the demand for engines would shrink as the price rose and Ronaldson Brothers and Tippett Limited would sell fewer engines than ever. So it looks as if Ronaldson Brothers and Tippett Limited will have a very difficult time, and I am sorry for that. It is important to realize, however, that the fault is not that the protection is too low. The main reason for this is that electric power has come to the country and fewer engines are required to drive 32-volt electricity generating plants. I myself have sold only three such engines in the last three years due to the fact that electric power has come to our area, and I doubt that even the honorable member for Ballaarat would deny me the use of electricity in order to keep Ronaldson Brothers and Tippett Limited happy.
The moral of all this is that there are many instances in which high protection is not the answer to the problems of industry. I have often challenged high duties because of their adverse effects on the user and on export industries. But, leaving this important aspect aside, it is clear in this case that the problem of this industry was growing pains caused by new techniques and new methods, and these growing pains were intensified by the failure of sections of the industry to adapt themselves to the new situation, and the position was worsened by errors of judgment with respect to the size of the market. It was worsened still further by the panic introduction of emergency protection which in turn encouraged the installation of extra plant. I hope that there will not be any more emergency hearings to upset things still further.
.- I cannot allow the remarks of the honorable member for Wakefield (Mr. Kelly) to go unchallenged. The internal combustion engine manufacturing industry in Australia is of vital importance to the people of this country. For too long were we entirely dependent upon importations of such engines from overseas and we owe much to firms like Ronaldson Brothers and Tippett Limited and others, including Villiers, an outside company, which saw the light, came to Australia and established an industry at Ballarat. According to the honorable member for Wakefield, whatever you do to protect Australian industry, it is wrong. The implication to be drawn from his remarks is that the sons and daughters of Australia are all born with a natural capacity to be farmers, to be hewers of wood and drawers of water. They are not. The plain fact is that there are only 250,000 rural holdings in Australia. They can directly provide employment for only a little more than 500,000 people, including the holders of the properties. When we realize that Australia has a total population of 11,000,000 it becomes obvious that there are many people in Australia who must do many other things than produce food and raiment, and secondary industries are essential to provide the other commodities that we require.
Much criticism has been levelled at the manufacturers of small internal combustion engines in Australia. Let us examine the position. It costs more to produce these engines in Australia than in other countries, but if the Australian industries did not exist, the overseas manufacturers would bleed us white. Make no mistake about that! The moment a protective tariff wall is erected in Australia the exporter to Australia brings his price down and, in the final analysis, it is the protective wall which enables us to buy our requirements at prices which would probably be even lower than those at which the overseas manufacturers would have been prepared to sell us engines if there had been no wall.
There are about 800 persons engaged in the production of small internal combustion engines in Australia. The funds invested in the industry by the manufacturers total £2,300,000. The honorable member for Wakefield tells us that some of these manufacturers have not been far-sighted enough, that they have in fact installed machinery with a capacity to manufacture twice the number of engines required on the Australian market.
– Three times.
– Somebody has interjected, “Three times”. There is another un-Australian interjection - another man who has no vision whatsoever. In this developing country, with its annual migrant intake of at least 130,000 to 140,000 and its natural population increase of even greater numbers, he would be a stupid manufacturer indeed who, when erecting and equipping his factory, would not provide for future development. The honorable member for Wakefield is a capable farmer, but I will bet my bottom dollar that within the confines of his farming enterprise is capacity to harvest a much larger crop than he is likely to harvest in any season except a most extraordinary one. I guarantee that his buildings are more than adequate for his present production and that he expects to be paid a price to cover his excess installations. Why do we hear this sort of drivel and these attacks on Australian industry? Had it not been for existing Australian secondary industries during the war period, this country would have been practically starved out of existence. Ronaldson Brothers and Tippett, against terrific competition nearly 50 years ago - 1 have known of their products for that long - assumed the heavy responsibility of competing with the manufacturers of internal combustion engines throughout the world. It is well known that the firm manufactured a small internal combustion engine. Adventurous as it was, the firm manufactured large engines to generate power in other parts of Australia. It exported engines and delivered engines all over Queensland and indeed, in every State of the Commonwealth.
During the man-made depression the firm embarked on a tractor manufacturing enterprise, and unfortunately, lost a lot of money because of something which it could not foresee. I know that overseas manufacturers who have inspected this enterprise at Ballarat have been astonished at its efficiency. Despite the disabilities that the firm suffered for a number of years in working in an antiquated establishment, it showed enough foresight, during the difficult periods which have gone by and even during’ this Government’s term of office, to shift out of premises, build a large factory and instal the most modern and up-to-date machinery it was possible to purchase. Yet we get this miserable anti-Australian attitude. The honorable member for Wakefield (Mr. Kelly) is a good Australian, but he is anti-Australian, inasmuch as he seems to suffer from a strange superstition. He things that if you wind up a manufacturing industry in this country the bloke overseas will sell you things below cost, whereas in actual fact he will bleed you white. The only protection the people of Australia have is the big manufacturing enterprises. They are the great sources of employment which there is no hope of our ever obtaining directly from our primary industries.
.- I, for one, cannot understand the attitude of the honorable member for Wakefield (Mr. Kelly). He has referred to a reduction of costs. He hopes that costs can be reduced in industry and at the same time he wishes to reduce the volume of production by encouraging imports. How can you reduce the costs of this local industry and at the same time import more and more engines? It just cannot be done. We can reduce costs only by increasing the volume of production.
This is an industry which, as the honorable member for Lalor (Mr. Pollard) said, has grown up in Australia. One of our early manufacturing industries to which I refer is Ronaldson Brothers and Tippett of Ballarat. I do not know what our farmers would have done in the early days had it not been for the internal combustion engines manufactured by this firm. Their use spread throughout the country for driving chaff cutters and shearing plants. The honorable member for Wakefield asked how we could blame him for putting out of use three internal combustion engines because of the advent of electric power. We cannot blame him for doing that, but why reduce the tariff? Why remove the temporary tariff at a time when this industry is experiencing severe hardship because of the advent of electricity in rural areas? We are heaping disadvantages on this industry at the time when it is endeavouring to cope with difficulties caused by the extension of electricity throughout every State of the Commonwealth which is reducing its volume or production considerably.
The industry is once again asking for an emergency tariff. The emergency tariff was granted and then, after a Tariff Board hearing, it was removed. As the honorable member for Wakefield has said, this tariff has been jumping up and down like a yo-yo, but I was sorry to see the emergency tariff removed. I hope the Special Advisory Authority will see fit once again to impose this tariff for the protection of the industry.
The Tariff Board’s report states -
Tariff protection will lead to increased employment and economic production which will eventually be reflected in lower prices and expanded exports. That must be so. All that has to be done to reduce the costs of the industry is to increase the volume of production. It is as simple as that. At present there is very expensive machinery in these factories and it cannot be kept going for even eight hours a day. Firms have to take skilled workers from one plant and close it down and employ them in another plant. Each of the machines costs an enormous amount of money and when skilled workers have to be taken from one machine and put on to another the machinery is often working tor only four hours a day. How can that be economical? This position has been brought about by imports.
This Tariff Board report is quite a good one and says quite a lot about the industry. It mentions that Ronaldson Brothers and Tippett manufactures engines under licence from the Wisconsin Motor Corporation of Milwaukee, United States of America. The firm pays a licence fee on each engine, based on the net factory selling price. In reducing the tariff we will force the firms which are manufacturing engines under licence to become nothing more than assembly plants. They will cease to be manufacturers, because it will be unprofitable and they will not be able to go on.
They will be just more or less assemblers, and this is terribly dangerous. Both Kirby and Kirby-Lauson engines are produced under licence from the United States of America. The Tariff Board report states -
Villiers, although a wholly owned subsidiary of the Villiers Engineering Company of England, does not manufacture under licence. The company stated that it does not pay any royalties or other fees to. its British parent, but that it has full access to the research and development work carried out by the parent.
The honorable member for Wakefield referred to Kirbys going into the manufacturer of local engines and securing the market. What I cannot understand is that the Kirby engine manufacturers are wholeheartedly behind this increase in tariff. The next part of the report rather stunned me. It is in these terms -
Several factors have contributed to this change. Not the least important has been the extension of electric power grids to many country areas previously dependent for their power on engines of the type that Ronaldson-Tippett manufactures. An accompanying change in demand has been away from the traditional type of heavy stationary engine towards lightweight, portable, multipleuse engines. The Board is of the opinion that the industry will need to cater for this changed demand if it is to continue to manufacture engines profitably.
That is reasonable. Let us consider orchard sprays as an example. Most of them have Ronaldson-Tippett engines. Had it not been for this very modern and efficient spray Ronaldson-Tippett would have experienced a great deal more hardship than it has. The report goes on -
In these circumstances, protective duties sufficiently high to offset this section of the industry’s price disadvantages of some 100 per cent, against imported engines would seem undesirable.
Of course that is undesirable. The firm is not asking for 100 per cent, protection. It would be satisfied if it received the 62i per cent, for which it has asked. We should bear in mind that at this time the manufacturers were protected not only by the 42* per cent, but by the additional protective tariff granted by the Special Advisory Authority. While this special tariff was in operation this is what the board had to say -
However, the Board is of the opinion that a reasonable level of duty would go some way towards alleviating the difficulties being experienced by Ronaldson-Tippett, and it considers that the firm is worthy of such protection.
But what did the board do? It immediately reduced the tariff protection. That just did not make sense. The report continued -
The Board has no reason to doubt the productive efficiency of the firm or the quality of the engines it produces. Ronaldson-Tippett has for many years been an important Australian manufacturer of engines and has recently spent considerable amounts on extending its production. The firm is situated at Ballarat, in Victoria.
I cannot understand the board’s reasoning, particularly when one signatory to the report was a person who saw fit to grant the industry some emergency tariff protection. A few months later he saw fit to reduce that protection to 42½ per cent.
From all the evidence before us it is clear that we have not only a duty but also a moral obligation to give protection to this firm, which has done so much for the rural areas by decentralizing its industry thus affording increased employment opportunities.
Item agreed to.
Items 310, 324 and 334 - by leavetaken together, and agreed to.
.- I want to discuss the duties imposed on paper and paper board as a result of a Tariff Board report which was signed on 19th December of last year. It was one of the last reports signed by Sir Leslie Melville as chairman and was one of the most important. It is a very large report and deals with a great amount of technical detail which a man of my background finds great difficulty in understanding. The report deals with a very important industry. It was signed soon after the statement by the Minister for Trade (Mr. McEwen) that the Tariff Board was expected to keep within its sights policy statements as made from time to time. This, as honorable members know, concerned me greatly at the time and it still does. I did not know then and I still do not know whether the report answers the questions whether the paper and paper board industry is economic and efficient and whether the board has kept within its sights the policy laid down by the Minister. That is why I looked atthe report in some detail.
One general comment that I want to make is common to Associated Pulp and Paper Mills and Australian Paper Manufacturers
Limited. The raw material used is long fibred pulp, pulp from eucalypt timber or pulp from waste paper. The industry is not badly placed in relation to all three materials. Long fibred pulp comes in duty free and the board states that eucalypt pulp would be cheaper than most similar fibre overseas. Further, as there is a limited demand for waste paper, waste paper pulp generally is cheaper in Australia than elsewhere, so it is difficult to understand why the industry needs the degree of protection which it demanded so vociferously. The fine paper and paper board section of the industry is largely under the control of A.P.P.M. and its subsidiaries, and of Shoalhaven, which is a subsidiary of the Wiggins Teape group. The two groups only compete with one another in about 50 per cent. of their range In previous reports both the Tariff Board and the Special Advisory Authority have referred to the restrictive trade practices adopted by A.P.P.M., but in this report the board assumes that these practices have been abandoned. That is not so. To give only one example of restrictive trade practices I shall read directly from a letter which I have received from a paper merchant. He states -
Following pressure from the Attorney-General, A.P.P.M. submitted, on June 13th, 1962, a letter of invitation to all merchants to sign a two years contract for the supply of not less than 2,500 tons of paper per annum. This invitation was open for acceptance until June 30th, 1962. On June 27th, 1962, my company accepted this invitation and advised A.P.P.M. that we were prepared to sign a contract for 2,812 tons per year, worth about £500,000. However, on July 2nd, 1962, A.P.P.M. advised us that they were not able to accept our contract, that they had initially only accepted six companies who, in turn, sent circull ars around the trade on June 15th, 1962- fifteen days prior to A.P.P.M.’s expiry of invitation - advising the trade that they had been accepted by A.P.P.M. as contractors. All this in spite of the fact that we have been substantial customers of A.P.P.M. for many years, exceeding 3,600 tons in the period 1960/1962 alone and our total annual turnover of all paper and paper board grades is many thousands of tons a year.
Obviously this company was not messing around. It was really in business.
This is the kind of restrictive trade practice that I hope the proposed legislation will stop. And this is the kind of practice that makes merchants import, otherwise they would find themselves at a quite unfair disadvantage with their more favoured competitors who are “ in the ring “.
I do not pretend to have given this section of the industry the close examination that I have given the A.P.M. section, but I will make a bold stab at its cost to the consumer. Shoalhaven and A.P.P.M. together appear to have produced last financial year about 100,000 tons of paper, although they have capacity to produce more than 120,000 tons. The rate of duty ranges from £32 13s. 4d. on this main portion of their production to about £40 or £45 a ton on coated boards. They would not use all their duty in all cases. However, I would think the extra cost to the consumer of paper would amount to at least £3,000,000, and if I am wrong I would appreciate an estimate from the two companies. I do not say it is too much; I am simply calculating it.
But the biggest section of the industry deals with brown paper, sack kraft paper and the coarse paper and boards generally. The overwhelmingly important company in this section of the industry is Australian Paper Manufacturers Limited, widely known as A.P.M.. and it is the effect of these duties on this company to which I will devote most of what I have to say. On this section of the industry Mr. Murray presented a minority report, in which he recommended a higher rate of duty than did the majority of the board. Mr. Murray’s reason for this was that he thought that a company that was doing so much to develop and improve afforestation methods deserved more generous treatment. Mr. Murray has recently been presenting quite a few minority reports, some of which I have found quite interesting. I refer particularly to his minority report on precision and ball bearings.
In this case I wonder whether Mr. Murray’s enthusiasm has not run away with his judgment. I believe that A.P.M. has been treated particularly well both by the board and by the consumers of paper in late years, and I will now demonstrate this. A.P.M. makes annually about 290,000 tons of paper and board, which can be broken down into three main groups. The first group is low-grade unlined boards of the plain strawboard and chipboard variety. A.P.M. makes about 30,000 tons of this product a year, and it is protected by a duty of £15 a ton. A.P.M. prices are generally close to the duty-paid prices, and if this is so the value to A.P.M. of the duty is 30,000 times £15. which works out at £450,000.
The second group of paper is corrugated paper and container paper. The duty in this case is about £22 a ton. The company makes 170,000 tons of this, so it benefits by £3,740,000 on this group. The balance of production, 90,000 tons, carries a duty of £32 13s. 4d. a ton, so the company benefits by £2,940,000 on this group. The three amounts added together make £7,130,000- let us say £7,000,000 for easy arithmetic. The users of A.P.M. products pay the company £7,000,000 a year more than they would have to pay if they could import the same material duty free. 1 must emphasize this: The £7,000,000 is not what the consumers of A.P.M. products pay for their paper; it is the extra amount they pay because of the duty. Yet Mr. Murray said this is not enough, that the company should get more.
This figure of £7,000,000, representing the bonus to A.P.M., interests me greatly. It works out at £1,400 for each of the 5.000 men employed by the company. If the duty were put on to provide employment it would pay the users of A.P.M. products to organize themselves into an association and give each of the 5,000 employees £1,300 a year to sit at home and watch television. Actually this £7,000,000 is probably an understatement. The overseas manufacturer of paper has a higher price in Australia than he has in other places because of the fear of the imposition of dumping duty in Australia. For instance, the price of the Swedish Kraft wrapping paper is £70 sterling a ton if it is going to Hong Kong, while the price of the same paper, if it is going to Australia, is about £96 a ton, with a possible small discount for quantity.
As I say - and I am sure that you, Mr. Lucock, will be interested in this - the figure of £7,000,000 is most interesting. The wheat-growers have been castigated lately by almost every one because they are getting a subsidy under the stabilization scheme. People are inclined to forget that the wheat-growers lost £198,000,000 in past years by supplying wheat to Australian consumers at a lower price than could have been obtained on world markets. This is forgotten, and what is remembered is that we are now getting a subsidy from the consumer or the taxpayer. Do you know how much is put aside for this purpose in the last Budget? It is just a little more than £7,000,000, just about the same amount as A.P.M. is getting in subsidy each year. Yet no one seems to raise an eyebrow about that.
In making this statement that A.P.M. benefits by £7,000,000 I realize I have got out on rather a long limb. However, I have made the statement, and the supporters of A.P.M., in this House or outside it. will have plenty of opportunity to refute me if they care to do so. As a matter of fact, I will be severely criticized for making this statement, but I am not greatly concerned about that. What 1 am concerned about is this: If I am said to be wrong I want to be proved wrong. I will not be content with vague denials or, indeed, with any particular personal criticism.
I have used table 22 on page 33 of the board’s report as a basis for my figures of the break-up of the company’s production and the duties for the various grades are in recommendations at the end of the report. The company’s prices on most lines are close to, if not higher than, duty-paid prices. There seems no doubt about that. That is the basis of my arithmetic. Since I have prepared this statement I understand that A.P.M. has reduced its prices slightly, but the main reductions have been granted in such a way that very few purchasers are able to take advantage of them, because very few will be able to buy the large quantities of particular grades that have to be purchased before any worthwhile reduction is granted. I have not yet had time to go through all the details, but perhaps the difference between the dutypaid price and the A.P.M. price will be slightly less than my original estimate, so that my £7,000,000 would have to be slightly reduced on that score. On the other hand, A.P.M.’s annual report, which has just been issued - which, by the way, shows a profit of £2,700,000, with a return on issued capital of 12.2 per cent. - shows also an increase in sales from 290,000 tons to 331,000 tons, an increase of 41,000 tons. So I will Jet my figure of £7,000,000 stand and challenge the company to prove me wrong - but by figures, not by abuse.
In previous reports both the Special Advisory Authority and the Tariff Board have directed attention to the restrictive trade practices indulged in by A.P.M. There is a noticeable omission in this last report, in that criticism of this kind has been withheld.
– It was not warranted.
– Some restrictive trade practices were criticized in previous reports and were altered, but, as I will now show, there is plenty of room left for criticism. Let me give some examples. A.P.M. markets a grade of brown paper which, if it were sold as brown paper or wrapping paper, would be sold at a price of £155 a ton. The same paper, if sold to brown paper bag manufacturers, would command a price of £143 a ton. The same paper, if sold to makers of, say, cement bags, would bring £ 1 28 a ton. There is a firm in Sydney that offered to buy 1,000 tons of this kind of paper, sack kraft paper, from A.P.M. at sack kraft prices. A.P.M. refused to supply this company, the reason being that the company was not a manufacturer of large paper bags. I do not ask the House to take my word for this; I quote from the public evidence at the Tariff Board hearing, when Sir Leslie Melville, chairman of the board, asked certain questions of Mr. Wilson, managing director of A.P.M. He asked, “May I get this a little clearer, Mr. Wilson? Do I understand that Mr. Feuer - of Cello Papers - has asked for multiwall sack kraft paper in order to use it as wrapping paper “ Mr. Wilson replied, “Yes”. Sir Leslie Melville asked, “And A.P.M. will not sell it to him for that purpose?” Mr. Wilson answered, “ That is right. We will sell him wrapping paper, which is identical, at a different price.”
The company has since applied for bylaw entry of sack kraft paper, which A.P.M. refused to supply. This should have been granted if local supplies of the particular grade of paper were not available. However, the application has been refused by the Department of Customs and Excise. I think the company in question could very well contest this in the courts, because A.P.M. has made it clear that it will not supply sack kraft paper to the company.
Order! The honorable member’s time has expired.
.- In the second-reading debate on these measures. I dealt rather extensively with the position of Associated Pulp and Paper Mills Limited which has a mill in Burnie and a subsidiary in Ballarat, Victoria. I outlined the history of the company and the effect that the extra tariff would have on it. I rise to-night simply to answer one or two criticisms that were levelled at the company by the honorable member for Wakefield (Mr. Kelly). 1 have nothing at all to say about the great Australian company, Australian Paper Manufacturers Limited, because it has no connexion at all with the area that I represent. However, Associated Pulp and Paper Mills Limited has.
I take strong exception to certain remarks made by the honorable member for Wakefield. I should like to correct some of his statements and to suggest that he do a little more homework on this matter before he stands up in this chamber and makes accusations against and misstatements about a great Australian company, such as Associated Pulp and Paper Mills Limited. He speaks as a free trader and his remarks are distinctly anti-Australian. I sincerely hope that the Liberal Party sends him over to the electorate of Braddon to support the Liberal Party candidate at the next federal election, because the whole economy of the northwest coast of Tasmania - in fact, the economic life of Tasmania generally - is wrapped up to a great extent with the wellbeing of this company.
He asks why the industry is protected. Let me tell him that this is an Australian company with Australian capital. The funds employed in Associated Pulp and Paper Mills Limited are £12,400,000 of shareholders’ money and £6,400,000 from outside borrowings, making a total of £18,800,000. The fixed assets of this company are valued at £25,000,000. Its total assets are valued at £32,000,000. I point out for the honorable member’s benefit thai there are 11,000 shareholders in the company holding £8,500,000 of the capital, and only £1,500,000 of that amount is held by other companies, such as the Broken Hill Proprietary Company Limited which came to the aid of Associated Pulp and Paper Mills Limited with that investment in 1936 when the company was getting a start. The remainder of that capital is held by Australians.
When the honorable member for Wakefield speaks as he did to-night, he deals a direct blow to the welfare, economic wellbeing and employment opportunities of many people. The total annual wages bill of this group of companies is £4,000,000. At present 2,862 people are employed directly in Burnie. As I said this afternoon, if we include the people employed in the bush and in the subsidiary in the area represented by the honorable member for Ballaarat (Mr. Erwin), the total number of employees is about 3,500. The honorable member for Wakefield asks, “Why is the industry protected? “ This is a great industry in this part of Australia. The figures I have cited show the content of Australian capital invested in it and the importance of the industry.
I want to tell the honorable member that the credit squeeze and the lifting of import restrictions by the Government that he supports caused the industry to get into trouble. If we look at the figures of the imports that have flooded in, we see the facts in relation to the reference he made to tha marketing system of Associated Pulp and Paper Mills Limited. He calls it a restrictive trade practice. This company has nothing to hide. It went before the Tariff Board and outlined its trading policy. In the evidence it gave it freely admitted that prior to 1st July, 1960, it sold its paper through any recognized wholesale paper merchant. That is the point I wish to make. What caused the change in policy? Why did the company have to say to the merchants after that date, “ You may sell our paper provided you keep the proportion of imported paper down to 10 per cent.”. The answer is obvious. The merchants were supposed to be selling Australian goods. The Prime Minister (Sir Robert Menzies) went along to a hotel here in Canberra at that time and addressed a big meeting of manufacturers and consumers. He exhorted them to buy Australian goods. Those very people - the wholesale paper merchants - were cramming their shelves and warehouses with imported paper which was dumped into this country at prices below the cost of production in the country of origin.
This company, in order to protect itself and to protect the well-being of its employees, had to say to the merchants, “ If you are going to fill your warehouses with imported paper that is dumped into this country, then you cannot sell our paper.” That was fair enough. That is recognized business procedure in any industry. The company was forced to take those measures. Why was it forced to take those measures? In its own mill 400 people were out of work. People lost their jobs almost overnight in Burnie. Just imagine 400 people being out of work in the town of Burnie on the north-west coast of Tasmania, the district to which I belong. Imagine the immense hardship, the suffering, the mental strain on those people ‘and the tremendous social effect on the homes from which they came. We all know that to-day people are caught up with hire-purchase commitments and medical benefits commitments. The unemployment of these people threw the town of Burnie into a great deal of confusion and discontent. Not only were 400 people sacked, but 1,297 people were put on a short working week.
Things are all right when a person’s weekly salary is coming in. These people had been working in the mill since about 1938, when it started. They were used to receiving a regular weekly salary. They had entered into hire-purchase commitments in accordance with what they expected to receive in their weekly pay packets. Then almost overnight, they found that their weekly wages were cut to such an extent that they could not keep up the hirepurchase payments to which they were committed. The company had to consider the well-being of those people. There is a welfare association in the works. If any honorable member is interested in employer-employee relationships, I advise him to pay a visit to the Associated Pulp and Paper Mills Limited works in Burnie to see how good such relationships are there and how the well-being of the employees is protected in the best possible way, through the various councils which are composed of representatives of both the employees and the employer.
Naturally, the company had to consider the well-being of its employees when it found that the wholesale paper merchants were filling up their warehouses with imported paper and not giving preference to the Australian product. The company said to the merchants: “ This cannot go on. We must put a limit on the amount of imported paper that you can sell if you are going to sell the Australian product.” It took that action in an effort to keep its employees in work. The Government did nothing about the problem. It refused to reimpose the import restrictions. So the company was forced to take that action. It had nothing to hide. The honorable member for Wakefield calls the company’s action a restrictive trade practice, but it is simply a proper marketing system in which any great company would have engaged in similar circumstances. The position changed as from 1st October, 1962. The Tariff Board’s report says -
A.P.P.M. introduced from 1st October, 1962, a new arrangement which differs basically from the old system. Under the new system, A.P.P.M. contracts with paper distributors for the supply of an agreed minimum quantity per annum of both A.P.P.M. and Ballarat papers.
Perhaps the most telling sentence in the whole discussion of the marketing system is this one -
There are no restrictions on the sale of competing papers.
What the honorable member for Wakefield has said about restrictive trade practices and the marketing arrangements of this great company is a lot of bally-hoo. I am sorry to have to refer to him like this. He spoke about the cost to the consumers. He said that no doubt the cost of paper to the consumers and the Australian public had increased because this higher tariff had been granted. Let me tell him again that there has been no rise in the cost of fine papers from Associated Pulp and Paper Mills Limited or from Ballarat since 1956. I suggest, Sir, that honorable members speaking here ought to check their facts before they rise to speak. Despite the fact that there has been a tremendous rise in the cost of production right throughout the paper-making industry, there has been no rise in the cost of the products from Associated Pulp and Paper Mills Limited or from Ballarat since 1956, although this protection has been given by the Tariff Board.
So the honorable gentleman’s fears that there would be a rise in the cost of paper to the consumers in Australia are unfounded. I consider that the company is doing an excellent job.
I again draw attention to the fact that, as I believe, this is the first time in any Tariff Board report - I have read many of them since coming here - when, in dealing with an industry of any size, the Tariff Board has drawn attention to dumping. I sincerely hope that the Department of Customs and Excise will continue to exercise surveillance over all countries exporting paper, particularly Sweden and Britain, which countries the Tariff Board acknowledges to have been the origin of the cheap paper.
I regret having had to rise again. I have nothing to say about Australian Paper Manufacturers Limited. I know a fair bit about the operations of that company, but it is located in another State. However, I am pleased to have been able to say something about employer-employee relationships and about the great work done by Associated Pulp and Paper Mills Limited, a company with all-Australian capital and one of which every one in this Parliament should feel justly proud.
Mr. WENTWORTH (Mackellar) [9.231. - It is good to hear the honorable member for Braddon (Mr. Davies) commending the work of Associated Pulp and Paper Mills Limited in his electorate and its relations with its employees. I cannot pretend to have the detailed knowledge of this subject that he has. but I was glad to hear what he had to say. I find myself, from what little I know, to be in general agreement with him. I was glad also that, in spite of whatever criticism he may have directed towards the Government’s past actions, he is supporting the Government in its proposals in this bill.
I listened with some attention to my friend, the honorable member for Wakefield (Mr. Kelly), speaking on this matter. Again I cannot pretend to have the detailed knowledge of this subject that he has, but I do think that he is seriously astray in his approach to it. If he will look at the information on national income and expenditure placed before us only last night bv the Treasurer, he will see that for the last year we had a deficit on current account on our overseas transactions of £214.000,000. It seems to me that we have to take action to control imports until this discrepancy is made good. I certainly agree with the philosophy that we have to maintain full employment in our factories. I am all for that.
But 1 rise to-night to say something a little different. I want to ask a question of the Minister in regard to the whole matter of Item 335 which is at present before us. I ask the Minister what serious consideration has been given by the Government to the diversion of the purchase of our imports of paper and pulp from other countries to New Zealand, from which country we could be getting them in far greater volume. I repeat that I am in favour of keeping the Australian industry at full employment and under full pressure. I am not suggesting anything to the contrary. I say that when we have a very favorable trade balance with New Zealand, as we have at present, we should be looking actively at ways and means of taking our imports from New Zealand rather than from other countries. New Zealand is providing a great market for our manufactured exports. It is up to us to do something in return. I am not suggesting that we should sacrifice the interests of Australian industry. I am suggesting that we should have a conscious policy to import from New Zealand rather than from other countries.
One of the ways in which we could implement a conscious policy of this character is through tariffs. I know that there are certain international agreements which restrict our freedom of trade, but I ask the Minister what action the Government has taken in respect of Item 335 to divert the imports which we are at present taking from other countries and take them instead from New Zealand. It may be that at this present moment New Zealand cannot supply our demands. But New Zealand, as we know, is the origin of a good deal of paper and paper pulp, and it may be that by some long term co-operation with New Zealand in this matter we shall be able to produce a set of circumstances in which a great proportion of the imports which at present we take from other countries could be taken from New Zealand. Having regard to the natural advantages of New Zealand in this aspect of production, perhaps a New Zealand industry could be created to supply Australian needs.
If the Government is looking at this problem in a constructive way, if it is looking at the major matters in respect of which we need to have greater liaison across the Tasman with our New Zealand neighbours, then it should be looking actively for ways and means to increase the trade in paper and paper products between Australia and New Zealand. This increase need not be to the detriment of the Australian industry, but could be accomplished by diverting the imports which at present we take from countries which do not have an unfavorable trade balance with us, countries which do not have the same political interests as we have, and putting that trade into New Zealand hands. I ask the Government for a positive policy in this regard. One of the things that we have to do it to build up a closer relationship across the Tasman, for both trade and defence reasons. Here is a golden opportunity which should be seized. It would not be to the detriment of Australian industry. I am suggesting a conscious and longrange policy of diverting this import trade from other countries to New Zealand, for the benefit of New Zealand. I ask the Minister what the Government is doing in this regard.
.- Mr. Chairman, I do not want to prolong the debate, but I feel that the honorable member for Wakefield (Mr. Kelly) has been overdestructive in his references to the activities of this particular industry. Anywhere in Australia where there is an Australian paper-making industry you will find prosperous communities and satisfied employees. It must be remembered that not one penny of overseas capital has been invested in this industry. The industry is completely Australian. Its development reflects credit on the people who originated the industry in this country and on those who have continued its development. It would be tragic if in time of war Australia found itself bereft of adequate paper supplies of every type. The companies under discussion are supplying this requirement. If it is true, as has been alleged by the honorable member for Wakefield, that these companies are involved in unduly restrictive trade practices or are making excessive profits, who is responsible for the fact that there is no restrictive trade practices legislation in existence in this country and who is responsible for not adequately taxing excess profits? Those are matters that may easily be adjusted but there is no way of dealing with unfair foreign competition than by adequate tariff protection or, in some circumstances, a total prohibition on imports. The honorable member in his destructive criticism took mighty fine care not to refer to the fact that not only the majority report but also the minority report of the Tariff Board referred to dumping in Australia by overseas interests. Both the majority report and the minority report of the board showed that overseas firms in various countries were dumping their goods in Australia at below what was a fair price even for the country of origin of the product. What more conclusive evidence do you need before granting protection to the Australian industry? I repeat that if anybody in this Parliament or outside thinks that the elimination of tariffs or their undue reduction will save this country from exploitation by manufacturers within Australia I can assure them that the only result of those actions would be to throw good Australian employees of companies such as those under discussion into the arms of overseas exporting and importing interests. This Opposition will not stand for that state of affairs under any circumstances.
– Without taking up too much of the committee’s time I would like to deal briefly with the matter raised by the honorable member for Mackellar (Mr. Wentworth). As the honorable member probably knows, some months ago discussions were held between the Australian Minister for Trade and the New Zealand Minister for Trade on the subject of development of trade between Australia and New Zealand. As a result of those discussions some important decisions were reached and a joint standing committee was set up to investigate the possibility of further removing the tariff barrier that exists between the two countries. At the present time the majority of items imported from Australia into New
Zealand, and from New Zealand into Australia, are free of tariff, but quite a number of important items are still the subject of tariff protection. The joint standing committee has met a couple of times already and will meet alternately in Australia and New Zealand. At the conclusion of its considerations it will submit a report jointly to the two governments, when further discussions at a government level will be held. It is anticipated that about twelve months will elapse before the committee’s present deliberations are completed. 1 am not referring principally at this stage to the items dealt with in the measure now before honorable members. All I wanted to do was clarify the points raised by the honorable member for Mackellar.
.- I rise to support the remarks passed by the honorable member for Braddon (Mr. Davies) insofar as they referred to Associated Pulp and Paper Mills Limited. I have in my electorate a subsidiary of that company - Ballarat Paper Mills Proprietary Limited. As many honorable members know, paper manufactured in Burnie is brought to Ballarat for coating. The production of coated paper commenced in Ballarat in 1950. The industry, which has proved worthwhile to Ballarat, is most efficient. I agree with the honorable member for Braddon that this is one firm that has a very high standard of employer-employee relations.
Ballarat Paper Mills Proprietary Limited was embarking on a programme of expansion involving the purchase of expensive machinery at a time when the Government saw fit to discontinue import licensing. The Government’s decision created great havoc for the firm. There was a flood of paper into Australia from quite a number of overseas countries. What is more important, the quality of the paper being imported was inferior to that being manufactured in Ballarat. The users of paper had to learn by experience how superior the local product was. Fortunately some of them got their fingers burnt. Having embarked on a large and costly programme of expansion, the firm was faced with a serious problem when the Government announced its decision to discontinue import licensing. As honorable members are aware, the company, being in a decentralized industry, faced sufficient hazards without having to face the hazards created by the Government’s action.
It may be claimed that the company should have heeded the Government’s frequent warnings to industry not to shelter behind import licensing, that import licensing was an economic measure used by the Government and not a protective measure for the industry. But a look at this industry’s record will show that from time to time it has sought protection. It has spent a good deal of time presenting to the Tariff Board a case for protection, but its efforts were not sufficient to convince the board. I congratulate the Tariff Board for now seeing fit to give some protection to this industry. The industry is doing a worthwhile job in a decentralized area. I cannot understand the views of the honorable member for Wakefield (Mr. Kelly). I would like him to endeavour to represent for a short time an area that not only has industry but has decentralized industry. I think the honorable member’s electorate is wholly rural. I am sure that if he visited our factories and workshops he would have a different outlook. He referred to the making of high profits and indulged in other similar nonsense. If these people did not make profits how could they undertake large expenditures? I am referring now to the expenditure by Ballarat Paper Mills Proprietary Limited on modern machines. Without profits how could the company expand, make plans and produce paper more economically in Australia? It is the old story: Give the Australian manufacturer a go to increase his volume and he will produce at a lower cost.
Mr. KELLY (Wakefield) 19.39].- I shall continue my speech where I left off, despite all the shafts that have been flung at me. They probably were not meant. At least, they did not hurt much. At the conclusion of my previous remarks 1 was describing the process by which Australian Paper Manufacturers Limited deliberately and admittedly refused to supply paper to a company. On 29th July of this year Australian Paper Manufacturers Limited altered the agreement that I have been describing, but it had been in force up to that time. Perhaps the company heard the footsteps of the Attorney-General (Sir Garfield Barwick). Even with the agreement in its amended form, there are grave doubts whether the sack kraft paper available to merchants is of the same quality as that available to manufacturers of cement bags, and the manufacturer of cement bags still gets a 7i per cent, discount that the merchant does not receive.
It is interesting to examine the procedures by which by-law admission is refused by the Department of Customs and Excise. In May of this year, a firm applied for permission to import under by-law extensible kraft paper, which the Australian Paper Manufacturers company admits that it does not make. Nor does it make a similar paper. The department’s response to the request is interesting and I quote the department’s letter in full. It reads -
I refer to your letter of the 26th May, 1963, requesting By-law admission of 20 tons of Extensible Kraft paper on bag reels.
I would advise that your request is refused as the granting of By-law concession would be detrimental to the interests of Australian Paper Manufacturers Pty. Ltd.
Director, By-law Branch.
That seems a queer way to make a decision. The department merely says that the granting of the concession would be detrimental to A.P.M. Is not the department concerned with the interests of the consumer? Is it the policy of the department that anything detrimental to the interests of A.P.M. is out? This is an interesting slant!
There are other practices that should be mentioned, Sir. Australian Paper Manufacturers Limited is very critical of the dumping practices of other countries and has succeeded in having dumping duties imposed.
– The Tariff Board is very critical of those practices, too.
– I am glad to hear the honorable member’s confirmation. Does he know that one can buy A..P.M. paper in Singapore at £100 a ton and ship it back to Australia at less than the Australian price of £163 a ton? In other words, A.P.M. is dumping paper in Singapore - a practice of the kind that it so bitterly criticizes when adopted by other countries.
On the subject of dumping duties, it is interesting to study the procedure by which
A.P.M. justified its complaint about dumping by Sweden. It negotiated special milltomill prices from Swedish mills, which no merchant could hope to obtain, for paper which it could have made itself, and used the documents in connexion with these arrangements to substantiate its claims of dumping, knowing very well that no bona fide importer could import at that price.
Let us have a look at another restrictive trade practice. Australian Paper Manufacturers has been promoting Dawn toilet paper for some time and has been having it made by five licensees. Different arrangements have since been made, and the Kimberly-Clark of Australia Proprietary Limited is now the sole licensee. It is supplied by A.P.M. with raw paper at a price that is considerably lower than that charged for a very similar paper supplied by A.P.M. to other paper converters. The price for the raw paper sold to the Dawn licensee on 25th July has risen by only 8s. a ton since August, 1960, while the price of similar paper sold to other converters who are not licensees has risen by £7 5s. a ton. What are the unlicensed converters to do? Are they to pay the extra price and be uncompetitive? Or are they to pay the duty of £28 a ton and still be uncompetitive? In such circumstances, by-law entry of the raw paper should have been granted, one would think. It is granted in some cases and duty is only £2 a ton, but only if there is a signed declaration to the effect that the paper will not be used for toilet tissue. The toilet-roll market is to be kept for the Kimberly-Clark group and A.P.M. to enjoy together, while other converters who wish to market their own toilet paper under their own brands are placed in an impossible position. In the meantime the principals of Bowater-Scott Australia Proprietary Limited, which makes Sorbent toilet paper, must be laughing their heads off. That company has a simple paper-making machine, and it converts its own paper. It has no restrictive arrangements; it is too busy making paper and profits under the shelter of a tariff wall the height of which must be a perpetual source of surprise and delight.
There is another practice of the A.P.M. company which perhaps is not restrictive, only ingenuous. The company fell behind with its orders of MG carton boards early this year. It usually calls for orders by the 8th of the month and is supposed to make and deliver by the end of the following month. But, in the middle of this year, it was running a month behind schedule. It solved the problem with great skill - by not calling for orders for one month. Then, to add insult to injury, the company wrote to its clients on 1st July and blandly pointed out that it was then up to schedule. Its letter stated -
We are therefore pleased to advise that the overload which had accumulated for these grades has now been eliminated and we can now deliver in the normal month of making.
That was true, of course. The company was up to schedule. But this was little consolation to the poor carton manufacturer who had to miss a month’s supply. This is rather like the effect of a train controller who finds that he has an express running an hour behind schedule, and, with prompt decisiveness quickly remedies the position by altering the schedule by one hour. But probably the passengers would not be impressed.
One has only to read the sworn evidence given at the recent Tariff Board inquiry to realize that the user of paper is regarded as not being important. I recommend any one interested in the subject to read that evidence. On reading the evidence of Mr. Sneddon, of Master Butchers Limited in Adelaide, one realizes that Australian Paper Manufacturers Limited is most cavalier in its treatment of its customers and, in many instances, by its refusal to give delivery dates and even to confirm orders, is deliberately forcing customers to import paper. I quote from Mr. Sneddon’s sworn evidence as follows: -
A.P.M. in Adelaide have been approached by us, but have been quite offensive when asked for anticipated delivery dates. In fact, they have refused to speak to us on the question. The onlyadvice received after an order has been placed is the rail note when it is delivered to the railway.
That may not be the position now, Sir, but it was the position at the time of the Tariff Board’s inquiry. The same story goes right through the evidence. I challenge people to read that evidence. If honorable members can get it in the Parliamentary Library, they will find it very interesting. Read the evidence of Bates (Australasia) Proprietary Limited, a firm that makes paper bags. It complained1 bitterly about the quality of the paper that A.P.M. was supplying. Read the evidence of Cello Paper Company Proprietary Limited, which, referring to A.P.M., stated-
This monopoly and the tie ups have prevented much needed investment in the industry. Dutch and Scandinavian interests have examined the possibilities of establishing a competitive Kraft paper industry in Australia and were ready to bring millions of pounds of capital and skilled labour and management and know how, as well as being ready to export to markets in South East Asia
I thought that this was the kind of thing that we wanted - but have shied away from fear that there is no independent and free outlet for Kraft in this country . . . We would naturally prefer to obtain supplies from local sources if A.P.M. makes available their products without strings and tie ups and would extend reasonable service by supplying paper in bulk to required specifications . . . In the meantime, until A.P.M. relaxes its restrictions, we ought to be able to survive by imports without crippling duties.
These are not my comments. These statements are contained in sworn evidence given before the Tariff Board by the representative of a company that is feeling the squeeze. Remember the old saying -
The toad beneath the harrow knows
Exactly where each tooth point goes.
This picture that I have given of the industry and particularly of the restrictive trade practices operating in it is not a pretty one. We must find the reasons for this. Why is A.P.M. adopting these measures? One would have thought that an industry receiving the benefit of a subsidy of more than £7,000,000 a year paid by the Australian consumers of paper would be most assiduous in giving the impression that it was playing the game. Obviously, A.P.M. does not feel it necessary to do this. We must ask ourselves why.
It is worth remembering that the Tariff Board has said that A.P.M. has a price advantage for many classes of pulp and also imports much of its pulp duty free. Why, then, does it need the kind of duties that it says it needs and that it continually laments are not high enough? This company has a reputation for grandiose ideas that have probably led it to manufacture lines that are not economic with the Australian market as it is. This company has a reputation also for employing labour with what can only be described as reckless abandon. In fact, the Tariff Board drew attention to this in a mild way when it pointed out that A.P.M. was producing as much paper with 4,900 men in 1962 as it was with 5,700 men in 1961, making allowance for the change of machines. Evidently, in 1961, 800 men were largely sitting about, probably polishing the company’s halo or its public image.
My campaign to examine the tariff schedules is, I find, time consuming, dull and mostly hopeless. However, now and again there comes a glimmer of satisfaction. In this instance. I cannot help but hope that, as the result of the few pebbles I have flung into the placid pool of peaceful adulation in which the company basks, a few ripples may disturb the peaceful surface. Perhaps the twenty-odd sales managers of the company will be called together in the palatial head-quarters of the company at South Gate, Melbourne. I can imagine them treading reverently through the thick pile carpet and deciding with difficulty whether to meet in the theatrette or the big board room. Perhaps the meeting will be opened by the managing director, who, in a speech notable for the power of its adjectives, will in lurid language consign me and my works to unmentionable places. I am well aware that I will feel the weight of the long and heavy arm of the company very soon. But I am fortified by knowing that I will have the good wishes of almost every one in the paper trade. Frightened though they may be to open their mouths in public, most of them will be cheering in private.
Summing up, I say that both sections of the industry have played their part in development. I know that. But we should realize that this development has been bought at a price. It has been bought at a total cost to the consumer of at least £10,000,000 a year and with the use of restrictive trade practices of which companies so generously subsidized by the consumer should be heartily ashamed. If any one has any doubt as to whether the proposed restrictive trade practices legislation is justified, I would recommend a close study of the Australian paper industry.
.- It may well be that we are justified in providing Australian Paper Manufacturers Limited with £7,000,000 worth of protection at the expense of the Australian consumer. It may well be that the company was justified in making a profit last year, as the honorable member for Wakefield (Mr. Kelly) said, “of £2,700,000. It may well be that the company was justified in making a return on capital of 12i per cent. This may well be justified on the ground that the company provides employment for a number of Australians, although it seems to me that the cost of £1,500 per employee is rather high, to put it mildly. In addition, those who have supported this protection on the ground of the employment provided have not attempted to calculate the extent of employment that could not be made available because of the high cost of the goods manufactured from A.P.M.’s product as a result of this protection. If this were done, we might well find that thousands of Australians could have found employment elsewhere in the paper industry if the protection had not been granted.
Let us assume that we are justified in presenting the company with £7,000,000 worth of protection at the expense of the consumer. Is the company entitled to use the position created by the granting of the protection to hold the Australian consumer of paper to ransom, as it does? The honorable member for Wakefield has given an example of the restrictive trade practices used by the company. I want to deal with one such practice that seems to me to be very severe.
A manufacturer of cartons who guarantees to buy all his board from A.P.M. gets a discount of 7i per cent, on his purchases, but a manufacturer who buys some of his material from overseas has to forego the 7i per cent, discount on the material that he buys from A.P.M. In other words, he must obtain the whole of his material from A.P.M. or he does not receive a discount. Let us suppose that a canning factory is exporting canned fruit in cardboard cartons. This may be a canning factory in the electorate of the honorable member for Braddon (Mr. Davies), the honorable member for Mallee (Mr. Turnbull) or any of the many honorable members who have canned fruit factories in their electorates. The honorable member for Braddon, who was so vocal about this earlier, would also be interested in the export of apples in cartons. The factory exporting canned fruit buys its cartons from a carton manufacturer and is able to claim a drawback of duty on any cartons that are made from imported boards if the cartons are later exported containing, in this example, canned fruit. The purpose of the drawback duty is to enable the exporter to market his goods overseas as competitively as he possibly can. But does he in practice get the benefit of the drawback duty? He does not, and 1 will tell the House why he does not.
A carton manufacturer who supplies the cartons to the canning factory would also make cartons for the local trade. That is obvious. There would not be enough profit in the export carton business to make it worth while for the manufacturer to supply cartons for that purpose only. If the manufacturer used imported board, he would certainly be able to claim drawback on the portion that was exported. But he would not be able to claim drawback on the most important portion of his production - cartons made for the local trade. If there were no restrictive trade practice operating, he would be able to make the cartons for export from imported board and his cartons for the local market could be made from board purchased from A.P.M. The cartons for the local market would be the bulk of his production and this would assist the Australian industry. But he cannot use ir “ed board without losing the 7i per cer.i. discount on all the material used in cartons sold for the home trade.
Honorable members say that this does not matter much, but when we get into it we find that it matters a great deal. Let us suppose that a manufacturer is making a carton at a cost of 2s. Of this 2s., ls. 8d. will go in the purchase of the raw material - that is, thd board. The other 4d. will go in manufacturing and overhead costs. If he has to forego his 7i per cent, discount he will have to pay an extra Hd. for his material and will have only 2id. left as compared to his competitors’ 4d. to cover manufacturing costs. It is quite clear, then, that a discount of 7i per cent, would be of overwhelming importance and would certainly make it impossible for him to compete with other manufacturers who received the 7i per cent, discount. This is a clear example of how the restrictive trade practice now operated by Australian Paper Manufacturers Limited is making the position of export industries more difficult and nullifying the declared’ purpose and effect of the drawback duty. That, no doubt, is the reason why the drawback duty has been claimed in only negligible proportions.
It is interesting to see that the Tariff Board noticed the smallness of the amount of drawback duty that had been granted. It was only £7,000 in the twelve months ended 30th June, 1961. Obviously, if it were being effective, having regard to the volume of goods exported in cartons the amount granted would have been many hundred’s of thousands of pounds. But it is disturbing to find that the board did not follow this through and say why the drawback ararngements were not effective. It seems clear, too, that Australian Paper Manufacturers Limited is not unmindful of the effect the practice engaged in by it might have on its application for increased protection because, just before the last Tariff Board inquiry, the company announced that it would give a 15 per cent, rebate on the value of the board and paper used in the making of cartons where such cartons were used for packing goods to be exported. This 15 per cent, rebate approximated £16 per ton of raw material used for this purpose, compared with the new duty of about £22 a ton imposed on cartons made from imported board. In other words, Australian Paper Manufacturers Limited rebated to export industries approximately two-thirds of the new duty value. But now that the inquiry is over, the company has announced a reduction of this rebate from 15 per cent, to 7£ per cent., to operate as from 1st July, 1963, with a provision for alteration or cancellation of the rebate at any time without notice. I have described this particular practice in some detail because I believe it to be important. We see now that this firm which no honorable member will deny gains so much from our protective system, with all that that means in terms of increased costs to the consumer and to the export industries, in order to squeeze the last ounce out of the preferred position in which it has been placed, has deliberately set out to use that position to violate a national objective - the expansion of exports. I might say that the reason for my intervention in this debate is not to argue about this proposal, which may be well justified in terms of our national objective, but because, in effect, having got itself into a position where it can dictate prices and conditions to the Australian consumers of its products - a position which it owes entirely to the protective system - this company proceeds to make it difficult for struggling export producers who are in no position to control their prices because their prices are determined, not within this highly protective system, but by world markets. If ever there was a clearer case of the need for the AttorneyGeneral’s restrictive trade practices legislation, I have yet to hear of it. If ever there was a clearer example of the need for the Tariff Board to use its undoubted powers to make its recommendations for protection subject to proper behaviour by the company which receives the gift of protection, again I have yet to hear of it.
Not all honorable members may be aware that there is a section in the Tariff Board Act which empowers the Tariff Board to act in these cases. Section 15 (h) provides that the Minister shall refer to the board for inquiry and report - any question whether a manufacturer is taking undue advantage of the protection afforded him by the Tariff or by the restriction of the importation of any goods, and in particular in regard to his -
If the board so finds, then it can recommend either that the protection afforded to the manufacturer be reduced or abolished or that such other action as the board thinks desirable be taken. We all hope that the Attorney-General’s restrictive trade practices legislation will be brought into this House and become effective in the very near future, but until that time arrives, I should like to say to the Minister that there has been enough evidence produced by the Tariff Board, by the. honorable member for Wakefield and by me about the abuse by this company of the protection it has received to justify him making a reference to the board under section 15 of the Tariff Board Act, in order to ascertain whether this company’s behaviour has not been such as to justify the board in recommending measures to reduce or abolish the protection afforded until such time as the company amends its ways.
.- I hope I do not provoke further debate, but I was interested in the suggestion by the honorable member for Mackellar (Mr. Wentworth) that there should be more reciprocal trade with New Zealand. I agree with him, but I can see some difficulties in the way of promoting that trade. One of the things that rather troubles me is the difficulty in having reciprocal trade in dairy products. So far as I can assess it, a strange situation exists in Australia and I am wondering if the Minister can answer a question for me as he did for the honorable member for Mackellar.
The dairying industry of Australia is telling cheese manufacturers to ease up a little on the manufacture of cheese as there is an over-supply of this product on the Australian market. Yet, when I walk into a big emporium or a grocer shop in Melbourne and ask for a piece of first-class bitey, good quality cheddar cheese, and I am given a sample of soapy cheese, I say: “This is not good enough. I like a good, crumbly, bitey cheese.” The shopkeepers reply, “ The only product we have like that is New Zealand cheese “.
– You are going to the wrong shops.
– I have been to many shops.
– I will take you to some.
– I know you can get Australian cheese, but why is not more of it available? I think some one said the other day that at present we have a surplus of 11,000 tons of cheese over present requirements. I stand to be corrected on that figure, but it is no wonder that we have a huge amount of surplus when all one can get is something like soap when one asks for good cheese. Apart from that, can there be any justification for transporting good quality New Zealand cheese - New Zealand makes beautiful cheese - across the ocean to Australia when we already have a surplus of our own cheese? That is not anti-New Zealand and I approve generally of the ideas of the honorable member for Mackellar (Mr. Wentworth) if we want reciprocal trade. But I want to know why we cannot get some good quality cheddar cheese in Australia. Perhaps the Minister can tell me.
– I think you are buying in the wrong shop.
. -I want, first, to thank the Minister for Supply (Mr. Fairhall) for his courteous reply to me in regard to New Zealand trade. I am. of course, aware of the existence of the committee of which he spoke, particularly since I have been in communication with the Minister for Trade (Mr. McEwen) concerning it. It seems that this is a committee which should not be left at the bureaucratic level - as it is and as the Government apparently intends to keep it. The question of closer relationships between us and New Zealand is so important that it requires to be dealt with on the parliamentary level - both here and in New Zealand
I think it would be a very good idea if honorable members of this chamber were given some opportunity of participating in this matter and of seeing something of the work of the committee and perhaps helping it, particularly by making contact with their opposite numbers in the New Zealand Parliament. This is a joint venture. It is not an Australian or a New Zealand venture, but a joint venture. I will not go into the details of the question raised by the honorable member for Lalor (Mr. Pollard), but I remind him that we are discusing Item 335 at the present moment.
We. in Australia, are not self-sufficient in regard to paper and paper pulp products. We do import quite large amounts of these various products and it looks as though we shall continue to do this, though it will be to a reducing extent as our own resources expand. But while we are importing from overseas, would it not be advisable in this, where the interests of Australian industry are not in question, to have a more positive policy of co-operation with our sister country, New Zealand? This is the kind of question which I think should be engaging the attention not merely of this bureaucratic committee - excellent though its work may be and although I commend in every respect the setting up of that committee - but also of the Parliaments on both sides of the Tasman. After all, if we are to have a closer union between us and New Zealand it must be based upon the popular consent of the people on both sides of the Tasman.
There may not be much time left to us and the sooner this Parliament, which is the representative of the people, takes cognizance of this and engages in negotiations, the better. I ask the Government to change its outlook towards the work of this committee and to integrate it more with the work of this Parliament.
Item agreed to.
Remaining items of Third Schedule- by leave - taken together, and agreed to.
Remainder of bill - by leave - taken as a whole, and agreed to.
Customs Tariff (Canada Preference) Bill (No. 2) 1963 - by leave - taken as a whole, and agreed to.
Customs Tariff (New Zealand Preference) Bill (No. 2) 1963- by leave- taken as a whole, and agreed to.
Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Bill 1963 - by leave - taken as a whole, and agreed to.
Excise Tariff Bill 1963 - by leave - taken as a whole, and agreed to.
Bills reported without amendment; report adopted.
Bills read a third time. ‘
Motion (by Mr. Fairhall) - by leave - agreed to -
That so much of the Standing Orders be suspended as would prevent two customs tariff bills-
being presented and read a first time to gether and one motion being moved without delay and one question being put in regard to, respectively, the second readings, the committee’s report stage, and the third readings, of the bills together, and
the consideration of the bills in ono
Committee of the Whole.
Bills presented by Mr. Fairhall, and read a first time.
– I move -
That the bills be now read a second time. We have before us for discussion the Customs Tariff Bill (No. 3) 1963 and also a complementary tariff preference bill. These bills will enact the Customs Tariff Proposals which are now before the Committee of Ways and Means, namely, Customs Tariff Proposals Nos. 80 to 83 and Customs Tariff (New Zealand Preference) Proposals No. 17. Honorable members will recall that full documentation was distributed at the time the proposals were circulated and additional copies of the documents are available if required. I commend the bills to honorable members.
.- I am sorry to have to inflict a speech on the House at this stage, but I shall go through with it. It has always been understood that the tariff can be altered in several ways. The schedules can be altered or the methods of applying the schedules can be altered. In a case involved in this second bill there is a question of the procedures adopted - particularly by the Department of Customs and Excise - which concerns me.
It has always been understood that customs schedules should be altered and administered according to clearly defined principles. These principles are generally accepted as being - (1) that the tariff should not be altered except after inquiry by the Tariff Board; (2) that tariff changes should be ratified by Parliament; (3) that any changes so made should be equitable on all citizens in the Commonwealth; (4) that the changes be workable or administratable; (5) that procedures should conform to usually accepted principles of business ethics; (6) that they be understandable; and (7) that they be constitutional. I am concerned with how often these seven principles may be being transgressed. I am not making any specific charges - I should like the Minister to be clear on that - but I am asking specific questions to which I expect specific answers. I do not expect the Minister for Supply (Mr. Fairhall), who only represents the Minister for Customs and Excise (Senator Henty), to answer my questions, but I hope that when the Minister for Customs and Excise introduces these proposals in the Senate he will answer my questions in detail, because they concern me greatly.
The first principle is that it is government policy that tariff changes should be made only after inquiry by the Tariff Board. Indeed there is a legal obligation in this regard because the United KingdomAustralia Trade Agreement lays this down specifically. I ask the Minister how in two particular cases his action can be said to have followed Tariff Board advice.
Tariff circular memorandum 63/77, known as T.C.M. 63/77, was issued by the customs authorities on 4th June, 1963. The effect of this memorandum was to bring printed cotton material used in clothing factories into the protected range. Previously it was in the revenue range. The Tariff Board, in its last report on printed cotton, dated March. 1963, recommended that printed cottons be not placed in the protected range because it felt that the market for printed cottons was not large enough to make the industry economic. That decision was definite and clear. Six Tariff Board reports in six years have all said the same thing. T.C.M. 63/77 obviously over-rides the considered and definite opinion of the Tariff Board, frequently expressed, and radically alters the existing schedule as passed by this chamber.
Again, the Tariff Board in its last two reports on cotton piece goods, in 1956 and 1958, definitely stated that woven patterned cotton piece goods, denims, drills, and so on should not be in the protected range. T.C.M. 63/77 definitely places those goods in the protected range and increases the rate of duty from 2d. a square yard to 7d. a lb. plus 276 per cent, mostfavourednation, which is really an effective increase of from 2d. a square yard to about 2s. 6d. a square yard on many common types of cloth. I ask the Minister this specific question: How does he justify the action of his department in issuing T.C.M. 63/77, which has the effect of over-riding two recent Tariff Board decisions and altering the law passed by this chamber? *
Let me cite another example. In May, 1962, the Tariff Board, in a report on metal working machines and parts, recommended quite high rates of duty. The reference was defined clearly as dealing only with metal working machines and parts. Other machines and parts were specifically excluded. Acting on this report, the Government in November, 1962, amended the schedule to alter the rates of duty on metal working machines and parts. Will the Minister explain the alterations made at the same time to items 176 (f) (2) and 176 (f) (3), which increased the duty on wood working, leather working and sheep shearing machine attachments? By whose authority were those alterations made? Was not increased duty collected on various accessories previously rated at a lower duty? Will the Minister explain how these alterations which were made by T.C.M. 63/77 do not deliberately flout and exceed the clearly expressed Tariff Board recommendations?
The second principle is that we expect tariff changes to be ratified by the Parliament. Will the Minister tell me when we ratified, or are expected to ratify, the changes in the effective level of duty which followed the issuing of T.C.M. 63/77 which I have described previously? This memorandum brought goods into the protected range which the Tariff Board said should not be protected, thereby in effect altering a schedule passed by the Parliament. I specifically ask the Minister when these changes were made effective by this chamber, following the issuing of T.C.M. 63/77.
The third principle that we look to when altering tariff schedules is that the schedules shall affect all citizens equitably and that no particular advantage will be given to particular groups of people. With the operation of T.C.M. 63/77 there arises a great administrative problem. On some materials that are used for male outer wear the duties are considerably higher than on the same materials used for female outer wear. Let us assume that a small factory is making boys’ and girls’ cotton waterproof overcoats. The only essential difference is that boys’ overcoats button up one way and girls’ overcoats button up another way. The management of a particular factory pointed out to an official of the department that it would be impossible to differentiate between the end uses of the cloth. This was admitted by the official, who then said that T.C.M. 63/77 was designed not to catch the small manufacturer but to catch the large manu facturer. where the regulation could be policed and where the manufacturer’s considerable reputation would be at risk if he were to step over the line. I repeat that it was admitted that a particular class of factory was not expected to be disadvantaged by this regulation but that another class of factory would be. Is the principle of equity being honoured in that case?
I shall take another example. Two girls decide to marry, one wearing a white wedding frock and the other a blue wedding frock, each made from a type of jacquard fabric which the department alleged to be a furnishing fabric. By virtue of departmental action, and not as a result of a decision by this Parliament, the girl who chose to be married in a white wedding frock would be paying duty, if the material were imported, at the rate of 2s. 8id. a square yard, whereas the girl who chose to be married in blue would be paying duty of about 7s. 6d. a square yard.
Let us consider another two girls, one from a rich family and the other the daughter of a poor widow, who chose for their wedding frocks the same man-made fibre material, a 45-inch jacquard weighing 8 oz. a square yard in a colour other than white or off-white. The girl of the wealthy parents buys from a retail store a frock which was made up in a clothing factory. She pays duty at the rate of 3s. 6d. a lineal yard. The daughter of the poor widow, to save money, must make up her own frock from material bought at a retail store. Because of the ruling contained in T.C.M. 63/81, she will be charged duty on a cloth having a value for duty of 12s. a square yard Australian currency at the rate of 8s. Hd. a lineal yard. Is this equitable? Is this the intention of Parliament?
I shall cite another example. There have been many cases of certain firms which are prominent in an industry and are large users of a particular product getting what is called a blanket by-law whereby they are enabled automatically to import under bylaw free of duty, or at comparatively lower rates of duty, certain materials which may not be available from Australian manufacturers. There are others, however, in the same industry who may not be so big or so prominent, who often do not know of the existence of this by-law arrangement which is available to their competitiors. Will the Minister tell me why, in many instances, an importer learns only by adverse results of a competitor being able to sell at lower prices, or even only by chance, that such by-laws are available for others operating in his particular sphere? That procedures such as these are being followed is undoubted. Surely these inequalities could be remedied by some form of announcement after a by-law entry is granted, so that the benefits may be available to all concerned. It would appear now to be a case of learning by chance or by being in the know.
Let me give another example. Last year valuable concessions to import corduroy, or velveteen, at half the usual rate of duty were given to certain importers. The only public announcement was made several months after the decision was arrived at, and it was made in such a form that even the most alert importer would not be aware of what was going on. There were four announcements in the Commonwealth “ Gazette “. One of these, number 94/60749, made it clear that the by-law was granted so that the velveteen could be used in the manufacture of jewel cases. I have no objection to this form of announcement. But the other three notices gave no information to any one at =11. The importers who obtained the by-law entry and were in the know could obviously undersell the importers who did not obtain the by-lav entry and who also could not obtain information as to why the by-law entry was granted and to whom it was granted. Why cannot information of this kind be made known by a tariff circular memorandum so that all people in the trade will know what is going on? Will the Minister now grant similar concessions retrospectively to other importers who were not in the know? Will the Minister agree to a refund of relevant duties collected since 1st July last year?
The fourth principle is that any procedures adopted should be administrable or workable. In the case of the recently issued T.C.M. 63/77 great problems of administration are inevitable. How can an importer expect to get from his client a certificate of end usage? Why should the importer be expected to police the schedule? How does the Department of Customs and
Excise intend to administer this T.C.M.? Has not the department itself admitted that it cannot be administered except in large factories? Did not the Chief Tariff Officer, when giving evidence at the inquiry on furnishing fabrics on 17th June this year, state in sworn evidence that this kind of regulation led to a bending of conscience which made it unworkable? Does not the administration of T.C.M. 63/77 rely on a declaration which the purchaser is supposed to make when he gets the material, a declaration which the Chief Tariff Officer himself admitted in sworn public evidence is not satisfactory?
The fifth principle is that any system of administration should conform to accepted standards of business ethics, and in this regard I shall give examples of things which are disturbing me. Take the case of merchants who are importing laboratory glassware for hospitals and laboratories. If they want by-law entry, do they not have to submit their request to the Department of Customs and Excise, and do they not immediately send their request to the main Australian manufacturer, the only manufacturer in the city, who then goes through the list and crosses off the items which he says that he can supply? Does this not place importing merchants in a very unfair position as compared with their competitors?
In the recent debate on the paper tariff, I quoted a letter from the Department of Customs and Excise, in which application for by-law admission was refused, the sole reason given being that it would be adverse to Australian Paper Manufacturers Limited. I use this example again as illustrating a poor standard of business ethics. Is it good business ethics to let the power of decision rest on the whim and goodwill of a merchant’s main competitor, particularly when that competitor is A.P.M.?
The sixth principle that we should recognize is that the tariff should be understandable, that the explanation by the Department of Customs and Excise of tariff changes should be understandable by people without years of training as customs agents and without degrees in law and commerce. I see that the Minister agrees with my contention in this regard. I am continually perplexed by the difficulty of understanding the schedules and the explanations of the schedules. Will the Minister endeavour to make T.C.M. 63/77 intelligible to people like me and, perhaps, to people like the honorable member for Lalor (Mr. Pollard), who, I think, would not mind being mentioned in this connexion.
– Don’t put me in the same category as yourself.
– There was a recent determination by the Chief Tariff Officer which stated that terry towels, if they are simple rectangles, should be in a certain tariff category. I mention this to give an idea of the complexities and difficulties. I spent hours worrying about the essential difference between a simple rectangle and a rectangle. I had the greatest difficulty in imagining an unsimple rectangle.
Finally, ohe would expect that any procedures adopted by the Commonwealth would be constitutional. Section 99 of the the Constitution reads as follows - and this is a great moment for me, having the opportunity to read something like a lawyer: -
The Commonwealth shall not by any law or regulation of trade, commerce or revenue, give preference to one State or any part thereof over any other State or any part thereof.
The operation of T.C.M. 63/77 fixes duties for the same cloth at different rates if they are used for different purposes. If a factory in one part of the State is using a material for making men’s outer wear, the duty on that material would be different from that applicable to a factory in another part of the State using exactly the same material for making women’s outer wear. Will the Minister please explain to me. in words of one syllable, how this does not transgress section 99 of the Constitution?
These matters of principle that I have raised to-day concern me greatly. As the government of the country becomes more complicated, the risk that the bureaucratic machine will become so complicated that no-one can understand it becomes a very real one. When this happens, as I think we will all admit has happened in relation to the tariff schedule, there is a great danger that the bureaucrats - and I say this not unkindly - may be able to do things under cover of the resulting fog of confusion that we would not countenance if we could understand what was going on. I am concerned that this may be happening now.
Recently the Victorian branch of the Liberal-Country Party passed a resolution pressing for the appointment of an ombuds man, who would be charged with the special duty of protecting the individual against bureaucracy. This resolution was thought to be rather quaint by many people, but I have given some examples to-day which illustrate the need for such an appointment. If such a person is appointed, there will be no lack of demand for his services. Democracy can be overthrown by revolutions or it can be nibbled away from underneath. I fear that officials can conconsciously warp the Government’s policy, which is to alter customs schedules only after reference to the Tariff Board, and which requires that such alterations should be ratified by Parliament and should bear on all citizens equally. My fears in this regard may be groundless, but to put my mind at rest, I would appreciate clear answers by the Minister for Customs and Excise in another place. Only when I have received such clear answers will I be satisfied that the Government I have supported is acting in our best interests.
.- Far be it from me to prolong this second-reading debate, because we are all eager to get to the substance of the bill. However, the honorable member for Wakefield (Mr. Kelly) has had a bit of a field day to-night - if I may use the two words in such close conjunction. If he is looking for a field in which to find anomalies and difficulties, particularly those of classification, he will certainly find it in the field of customs, if nowhere else. Because of the extraordinary difficulty of classification of the thousands of groups and subgroups of materials and items which come within the customs schedule, if he does not find an anomaly or difficulty or an injustice or two, he is just not trying. The honorable member was good enough to tell me that he proposed to say a few words on departmental practice, particularly in relation to reclassification. The Minister for Customs and Excise (Senator Henty), whom unhappily I represent in this chamber-
– You represent him very well.
– Do you mean that I keep quiet most of the time? The Minister for Customs and Excise was good enough to give me a few words of explanation on the matters to be raised by the honorable member for Wakefield to-night. I am also grateful to the honorable member because he has been good enough to say that reference to questions put to the Minister for Customs and Excise, asking for very precise answers to difficult questions, must be read as applying to that Minister and not to any Minister in this House. That relieves me enormously.
The right of an administering department to make executive decisions, particularly in relation to classifications, is inherent in the creation of the department. It seems to me that the Parliament recognized that right when it passed section 166 of the Customs Act which reads -
If any practice of the Customs-
About which the honorable member for Wakefield is now raising questions - . . relating to classifying or enumerating any article for duty shall be altered so that less duty is charged upon such article, no person shall thereby become entitled to any refund on account of any duty paid before such alteration.
Without going into the legalities of this matter, it seems to me that that establishes the right of the department to reclassify items. In connexion with the particular tariff circular memorandum to which the honorable member has referred, I think it can be shown that there are times when a reclassification of items by the Department of Customs and Excise as an administrative act is essential to preserve the full meaning of the schedule to which the House has given its approval.
Changes of practice are not uncommon. It is true that some result in reductions in duties, others in no change, and others in increased duties. In fact, there were nine changes in practice in 1961-62 and fourteen in 1962-63 - a total of 23 for the two years. The figures for previous years would be about the same. Of the 1962-63 changes, the three that have caused the most comment are the two concerning furnishing fabrics and the one concerning fabrics for male outerwear. Those have been referred to by the honorable member for Wakefield and broadly are the subject of tariff circular memorandum No. 63/77. One has only to look at the enormous range of fabrics being turned out to-day and realize that they may have applicability in one or more fields to understand the difficuties of the Department of Customs and Excise in making a classification which preserves the sense of that to which the House has given its approval. The wording of the tariff determination in this respect certainly would make it apply to items of male outerwear used for a particular purpose. The fabrics must be ordinarily used for a certain purpose. The test will be that the use is not extraordinary. If the honorable member for Wakefield turned out in this House in a pair of yellow satin pants, that would be an extraordinary use of a fabric and, accordingly, it would not fall within this classification.
– Short or long ones?
– Short ones, with lace. Until recent years the cotton fabrics used for male outerwear were drills, denims, dungarees and tweeds. They were the items presumed to be covered by the Tariff Schedule. Over the past three years a fashion trend has developed for the use of repps, poplins and various types of more exotic fabrics on a regular basis for men’s outerwear. Indeed, there has been quite a procession of people to Canberra, bringing with them a variety of fabrics. Some were dutiable at the rate of lOd. per lb. plus 45 per cent, ad valorem; whilst others were classified at 2d. a square yard. Those fabrics that were classified at 2d. a square yard were imported to form the basis of a new fashion in the use of fabrics for men’s outerwear. So the thing that created the fashion in material for men’s outerwear was nothing more than the favorable rate of duty which could be obtained if those items were not classified as for outerwear. This was an attempt to escape the very meaning of the tariff classification approved by the Parliament. I suggest to the honorable member for Wakefield that in a case of that kind the Department of Customs and Excise is obliged to change the classification of those items to bring them within the meaning of the tariff classification approved by the Parliament. If the honorable gentleman wants some further information, I am certain that the Minister for Customs and Excise will be able to go through this matter in more detail than I have been able to do, to study the references which he has made and then to give him the detailed answers for which he has waited so long.
Question resolved in the affirmative. 1
Bills read a second time. 1
– Order! Is it the wish of the
House that, in conformity with new Standing Order 222, we proceed forthwith to the third reading?
Order! The bill before the committee is the Customs Tariff Bill (No. 3) 1963.
.- I now wish to make the shortest speech that I have made for a long while. This proposal deals with penicillin and streptomycin. The Tariff Board has altered the rate of duty recommended by the Special Advisory Authority. I do not say that we should not have an antibiotics industry in Australia; but if such an industry were necessary for defence purposes, I would have thought that it was the function of the general taxpayers, rather than of a particular group, to meet the expense of it. It is true that the taxpayers are meeting about half of the expense because any increase in the price of antibiotics caused by these duties is met from the Consolidated Revenue Fund. But one-half of the antibiotics used in Australia are used in veterinary products, and it seems unreasonable to expect the primary producers to pay these exceptionally high prices. In many cases the rates of duty are exceptionally high. On some products the duty works out as low as 33 per cent.; but on penicillin G in bulk from West Germany the duty works out at 298 per cent., and on streptomycin sulphate from France the duty is 290 per cent.
When the annual report of the Commonwealth Serum Laboratories is presented. I am sure that the new management will be able to point out how excellent its stewardship has been; but let us not forget that this is being bought at a price - a price of particularly high prices paid by farmers for veterinary antibiotics and by the general revenue for human antibiotics. When people criticize our dairy farmers for not being able to compete with New Zealand dairy farmers, as they often do, let us remember the load that our dairy farmers are carrying in this and other respects.
Schedule agreed to.
.- The customs duties on towels and towelling are imposed as the result of a Tariff Board report signed in May of this year as a part of the general textile reference. Before dealing with the duties imposed by this schedule, I want to discuss briefly the general reference. I understand that when the Tariff Board was asked to deal with the general textile reference it was hoped that the various reports, as they were signed, would bring a pattern into the textile industry and that there would be a general movement towards a common definition of fabrics and so on. It was also hoped that the various duties would be kept in step with one another. For instance, if a duty on yarn is too high, it will increase the protective needs of the user of those yarns, the manufacturer of piecegoods. If higher duties are imposed on piecegoods, the garment manufacturer is adversely affected. So it is clear that the duties should be kept in step, if possible.
I cannot say how successful the board has been, but I presume that some good has come of this inquiry. I think we ought to look briefly at the textile industry as a whole. I do so with the sickening knowledge that again I will be branded as a free trader and as one opposed to local industry. This is not so, of course, but I know that I will ‘be so accused, probably by the honorable member for Lalor (Mr. Pollard). However, on a large national issue such as this, that kind of personal criticism is not of much account. I have never found that problems disappear by being ignored, so let us have a look at the problem of the textile industry as a group.
I have often been critical of various sections of the textile industry and of the various devices used to get protection, but I will put all that behind me and assume that the industry is well organized and technically efficient and that there is generally free competition within the industry. Yet, having made those broad assumptions, one still cannot but be doubtful as to whether we should deliberately encourage it. The industry as a whole suffers from fundamental difficulties which no amount of protection can alter. It is labour-intensive and it suffers from the smallness of the market and the peculiarities of the feminine mind. Because it is labour-intensive and because our labour costs us more than it does our competitors, our competitive position will not improve. In a capital intensive industry that receives protection, there is always the hope that economies of scale will lift productivity enough to enable the industry to compete on more equal terms and avoid the need for protection, but I think we all realize in regard to the textile industry that its labour-intensive nature will mean that we will always need to protect it heavily.
Further, because women are women and hate wearing uniforms, for very good feminine reasons - and for masculine reasons too - it must follow that the fashion side of the industry will always suffer from the fundamental handicap of the smallness of production runs, the frequent changing of patterns and the frequent changing of the dyeing vats. The fashion side of the industry suffers under the two fundamental difficulties that it is labour-intensive and has only a small market. These difficulties are admitted by all people in the industry. I am not telling them anything they do not already know very well. But they and their defenders, and almost every one in this chamber say, in effect, that although this is so, the industry should still be nurtured by protection. The justification, of course, is the employment offered and the returns from capital employed. I admit that these are important considerations, but there are several considerations which should be spelt out on the other side. I do not say that those considerations should carry the day, but at least they should be looked at.
First, the costs of protection are always paid by the export industry. In this situation, when all admit that the protective needs of the industry will not decrease, we must expect the cost to the export industry to be a continuing one, if not an increasing one. I ask honorable members to realize that there is obviously a limit to the burden we can ask our export industries to carry. Secondly, we must realize that there is, after all, an advantage in being able to buy cheap clothes. Thirdly, there is an advantage for women if they can buy the kind of clothes they want. Fourthly, there are more people engaged in making garments than in making piece goods, and if we make clothing prices high by protection, people buy less clothes and there is a tendency to reduce employment in the garment-making section.
There is another economic argument that should be mentioned. We have a trade balance with China of sixteen to one in our favour. How can we expect China to pay for our wheat if we will not buy its towels? We are always getting angry with countries which will not buy our primary products, and with good reason. But when we do the same thing ourselves, it is excused as being necessary to national development.
Those are five economic arguments against continuing protection for textiles. I do not say that they should carry the day, but at least they should be considered. The sixth reason is not an economic one. All of us pay lip service to the idea of helping our Asian neighbours. It is a subject that lends itself easily to splendid eloquence, and I suppose that most of us have beaten our breasts in public on this subject. It is easy to proclaim in ringing tones that trade is more important than aid, but when it comes to actually buying from people in India, Hong Kong, or even Communist China those textiles which they can produce cheaply because of their access to cheap cotton and because of their cheap labour costs, we smartly put a stop to it by putting on a duty. Not so much for the sake of India, Hong Kong, or China, but for our own survival’s sake, we must eventually face this problem. We know in our hearts that this is so, and to ignore it, as we always do, is tragic.
These are the arguments placed against the employment offered by the industry. I do not pretend that the answer will be easy for anybody to give. I am glad that the responsibility is not mine. It may be that the answer will be a compromise, and that we will tacitly admit that a mistake was made in starting the industry at all, but we will say that, having allowed it to start, it is politically impossible to shut it down. Perhaps we must deliberately decide to stop it expanding. New Zealand, after that country decided foolishly to foster a textile industry, found that because of the size of the market the industry was doomed to be uneconomic. New Zealand then bought out the industry, and we may have to do something like that also.
I believe that the industry is entitled to a clear answer to the question whether we should encourage it to expand. We cannot go on patching up things in the way we do now. If we decide that we are wealthy enough to afford the luxury of supporting an uneconomic industry, well and good. We could carry it a stage further if we were really feeling generous. We could forget all about the good of the economy and take up the suggestion, made a short time ago, to make clothing for animals. We could make muu-muus for cows, track suits for greyhounds or flying suits for budgerigars. Let us make a deliberate decision instead of drifting from crisis to crisis, as we do now.
All the problems I have referred to as common to the textile industries are found in the report on towels and towelling. First, the industry uses cotton yarn, protected by a duty, which is dearer than the yarn available to other countries. Secondly, some parts of the industry are doing very well. For example, H. B. Dickie Limited made a profit of 21 per cent, on ordinary capital last year, while others manufactured at a loss. Evidently that company is better at making towels than its competitors. Yet H. B. . Dickie Limited needs a protection of over 200 per cent, against towels from Hong Kong, China and Japan. The company says it needs that protection, and so does the Tariff Board, so the company must need it. It says that it is an efficient producer, and so it is. But does that not point to the fact that either the duty on the yarn is too high or the industry is uneconomic? It is no good hiding behind the fact that the price of towels from China may be subsidized. That may be, but it may be that the Chinese are desperate for foreign exchange with which to pay for the wheat that they buy from us. But that does not explain the Hong Kong prices. Nor does it explain the Japanese prices. I have seen an invoice showing that at the f.o.b. prices of these Japanese towels the recommended duty works out at more than 250 per cent. Many of us were anxious about the delay in renewing the Japanese Trade Agreement. I wonder whether the delay was caused by actions such as these on our part. One thing is certain: This rate of duty will very effectively prevent the poor people in Australia from buying cheap towels.
In my modesty I refer to the next matter with some hesitation. I propose to speak about nappies. We could buy terry nappies, or diapers as they are called in the circles in which you, Sir, move, for 15s. 4d. a dozen in Hong Kong. The new duty of 150 per cent, raises the price to 49s. 3d. a dozen. The babies of Australia are paying more than 24s. a dozen extra, or 2s. extra for each nappy, for the privilege of having the industry in Australia. If each baby requires two dozen nappies - that does not seem an excessive number if my memory serves me correctly - each baby will pay £2 8s. subsidy to the industry. That is about seven times the contribution that the poor little beggars are asked to make to the Colombo Plan each year. In Australia in 1962, 237,000 babies were born. If each of those babies was supplied with two dozen terry nappies and if those nappies cost an extra 2s. each, the extra cost to the babies of Australia would be more than £568,000 for the privilege of having the industry in Australia.
The industry is paying over-award wages for its labour. The Tariff Board’s report states -
The evidence submitted at the enquiry shows that incentive and bonus schemes are a feature of the industry and weekly earnings are on the average 20 per cent, above minimum award rates.
The wages are fixed by the authorities and are used as a justification for the high protection needed. Then the wages are raised by another 20 per cent., so I suppose even more duty will be sought. Nobody objects to the industry paying over-award wages if the industry really pays them and does not pass on the extra cost to others. But to pass the extra costs on at the rate of 2s. a nappy to the poor little kids of Australia seems to my simple mind to be a bit lousy.
The board recommended that as tea towels are not made in Australia they should come in duty free. Will the Minister for Supply (Mr. Fairhall) who is at the table, tell me why tea towels are allowed in duty free only under by-law? Why are they not shown in the ordinary way as duty free? Is it not a fact that if they are allowed in under by-law in this way the by-law may later be revoked without reference to the House? Will the Minister assure me that the department has not used this method of by-law entry instead of the straightforward duty-free entry recommended by the board so that the department may later remove the by-law without reference to us? If this is not the reason, why is the matter dealt with in this way?
The industry has sought and the Tariff Board has confirmed rates of duty which run often at well in excess of 200 per cent., for which the export industries must pay. Everybody seems content with this state of affairs; even Country Party members seem to be really keen about these things. I do not expect to be able to influence the thinking of the House on this matter but I hope that I have demonstrated the need for a careful examination of the place in our economy of the textile industry generally. One thing is certain: We cannot continue to drift as’ we are drifting in this matter.
Schedule agreed to.
House adjourned at 11.6 p.m.
The following answers to questions were circulated: -
m asked the Treasurer, upon notice -
What interest rates have been paid since the war on (a) Commonwealth bonds; (b) savings bank deposits; (c) trading bank deposits; and (d) trading bank overdrafts?
– The information requested by the honorable member is set out in the following statements: -
d asked the Minister representing the Minister for Civil Aviation, upon notice -
– The Minister for Civil Aviation has supplied the following information: -
m asked the Minister representing the Minister for National Development, upon notice -
– The Minister for National Development has supplied the following answers to the honorable member’s questions: -
d asked the Minister representing the Minister for Civil Aviation, upon notice -
– The Minister for Civil Aviation has supplied the following information: -
Repatriation. (Question No. 29.)
n asked the Minister for
Repatriation, upon notice -
– The answers to the honorable member’s questions are as follows: -
s asked the Minister representing the Minister for Civil Aviation, upon notice -
– The following answers to the honorable member’s questions have been supplied by the Minister for Civil Aviation -
d asked the Minister representing the Minister for Civil Aviation, upon notice -
Which of the landing strips now being used by MacRobertson Miller Airlines Limited in their Western Australian service are suitable for landing and take-off of Viscount aircraft?
– The Minister for Civil Aviation has supplied the following information: -
The aerodromes at Perth, Kalgoorlie and Meekatharra are suitable for Viscount series 700 and 800 operations, whilst those at Derby and Port Hedland will be suitable for series 700 operations when the present sealing programme on the runways is completed. Broome and Geraldton aerodromes will also permit Viscount 700 operations, but only under the most favorable operational conditions, so these aerodromes must at present be regarded as marginal for the operation of this aircraft type.
d asked the Minister representing the Minister for National Development, upon notice -
– The Minister for National Development has supplied the following answers to the honorable member’s questions:-
Cite as: Australia, House of Representatives, Debates, 14 August 1963, viewed 22 October 2017, <http://historichansard.net/hofreps/1963/19630814_reps_24_hor39/>.