House of Representatives
22 August 1967

26th Parliament · 1st Session

  1. House of Representatives
  2. 26th Parliament
  3. 1967

Mr SPEAKER (Hon. W. J. Aston) took the chair at 2.30 p.m., and read prayers.

page 259

CAPRICORNIA ELECTORAL DIVISION

Mr SPEAKER:

-It is my intention to Issue a writ tomorrow for the election of a member to serve for the electoral division of Capricornia in the State of Queensland to fill the vacancy caused by the death of Mr George Henry Gray. The dates in connection with the election will be fixed as follows: Date of nomination, Friday, 8th September 1967; date of polling, Saturday, 30th September 1967; and date of return of writ, on or before Friday, 3rd November 1967.

page 259

PETITIONS

Constitution Alteration

Mr CALDER presented a petition from certain residents and electors of the Alice Springs district in the Northern Territory praying that the Parliament give consideration to having section 128 of the Commonwealth of Australia Constitution Act amended as provided by that section to the intent that electors and residents in the Northern Territory of Australia may vote on questions brought forward in a referendum to amend the said Constitution.

Petition received and read.

Social Services

Mr MINOGUE presented a petition from certain electors of the Commonwealth praying that the Government implement Article 25 of the Universal Declaration of Human Rights by providing increased social service and housing benefits for the aged, the invalid, the widowed and their dependants.

A similar petition was presented by Mr Bridges-Maxwell.

Petitions severally received.

Aid to Developing Countries

Mr PETTITT presented a petition from certain citizens of Australia praying that the Australian Government set 1% of the gross national product as the target for the annual allocation of aid to the developing countries.

Petition received.

page 259

QUESTION

VOYAGER’ ROYAL COMMISSION

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– 1 ask the Prime Minister a question. In the light of evidence given yesterday and last Friday before the Voyager’ Royal Commission by the Secretary of the Department of the Navy regarding the loss, destruction, substitution, shelving and misplacement of documents which appear to corroborate the statement of Lieutenant-Commander Cabban and which appear to have been withheld in the debate in the House last May, has the right honourable gentleman considered the propriety of the Minister for the Navy stepping down until the Royal Commissioners make their report and it is debated in the House?

Mr HAROLD HOLT:
Prime Minister · HIGGINS, VICTORIA · LP

– The Leader of the Opposition was in touch with my office yesterday. He indicated that he would raise this matter with me and would put the very grave request to me that I should stand down one of my ministerial colleagues. I took the first opportunity this morning to discuss the matter with my colleague, the Attorney-General and other members of the Cabinet. I make this comment at the outset: Throughout this business it has been the desire of this Government, and that’ includes my colleague the Minister for the Navy, to see that the House, the country and the commission of inquiry had available to them all the information which would enable a proper judgment to be given on these matters. Having discussed this matter in detail with my colleague I remain convinced that that is still the position as far as he is concerned. It was because he wanted to get this information to the Parliament and to the public that my colleague got in touch, through his Department, with those persons who had been mentioned directly or whose names could be read into the statement made by Cabban. Dr Tiller was one of those persons. He was not specifically mentioned by name but it could be read into the document that he was the medical man referred to. He was contacted in London.

I do not need to go into the matter in ali its detail because it has been fully examined by counsel in evidence in chief and in cross examination before the Royal Commission and no doubt in due course the Royal Commissioners will make their comment on these matters. The fact of the matter is that the request having been put to Dr Tiller, he was asked to give a brief account. I think the word ‘signalese’ was used; in other words, language that could be signalled. It was a brief account. Later my colleague asked the Secretary of the Department of the Navy whether the statements, not only from Dr Tiller but also from other people, could be used publicly as he thought there would be discussion on them and he wanted to be in a position to use them. When he came to confirm this through his Department with Dr Tiller, Dr Tiller expressed the view that the account he had given, being necessarily brief - it had been done very hurriedly - was not a full and faithful account of what he felt and believed about these matters or what he recollected about them. He was not willing to have a statement in that form publicly disclosed. So arrangements were made for the same extracts from Cabban’s letter to go to him to enable him to make a full statement on the matter. He has since made a full statement before the Royal Commission.

Mr Landau, who was involved in these developments as Secretary of the Department of the Navy, also has made a full statement on these matters before the Royal Commission. Knowing that the Leader of the Opposition had displayed this interest in this matter and that he was likely to raise it in the House, I obtained portion of the transcript of the proceedings before the Royal Commission. It is appropriate and relevant to inform the House of a comment made by the Chairman on 21st August. It is reported at page 1712 of the transcript. The Chairman said:

The word destroy on its own perhaps carries with it a miasma of suspicion but to destroy something because the author is desirous of withdrawing it might be a different thing. That is why I wanted to ask you whether your understanding was that Dr Tiller wanted his original comments withdrawn because he didn’t feel that they exactly represented what be wanted to say?

Mr Landau replied:

Your Honour, that is my very clear and distinct impression of the outcome of the talk with Dr Tiller. The comments, the original set of comments, were destroyed in the expectation and on the’ understanding that a fresh set of extracts would be sent back to London for him, and in the expectation that he would get those and study them further and complete comments on them.

That is a very significant extract, but honourable members who want to study it in all its detail can do so through the transcript. 1 would hope that this House would be willing to await the full report and comment of the Royal Commissioners themselves. The House has, I believe, kept the matter on a high political plane and I hope that no-one will be tempted for his own political purposes to remove it from that plane. There w »l be ample opportunity to discuss all aspects when we have the report of the Royal Commissioners before us and debate on it can then ensue. In the meantime, I can say that nothing has come to my notice - 1 have probed the matter as thoroughly as I can - that would justify me in. asking my colleague to stand down. 1 repeat that I am convinced that from the outset it has been his determination to provide alf the information he can secure that would help an honest judgment of these matters.

page 260

QUESTION

CITRUS INDUSTRY

Mr IRWIN:
MITCHELL, NEW SOUTH WALES

– My question is directed to the Minister for Social Services who is acting for the Minister for Trade and Industry. Is the Minister aware that the citrus industry is facing a crisis, that a large portion of this year’s crop will be dumped, that approximately 150,000 gallons of single strength juice were imported from Brazil and Italy for the year ended 30th June 1967 and that certain processors are using the importation of citrus juice as a means to keep local prices depressed? Will the Minister consider asking the Tariff Board to apply anti-dumping regulations immediately as a matter of extreme urgency?

Mr SINCLAIR:
Minister Assisting the Minister for Trade and Industry · NEW ENGLAND, NEW SOUTH WALES · CP

– It is true that earlier this year the citrus industry made representations to the Government about the state of the industry. I understand that early in the year it seemed as though there would be some shortage of oranges, in particular, but as the season developed the production of oranges increased and at this stage appears to benormal. I understand there was a double crop of lemons and consequently there will be some surplus of production of this fruit. The processors have intimated at this stage that they will not be importing nor will they be asking to import any quantities of Oranges or lemons. They are in the normal course of business using the quantity of fruit that they would normally use. It is true that a small quantity of juice was imported earlier this year. This was orange juice and I understand it represented only a minute percentage of the total needs of the industry. Consequently, the imported juice has in no way affected the processors’ demand for oranges. The honourable member asked that antidumping action be taken by the Government. The problem with dumping is that it is necessary to establish that the goods are being introduced into this country at a price that is below the cost of production in the country of origin. This means that it would be very difficult in the instance of imported citrus juice to establish that this situation existed. It is true, as the honourable member has suggested, that overseas prices have a general bearing on local prices in this industry. However, at this stage I do not think that anti-dumping action would be appropriate.

page 261

QUESTION

AUSTRALIAN FORCES IN VIETNAM

Mr BARNARD:
BASS, TASMANIA

– My question is directed to the Prime Minister. Last weekend, ‘Four Corners’ telecast an interview with General Maxwell Taylor and Mr Clark Clifford on their return to America from Australia and several other countries. Asked about the possibility of the allies sending more troops to South Vietnam, General Maxwell Taylor said:

Certainly the impression I received was that they are willing and they recognise the need to do more in South Vietnam.

Mr Clark Clifford, discussing the present commitment of South Korea, Australia and New Zealand, said:

It is my opinion in each instance that they are going to increase.

Why was this increase not announced by the Prime Minister? When does he propose to give details of the increased commitment that the Government has so clearly promised to the presidential envoys who visited Australia?

Mr HAROLD HOLT:
LP

– The Government has given no undertaking of any kind to anybody in relation to this matter. What we made clear to the emissaries from President Johnson who came to see us was that we, as well as our other allies, would consider the needs of the military, civil and political situations in South Vietnam. The Government has made no decision on the matter. Indeed, we made it clear at the time that we were going through a period in which we had to assess the signifiance of the implications of the British decision to withdraw east of Suez and that we had to review our own situation in the light of the provision made in the Budget for defence, but that we would consider this matter further when the opportunity arose. I have arranged for that consideration to be given, not just in respect of Vietnam but also in respect of these other matters which 1 have mentioned. I have arranged for the Foreign Affairs and Defence Committee of Cabinet to meet at the end of this week for such further consideration as we can then give to these matters. Whether we shall be in a position to announce decisions arising from that consideration remains to be seen. But the matter is well before us and a great deal of work is being done departmentally on all these aspects that I have mentioned.

page 261

QUESTION

DEFENCE FORCES RETIREMENT BENEFITS FUND

Mr STOKES:
MARIBYRNONG, VICTORIA

– My question, which is addressed to the Treasurer, relates to the current quinquennial report of the Commonwealth Actuary on the Defence Forces Retirement Benefits Fund and the consequential departmental investigation of the Fund. I ask: Can the Treasurer now tell the House how far this departmental investigation has progressed and when we may expect to learn its result?

Mr McMAHON:
Treasurer · LOWE, NEW SOUTH WALES · LP

– The report to which the honourable gentleman has referred is now in the hands of the Treasury officials. However, it is a very complicated document and will require not only detailed but also lengthy Treasury examination before I am able to submit concrete recommendations to the Cabinet. I am constantly pressing the officials to prepare a submission with recommendations that I can submit, but I am unable to tell the honourable gentleman at present when I shall be able to refer the matter to the Cabinet.

page 262

QUESTION

FISHERIES

Mr BENSON:
BATMAN, VICTORIA

– My question, which is directed to the Minister for Primary Industry, concerns fishing in the Gulf of Carpentaria. I ask: Is the Minister able to inform the House whether any arrangements have been made for Japanese or other non-Australian fishermen to operate in Australian waters? Is it the Government’s intention to allow fishing boats other than Australian vessels to operate out of Australian ports? Has any permission been given to Japanese or other foreign interests to catch prawns and fish in the Gulf of Carpentaria? Finally, if no arrangements of this kind have been made or concessions given, will the Government take steps to protect this industry for the benefit of Australian fishermen and fish processors, taking into consideration the fact that it is a great dollar earner?

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

– No permission has been given for Japanese fishermen to fish in Australian waters. However, they or fishermen from any other nation can fish beyond the territorial limits. I announced in the House in March last that it was the intention of this Government to bring in legislation extending those limits from 3 to 12 miles. That legislation is now being drafted. We propose discussing all these aspects at a fisheries conference between myself and State Ministers in Perth on 8th September next. The honourable member asked whether we have given permission for Japanese to fish for prawns within the Gulf of Carpentaria. The answer is No; but I point out that a large area of the waters of the Gulf of Carpentaria is beyond the territorial limits and as a consequence we cannot stop people from fishing there. All these matters are under consideration and on the agenda for the forthcoming fisheries conference.

page 262

QUESTION

SOCIAL SERVICES

Mr ARMSTRONG:
RIVERINA, NEW SOUTH WALES

– My question is directed to the Minister for Social Services. Can the Minister advise the nature of the extension of entitlement to pensioners and in particular the position regarding moderately retarded persons in State institutions?

Mr SINCLAIR:
CP

– The Treasurer last week announced in the Budget Speech that the Government intended to extend the benefit of social services to moderately mentally retarded persons who are in State institutions. The intention of this extension is to provide pension benefits to those moderately retarded persons who are capable of receiving training which will enable them to return to normal life in the community. Were suitable accommodation available, many of these persons would be able to move out of State institutions and lead a normal life. Consequently, it was felt that these people should now receive social service benefits.

page 262

QUESTION

CIVIL AVIATION

Mr DEVINE:
EAST SYDNEY, NEW SOUTH WALES

– My question is directed to the Minister for Civil Aviation. I preface it by stating that the Minister will recall that he was asked a question last week concerning allegations about costs incurred by Trans-Australia Airlines on Viscount aircraft TVE and TVF when they were returned from Ansett-ANA. I now ask the Minister: Is it a fact that TAA spent $40,000 each on these aircraft and, except for some money spent on cabin modification, the rest of the money was spent on neglected maintenance to bring the aircraft up to the high maintenance standard required by TAA before it permits its aircraft to carry passengers?

Mr SWARTZ:
Minister for Civil Aviation · DARLING DOWNS, QUEENSLAND · LP

– I can merely repeat what I said last week in answer to a question from another honourable member. The standard of maintenance which has been maintained by both operators during the leasing of the two types of aircraft had been up to the standard required by my Department. In both cases when the aircraft were returned normal maintenance was continued and the only additional expenditure at that time was the conversion of the flight deck configuration for both the Viscounts that were returned to TAA by Ansett-ANA. This applied also to the two DC6B aircraft returned from TAA to Ansett-ANA. In other words, the expenditure at that time was principally concerned with the conversion of the flight deck and was not related to maintenance, as has been suggested.

page 263

QUESTION

ELECTORAL

Mr CHANEY:
PERTH, WESTERN AUSTRALIA

– I ask the Minister for the Interior whether he is in a position to give the House the timetable for the projected redistribution of seats in the House of Representatives.

Mr ANTHONY:
Minister for the Interior · RICHMOND, NEW SOUTH WALES · CP

– The Prime Minister has already announced that it is the Government’s intention to hold a redistribution in the life of this Parliament. Approximately twenty months up to the point of holding an election is required to carry out a redistribution. It would take approximately nine to ten months for the Commissioners to seek evidence, prepare maps and submit them to the Parliament, and for the printing of the rolls it would take six to eight months. At a conservative estimate, therefore, about twenty months in all would be required. This being the case, it is the Government’s intention to commence a redistribution within the next six months.

page 263

QUESTION

HALLUCINATORY DRUGS

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– Has the attention of the Minister for Health been directed to statements by qualified medical practitioners abroad that the hallucinatory drug known as LSD produces chromosone changes which may lead to the birth of children suffering defects similar to those found in thalidomide babies? If this matter has not been investigated will steps be taken to do so? If the statement is correct can warnings be issued?

Dr FORBES:
Minister for Health · BARKER, SOUTH AUSTRALIA · LP

– My attention has not been directed to the statement referred to by the honourable member. I will be glad to consider what he has had to say and take whatever action is appropriate and necessary. I do not need to remind the honourable member that provision has been made for very strict controls on the import’ of this drug and its distribution in Australia.

page 263

QUESTION

SNOWY MOUNTAINS AUTHORITY

Mr MUNRO:
EDEN-MONARO, NEW SOUTH WALES

– My question is addressed to the Minister for National Development and has to do with the future headquarters of the Snowy Mountains Authority. As the decision has been announced to retain the hydraulic laboratory, the major contracts section and the investigation, research and design sections of the Snowy Mountains

Authority for water conservation and civil engineering works throughout Australia and overseas, does the Government consider that a permanent headquarters will be needed? If so. can the Minister now tell us whether or not the present well located headquarters will be retained at Cooma, where the investment in buildings alone is in the neighbourhood of SI 2m?

Mr FAIRBAIRN:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– 1 am afraid that I cannot at present give the honourable member any further details about this matter. An inter-departmental committee is at present acquiring as much evidence as it can on the subject. This will be put before Cabinet and a decision will bs made, but I do not hold out to the honourable member any hope that the final decision on the future location of the headquarters of the Snowy Mountains Authority will be taken for some months. I point out to him also that the Snowy Mountains Council is another organisation which will be permanent. At present this Council has its headquarters in Cooma and is expected to remain there.

page 263

QUESTION

NATIONAL LIBERATION FRONT

Mr JAMES:
HUNTER, NEW SOUTH WALES

– My question is directed to the Attorney-General. I preface it by saying that he will recall the Prime Minister telling the House last week that he had requested the Attorney-General to study the legal aspects of the contribution by Australians of money to the National Liberation Front. What action has the Attorney-General taken to investigate a donation of $10 to the National Liberation Front by one of his parliamentary colleagues in the Liberal Party?

Mr BOWEN:
Attorney-General · PARRAMATTA, NEW SOUTH WALES · LP

– I have been giving consideration to the broader aspects of this problem. I can only say that if the honourable member can substantiate what he has implied in his question I will investigate the matter. No facts have been put before me that would suggest that what the honourable member implies is true.

page 263

QUESTION

CHEQUES

Mr LYNCH:
FLINDERS, VICTORIA

– My question is addressed to the Attorney-General. I refer to the fact that some one million cheques are dishonoured each year in Australia for lack of endorsement or for irregular endorsement and to the consequent need for more simple rules for cheque endorsement. Will the honourable gentleman tell the House whether this matter is being considered by the Government and whether it is the intention of the Government to implement the recommendation in the report of the Manning Committee which reviewed the Bills of Exchange Act 1909-58?

Mr BOWEN:
LP

– The question of a new Cheques Act for Australia is currently under consideration and the draft Bill which is attached as a schedule to the Committee’s report has been taken as a basis. I have recently received very substantial representations on this matter. Last Monday week, I received a deputation from the Australian Bankers Association, making representations on a number of quite technical matters involved in this draft. Those representations are presently under consideration and the progress of the preparation of the Bill depends on our assessment of these matters.

page 264

QUESTION

CIVIL AVIATION

Mr J R Fraser:
ALP

– I ask the Minister for Civil Aviation: Since he was enabled on 16th August to give a full and detailed reply to a question by the honourable member for Isaacs about the Government’s rejection of proposals by British charter airlines to arrange cheap flights to and from Australia, can he explain why he has not been able to provide me with the answer he promised to the quite detailed letter on this subject that I submitted to him on 13th July?

Mr SWARTZ:
LP

– I just cannot recall the details of the particular letter but I shall certainly see that a full reply is furnished to the honourable member at a very early date.

page 264

QUESTION

OIL

Mr NIXON:
GIPPSLAND, VICTORIA

– I ask the Acting Minister for Trade and Industry whether he can inform the House whether permission is required from the Australian Government to export unrefined oil from Barrow Island to Singapore? Can he say whether there is enough refining capacity in Australia to handle this oil? Is he able to state whether it is intended that the refined products will be returned to Australia? How does this act stand in relation to Australia’s expressed desire to become self-sufficient in oil?

Mr SINCLAIR:
CP

– It is true that it is necessary for a company to gel a licence to export crude oil. lt is also true, as the honourable member has suggested, that one company has found that it is more economic in its budgeting to send oil from Barrow Island to Singapore to be refined and to bring oil from the Middle East to its own refinery in the south of Victoria. 1 understand that the difficulty lies in the fact that all the companies having a share in the disposal of the Barrow Island oil have not yet been able to secure a satisfactory price from the nearest refinery. But I am assured that, in terms of net gain and loss, there will be no addition to the amount of oil that will be required to be imported into Australia as a result of this export of crude oil to Singapore.

page 264

QUESTION

NATIONAL SERVICE TRAINING

Mr STEWART:
LANG, NEW SOUTH WALES

– I ask the Prime Minister whether it is a fact that his Government,, which is prepared to spend millions of dollars a year in keeping our armed forces in Vietnam as part of the policy of ‘All the way with LBJ’, is not prepared to make up the salary of the few unlucky Commonwealth public servants who are conscripted to perform national service training. If so, will he assure the House that this paltry policy will be changed and so bring the Commonwealth attitude into line with the more generous attitude followed by some of the States?

Mr HAROLD HOLT:
LP

– Dealing with the introductory comment first, the Australian forces are in South Vietnam aiding that country to resist terrorism, subversion and the other acts of aggression either in a direct or indirect form which are levelled against it. They are also there for the greater security of South East Asia as a whole and, eventually, the security of Australia itself. On the particular point that the honourable member raises, this matter has had consideration and I shall be glad to supply the honourable member with a full statement setting out the reasons for the policy which the Commonwealth Government follows in relation to it.

page 265

QUESTION

NUCLEAR TEST BAN

Mr KILLEN:
MORETON, QUEENSLAND

– I address a question to the Minister for External Affairs. Since a thermo-nuclear weapon was exploded by the Communist Chinese has there been any expression of willingness on their part to join in the partial nuclear test ban treaty and in the move to restrict the proliferation of nuclear weapons? If the answer is no, can the Minister say whether any particular initiative is being taken by Western powers to modify the Communist Chinese attitude?

Mr HASLUCK:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– In answer to the honourable member, up to the present time Mainland China has certainly shown no disposition to join any other countries either regarding a nuclear test ban-

Mr Webb:

– The Government does not recognise Communist China.

Mr HASLUCK:

– It is not a question between Australia and Communist China; it is between Communist China and the rest of the world, including the Soviet Union and all the other powers that are engaging in nuclear testing. Communist China has hitherto refused to join in any discussions either aimed at a nuclear test ban or at the non-proliferation of nuclear weapons. Of course, this constitutes a threat and a cause of anxiety both to the other great nuclear powers of the world and to all of China’s immediate neighbours.

page 265

QUESTION

THE BUDGET

Mr PETERS:
SCULLIN, VICTORIA

– I desire to ask the Treasurer a question. During the weekend he was particularly emphatic that the present Budget is a Budget for investors and, above all, for businessmen. As he has previously stated that business and economic growth in the community during the last twelve months has been greater than ever before in Australia’s history, and as many investors are receiving 10% or more for their money, does he claim that their plight now is more serious than the plight of the average worker and the age pensioner?

Mr McMAHON:
LP

– Mr Speaker, it would have been wise for the honourable gentleman to listen attentively and to have placed what I said i.i context.

Mr Peters:

– I listened to it.

Mr McMAHON:

– Then the honourable member did not understand. What T did say was that the major objective in this Budget was to ensure that our productive capacity continued to increase. If the honourable member will read my speech he will see that what I said was not that our performance last year had been greater than that of any other year in our history but that it had been at least up to the best performances of recent years. I believe that we have remarkable opportunities for expansion in Australia today. The opportunities are there and the Government has done nothing to impede the private sector of the community in taking advantage of them. I am glad the honourable member has given me the chance to repeat this. I said that if businessmen were aware of the opportunities and grasped them they would make certain that production this year was at least as good as it was last year, and that is the context in which I made my statement on Sunday night.

page 265

QUESTION

POST OFFICE DISPUTE

Mr GRAHAM:
NORTH SYDNEY, NEW SOUTH WALES

– *I address my question to the Minister for Labour and National Service. Has the Minister been advised formally and officially of a work to regulations strike in Sydney post offices over the five-day week dispute? Can the Minister say whether this action represents a deliberate defiance of the Government’s decision that the public should continue to have on Saturdays the Post Office services that they require?

Mr BURY:
Minister for Labour and National Service · WENTWORTH, NEW SOUTH WALES · LP

– Mr Speaker, I have recently had interchanges of communication with Mr Monk on this subject. I received i telegram from Mr Monk just before lunch. After I have considered the telegram carefully I shall be replying to him. Perhaps it would be unwise to comment in the meantime on the other matters that the honourable -hM has raised.

page 265

QUESTION

KOREA

Mr GRIFFITHS:
SHORTLAND, NEW SOUTH WALES

– I direct a question to the Minister for External Affairs, ls there any truth in the report that there is every likelihood of a renewal of hostilities in Korea? What effect would such hostilities have on Australia’s defence commitments? Is Australia militarily committed to Korea in the event of further hostilities in that country?

Mr HASLUCK:
LP

– As the honourable member and the House will know, the border between North Korea and South Korea is supervised and although there are occasional incidents there is no incident of recent happening that, I think, would justify the honourable member’s fear of an outbreak of large-scale hostilities.

page 266

QUESTION

LEGAL AID

Mr PEACOCK:
KOOYONG, VICTORIA

– Does the AttorneyGeneral consider that there is a need throughout Australia for a uniform and comprehensive scheme of legal aid designed to ensure that no person should be precluded, by lack of means, from access to legal advice and to the courts, through legal practitioners of their choice?If so, would he consider the introduction of an uptodate scheme of legal aid in the Australian Capital Territory to be used as both a model and a basis for discussions with the States regarding such a uniform scheme?

Mr BOWEN:
LP

– The question of legal aid in each of the States is, of course, a matter for the States, and they have their own legal aid systems. In the Territories it is a matter for the Commonwealth, and we are presently considering the question of introducing a more modern form of legal aid than we have had hitherto in the Territories. There are difficulties in this which I might explain in this way: The present legal aid systems tend to give aid to the very poor, and one result which some people claim flows from this is that either the very poor or the very rich may go to law without prejudicing their financial position but others do have to jeopardise that position due to the costs of law. The question of the proportions in which the Government, the legal profession and those who wish to litigate should bear the costs is one ofthe questions that are at the heart of this problem. It was raised at the Standing Committee of AttorneysGeneral, and they are waiting to see what the Commonwealth Government is going to propose in this regard. We are presently engaged in working on the matter.

page 266

QUESTION

SOUTH VIETNAM

Mr NICHOLLS:
BONYTHON, SOUTH AUSTRALIA

– I direct a question to the Minister for External Affairs. In view of the active participation by the military junta in the so-called free elections in

South Vietnam early in September, will the Minister make inquiries into the latest reports that South Vietnamese servicemen are being issued with two votes, one for the area in which they are stationed and one for the district in which they previously resided?

Mr HASLUCK:
LP

– The Australian Government, of course, is taking a very close interest in the elections which are to be held in early September for the presidency, vice-presidency and Lower House under thenew Constitution of South Vietnam. In the course of the close interest that we take in them, we are trying to ensure to the best of our understanding that the elections are held fairly. It seems to us to be a remarkable and commendable thing that in a wartorn country like this, effort should be made to hold elections at all. We are also convinced that the Government of South Vietnam, which is a constitutional government and not just a ‘so-called military junta’, has dedicated itself to the idea of constitutional reform and political advancement and is spending the best efforts it can to ensure that the elections that take place are satisfying to the people who take part in them and convincing and credible to those who observe them. The particular matter to which the honourable member has drawn attention will certainly be inquired into by us, but I myself have a high measure of confidence that having regard to the conditions that exist - among those conditions is the terrorist intention of spoiling the elections - we can look for a resolute attempt by the Government and the people of South Vietnam to hold fair elections.

page 266

INTERNATIONAL AFFAIRS

Ministerial Statement

Mr SPEAKER:

– There being no objection, leave is granted.

Mr HAROLD HOLT:
Prime Minister · Higgins · LP

– I have outlined already the fact that the honourable member for Yarra (Dr J. F. Cairns) sought leave to make a statement. He began by saying:

The Prime Minister (Mr Harold Holt) has misrepresented me in two ways in the remarks he has made this evening.

I think the House will appreciate that the word ‘misrepresents’ implies or conveys that the honourable member concerned has been put in a false position or shown in a false light and is seeking to explain his position more faithfully. I make that comment because although it will be clear from what I say that on points of detail the facts differ from the version I gave to the House, I believe it will become clear that the honourable gentleman could not fairly claim to have been misrepresented in the substance of the matters to which reference was made.

The honourable member for Yarra usually speaks in such direct terms that he makes his own meaning clear and well understood. I feel that that comes through in the statements which have either been reported by me or to which I can now make reference in direct relation to these matters. But first I propose to deal with the matter raised by him regarding reporting by the Australian Broadcasting Commission. Honourable members will recall that at page 236 of Hansard I had quoted the honourable member as saying:

  1. – It did not matter what the ALP leader, Mr Whitlam, or the Deputy Leader, Mr Barnard, said on Vietnam. It was the Federal Conference which had decided the policy.

I may say that I heard that ABC broadcast when it was made and later I sought the text of it so that I could quote it precisely. My Press Secretary got in touch with the ABC and I gather that the Sydney office of the ABC supplied the text which was subsequently read out by me to the House. The honourable member for Yarra then gave his own version of what had been said. He said that the statement was contrary to fact. He continued:

In the ABC broadcast I made no reference whatever to the Leader of the Opposition (Mr Whitlam) or the Deputy Leader of the Opposition (Mr Barnard) as was claimed in the broadcast. About half an hour after the first broadcast, as I understand it, the Assistant News Editor - T think a Mr Nelson - telephoned me and said that the ABC had made a bad error. H: apologised and said that the matter would not be broadcast again. I listened to subsequent broadcasts and it was not 1 would have expected that the ABC may have informed the Prime Minister’s staff of the error or they may have discovered it when they obtained the material for the Prime Minister.

The first point I make is that I gave the material as supplied to me directly from the Sydney office of the Australian Broadcasting Commission, but I was troubled by what seemed to me to be an inaccurate version which I had inadvertently used in the circumstances. So I made further inquiries. This is the information which reached me:

The ABC assigned a reporter to cover the Hiroshima rally in Melbourne on Sunday, 6 August. He wrote the story (see Version No. 1 attached)-

I will give the detail of it: which was broadcast on the Victorian State news at 7.10 p.m. lt was also teletyped to Sydn y for the national news.

That version was:

Several hundred people attended a rally in Melbourne this afternoon to mark the 22nd anniversary of the dropping of the first atomic bomb on Hiroshima. The Federal Labor Member for Yarra, Dr Cairns, told them that the ALP now had a precise policy which condemned and opposed the war in Vietnam. Dr Cairns said that unless America stopped bombing North Vietnam, recognised the National Liberation Front and transformed the war into a holding operation, a Labor Government would have no alternative but to withdraw Australia’s armed forces.

He said it did net matter what the ALP leaders, Mr Whitlam and Mr Barnard, said on Vietnam. It was the Federal Conference which decided ALP policy. Dr Cairns said the ALP did not want power without conscience. He added that conscience with power was essential to prevent another Hiroshima.

Earlier, many peace groups, trade unionists and clergymen marched through the city. On.1 group representing the Monash University Labor Club had recently decided to send aid to the National Liberation Front, the political arm of the Vietcong. They carried large National Liberation Front flaps.

My inquiries also brought forth the following information:

After the 7.10 news, the ABC Chief of Staff in Melbourne (Mr John Nelson) received a telephone call from a listener who said that Dr Cairns’ comments had not been accurately reported.

The Chief of Staff rang Dr Cairns to check the story. Dr Cairns said that he had not in fact referred to Mr Whitlam or Mr Barnard by name. Following the discussion with Dr Cairns, the story was revised and broadcast in ils corrected form on the Victorian State bulletins at 9.10 and 10.10 p.m.

I am told to see version No. 2 attached. I now read version No. 2 and my advice is that this was the version which was checked and approved by the honourable gentleman, lt is in these terms:

A rally was held in Melbourne today to mark the dropping of the first atomic bomb on Hiroshima twenty-two years ago. It followed a march through city streets with peace groups, trade unionists, university students and clergymen taking part.

Addressing the rally, the Federal Member for Yarra, Dr Cairns, said that unless America stopped bombing North Vietnam and recognised the National Liberation Front, a Labor Government would have no alternative to withdrawing Australian armed forces.

Dr Cairns said that the Labor Party’s policy on Vietnam before the Federal Conference had been ambiguous and capable of many interpretations.

The Conference decided policy - not the Leader or the Deputy Leader or any other member.

He added that this ambiguity had to be removed and the conference had done this.

Well, admittedly the honourable gentleman did not mention the Leader or Deputy Leader by name. Perhaps it is not always easy in the Labor Party to know who are the leaders. Certainly from this version it is clear that the honourable gentleman was making the point that it was not for the Leader or Deputy Leader to decide, interpret or announce policy; it was for the Federal Conference.

So much for that matter. I turn now to the other matter in which the honourable gentleman claims that I misrepresented him. He said:

In the second case I did not speak outside the United States Embassy as reported, apparently, in some newspaper which the Prime Minister was prepared to use. I was not there. I think that this indicates that the Prime Minister like the rest of us, should be more careful when he uses newspaper reports in this way.

So much for the point of detail, but let us look at the point of substance. On the point of substance, the honourable gentleman was very much there. I have here an advertisement which appeared in the ‘Age’ of 3rd July 1967. It reads:

American independence 1776 -

Vietnamese independence When?

Tuesday, 4 July ra11y

Speakers: Dr J. F. Cairns (recently returned from US Lecture Tour); Senator J. Keeffe (.Federal President of ALP); Mr F. James (Managing Editor. The Anglican).

Debate between Presidents Jefferson and Johnson.

Apparently some fellows were dressed up for this purpose. It continues:

Assembly Hall, Collins Street - 8 p.m. (Authorised UDC-

I think that should be VDC, meaning the Vietnam Day Committee, but that is a matter of detail. The advertisement concludes:

C/- P.O. Box 59, Parkville.)

From other information, it is clear that this vigil was arranged by the Committee for International Co-operation and Disarmament, about which I gave the House some information the other night. I have here the programme for 4th July arranged by the Vietnam Day Committee. It sets out that it is to take place outside the United States Consulate, Commercial Road. It states:

Independence Day vigil, demonstration and rally on the theme of independence for all, call for independence for Vietnam. Write a letter to the Consul, Mr W. Wieland, Commercial Road, Melbourne. Vigil July 3rd. 3.45 p.m. will continue overnight and lead up to a mass demonstration July 4th between 5 p.m. and 6.30 p.m. when the majority of people will be able to attend and culminate in a march along St Kilda Road to a rally at 8 p.m.. Assembly Hall, Collins Street. Speakers: Senator J. Keeffe, Federal President, ALP, Dr J. Cairns, just recently returned from tour of USA, Mr Francis James, Managing Editor, Anglican’.

While the sponsoring group is not mentioned in the document, it does give this information:

Ring the office to book - -

That is to make up a party, which is one of the elements of the programme -

Phone: 63 2005.

That is the telephone number of the Committee for International Co-operation and Disarmament. I do not think there is any doubt that the honourable gentleman addressed the meeting at the Assembly Hall, as he did later under somewhat similar auspices, if not identical auspices, the rally at the Princess Theatre to which I made some detailed reference the other night. The meeting he addressed as part of the Independence Day vigil and celebration was reported in the Melbourne ‘Age’ of 5th July and in the ‘Sun’ of the same date. There is a later more detailed report, not surprisingly, in the ‘Tribune’ of Wednesday, 12th July. It gives quite a detailed account in these terms:

Melbourne: Withdrawal of Australian forces from Vietnam would have a tremendous impact on opinion in the USA, Labor Party Senator J. Wheeldon told almost 1,000 people crowding the Assembly Hall in a special anti-war rally on American Independence Day, July 4.

Such a step would greatly assist all those Americans working for peace, he added.

Senator Wheeldon had just returned from a lecture tour of America with leading ALP parliamentarian Dr J. F. Cairns, who also addressed the meeting.

Other speakers included ALP Federal President Senator Keeffe and Mr Francis James, Editor of the Sydney church newspaper, the Anglican.

Several hundred people had marched from a teatime rally outside the US Consulate, and some had previously taken part in a 24-hour vigil at the Consulate in freezing temperatures.

The meeting was the most spirited protest yet organised by the peace movement . . .

The words ‘peace movement’ were used in this report. Honourable members will not see any reference to the Committee that has been mentioned, because, as I said the other night, the Communists have been very careful to keep themselves clear, nominally, of this peace Committee. The report added:

Messrs Cairns, Keeffe and Wheeldon all expressed strong support for the complete withdrawal of Australian forces from Vietnam.

The strength of their statements was significant in light of the approaching Federal ALP Conference at which this policy will be under challenge.

There is a good deal more of it. Sir, but I think I have given the House enough to show that, whatever point of detail the honourable gentleman may take objection to, no-one has misrepresented either his general attitude or his participation in this vigil of which the meeting at the Consulate was only a part. The main gathering, as is clear from the documents, was at the Assembly Hall, and it was addressed by the honourable gentleman in his usual eloquent and spirited fashion.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– by leaveMr Speaker, on. Thursday night the Prime Minister (Mr Harold Holt) chose to make the substance of his speech on foreign policy an attempt to show that the Australian Labor Party had an association with people, ideas and proposals that, if what he said were true, would cast serious doubt on the loyalty of the Labor Party and on its right ever to form the government of this country. The right honourable gentleman has chosen to make this sort of attack his main election campaign in this House and outside it for the present and, no doubt, for the future.

Mr Harold Holt:

– The honourable member misled the House.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– This is the Prime Minister’s technique for trying to win elections.

Mr SPEAKER:

– Order’ The House will come to order. I point out that the Prime Minister was heard in comparative silence. 1 should think that the same courtesy ought, to be given to the honourable member lor Yarra.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– The Prime Minister referred twice to me in relation to matters of fact. I immediately rose in the House and corrected what he had had to say, stating that the two references to me that he had made misrepresented the position. The right honourable gentleman has sought leave today to make an explanation in which he has sought to establish that he really did not misrepresent me at all. However, in the course of making that explanation to the House, he has chosen to introduce a number of other misrepresentations in addition to the two that I shall deal with in a few moments. He quoted some report from, I think, a Communist newspaper which stated that Cairns and Wheeldon expressed strong support for the withdrawal of Australian forces from South Vietnam. That is another misrepresentation. That was not said at any time at the meeting referred to and if any newspaper reported the proceedings in that way, it reported them quite inaccurately.

Furthermore, the Prime Minister, in attempting to defend himself against two charges of misrepresentation, . took the opportunity, not only to misrepresent, but also to suggest that there was something wrong with the Association for International Co-operation and Disarmament and with Mr Francis James of the ‘Anglican’. The Prime Minister took the opportunity this afternoon to drag in a number of other things that he thought would be harmful to the Labor Party. He was not concerned only with explaining away the earlier misrepresentations. Knowing that the proceedings of this House are being broadcast this afternoon and that what he said would bc heard all over Australia, he took the opportunity to continue his misrepresentations.

Lel me now deal precisely with the two points that the right honourable gentleman made. First of all, on Thursday evening he quoted a significant sentence from an Australian Broadcasting Commission news bulletin. Purporting to quote me, it stated:

He said it did not matter what the ALP leader, Mr Whitlam, or the Deputy Leader, Mr Barnard, said on Vietnam.

That was the gist of the Prime Minister’s story. He went on immediately to repeat that by describing me as having said:

It does not matter what interpretation the Leader of the Opposition or the Deputy Leader of the Opposition puts on it.

In doing this the right honourable gentleman was trying to make the point that I had reflected on the Leader of the Opposition (Mr Whitlam) and the Deputy Leader of the Opposition (Mr Barnard) by saying: ft does not matter what they say. Tt is the Federal Conference that makes policy.’ The Prime Minister was using a statement that appeared in his version of an ABC broadcast which he got from the Commission. He was using that statement to try to make out that I had reflected on the Leader and the Deputy Leader of the Opposition. Immediately I heard that, I corrected it. Neither those words nor any words meaning what they mean were ever used by me.

Dr Mackay:

– The honourable member rang the ABC.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– I did not ring the ABC. I said that a gentleman on the staff of the Commission, who I thought was a Mr Nelson, had rung me and told me that the Commission had made a bad error in saying that I had said precisely those words that I have just quoted: it did not matter what the ALP leader, Mr Whitlam, or the Deputy Leader, Mr Barnard, said on Vietnam.

Mr Nelson was precise in stating that the Commission had made a bad error in using those words. I said that I had never used them and he stated that in subsequent broadcasts the Commission would leave them out. I listened to subsequent broadcasts, and I heard a broadcast containing the paragraph that appears in Hansard but without those words.

Mr Harold Holt:

– Did the honourable member hear the version that I read out?

Dr J F Cairns:
YARRA, VICTORIA · ALP

– At no stage did Mr Nelson or anyone else at the ABC read to me the second version that the Prime Minister read to the House. At no stage did I check that version and at no stage did I say that that version was correct. At no stage did I hear that version broadcast on the ABC programme. The point is that the Prime Minister was trying to use a sentence attributed to me that was supposed to be a reflection on the Leader and the Deputy Leader of the Labor Party. I say that I never uttered that sentence.

Mr Harold Holt:

– Does the honourable member say that he heard the news bulletins and that he did not hear the words that I read out?

Dr J F Cairns:
YARRA, VICTORIA · ALP

– I heard the bulletin and I did not hear the words that the right honourable gentleman read out. I heard the words that are in the paragraph quoted in Hansard but without the sentence referring to the Leader and the Deputy Leader of the Labor Party, which was the point that concerned me.

Mr Harold Holt:

– Did the honourable gentleman hear the words: ‘The Conference decided policy, not the Leader or the Deputy Leader or any other member.’?

Dr J F Cairns:
YARRA, VICTORIA · ALP

– I did not hear those words on any ABC broadcast. The point is that when the right honourable gentleman said that I had reflected on the Leader and the Deputy Leader of the Labor Party - and it was to propagate this alleged reflection that he mentioned it - I stated that that was a misrepresentation. That is still a misrepresentation, and that is the only point with which I was concerned. At no time did I make any reference of that sort to the Leader and the Deputy Leader of the Labor Party, and it is a misrepresentation to say that I did. The Prime Minister, having made his misrepresentation by using some material that was in his possession on Thursday night, has gone on to repeat that misrepresentation today after he has made inquiries about it. Whatever he did wrong on Thursday evening, he has done much more wrong today.

Let me now turn to the second point. The Prime Minister is reported at page 241 of Hansard as having said:

But the Federal Executive of the ALP, chaired by Sena-tor Keeffe, who, I understand, was unanimously re-elected recently President of the

Party, ruled on 30th March 1967 in Canberra that the NSW Branch had exceeded its authority in proscribing the AICD.

He then said: 1 understand that in July Senator Keeffe and the honourable member for Yarra (Dr J. F. Cairns) spoke at a protest meeting organised outside the US Consulate in Melbourne . . .

When 1 heard the words ‘organised outside the US Consulate in Melbourne’, I immediately corrected the right honourable gentleman, because 1 have never in my life spoken at a meeting outside the United States Consulate in Melbourne. In order to try to escape from this obvious misrepresentation, the Prime Minister comes into the House today with an advertisement from the Melbourne ‘Age’ reporting a meeting at which I spoke at the Assembly Hall in Collins Street, Melbourne, three miles away from the United States Consulate. He tried to make a point, not without reason, that I was speaking outside the United States Embassy in order to suggest that I am anti-American, and the consequences of this to distort this situation. The Prime Minister then got his staff to assist him - and I suppose others to assist him because judging by their performance 1 am sure that they would need assistance - to find evidence that I spoke not at a meeting at the United States Consulate but at a meeting at the Assembly Hall three miles away. It may interest the Prime Minister to know that as far as I was concerned 1 had no knowledge whatever that this meeting had been preceded by any activities at all in or near the United States Consulate. I was invited to go to a meeting at the Assembly Hall and to speak there, and I spoke at the Assembly Hall. Whatever the precedents of that meeting were, I was not involved in them; not that this would have made any difference because if I thought it was necessary to speak outside the American Consulate 1 would do but in this case I did not do so, and I have never done so. It is misrepresentation to say that I did.

Mr Harold Holt:

– The honourable member did not see this pamphlet advertising his speech?

Dr J F Cairns:
YARRA, VICTORIA · ALP

– I have never in my life seen that pamphlet. If 1 took as much lime running around after pamphlets as apparently members of the Prime Minister’s staff do, I would get no work done at all.

Finally, I want to make something quite clear. It is the Prime Minister of Australia who is making these allegations - It is not some character who runs around in the streets or gossips over back fences. It was the Australian Prime Minister who said that I spoke at a meeting outside the American Consulate in July in order to make me appear anti-American. I did not do so and I denied that. It was a misrepresentation. The Prime Minister has taken the trouble to come into the House while the proceedings are being broadcast and thinks that he is correcting that misrepresentation by producing some evidence that I spoke at a meeting at the Assembly Hall more than three miles away. If that is not a misrepresentation I have yet to see one. I suggest to the right honourable gentleman and to those who work with him that they ought to be more careful in their collection of material before they come into the House and so deliberately and obviously misrepresent people as they have done in this case.

Mr Wentworth:

– I ask for leave to make a statement.

Mr SPEAKER:

-Order! is leave granted?

Opposition members - No.

Mr SPEAKER:

– Leave is not granted.

page 271

COST OF IMPORTED DEFENCE EQUIPMENT

Discussion of Matter of Public Importance

Mr SPEAKER:

-I have received a letter from the honourable member for Bass (Mr Barnard) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Government’s maladministration in relation lo the costs of imported defence equipment.

I call upon those members who approve the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places) -

Mr BARNARD (Bass) (3.46]- Mr Speaker, the Opposition takes the opportunity to bring forward this matter in accordance with the proposal that you have read to the chamber. We do so because we arc gravely concerned at the increasing evidence of serious laxity in the control of defence spending by the Government. We believe that there is considerable evidence that forward planning by the defence departments has been mismanaged, particularly in cost estimation of imported defence equipment. We say that the Government has lost control of defence spending; that it has become a victim of its hasty escalation of defence expenditure in the past few years; and that there are far too many examples of unco-ordinated and wasteful planning of defence expenditure.

In the Budget Speech, the Treasurer (Mr McMahon) outlined the dominant role of defence commitments in the Government’s budgetary plan. The Opposition will be dealing at much greater length with flaws in overall defence strategy and expenditure in the Budget and Estimates debates, but I feel there are serious examples of wasteful mismanagement which should be placed immediately before this Parliament. With a Budget shackled and constrained by defence expenditure there can be no excuse for glaring waste and inefficiency. While- it may not be possible to apportion the blame between the Ministers who control the defence departments in this Parliament, the Minister for Defence (Mr Fairhall) must accept responsibility for the ineptitude displayed in defence procurement overseas by this Government. This was referred to in the recent report submitted by the AuditorGeneral. There is need for complete overhaul of defence planning by the Government. The Government must realise that the present system of defence purchases by inter-service committees is extremely inefficient. Forward defence planning and spending must be removed from the area of the inter-service rivalries and compromise. There has been an unbridled expansion of defence expenditure which the Government seems unable to curb. For example, the Treasurer said in his Budget Speech that further orders would have to be placed overseas this year and in subsequent years for replenishment and replacement as well as for new and additional equipment. This seems a plain hint that the provision in the Budget of $1,1 18m for defence is too low, and that it will be exceeded and that an even greater allocation for defence will be necessary in 1968-69. These difficulties are accentuated when the Government has no clear idea of what orders will arrive or what payments will be required in the course of the financial year.

In view of the dominant role of defence in this Budget and in future Budgets, we must insist that there be maximum efficiency m planning and estimating defence expenditure. All the evidence points to waste and inefficiency through lack of co-ordination and planning, and particularly through clumsy and inaccurate estimation of costs. I want to refer briefly to aspects of the recent Auditor-General’s report, which have alarmed members of the Opposition and those members of the Government who are members of the Public Accounts Committee of this Parliament. I refer to paragraph 214 on page 213 of the Auditor-General’s report dealing with the procurement of the three Charles F. Adams class destroyers. The Auditor-General is particularly critical of several aspects of expenditure on this project. He refers to a threefold increase in the cost of shore based spares for the first two destroyers; to an extraordinary increase in the unit prices of some items of spares; and to what seems to be a highly unsatisfactory level of efficiency in the ConsulGeneral’s office in New York. It seems to me that the answers given by officers of the Department of the Navy to the AuditorGeneral’s criticisms are completely unsatisfactory. I hope that the Minister for the Navy will be able to explain satisfactorily to the Opposition - and, I hope, to the Auditor-General - his department’s answers to these criticisms.

It is claimed that it will be possible to absorb an estimated $US 12.6m for shore based spares within the original overall cost estimate of $US90m The Department says that this can be done by savings in shipbuilding costs. It is difficult to understand how savings in ship construction costs could absorb a fourfold increase in the original estimates for shore based spares. Even if this saving could be achieved, it is undoubted that there has been complete lack of planning and of knowledge of the range of shore based spares required for the first two destroyers. An estimate which is subsequently found to represent only a quarter of the actual requirement plainly shows a reprehensive lack of foresight and planning.

The Auditor-General also reveals considerable laxity in the estimating procedures of the Navy. He says his office was told by the Department that its policy in the event of a significant increase in prices of spares was to seek professional opinion from technical officers. On the Department’s own admission this policy has not been followed, or certainly not stringently followed, In some sections of the supply branches of the Department. One wonders whether it has ever been followed by any section of the Department. The Navy says that appropriate instructions have been issued to correct the situation. This action is much too belated and will not save the heavy additional costs which have already been incurred.

The Auditor-General’s report also reveals a highly unsatisfactory state of affairs in the Consul-General’s office in New York. It appears that excessively high charges have been levied by freight forwarding contractors in the United States and that there have been delays in the examination by the Consul-General’s office of billings received from the United States Government for spares delivered for dispatch by the freight forwarder to Australia. It seems that this highly unsatisfactory situation is still unresolved.

In his report for 1964-65 the AuditorGeneral referred to difficulties with procurement in the United States, and particularly to the failure to process promptly billings received. He said that a new section had been established in the ConsulGeneral’s office to accelerate this work. Quite plainly, the work of this section has been unsatisfactory. It is highly disturbing that such apparent inefficiency exists in the handling of the immensely important procurement of Australian military equipment in the United States.

The Auditor-General referred to the need for improvement in certain aspects of the accounting for public moneys by the Australian forces in Vietnam. On this question let me say that we should be sympathetic towards Australian personnel working in Vietnam because of the conditions under which they operate. But we must insist that’ in Vietnam, where our civil aid expenditure is barely onetwentieth of our military expenditure, there be no waste of public moneys of any kind. It is extremely important that our expenditure in Vietnam be carried out with the utmost efficiency and that it be rigidly controlled. 1 do not want to refer at any great length to the Fill aircraft, but 1 do believe that recent developments have confirmed the repeated criticism by the Opposition of the purchase of this aircraft and the heavy increases in its costs. It seems certain that a further substantial increase in the cost of the FI 1 1 aircraft will be announced before the end of the year. The Auditor-General’s report reveals that conditions governing Australian payments for this so-called economy aircraft have been made much more stringent although the estimated cost has more than doubled. According to the report, the original terms of purchase provided for an initial deposit of $US20m in 1963-64 and for further half-yearly cash deposits, with the final payment scheduled for January 1972. At that time the estimated cost of the twenty-four aircraft was approximately $US125m. The most recent estimate of the cost furnished by the US Air Force is $US238m and the revised financial arrangements provide for quarterly payments instead of half-yearly payments, with the final payment scheduled, for July 1970. Although the cost has doubled the payment arrangements have been made more stringent and the time for payment has been shortened by eighteen months. This must inevitably impose an increased strain on our foreign exchange and on the Government’s budgetary planning.

Evidence given yesterday to the Public Accounts Committee by the First Assistant Secretary (Finance and Logistics) of the Department of Air reveals how the Government has lost any semblance of control over the final costs of this aircraft. When the then Minister for Defence outlined to this Parliament the arrangements for the purchase, each one of the aircraft was to cost the taxpayers of this country approximately $US5.2m. Now the cost has increased to $US9.9m each. Let the Minister for Defence explain escalation in prices of this magnitude.

The First Assistant Secretary of the Department of Air told the Public Accounts

Committee, as reported in the Press this morning: ‘The Government is completely in American hands on this’. He said that the Americans were unable to give the Department any assurance that future estimates of the total cost would be more accurate, and he said that the US estimates could not be checked. On the Fill spending voted for this year the Secretary said that the Department of Air had taken a chance. This summarises the way in which far too much of Australia’s defence spending is planned and estimated. How can a logical and coherent strategy be determined if expenditure is planned on a shoddy, slipshod basis?

Another subject of grave concern to the Opposition is the cost of the armed forces computer project which has more than doubled since the original estimate was made in 1960. This project is now more than three years behind the completion date originally scheduled. The increase in cost of the computer project stands in striking parallel to the spectacular cost rise of the Fill.

The Government has accepted a substantial escalation in defence expenditure in recent years and some mistakes and waste could have been expected. However, the Opposition believes that there is a great accumulation of evidence pointing to extreme negligence and inefficiency in the whole administration of defence expenditure. Plainly there is an urgent need for centralisation of control of defence expenditure. It can be inferred from the remarks of the Treasurer Mr McMahon) in his Budget speech that he is frustrated by the Treasury’s lack of control over defence spending.

I believe the examples of waste and inefficiency that I have given indicate a serious malaise in our overall defence planning. The Government claims to be a businessman’s Government, but it is clearly not an efficient business administrator itself. The managerial expertise revealed in the Government’s management of defence expenditure is reminiscent of the disastrous Korman and Reid Murray financial empires. Unless defence expenditure is controlled and subjected to rigorously enforced co-ordination and planning among the Services, the consequences for Australia could be equally disastrous.

Mr DEPUTY SPEAKER (Hon W C Haworth:
ISAACS, VICTORIA

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

Mr FAIRHALL:
Minister for Defence · Paterson · LP

– The Opposition has proposed the discussion of this matter as a matter of urgent public importance at a time when the House is about to debate the Budget. That debate will range widely and will not be subject to the limitation of time that governs the discussion in which we are now engaging. Following that, we will go into a debate on the Estimates when any member of the Opposition will have the right to challenge, to question, and to probe as far as he likes any item on the Defence estimates of any of the Services. I am looking for the reason why the honourable gentleman should find a little comfort, so called, in the report of the Auditor-General and hasten to bring this matter up as an urgency motion.

Mr Barnard:

– We want an answer from the Minister.

Mr FAIRHALL:

– The honourable gentleman will have the answer. But there is a secondary consideration here because, quite clearly, the Opposition was discomforted at the disclosure made when it lost the debate on external affairs last week. Anxious to retire from that defeat the Opposition has sought a little refuge in a debate on the Defence estimates which support the Government’s external affairs policy. It is not going to do any better here than it did in the debate on external affairs.

The honourable gentleman said in his opening remarks that something ought to be done about defence purchases by interdepartmental committees. He said that the present system is no good. Then he supplements that with a statement that in fact we can no longer go on defence buying with the individual Defence Departments in competition with each other. How does one put those two things together and come up with an intelligent answer?

The terms of the motion refer to maladministration. In the administration of public funds and in the affairs of government this is an extremely serious charge, not to be debated in an atmosphere of this kind. We would welcome a debate on the matter at any appropriate time the Opposition would like to debate it. The fact is that the Auditor-General has produced no evidence to support the kind of charges which the honourable gentleman makes, and he himself has failed to prove maladministration. He has come up with a whole lot of broad brush constructions of situations about which he is himself totally illinformed.

The Australian Labor Party always debates defence as though we were dealing in lollies and peanuts. The thinking of honourable members opposite is the thinking of last war when we bought relatively simple pieces of equipment which could be costed precisely. Let me get round to the Charles F. Adams destroyer. My colleague, the Minister for the Navy (Mr Chipp) will deal with this in such detail as honourable members may wish.

Mr Stewart:

– He is in enough trouble.

Mr FAIRHALL:

– He is not in any real trouble at all. The Deputy Leader of the Opposition said that the estimate of §3.2m for Navy spares was hopelessly inadequate. That $3.2m was never designed to be the estimate of spares required for this vessel. The fact is that we made a package deal with United States of America to buy the first two DDG destroyers for $90m. That $90m permitted an amount of S3. 2m to be devoted to the purchase of spares. There is nothing anywhere to indicate that this was the total amount to be set aside for spares. Indeed, we knew beyond peradventure that the requirement of spares would be vastly higher than that because my colleague and his people in the Department of the Navy have been operating ships long enough to know that this is an unrealistic figure.

Mr Beaton:

– Why did the Minister not tell the Parliament that?

Mr FAIRHALL:

– Because honourable members opposite did not inquire and have not enough sense to understand these things. The fact is that the DDG ship was a new type of ship in operation with the United States Navy. It was so recently in commission that the United States Navy had not had sufficient experience satisfactory to establish a level of spares maintenance. So we provided an amount of S3. 2m within the S90m ceiling and we were to supplement it as the need for spares became obvious from operational experience. This was done and, in the event, the savings in ship construction costs permitted a higher degree of spares purchase, but one still within the original estimate of $90m. I do not know how the Opposition can claim that this is bad business. After all, it was under control at every stage of the game. Our controls and our co-operation with the United States Navy allowed us to know beyond peradventure what the cost of ship construction was to be. We knew what level of spares was provided for within the original estimate and we learned from experience, which surely is the best of all possible ways to learn, what we would really require.

Perhaps honourable members opposite do not quite understand what goes on in modern defence services. After all, they are not dealing with the simple ships of a generation or so ago. They are dealing with highly sophisticated equipment and the ship, in fact, is the least part of the equipment. It is only the carrier for-

Mr Kelly:

– The black boxes.

Mr FAIRHALL:

– Call them ‘black boxes’ if you like, although I rather object to that title. These ships are jammed full with the most highly sophisticated, and therefore the most highly expensive and complex, equipment one can imagine. I wonder whether honourable members opposite appreciate that something like 70,000 items of required spares need to be assessed for these ships for replacements during their life. This is not an easy job. We could be charged with irresponsibility if, before we got the ships, we were able to know all the things we need to maintain them. But knowledge of these things comes only out of experience and, as with the Charles F. Adams destroyer, so with the Fill aircraft

The honourable gentleman singles out’ the Fill for criticism. That is easy to do. After all, it has been the subject of an enormous amount of criticism overseas. It is interesting to know that in the United States of America where the criticism began very much about the machinery of decision making, due very much to the demands by Robert F. McNamara that the Navy and Air Force should use the same kind of aircraft, the criticism has carried over to the aircraft itself. Today, with the exception of the B model which is flying for the

Navy, criticism of the aircraft has all but disappeared. It is interesting to consider a comment from a gentleman who knows, because he lives cheek by jowl not only with the production but with the use of this aircraft. He reports from Nellis airport base as follows:

The Ft 11 is a super battle bird, the greatest thing with wings since angels. It is the ‘Cadillac of the Air’. It flies high and low-

Listen to this, because it is tremendously important -

It flies high and low, fast and slow, throws a power punch tougher than five World War II heavy bombers and sniffs out targets like a thirsty vampire. The Fill and its internal organs are a ‘radical effective departure’ from any contemporary aircraft. The supersonic plane is ‘the shape of things to come!’

If one casts one’s mind back to the time when this aircraft was contracted for by the Australian Government one recalls thai the charge from the Opposition side of the House was that our bombers were obsolete. If one is going to go into the aircraft business nowadays which, as I said, is rather complex and therefore expensive, one is going to face a lean time - a generation time - from drawing board to operational aircraft of from five to ten years. When the Deputy Leader of the Opposition talks about planning, what he really wants is a better crystal ball. We looked forward as far as one could reasonably look forward seven or five years ago to the use to which we would be putting this particular aircraft, and we decided on the specifications then down, with all the faith in the world in American technology, which has been completely vindicated, that this was the 1kind of aircraft that ought to find its way into the Australian inventory. If we had bought an aeroplane that was then flying, it would now be obsolete and honourable members opposite would now be charging us with having committed ourselves to obsolete defence equipment. If we adopt the alternative course, we buy aircraft off the drawing board. Then we take a risk on the cost involved in relation to research and development. The sum of $US125m was never the price of this aircraft. It was an estimated figure for the kind of aircraft we were to produce in the light of the kind of problems we saw ahead of us. It must be understood that this aircraft is operating in all of its departments against the frontiers of human knowledge. When one goes through the factory as I did and sees the whole aircraft structure being turned out of great solid billets of metal one forms the impression that this aeroplane is virtually being carved out of a solid. When one looks at the range of operational conditions, on deck one minute and x thousands of feet in the air in another - the figure is classified - operating from a landing speed of 100 knots to something over Mach 2 one realises that in this aircraft we have the most versatile weapon system in the world, and it is likely to be so for a long time to come.

Mr Beaton:

– It is not here yet.

Mr FAIRHALL:

– It is here now. The fact is the Labor Opposition, with all the joy of ignorance, keep oh referring to the Fi 11 as an aeroplane. It is not an aeroplane, it is a weapons system, and once again, as was the case with the DDG destroyers, the machine tends to be the least costly part of the weapons system. But the performance of the aircraft is so magnificently complemented by the electronic and other gadgetry and the knowledge built into it that it becomes a most versatile and most powerful weapon, able, as the correspondent of the ‘Star-Telegram’ points out, to sniff out targets like a thirsty vampire, pack the punch of five World War II heavy bombers and operate at a tremendous range into the bargain.

The honourable member for Bass overlooks the fact that we are buying something like six or eight types of aircraft, valued at $500m, from the USA. There has not been any trouble with these. They are operational and the know-how has been completely traversed in research and development. But on the Fill we knew very well we were committing ourselves to a research and development component. When the cost reached a certain figure the United States came to the party and by agreement set the basic figure at $5.95m per fly-away aircraft There is still some research and development to go on and to the extent that it affects the fly-away aircraft, Australia will carry no part Of that charge. We have these reviews from time to time. Honourable members opposite ask ‘Why did you not tell us this?’. As late at last May my colleague the Minister for

Air (Mr Howson) made a complete disclosure of the trends in the cost of these aircraft. He pointed out that the figure would be S237m and warned the House that there was still more to come because the research and development phase was not over. Not only is this phase not over but there are 100,000 items to bc assessed by the Royal Australian Air Force to decide how many of them we will carry as spares and what quantity of each we shall include in our inventory. Here is a steady, hard-slogging business of going through at least 70,000 of these items and it is a time consuming job. For this reason we have not yet been able to establish the inventory of spares we are to carry.

The basic reason why we are not yet able to put down a firm price for the aircraft is because we have not been able to decide the quantity of spares and because some of these unit spares are likely to be affected by research and development that has still to be done. When I was in the United States of America two or three months ago I discussed this matter with officials at the Pentagon and asked them to give me a date on which they would be able to give, as near as practicable, the final costs. It is estimated that the research and development phase of the aircraft will be completed in six months time - certainly by the end of the year - and we believe we will then have a figure for the aircraft. Over and above that there may still bc some doubt because we are still plodding through the job of assessing our spares requirement, but whatever may be said about this aircraft, Mr Speaker, we will be getting our money’s worth, regardless of cost.

The availability of this aircraft is in fulfilment of the 3-year defence programme laid down by this Government 2i years ago. It is a piece of equipment that will be coming into service in the very near future and if it fails in service that will then be the time to criticise, but surely it is the poorest of all approaches to apply political criticism of the United States to an aircraft which I assure the House in every phase is performing right up to specifications the Royal Australian Air Force has put on it.

Mr CONNOR:
Cunningham

- Mr Acting Speaker, the Minister for Defence (Mr Fairhall) chooses to put on a very bold front to cover one of the most awkward and embarrassing situations that any government has had to face, and in the process of doing so he has attacked his own Auditor-General. Does he also challenge the veracity of Mr Sutherland or the accuracy of the comment that he made yesterday? How can an Auditor-General give a final comment if he has not seen the exact contract on which the deal for the Fill bomber has been based? Let the Minister answer that question if he can. He has no answer to that question and he knows it.

The Treasurer (Mr McMahon) has blithely announced that his new Budget is designed for businessmen and investors. Soaring overseas defence expenditure, on an alarming scale and without limit, suggests that we urgently scrutinise members of this Government as self-styled paragons of business virtue and wizards of managerial efficiency. In overseas defence payments, including the escalating costs of spares and maintenance, Australian taxpayers will be paying for Sir Robert Menzies* 1963 election victory for many years to come. Unlimited overseas payments for defence commitments, entered into on an open-ended basis, are the pervading influence behind the Government’s strategy in the preparation of its Budget. The Treasurer has lamely admitted that there is to be some stress in our overseas payments. There is not a word from the Government about the further escalation of defence costs. The basic fact is the initial capital cost of the elaborate new defence systems, whether for air or naval defence, is only a small part of their eventual cost. The cost of the FI 1 1 weapons has yet to be added, after they are chosen, and the cost of periodic refits to keep our aircraft up to date with their United States forces counterparts - a matter on which the Minister for Air (Mr Howson) would not give an answer in May - will provide some further stunning surprises. Already an avionics mark 2 package is available for the Fill, being more costly than the mark 1 package we have ordered. Early last May the Minister told the House he would be discussing the increasing cost with the United States representatives in late June or early July of this year. We have yet to hear from the Minister - or is the truth too devastating?

With the Prime Minister (Mr Harold Holt) obviously straining to steam up a synthetic khaki Senate election campaign, we need a full inquiry into the scandal of defence purchases in this guns before pensions Budget. Defence is the fastest growing aTea of public expenditure. For four years the Opposition has failed to get a frank disclosure from the Government of the rocketing prices of its open-ended overseas defence purchases, particularly the cost of this swing-wing aircraft, the ‘flying opera house’. On the real costs ‘operation coverup’ is continuing, whilst this miraculous aircraft, the major item of the defence programme on which the 1963 elections were fought, has yet to arrive in Australia. Already there have been four announced increases in the fly-away cost of this unproved, undelivered aircraft. In the meantime the strategic concepts on which overseas defence hardware were ordered have been demolished. The former Prime Minister, Sir Robert Menzies, has gone into retirement and the Government’s bankruptcy in foreign policy is complete. Its embryonic foreign policy is apparently to be the entirely new concept of a fortress Australia and regional defence co-operation with adjoining countries of South East Asia.

The first light on the situation came from super-arms salesman Henry Kuss last May. He really blew the gaff on the Fill costs. He told Australia more in five minutes than had been released by this close-mouthed, redfaced Government in four years, so much in fact that he earned a rebuke from the Minister for Defence. To make the Government’s face even redder, Dr Juaren, a US quality control expert of world renown recently said in this country that US military experience had shown the total cost of maintaining and modifying sophisticated defence equipment over its economic lifetime was as much as three times the original cost. With a prestige weapons system that is subject to continuous technical innovation, such as the Fill, it is quite possible that the fina] systems cost will be even more. The Fill could well cost Australia $ 1.000m before the planes are ready for retirement. This is quite a substantial price to pay for twenty-four aircraft. Moreover, the Fill will give Australia a nuclear weapons delivery system which will never really per form to peak efficiency with conventional weapons. ‘New York Times’ military correspondent, Hanson Baldwin, has just stated that the Fill, with about half a bomb load, is experiencing an excessive vibration problem, particularly when approaching the speed of sound. When these planes ultimately arrive we will have a Royal Australian Air Force equipped with an advanced swing wing bomber of quite prodigious cost but of questionable usefulness. Everything happening in Vietnam goes to prove that unless there is a major nuclear holocaust the plane will be little more than a fancy status symbol, useful for flying past visiting VIPs.

In the meantime, the Government continues to evade anything remotely resembling a business-like summary of its total defence purchase commitments. Today we find that even the computer complex of the Department of Defence - which might be appropriately turned loose on such a problem - is, in istelf, not yet ready for full operation. The Defence computer costs, incidentally, have risen from $15m to $27m with completion likely, we hope, in 1969. Who computes the computer costs? Is it another computer, I ask? The net result of all this financial maladministration is that the Government’s original three year defence plan, as outlined by the former Prime Minister, cannot be completed by the target date of June 1968. There is growing anxiety at the soaring cost of defence hardware and its ultimate effect on Australia’s reserves of foreign exchange. Australia today is in a three way defence squeeze, and this Government with its defence programme unbalanced and incomplete, because of unanticipated cost increases, is evading the early five nation regional defence conference suggested by the Tunku Abdul Rahman.

Australia’s commitment today is to procure indefinitely increasingly expensive ultra-sophisticated military equipment, and we are now continually on a treadmill of fantastic military expenditure. We are now buttoned-in to the strategy and military logistics of a major power, with an ultimately frightening bill beyond the economic capacity or true needs of this country. We are now commencing to realise the vast apparent disparity in military and economic power between Australia and the United

States of America. Apparent gains in efficiency by integration of this type will prove to be an expensive illusion. Australia cannot ignore the possibility of limited military action in our near north independently of the United States which is itself learning the inherent contradictions in the application of unlimited power to a limited war in Vietnam. Australia must in the future face primary risks and primary responsibilities. Defence and foreign policy must be integrated. We are applying 1945 administrative methods to 1967 strategic problems. The Government’s approach is weakened by five government departments responsible for defence plus overriding supervision by a non-military Treasury. The result is a damning indictment of this so-called businessmen’s government. The lag in fundamental concepts of management and decision making in the Australian defence establishment will be a real issue in the forthcoming Senate election. A fundamental clarification of Australia’s military philosophy is long overdue.

The net result of the Government’s maladministration has caused a delay in the refitting of the Daring class destroyers Vendetta’ and ‘Vampire’, which were to have been completed before June next year. The estimated cost of the re-equipment has apparently increased from $26m to $30m. They will be out of commission for a period of six months. Our flag ship, the Melbourne’, will also be having its refit next year. The two Charles F. Adams destroyers delivered to this country were bought with obsolescent weapons systems. The first of them needed a complete refit on arrival and was out of commission for twelve months. The Government is unable to anticipate what its future policy will be. Australia has yet to evolve even a rudimentary foreign policy other than one of utter sycophancy. Last May the Minister for Air (Mr Howson) said that the Fill was a damn fine aircraft. It is being bought at a damnable price and it will lead to the damnation of this Government. We have, in fact, in Australia, through the maladministration of this Government, gone for a ride on an aerial tiger.

Mr DEPUTY SPEAKER (Hon W C Haworth:

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

Mr CHIPP:
Minister for the Navy · Higinbotham · LP

– We were surprised to hear the honourable member for Cunningham (Mr Connor) launch his speech with a rather extraordinary statement that my colleague, the Minister for Defence (Mr Fairhall), spent most of his speech attacking the Auditor-General. I do not think that any member of this House would have gained any sort of indication from the speech of the Minister for Defence that he did anything of the kind, because he knows - and we know - that he did nothing of the sort. We were also even more astonished to hear some of the words that the honourable gentleman used about the defence policy of this Government. He said that the concepts of the 1963 defence policy of this Government had been demolished; that this Government had retreated into a philosophy of fortress Australia’ and of resorting to nebulous regional pacts. As I heard him, I believe he was describing the wrong party, because if any party has resorted to the ridiculous position of a ‘fortress Australia’ and has airy-fairy ideals it is the Australian Labor Party and not the parties that sit on this side of the House. How can this sort oi criticism stand up when, as the Treasurer (Mr McMahon) said, we are now undertaking defence expenditure at the rate of 5% of our gross national product?

This Government stands proudly by its defence record. We have achieved this rate of defence expenditure, and achieved it while maintaining economic stability at the same time. The Deputy Leader of the Opposition (Mr Barnard) said, in his opening remarks, when referring to. the Navy in particular: ‘I find it difficult to conceive how you cannot get exact costs for specific items for the DDG destroyers’. We know his difficulty of conception of these things because, I say with respect to him, that he illustrated this during his speech. He said on the one hand that we are supposed to have some business experience and yet we have this rather ridiculous sort of bad deal. Let me just pose to the House the alleged bad deal that we have negotiated for the DDG destroyers. As the honourable gentleman knows, we first bought two of them, HMAS Hobart’ and HMAS ‘Perth’. Here are some ingredients of the deal, and I should like honourable members to assess whether it was a good or bad deal. We bought them at actual cost to the United States Navy; two of them cost at that time - in October 1961 when the deal was concluded - $90m; the payment arrangement, which was extraordinarily generous, was for the final payment to be made three years after the completion of the ships. Is that characteristic of a bad deal? The terms under which we had the use of the ships, or parts of them, for three years was interest free. Is that an ingredient of a bad deal and one for which we should be criticised?

These destroyers were among the first off the assembly line. In the light of our own peculiar needs in Australia - needs which differ from American needs or the needs of other countries - we found it necessary to order more base spares than was at first envisaged as necessary. We have ordered them and they will be delivered, but the cost, it seems, will remain at S90m. Is this an ingredient of a bad deal? Not only is the total cost constant, but we are receiving many more base spares for the total cost at which we originally contracted. This, to me. does not seem anything like a bad deal. I remind the House that these ships were ordered and the deal was concluded in 1961 . That was almost six years ago. Today, six years later, we can stand in this place and say, four square, that six years after the contract was made the costs will not be increased beyond the original $90m. I ask the House to assess fairly whether this is the kind of ingredient that one would find in a bad deal. We are receiving more spares three years after the final payment at the original cost and interest free. We are getting more spares than we originally bargained for and are receiving them for the same price. Into the bargain, on a deal entered into in 1961, they are still costing the same, notwithstanding price and other escalations that have happened in every country. If as a private citizen I could enter into any kind of a deal like this with anybody I would be congratulating myself most sincerely on achieving such a master stroke of business acumen. Yet this is the deal that the Government has achieved.

The provision of ships and associated equipment were subject to the same United States Department of Armed Services Procurement Regulations as apply to all contracts for the United States Navy. The original package deal provision of $90m is still regarded as adequate, as I have said. The latest estimates were confirmed at a meeting of the United States representatives as late as April of this year. At the time the first two ships were ordered the first ship of the class had only recently been commissioned by the United States Navy and specific experience data was not available to the United States Navy, even in relation to its own requirements for base spares. With respect to the honourable gentleman who led the debate for the Opposition, I ask: What sort of genius does he suppose that the greatest navy in the world, the United States Navy, can throw up to project into the future the exact number, type and price of base spares for a ship which, as the Minister for Defence has explained, is sophisticated in the extreme, not only in its working parts but in its weapons system and so on. As he said, how can it be conceived that we could get some sort of mystical genius who would be able to project six years ahead. The person just does not exist and the honourable gentleman, with his acknowledged interest in defence, should know this.

If the United States Navy cannot project its own requirements, how can a navy with the peculiar needs and the different needs of the Royal Australian Navy do so? Does the honourable gentleman know that for a DDG alone there are 75,000 base spare parts and spare parts? Is the honourable gentleman serious when he suggests that at the point of sale, when only one has come off the assembly line, one could nominate a price for every one of the 75,000 spare parts, that one could project six years ahead how many spare parts will be needed and of what type they will be? The proposition just does not stand up to any sort of logical thought at all. As the United States Navy acquires greater practical experience it will discover these things. As the Minister for Defence has said, the degree of sophistication these days, not only with the navigation and other aids but also with weapons systems, is a fundamental factor. The honourable gentleman knows that with weapons the days have gone when one buys a torpedo, a bomb or some bullets and puts them into a dusty store to forget about them. Those days have gone forever with any sort of weapon. Today a continual service is required. But as the United

States acquired this knowledge, after a review by the Royal Australian Navy these spares were incorporated in the overall support proposed for the Australian ships and all within a package deal of S90m.

It is important to stress that there is an agreement within the United States Navy to arrange the purchase of the DDGs and associated equipment. The United States Navy is responsible for making and oversighting all contractual arrangements. The United States Department of Defence Armed Services Procurement Regulations apply to all contracts entered into by the United States Navy on our behalf. I was anxious to deal with other points made by the honourable gentleman concerning contract charges. Unhappily, time does not permit me to deal adequately with this vexed and very important question which the honourable gentleman rightly raised in relation to the DDGs. I hope the information that I have given to the House as objectively as I could explains the situation.

Mr DEPUTY SPEAKER:

-Order! The Minister’s time has expired.

Mr BEATON:
Bendigo

– Nothing that either the Minister for Defence (Mr Fairhall) or the Minister for the Navy (Mr Chipp) has said this afternoon has eased our concern and alarm at the inflated cost of equipment purchased from overseas.

Mr Stewart:

– Not only ours.

Mr BEATON:

– Not only ours but also that of the Australian people. I want to touch briefly on two remarks made by the Minister for Defence. He said first of all that we are getting our money’s worth regardless of cost in respect of the IIIC aircraft. This apparently is the Minister’s view. Apparently there is no limit to the worth of these aircraft, regardless of the sacrifices that Australians - Australian pensioners, indeed - might have to make. He is very happy about the situation and believes that we are getting our money’s worth, regardless of the cost. I ask honourable members to think about that statement. Then he said in answer to a question about spares for the guided missile destroyers that the reason he did not tell the people and Parliament about this was that he had not been asked. Surely this is a shocking admission from the Minister for Defence, a

Minister of a Government. He has a responsibility to the Australian Parliament and to the people to indicate by clear statement what the costs are and what they will be in respect of any defence equipment. He did not make this statement before and he has not told the Australian Parliament because he was not asked. Surely he deserves the censure of the Parliament for failing to do so. He has completely disregarded the Australian Parliament and the people.

Let me sum up the Labor Party’s position this afternoon. I am sure that it is the position also of the Australian people. I want to make it quite clear that we will not quibble at the cost of defence equipment if those costs meet the basic tests which any government must surely apply: Firstly, whether it is necessary, after having made an assessment of risks and possible threats to our security; secondly, whether the equipment is the most effective available having regard to its role in the type of war that we may be called upon to fight; thirdly, whether it is being acquired at a reasonable cost, with preference, where possible, to Australian manufacturers. It is apparent that not only the Labor Party but also the nation’s Press and the Australian people have every reason to complain that loose and lazy administration is costing this country dearly in respect of the purchase of defence equipment. The Labor Opposition agrees that in these troubled times we need to be strong, but we cannot in the name of defence excuse waste, maladministration and extravagance.

A little more than a month has passed since our verbose Prime Minister (Mr Harold Holt) made a feeble attempt at a Churchillian call to arms. This is not a lotus land’, he said, exhorting the people to work longer hours and for more weeks in the year. Clearly it was a call to the Australian people for a sacrifice in the name of defence. ‘Brace yourselves’, he might have said in his version of sweat, toil and tears. But then came his Budget which gave the well-to-do with so much insurance coverage, and indeed insurance companies, a handsome tax handout but left the sweat and the starvation to the elderly and infirm in our community. It was they who were to bear the sacrifices. We have the words of the Treasurer (Mr McMahon), for that We could not afford a rise for pensioners’. he said at the weekend. I wonder how the pensioners feel about their aimless, blundering, bungling Government which, in the name of defence, buys a pie in the sky, an experimental aircraft - the TFX, as it wds called. It bought twenty-four of them for SI 25m. 1 wonder how they feel about the Government which now finds that the cost has doubled, a Government which does not even know what the final cost will be. But just to cap it all, the Government overpays its instalments. I wonder what the Americans think of this. I suppose they are saying that we are suckers from down under, or something like that, and cannot do our arithmetic.

What do the pensioners think of a government which finds that the cost of spares for its guided missile destroyers has risen by almost 200% and indeed has nearly trebled? I must point out that this cost of $90m is not the total cost of these destroyers. We have never been told what the total cost will be. I understand that the Americans built the hull, the engines, and the orthodox guns and that we have to fit the complex electronic equipment. 1 understand that a guided missile destroyer is now at Garden Island being fitted out. What is the real cost of these destroyers? This is something we would like to know. What do the pensioners of this country think of a Government which buys aircraft for its virtually aircraftless flagship? I refer to the purchase of Tracker aircraft for the carrier ‘Melbourne’. What do the pensioners think of a Government which does this and then sends the carrier off for a twelve months refit - a refit that will cost almost twice the original estimate?

For twelve months we will have carrier aircraft but no carrier. This is a change from having a carrier without aircraft. This is real defence planning.

Then in 1964 this bungling Government announced that the destroyers ‘Vampire’ and ‘Vendetta’ would be modernised in the 1965-1968 triennium. Presumably they, too, will be in dry dock next year. So we will have naval commitments which we will be hard pressed to meet. We will have the men but not the ships. We are entitled to ask why this work has not been carried out, when it will be carried out and why it has not been commenced. In his Budget speech the Treasurer said that he was concerned with the rate of escalation of defence costs. Well he might be. The Australian people are now paying the penalty for years of neglect, for years of election time words about the threat to Australia but years in which the Australian defence forces were kept at subsistence level. Suddenly came the awakening. Remarkably enough, this was several weeks before the 1963 elections. That is when the real escalation of our defence budget commenced.

Let us look at the situation surrounding the purchase of the Fill aircraft. Here the Government has been far from frank with the Parliament and the Australian people. In fact, what information we have obtained about this aircraft we have had to wring from the Minister for Air (Mr Howson) by a series of questions in the House. The Opposition is not satisfied that the Fill meets three essential requirements - that it will be safe and reliable enough for squadron service; that it is the best aircraft for our needs; and that its cost is not inflated to such an extent that we could have purchased far greater numbers of more specialised aircraft to carry out the various tasks associated with defence operations. Nothing that Government spokesmen have said has dissipated the doubts we have legitimately held regarding those three requirements. If we look at the history surrounding the purchase of the Fill some of the reasons for our doubts are made clear. Cast your minds back to 1963 when the Liberal-Country Party Government had the jitters. They were not war jitters but election jitters. The Government dispatched the then Minister for Defence on a sudden, urgent and much publicised visit to the United States. Before you could say ‘Jack Robinson’ we had signed up. Referring to the Fill, the Minister for Defence at that time said that we had obtained ‘the most favourable price and delivery terms in the history of the RAAF’. We have learned to become very sorry about that. A few days later the then Prime Minister said that it was a ‘very favourable package deal’. He said also that ‘no government could think of spending the taxpayers’ money except on the American aircraft’. Those statements have been supported and repeated ever since by Government spokesmen.

What is this very favourable package deal? We do not know. We would like to see the agreement relating to the purchase of this aircraft tabled in the House t> thu we may really ascertain what it is all about. I ask the Minister for Air to table the agreement in the public interest and in the interest of this Parliament, so that we may find out what it is all about. In years to come the 1963 elections will cost us a lot of money. From the little that we have been told it would appear tha! it is our share of the research and development costs that keeps inflating the final price to us. lt is obvious that we have no check on the increasing research and development costs. I think we are entitled to say that it is Mr McNamara’s decision to make this dual role aircraft that has caused the development costs to be vastly inflated. Are we paying for this too? This is something we would like to know. If this aircraft is to meet all its requirements further problems will arise, the cost of which we will probably have to meet.

The report of the Auditor-General has unfolded an astonishing story. It is a continuing story of neglect, maladministration and sheer bad business practice. This Government claims that it is a private enterprise government. It is a big business government, ft is a pity that it does not practise what it preaches and apply businesslike methods to its administration not only of the Defence departments but of all departments, where waste and extravagance are costing the Australian taxpayer dear.

Mr HOWSON:
Minister for Air · Fawkner · LP

– The honourable member for Bendigo (Mr Beaton) said that he desires defence equipment to be shown to be needful for Australia, to be most effective and to be purchased at reasonable cost. He has criticised the purchase of the Fill aircraft. Let us look at the reason for the Royal Australian Air Force originally requiring fo place a contract for this aircraft. In 1963 the Air Force foresaw the need for a long range strike aircraft capable of attacking targets at transonic speed low down on the deck in all types of weather, both by day and by night, with a varied range of weapons including guns, rockets and bombs, and because it was to operate in this part of the world it needed to have in addition long range capability. That is the assessment of the need by the Royal Australian Air Force. Since this Air Staff requirement was written, wars have taken place in Vietnam and in the Middle East.

During the last parliamentary recess I had the opportunity of talking to pilots who have operated over North Vietnam and to other officials who have been concerned wilh the Middle East conflict. In all of the discussions that I have had one message has come out loud and clear: There is an urgent need for a strike aircraft that has good low level performance and that can operate at transonic speeds in all types of weather. All the predictions made by the R.A.A.F. four years ago have been borne out in present day operations. What is more, all these requirements are fulfilled in the performance of the Fill.

I do not rely on what other people may say in the Congress of the United Stales or on newspaper reports, because I personally have flown this aircraft. 1 was the first civilian, other than General Dynamics Corporation test pilots, to fly it. So I can confirm everything that has been said - that the aircraft fulfils all the requirements laid down in our original Air Staff requirement.

Mr Barnard:

– Nobody has been critical of the aircraft’s performance.

Mr HOWSON:

– The honourable member for Bendigo and the honourable member for Cunningham (Mr Connor) were critical. What I am saying is that this aircraft is fulfilling the requirements laid down by the Air Force. All pilots who have flown it have confirmed that.

United States Air Force Secretary Brown has said:

We view the FI IIA . . . as vital additions to . . . our operational inventory - the one freeing the tactical commander from many of the limitations he has had to accept with listing aircraft, the other providing penetrability through high-speed, low-altitude capability.

There is now a programme known as Harvest Reaper’ which is providing an accelerated field evaluation of the FI 1 IA weapons system. As a result of this evaluation the Fill A is confidently expected by the United States Air Force to fill an existing gap by providing a much improved night and bad weather tactical air strike capability. This accelerated field evaluation will be completed by the end of 1967. So the need for an aircraft of this kind has been borne out in operation in war now taking place in this part of the world. Quite clearly there is no other comparable aircraft in service or on the drawing board that will meet these specifications. If we are to have our own deterrent force, there is no alternative to having our own Fill force. If we do not have such a force, we will in due course find that our defence will be determined by other nations. If at any stage we were to buy second rate aircraft, as has been suggested by the Opposition, which would have had us buy the TSR2 aircraft, for instance, we would be living in a fool’s paradise. If we get a second rate aircraft, we will place undue reliance on it, as we did in 1940 with the Wirraways, for instance.

If we were to have the Fill aircraft as soon as we will under the present arrangement, we had to order it from the drawing board. We went into a joint venture with the United States authorities. They provided us with the best estimate of the cost available at that time. We are both paying the same price. We are not paying more than the United States will pay. We are paying only for our share of the research and development of the FI IIA aircraft, which is the one we are buying, and not the F111B. As the price has been increased as a result of research, we have been informed and I have informed the Parliament. At a later stage the Royal Air Force came into the deal, and it came in on the same basis. We now have a ceiling price for the aircraft itself , of $US5.95m. The ceiling price for the spares and the test equipment is still to be determined, but, as the Minister for Defence (Mr Fairhall) said, 70,000 items must be evaluated. All of these are subject to modification during the research and development phase, but, as the Minister for Defence said, we will have a final price for these by the end of the year.

The Opposition has made some charge that we have badly administered our purchase deals in the procurement of defence equipment. Apart from the Fill aircraft, over the last three years we have placed orders overseas for 271 aircraft at a total cost of $509m. For those aircraft that have been proven in service, we have no difficulty in estimating the cost and the delivery price will be under the total cost presented to the

Parliament. In the total arrangement, we have come within a very small percentage of our original estimate, and the final total price will be lower than the estimate given to the Parliament. When we are dealing with aircraft of proven performance, the RAAF is perfectly capable of estimating the costs. When, on the other hand, we need for the defence of this country an aircraft that is right in the forefront of aeronautical knowledge, we have no alternative but to use a cost plus basis. We must not gamble with the destiny of our nation. We must pay the price if we are to be ahead of our competitors. All the predictions we made in 1963 have been borne out in practice by the operational needs of the war going on to our north at present. We had to go into a joint venture with our allies in order to get the aircraft that we need.

The Opposition raised two matters. The first deal with the report of the AuditorGeneral, in which he referred to the payments made to the contractor, which he said would be finished by July 1970. That is true. Those are payments to the contractor, but they do not relate to payments under the credit arrangements agreed to between the two Governments. The final payment under these will not be made until 1975. The payments to the contractors - that is, General Dynamics Corporation - will be completed by 1970; the payments under the credit arrangements between the two Governments will not be completed until 1975. The second point raised by the Opposition related to evidence given by Mr Sutherland yesterday before the Public Accounts Committee. I do say to honourable members that they would be wise to check the evidence reported in the transcript, which I have here, rather than rely on the report given by the newspapers. It is quite clear from the statement made by the Chairman of the Committee that the Committee confined itself to the amount paid each year as progress payments to the contractors, General Dynamics Corporation, and did not deal with the total cost of the project, which I have been outlining to the House this afternoon. All the remarks by Mr Sutherland quite clearly relate to the actual progress payments required by the contractor, and these relate to the amount of work done in any one period of twelve months.

Mr DEPUTY SPEAKER:

-Order! The Minister’s time has expired. The discussion is concluded.

page 285

INTERNATIONAL AFFAIRS

Ministerial Statement

Debate resumed from 17 August (vide page 258), on motion by Mr Hasluck:

Thai the House take note of the following paper:

International Affairs - Ministerial Statement, 17 August 1967.

Mr BEAZLEY:
Fremantle

– 1 begin by referring to what was almost an afterthought in the speech of the Minister for External Affairs (Mr Hasluck) - aid and trade. The world is now moving into a sustained famine crisis of a severity unprecedented in history. The fundamental political issue in the world today is not Communism or anti-Communism; it is starvation. The fundamental ideological issue is whether we care. It is not how food needs can be used to buy support or if food needs should be left unmet to punish attitudes of which we disapprove. If those are our motives, we do not even begin to meet the crisis, lt will take the best of our minds, capital on a scale of that being spent on the Vietnam war and care equivalent to military planning to avert famine. The United States Congress is reported to have cut heavily the amount asked of it by the Administration for aid. Congress appears to be irritated by the reaction of Arab countries which, despite the fact that they are receiving aid, have severed diplomatic relations with the United States. This is an understandable political reaction, but it is the diplomacy of a vanished world in which authorities dealt wilh governments but did not conceive themselves as having the obligation to deal with the needs of people.

The Minister’s speech in some ways reflects this view. He said, logically enough: 1 believe we have to pass beyond general expressions of concern to the realities of international economic relations - the realities ot sources of investment, the application of technology and managerial skills and, above all, the marketing aspects of economic production.

One then waits for the speech to pass beyond general expressions in these fields, but it does not do so. What is the. reality of the sources of investment? What is the. reality of the application of technology and managerial skills? What is the reality of the marketing aspects? The Minister does not say. I suggest that the reality of the sources of investment is that investment will continue to flow where it will be sure of its return. It will flow to Australia before it will flow to New Guinea or India or Indonesia, unless deliberate measures are taken to guarantee investment. In a previous speech I drew an analogy wilh the past of India. One of the miracles of the Imperial period of India was the development of India’s magnificent network of railways. This was produced by the private investment of Europe, but the private investment of Europe would never have gone to India unless the Vice-Regal Government, which in effect was the British Government, hud guaranteed a return to the private investor. In point of fact, the whole development of the Australian railways system was another example of State guaranteed capitalism.

In a previous speech, I mentioned what Governor Horowitz of the Bank of Israel has said, and I want to make passing reference to it again. We cannot solve the problems of the underdeveloped world unless we have a public guarantee of private investment. I take India as one example of an underdeveloped country. If India needs, as it does, $3,000m invested in agriculture, the International Bank for Reconstruction and Development, which is commonly known as the World Bank, could not find that sum out of the budgetary grants of member governments, but it could possibly raise this amount on the world’s capital market if the member governments guaranteed the interest. What Horowitz suggested was that the member governments should establish an interest equalisation fund. If the World Bank, for example, were giving the private investor 6% and charging the recipient country %. the 5% disparity in interest would be met by the action of member governments. With a $3 billion investment, this would require SI 50m in the first year. There would have to be, of course, arrangements whereby the recipient country would pay off the capital. But it would not be left running against the escalator of a tremendous burden of interest.

What is the reality about the application of technology and managerial skills? There are two workable forms of society. One is the sophisticated society with scientific government. This presupposes education, technology and disciplined effort in depth, in large segments of society. This kind of society produces the sort of civil service that can give reality to Cabinet decisions and, outside the field of government altogether, large numbers pf private skills, private decisions and private actions which advance and maintain the economy, education, health, transport, communications, housing and the life of the nation. The other workable form of society is the simple subsistence village economy. The unworkable society is that in which masses of people are attracted from subsistence in an endeavour to set up a government and society that presuppose an intensive division of labour without skills, and government decision without an executive administration, in the expectation that this will work. What happens is that, in a desperate effort to maintain coherence, society sets up military dictatorships. The Congo, which is essentially in a state of administrative nihilism through lack of a trained administration, holds together, to any degree that it does hold together, through military obedience. So do Nigeria, Algeria, Egypt, Syria, Burma, Indonesia, Ohana, Pakistan, Greece and a number of other states. This does not necessarily solve the problems of production, lt has not done so in Burma. It merely counters final chaos, and it may not do that permanently. We are on the edge of calamity, with former granaries of Asia, such as Burma, turned into importers of food.

Immediately, the need is not trade; it is the capital for subsistence. The advanced countries are moved primarily by fear. The United States Congress is appropriating annually $25,000m for the war in Vietnam. It is unthinkable that Congress would impose on the American people such taxes as would be required to provide this sum for the advancement of living standards throughout the world or that the American people would accept them. But the possibility of Western effort is shown in our defence expenditures. That our society can sustain such expenditures is a sign of the magnitude of the effort that could be made. I am not suggesting that if there were no Vietnam war the United States would be spending §25,000m on aid to other countries, but in ouch a situation that kind of effort could be made. If there were no war, we in Australia would not offer aid on such a scale as war expenditure. We are far more motivated by fear than by compassion.

The daily ration in many areas of Asia today tends to be the same as that which Hitler assigned to the inmates of concentration camps. Mahatma Gandhi used to say:

To the minions who have to go without two meals a day the only acceptable form in which Cod dare appear is as a loaf of bread.

Two thousand years BC, Seneca commented:

A hungry people will not endure reason; they will not listen to justice; they will not even pray.

The failure to solve food supply problems will strike down any regime, leftist or rightist, for famine is more fundamental than ideology. Krushchev fell on the failure to solve agricultural problems. Sukarno fell ultimately on the failure to satisfy economic needs that were basically food needs. The Congress Party in India is shaken on the issue of famine. The irrationality of United Arab Republic policy is possibly a diversion to hide the failure on food, as the Neocolim propaganda of Sukarno was in Indonesia. But hunger in India is not just an emptiness in the stomach. In many areas, it dominates all thought. If we have produced the scientific and medical effort that has lowered death rates, we must produce equal effort to solve the problem of dignified survival. I realise that this is the kind of generalisation that the Minister for External Affairs deplores. Before means are found, the commitment to find them must be made and a statement of the objective must be made.

Let us not imagine for a moment that the standards of effort that we in this House are accepting at present will be accepted by those who follow us. Our standards have shifted. When, in the immediate postwar years, aid to the United Kingdom amounting to £25m was given and large sums were allocated to the United Nations Relief and Rehabilitation Administration, or UNRRA, a new era was entered. Nothing prior to the war was comparable, and in 1939 an effort on this scale would not have been believed possible. Australian aid on the scale cited by the Prime Minister (Mr Harold

Holt) would have been regarded as wildly impossible even a few years ago. So we now regard as wildly impossible what will be found to be necessary to avert disaster and what we know, if we look at our defence expenditures^ our societies can sustain.

I do not believe that this situation of threatened chaos constitutes a military threat and I do not believe the right appeal is to fear. The effort required to feed the world is far greater than the present combined international, bilateral, foundation, industrial and private assistance to less developed countries. Technical assistance is too spotty and too little, and may soon be too late. The world food gap is increasing alarmingly, demographic projections are intimidating and poverty and social unrest are becoming the rule, and lower income countries are becoming trapped by increasing dependence on external sources of food and money. The industrialised countries must come to recognise that the application of scientific and technical knowledge to solving the problems of the developing countries requires a concerted and sustained effort of the magnitude of that being devoted to the conquest of space and a substantial fraction of that devoted to armaments. Robert S. Stevenson, chairman of the great firm of Alliss-Chalmers, recently said:

The United States, Canada and Australia are going to have to feed the world, or we are going to have to help the world to feed itself.

I believe that this is true, but I do not want to imply that Europe and the industrialised countries have no responsibility. They have the technology to develop water schemes and communications and to produce fertilisers, even if they have no food surpluses. We must face the fact stated by Eugene Black of the World Bank:

The speed at which a country develops depends largely upon its ability to direct its growing resources to investment rather than consumption, to uses which will raise tomorrow’s output rather than satisfy today’s demands. A poor society finds it difficult to save at all and will be doing well if it can set aside 10% of its income. But if its population is growing at an extremely rapid rate, it will barely be investing enough to stay where it is.

It must be an objective to assist people to feed themselves. This is far more im- portant than the threat ot China, real or not real, or any of the other issues in the world today. Once bulging United Slates food surpluses are rapidly disappearing. In fact, surpluses of those farm commodities that hungry nations need are down to or below levels which the United States Department of Agriculture deems prudent to maintain as a national reserve. The United States, like Australia, is, of course, capable of increasing production. A world summit conference on food is needed. I think that as time moves on this will become more and more possible because the Communist world is not immune from famine. In fact, even when the Communist world has solved or at least has advanced towards the solution of problems of secondary industry it has been characterised by universal failure in agriculture. Even Tsarist Russia which was an exporter of wheat has been succeeded by regimes which import it. Communist China has become a major importer of food. Since the world Communist sector is not immune it may be prepared to come to a collective effort at some kind of summit to try to solve the problem of food. This problem needs a world effort. It may be that some kind of unity can be found on this basis which does not seem to be found in iedeological polemics. If present trends continue it seems likely that famine will reach critical proportions in India, Pakistan and Communist China in the early 1970s and in Indonesia, Iran Turkey, Egypt and Brazil a few years after that. Most of the other countries of Asia, Africa, and Latin America will follow by 1980.

I shall leave that subject and in the last few minutes available to me I want to make some comments on the projected British withdrawal from east of Suez. I think this matter has been discussed in the Australian Press generally and in most political statements in this country in an unreasonable manner, as if Britain were going to gel out tomorrow. The withdrawal date is, after all, eight years hence. Is. it seriously expected by members of this House that European powers will be garrisoning Asia into the 21st century? I cannot see how anyone could regard that as a reasonable expectation. This belongs to the imperial past. The British presence in Malaysia and Singapore was artificially prolonged, after the independence of those areas, by the threat of confrontation. Britain bore the main burden of this threat of confrontation, at a cost of something like £Stg500m a year. What surprises me is that, considering the economic problems that the British face and the problem of modernising their industry in the face of very intense competition, they are sufficiently considerate to everyone in this region as to give us something like eight years notice of a phased withdrawal by 1975 which could be suspended if there were any increase of tension in the area.

I believe that while we may regret Britain’s withdrawal because of our traditional associations and habit of mind of putting security in British action to the north of us, any realist would have expected this to happen. What 1 am concerned about is the fact that the area appears to have no substitute for the Pax Brittanica. During a tour I made of the area during confrontation I had the privilege to meet a distinguished Malayan Cabinet Minister. He said to me: ‘The fundamental situation right through South Asia and South East Asia was that before the war the whole area was underwritten by the Pax Brittanica. As the British presence withdraws there is no substitute for it.’ This did not mean that the Malayans did not desire the withdrawal of Britain. They did not desire it, of course, under the circumstances of confrontation, but they did desire independence and not a British presence in a military sense as if they were a colonial area.

It is quite clear that what really matters is that if an emergency arises the British, without the incentive of imperial control but with a new motive of responsibility that we apparently are asking them to assume, will always come back into the area. I think there is no doubt, for instance, that when Communist China threatened India Britain would have come to India’s assistance. If Britain has a clear commitment to the area, 1 do not think we can expect a continuing presence at great expense to the United Kingdom Government. However, if we do expect a British commitment to the area it is perfectly clear that we ourselves have to take a much greater measure of responsibility in the future. I believe that a lot of criticism of the UK here would have no power at all on the minds of the British people because such criticism is .entirely unreasonable. It ignores the notice that they have given and possibly is selfishly motivated. If we assume our responsibility to the urgent problems of our area in food and in other respects, I do not think there is much doubt but that we will be a factor in mobilising interest in the area that could lead to a British presence or British support.

Mr McMAHON:
Treasurer · Lowe · LP

– But for the fact that we know the honourable member for Fremantle (Mr Beazley) well and we know of his good intentions, 1 would have come to the conclusion that he was speaking in an entirely different debate from that which is set down on the notice paper. What I would like to do this afternoon is to isolate, if I can, what I regard as the most important issue in foreign affairs and defence that faces this country. I want to take the House back a little to the last election campaign when the issues that I now want to raise were plainly put before the Australian people. In an unprecedented way the people gave their support to the Prime Minister (Mr Harold Holt) and to the policies that he announced. Therefore, what I want to do today is to ask: What ideals are we fighting for in Vietnam? What are the principles we hold to be dear? Are our own vital interests intimately involved in the struggle and the operations that are going on there?

I wish to discuss the second question concerning any change in the policy of the Liberal Party and of the Australian Labor Party relating to the operations in South Vietnam and then to mention the consequences of such changes of policy. I want to put as quickly and as strongly as I can the four principles, the four issues, the four ideals that we are fighting for in South Vietnam. The first is to protect the integrity of a small country and to give it the right to survive and live free from oppression. Secondly, we are there to create an impression in the minds of all the people of South East Asia that we in Australia are prepared to support our treaty obligations under the South East Asia Treaty Organisation and ANZUS and that we are prepared to give OUt support physically and morally to ensure that they should be free and independent. Thirdly, we have the question of our own defence which 1 believe is intimately involved in the survival of South Vietnam and of the other countries of South East Asia. Finally, we are in Vietnam because our presence there represents a very great and sacred principle to us - to maintain our alliance with the United States of America which is the most powerful country in the world and one with which we have entered into treaty obligations mutually to defend each other. I have mentioned these matters quickly, but I point out that today they are crucial political issues of as much importance as they were when the Prime Minister delivered his policy speech to the Australian people in November of last year.

The first question I want to ask is: Has there been any change in the policy of the Liberal Party? The answer can clearly be given that in terms of principles and in terms of ideals there has been no change whatsoever. Naturally we must watch movements, the ebb and flow of the battle, the opportunities that might arise for negotiation with North Vietnam, and we may, as time goes by, frequently have to change the methods we employ to try to get the North Vietnamese around the conference table and to try to achieve peace on just and fair terms. But as to principles, there has been no change whatsoever. We stand today where we stood in November 1966.

Now let me return to what 1 regard as the critical change in the attitude of the Labor Party to the conduct of foreign affairs and particularly to the resistance to aggression in South Vietnam. 1 shall first go back a little and recount what was the policy of the former leader of the Labor Party, Mr Calwell, announced during the Federal election campaign and endorsed by the Federal Executive of the Australian Labor Party. That policy clearly involved the immediate withdrawal of national servicemen from South Vietnam. It also proposed that there would be negotiations with our allies and that then the regular forces, the professional soldiers, would also be withdrawn. In other words the Labor Party would, as quickly as it could do so, get out of South Vietnam. It would renegue on our allies. It would do something that has never been done in Australian history; it would dump our friends and supporters in their hour of great need.

What has happened since that policy was announced? There have, of course, been two big changes. The first was the passing of Mr Calwell from his position as leader of the Labor Party and the second was the emergence of the honourable member for Werriwa (Mr Whitlam) as leader. I want first to show the House what the attitude of the present Leader of the Opposition was when he took over that position. On a Four Corners’ television programme he was asked his attitude towards pulling Australian troops out of Vietnam. He was asked the question: ‘Would you withdraw Australian troops now?’ He said no, but he said that it was an academic question because he believed that by the time the next election came round the war would be over. I want to point this out to show, first, the degree of influence, or rather the hick of it, that the Leader of the Opposition exercise. when formulating foreign policy, and, .secondly, how different that statement by the Leader of the Opposition was to the statement he made in the House a few nights ago.

What is the present policy of thu Australian Labor Party? Before I come to that I want to emphasise to the House, and to as many people as I can communicate this point to, that there has been little or no change in the power structure of the Australian Labor Party. It is true that at its conference the Labor Party took the thirtysix faceless men and added to them eleven face-saving men in an attempt to create the impression that the power base had been altered. But has that in fact occurred? Those who watched the August conference of the Australian Labor Party must have been driven to the conclusion, despite the efforts of many people who wanted a different conclusion to be drawn, that control of the Australian Labor Party firmly remains in the hands of the left wing, of those who support the proposition that we should get out of our obligations in Vietnam, desert our ally, the United States, and let it handle the whole problem itself. There is no doubt at all in the minds of those who have cm rs to listen wilh and minds to think with that the control of the conference was firmly held by a Mr Joe Chamberlain from Western Australia, by Senator Keeffe, the Federal President of the Australian Labor Party and, strangely enough the honourable member for Yarra (Dr J. F. Cairns), who, unaccountably, took over from Mr Brebner as a representative of Victoria at this conference. It is clear that Mr Whitlam’s pious statements about not pulling out had no impact whatsoever on the Federal conference when it made its decisions. His was a captive mind; he was a captive person - and whatever else might have been said-

Mr James:

– I raise a point of order, Mr Speaker. Are we debating international affairs or are we debating the proceedings of the annual conference of the ALP?

Mr SPEAKER (Hon.. W. 3. Aston)Order! The honourable member will resume his seat. As I said on Thursday night it has been the practice of this House to conduct debates on international affairs on an extremely wide base.

Mr McMAHON:

– Now I turn to the August decision of the ALP. After some recitals in typical United Nations fashion to the effect that we were not in Vietnam under the authority of the SEATO treaty or the ANZUS treaty, the conference decided that three conditions for retaining Australian troops in Vietnam would be imposed. It said that bombing must cease, the National Liberation Front must be recognised, and that the allies themselves must be drawn into enclaves in Vietnam and kept there while the North Vietnamese and the Vietcong retained freedom of action to go wherever they wanted to go. These are the three conditions imposed by the three men who were responsible for and controlled ALP policy.

Let me remind the House of decisions made in other days by the ALP conference. The first concerned the communications centre at North West Cape. The Labor Party wanted to impose a condition that before any signal could be sent from that base the approval of the Australian Government must be obtained, despite the fact that only a few seconds may be available for the sending of a vital cable and that grave damage may be done unless it reaches its destination in time. We have shown the fallacy of this thinking and what an impossible condition it is. Then there was the Labor Party’s suggestion for a nuclear free zone. It was pointed out at the time that not only would the Labor Party give full opportunity of action to the Communists to our north, but also that we would denude ourselves of the opportunity to fight back if we decreed this to be a zone free of nuclear weapons while other people were firing their weapons at us. I point out that the same kind of devious mind that framed those policies obviously framed the ALP policy on Vietnam. The persons responsible would be well aware that impossible conditions were being imposed; that if we tried to impose them on our allies we would invite a rebuff and Australian troops would be withdrawn by the Labor Party from South Vietnam as a consequence.

The honourable member for Yarra said that the former policy could not be adequately interpreted. Let me give this interpretation: Whatever else can be said about it, it was a less dangerous policy than the one that is now the policy of the Labor Party. Having in mind those three impossible conditions that no allies could ever agree to, it is obvious that the policy of the ALP is not simply to withdraw, first, the national servicemen and then to consult and subsequently withdraw the professional soldiers, but to get out immediately, and this would establish a very dangerous position for this country. It is a matter that I believe should be drawn to the attention of the Australian people.

The second condition relates to the recognition of the National Liberation Front. Let me repeat what has been said many times by my colleague, the Minister for External Affairs (Mr Hasluck). I think that we must, over and over again, bring it home to increasing numbers of Australian people that the National Liberation Front is the front in South Vietnam for the North Vietnamese Communist Party. In other words, this is the lesson that must be driven home again and again, even to people like the honourable member for Hunter (Mr James), who is trying to interject: The National Liberation Front is a Communist organisation. Its methods are typical of the methods of the Communists. On the very vital question of the objectives and the actions of the National Liberation Front let me quote from a speech made at Monash University by the Vietnamese Ambassador, Mr Tran Kim Phuong. He set out in clear and unambiguous fashion the methods and objectives of the National Liberation Front.

He made it clear, as many other people have also made it clear, that the National Liberation Front. is a front organisation and exists to do the bidding of Hanoi. But what he did was to draw attention to these methods. Referring to the teachings of Mao Tse-tung, he said:

The Vietnamese Communists followed those teachings very closely and added some contribution of their own; the systematic use of terrorism to isolate the central government by the process of shackling, or, in the case nf refusal, killing the rural administration officials.

Here we find a description of the type of organisation this is. lt is there to subvert the interests of the South Vietnamese, lt is there surely as an operational force of the Communists. It is there to support to the utmost of its ability the operations of the North Vietnamese regular troops in South Vietnam. And this is the kind of organisation that the Labor Party says should be recognised.

The Minister has indicated over and over again and the US Administration has indicated over and over again that they are willing to go to the conference table the moment they find any inclination from the North Vietnamese who, after all, are controlling and conducting these operations, that they are willing to look at the problems of negotiation and that they are willing to look at them on a basis that will secure the independence of South Vietnam. Under those circumstances, would we as a government be prepared to recomment now that the National Liberation Front should be a negotiating party? lt is a treacherous organisation within South Vietnam. lt is but the agent of the North Vietnamese Government, ft is carrying out the evil purposes of the North Vietnamese Government and on that basis I do not believe it should be recognised at law or permitted to put its point of view alongside that of its masters at the negotiating table.

It may be that circumstances will change. I make no comment about that. But I do say in law that it is an extraordinary thing to say that when you want to attend a conference to achieve a compromise you should permit the agent to stand in the place of, or together with the principal. Yet that is exactly what the Labor Party is asking for when it asks for the recognition of the National Liberation Front.

The third point. I want to put relates to the question of seeing that the allied forces are concentrated in particular areas and that freedom of action is retained by the Communists. I have already mentioned the question of the nuclear free zone to show how our enemies would have freedom to shoot off their guns, to drop their bombs in territories known to be occupied by the allies. At the same time they would have immunity because they would have mobility and secrecy and initiative. We would not know exactly where they were. With modern weapons being supplied to the North Vietnamese and the Vietcong, if they did get possession of intermediate range missiles or short range missiles, the tactical advantage to them would be so enormous that the loss of Australian and allied lives would become impossible to bear.

Australian lives are just as precious as - in fact they are more precious to me than - the lives of those who are attempting to take them. I believe that the life of every allied person who is fighting there is precious and I for one would not take any action that would prejudice his right to survive or his right to go back home to his family and live in comfort and freedom, the very ideals for which we are now fighting.

There is one other point 1 want to make, however quickly I have to make it. We all hope and expect that the elections in South Vietnam will be successful. They are doing their best to ensure that the elections are as free as is practicable in a country that is oppressed by warlike operations. The ones who are stopping the people from getting to the. poll are the Vietcong Communist forces who want to prevent them. If there is a successful election for President and the Senate then the claim that the National Liberation Front is the sole representative of the South Vietnamese people can be disproved immediately, particularly if large numbers vote.

Let me come, now, to the last point thai I want to put to the House this afternoon. What would be the consequences of permitting the Labor Party to put its policy into effect, not because of a decision of this House but because of a decision of the Federal conference of the ALP? The Leader of the Opposition spoke about co-operation in South East Asia. Could we ever hope to co-operate with South East Asia when we had deserted them - when we had said to them: ‘Your future does not matter to us. Take the consequences of Communist aggression, defeat and consequent dictatorship in your own country’? Could we expect our own allies, once we had deserted the cause, to come to our help in our time of need? Above all, if, in their hour of trial, we deserted the United States which has, under the ANZUS Treaty virtually guaranteed our independence and in effect said to us: ‘If there is an attack upon you it will be considered an attack upon us,’ could we ever hope that the United States would come to our aid in our hour of need? We certainly could not. I have pointed out that there has been a change in the Labor Party’s policy and that its present policy is more dangerous to us than the policy announced by Mr Calwell. I believe that Australia’s vital strategic interests are involved here and that if we lose this battle we bring the enemy closer to our shores. I am sure we would place this country in greater danger than’ we do by sticking to our friends and to the principles on which we won the last general election.

Mr DUTHIE:
Wilmot

– The Treasurer (Mr McMahon) makes a far better Treasurer than he does a speaker on foreign affairs. It was pathetic to listen to him tonight and to the Prime Minister (Mr Harold Holt) last Thursday trying to talk about foreign affairs. What we do in the Labor Party has nothing to do with the Treasurer and we do not intend ever to invite him to any of our” conferences. Whatever we did at the last Federal Conference was decided upon democratically. No other political party in this country can claim to function as democratically as we do. We allow the Press and representatives of the television industry to attend our conferences and our minutes are available for anybody in Australia who wishes to see them. That is more than one could get from any of the parlies on the other side of the House.

The Treasurer was prattling about how we formulate policy in the Labor Party. This piece of late news appeared in tonight’s Melbourne ‘Herald’: ‘ “Act of war”, says Red China’. The related article concerned the shooting down of American planes over Chinese territory. This is the first time in this frightful war that two American planes have been shot down over Chinese territory. Yet all the Treasurer can prattle about is the setup of the Australian Labor Party. It is an utter disgrace that a Minister of a government that is supposed to be in charge of this country at a time like this when this sort of news hits tonight’s headlines should take that line of argument. We feared all along that bombing close to the Chinese border would finally bring China into the war with disastrous consequences to Asia and probably to other parts of the world.

Senator Fulbright, Chairman of the Senate Foreign Relations Committee said this when he heard the news to which I have referred:

I don’t know how they can he so sure Red China won’t intervene in the fight. They’re pretty close to being in the war when they are shooting down our planes over their territory.

Honourable members on the Government side may laugh it off if they feel that it is of no consequence but in fact it is the most serious turn in the war since its very beginning. The people in America who are yelling for China to be bombed may read this news with a great deal of satisfaction. Only a monster, not a human being, could view this news with any degree of satisfaction, or could get up in America and say: Bomb China now before she gets us.’ Yet there are these types of creatures masquerading as human beings throughout the US. We have a few of them in this country, too, but they are not game to get up and say these things although they believe in them.

The war in Vietnam is the main subject of the debate on foreign affairs which was introduced by the Minister for External Affairs (Mr Hasluck) last week. I congratulate the Minister on the coverage he gave the subject in his speech. It was one of the best speeches be has made on foreign affairs since becoming Minister. I want to refer tonight to the war in Vietnam in particular, although the honourable member for Fremantle (Mr Beazley) raised a most important and serious aspect of the whole question this afternoon when he spoke of the shortage of food and the coming famine throughout vast areas of Asia and the rest of the world. What hope is there of growing food in Vietnam when you are bombing the rice fields out of existence?

The war in Vietnam has become a war of desperation - a war in which the allies are desperate for early victory; desperate for the destruction of North Vietnam; desperate in their attempt to get Hanoi to agree to negotiations; desperate to turn the bombing into saturation bombing; desperate to regain support from world opinion; desperate to get it over with. It has also become a war of frustration, Mr Speaker, for in spite of the increase of American ground forces to 525,000 and the colossal increase in bombing, there is no sign of a halt; no sign of North Vietnam surrendering; no sign of the Vietcong being defeated. The cost in men and money is reaching staggering proportions. At present the war is costing the United States $70m a day and 12,269 United States servicemen have been killed and over 75,000 wounded up to the beginning of this month. The governments of all countries seem to be concerned about these things, except the Australian Government, which goes on prattling today about how the Australian Labor Party’s external affairs policy is prepared. The American economy is taking a frightening hammering, for the Americans have not only the war in Vietnam on their hands but also grave racial trouble in many parts of their country. Moreover, President’s Johnson’s dream of the great society has been abandoned. America’s economy is being mauled at an alarming rate by the cost and one wonders how long it can stand the output of men and money that this war is costing. Taxation will have to be increased and more and more people in the United States will feel the personal pressure and the personal loss involved in the huge cost and seriousness of this war.

The war has certainly become a quicksand, sucking down men, money, machines and effort. The bombing of North Vietnam is now over two years old. In February 1966 there were 1,935 bombing missions over North Vietnam. This rose to 12,673 in September of last year, an increase of nearly 11,000 missions a month. I would like to quote a few more facts in the fantastic story of the bombing. In ‘Vietnam - myth and reality’, Harold Levien writes:

On April 20th, 1966, the U.S. Defence Secretary, Mr McNamara, said it was planned to drop 638,000 tons of bombs on Vietnam during 1966. This, he said, was a rate higher than that reached by all American bombers in North Africa and Europe during the last three years of World War II. On April 28th, 1967, the Pentagon announced that the current rate of dropping bombs on Vietnam was 77,000 tons per month (924,000 tons per annum), which compares with 80,000 tons per month dropped on all targets in Europe by all allied air forces at the peak of the bombing in World War II.

Figures like that reveal the immensity and the enormity of the bombing over North Vietnam at the present time. How the country has not been pulverised out of existence is beyond me to understand. In August 1965 there were only 125,000 troops in Vietnam but eighteen months later - at the end of last year - the figure was 400,000 and now in August 1967 it is 525,000. Experts tell us that we are no nearer to bringing Hanoi to its knees than we were at the beginning of the bombing The American estimate was that the enemy’s troops amounted to 90,000 in March 1964 rising to 170,000 by August 1965. The bombing may have made it more difficult to transfer men from the North to the South but the actual numbers have steadily increased as these official figures reveal in spite of this saturation bombing of supply routes. Mr Speaker, I would express it this way: Never has so much from the air been poured on so few for so little.

I have here a statement by Mr McNamara in which he says that the bombing of North Vietnam has not in any measurable way interfered with the supply of troops from the North to the South; yet America continues bombing at the rate of 900,000 tons a year. Who is to say that if the bombing fails to bring Ho Chi Minh to his knees or to stop his support of the Vietcong in South Vietnam, the American Administration will not consider invading the North with its ground forces as a final method of winning the war? This has not yet been ruled out at the Pentagon level at all in this crazy war of desperation, frustration and panic escalation. I would like to quote the actual words of Mr McNamara in respect to the bombing as they appear in this booklet ‘Vietnam - myth and reality’:

I don’t believe that the bombing up to the present has significantly reduced, nor any bombing that I could contemplate in the future, would significantly reduce the actual flow of men and material to the South.

One wonders why the bombing goes on with increased intensity. What is the position of China in this matter? The reason for the United States intervention has been declared to be the containment of Communism in South East Asia, based on the assumption that the Chinese want to take over the whole of South East Asia. There is no doubt whatever that as the bombing becomes intensified closer to the Chinese border the danger of China coming in and wanting to take over becomes greater and greater. We .should remember this, Mr Speaker: To my knowledge, prior to the present war China never threatened to take over South East Asia. I have read all I can lay my hands on in this regard and I invite honourable members opposite to show me where the Chinese authorities are reported as wanting a military take-over of the whole of South East Asia. Never was this mentioned before the present war. However, now that the war is on we have an entirely different situation. Two American aircraft have been shot down over China’s border. This is provocation of the worst kind and if China does come into this war we will have brought her in. I cannot stress that too much. Honourable members opposite should not try to hide under a halo of hypocrisy. Of course, if China comes in then we will have brought her in. The Chinese had no intention of taking over South East Asia until this wretched war started, and may not even desire to do so now in spite of provocation.

Several commentators close fo the scene, including Arthur M. Schlesinger Jr, in his recent book ‘The Bitter Heritage’, have stressed the danger of China entering the war to unite its own warring forces.

Mr Bridges-Maxwell:

– Has the honourable member read it?

Mr DUTHIE:

– Of course I have. I have read nearly every book printed on the subject of Vietnam. Chinese intervention in the war is a distinct possibility as the Chinese internal situation is close to civil war. In tonight’s ‘Daily Mirror’ appears a statement that China has never been nearer to complete political and economic disintegration than it is now.

Mr Peacock:

– What source is the honourable member quoting?

Mr DUTHIE:

– The ‘Daily Mirror’s* overseas correspondent. This is the situation as it is now, Mr Speaker. If ever a country was in need of unity it is China and there is no better way to unite warring elements within a country than to get them fighting a war outside. However, we do not agree that China intends to take over South East Asion. A sensible study of China under Mao Tse-tung and a study of Communism at the top in China indicates beyond doubt that purges, intrigue and internal terror campaigns are part and parcel of the politics of Communism. It is a pity more honourable members do not read more about Communism and try to understand its workings and ways, especially in countries such as the Soviet Union and China. They are fully occupied having purges every three or four years. In effect, their governments change every three or four years or less and this internal behaviour means they are constantly looking inwards to try and keep their own economy stable and peaceful.

It must also be remembered that the Vietnamese are not friends of the Chinese. A study of the history over the last 1,000 years indicates that the Indo-China region was dominated by the Chinese for centuries. They were finally driven out and a succession of military and mandarin regimes followed until the French took over the country in 1874. For the next 80 years France ran this region as a colonial empire, denying the people freedom of speech, denying them elections, denying them a say in the running of their country and suppressing all insurgency. The French were literally responsible for the rise of Ho Chi Minh and his underground guerillas, who finally came out to fight the French in an eight-year battle ending in 1954 with the defeat of the French at Dien Bien Phu. The guerillas went on fighting a civil war even after the partitioning of the country, for five more years - fighting Diem, the President of the so-called South Vietnam Government, and his corrupt regime - before the North Vietnamese began their military aid. For nearly five years before North Vietnam became involved in this situation, fighting had been in progress, yet honourable members opposite have the nerve to say that the whole war was caused by North Vietnam. Why do they not read the history of the situation - history authenticated by writer after writer? I have made a closer study of the Vietnam question than any other matter during the last two years. The argument that North Vietnam caused the war has been completely knocked out. The guerillas were fighting against Diem for years before North Vietnam came in about 1959 to give them aid.

A study of history indicates that the Vietnamese, both North and South, would be opposed to any Chinese intervention unless it were designed to try to prevent the Americans and their allies trespassing on China’s borders.

Mr James:

– Ky said that himself.

Mr DUTHIE:

– Of course he did. The Vietnamese have just had the first genuine election in their history, and out of it has come a form of democratic government. Had the election of 1956 been allowed to go on, as laid down in the Geneva Accord of 1954, the ultimate Vietnam war probably would not have occurred at all. But the country was not allowed to decide its own affairs then because of the fear that Ho Ghi Minh would win the election and become Premier of Vietnam. The ultimate military intervention of the United States of America was contrary to the Geneva Convention of 1954 and was also opposed to the United Nations charter itself. Unfortunately I have not time to quote Article II paragraph 4 of the charter, but the situation is clearly outlined in Dorothy Bromley’s book Washington and Vietnam*. It has been shown beyond all doubt that the United Nations has been by-passed and that American unilateral intervention has taken place. It is a fantastic situation for a country to claim that other countries have broken their word when that country has broken both the Geneva Convention of 1954 and the United Nations Charter of 1948.

The United States has been in Vietnam since 1947. Up until 1954, when the French were defeated, America had poured in $3 billion worth of atd to the French. The United States have, been in Vietnam for 20 years. In the early years it had representatives there as advisers, but gradually it has sent soldiers in. Its military com mitment has increased like a snowball until we have the tragic situation of today. Neither the election of a democratic government in South Vietnam, nor the election of a new President, in a few weeks time will end the war. I have not time to develop that argument, but in the Time’ magazine of 11th August 1967 Bishop Fulton Sheen, whose anti-Communist views are well known, is reported as having said:

May I speak only as a Christian and humbly ask the President to announce, In the name of God. who bade us love our neighbour with our whole heart and soul and mind, for the sake of reconciliation I shall withdraw our forces immediately from Southern Vietnam’.

If I said those words in this House 1 would be called a Communist, yet Bishop Fulton Sheen said this, and he is one of the greatest anti-Communists of all time. Senator Stuart Symington, who has been a hard core supporter of this war, has now come out and said:

We offer not only to stop the lighting in North Vietnam but also the fighting in South Vietnam and start negotiations from there.

Honourable members opposite can call him a Communist if they like. Others who have been hard core supporters of Johnson’s policy are now making similar statements. It is interesting to refer to a gallup poll which was completed in mid-July, the results of which were announced last week in the same issue of ‘Time’. It showed that for the first time a majority of Americans - 52% - disapprove of President Johnson’s handling of the war and that 41% of the people believe that the United States should never have sent troops to Vietnam in the first place. This is a percentage that has risen steadily from 24% in 1965. The poll showed that 56% of the American people think the allies are stalemated or losing the war. Only 34% said they believe the allies are making progress.

There are members in this House who will not believe these figures, but they are official figures. We must get this war stopped. We must stop the bombing of North Vietnam, we must contain the situation in South Vietnam and we must then get to the conference table. This is what the Government should set its heart and mind to as the prime target of diplomacy.

Mr SPEAKER:

-Order! The honourable member’s time has expired.

Debate (on motion by Mr Turnbull) adjourned.

Sitting suspended from 5.57 to 8 p.m.

page 296

APPROPRIATION BILL (No. 1) 1967-68

Second Reading (Budget Debate)

Debate resumed from 15 August (vide page 72), on motion by Mr McMahon:

That the Bill be now read a second time.

Mr WHITLAM:
Leader of the Opposition · Werriwa

– The Budget is the principal instrument of economic policy in a modern economy. It is, or should be, something more than this. It is not only the Government’s presentation of the nation’s accounts but it is an accounting by the Government to the nation and a prospectus for the future. It is in this much wider sense that this Budget should be judged. We seek in a budget a sense of purpose and direction. We seek guide-lines for national growth. We seek evidence that the Government is prepared to take initiatives and accept responsibilities to achieve that growth. In this Budget we seek these things in vain.

We were entitled to expect some especially energetic response to the challenges of our time in view of recent statements by the Prime Minister (Mr Harold Holt). After all, he chose to tell the people last month that they were not ‘living in some kind of lotus land’. As he chose to rebuke the people for their presumed selfishness and apathy, he and his colleagues in government were bound to produce some evidence of their superior responsiveness and responsibility. On the contrary, this Budget is an expression of a policy which in almost all fields shows flabbiness, unfairness, indifference to real needs, favouritism to special interests, laxity in spending control and, above all, lack of vision.

If the Prime Minister was worried that his words might not be taken to heart, he has certainly ensured that the Treasurer (Mr McMahon) has reinforced his warnings. Perhaps the pensioners and widows have been too prone to believe that this is lotus land. This Budget will remind them to the contrary. Perhaps the Aborigines, with the highest rate of infant mortality, tuberculosis and leprosy of any identifiable ethnic group in the world, thought they were living in some kind of lotus land. The five lines with which their needs are dismissed in the Budget will surely bring them back to earth. The half million Australians living on subsistence incomes, the 700,000 people in Sydney living in unsewered areas, the thousands of young couples deep in debt through their efforts to establish home and family, the millions travelling daily to and from work in rundown public transport systems - all these will indeed be assured by this Budget that this is no lotus land. The lower income earners upon whom the real burden of rising defence expenditure is increasingly falling, and who have to work longer and longer hours of overtime in order reasonably to meet the demands of a modern standard of living, will surely be shocked out of their 40-hour week mentality. Is it really the people of Australia who live in lotus land? Or are the lotus eaters rather to be found on the Treasury bench, fed too long with the fatal fruits of over-full majorities.

Few budgets in recent times have so firmly drawn the line which distinguishes the approach to the development of this nation as between the Liberal Party and the Labor Party. The fundamental difference between us is about the proper role of government. Where we believe that governments should initiate, this Budget gives the clearest possible expression to the Liberal Party philosophy that governments should abdicate. For all its pretence at pragmatism, this is in reality a highly doctrinaire Budget. The Treasurer expresses the old blind faith in the natural superiority of private enterprise over public endeavour. He says at page 5, referring to private capital expenditure, ‘some might not pass the test of high national priority but the private sector is responsible for the largest part of production and has therefore a critical role to play in national growth and progress’.

By the standards of this Budget, the real estate developer has a superior role to play in the nation’s growth and progress to the Snowy Mountains construction engineer because the one represents private enterprise and the other is a public employee.

The Treasurer expresses alarm at the percentage increase in public sector employment. Yet it should not be assumed automatically that a construction worker on a dam makes a lesser contribution to real growth than the same man working on an insurance building in Sydney or Melbourne. The continuing economic debate in this country is principally a debate about priorities. This Budget illustrates clearly the difference in the sense of priorities between us.

This is a sectional Budget and it is the product of a government propped up by sectional interests. The Government condones inefficiency amongst the groups which support it and ignores the needy unless they are in a position to exert political pressure. Aborigines exert no political pressure, so they have been ignored. From this Budget one would infer that the referendum on 27th May had never taken place and had never been carried by an overwhelming majority. Ninety per cent of the Australian people said emphatically that they believe the Commonwealth should take greater initiatives in securing a fair deal for Aborigines. If the other referendum presented on 27th May had been approved by the merest margin, the Government would be ready with all the legislation necessary to give it effect, and all the machinery to effect a redistribution for an enlarged House of Representatives would have been fully in operation by the end of this session.

This Government does not look to the broad interests of the community as a whole in social and economic planning. It merely reacts to the various pressures from organised pressure groups. It heeds the best organised pressure groups and those whose support it finds necessary for its political survival. A Liberal Party and Country Party Government in Australia today is bound essentially to think of itself as primarily the instrument of sectional interests. It is bound to think of itself as the instrument through which the better organised, the richest, the most influential groups in the community can have their due and full say in the government of the country. This is because the Country Party and Liberal Party are fundamentally the protectors of the established system, the spokesmen for the forces within the community who are satisfied with the social and economic system as it is. They ignore the interests of the weak,, the unorganised, the people who have little organised power in the manipulation of affairs. They do not believe in the positive power of the Commonwealth Government as a force through which individually weak groups in our community can express their desire for change and improvement, for the reduction of privilege and for the improvement of the lot of the people as a whole. They see only a negative role for government, and this Budget typifies this negative attitude. Over the last decade and a half, an expanding pattern of privilege and pressure, of deals and silent agreements has grown up under this Government. It is haunted by the fear of offending privileged groups on which its political existence depends.

Its special concern for powerful groups and its lack of concern for those without special influence can bc illustrated by reference to two of the most important questions in the policy with which the nation has to deal, tariffs and defence. Nowhere is the lack of firm government leadership so evident as in the administration of tariff policy. This is not the responsibility of a single Minister. The Prime Minister himself pointed out on 27th June:

I want to make very clear that criticism of tariff policy generally and of Mr McEwen’s role in particular in formulating tariff policy is not criticism of himself or of the Country Party, but is criticism of the Government as a whole.

The Department of Trade and Industry has chosen to identify itself more than any other with the political philosophy of its Minister. If it is too much to say that the Department serves as a Country Party secretariat, it is something of an understatement to say that it is a highly political department. Further, the Department of Trade stands in very close relationship to the Tariff Board whose decisions can have vast effects on the welfare of this country and the profits of individual companies. There is considerable interchange of officers between the Department and the Board. The Senior Deputy Chairman of the Board was an Assistant Secretary in the Department. The Head of the Department was a member of the Board. The officer now in charge of the Office of Secondary Industry in the Department was formerly a Senior Deputy Chairman of the Board.

Referring to the chemicals case, Professor W. M. Corden of the A.N.U., and the leading academic economist in this field, drew attention in the Joseph Fisher Lecture last month to the way ‘the distinction between the Tariff Board and the Department became rather blurred’. He continued: ‘One of the authors of this famous report was a Deputy Chairman of the Board, who by the time the report was being considered by the Government, had become head of the Office of Secondary Industry, the section of the Department of Trade and Industry concerned with examining Tariff Board reports’. Professor Corden suggested that perhaps it might be wisest to take the Tariff Board away from the Department of Trade and Industry and attach it to the Prime Minister’s Department.

Several of the most regular supplicants and beneficiaries of Tariff Board largesse are on the appeal committee of McEwen House, which is to be the Country Party secretariat in Canberra. It includes very well known names in the manufacturing field. The appeal brochure calls on con.tribuors ‘to say thank you to John McEwen’. The appeal has apparently been successful. The National Director of the appeal said: ‘The project has already received remarkable support, much of it from people not connected with the Country Party.’ Apparently industrialists have been generous.

To say the least, the Government is highly indiscreet. This is a most serious situation. Commenting on it, Professor Corden said:

Tariff decisions have vast effects on the profits of individual companies, so that the temptations for questionable connections or pressures must be immense. If the detailed application of tariff policy, as distinct from the broad principles, is made in a political way, as it has been made lately, it becomes at least possible that contribubutions to party funds would have some effect on actual policies.

Is the Prime Minister, who avows responsibility for tariff policy, satisfied with such a situation? ls the Treasurer satisfied with it?

In the Budget Speech the Treasurer quite rightly drew attention to the fact that the rapidly expanded defence programme has meant that resources have had to be drained away from other fields. The simple question is: Who is paying for this defence build-up and for the war in Vietnam? The real burden is falling on those least able to bear it. Last year the Government’s methods were quite clear. By subjecting the State governments to a financial squeeze, it forced them to increase their charges. By their nature, most State taxes are regressive and fall most heavily on low and middle income earners. Last year, the States, with few exceptions, had to raise their hospital and transport charges. This year the Government is even more clearly placing the burden of the Vietnam war on the people in our community least in a position to pay for that burden. Professor Lydall, in a paper presented to the Vernon Committee, drew attention to the fact that there had been no move forward in the progressiveness of the Commonwealth taxation structure. He pointed out how increased provisions for tax deductions had prevented any increase in the effective rates of tax progression.

We have two glaring examples in this Budget of how the progressive tax base is being eroded. The increased dependants’ allowances in this Budget will vary in value depending on income. The Taxpayers’ Association, the morning after the Budget, estimated that for a married man with two dependent children and a weekly wage of $80, the annual tax bill would be reduced by $24. For a married man with two children but a wage of only $40 per week, the annual tax bill would fall by only $9.

Even more regressive is the proposal to raise from $800 to $1,200 the maximum insurance and superannuation contributions which may be deducted from incomes for taxation purposes. Because of the progressive system of taxation, insurance becomes cheaper to buy as the income of the purchaser rises. Even when the maximum stood at $800, only family men with an annual income of about $6,000 or more could take full advantage. They represented about 4% of taxpayers. For a family man now to take advantage of the full $1,200 deduction, he would need an income of about $10,000 or more a year. Such taxpayers represent less than 2% of total taxpayers.

And this is what is called a family man’s Budget. The Treasurer is not prepared to disclose in his Budget the loss to revenue of these generous insurance and superannuation provisions. I suspect the cost of the meagre improvement in child endowment will cost little more than the largesse the Government is handing out to high income groups for insurance and superannuation cover. Already insurance companies are telling their clients what this increase in deductible premiums means. One insurance agent has pointed out that on an income of $12,000 there would be a tax saving of 56% on a $1,200 insurance premium.

Contrast this with the Budget’s social service provisions. After a year in which prices rose by 34%, a 50c increase would at least have compensated for the erosion in the value of the pension and would scarcely have placed a significant strain on the economy. Pensioners of this country can quite correctly infer that they are paying for Vietnam. Have they not made sacrifices enough already? What sacrifices are high income groups making today?

This year the main elements in the prospective increase in Budget expenditure will be: Defence, 18%; payments to or for the States, 11%; business undertakings, departmental running expenses and Commonwealth capital works and services, 9%; State works and housing programmes, 5%; and social service and repatriation benefits, 4% . It is quite clear that the last two items will carry the defence burden. The Prime Minister says that the style of his Government is firmness, forthrightness, friendliness and fairness. Is this fair? The Government ignores those who it thinks do not wield political power.

The people who have to bear these burdens might do so more willingly if they could believe they and the nation were getting value for money. Yet there is startling evidence to the contrary. Last year the Government budgetted for defence expenditure of $ 1,000m - no doubt a good round figure for use at the elections. The estimate turned out to be $50m astray. It is, of course, extraordinary how the defence crises confront this country coincidentally with its election campaigns, and how defence decisions precede the elections. The original cost estimate of the twenty-four Fill aircraft presented before the 1963 election was SI 12m. The latest estimated cost is $212m. The Minister for Defence (Mr Fairhall) said on return from Texas in July that the final price was still not known. He refused to hazard a guess at the final price. So the cost of the Fill, already $100m over the estimate, is still climbing, perhaps by another $50m, as some commentators have suggested. It is a record of unbusinesslike and irresponsible behaviour. The Government believes that budget figures will deter any possible aggressor. Can be explain how we are likely to be better defended because the Fill will cost an extra $150m?

In May this year, the Minister for Defence told the Deputy Leader of the Opposition (Mr Barnard) that the Armed Services computer project would cost $12m over the original cost estimate of $ 15.5m. The project is three years behind schedule. Then we come to the report last week of the Auditor-General who referred to the extraordinary increases in unit prices of some items of spares’ for the two Charles F. Adams destroyers. The cost has increased by almost 200% from $3m to $9m. The Auditor-General’s report on this matter and so many other matters within the Defence Departments is a damning indictment of a government which is lax and careless with taxpayers’ money. The Directors of Reid Murray were orthodox financiers compared with our Defence Ministers. This afternoon we had an example of the Government’s extravagance and arrogance in defence matters. If in any other English speaking democracy evidence had been given about a government department such as has been given in recent days about the Australian Department of the Navy, the Minister concerned would have stood down or been stood down.

Large amounts are involved. They are hard to grasp. In these three fields alone - Fill, computers and destroyers spare parts - costs have risen by about $160m above the initial estimate. What does this mean in relation to some items in the Budget? It is the equivalent of the total increase in defence expenditure this year. It is nine times the increase in international aid. It is sixteen times the cost of extended benefits in this Budget for child endowment, handicapped persons, hearing aids for pensioners and relief for deserted wives and wives of prisoners. But on television on Sunday in Melbourne, the Treasurer said nothing could be done for pensioners; to do anything worth while would cost $50m.

He did not say, on that television programme, what any worthwhile increase in repatriation benefits would cost. Immediately after last year’s Budget, the Returned Services League demonstrated that in terms of the Commonwealth basic wage, the special rate - the total and permanent incapacity rate - pension and the general rate - the 100% rate - pension had never been worth less. At the same time, the Minister for Social Services (Mr Sinclair) told me that compared with average weekly earnings, the basic age pension had never been worth less than in mid 1966. Since this Budget makes no adjustment in any of these pensions while wages and prices have risen in the intervening year, those citizens whose incomes solely or mostly depend on the Commonwealth Budget are undergoing the worst conditions in memory.

As with defence, the administration of health services in Australia is wasteful and inefficient. The Budget makes no reference to health services. The administration of our health services is costly for the individual and for the community. Health costs in Australia will top $ 1,000m this year. For all his grandstanding in the House, the Minister for Health (Dr Forbes) has now checked his facts and has told me that in the last year for which figures are available total expenditure on health in Australia was $7 16m, or 4.9% of our gross national product, more than in the United Kingdom, which at least has a national health system.

We have no national hospital system or health system. The result is an alarming increase in hospital costs and charges. In the last nine years, the daily fee charged for treatment in public wards of public hospitals has risen by 130% in New South Wales, 180% in Victoria and Western Australia, 110% in South Australia and 100% in Tasmania.

Mr Bosman:

– What about Queensland?

Mr WHITLAM:

– In Queensland the treatment is free. Australia spends more of its national income on medicines than any other comparable country does. I suspect this is not due so much to the poor health of Australians as to the methods of prescribing, the costs of distribution and the profits of drug companies, controlled, as they are, mainly from overseas. There are almost 200 separate medical and hospital funds and over 100 combined organisations in Australia. Their operating costs in the last ten years were over $100m, representing about 14% of contributions.

To obtain maximum health insurance cover for himself and family, a contributor has had to increase his contributions between 1955 and 1966 by 140% in New South Wales; 500% in Victoria; 130% in Queensland; 110% in South Australia; 120% in Western Australia; and 33% in Tasmania. This is a serious indictment of the administration of health services in Australia. Australians could get improved health services at no greater cost if only the Government would take action to remedy the glaring areas of inefficiency.

The same story of inefficiency resulting in increased burdens is told in that section of the Budget speech dealing with the Post Office. The most important taxation increase in the Budget is the increased Post Office charges. Words from the Treasurer will not gloss over this simple fact. In his speech, the Treasurer said:

Postal and some other charges will be increased; but they are directly related to the increasing costs and outlay of the Post Office . . . They are not general taxation measures.

From the point of view of their effect on the economy, they have the same result. This is confirmed by a sentence explaining Statement No. 6 in the Budget documents which the Treasurer presented a week ago. If reads:

Whatever the purpose of particular changes in rates of taxation and charges, one of the effects of such changes is on the expenditure of the private sector.

The Treasurer’s own documents do not support his contention that this is not a taxation measure.

Earlier this year, the Government attempted to introduce postal charges so that it would not suffer the political embarrassment of introducing them in the Budget preceding the Senate election. The Senate performed a very valuable function in forcing the Government to admit the real nature of these charges and to introduce them in the Budget. By its opposition, the Labor Party has also forced the Government to change its accounting system in the Post Office and give Parliament greater opportunities to examine the affairs of the Post Office henceforth.

Under pressure, the Government has given way. As far back as August 1965, the Labor Party proposed a joint select committee to inquire into and report upon the methods by which the working and capital expenses of the nation’s telephone services can be most fairly and efficiently met. A great deal more has to be done, but we have succeeded in removing some of the political obstruction at the top, political obstruction from people who boast of their prowess as private businessmen but are failures when they are responsible for the financial operations and industrial relations of the largest business in the southern hemisphere. It was against this background of massive maladministration that the Treasurer had to prepare his Budget strategy. I now deal with the question of the Budget’s impact on the economy.

The most important effects of a Budget on the economy are those associated, on the one side, with changes in the level of Government expenditure and, on the other, with changes in rates of taxation and the charges of public enterprises. Having regard to these two factors, this year’s Budget could well be regarded as slightly deflationary. Even on the most generous view, any expansionary impact which this Budget could have, however, would be of the most marginal order.

There are several important considerations which support this view. Although total Government expenditures are to rise by $582m, $147m of this will be going overseas, chiefly in connection with defence purchases. The actual increase in domestic outlays of the Government is only $435m, an increase of 8t% on the existing level of domestic outlay. It is sensible to expect that prices will rise again this year. Rates of increase in prices of around 4% have been quoted by some observers. If prices generally rise by this amount, the real rate of increase in Government domestic outlays is perhaps only of the order of 4J%. The Treasurer has indicated that he ‘expects’ - we would say ‘is gambling on’ - a rise in the real value of national output of something like 5% to 6% again this year. This probably assumes some fall in the rate of unemployment. This means that Government domestic outlay is growing at just about, and probably less than, the rate of growth of potential national output - that is, the output which would be realised with full employment. On this basis, the increase in Government expenditure can be regarded as deflationary: the level of demand for real resources stemming from Budget expenditure is likely to fall in relation to the economy’s potential.

On the revenue side, some minor tax concessions have been given, but Post Office and air navigation charges are to be substantially raised. These imposts are much more important than the concessions. In a full year, the net value of the revenue measures is put at an increase in revenues of $28m. This is in itself deflationary, although the amount involved is not particularly large.

The Treasurer claims that he wants to restrict the rise in Government spending, and he says explicitly that he does not wish to give a stimulus to consumption spending. He does not claim in his speech that this year’s Budget is expansionary nor, for that matter, does he say it is deflationary. But in Statement No. 6 it is argued that ‘the initial impact of the 1967-68 Budget should be expansionary, but not to the same degree as its predecessor’. The validity of this statement is open to challenge. It turns in part on the view that any increase in Government spending is automatically expansionary. It is true that the absolute level of domestic Government expenditure is expected to rise; but it always does, and almost always should. As we have suggested, account must be taken of prospective price increases and of the underlying trend of the economy’s potential output. When that is done, it is not at all clear that this Budget should be regarded as expansionary, and the contrary effect is just as likely. The Treasurer says that if any extra stimulus is required later this can be achieved through monetary policy. It is doubtful how successful this course would be, for bank advances are already high and the economy is barely rolling.

I have explained that the Budget does not contain measures which, in themselves, will ensure that total spending rises sufficiently to ensure maximum production this financial year. In itself, this does not condemn the Budget. The question is whether or not there are reasons for believing that private spending will rise sufficiently for reasons independent of the content of the

Budget. The Treasurer is gambling on the expectation that this rise in private spending will occur. Indeed, most of the time he speaks as if the necessary upswing in private spending were already under way. This is certainly not so and there is little evidence that the necessary upswing is about to begin. It would be better tactics to give a stimulus to the economy now and, in the event that the upswing does develop rapidly and powerfully, to take further action later in the year.

The Treasurer has presented a ‘favourable’ view of the state of the economy by taking as his test of performance the current absolute values of certain key economic quantities such as employment and housing commencements. This test is not appropriate. If the absolute level of the major economic indicators were not growing, our economic performance would be extremely poor. But by taking this test of the performance of the economy, the Treasurer is able to give plausibility to the argument that his choice in preparing the Budget was whether or not to check the so called exuberant’ private sector, or whether to allow the private sector to continue on its present course. After some discussion of the dangers which would arise ‘if all the main segments of expenditure rise strongly together’, and after stating that ‘consumer spending has revived and we expect private capital expenditure also to do so’, he goes on to say that ‘we do not think it would be in the nation’s interest to put further constraints on consumption’, ‘nor do we wish to depress private capital expenditure’. The implication is that the community should be grateful that the very real danger of tax imposts has been considered and rejected. By these tactics the Treasurer diverts attention from discussion of the much more relevant issue of whether or not actions to stimulate the private sector should have been taken by a greater increase in public expenditure.

The Treasurer should face the real fact that the gap between actual output and potential full capacity output has widened steadily for two years. We reached a peak in the cycle in mid-1965, and ever since - with a minor, barely perceptible pause in the December quarter of 1966 - the economy has been in a steady downswing. This downswing has not been spectacular as compared with, say, 1961, but it cannot be talked away. The two best single indicators of the gap between the actual performance of production and the potential performance are the numbers registered for employment, and the job vacancies registered, expressed as percentages of the work force. The broad nature of the cycle since 1958 is given by the behaviour of seasonally adjusted job vacancies registered with the Commonwealth Employment Service. They have fallen steadily since June 1965. Most of the other indicators have the same pattern of a peak of activity around June 1965, and a steady decline over the following two years. The Reserve Bank in its annual report is hardly jumping with enthusiasm about future prospects. It is a very tentative report.

Sluggishness in employment results from the fact that several key sectors of spending are not growing at satisfactory rates, or else are not growing at all. First, there is capital expenditure by private businesses on both ‘new buildings and structures’ and other new capital equipment’ such as machinery. For the March quarter of 1967, the former is only slightly above the figure of last year, and the latter is down from $3 14m last year to $276m this year. The total of these two items is §420m for the March quarter of this year as compared with $454m for the March quarter of last year. The investment expenditure upsurge of 1964 and 1965 has clearly faded. Secondly, motor vehicle registrations are still running at rates well below those of 1965 and there is no clear evidence of a marked upswing. Thirdly, the Treasurer speaks of an improvement in consumer spending but at best he can point to absolute increases. In fact, the ratio of consumption spending to personal disposable income remains unusually low.

For the first three quarters of 1966-67, the proportion of the amounts available for spending which was actually spent has been well below the levels of the corresponding periods in 1964-65 and 1965-66. This relatively low ratio of consumer spending is reflected in the almost stagnant level of consumer borrowing on instalment credit. Over the twelve months between May last year and May this year, the growth in the balances outstanding, seasonally adjusted, was only $17m, a mere 1.6% increase.

The lull in consumer spending is also shown in the relatively slow rate of growth in retail sales. The sluggish behaviour of business expenditure is linked to the sluggish behaviour of consumer spending. The Treasurer is mistaken to gamble on the revival in consumer spending, which is a prerequisite for increased business spending. He should have given increased social service benefits to promote a rise in consumer spending. If the signs of an uplift in private spending are far from obvious is there any reason to take the gamble on the recovery of the growth rate of private spending?

The gamble would be justifiable if there were great dangers involved in the alternative course of action, namely, in using the Budget to stimulate the private sector. The Treasurer considers the dangers of ‘all the main segments of expenditure rising together’ and he claims that ‘rising wage rates have created a cost problem’ and externally our position is under some stress’. The Government is concerned with the fears of inflation and balance of payments difficulties. But the evidence is that such fears are premature.

The Treasurer himself refers to good export prospects and to the potential import saving from oil. In the Treasury’s White Paper ‘The Australian Economy 1967’, there is a detailed discussion of the external account’. The general tone of that analysis is not one of anxiety. The balance of trade is quite good, and the only real worries are the unpredictable capital inflow and the possibility that a sharp upswing will bring a flood of imports. The Reserve Bank in its annual report for the year to June 1966 said that ‘at the close of the year Australia’s international reserves were still at a relatively high level and backed by increased second-line reserves in the form of drawing rights at the IMF. At that time our holding of foreign reserves was $ 1,375m, and our second line reserves with the International Monetary Fund were $595m. Over the year, our foreign reserves have fallen by approximately $200m and our drawing rights with the IMF have increased by $26m. In its latest report, which was presented today, the Reserve Bank said ‘the loss of reserves during the year was not sufficient to cause immediate concern’. Thus our overall position is still good. The slight decline has been due to a lesser capital inflow, not to any dramatic change in the rate of imports.

Between the March quarter of 1963 and the March quarter of 1967, the consumer price index rose by 1.3%, 4.9%, 4.5% and 3.5% respectively in each year. There is no sign from this that the rate of increase is accelerating or would accelerate through a stimulation of demand. The price increases cannot be attributed to any ‘excess demand inflation’ since the economy has been on the down phase of the cycle and there has been no shortage of labour, as the Treasurer acknowledges. Price increases in the private sector have in part been due to the fact that demand has not been increasing fast enough to permit an increase in output and consequent productivity gains. Some price increases are also clearly the result of increased government charges, and postal charges in particular. For the June quarter of this year, it is true, there was an unusually large increase in the consumer price index; but no great weight should be placed on one quarter’s figures. For the whole year to June this year, the rate of increase in the consumer price index was slightly less than for the previous year.

Last year the Treasurer took a similar gamble on an upswing. His speech last year had similar themes to this year’s. He looked to an increase in consumer spending as a key factor in leading a rise in spending. He looked to a rise in employment of 3% over the year. His gamble failed. In fact, employment rose by only 2.5%, and the expected rise in consumer spending did not eventuate. This year he again points to a potential rise in employment of 3%, and is confident of a rise in private spending. The Treasurer’s optimism is apparently not shared by his taxation officials. They have estimated tax revenue this financial year on the basis of an increase in average employment of 2.75%. Last year the Treasurer did increase public expenditure by a rate in excess of the normal rate; this year he does not do this. He should face the cold facts that his policy this year is similar to that of last year in kind but worse in degree. First, we now have a higher percentage of unemployed workers in the work force. In June this year there were 10,000 more people registered for employment and 5,000 fewer vacancies registered than in June last year. The absolute and proportional growth in civilian employment from June 1966 to June 1967 was the smallest for any corresponding period since 1960-61. The seasonably adjusted unemployment percentage in July this year was 1.47. Since January 1947 there have been only 68 months with higher unemployment but 177 with lower. If the Treasurer now regards the current level of unemployment as normal, he should say so. Secondly, the Budget this year, on the Treasurer’s own admission, gives less stimulus and probably no stimulus at all to the economy.

The basic Treasury doctrine in this Budget is that it is time to restrain public expenditure to permit greater expansion of the private sector. I have pointed out that restricting public expenditure does not guarantee that private expenditure will grow. In fact, it may have the reverse effect if demand is reduced. With some slack in the economy, it is not clear that public and private spending are competitive. If the Treasurer believes that public spending is too high, does he suggest that there is private property in the midst of public affluence? Apparently he does, although obviously the reverse is the case. The Government is clearly concerned about the difficulty it is encountering in attracting migrants. Yet surely it is quite obvious that one reason why migrants are not coming is because our standards of public facilities, housing, transport and health, are in general inferior to the standards in the countries from which we wish to attract migrants.

There are distortions within the public sector which the Treasurer completely ignores. Clearly benefits would flow from improving the relative financial position of those activities still left to the States and local government. It is irresponsible for the Government to maintain a policy of rapid population growth without regard to the strains this policy places on the resources of other sectors of government. There is clear evidence of the strains on local government. The Local Government and Shires Association presented evidence to the New South Wales royal commission into rating, valuation and local government finance showing that between 1947 ‘ and 1965 rates for ordinary services grew by 693%. Over that period Commonwealth taxation, net of reimbursements to the States, grew by only 316%. Between 1947 and 1965, the debt of the Commonwealth fell by 16%, while the debt of the States rose by 247%, that of local government by 481% and that of semi-government by 980%. This increase in debt, particularly of local and semi-government authorities, is reflected in their interest liabilities and repayments. The Treasurer cannot provide figures for me back to 1947, but between 1955 and 1964 - the latest year for which he has given me figures - the interest liabilities and repayments of the Commonwealth rose by 25%, of the States by 115%, of local government by 148% and of semi-government by 204%. Each year when the financial cake is cut up, local government is ignored. Yet it provides so many basic facilities. Unless there is proper recognition of the needs and responsibilities of local government, we may soon find the already serious situation of local government deteriorating to the point of collapse. The Commonwealth must share the responsibility with local government, as forty years ago it did through the Financial Agreement with the States in respect of their debts.

The appropriation for the Snowy Mountains Authority is to be cut by $7m while there is to be an increase of $3m for new beef cattle roads in the Northern Territory. The tax advantage to insurance contributors will mean an expansion of the assets of the life offices, which have not been renowned for their boldness in financing development proposals. There is no appreciation of the need for well-planned development projects. To illustrate its attitude, I take three examples. During the last election, the Government made great claims about its proposal to help the States with finance for water conservation projects over the next five years. There is a complete omission of any water conservation project in this Budget. This year the Commonwealth will receive $22m in interest and capital repayments from the Snowy Mountains Authority. The Budget allocation for the Authority this year is to be cut by $7m. The basic resource for development outside metropolitan areas is power. The Commonwealth has refused to provide sufficient funds to enable the States and electricity authorities to provide adequate power for industrial development outside the capitals. For eighteen months the Loder report on northern transport costs gathered dust. Early this year it briefly saw the light of day and is now apparently forgotten again. This Budget makes no attempt nor is there any indication whether the Government has any plans to overcome the unjustifiably high level of freight rates in northern Australia and particularly in Queensland which inhibit the development of both primary and secondary industry.

This is the piecemeal planless way in which the Government approaches national development projects. We have the case of the Chowilla Dam. The agreement between the Prime Minister of Australia and the New South Wales, Victorian and South Australian Premiers was unanimously ratified by the Australian Parliament and the Parliaments of the three States concerned four years ago. Now the project has been suspended. No technical report was made to any of the Parliaments four years ago. None has been made now. Four years ago Sir Robert Menzies opened the first stage of the Ord River scheme. The remaining stages are still in doubt. It was not until this year, June, I believe, that the Treasurer visited the Ord. Four years ago, the Queensland Government asked the Australian Government for an investigation of the proposed Nogoa River Dam by the Bureau of Agricultural economics. Again, only in June of this year did the Treasurer visit Nogoa. The Prime Minister said of the project that the proposal would be ‘considered along with projects suggested by the other Premiers’. There is no reference to this project in the Budget.

The Treasurer has set his own standards for the success of this Budget. On Melbourne television on Sunday, he described it as ‘a good investor’s Budget and a good businessman’s Budget’. Whether or not in the long term it is even this remains to be seen. But by the standards of national need, the need for Government initiative, for bold planning for national development projects; the need for fair incidence of tax burdens; the needs of pensioners, of widows, of deserted wives and of the handicapped; the needs of the Aboriginals; the needs of migrants in relation to the need for migrants; the need for better defence planning and more efficient defence spending; the need for rational tariff policies; the needs of our school and hospital systems; the needs of the activities still left to the States and local government - by all these standards of needs, this is a bad Budget, lt is, in the deepest sense of the word, an irresponsible Budget, in that it represents a massive retreat from the real responsibilities imposed on this Government by the people and the times. The Treasurer is impaled on a paradox. He wishes to claim the maximum credit for the alleged soundness of the economy, yet he wishes to do nothing which he fears may imperil it. All is to be sacrificed in the name of stability and all is to be postponed for the presumed superior operation of the private sector. If nothing bold or imaginative or fair can be done when the economy, as the Treasurer so loudly claims, is professedly healthy, must we then wait for a recession before we can go ahead with national development or give justice to pensioners and families? Must we wait for wild inflation before there can be a redistribution of the tax burden? Is this what Liberal economics really means?

In this Budget, the privileged, the powerful and the pressure groups have done well. The great middle mass will come to realise, as the continued burdens of inequitable taxation, lack of proper financial control and rising costs come to bear more and more heavily upon them, how poorly they have fared. The poor, the sick, the aged, the handicapped, know it already. Probably, with the infinite patience of the powerless, they had become resigned to it. But we on this side are not resigned to it.

Perhaps the most honest part of the Treasurer’s speech was its conclusion, in which he posed a series of rhetorical questions, for which he did not attempt to provide an answer. The Budget itself provides no answers. It is indeed the Budget of question marks, which gives no real answer to the great questions of security, growth, development, progress and justice for all the people of Australia.

I therefore move:

That all words after That’ be omitted with a view to inserting the following words in place thereof: ‘this House condemns the Budget because -

it places defence costs on those least able to pay them;

it fails to curb administrative waste and extravagance;

it defers and retrenches development projects; and

it allows social service and war pensioners to fall still further behind their fellow citizens’.

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

-Is the amendment seconded?

Mr Barnard:

– I second the amendment andreserve my right to speak later.

Mr BURY:
Wentworth · LP

– FirstI would like to congratulate the Leader of the Opposition (Mr Whitlam) on his first attack on a Budget since assuming the position of leader. I hope he will continue to play this role for many years to come. In fact in view of what I may say a little later it would be churlish of me not to congratulate him and wish him well in this role. I thought he began with quite a good statement which I shall repeat to the House. He said:

The Budget is the principal instrument of economic policy in a modern economy. It is, or should be, something more than this. It is not only the Government’s presentation of the nation’s accounts but it is an accounting by the Government to the nation and a prospectus for the future. It is in this much wider sense that this Budget should be judged. We seek in a Budget a sense of purpose and direction. We seek guide-lines for national growth.

That is precisely what the Treasurer (Mr McMahon) has offered to the nation. The Budget is really an overall plan for the year ahead. It does much to shape our economic destiny. It places the rival demands for expenditure in order of priority and it should be a rounded, consistent whole. It should contain measures in which the means are clear and the end to be achieved is also clear.

Thetrouble that I found with the contribution of the Leader of the Opposition was that it amounted to a simple tirade of negatives. If I may say without offence, it read to me very much like a series of snippets from the critical element in the financial press, all pasted together and read out. 1 must say that I thought the honourable gentleman read the screed extremely well, but I much regret the passing of those delightful lapses by his predecessor who sometimes departed from the prepared script and dropped a considerable number of clangers. The previous Leader of the

Opposition was, of course, in economic matters a little wild and woolly, but he still had hard by him the honourable member for Melbourne Ports (Mr Crean) and the honourable member for Yarra (Dr J. F. Cairns), to whom we look for contributions which are reasoned, logical and consistent. One might not like what they suggested but at least when they turned out a proposal for large-scale expenditure they usually indicated the kind of tax programme that went with it. On this basis one could debate the issues in a sensible fashion. Now the new leader has come in and one must concede that it is the duty of the Leader of the Opposition to pay a great deal of attention to what he regards, genuinely or not, as the sins of the Government. But one would have thought that in his first speech on the Budget in the position of leader he would have put forward some constructive proposals for the future; that he would have set out the kind of policy that the Labor Party would follow. One might have expected him, instead of simply attacking us for not having indulged in extravagant expenditure in many directions, to say in which direction he would spend heavily and also - and perhaps this is even more important - how the resources would be obtained, who would be taxed-and by how much. What he has offered however, is just a general attack, a flow of words eloquent and facile but not really pointing to very much. In the absence of such constructive proposals, therefore, it is interesting to look at the fascinating document which carries the title ‘Australian Labor Party - Platform, Constitution and Rules’. We have to study this carefully in view of the absence of any suggestion in the speech of the Leader of the Opposition of any new policy.

This document is pretty fresh. It bears the novation: ‘As approved by the 27th Commonwealth Conference, Adelaide 1967’. We look through this document for an economic policy. This is important because as the honourable member for Yarra pointed out - or did not point out; there seems some doubt in his mind on this - whatever the leaders may say the policy of the Labor Party is in fact determined by the conference. Whether or not the honourable member for Yarra said it, this is profoundly (rue. Going through the document one finds some of the old policies refurbished and reconfirmed. In the section which outlines the platform of the Australian Labor Party we find a sub-section IV which is headed ‘Methods’ and 1 want to draw particular attention to paragraph 4. This is still part of the Labor Party’s policy, although one might have expected that in this day and age it would have been given a look over, particularly by a leader who is supposed to have a new outlook. This paragraph speaks of the nationalisation of (a) banking, credit and insurance, (b) monopolies. I know that the word is used loosely by honourable members opposite but henceforth we will realise when they use the word ‘monopoly’ the industry under discussion will become a candidate for nationalisation. The paragraph goes on to speak of the nationalisation of (c) shipping and (d) radio services and television. That is a fascinating one. Then we come to the final one, nationalisation of (e) sugar refining.

Mr Beaton:

– Have a look on the front cover.

Mr BURY:

– Here on the front is a picture of the great man of destiny for all to look at. At least this document is not faceless, even if the policies it contains are based on a structure of three faceless to one with a face. I will not express an opinion on this face because I have heard many ladies in my electorate, particularly ladies of Labor persuasion saying it is a magnificent face, just oozing with sex appeal. To do the honourable gentleman justice, 1 think he is too busy talking gobbledy-gook to really take advantage of the other things of life, but should he ever retire from the House he can look forward to a magnificent future.

Now we come to economic planning. There is a proposal to set up nine bodies to plan beautifully, according to all the best standard text-books. Although the figures, particularly those relating to cost, are not set out, this pattern of economic policy, in the absence of any mention of another by the Leader of the Opposition, is all we have got to go on. But, by God, Sir, it offers pretty stiff competition.

Let me quote one instance. The Leader of the Opposition made a certain play on health. I understand from the Minister for

Health (Dr Forbes) that, contrary towhat the Leader of the Opposition was suggesting, the share of the average medical fee met by insured patients has increased by only 13c over the past five years and by only 32c over the past ten years. Expressed as a proportion of the average medical fee, the average patient’s contribution in 1966-67 was 32.4% compared with 36.1% in 1961-62 and 36.6% in 1956-57.

Mr Webb:

– I rise to order.I move that the Minister be given leave to incorporate the document in Hansard.

Mr DEPUTY SPEAKER:

– Order! The honourable member is out of order.

Mr BURY:

-I am enthralled by this document. I recommend it for reading, and I hope everyone will read it. In it, wegot everything free. There is no bill attached to this. There may be a bill for the taxpayer, but who he is after he has been relieved from taxation, as has been suggested so freely by honourable members opposite, would be very difficult to recognise. The objective under ‘General Practitioner Service’ is:

The provision of general practitioner medical services staffed bysalaried medical practitioners willing to join and available without chargeand without means test to persons who choose to use such services.

The payment of Commonwealth benefitto all patients who choose to use private services irrespective of their membership of voluntary insurance organisations.

I come now to Labor’s policy on hospitalisation. It is:

A national hospital service–

Lovely words - including hospitalisation without charge and without means test - -

As well as medical services. Under Specialist Service’ it provides:

Grants to the States to provide that patients in all wards of public hospitals have the option of using, without charge, the services of specialists, remunerated by salaries or sessional fees.

And so it goes on.

Mr Stokes:

– Where does the money come from?

Mr BURY:

– That is a fair question. Where does the money come from? Perhaps successive speakers on the Opposition side will explain just exactly where the money would come from. But that is not all. The objective under ‘Dental health’ is:

The formation of a Division of Dental Health within the Commonwealth Department of Health.

The provision of dental services to be conducted by salaried dental staff willing to join and available without charge and without means test to persons who choose to use such services.

Again, under ‘Optical Service’ we find:

The provision of optical services staffed by salaried qualified personnel willing to join and available without charge and without means test to persons who choose to use such services.

This is splendid. It makes the competition pretty stiff, except on the point of responsibility. The Leader of the Opposition, who has now departed, understandably perhaps, mentioned the British service. I am told, again on good authority, that in Great Britain if you are near to death you get splendid medical attention. If you are only half dead you have half a lifetime to wait before you get it. Take hernia as an example. I know from my private conversations with them from time to time that a number of honourable members opposite have had a hernia. The waiting time for attention for hernia is only twelve years. I suppose one has to use brown paper and glue in the meantime.

If the Labor Party’s policy had been filled in I might have been able to answer it more fully. No doubt all these minor criticisms that have been levelled at the Government will be picked up and dealt with specifically by my colleagues who have had time to look at the figures and the facts that go with them. This document to which I have been referring is an interesting one. It sets out what Opposition members have to do. Although a few faces have been added to the faceless, it still remains true that the Labor Party has to obey the edicts of its masters in this body. The members of the Opposition - and we all regret this - remain as mere parliamentary pawns in this House, however many people may have elected them.

Mr Davies:

– That is not right.

Mr BURY:

– If it is not right I shall be very glad to hear it disproved by subsequent speakers. What one might legitimately ask, and what many of the public do ask when the Leader of the Opposition talks, is whether it is the Labor Party talking or just a very faceful frontispiece. I regret that I omitted to say that there are further items of expenditure in this policy. There is something for almost everybody. Even for companies there is graduated income tax. There are to be three new Ministers.

Mr Peters:

– Do not mumble. Speak up.

Mr BURY:

– I have previously talked about the tariff policy of the honourable member for Scullin which I must say that I did not recognise in the speech of the Leader of the Opposition tonight. As I have said, under this policy there are to be three new Ministers, one for northern development, one for culture and one for Aborigines. One is to go out because the Postal Department is to become a corporation. There is to be a royal commission on the Press. That would be a fascinating exercise. If Labor’s return to office were not so remote, this is an exercise to which I think we could all look forward with considerable interest.

We have watched the Leader of the Opposition in recent months with very great interest because he has conducted a magnificent campaign. He has been uttering soothing words to the public, continually reassuring them, and telling them about the new look candidates. No doubt some of the candidates look new, but new in what respect is a matter that has never been very carefully defined.

Mr Bryant:

– They tell me the Minister is getting $16,000 a year for this.

Mr BURY:

– It will be the day when the honourable member gets six bob if he is ever eliminated from this House. We have watched this campaign - and this is important - because the Leader of the Opposition has made a noble effort to make the Labor machine a creature of democracy instead of a tight power centre. He has endeavoured-

Mr Webb:

– To give it face.

Mr BURY:

– I think the honourable member for Stirling is one who has a face in this list.

Mr Webb:

– I have a face.

Mr BURY:

– It is a pity that the honourable member has a face. The hard core of thirty-six faceless men and the twelve witless men, to use the Leader of the

Opposition’s own term, have been subjected to a quite fascinating campaign by their leader who has endeavoured to outwit them, outflank them and overturn them. He has used’ the Press, television and indeed every media pf mass publicity to go over their heads and bring pressure to bear to bring about these changes. We read that there is a certain amount of objection by these people to relinquishing their power. It has been interesting to watch how the compromise came about. Perhaps the public campaign reached such a point that those concerned were shamed into doing something. However, what’ the Leader of the Opposition has not done is to break the monopoly of power of these thirty-six. It is all very well to hear economic doctrines but what do these people stand for? This is what we want to know. If honourable members look now at the qualifications required of a leader of the Labor Party they will see that it is very difficult to fill. He has to deal with almost irreconcilable elements in his own party and to explain some of these to the public is a very difficult but important exercise. It is interesting to note that despite great efforts, the Leader of the Opposition has completely failed to break the monopoly of power. At one minute he is appearing before the public as a glib, glossy, glamour puss of television and the next minute he is almost carpeted at Adelaide and the deals are fixed up by the big boys upstairs while he is miaowing round the piano.

Mr Davies:

– How would the Minister know?

Mr BURY:

– Well, the aim is pretty well publicised and I know the result. There is very little change. However, it is an interesting exercise and no doubt it is a matter that subsequent Labor speakers will be able to clarify.

This Budget is very sound. It absorbs a quarter of the gross national product and it shows 1966-67 as having been a period of strong and varied growth with the gross national profit rising 9%. Even if price rises are taken into account the rise was between 5% and 6%. Minimum wages rose by 7%, that is the wages of the lowest income earners. The actual general rise in wages during the last twelve months has been something in the order of 10%.

Mr Griffiths:

– Tell the truth.

Mr BURY:

– If the honourable member wishes to challenge my figures I am quite prepared to make a detailed examination with him. It is true that although during the first three-quarters of the year consumer prices rose at a rate of nearly 2% per annum, during the last quarter the rise was about 5%. This is a serious factor. As the Leader of the Opposition himself said, there had been no excess demand so this rise certainly would not have been due to excess demands. In fact it is in part a reflection of the very large increases in wages that the economy has had to absorb over this period. Despite the considerable expansion in a year in which we were spending heavily overseas, our external position deteriorated by only $177m. The prospects are for another good year, as the Treasurer (Mr McMahon) indicated. This result was achieved only by very careful husbandry on the part of the Treasurer and the Government.

There is likely to be a considerable increase in consumer demand, not just among the rich and powerful’ that the Leader of the Opposition referred to, but spread over a very wide part of the community. There was a rise in non-residential building construction of about 16% in the last quarter of 1966-67. Undoubtedly Australia is operating virtually at a full employment level, despite what the Leader of the Opposition said about the position. There is room for absorbing some extra men but there are also grave shortages in the labour force especially of the skilled and we have to beware of inflationary pressures developing. According to some good economic minds, we are likely to experience some inflationary pressures in the next few months. Naturally the Treasurer was fairly tentative about the result of the Budget because so many factors are unpredictable and not susceptible to close control. He has indicated that should any unpredicted movements develop in the level of economic activity monetary policy will be the suitable tool to use.

The Leader of the Opposition may write off the fact that the private sector is important and perhaps would allow the public sector to develop ad lib in the future, but the Government has to recognise that, fundamentally, the growth in our manpower, our industrial capacity and our ability to meet our payments abroad - upon which our position in world economic affairs depends - depend very largely on the private sector and on the expansion of our ordinary industry and employment. Of the increased employment in the last two years, ‘44% has gone to the public sector as against the normal growth figure of 25% to 30%. In the last four years public expenditure has increased from 19% to 21% of the total expenditure and unless the public sector is to continue to rise relative to the private sector a halt has to be called in this growth in the period immediately ahead. Not only has Australia increased its defence expenditure - I remind honourable members that it has risen at the rate of 22% per annum over the last four years and is a very big burden to carry - but also Australia is one of the few countries to increase foreign aid. Others have been cutting down. We now spend 0.75% of our estimated national income on overseas aid, including aid to our own Territory of Papua and New Guinea. Only France exceeds this figure.

The Leader of the Opposition made great play about the Government neglecting the poorer elements of our population. I might say when the Government has specifically tried to relieve poverty where it pinches most, an example being single aged pensioners without a home of their own - one of the most depressed groups in the community - we have come under great fire and criticism from the Labor Party for not spreading relief more evenly over to include married couples as well. This year the child endowment provisions, which no doubt will not win any great political kudos, have been aimed at large families. These, increases have not been granted merely for political kudos but because surveys show that large families and elderly single people are the most depressed income groups.

This year the revenue grants to the States have been increased to $936m, which is an increase of $58m on last year’s grants. With special items added those grants amount to over $1 billion for the first time. Specific purpose grants to the States this year will total $3 19m, which is a rise of 28%. State works and housing grants, which have not reached the same urgency this year compared to the other matters, have gone up to $677m, which is an increase of 5%. These, again, amount to a huge total of over $1 billion. Commonwealth capital expenditure, which after all is public expenditure, has increased by $560m or 9%. Assistance to industry, which no doubt will be condemned in many quarters opposite, has risen by $230m or 28%.

What this Budget represents is a sound foundation for future growth. It represents extremely good management over a considerable period of years. It has been drafted by the whole Government but I might say that our Australian Treasurer is probably technically the most competent Treasurer and the best equipped Treasurer in the Anglo-Saxon world. Certainly he has shown himself to be highly adaptable should the economic climate change. It is easier, naturally, to use monetary policy to bring about some changes in direction because there is bound to be a certain rigidity in fiscal measures. This Budget is sound and sensible and it paves the way for greater things to come.

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– I never believed that I would have to wait eighteen years in this Parliament to see the first Minister to speak after the Treasurer (Mr McMahon) in a budget debate - the Minister responsible for the Department of Labour and National Service - rise in his place and not deal with the existing national unrest in Australia. Furthermore I never thought I would see the Minister conclude his speech in 25 minutes when he had 30 minutes available to him and devote 18 minutes of his 25 minutes speech to clowning. This country is faced with the worst industrial unrest it has seen for a decade, yet the Minister for Labour and National Service (Mr Bury) made no mention of the Government’s attitude to this unrest. So I dismiss his speech, because his contribution represented mere clowning at a serious time when one would have expected something different from a Minister holding a senior portfolio.

This Budget is in many ways notable and outstanding. I support the Leader of the Opposition (Mr Whitlam) but take criticism of this Government and this Budget a stage further. The Treasurer’s Budget was remarkable for the way it was applauded fay the Press of this country. Firstly, it was remarkable for the added information the Press barons read into it to suit their own selfish lines of interpretation. Secondly, it was a remarkable Budget in that it referred to the recent consumer price rise of 5% in the most recent quarter yet proposed no action to give any relief to pension recipients to cover the additional burden they must carry if they are to survive. Thirdly, and importantly, the Budget failed to deal adequately with the situation with which wage earners are confronted. The Treasurer referred to the income of wage earners by saying:

Wage rates have increased strongly: over the year to June, minimum weekly wage rates rose by about 7%.

We had the spectacle this evening of the Minister for Labour and National Service, knowing full well that that kind of statement was misleading, speaking in the same tongue and not explaining to the the nation what that 7% rise represented. 1 wish to devote my attention directly to this particular problem. I should have thought that the Treasurer or the Minister would have said something about what this 7% increase in the minimum wage meant to the country I should have thought that the Minister would have said something about the change that has taken place in the last few months as the result of the removal of the basic wage content from the wage structure of this nation - a content that has stood for sixty years. However, the Minister in charge of a responsible department spent his time clowning although this all important question is engaging the mind of every worker who is concerned about the immediate future. 1 would have thought that the Treasurer and the Prime Minister (Mr Harold Holt), both having held the portfolio of Minister for Labour and National Service, would have told the nation what the Government’s view was and what it intended to do about the new minimum weekly wage in the wage structure. The Government was a party to this provision and the Minister for Labour and National Service would be the Minister most responsible in the Government for the great change that has taken place.

I say frankly that this 1% increase in the minimum weekly wage did not and does not represent a real wage increase to Australian workers. The increase was to have operated as from 11th July 1966. The minimum margin - if I might call it that - was fixed at S3. 75. It was fixed as a minimum margin, not as a minimum wage. It was a rounding off figure for the 41 classifications - nothing else - and it represented a big increase of 15c in the metal trades award. The great majority of the classifications in the metal trades award which this figure rounded off were already on a margin of $3.60 and all this rounding off of $3.75 did to the Australian workers’ pay envelopes was to increase them by 15c. Yet honourable members opposite talk of a 1% increase in the minimum wage. They are phonies when they use that kind of argument in this Parliament. This decision meant very little to wages in Australia. Perhaps the classic example is what it meant to railwaymen throughout Australia. Railwaymen are the lowest paid workers of any large group in the Australian community. Out of this minimum wage, which was struck in 1966, apart from a few first year new employees in the Victorian railways, no railways employee in New South Wales, South Australia, Tasmania or Victoria received a lc increase out of the 53.75 margin. Honourable members opposite quote figures and speak of a 7% increase in wages which never eventuated. They know the truth but they are not prepared to go on the hustings and tell it. They will clown, but they will not tell the workers the true situation.

No longer is it waterside workers or miners who are throwing this country into confusion. It is the whits collar workers in the Commonwealth Public Service, the white collar workers in the Commonwealth Railways and workers in all types of industry who are revolting against the present wage structure adopted by this Government through its mouthpiece in the Commonwealth Conciliation and Arbitration Commission. T want briefly to deal with this question. I ask the House not to listen to the clowning of the Minister for Labour and National Service but to pause and learn what is happening to the Australian wage structure when read in conjunction with this Budget. The sweeping decision to eliminate the basic wage content in wage fixing spells out quite deliberately, in my view, the urgent requirement of trade unionists to fight for their rights on the industrial battlefield. They were forced to do so over 60 years ago. I was one who hoped that conciliation and arbitration would see the end of that kind of situation, but today at the level of this Government there is an increasing effort to have introduced into this country the type of wage management that they have in America under the barter system. It is known that the 1967 decision is a major step towards collective bargaining. The great difference between collective bargaining in Australia and collective bargaining in America is that the employee and employer meet on different grounds. The employer in America has not the bludgeon of the penal provisions that this Government has put in our legislation to make it unnecessary for employers to go to the conciliation table in a conciliatory manner. Nobody knows that better than does the Minister. We are now going from the field of conciliation and arbitration as propounded in 1907 and which has stood the test until 1967. This is now being discarded as we approach an era of collective bargaining.

The need for a basic wage content in our wage structure dates back to the last century. It was not until 1907 that the Arbitration Court, which was the forerunner of the Commonwealth Conciliation and Arbitration Commission, first laid down by order what was to become known as our basic wage. Since about 1920, by order of the Arbitration Court, the basic wage has been adjusted, firstly as a needs basic wage and then, since 1934 and as a result of a full inquiry, as a capacity wage. The question of adjustability has been an issue in every basic wage case since then. It should not have been put into awards, and in fact was not put into awards, merely as a matter of course but always as a matter of considered judgment for which the Court took responsibility.

For many years after 1930 the Court which fixed the basic wage was a specially constituted tribunal of three judges at which the Chief Judge was requested to preside. It was not until 1953 that the quarterly adjustment system was abandoned by a court presided over by Chief Judge Kelly. From 1953 to 1961, by periodical adjustments made by the Court and later by the Commonwealth Conciliation and Arbitration

Commission, as it then became, the basic wage continued to keep pace with, although lagging behind, the cost of living as represented by the C series retail price index figure. Until this time there had been a constant trend upwards of prices with wages periodically catching up by means of the annual adjustment by the Commission. But let me put the clock back for a moment to 1953.

After the cessation of the hostilities of the Second World War, because of the change in patterns of consumption and the general pattern of household expenditure, it was necessary and desirable to revise component items and the weighted system of the C series index. In 1953 the Commonwealth Statistician decided to attack this question to see what could be done about revising the C series figure for prices by providing a new figure to cover a new range of components. It took seven years to effect that change and in 1960 the new consumer price index was introduced. It was welcomed by the Government as a new era when the real issue of the wage structure would be put into proper perspective and a real range of prices and commodities would be brought into line.

Time does not permit me to mention the whole change which was brought about at that time, but I should mention that the consumer price index was a quarterly measure of variations in retail prices for goods and services representing a high proportion of the expenditures of wage earner households. The weighting pattern related to estimated aggregates of wage earner household expenditures and not to estimated expenditures of an average or individual household of specified size, type, or mode of living. In this way it was possible to give appropriate representation to owneroccupied houses as well as rented houses and to include motor cars, television sets and other major expenditures which related to some households and not to others. It covered five major groups: Food, clothing and drapery, housing, household supplies and equipment, and miscellaneous. If anyone cares to inspect the decision made at that time he will find in it almost every field of expenditure that the ordinary wage earner would be required to meet. That change was welcomed in 1960 and, flowing from that, from 1961 the machinery of the Conciliation and Arbitration Commission was used to conduct another inquiry. The Government talks about wanting to stabilise prices and costs, but I propose to show now how it has acted to oppose such a proposition.

In the basic wage inquiry of 1961 the Commission had the advantage of this new index and in point of fact it was adopted as a fair measure upon which to base a basic wage entitlement. I propose to show as I go along that there is good reason for the workers of this country to reach a stage at which they have lost faith in the conciliation and arbitration machinery which is operating in Australia at the present time at the behest of the Minister for Labour and National Service at the instigation of the Government. In 1961 the application before the Commission on behalf of the trade union movement was to restore the quarterly adjustments. The Commission said in its judgment:

We therefore are not prepared to restore a system of automatic adjustments. We consider it desirable that the application of the Consumer Price Index should always be subject to control by the Commission and that the Commission should be able to decide whether a particular increase or decrease in the figures as disclosed in the Consumer Price Index should be applied to the basic wage.

Could there be anything more realistic than that? The Commission laid down in its decision in 1961, for the first time in the history of wage fixation in Australia, a realistic approach to the wage fixing problem. It laid down that as from February of the following year and for the future the basic wage would be automatically varied by the Commission in line with the changes in the consumer price index, unless good reason could be shown why variations should not take place automatically. This was the first time that the employers and the Government in Australia had to face a situation in which the profits had to go back into the melting pot to be assessed in a consideration of what would happen to the workers’ pay envelope for the following 12 months. What was the result? The 1961 decision increased the basic wage in Australia by 12s. But then a strange thing happened. Once the onus of proof was put on the employers to show why the basic wage should not be increased, prices in Australia did not rise. They did not rise in 1961, 1962 or 1963 because the onus of proof was on the employers - the profitmakers - to show cause why the basic wage should not follow the new consumer price index on household commodities.

In 1962 and again in 1963 the Commission found that no alteration was necessary to the rates set in 1961. In the last year’s Budget the Treasurer referred to this. He was not prepared to give credit where credit was due, but he said:

Despite the fact that there has at times been heavy pressure on resources, the consumer price index has risen by only about 9% during the last S years.

That was brought about by the application of the 1961 decision. The Commission had laid down that after three years it would review generally the basic wage content of wages in Australia. If productivity rose throughout the country, surely the workers would have been entitled to some return in the basic wage content of their wage structure. So in 1964 the matter came back to the Commission.

From the time of the decision in 1961, when the onus of proof was reversed, until the matter was before the Commission in 1964, prices of goods within the consumer price index rose by only 20c. That was over a period of three years. In 1964 the employers and the Government both went before the Commission and criticised the 1961 decision and demanded that a one unit wage structure be introduced. This has since been done. If one reads the 1964 judgment one will find that what I am saying is factual. The Government assisted the employers to throw overboard a system under which we had achieved stability in prices in Australia. It joined with the employers before the Commission to smash the system then in operation. However, they did not succeed in 1964. But in 1965 by some means the Commission was reconstituted and two new members who had not previously appeared in basic wage cases were on the bench. In the majority decision those two members, as well as another, gave a decision contrary to that given by the President, who had given the 1961 decision. The majority decision of 1965 stated:

  1. refuses the unions’ claim for an increase in the basic wage based upon increases in the Consumer Price Index,

    1. decides that neither the basic wage nor margins should be altered because of movements in- the Consumer Price Index, whether those movements are up or down.

The employers and the Government were not prepared to accept a situation whereby, wages were regulated in accordance with prices. In 1966 there was another President on the bench. He had not previously sat in that position. In his decision he clearly laid it down that the basic wage should be related to changes in prices and should be reviewed in total only every three years.

Now we come to the shortest decision on record except for 1962 and 1963, when the Commission merely assembled and said that there was no need to increase the basic wage because the consumer price index had disclosed no increase in prices. The decision handed down in the basic wage case of 1967 destroyed completely the arbitration structure set up in 1907. It read:

The Commission in Presidential Session will formally dismiss the unions’ application for an increase in the basic wage. On behalf of the reference bench I announce the elimination of basic wages and margins and the introduction of total wages. The total wages will be arrived at by adding an amount of SI per week to the weekly award wages of all adult males and females, but no employee is to receive the increase twice.

No guide lines were set as to how the other arm of the Commission was to introduce this system. The workers were left dangling in mid air. There were to be no adjustments to the basic wage. A minimum wage was to be assessed when awards were under review. The basic wage content of all Federal awards was eliminated. How did the other arm of the Commission find ways to do this? Only one way was left and in every Federal award the basic wage disappeared and a new total wage appeared. The new rate is merely quoted as the rate for employees not otherwise provided for. There will be no review of this rate until August of next year. All the references in the Budget and by the Minister for Labour and National Service to the good things to come in the next few months are just so much eye wash. The workers know that not until August of next year can they expect to have their rates reviewed. The Government has destroyed the wages structure that has stood the test for sixty years. The Minister for Labour and National Service sup ported the Commission’s decision. Tonight he talked about a 7% increase in the minimum wage. For eighteen minutes tonight he canted without saying one word about the wage structure in this country. Is it any wonder that Australia faces the greatest period of industrial unrest that it has known for many years?

I speak with feeling on this matter. I have appeared in industrial matters since 1936. I gave evidence in the standard hours case. I know what arbitration means to the average worker. I know that conciliation has been killed by this Government. But at times we got something out of arbitration. Hansard records what was said on this side of the House when the Government amended the legislation to provide for the one wage fixing authority to deal with the basic wage, standard hours and margins. On that occasion I and others on this side said that the authority so clothed must eventually fail and leave in its trail decisions that could cause no end of industrial unrest. We have now witnessed this, much to the dismay of every thinking Australian.

Might I be excused for referring for a moment to a decision of 1959, six years after the Commission abolished quarterly adjustments to the basic wage. I refer to the minority judgment of the late Mr Justice Foster. It is a lengthy judgment but I invite all honourable members to read it. In part it reads:

Of course the economy’s capacity to sustain a wage cannot be determined mechanically by the application of a price index. Neither can that capacity be estimated by such an index nor can the ‘justice and reasonableness’ of a demand nor the ‘public interest’ be determined in any such mechanical fashion. A price index is simply not devised for any of these purposes, but, properly applied it docs enable the standard of living prescribed by the Commission to be maintained, and it does prevent the wage determined upon a capacity basis from falling below or rising above that ascertained capacity. It prevents the defeat of the Commission’s award and is, in my opinion, the only satisfactory method of preventing that award from becoming to some extent illusory and potentially mischievous.

What we have today is exactly what His Honour forecast in 1959. We have decisions that are illusory - the changing decisions of 1961, 1964, 1965 and finally 1967. All of those decisions underline what His Honour forecast in 1959. The workers of this country are now faced with decisions of the Commission that are illusory and potentially mischievous. There will be unrest and untold poverty in Australia. If the Government thinks that it can use the mailed fist on the worker without destroying the economy it has another think coming because if the mailed fist is used the Australian worker will fight back. For every day that the worker fights back because he is not getting justice and because he does not have an industrial commission in which be has faith, the country’s capacity to pay is reduced. Its potential is reduced. The unrest amongst white collar workers - leave to one side for the time being, if you will, your blue collar workers - will gather momentum, because they have lost faith in the Arbitration Commission. This is due to the Government’s action in amending the legislation to provide for the one authority to deal with these major industrial matters.

I believe in conciliation and arbitration. I have been condemned for my beliefs. I hope to see the day when a Labor government will separate the court from the Commission so that the basic wage and standard hours will be the function of one independent body. The Labor Party will always press for the principles laid down in the 1961 decision as a commencing point for wage stabilisation in Australia. The Labor Party will always press for the return to a secondary authority of the task of assessing fair wages for a fair day’s work, in addition to the basic wage. These are the standards by which we can bring the workers back to a degree of sanity, to an understanding of where we are going in conciliation and arbitration. Until a Labor government introduces this kind of legislation the days ahead will be dark for the economy, the workers and the Government. The present awards flowing from the many basic wage inquiries are now elusive and potentially mischievous. I am reminded that a writer named Winter once said:

Ambition has but one reward for all - A little power, a little transient fame, A grave to rest in and a fading name.

It is with sadness that I say that this description fits the Arbitration Commission under this Government. No longer can the workers have any faith in the Commission which changes its decisions every time the authorities change its personality. No longer do the workers trust the Commission, and the grave it has dug for itself will bring untold trouble and woe to this country while ever this Government remains in office.

Mr KEVIN CAIRNS (Lilley) [9.511 - The amendment moved by the Leader of the Opposition (Mr Whitlam) is, in the traditional way, quite a general one. lt is the kind of general amendment that, in terms of economic policy, is always safe. If we speak only in qualitative terms when we criticise a budget or an economic policy, we are always safe. One never needs to delineate how much he would do where or how much he would do when. Let me read out one or two lines of the amendment, which makes this point clear. The Leader of the Opposition moved that: this House condemns the Budget because -

  1. it places defence costs on those least able to pay them;
  2. it fails to curb administrative waste and extravagance;
  3. if defers and retrenches development projects; and
  4. it allows social service and war pensioners to fall still further behind their fellow citizens.

This is so general that it cannot be pinned down. We can analyse it only in the light of previous economic statements made by the Leader of the Opposition. I will remember those that were made at the height of the election campaign last year. It was a campaign in which most extravagant and unreal promises about pensions were made. The promises were quite unrealisable. He adopts the technique of writing to groups in the community in the hope that his letters to the groups will never be examined in Canberra. He writes to other people promising that certain development projects will be undertaken. But he never delineates how much will be spent on them, when he will spend the money on them or what principles of judgment he will use in relation to them. His economics are rather like those of a shopkeeper who regards all receipts as profits. That would lead to disaster for the shopkeeper, as it has led to disaster for those economies in the world that have been organised on the socialist principles that the Leader of the Opposition espouses from time to time.

I will examine those principles during the course of my speech, but before I do so I will refer to the statement of the Reserve

Bank for this year. It was released some hours before the Budget debate commenced. It was obviously not available or not understood by the Leader of the Opposition’s speech-writers, because this year he did not quote from the statement. I know that the shadow Treasurer will quote from it later in the debate. However, I will read the first paragraph. It is worth reflecting upon, certainly with respect to the management of the economy over the previous twelve months. It reads:

During 1966-67 eternal equilibrium was broadly maintained while the economy continued to grow and to respond to a changing composition of demand.

That means a good deal in terms of employment and of economic growth, lt means an unparalleled record, certainly compared with any Socialist economy in the world, in terms of growth, employment and the redistribution of money and resources to those people who need assistance.

To make this point, let me go back to the election in 1963. At this election, for the first time in Australia’s history, a government went to the people and promised that it would raise gross production in this country by 25% in five years. Let us have a look at the figures, during the years for which figures are available. We must go back to 1962-63 because quite obviously we have not yet reached the year 1968-69. However let us look at the previous five years. What is in fact the rise in gross production at constant prices? At constant prices, it has been over 25%. In 1962-63 it was 6%; in 1963-M, 6*%; and in 1964-65, 6£%. In 1965-66 we were down to 1%. There was a massive drought, but a massive drought in which unemployment was kept to an absolute minimum and certainly was far less than the unemployment that has been thrust upon the workers under the Socialist economy of the United Kingdom, to which the Leader of the Opposition referred. During the last year, the increase in real terms was over 5%. That is an extremely good record and one of which we are to be proud.

Let us compare this for the record with the results obtained by overseas economies. France is going through difficult times at the moment. Germany is going through difficult times; her economic growth has slowed. Let us look at the United Kingdom economy after three years under a Socialist government. I refer to this because the planning of the United Kingdom economy has often been quoted in the past by the Leader of the Opposition as something to be emulated. I have often thought that he regards Harold Wilson as his Steerforth this will interest some people who have read ‘David Copperfield’. The United Kingdom Government has been in power for three years. It spoke about a growth rate of 4i% a year before it took office. When it had been in office for some time, it dropped the rate to 3.8% a year. Now the Chancellor is hoping above all hope to achieve something like 3% for this year, if he is lucky. This is the kind of situation that has occurred in a Socialist economy. It docs not compare with the situation that has been obtained and sustained in our own economy.

Mr Freeth:

– How many unemployed are there in the United Kingdom?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– We will come to the unemployed later. It is approaching 750,000 men. The Leader of the Opposition was Deputy Leader and he aspired to the Emperor’s clothes. A few knives were used. We want to see what his economic programme has been. We want him then to make it clear that he will not follow the principles of the Socialist International, of which he is a member. These principles result in the poor employment prospects and the poor economic prospects of the countries that ascribe to that kind of philosophy. Then we had other proposals flowing from the usual kind of doctrinaire economic philosophy that excites emotional support from the members of his party, and I refer to the honourable member for Blaxland (Mr E. James Harrison). A few of the phrases that dropped from his lips were: ‘The Government has ignored the weak and the unorganised’; ‘It has failed to bring about a reduction of privilege’; and ‘It has been responsible for expanding the profits of the privileged and powerful groups’. He then compared us with the United Kingdom. Each of those statements has one common theme. He claims that, compared with countries overseas, we have not been mindful of our obligation to the unorganised groups, the unprivileged, and to those people who could be the victims of poverty. I am reminded when I hear these remarks of an address by Professor Peter Townsend to the Fabian Society in

London recently. Earlier this year he referred to this kind of attitude on the part of the Socialist Government of the United Kingdom, and asked rather quizzically: Why is it that poverty has increased in the United Kingdom under a Socialist Labor Government? 1 suggest that the increase is due to the Socialist Government’s very poor organisation of the economy and of the redistribution of the country’s resources. In terms of poverty within the community and of assistance to the underprivileged groups, Australia has a better record than any other country whose standards have been measured. 1 refer now to a survey made in Melbourne by the Institute of Applied Economic Research. According to that survey, something like 6i% of the households in Australia are at poverty level. A few years ago, before Professor Peter Townsend judged the situation had worsened, 14% of households in Britain were at poverty level. The proportion is now significantly higher. No matter how many honourable members opposite argue about it, the situation of people-

Mr James:

– That situation was taken over from the Conservatives.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– The honourable member always reverts to the past to explain away a situation for himself. He may live in the past and he may have a class attitude about the past, but those people who depend on the community for consideration have very little to hope for from any government in which the honourable member, who is Deputy Opposition Whip, or the Opposition Whip (Mr Duthie) may have any influence.

Now, let us turn to other matters that are worth considering. A number are well worth looking at. We look first at the impact of the Budget on the economy. The Deputy Leader of the Opposition - or rather, the Leader of the Opposition, for he has improved his position - said of this Budget that it is in fact slightly deflationary. Neither he nor the writer of his speech understood the ingredients of this Budget. The honourable gentleman made the simple mistake of comparing it only with the Budget of the year before. If a budget is compared only with that of the year before, the fact that it is not as expansionary as that of the year before, particularly if the earlier one was very expansionary, does not mean that the succeeding Budget is slightly deflationary. It means only that it is less expansionary. We hope to achieve a growth rate of something like 5% this year; so the present Budget is not deflationary, lt is merely slightly less expansionary. And it is slightly less expansionary in a way that will maintain internal equilibrium in our economy, as we seek to do. Earlier this year, Mr M. Artis and Mr R. H. Wallace, two economists at the Flinders University in South Australia, wrote a paper on the kind of misunderstanding that creeps into the minds of those people who comment on budgets. The authors of this paper pointed out that when one looks at ‘a budget one looks at the trend line of the growth of public expenditure over the years. The growth of public expenditure over the years has been referred to in the Budget Speech and by speakers who preceded me this evening. The average growth of public expenditure over the years has been 3.7% or 4% a year. This year, even if one allows for price movements, the growth rate is considerably above that level. This means that in real terms the present Budget is expansionary. We know that it is so.

I refer again to statement No. 6 in the documents presented at the close of the Budget Speech. Statements such as this, which presents the Budget estimates in national accounts form, have become increasingly valuable. That portion of this statement which appears at page 56 of Hansard shows that whereas the gap bebetween outlays and receipts increased by $286m in 1966-67, the increase in 1967-68 is estimated at $147m. So there is si ill an expansionary influence in this Budget. There is still a difference between outlays and receipts. But I suggest that the expansionary influence is in fact rather greater even than the Treasurer (Mr McMahon) indicated. After all, the increases in receipts are not rises due mainly to discretionary increases in taxation. Much of the increase in receipts is related to estimates of increased postal charges, and these do not have the deflationary effects that increases in taxation have, those being increases of the kind that have occurred in previous years.

So. Mr Deputy Speaker, I suggest that in real terms this Budget is somewhat more expansionary than the Treasurer indicated, and it will be expansionary while at the same time it maintains internal equilibrium. How does the Treasurer intend to maintain internal equilibrium? He made a clear statement on this point in his speech. I paraphrase it in these words: ‘If there are fluctuations in the economy during the year, I shall use monetary policy to iron them out. This will be done to iron out economic fluctuations and social distress that can arise and are likely to arise in the kind of economy that we have.’ How has the Treasurer done this in the past? He has done it by the exercise of monetary policy, and the Reserve Bank in its recently presented annual report, has commended this policy. I shall mention its comments in a moment. Before I do, I would like to refer once again to the speech made this evening by the Leader of the Opposition. It showed that he has not understood the way in which monetary policy is used in conjuction with general budgetary policy to pursue the objective of economic growth without fluctuations. The Leader of the Opposition said that it is doubtful how effective monetary policy would be in damping down fluctuations later in the year. He had earlier referred to indications of the fact, so he said, that monetary policy had been inappropriate and had been used incorrectly in the past. He has used the annual report of the Reserve Bank as a kind of bible previously. As appears at page 6 of the report, the Bank, referring to the past 2 or 3 years, stated:

Fiscal policy has tended to set the general policy framework by modifying the level of disposable incomes while monetary policy has made adjustments around this level of income by influencing the cost and availability of finance, lt is true that in recent years there do not appear to have been the rapid shifts in attitudes to holding various financial assets which have proved to be unsettling disturbances in the past. This is probably accounted for, to some extent, by the wider and presumably more attractive range of Government securities and bank deposits available.

So the Treasurer has used monetary policy in a flexible way. This has been an ingredient of the Commonwealth Government’s economic policy at least since 1963, and this course has been adopted to iron out the fluctuations that have tended to cause distress. The Reserve Bank, at the last page of its annual report, indicated that over the past twelve months monetary policy has been used on three occasions to damp down fluctuations. On 1 7th August it was used to reduce interest rates on securities having a short term to maturity. It was used also to build up term loan funds, which were increased to about $40m. It was used, too, in another way with respect to the personal loan policy that was instituted by certain banking organisations. So monetary policy has been an important and clear adjunct to the fiscal policy enunciated in the Budget. The Treasurer has indicated that if we have droughts and downturns in the economy, monetary policy will be so used again. It is a tragedy that the Leader of the Opposition obviously has not understood this aspect of the Treasurer’s Budget Speech.

I now turn to other matters that were mentioned by the Leader of the Opposition, unemployment being one of them. He tried to make out a case to the effect that somehow unemployment represents the gap between potential growth and actual growth in the economy. I was intrigued by this continual reference to unemployment, because I would have expected a Socialist to go easy on this kind of subject, at least in the current year. A moment ago, I mentioned the fact that under the Socialist Government in the United Kingdom unemployment is at its highest level since the immediate postwar years. The ‘Economist’, in its issue of 22nd July this year, at page 336, referring to unemployment, stated:

By this winter, the raw total may be as high as 3%, the highest rate of unemployment, barring only that in the 1947 fuel crisis, that postwar Britain has seen.

This is a raw total. No amount of deseasonalising will get honourable members away from this. There is massive and cruel unemployment under the Socialist government in the United Kingdom. These people obviously have some disciples in Australia because when we look at the record of various State governments in Australia and the record of unemployment we come up with some interesting figures. These are used as a guide to judge the difference between potential and actual growth. It is the measure used by the Leader of the Opposition, not by me. If we look at these figures we can see that the two States which have the highest unemployment in Australia and the least number of job vacancies available to be filled by men are South Australia and Tasmania.

Mr Bosman:

– What kind of governments have those States?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– They have Australian Labor Party governments. Those States have the highest level of unemployment in Australia. They obviously regard Harold Wilson as their Steerforth also.

Dr Patterson:

– What month is the honourable member talking about?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– The last month for which figures are available. The honourable member knows the factors that apply in Queensland. He knows that the seasonal down turn, certainly in his own area, was cushioned far more than was ever possible under any Labor Government here or in the States. The honourable member is always referring to big development projects. I am concerned with the availability of work, so that men leave their homes in the morning and get a job. In terms of regional unemployment our record is unparalleled. We find that the number of vacancies available for males, presumably men, in South Australia, is just over 1,000. The number of vacancies available in Tasmania also is just over 1,000. No other State in Australia comes down to their level. Obviously the governments of those two States emulate, with some vigour, the economic policies which are pursued by governments of their own ilk overseas.

My time is running out rather quickly. There are many other comments I would like to make upon the speech made by the Leader of the Opposition. He referred to pensioners. It is true that in this Budget pensioners have not received an increase in pension although they have received increases in previous years. The pension has never been reduced by governments on this side of the House as it has by governments on the other side. I want a bench mark against which to measure the record of the Opposition. Since there are very few Labor Governments in Australia I had to look around for local authorities. Let us have a look at some of the local authorities in Labor governed areas and compare them with other local authorities to see how the Labor local authorities treat pensioners. Let us take as an example the Brisbane City Council which is the largest organisation of its kind in Australia. Its record in respect of pensioners falls far short of that of local government bodies such as those at Armidale, Townsville, Bundaberg and elsewhere in Australia. Such bodies have greater concern for pensioners in terms of concessions on rates and concessions which are given unless a property is free of all indebtedness.

The Party opposite talks about social justice and obviously gets all mixed up in trying to measure it. The Opposition just does not understand the situation. I would like to come back to one other point which the Leader of the Opposition touched on and to which the Treasurer referred - the matter of overseas aid. We all know that the record of this Government in terms of overseas aid is a very good one. We also know that unlike many countries overseas our overseas aid has not been decreasing. It is not in terms of tied grants or loans. Our contribution represents a real reduction in the disposable wealth of the citizens of Australia. This is a real sacrifice on their part. From time to time we are pleased to know that private organisations in this country also engage in overseas aid. After all, this is a private enterprise economy organised on the private enterprise system. I am pleased, in a certain way, to see that one of the great political parties of this country is now calling for overseas aid. It is not only calling for overseas aid for South Vietnam but also is calling for aid to go to North Vietnam, and not only medical aid. It is significant that the Opposition Party in this place is obviously calling for aid. It is lending the columns of its own newspapers to request assistance to be given to people in North Vietnam who are in fact invading the South. I refer to the latest issue of ‘Fact’ which I understand is the official journal of the Victorian branch of the Australian Labor Party. The issue concerned is dated Friday, 11th August 1967. On page 7 there is a small note entitled Vietnam Aid’. I will not read the whole of it but I will read the last two or three sentences. The honourable member for the Australian Capital Territory (Mr J. R. Fraser), who is interjecting, will have an opportunity to refute this. If he likes I will send the journal over for him to read. The article in ‘Fact’ states:

While it is realised that the aid provided by the appeal will be minimal, in proportion to the need, it is essential to demonstrate that people are aware of the need and are taking action.

Possibly then the Government will assume more responsibility for this field.

The article states that if people can help they should send their donations to certain box numbers in Melbourne and so on. This is preceded by a statement that:

All is needed in North and South Vietnam for economic and social development, in the fields of housing, provision of employment, medical care and public health services.

This is reported in the official organ of a great section of the party opposite. One welcomes the advent of private organisations in the field of foreign aid. However, I doubt whether it would be appreciated that the alternative government in this country is soliciting aid of whatever kind for North Vietnam. As I said before, this was revealed in the official journal of the Victorian branch of the party opposite.

I have dealt at some length with propositions and statements which have been made by the Leader of the Opposition tonight. He criticised the Budget. However, how can a person criticise a budget without quantifying his criticism? No economist would ever dare do so. The economy can be in many ways like a rubber ball full of water. If we care to expand the ball in one direction by investment programmes, nationalism, socialism and so on, we will cause an indentation on the other side. From experience we find that massive unemployment would result from the indentations on the economy which has been squeezed by the Opposition. We find quite a deal of lack of social justice with respect to redistribution of income. The Labor Party in the past opposed child endowment. The Party expelled the only man who tried to bring in child endowment.

The Treasurer in his Budget Speech made clear the philosophy which he wanted to follow in respect of this Budget. He is willing to be flexible to pursue high economic growth in a Budget which is based on defence. The Treasurer stated:

As far ahead as we can see Australia has all the potentialities for sustained growth and we in Australia are in truth making creditable efforts ourselves. I say this against the background that wo plough back a quarter of all we produce into investment for the future, allocate 5% of our national production for defence, and make a large contribution to international assistance.

This, of course, is to be assisted by private organisations as we now know. The Treasurer continued:

This I repeat, is a worthy and creditable effort.

Every member on this side of the House and every person who supports the Government ought to be proud of a Budget which is made up of these ingredients.

Mr J R Fraser:
ALP

– Squeeze the honourable member for Lilley (Mr Kevin Cairns) and you get an outpouring of political invective. His speech was no contribution to the Budget debate. Despite what the honourable member for Lilley has said, the Budget is a miserable little document. There is no other description for it. It is no wonder that the pensioners of Australia have called it the malnutrition Budget.

When the Treasurer (Mr McMahon) presented the Budget in this House last Tuesday night - and he presented it to a packed Houses - he referred to the soundness of the economy. He predicted a very good year ahead. According to him, everything in the garden was lovely no matter what the baby’s name was. On the very first page of his Budget speech he said:

For 1966-67 as a whole, gross national product rose by 9%. After making full allowance for price increases there was an increase of between 5 and 6% in national production in real terms. This achievement was close to the best of recent years. Plainly there must have been some good gains in productivity.

A little later the Treasurer said:

Wage rates have increased strongly: over the year to June, minimum weekly wage rates rose by about 7%. As to prices, the consumer price index rose in the first three-quarters of 1966-67 at an annual rate only a little above 2%. However, in the most recent quarter the rise approached an annual rate of 5%.

A little later the Treasurer said:

Employment is bound to go on rising and so are average earnings. Generally, conditions seem set, not for a boom, but for a good steady expansion of consumer demand.

But what of the pensioners, particularly the age and invalid pensioners? What do they get out of this near-boom Budget in an affluent society? Absolutely nothing - not one cent for the pensioners. So minimum wages have increased by 7%. So prices in the last quarter have risen at an annual rate of 5%. Pensioners whose right to earn is restricted by a means test and whose ability to earn is limited by their age or invalidity, may gain a few cents here or there from the projected increase in average earnings, but what of those who have nothing else but their pensions with which to meet all the costs of living - the payment of rent, the purchase of food, clothing and housebold necessities, the cost of transport? They must meet all increases in prices and costs, including the new postal charges, with a pension which is already far too small. It is clear that many thousands of pensioners in this country are unable to buy the food that they really need. No-one can dodge that fact. Any member who gets around his electorate at all knows the truth of this. The pensioners cannot purchase new clothing. They must make do with what they have, what they may be given by charitable organisations or what they may pick up at jumble sales. Those pensioners who shook the Treasurer’s hand as he came up the steps of the House on Budget day, and who received his benign and fatherly smile, must have felt bitter and betrayed as they sat in the gallery and heard that they were to receive absolutely nothing from a budget which provided for a total expenditure of $6,483m. In this huge total there was not one cent provided for the aged, not one cent provided for the invalid. This is the treatment they received from a government which said: ‘We will look after the pensioners’. It will look after them in election year; the only time it will make an increase is when an election is in the offing. This is the way in which the pensioners have been betrayed by this Government.

But there was something for the pensioners. The Commonwealth Acoustic Laboratories will be authorised to supply hearing aids to pensioners and their dependants with defective hearing. Will they be given the hearing aids? No, not in this affluent society. The hearing aids will be provided on loan for a nominal hiring charge. When a pensioner collapses and dies the first thing to do will surely be to remove his hearing aid and see that it is returned to the Commonwealth. This is what the present Government does for the pensioners. No pensioner would seek a hearing aid unless he needed it. Surely we can be big enough to provide them without cost. A pensioner who cannot see may be provided with free spectacles by this Government, provided they are not elaborate and have plain steel frames. If he cannot eat properly he can get dental attention free, subject to a means test. But if he is hard of hearing he may get a hear ing aid on loan only and for a nominal hiring charge. How proud honourable members opposite must be - how proud of their generosity to the pensioners! I do not think anyone at all will feel proud of what this nation is doing or is proposing to do for those who have committed the sin of growing old or who suffer invalidity. No matter what any speaker on the Government side may say in this debate, this is where the Government stands condemned, for its absolute betrayal of the needy section of the community. It is looking after its own; it is looking after those who can stand the racket, but it is not helping those who need help and whom it promised to help. Those are the people who have been betrayed.

Once again, in an offhanded announcement of a few words in a Budget speech in this Parliament, the people of the Australian Capital Territory have been threatened with the imposition of stamp duties, and this time, by all the signs, the Commonwealth Government really means it. The Treasurer said in his speech the other night:

It is also proposed during 1967-63 to introduce legislation to impose stamp duties in the Australian Capital Territory. The duties will become payable from a date to be announced later.

No explanation or no reason for the imposition was given, no statement of the extent or incidence of the proposed taxes. There is no need, in this Government’s view, to explain anything to the 100,000 people of the Australian Capital Territory. Two years ago in the 1965 Budget the present Prime Minister (Mr Harold Holt), then the Treasurer, made a similar announcement. He said:

With the growth of Canberra as a city and as a business centre, we think it would be no more than fair and proper that residents of Canberra should bear certain taxes of a nature comparable with those levied on residents of the States.

He went on to say that the Government had decided to introduce stamp duty on a range of instruments and transactions completed or made in the Australian Capital Territory. The new duties which would apply, among others, to cheques, promissory notes, conveyances, hire purchase transactions and so on, would be introduced in 1966 after the necessary legislation had been drafted and the necessary administrative machinery established. The proposals raised a storm of protests in the Australian

Capital Territory. Among the various persons or groups which protested, apart from the member for the Australian Capital Territory, were the A.C.T. Electorate Council of the Australian Labor Party, the Canberra Branch of the Liberal Party, the Law Society of the A.C.T., the A.C.T. Advisory Council, the Canberra Chamber of Commerce and a special committee which established itself to fight this imposition, the A.C.T. Anti-Stamp Duty Committee. Others who joined in the protest were the Canberra branch of the Democratic Labor Party, the Trades and Labour Council, the Australian Institute of Credit Management, Canberra Branch, and the Liberal candidate in the 1966 elections who announced from the public platform that if he were elected to Parliament he would cross the floor to vote against this iniquitous proposal of the Liberal Government to levy stamp duties in the Australian Capital Territory. He did not get elected. It is on record. All the major candidates at the 1966 elections opposed stamp duties.

The Government then gave no details of its proposals. Stamp duties were not introduced, and the 1966 Budget made no mention of them. But apparently pressure from Governments in the States of New South Wales and Victoria has caused the present decision to impose stamp duties here. I do not doubt that State revenues have suffered serious losses because of the incorporation of companies in the Australian Capital Territory and because of arrangements made for share transfers to take place here. Until recently, these transactions avoided State stamp duty.

I suppose few of us would quarrel with the Government’s desire to gain some revenue from probate dodgers and others who have sought to take their profit from the fact that stamp duties and other imposts of that kind common to the States have not operated in Canberra. I hold the general view that big business can look after itself. It certainly will pass on any increased costs. My concern is for the wage and salary earners and the housewives operating cheque accounts, as well as the home seekers who will be called on to pay these charges and to bear the effect of them on many business transactions.

One effect of the introduction of stamp duty, if the Government is honest, should be the abolition of transfer fees paid by the purchasers of houses, assessed at 1% on the capital value of house and land. I say these should be now abolished because a former Minister for the Interior justified the maintenance of this transfer fee on houses and land on the ground that the people in the Australian Capital Territory did not pay stamp duty. Now, if we are to pay stamp duty at least the transfer fee should be abolished.

But quite apart from the effect of the proposed tax, the manner of its introduction was a gross insult to the people of the Australian Capital Territory. We have not been told when the legislation will be introduced, we have not been told what rate will apply and we have not been told this time what transactions will be affected. Elsewhere in Australia, of course, stamp duty and other imposts of this kind are levied by State Governments who are elected by the people and are capable of being dismissed by the people. These governments assess the expenditures they must meet. They count the revenue that they expect, and they levy the taxes and other charges they must have to raise the funds necessary to balance their budgets. But here the tax is to be imposed on a people who have been denied the right to govern themselves and who have not been consulted in any way. Some reference was made to this when the earlier attempt was made to impose stamp duty here. I quote from an editorial in the ‘Canberra Times’ which reads: there is no logic at all in the suggestion that because the States choose to levy certain taxes, the people of the ACT should pay them also. Presumably this means that if Mr Bolte introduces entertainment tax in Victoria tomorrow, the Commonwealth will have a good case for imposing it here. That is nonsense. There may be a case, perhaps a good one, for imposing extra taxes upon the people of the ACT, but it could only be based on the argument that we are not paying our way; that we are being heavily subsidised by the people of the States. And no proof of this has been forthcoming, because :here is no Territory budget that shows where the money goes and what proportion of expenditure should be charged to Canberra people for ‘Local’ development and services and what proportion should be a charge on the whole nation for its national capital. No-one in Canberra could properly object to being taxed more if the figures showed the need for it. On the other hand, if the object of the exercise is to catch those who by cai ry ing out their dealings in Canberra instead of in the State save themselves tax, then there is no excuse for a net that catches everybody else as well.

There were other comments of a similar kind when the previous proposal was made. On this occasion, as I have said, we have not been told what the rate is to be. Figures produced on the previous occasion showed that the average paid in the Stales in stamp duty was in those days around £5 a head or, in today’s currency, $10 a head of population. But if we divide the total of stamp duties paid throughout the States by the workforce of those States we find that the average family man - say with a wife and three children - if the Commonwealth levies stamp duty here at the level of the States will be paying approximately $50 a year additional taxation because we must assume, in the light of what the previous Treasurer has said, and in the absence of any detailed information from the present Treasurer, that the stamp duties will be levied on the whole range of transactions to which reference has been made. If stamp duty is to be levied on insurance and that sort of thing, the man who has a car which he seeks to insure for $2,000 will find that he will be paying an additional $1 a year in stamp duty on that transaction. On the whole, minor taxes such as a tax on betting tickets and on receipts could bring the amount paid by the average wage or salary earner up to about $1 a week or $50 a year. But we have not been given that information. The people of the Australian Capital Territory have been treated with gross contempt .by this Government. It does not consider that there is any necessity to explain to the people, of the Australian Capital Territory, if there is any sound reason for the imposition of this tax, why it should be imposed, or the rate at which it should be levied. I think the Government’s proposals are bad. They should be opposed as strongly as possible. I believe the people of this community will oppose them strongly. The only elected body we have in this Territory, the Australian Capital Territory Advisory Council, has already expressed its violent opposition to them. Every major candidate at the last general election pledged his opposition to the proposed stamp duty. As I said, the Liberal candidate gave a pledge that if he were elected he would storm across the floor and vote against his own Government’s proposal to levy stamp duty. 1 want to refer to one or two other matters affecting the Territory in the time that is available to me. One of these is the very important question of education. I would like to say that although we are frequently envied here because of the generally high standard of our school buildings and school equipment, our schools are not without their faults and the education of our children is not free of the problems that exist in other parts of Australia. I commend the members of the teaching fraternity in Canberra for their constant alertness and their ability to put forward their views for consideration by the Commonwealth Government.

One of the great needs in education here is the establishment of a national teacher training institution. This is a project that I have raised previously and it is one that I hope this Government or a future government will adopt. It should be a teacher training institution of the highest calibre and the widest scope. It is needed essentially to train teachers to staff public and private schools in the Australian Capital Territory, in the Northern Territory and other Commonwealth territories, as well as to meet the Commonwealth’s needs in Navy, Army and Air Force establishments and to undertake research in education.

The national teacher training institution I envisage would train teachers for service anywhere in State or private schools, unbonded and free to choose their field. Wc have a present teacher shortage in Austraiian Capital Territory schools. Our schools, of course, arc staffed by the Education Department of New South Wales and the resources of that Department are stretched to the utmost. Yet there are in Canberra many qualified and experienced teachers available for casual, part-time or full-time employment. I believe the Government should take action to provide from these resources the additional staff needed to ease class loads in Canberra’s public, primary and secondary schools and to provide relief in cases where subject teachers are away because of illness, or for other reasons. Although our schools are staffed from New South Wales, I can see no reason why the Commonwealth Government should nol recruit staff directly from the pool that is available here.

Perhaps one of the greatest needs is to provide increased and improved facilities for teaching the mildly mentally retarded. It is easy to teach the bright child; to coach and encourage him to secure the best possible pass for the glory of his school and the advantage of his teacher. But surely the greater challenge to teaching ability is to encourage the retarded child to develop his retarded abilities and to make the most of his other skills, which are sometimes quite remarkable. We are doing something in this field. We are doing more than we were doing, but we are not doing enough. Too often the retarded child is branded, set apart and shunned by his fellows because we have labelled him - the very treatment that diminishes his confidence, increases his disability and pushes him further down. We grant scholarships to the bright child, clearing his path and easing the financial burden on his parents. We make no similar grant to aid the dull child and assist his parents, although they too pay taxes and they have the greater need.

Recently a case was brought to my notice of a lad 15 years and 9 months of age who had been exempt of any requirement to attend school since he was 4i years of age. At that time his IQ on the verbal scale was 76-79 and on the performance scale 117, giving an overall of 95-96. A recent test confirmed his IQ on the verbal scale at 74 and on the performance scale at 118, an overall reading of 94, but this boy cannot measure up to the standards set by society and he cannot meet the standards set by a normal school. Yet there is nothing in our education system to help him. He cannot read and he cannot secure employment. His only hope at present is in a terminal workshop maintained by a charitable organisation. His case illustrates the plight of an increasing number of children in this community, yet research and experience show these people can be helped and can be led to useful places in the community. Many of them have quite exceptional manual skills.

I would agree with many experts in this field that if a retarded child is able to make his way in an opportunity class in a normal school, that is the place for him and that is where he should remain; but if he cannot cope there should be other opportunities, and here is a gap in our education system. For those people who cannot cope in OA classes, I would like to see an opportunity school, taking children from 7 or 8 or even younger to 13 or 14 years of age. From there they should be able to go on to a vocational school to the age of 18 years or 20, in order that they may receive training for subsequent employment and learn a useful trade to their own satisfaction and to the advantage of the community. I think this is a field in which this Government could give a very worthwhile lead here in the Australian Capital Territory.

I have had drawn to my attention the need for additional speech therapists to train children who are retarded in their oral expression because of a degree of deafness. Because of children coming here from other centres with the transfer of departments to Canberra and the influx in the population, more children are in need of this special therapy but cannot get it because the therapists are not available. Some children arriving here have been told that there will not be an opening for perhaps 12 months in the classes conducted by the therapists. I hope that the Minister for the Interior (Mr Anthony) will be able to make some arrangement that will ease this burden on parents of deaf children.

I want to refer to only one other matter and this is the opportunity we now have in Canberra to develop a really magnificent playground for the people of Canberra. It could be something really outstanding, not only for the people of this city and Territory but for the many hundreds of thousands of tourists, travellers and sportsmen who come here each year.

For years Canberra has depended for its water supply on the Cotter Dam, which is about 15 miles west of the city. Because the water was untreated it was necessary to ensure that the catchment area was kept free of any intrusion. Tight control was exercised. There was forestry control, because of the establishment of pine plantations in the area and over the slopes of the hills. There was fire control and, of course, controlled burning at the appropriate seasons of the year. But general entry to the catchment area has always been barred. With the increase in the population of Canberra and with the projected growth of the city, new storages have had to be established. We already have the Bendora Dam upstream from the old Cotter Dam. Further on still, up in the hills, the new Corin Dam is rapidly progressing towards completion. Also under construction at present is the Bendora gravity mab which will carry water from the Bendora Dam by gravitation only to the reservoirs in Canberra. With the construction of the gravity main from Bendora, Canberra’s supply will no longer depend on pumping from the Cotter. The Bendora pipeline will connect with the existing mains from the Cotter to the city and the lower Cotter Dam, as we know it, will be cut off from the supply lines. The Bendora pipeline is due for completion before the end of this year. The water treatment plant is, I understand, in the final testing stage, and with the completion of these works the Cotter Dam will no longer be used as a supply for drinking water for Canberra.

I believe this is where a great opportunity exists to develop for this city a really great playground area. Call it a national park or whatever one will, the area could be developed as a magnificent playground for the people. The lower Cotter area could be opened up and developed. There is a fine deep stretch of water in the Cotter Dam with inlets between wooded hills. Everybody knows, of course, that the Cotter abounds in mighty fine trout for anglers. There would be opportunity to establish out there vast picnic areas - camping areas even - and bush walks through some really magnificent country; not only through the pine plantations but through eucalypt country as well. There would be great opportunity for water sports. Of course it is notorious at present that one must not have a motor boat or go water skiing on Lake Burley Griffin, which is the series of basins through the centre of the city, but out at the Cotter there is abundant water for water skiing and I think this could be a really magnificent project. I shall most certainly seek opportunity to discuss it with the Minister for the Interior (Mr Anthony) and I should like to hear the views of experts on it.

There need be no fear at all of the Cotter Dam ever being needed again for Canberra’s water supply. In fact it will not be available because it will no longer form part of the supply to Canberra once the Bendora pipeline is in. If in the direst emergency, we had to call on the services of the Cotter Dam again, it would involve a major piece of surgery to connect the pipes from the dam to the pipes supplying Canberra. In that case, if the area had been opened for use as a playground, it would have to be closed off for only a couple of weeks - perhaps the Department of Health might insist on four weeks - in order to remove any fear of bacterial infection. I believe that, if our water supply has to be augmented in the future, we will rely on the Tantangara Dam, with a tunnel through the Great Dividing Range feeding water down to the Corin Dam, then to the Bendora Dam, and then through the gravity main to the city.

The opportunity should be taken now to commence the planning to develop this really magnificent area at the Cotter into something outstanding, not only providing for healthy recreational sport but also preserving for all time an area of great beauty for the people of this city and also the many hundreds of thousands of people who come here in the course of the years. I do not know whether this matter has ever been considered. I hope it will be considered. Its possibilities are tremendous. I certainly hope that the Government will do something about it.

Debate (on motion by Mr Giles) adjourned.

House adjourned at 10.51 p.m.

page 326

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Commonwealth Office Accommodation (Question No. 194)

Mr Peters:

asked the Minister for the Interior, upon notice: 1.What space was occupied by Commonwealth departments and instrumentalities in other than Commonwealth-owned buildings in each capital city during 1965-66?

  1. What was the cost of occupying this space?
  2. What space was occupied in Commonwealthowned buildings in each capital city in 1965-66?
  3. Does the Government plan to build more Commonwealth centres, to increase existing ones and to construct other Commonwealth buildings for the housing of Commonwealth employees in the capital cities in each of the next three financial years? If so, what are the details?
Mr Anthony:
CP

– The answers to the honourable member’s questions are as follows:

  1. The Government recognises its responsibility to house its staff in accommodation appropriate to present day standards by the most economical means at its disposal, and will, as far as budgetary conditions will allow, continue to review the need for additional Commonwealth office construction in the capital cities. Recognising that availability of funds limits the construction by the Commonwealth of office buildings to accommodate the staff of departments, there is no alternative but to lease private office space to provide accommodation for the expanding needs of the Public Service, as well as to improve administrative efficiency and the standard of accommodation where necessary.

A modern office block as a second stage to the Commonwealth Centre in Melbourne was completed towards the end of 1966. Tenders are expected to be called shortly for the construction of the first stage of a Commonwealth Centre in Perth, and preliminary design work for extensions to the existing Commonwealth offices in Brisbane is proceeding preparatory to the proposal being submitted to the Parliamentary Standing Committee on Public Works.

War Service Homes: Damage by Hail Storm (Question No. 321)

Mr Hansen:
WIDE BAY, QUEENSLAND

asked the Minister represent ing the Minister for Housing, upon notice:

  1. What was the cost of repairs to war service homes damaged by the freak bail storm at Maryborough, Queensland, on 17th December 1966?
  2. How many war service homes were affected by hail and rain damage?
Mr Bury:
LP

– The Minister for Housing has supplied the following answers to the honourable member’s questions:

  1. Insurance claims totalling $73,573.31 have been admitted for repairs to war service homes damaged by the freak hail storm at Maryborough, Queensland, on 17th December 1966.
  2. The number of war service homes affected was 247.

Public Authorities: Revenues (Question No. 356)

Mr Whitlam:

asked the Treasurer, upon notice:

  1. What revenue from their own sources was received by (a) the Commonwealth, (b) each State other than from business undertakings, (c) local government bodies in each State and (d) semigovernment and other public authorities in each State in the last year for which he has comparative figures?
  2. What were the corresponding figures for 5, 10, 15 and 20 years earlier?
Mr McMahon:
LP

– The answer to the honourable member’s question is as follows: 1 and 2. The figures requested by the honourable member are set out below. It should be noted that 1965-66 is the latest year for which the Commonwealth Statistician has been able to supply comparative data. Corresponding figures are available for the years 1950-51, 1955-56 and 1960-61, but not for 1945-46. Accordingly, the figures for 1948-49, the earliest year for which comparable data is available, are supplied. It should also be noted that the data has been compiled by the Commonwealth Statistician on a basis similar to that currently employed in compiling the Australian national accounts. In particular, while there is no generally accepted and precisely defined borderline between State governments and semi-governmental authorities, in accordance with the current practice in compiling the Australian national accounts revenue of such authorities is generally included in that of semi-governmental authorities only if the transactions of the authorities are not recorded in State governments accounts.

Burns Philp and Co. Ltd (Question No. 402)

Mr Whitlam:

asked the Minister for Shipping and Transport, upon notice:

What changes, if any, have been made in the basis and administration of the subsidy to Burns Philp and Co. Ltd as a result of the World Bank’s recommendations in September 1964 (Hansard, 27 September 1966, page 1329).

Mr Freeth:
LP

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

No changes as yet have been made in the basis and administration of the subsidy to Burns Philp and Co. Ltd, as a result of the World Bank’s recommendations in September 1964. The Government is currently examining the payment of subsidy to the company in respect of its vessels engaged in the Australia/Papua and New Guinea service. The views expressed by the World Bank are being taken into account, but no decision as to the future payments of the subsidy has so far been made.

Taxation: Registered Clubs (Question No. 433)

Mr Cope:
WATSON, NEW SOUTH WALES

asked the Treasurer, upon notice:

  1. ls it a fact that the Federal tax on visitors to registered clubs is applicable only to New South Wales?
  2. Are Federal taxation laws designed to apply equally and justly in the six States?
  3. If so, is it a breach of law to apply this particular tax to New South Wales only?
Mr McMahon:
LP

– The answers to the honourable member’s questions are as follows:

  1. All clubs, whether in New South Wales or any other State, are liable to income tax on income derived from the investment of club funds and from trading with non-members, unless the income is specifically exempted by the law from income tax.
  2. Yes.
  3. See answers to t and 2.

Standardisation of Rail Gauges (Question No. 448)

Mr Collard:
KALGOORLIE, WESTERN AUSTRALIA

asked the Minister for Shipping and Transport, upon notice:

  1. What is the most recent estimate of the cost of constructing the standard gauge railway, including associated railway works, between Kalgoorlie and Kwinana?
  2. When was this estimate determined?
  3. Have any of the works included in the original estimate now been excluded? If so, which are they, and what was their estimated cost?
Mr Freeth:
LP

– The answers to the honourable member’s questions are as follows:

  1. The most recent estimate of the total cost of this work is $158m, of which $130m is a charge to the project, and $28m is to be met by the State for associated railway works, in accordance with clause 6 (3) of the 1961 Agreement.
  2. The estimate was submitted in March 1966, by Maunsell and Partners, the consulting engineers retained by the Western Australian Government Railways on this project
  3. The route of the standard gauge railway, as specified in the first schedule to the 1961 Agreement, has been varied in a number of places, at the request of the State. This has resulted in the deletion of some works and the inclusion of others. In the March 1966 report, the consulting engineers recommended that some works should not be proceeded with. Final arrangements in this regard have not yet been made.

Broken Hill to Cockburn Railway (Question No. 499)

Mr Webb:

asked the Minister for Shipping and Transport, upon notice:

  1. What is the latest stage in the discussions with the New South Wales and South Australian Governments relating to the standardisation of the line between Broken Hill and Cockburn?
  2. Has a decision been made on the route the line will follow?
  3. Is the delay in finalising agreement on this section of line likely to delay the completion of the standard gauge project?
Mr Freeth:
LP

– The answers to the honourable member’s questions are as follows:

  1. At the present time final agreement with the South Australian Government has to be reached on certain essential matters relating to this standardisation project.
  2. The route the line will follow will be announced as soon as possible.
  3. Present planning is for commencement of through passenger train operations from Sydney to Perth, via Broken Hil), to commence about Easter 1969, and this could still be achieved. This is, however, dependent on early agreement on the matters mentioned in 1.

Transport of Goods between the States (Question No. 425)

Mr Webb:

asked the Minister for Shipping and Transport, upon notice:

  1. What is the average cost of coastal shipping freight per ton mile of goods compared with that of rail and road?
  2. Of the total goods transported between the States, what percentages of the total ton miles was carried by (a) ship, (b) rail, (c) road and (d) air?
Mr Freeth:
LP

– The answers to the honourable member’s questions are as follows:

  1. Statistics on the average cost of coastal shipping freight per ton mile are not compiled from official sources. The following table, however, provides a comparison of freight rates per ton mile for consignments of general cargo moved by sea, rail and road transport.

The figures in this table are not necessarily representative of average rates for all commodities on all routes. With Government Railways, for example, the average freight revenue per net ton mile was 3.18 cents in 1965-66. The corresponding average for road transport is not available.

  1. The estimated total ton miles for 1964-65 for both interstate and intrastate movements of goods is distributed over the transport modes as follows:

Some 97% of ton miles performed by sea transport involves interstate movement of freight. With air transport, interstate movements of freight account for about 83% of total ton miles moved by air. Details for interstate movements by road and rail are not available.

Cite as: Australia, House of Representatives, Debates, 22 August 1967, viewed 22 October 2017, <http://historichansard.net/hofreps/1967/19670822_reps_26_hor56/>.

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