26th Parliament · 2nd Session
Mr SPEAKER (Hon. W. J. Aston) took the chair at 2.30 p.m., and read prayers.
Mr BENSON presented a petition from certain residents of Victoria showing that they, along with thousands of other Australians, are deeply concerned at the unchecked, cruel, slaughter of our defenceless creatures of the bush, to the point where they face extinction. The Commonwealth Scientific and industrial Research Organisation report, Wild-life Division, has been presented to Parliament and the alarming fact made known of the danger that exists for our unique, inoffensive fauna. But still the slaughter continues, even with the so-called protection laws, as there are nowhere enough wardens to see they are properly enforced. Though our kangaroo is declared protected here in Victoria it is being slaughtered in the other States to provide Victoria with supplies of pet food - 2 million wiped out yearly, 5 million in Queensland in 6 years. We, the electors of Victoria will not stand silently by and see these ignorant, greedy killers- exterminate our unique, utterly defenceless kangaroo and all the inoffensive creatures of the bush who are the target of any callous crank with a gun and of spotlight shooters dazzling these helpless, docile, native animals to exterminate them completely without feeling that these graceful creatures are our national emblem and cannot be found anywhere else on earth. In fair climatic conditions the kangaroo can produce only 3 young in 4 years. It prefers different herbs and grasses to sheep and does not damage pastures permanently. It does not roam the land in millions. Its flesh is not safe to feed to pets or humans because of the danger of salmonella.
The petitioners pray that as only Government legislation can save them now, the Federal Government shall immediately ban the slaughter and export of kangaroo meat and fur products and, as a matter of urgency, set up a Commonwealth body to completely and thoroughly protect and conserve our unique defenceless fauna in every State, with enough wardens to see this thoroughly enforced, before one of the most wonderful animals on earth suffers the same shameful fate of so many other species.
– I ask the Prime Minister: Has he refused to meet country mayors from throughout New South Wales to discuss decentralisation problems even though they were prepared to fix any date to meet his convenience? Does the right honourable gentleman insist that he is too busy to spare time to meet the elected representatives of almost 1 million people? Finally, when can we expect the long overdue report of the joint State-Commonwealth committee on decentralisation which, in 4 years, has not produced a report?
- Mr Speaker, 1 have not refused to meet the representatives of mayors, and I am quite prepared to meet the representatives of mayors at any time that they choose to come to Canberra in a deputation, as is the normal course of events. It is true that I have not accepted an invitation to travel to particular areas to meet mayors, and I think that it would be impossible to do that throughout Australia, but the suggestion that I have refused to meet them is not true. 1 will have to ask the honourable member to let me give him an answer to the last part of his question later.
– I ask a question of the Minister for Trade and Industry. It refers to the statement by the Tariff Board in its 1968 annual report that it: ‘. . would be unlikely to recommend effective protection of more than 50% on other than a short term basis for any new venture, including an extension of existing production.
Will the Minister clarify for the House whether it follows from this statement that henceforth it will be unlikely that any new industries will be established in Australia if it is believed that the required protection will be 50%. Does the Minister believe it likely that investors will put up money for such ventures on the sporting chance that the Government might not follow the advice of the Tariff Board, but make its own decision on whether or not 50% is regarded as adequate protection for Australian industries which are economic and efficient?
– I would not attempt to interpret the Tariff Board any more than one reads into the report that has been given. The Prime Minister has made it quite clear, and I have also made it quite clear, that the policy of the Government is to determine tariffs after considering the report by the Tariff Board. The record of the Government is that it accepts an overwhelming majority of Tariff Board recommendations. The last scrutiny that I had made covered 402 tariff recommendations by the Board and of that number all but 9 had been accepted by the Government. But it does not follow that the Government will have its policy determinations made for it by the Tariff Board. The Government still will be responsible for the policy that applies in tariff making.
– I ask the Minister for External Affairs a question. Has Australia made any representations to the United Nations or to Indonesia seeking to ensure the fulfilment of Indonesia’s original pledge that all adults in West Irian will be effectively provided with an opportunity to vote on a clear choice as to whether they wish to continue their present relations with Indonesia or to sever those relations?
– Australia has not made representations of the kind referred to by the honourable member. The agreement between the Netherlands and Indonesia contained a provision for an act of selfdetermination to be conducted in West Irian in 1969 and invoked the supervision of the representative of the SecretaryGeneral of the United Nations. That supervision is being provided. The agreement does not specify the way in which the act of selfdetermination is to be carried out. It contains no reference to a vote as such. So far as we are aware the Government of Indonesia is meeting its obligations under the agreement to the satisfaction of Dr Ortiz Sanz, the representative of the Secretary-General of the United Nations who is at present in Indonesia or West Irian - I am not sure where he is; he has been in both areas - to ensure that Indonesia’s obligations are satisfactorily carried out. So far as we know at present they are being carried out.
– Has the Minister for the Army seen recent Press reports that only 37% of servicemen in the Australian Regular Army are re-engaging in the Army when their terms of duty are completed and that, as with the other armed Services, response to the recruiting programme is below departmental expectation? Will the Minister inform the House whether these allegations are correct and, if so, to what extent this situation may be attributed to allegations that lack of financial fringe benefits and an increasing requirement for mobility by servicemen in Australia, with its consequent disturbance to the family life of married servicemen, are responsible for this allegedly large percentage of soldiers failing to reengage?
– Turnover of personnel is, of course, an inhibiting factor in the efficiency of any organisation, whether it be private enterprise, government service or one of the armed Services and the honourable gentleman can be well assured that the matters of reengagement and recruiting generally are kept under constant scrutiny by me and members of the Military Board. I have seen the article to which the honourable gentleman has referred and while it makes some valid observations it also contains an amount of incorrect information. The re-engagement rate for the Australian Army in the 6 months ended January 1969 was 64%, not 37% as alleged and that figure of 64% maintains the rate of re-engagement over the past 5 years. It is not true to say that Army recruiting is lagging at this time. T am assured by my Department that the recruiting target for June this year of 43,900 will be met. That figure has almost been achieved already as a result of the first intake of national servicemen and a healthy intake of apprentices, applicants for the Royal Military College and the Officer Cadet School, and indeed soldiers. This is a reflection of January and February recruiting which is seasonally a very good recruiting period.
The honourable member also asked about the various factors which are of concern to servicemen in relation to reengagement. These factors are quite diverse, but surveys show them to be basically of the following types: Unaccompanied overseas service, non-availability of married quarters, rapid turnabout in postings and, in addition, the general level of employment and mobility in the civilian employment sector. In the last survey which I saw fringe benefits were not shown to be generally a factor adverse to re-engagement. In conclusion, may I say that all these matters are the subject of continuing survey by the Army Psychological Research Unit, and the results of this survey are a very useful guide in the development of Army policy in relation to recruitment, reengagement and the provision of better conditions for Australian servicemen generally.
– I refer the Minister for Defence to his flat refusal to allow Opposition members to visit the Pine Gap space research installation. Have members of the American Congress visited Pine Gap? If not, will they be permitted to visit the site, and on what conditions? If American Congressmen can visit Pine Gap, why cannot members of the Australian Labor Party do so?
– The honourable gentleman has based his question on the hypothetical situation that members of the United States Congress might be allowed to visit Pine Gap. The fact of the matter is that in the course of time Australia will become the custodian of information secure as to the United States as well as to Australia. To the best of my knowledge no member of the United States Congress has visited Pine Gap. I do not know under what conditions the United States Government would permit such a visit, if at all. Australia’s obligations under our agreement and for the purpose of security are such that we cannot permit visits by members of the Parliament to Pine Gap.
– The Minister for Shipping and Transport will know that the existing Commonwealth Aid Roads Act provides for up to $2m to be expended on works directly connected with transport by road or water. As the proposals for the next quinquennium, as outlined by the Prime Minister to the State Premiers recently, do not include a similar provision, will the Minister advise me whether it is proposed to establish a separate fund to enable the completion of port projects already commenced, such as at Laurieton, and for the commencement of new projects such as at Port Macquarie? If such a fund were established, could it also cover the necessary improvements to ports and harbours to meet the requirements of container vessels and large oil and ore tankers?
– It is true that under the existing Commonwealth aid roads legislation the sum of approximately S2m has been made available each year for expenditure on port facilities and that this amount of money has contributed substantially to the improvement of boat harbours and facilities throughout Australia. The Bureau of Roads recommended that the allocation for roads in the next quinquennium be specifically for roads, and this recommendation has been accepted. It is true also that there is an increasing demand for expenditure on the improvement of ports and other facilities in various parts of Australia. Whether or not the Commonwealth will embark on any other project of this nature is a matter of policy and not one to be dealt with in an answer at question time.
– I preface my question, which is directed to the Minister for Primary Industry, by referring to the decision to lift the 40-year-old embargo on the export of merino breeding stock which has been unreservedly supported by all the major political parties. I ask the Minister whether the Government will reverse its decision to lift the embargo on the export of merino rams and submit this very important question to a bona fide wool growers’ organisation Cor a decision?
– The recommendation that the Government consider this request came from a bona fide wool growers’ organisation, the Australian Wool Industry Conference, which is the supreme organisation in the industry. However, if the honourable member is suggesting that there should be a referendum to decide this issue, I inform him that this was not one of the requests that the Wool Industry Conference made, nor do I see how it would be possible to have a referendum on a decision that there be only a partial lifting of the embargo and that the conditions be reviewed annually. It is for these reasons that the
Government has taken a decision, but the decision will not become operative until arrangements have been worked out with the Australian Association of Stud Merino Breeders and other industry organisations.
– My question is directed to the Minister for Primary Industry. The Minister will recall that last year he asked the Australian Wool Board to supply him with answers to nine questions relating to the marketing of the Australian wool clip. Has the Minister received answers to these questions? If not, will he endeavour to obtain the answers as soon as possible?
– After the Australian Wool Industry Conference resolved the question of a non-statutory marketing authority for the handling of 1, 2 and 3 bale lots of wool, representatives of the Australian Wool Board came to see me to have discussions about the proposals and I listed a series of questions to them relating to administration, to whether finance could be obtained from the private banks and to the reaction of brokers and buyers. As yet I have not received the final and official submission from the Australian Wool Board on wool marketing proposals. I have had further informal discussions with the bankers, the brokers and the Australian Wool Board, and I have submitted further questions to them. I said that I hoped that answers to all these questions would be included in the final document that is presented to the Government when it is giving consideration to the proposals.
– I would like to ask the Minister for Primary Industry a question. If the Australian Dairy Industry Council agrees that the price of butter is to rise, has the Federal Government any power to prevent it? If the price rises by 3c per pound wholesale and lc per pound retail, what will the butter producer receive? Has the Government considered a consumer subsidy to bring the price of butter down as the best method of increasing home consumption and so reducing the quantity for export on a non-paying, glutted market?
– The fixing of the domestic price for butter in Australia is a voluntary arrangement with the industry and requires no legislation from any parliament in this country. If the price is increased, I could not say how much of this will be returned to the farmer. It will depend on whether the increase has any effect on consumption in Australia. The Government gives considerable assistance to the industry to help lower the domestic price. It gives an annual bounty of $27m, and this year it is committed to something like $16m by way of devaluation compensation.
– I ask the Postmaster-General: In view of the continual criticism of the mail sorting machine at the Redfern Mail Exchange, will he consider allowing members of the public to examine the machine in operation to allay the criticism?
– There is continual criticism by some elements of the community, particularly by some unions, about the mail handling equipment at the mail exchange at Redfern. I cannot understand why it is that Australians seek to depreciate this machine, which is an entirely Australian development and which has received commendation from overseas experts, particularly engineers. Recently I pointed out to a member in another place that in fact there was some damage to one letter in every 5,000 letters that go through the machine at the present time. This, apparently, was the cause of comment in one of this morning’s newspapers.
I should like to indicate to the House that the Post Office has always been willing for the public to see this machine. Naturally, people would have to view it in comparatively small groups. But last year some 10,000 people, representing 300 visits, saw this machine in operation at the mail exchange, and in this year to date some 1,000 people, in 30 groups, including representatives from chambers of commerce, chambers of manufactures and in fact the top management of the newspaper which carried this comment this morning, together with many members of the Press, have also viewed this machine. At the present time there are approximately four visits per week, and we will continue to allow members of the public to view the machine in this way so that they can make judgments independent of those made by people who are always criticising the machine.
– 1 ask the Prime Minister a question. He will recollect that approximately a fortnight ago I asked him a question concerning Mr Murray Sime of the Commonwealth Crown Solicitor’s Office who was fined for a trivial offence, by way of a salary slash of $585 a year, effective for 10 years, by the decision of Mr Sime’s departmental secretary. Is the Prime Minister aware that this harsh penalty has achieved the sought after effect and that Mr Sime has resigned from the AttorneyGeneral’s Department? Is it normal practice in respect of minor departmental offences such as that alleged against Mr Sime, which was a civil offence, incidentally, for Commonwealth Police officers to interrogate the alleged offender, search his work table and his personal work locker; for the police to refuse to provide the alleged offender with a copy of the record of interview between the police officers and the alleged offender; and to have the alleged offender report to a superior officer every 15 minutes? Finally, is it true that the Attorney-General took a personal interest in having the charges and penalty pressed against Mr Sime?
– Obviously I can answer from first hand knowledge only part of that question. Perhaps the Attorney-General could answer that part which comes directly within his own province. All I know of the matter is that the man in question was charged by the head of his Department, that a penalty was inflicted upon him by the processes of the Public Service, and that he had a right of appeal to the Public Service Board. I understood he was going to exercise it. Whether he did or not, I do not know.
– It forced him out of the Department.
– He had a right of appeal to the Public Service Board. Whether he exercised it or not I do not know, but the right was there. I do not know whether he resigned. But this matter would be one for his own decision. I think that the Attorney-General might well answer the other aspects of this question which are not directly within my knowledge.
– lt would not be correct to suggest, as was implied in the question, that I intervened in the matter. Indeed, as the Leader of the Opposition will know, he rang me and asked me whether I would intervene. I explained that it was entirely a matter to be dealt with by the Public Service, under the Public Service Act, that any discretion was committed to the Public Service and that I did not think it would be right for a Minister to intervene in any sense - for clemency or anything else. This was the procedure I observed in this case. I am not able to answer whether the Commonwealth Police interviewed Mr Sime or what took place. Some inquiry could be made into this matter.
I think I should add that 1 have looked at the papers. In view of the fact that it has been suggested from time to time that in some way Mr Sime has been penalised for political beliefs or political action, I should point out what took place. He was employed in the Deputy Crown Solicitor’s Office in Sydney. That office is concerned with the enforcement of Commonwealth laws and also with conducting prosecutions against people for breaches of those laws. He appears to have thought it consistent with his position in that office to criticise the prosecutions, to organise some march or other against the Commonwealth law and to give as a rallying point the Deputy Crown Solicitor’s telephone number.
– My question is directed to the Treasurer. I refer him to the financial section of this morning’s Melbourne ‘Age’ in which a sharebroker is reported as criticising the Government for preventing the use of convertible securities. Does the Treasurer agree with the criticism and if so, will he take steps to permit the use of such securities?
– I did read the comment made by a Melbourne broker in this morning’s Sydney papers in which he recommended that convertible notes should once again be introduced. I can point out to the honourable gentleman that we did permit deductibility of interest on convertible notes until, I think, about 1960 or thereabouts. We then found that the existing law provided so many opportunities for avoidance that the taxation revenue was suffering, and suffering in too substantial a way. As a result, action was taken by the then Treasurer to remove the provisions of the Act giving convertible notes the right they had under the taxation laws.
Nonetheless, we have received many representations from business interests which are always, naturally enough, trying to find some means of getting a better taxation deal. We have looked at this problem and have consequently tried to draft a measure to permit the reintroduction of convertible notes providing that it is not a method of ensuring a deferred share issue. We have not until the moment been able to find a solution to both sides of the problem, but I am hopeful in the near future that I will be able to put a submission to Cabinet about it.
– I ask the Prime Minister a question. Is it a fact that the Chairman of the Tariff Board has given certain assurances to the Associated Chambers of Manufactures of Australia, including the promises that the Board will not adopt a 50% effective rate as a ceiling limit on tariff protection or any arithmetical cut off point and that each application for tariff protection will be dealt with wholly on its merits, without the application of any upper limit? If so, was the Chairman of the Tariff Board acting with the full authority and knowledge of the Government in his negotiations with the ACMA? Can it be assumed by the Associated Chambers of Manufactures of Australia, the Australian Industries Development Association and industry generally that the assurances and promises of the Chairman of the Tariff Board now constitute official Government policy? If not, when can an official pronouncement of Government policy be expected?
– I understand that there was a discussion between the Chairman of the Tariff Board and the Associated Chambers of Manufactures representing Australian manufacturers and that the
Chairman of the Tariff Board indicated that he was not going to adopt hard and fast rules and that he was not going to adopt the kind of rules the honourable member has mentioned such as that anything over 50% was automatically out or matters of that kind. To the best of my recollection the discussion was satisfactory to both the representatives of ACMA and to the Chairman of the Tariff Board. But the Chairman of the Tariff Board is the head of what is in effect a statutory authority. He does not go along to negotiate or to talk with instructions from the Government on these matters. What he was doing was seeking to make clear to manufacturers the kind of approach which this independent body, the Tariff Board, would make. As for Government policy, I think it has already been made quite clear in this House, both by the Minister for Trade and Industry and by myself, that we are going to receive in the future reports from the Tariff Board as we have in the past, but that we are going, as a government, to base our acceptance or rejection of these reports on our own judgments of the economic value to Australia and the general criteria which have always been applied.
– I direct a question to the Minister representing the Minister for Supply. The chartered Antarctic relief ship Thala Dan’ has on several occasions had need to call for assistance in pack ice from American icebreakers, and also from its sister ship ‘Nella Dan’, and has in turn rendered assistance recently to ‘Nella Dan’ in order to help the French polar team. Is salvage payment involved in any of these rescues? Has consideration been given to the building, preferably in Australian shipyards, of one or more polar relief ships to make Australia independent of foreign charter in this continuing and critically timed work? Finally, does the air conditioning of such ships make them suitable for use in other waters for such national projects as fisheries research when not required for polar work?
– It is quite true that the Australian Antarctic chartered ships Thala Dan’ and ‘Nella Dan’ have been obliged to seek the assistance of ships of other members of the Antarctic Treaty when caught in heavy ice but the honours have been rather equally divided, I think, and our own ships have rendered similar assistance in their turn. It has become something of an accepted convention amongst members of the Antarctic Treaty concerned that no charges will be made for this reciprocal assistance, and there, I think, the matter rests. As for the other questions raised by the honourable gentleman, the Department of Supply is at the present moment giving thought to the question of what provisions should be made for the continuing work of the Antarctic Division, and this may well involve consideration of the question of providing our own ships. It is true, of course, that the Antarctic summer period is very short, and while it might be true that these ships would be available for other work in other Australian waters I should think they would need considerable modification for such work as fisheries research. I think the high cost of conversion, and then possibly reconversion for the Antarctic work, would tend to render this kind of proposition uneconomic. On the other hand, when the Department of Supply does look at this question of transport and the provision of ships I am sure the honourable gentleman’s suggestions will be given consideration.
– My question is directed to the Minister for National! Development and concerns the proposal to use a nuclear explosion to create a harbour at Cape Keraudren. The honourable gentleman will have noted that at a Press conference sponsored by the Atomic Energy Commission 6 weeks ago the Chairman of the Australian Project Technical Committee stated that the feasibility study is expected to be completed by the end of May or the commencement of June and that if the study is favourable the blast could take place next January. I ask the honourable gentleman whether he has noted that the Commission’s technical mission to the United States reported in the publication ‘Peaceful Uses of Nuclear Explosives - An Evaluation, for Australian Purposes, of Proposed Civil Engineering and Mining Applications’, which was issued in March 1964 and reprinted in 1965, that ‘since the occurrence of plants and animals may vary widely between seasons it is essential that the ecological study should cover at least the complete seasonal cycle’, that is, at least I year. Why is it now believed that it is no longer essential’ to extend the study over at least 1 year? Also, will the Commission publish the feasibility study as it published the earlier report by its technical mission?
– I understand that a conference is being held in Washington later today and that this will be attended by representatives of the company concerned, the Sentinel Mining Company, the Australian Atomic Energy Commission and the United States Atomic Energy Commission. Further discussions will be held and as a result of them we will know what the final position is with the proposed feasibility study. If the feasibility study is to be carried out, it will be carried out by the United States Atomic Energy Commission as well as the Australian Atomic Energy Commission. Therefore I am not in a position to say whether the details of the study could be made available, because obviously the United States will be the major contributor to it. However I believe it is likely that the timetable, if the study proceeds, will be rather longer than we had originally expected. Until such time as I get further information on the feasibility study I am afraid that I am unable to give the honourable member any further details.
– My question is addressed to the Treasurer. Does the right honourable gentleman agree that there is an increasing demand by young people for housing loans and that the Government has a responsibility to stimulate substantial investment to alleviate this pressure, according to the capacity of the building industry? I draw attention to the potential, now amounting to hundreds of millions of dollars, in that segment of the 30/20 rule for life assurance companies relating to semigovernment loans under the taxation legislation and ask whether the Government will consider including in this section a provision that funds placed with permanent building societies will, in addition to semi-government loans, be acceptable investments.
– lt must be obvious that the Commonwealth Government takes a major share of the responsibility for the provision of finance for homes. The recent statistics on housing commencements, construction and non-housing buildings show, in the opinion of the Government and particularly of myself, that the building industry is now very nearly fully employed. An indication of this was given in the December figures for housing, which showed that there was a rate of 130,000 commencements in the year.
In the 3 months to the end of January the annual rate of approvals had risen to 150,000. I believe that this was as high as the Australian demand would warrant and probably was a little above what the long term trend would warrant. The honourable gentleman will also know of the housing assistance grants for young people. There is an inducement for them to save and so gain the advantage of a Commonwealth subsidy.
In the last part of his question the honourable gentleman referred to the 30/20 rule for life assurance offices. He would know that the primary responsibility of the life offices is to look after the welfare and security of those who take out life assurance policies. Admittedly we do make some taxation concessions to them in relation to their contributions to Commonwealth bonds, but I do not think that this process could be taken much further. I feel that the taxation concessions are at a maximum and that overriding this is the need of the life offices to look after the interests of their policy holders.
– I ask the Minister for Trade and Industry whether, despite all the export promotion operations of his Department, the increase in the value of manufactured imports during the 7 months ending January last was over $50m more than the increase in the value of our exports during the same period. Is this due to the inadequacy of the tariff protection of our industries? If it is not, what does he suggest is the cause?
– Obviously I do not carry in my mind the figures that would enable me to deal with the honourable member’s question, but the volume of imports into Australia is affected by a great complex of considerations. It would not be an easy matter, in answering the question, to give an explanation. However, as a matter of interest I did have cause recently to inquire what proportion of imports to Australia come in duty free or at a comparatively duty free rate and I was told that the present volume is more than 60% . So the greater proportion of our imports is not competitive with Australian production.
– 1 address a question to the Minister for Primary Industry. How long will it be before any sales of merino rams for export actually take place under the terms of the Government’s decision to relax conditionally the embargo on the export of merino breeding sheep? If the Minister cannot give a specific answer to that question, can he indicate how long it will be before it is practicable for sales actually to take place?
– I am not in a position to give the honourable member a firm answer. The indication that I have received from the Australian Association of Stud Merino Breeders is that it would like to have something worked out for the Sydney stud sales which will be held in about 2 months time. Whether this is possible I am unable to say. My Department will have to consult with that Association and with other industry organisations about how the arrangements will work. Until these arrangements have been finalised I cannot give any indication.
– I ask a question of the Minister for Air. Is the Royal Australian Air Force base at Learmonth, in Western Australia, still important from a defence point of view? Was the base scheduled to be upgraded some 3 years ago to carry out what were then considered to be very necessary improvements in the interests of defence? Has the upgrading proposal now been postponed indefinitely? If so, why is it that improvements thought to be so necessary 3 years ago are no longer important today?
– I wish to advise the honourable member that this matter is still under consideration.
– I direct a question to the Minister for Primary Industry as a result of recent meetings of the Australian Agricultural Council and the Australian Wheat Growers Federation, at which discussions took place in relation to the excess of wheat production over estimated sales. As the recommendations suggested by the Federation have far reaching effects on many wheat growers throughout Australia, particularly in Victoria, where the recommended quota of 65 million bushels has been exceeded in 6 out of the last 9 years, I ask the Minister the following questions: Has he considered these proposals? Whose responsibility will it be and what action will have to be taken to have them implemented? Does this mean that the first advance, previously $1.10, automatically will be retained? What protection will be given to those wheat growers classified as small permanent growers who have prepared to sow their normal acreage this year and who will produce over their individual quota?
– I have not formally received any proposals from the Australian Wheat Growers Federation although it has notified me informally of its decisions and I have read about them in the Press. The Wheat Growers Federation is meeting with me next Friday in Sydney to discuss these proposals. The wheat industry will face a tremendous problem - quite a perplexing problem - this year if we have another crop of dimensions similar to those of the crop we had last year and if we export only at the rate that we have been exporting in recent years. The Federation has shown courage and a responsibility in relation to its problems in the proposals it has put forward, but to say that implementation of the proposals will be automatic is premature at this time. What is necessary is, first, an indication as to whether the proposals can actually work. To do this, they would need to have the backing of the State governments. I would like to know the reaction of all wheat growing organisations in Australia and I believe each State is having discussions on this matter at the moment. Then I would like to know the reactions of the State governments and whether they need to give legislative back ing to the implementation of the quota delivery proposals. Once this is done, the Commonwealth can consider the financial implications.
The first advance is purely a fiscal measure to provide short term finance to the industry while the crop is involved, too. The procedure always has been to wait until the latest possible time in a harvest to determine what the size of the crop is and what the marketing opportunities are, and then to assess how much money could be advanced to the industry that could be repaid within 12 months. To make any earlier announcement would be a departure from that procedure. I would say that involved policy and I could not make a comment. I would want to have first of all the reaction of the industry as a whole on a State to State basis, and I would want to have the reaction of the State governments before presenting the proposition to the Commonwealth Government. As regards the effect on small growers, to which the honourable gentleman referred, all 1 can say is that once a State quota is determined it will be the responsibility of the State to decide how that quota is further subdivided back to the farmer.
– My question is directed to the Minister representing the Minister for Customs and Excise. Does a ban exist on the export of domesticated Australian birds such as the budgerigar? If such a ban on its export does exist, can the Minister explain why the budgerigar is more important to Australia than merino stud rams?
– I have no idea whether there is a total ban on the export of Australian budgerigars. I know the value of the wool industry to Australia, and I think my colleague, the Minister for Primary Industry, has explained his approach to this question. To resolve this matter, I will ask my colleague in another place for an answer to the question and give that answer to the honourable member for Wide Bay.
- Mr Speaker, I ask for leave to make a short statement.
-Is leave granted? There being no objection, leave is granted.
Mr GORTON (Higgins- Prime Minister) - Mr Speaker, last Thursday night the question of my giving a woman journalist a lift home from a Press Gallery dinner on Friday 10th November was aired in this House in a manner which I think sought to reflect upon me. Any innuendo that there could have been anything improper in this was fully answered, and it is clear that I was at no time alone with the girl in question and indeed that she sat in the back seat with my Press secretary and I sat in the front seat beside the driver.
I think, however, that I should mention two points. Firstly, the Ambassador in question was not kept waiting for me to fulfil an appointment, he having twice telephoned my Press Secretary during the dinner to ask that I should call in on the way home for a nightcap, that he would wait up for me and that I should not be disturbed to be told of this until the dinner was over. I was therefore informed of it by my Press Secretary after we had driven off from the dinner. There was therefore no discourtesy to the Ambassador, though there could have been thought to be had I not called in for what was clearly a purely social occasion.
Secondly, since in some quarters time is thought to be of importance, and a variety of very widely different recollections of the time of leaving the dinner having been made, I should state as I have already stated that I have , myself no firm recollection of any particular times on a social occasion 5 months ago. I have, however, discovered over the weekend that there is a record of the time I returned to the Lodge, and that is 3 o’clock. That is the only accurate record of time that can be relied on as far as I know.
I and my colleagues have been trying to guide Australia along what we think are the best paths for Australia in what is in some ways a new era with new problems. I think Australians on the whole approve what we have done and what we have been trying to do. I think they will approve what we do in the future. I believe that these kinds of attacks will not make them believe any differently.
– by leave - For the information of honourable members I present the report of the Committee of Inquiry into Health Insurance. The inquiry was carried out at the request of the Government by a Committee comprising Mr Justice Nimmo, who was Chairman, Sir Leslie Melville and Mr N. H.- Mcintosh. The main theme in the Committee’s report and its recommendations is that there is a need for a much closer relationship between hospital and medical fees and contributors’ benefit entitlements. The report also recommends special assistance to families on low incomes who find the payment of health insurance contributions a hardship and stresses the need for the elimination of unnecessary complexity in the health insurance scheme. The recommendations include a number of measures designed to make the scheme more economic and efficient.
The Committee has made 42 specific recommendations and many of these concern not only the Commonwealth Government but the State governments, the medical profession and the health insurance organisations. Examination of the report will be put in band immediately and the Government will, at the earliest opportunity, initiate discussions with all of the parties concerned to consider the practical implications of the recommendations made by the Committee.
The report of the Committee shows that it has made a most thorough and comprehensive inquiry. It has given a great deal of thought to the 268 submissions made to it by various organisations and individual persons; it has conducted hearings in all States and, in addition, it has carried out a great deal of research. Because of its importance the report is being tabled at this early date so that honourable members and the public may know what has been recommended by the Committee and so that all of the parties concerned in health insurance may study its implications. Meanwhile, on behalf of the Government, I wish to thank the members of the Committee for this most thorough study of the problems of health insurance. I present the following paper:
Report of the Committee of Inquiry into Health Insurance - Ministerial Statement, 25th March 1969.
Motion (by Mr Erwin) proposed:
That the House take note of the paper.
– Mr Speaker-
-Is the honourable gentleman speaking to the motion?
– Yes. The report tabled by the Minister for Health (Dr Forbes) bears out in every significant detail the criticisms of the national health scheme raised repeatedly by the Opposition over a period of years and as repeatedly rejected by the Government. It demonstrates conclusively that, had the Government cared to heed the advice of the Opposition, much of the suffering and financial anxiety which ordinary Australians have undergone in recent years as a result of the deficiencies of the health scheme could have been avoided. It crushingly refutes the Minister’s strident and recurrent assertions that Australia has had throughout the period of his incumbency ‘the finest national health scheme in the world’.
Discussing operating expenses and resources which absorb $1 out of every $4 paid by Australians in contributions to voluntary health insurance funds, I said last year:
Administrative expenses of a totally unnecessary character were incurred . . . The funds compete with one another for members through lavish advertising campaigns and promotional activity. They erect prestige office buildings on expensive mid-city sites. One fund has purchased an executive aircraft to fly its staff around the countryside.
The report states:
Funds have sought to win a larger share of the available membership by offering excessive commissions and inducements to agents to promote transfers of members from one organisation to another; by establishing branch offices and cash payment centres in areas already well serviced by other organisations; and by advertising. It is doubtful whether this type of activity is winning many new members to the scheme. It is certainly a very costly use of contributions of persons who are already members.
In some areas the proliferation of branch offices, the relatively high rates of commission offered to agents and the extensive advertising undertaken raise doubts as to whether due attention had been given by the management of some organisations to economy of operation.
So much for the unsolicited testimonials which the Minister has given over the years to the administrative rectitude and business acumen of benefit fund management. Indeed, the Minister seems to know very little about the amounts which funds spend for operating expenses, or the purposes for which such expenditure is outlayed. Last August I asked him on notice a question dealing with these matters which still remains unanswered. I have had to rely instead on the Director of the Hospitals Contribution Fund of Australia, Mr R. J. Turner, for the following information:
No less than 27 organisations exceeded the permissible’ expense rate in 196S-66, and of these 20 would have exceeded a permissible limit proposed by the Department based on a flat rate of 16%.
Honourable members will understand for what sort of purposes these very substantial sums are expended when 1 tell them that certain fund managements are functioning at the moment as a sort of annex to the Liberal Party propaganda machine. Contributors to these funds are receiving through the mail off-prints of an apologia for the national health service which appeared in the ‘Australian’ in October last year. It would be interesting to know whether the cost of these off-prints and of the postage involved is being met directly from contributions Australians pay to insure themselves against health costs. Again, the answer may lie in the interest that the funds are paid on their $80m reserves. Or it may lie in the political slush fund which a number of benefit organisations created 7 years ago, and to which they have been paying annua] subventions of $20,000. What is the Minister’s attitude to the existence of this fund? What has he to say about the misappropriation of insurance contributions for political propaganda of the most blatant kind? What is his attitude to spurious research organisations such as the Office of Health Care Finance set up by the Hospitals Contribution Fund of Australia?
I said last year:
Under voluntary insurance, 17% of Australians have no medical cover whatsoever, and 15% have no hospital cover. The uninsured include many of those least able to afford to pay for medical and hospital services. Other low-income earners insure themselves and their families at the lowest available rates for a level of care irrelevant to the
Teal cost of medical and hospital care.
The report concludes that:
In the early days of the scheme the contributions were low and probably few contributors found them unduly burdensome. Now, however, when contributions of something like $1.40 a week are required for families to secure coverage against medical and hospital treatment, it is clear that there are many families on low incomes who cannot afford health insurance at all or for whom payment of the contribution represents severe hardship. Very often these families are large and the incidence of serious illness is high.
I said last year:
Under voluntary health insurance, contributors must bear a proportion of the cost of the medical services they receive. Under the Australian system, this proportion must not be less than 10%, and in fact averages 37.3%. … The more a medical service costs, the greater the gap tends to be between the amount the contributor pays and the amount he recoups as a benefit. Even a relatively minor proportion of today’s high medical and hospital bills may exceed the means of many Australian families. In these circumstances, it is not surprising that even insured families may dread having to call a doctor and regard hospitalisation as a major financial catastrophe.
The report confirms that:
Inadequate cover for medical expenses, especially when they are heavy, is an inbuilt characteristic of the medical insurance scheme, regardless of the contributions paid. . . . The Committee was provided with many instances where contributors who were insured in the highest medical tables had received accounts for medical services running into several hundreds of dollars and whose benefit entitlements were as low as 25% of the doctors’ accounts. It was evident that serious financial hardship was involved in many of these cases.
These are not new shortcomings, nor is their existence news to the Minister. The Opposition has for years been drawing them to his attention and to the attention of his predecessors. They have been verified by independent economists. On nearly every page, the report reveals glaring inadequacies in the national health scheme which in many instances could have been remedied without great expenditure of public funds, and indeed would have been remedied if the Minister had been less concerned with maintaining the fiction that Australia has ‘the finest national health scheme in the world’ and more with making sure that Australians in fact could enjoy adequate health services.
The report before the House is a credit to the Committee which prepared it and a reproach to both the Minister who drafted the terms of reference and the Government which approved those terms. The Committee has carried through an exemplary inquiry into the voluntary health insurance industry. It has exposed the glaring inefficiencies of that industry, and the injustices which are perpetrated through allowing its dictatorial sway over most of Australia’s health services. The Committee has, however, been precluded from carrying through its inquiries to their logical conclusion by the Government’s insistence that it make only such recommendations as may be accommodated within ‘the context of a voluntary health insurance scheme*. As a result, it has been able to propose only that contributions should be deducted by employers from paypakets which Ls more efficient than the present system but less efficient than collection through normal taxation procedures. It has been able to recommend subsidies for poor families, which is more equitable than present arrangements, but not contributions graduated according to the means of those who pay them, and therefore more equitable still, it has been obliged to vest its National Health Insurance Commission with a variety of regulatory powers and procedures to curb the more blatantly wasteful and extravagant features of the voluntary insurance system, rather than vest the insurance function in the Commission itself.
Australians want a health scheme which will provide proper service at a cost the community can afford to pay. They want a scheme which meets the needs of the entire community, regardless of age and income. They want a scheme which can cope with the demands of all forms of illness, injury and incapacity, regardless of their type, origin or duration. They want a scheme which will promote efficient use of the resources of the health industry while allowing practitioners satisfactory rewards, incentives and conditions of work. The Australian Labor Party has consistently advocated the establishment of such a scheme. Australian economists have shown how the Party’s proposals can be out into effect at a cost lower than that of the inefficient, ineffectual voluntary health insurance system. Here I should pay tribute to the work of the Institute of Applied Economic Research at the University of Melbourne under Professor Ronald Henderson. My Party has relied increasingly upon the work of the Institute, as was demonstrated in the urgency debate on poverty last week and as will be apparent in all that my colleagues and I have said on a more comprehensive, efficient system of health cover for Australians. The pity of it is, I would reiterate in this context, as I said in the poverty debate last week, that research in these matters is left to academics, who are given inadequate grants by the Commonwealth to pursue such research.
The Opposition salutes the work of the Nimmo Committee. It deplores the Government’s refusal to allow the Committee to carry its inquiry to its logical conclusion and to present proposals for a universal system of health insurance and contributions geared to the incomes of those who pay them. The Opposition reiterates its determination to promote and introduce such proposals.
Debate (on motion by Mr Wilson) adjourned.
– I have received a letter from the honourable member for Newcastle (Mr Charles Jones) proposing that a matter of definite public importance be submitted to the House for discussion, namely:
The Government’s continuing refusal to plan expenditure of an amount at least equivalent to the proceeds of all the automotive fuel taxes on roads and associated facilities.
I call upon those members who approve of 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 CHARLES JONES (Newcastle) (3.38] - In rising to speak to this matter of public importance I wish to outline the Opposition’s concern with the continuing failure and refusal of the Government to return for road use, not necessarily to the States, all of the revenue collected on automotive fuel, because we believe that the general assessment of the man in the street, the Australian elector, is that the whole of this money should be used for a national road construction policy. I wish to set out this afternoon in very clear detail the real position so far as the Government is concerned. The petrol tax is correctly known as customs and excise collected on automotive petrol and diesel fuel. With the concurrence of honourable members 1 incorporate in Hansard the following table, which has been prepared by the Parliamentary Library Legislative Research Service and which sets out the amount of fuel tax which has been collected in the 10 years from 1958-59 and the amount estimated in the Budget for 1968-69, and also the amount of money which has been paid to the States under the Commonwealth Aid Roads Acts.
With the concurrence of honourable members I incorporate in Hansard a table from the same source settting out the amount of sales tax collected on motor vehicles in the same period.
From these two tables honourable members will see that in the last 10 years an amount of $1,930,108,000 has been collected by way of customs and excise duties on automotive petrol and diesel fuel, and that in the same period an amount of $1,331,422,000 has been returned to the States under the Commonwealth Aid Roads Acts. They disclose that in the 10 year period there was a surplus of $598,422,000 and that in the last 5 years there was a surplus of $397m. In the same 10-year period the Commonwealth Government has collected, by way of sales tax, an amount of $1,103,234,000. We are not contesting that the amount collected by way of sales tax on motor vehicles should be returned to the States. But it has been accepted by every elector in this country, wilh the exception of honourable members opposite, that all the money collected from petrol tax, using that term to cover all revenue collected from taxes on the sale of petrol and diesel fuel, should be used for a national roads programme. The Opposition is concerned with the fact that over recent years the Government has not adopted this policy. When the Commonwealth Bureau of Roads was established we were hopeful that it would make strong recommendations to the Government setting out a clear and obvious case that this money should be used for road construction. But to our disappointment the Bureau recommended a figure of only $l,280m - which the Government did not accept. The Government reduced this figure to $l,200m, and then it made a bighearted grant of an additional $52m to the States. We do not accept that this is a reasonable policy.
Today the motor car is no longer a luxury, but the Government is imposing sales tax on it as though it were a luxury. At this stage we do not believe that the motor car should be included in this bracket of sales tax. We recognise that the motor car is a necessity in the community. People, particularly those living out of town and away from their places of employment, recognise that motor vehicles are a necessity in the community. I am surprised that members of the Australian Country Party are prepared to allow the present policy to be adopted, because if you take the motor vehicle away from the country voter, where is he? He no longer wants to travel by horse and buggy or on horseback from place to place. Unless he has a motor vehicle he is tied down to bis farm or to his place of employment in the country. We believe that the Government should dispense immediately with its idea of classifying the motor vehicle as a luxury item and imposing sales tax upon it.
Money collected from petrol tax should be returned to the States and used for road construction - and 1 emphasise that - and for all things associated with road construction. I want to show that the Government is not being as big hearted over the next 5 years as has been suggested. The State Premiers, possibly for political reasons, created no trouble at the recent Premiers’ Conference. They did not want to create any divergence of opinion in the political atmosphere, this being an election year. They said: ‘Let’s go easy on the Federal boys. They are going to have a tough enough battle as it is.’ The State Premiers accepted, as best they could, the offer that was made by the Federal Government.
What is the real position? Let us examine it, bearing in mind the figures I quoted earlier, that in the last 10 years there has been a surplus of $598m, and that in the last 5 years there has been a surplus of $397m. If petrol tax is not increased by lc per gallon in the next 5 years, based on this year’s estimate the figures show that the Federal Government will receive $l,350m, and that in the same period it will make $l,252m available to the States. In other words, it will still finish up with a surplus of $9 8m. We can reasonably assume that the amount of revenue collected from petrol tax will increase in the next 5 years. I do not know which figure honourable members should take. If they examine the figures they will find that in the last 10 years - and I am excluding the year in which petrol tax was increased by 3d a gallon - there has been an average increase of 8% per annum in revenue derived from petrol tax. If honourable members apply that increase to the figures for the next 5 years they will see that the Government will receive revenue totalling $l,711m. It will make contributions to the States totalling $ 1,252m. So in the next 5-year period the Government will finish up with a surplus of $459m, which is greater than even the surplus of $397m which the Government had for the previous 5-year period. Those figures are based on an average increase in revenue of 8% per annum.
The report of the Commonwealth Bureau of Roads shows that the bureau forecasts that in the next 5 years consumption of fuel will increase by a little better than 4.9% per annum. For simplicity in my calculations f have extended the figure to 5%. This shows that at the end of 5 years Commonwealth revenue will total $ 1,566m less, once again, the magnificent grant of $l,252m. That still leaves the Federal Treasury with a surplus of $3 14m. I should like the Treasurer (Mr McMahon), when he follows me in this debate, to give us some explanation of why the Federal Government proposes to withhold this money and whether it considers that the surplus on petrol tax will be $340m, based on an average increase of 5% in consumption of fuel - a figure which, incidentally, I do not accept. I think that the average increase for the last 10 years will be maintained because of the development that is taking place in this country and the number of migrants being brought into the country. Year by year the population is increasing. The average increase of 5% in the consumption of fuel which has been forecast by the Commonwealth Bureau of Roads is, in my opinion, unreal and is not a practical and realistic figure. [ think that what has happened is that the Treasury has said to the Commonwealth Bureau of Roads: ‘This is how much we will give the States this time, and we want you to prepare a case based on how much we will give them’. I regret having to say this, but it is the only conclusion to which I can come. If we take an average increase of 10% in the consumption of fuel - and this could well be the position - there would be a surplus of $554m, which would be almost equivalent to the surplus which was accumulated in the previous 10 years. I point these few facts out because, as I said, at this stage we are greatly concerned that the development of roads in Australia is not taking place fast enough. I refer to the statement of the Prime Minister (Mr Gorton) which states that an amount of $394.55m will be spent on rural roads in the period of the agreement. Let us consider what the Shires Association of New South Wales had to say on this matter. A survey which the Association carried out and which is dealt with in a publication by the Association dated February 1969 discloses that shire needs in New South Wales will total $708,127,000 in the period 1969 to 1979. Yet in the same period the Government is prepared to make available only $394.55m for rural roads in Australia. This shows the policy which the Government is adopting. It is taking no regard of the requirements of the road systems in this country. Although the Government has made money available for the construction of urban roads, an action with which we agree, I do not accept for one second that the Commonwealth Bureau of Roads has said that the amount of money to be spent on roads cannot be increased, that the work cannot be done. I do not accept that for one second. I firmly believe that much more money could be spent on roads if (he Commonwealth Government were prepared to make it available.
The States have been safeguarded because their increased expenditure will be governed by the increase in receipts from motor car registration fees, but no similar safeguards have been written into the Agreement to protect local government councils. In Newcastle a few years ago the Department of Main Roads made an offer to the City Council which would have represented a very substantial increase in rating. I believe, knowing a little about the Agreement, that the increased amount of money which is being made available under the Agreement between the New South Wales Department of Main Roads - other honourable members can talk about the position in their own States - and local government bodies will mean that local government will be required to pay a certain percentage of the cost of construction of roads. I have not time to read the whole Agreement, but I can assure the Treasurer and honourable members that local government will find itself in an embarrassing situation in the not too distant future when the effects of the Agreement come into being. Honourable members should not be misled into believing that I am advocating the amount should be reduced. What I am saying is this: When the Federal Government increases its contribution it should require the States to make adequate provision whereby the local government ratepayer will not be placed in the embarrassing position of having to withstand a very substantial increase in rates. This field is already over rated because of the burdens that have been placed on local government today. State and Federal governments require local government to carry out work today that it was not expected to undertake in years gone by. 1 ask the Treasurer and the Minister for Shipping and Transport, who will speak in this debate, to give us their assurances that local government bodies will not be burdened by increased demands on them to meet the development of roads in their own areas. 1 believe this is important because in this field the people today are heavily overburdened. This is particularly so in regard to rates. One thing that concerns us is that after 5 years operation the Commonwealth Bureau of Roads has still not produced a national road plan of what the Federal Government has in mind in regard to interstate roads and the develop ment of the export trade, lt is the Government’s responsibility to bring down a report. There is any amount of evidence showing that one State is prepared to tar surface a road to its border and because the other State is not involved it is not interested to carry on where the work stops. As a result we finish up with a gravel or unsurfaced road. There is any number of examples of where we require co-operation between States, but it is non-existent.
– Order! The honourable member’s time has expired.
– lt must become obvious that the honourable member for Newcastle (Mr Charles Jones), who has spoken on behalf of the Opposition, does not understand the elementary principles of budgetary finance. He does not understand that it is a fundamental responsibility of the Government to ensure in a fully employed economy that our resources are properly allocated. I would like to go back to the first question the honourable member raised - the allocation of fuel’ taxes to road grants. The honourable member should know, but he has not referred to the fact, that up to 1959 it was the custom of the Commonwealth Government to allocate a proportion of fuel taxes to Aid Road Grants to the States and that the amount granted was substantial. It was found that as fuel taxes increased and as the Commonwealth assumed other responsibilities it would not be practicable to keep up the proportionate allocation out of a particular kind of revenue for a particular purpose.
I think we could take it that if we were to pursue this argument to the obvious conclusion we would see how absurd the honourable gentleman’s argument was. How would we allocate postal taxation or corporation taxation? How would we allocate consumption taxes? I think it is an absurd recommendation and one not accepted in any other part of the world that such a nexus should he reached between a fuel tax or any other similar kind of tax and particular kind of government expenditure.
If I can take this argument a little further. I would like to pose two problems to honourable members. The first .s this: The growth in fuel tax can in fact rise in a year and fall in another. For that reason alone an automatic nexus between fuel tax and road grants is, I believe, out of the question, if we look at the figures - and I shall take one year only as an example - we see that in 1961-62 there was in fact a reduction in the growth rate of fuel tax. Now, does that mean we are to reduce the growth of money available to the States under Commonwealth aid roads grant in that year or are we to find money from some other source?
There is a second good reason that ought to bc known to members of the Opposition and which is fundamental to any sane system of economics and finance, lt is this: Frequently we have to impose a tax for budgetary purposes. In other words, we might find, as one example, that defence expenditure has to increase. When we decided 3 or 4 years ago to increase defence expenditure substantially we thought that one of the ways in which we could raise the necessary money was by means of a tax on motor fuel. Does it mean in those circumstances that, despite the fact that we were getting money for defence purposes, we should also have increased proportionately the amount of money available to the States for roads? 1 think if honourable members hear it expressed in these words they will come to the conclusion that to have an automatic connection or nexus between the fuel tax and aid roads is not only absurd but would, I believe, substantially weaken the Government’s capacity to curry out sensible economic and financial measures in order to keep up our objectives of full employment, of sensible allocation of resources and of vastly increased growth.
The next question to which I wish to apply my mind concerns the allegation by the honourable member for Newcastle about a mere surplus of $3 14m in one case and substantially more in other cases if the full amount of petrol tax had been allocated for roads. If he had analysed the figures he would have found that we expected the fuel tax to be about $300m in 1969-70. The Commonwealth aid roads grant for the next year is SI 93m. In other words, there is a deficiency of S107m. Does the honourable member in common sense and in logic argue that we should now increase that vote by $107m? lt was not recommended by the Commonwealth Bureau of Roads, lt was not asked for-
– The Treasury exerted some influence on the Bureau.
– That is untrue. I am glad the honourable member raised that.
– That was the amount that the honourable member was going to give.
– What the honourable member says is totally false. It is unworthy of the honourable gentleman, who I respect, to say that the Treasury exerted some influence on the Commonwealth Bureau of Roads. The Bureau will be able to answer that insult itself. If we look at the recommendations that were made by the Bureau, we find that an extra $30m over a 5-year period was recommended. In other words, the Bureau recommended S6m a year.
When the State Treasurers or the Premiers came here a few weeks ago to argue their cases, they suggested that the recommendation of the Commonwealth Bureau of Roads of SI, 2 80m should be accepted and consequently they asked not for $107m extra a year but for about $6m a year. What it adds up to is this: The Australian Labor Party accepts no-one else’s recommendations but its own. It does this without any knowledge of the complexities of road finance and without a great deal of knowledge of capacities or how much resources can be allocated to roads. The Labor Party wants to go its own wilful way. It forgets that if we allocated the extra amount we would have to cut down on the amount of money that would be available to the States for other purposes, to hospitals or social services, to defence purposes or for some other purpose that is contained in the Commonwealth Budget. So again this is another question that has not been answered. Where would the Opposition get the funds to allocate it roads? I am willing to make the forecast that when the Opposition comes along on some other matter before the House or at Budget time it will be strenuously arguing that money for roads should be cut down so that additional sums of money can be allocated for other purposes.
– We have never advocated that.
– The honourable member had his opportunity to speak. He will be able to speak at Budget time and we will see how he can justify his comments then. The third point I wish to make is that the Opposition obviously did not understand the substance of the recommendations made by the Bureau of Roads. First of all, 1 think I should explain that what the Bureau did was to establish what it regarded as an assessed need for roads throughout this community. In other words, it carried out a very large number of evaluations, or cost benefit analyses as they are called in the official document, and it came to the conclusion that there were certain assessed needs based upon a return on investment of something of the order of 10%. It then said: ‘Based upon this return of 10%, this is the way in which we think the money should be spent to get a first class road system for the Commonwealth’. But it went a stage further than this and put to itself this proposition: ‘What we have to ascertain is not only what is the need but also what is realistic; in other words: What is the capacity of the community to fulfil the needs of an assessed needs basis’. The Bureau came to the conclusion that if one looked at the amount of money to be made available by the States on an estimated basis then the Commonwealth should make available $ 1,280m over the 5 year period. It was quite clear that if any amount of money over and above that was made available we would run up against a shortage of materials, a shortage of technical personnel and a shortage of technological skill to permit the works to be effectively carried out. When we look at these vast additional sums mentioned by the honourable member for Newcastle, it is obvious that the honourable member has not thoroughly understood the tenor of the report of the Bureau of Roads and consequently has not understood what the Government has attempted to achieve.
The honourable gentleman then said that we had not a national roads programme. Again this leads to the conclusion that he did not understand the substance of the speech of the Prime Minister (Mr Gorton) or what it in fact meant, because if he had heard what the Prime Minister said, and understood it, he would have realised that the grant of $ 1,252m by the Commonwealth is divided into three sections.
First there is the provision for urban arterial and sub-arterial roads, a totally new development in Commonwealth aid expenditure. That amounts to $600m over the quinquennium. But then we also have an amount of $187m for non-urban arterial roads. This is also a novelty in Commonwealth aid programmes. The reason for this provision is that we want to establish throughout the length and breadth of this country an arterial road system which will permit the rapid movement of goods and services between States, between capitals and between various members of the population. The rest of the money, which I need not mention in this context, is for other rural roads, an amount of $394m or $94m over and above what was granted in the previous 5-year period.
– Does that include highways?
– It is set out in the definitions that have been given. 1 cannot go through them now because there are three separate classes of road, classifications 3, 4 and 5, set out in the Prime Minister’s statement, and the honourable member will be able to identify the classifications of roads in those three definitions. It is obvious that honourable members opposite have not really understood what this is about. But I take the matter a stage further and point out the way in which assistance by the Commonwealth for roads is in fact being granted. Under the 1959-60 allocations something of the order of 2% of our gross national production was allocated to roads by the Commonwealth, the States and the local government authorities. This year the amount will be 2.2% of gross national production and if the Commonwealth Government’s objectives are achieved it will be substantially in excess of that 2.2% by the end of the next 5-year agreement.
What all this means is - and I point out to the honourable gentleman that this was agreed to by the Commonwealth Bureau of Roads - that if our objectives are in fact achieved there will be a substantial improvement not only in the mileage of roads but also in the quality of roads. Lastly, I refer to one other matter which was obviously forgotten by the honourable member for Newcastle. I have just read again his proposal for the discussion of this matter as one of public importance. He stated that there should be ‘expenditure of an amount at least equivalent to the proceeds of all the automotive fuel tax on roads and associated facilities’. Obviously the honourable gentleman could not have read what the Prime Minister said, because his very last sentence directed attention to the fact that the Department of Shipping and Transport will be making an in-depth study of the total transport problems of the Commonwealth, and as and when it comes to grips with the problem will be approaching the Cabinet again in order to let it know the facts and ask the simple question: What should the Commonwealth do to improve the transport complex of the Commonwealth and so reduce costs and permit our export Industries to become more competitive in international trade?
This is a very, very good agreement. As I listened to the arguments of the Premiers I came to the conclusion that they went home a very happy group of people. Whilst they did put the argument for some increase of $30m they knew they were well treated, and they know that with their own allocation, which is roughly two-thirds of the total amount that will be allocated for roads - one-third by the Commonwealth and twothirds by them - at the end of the transitional period we will have a much better road system in Australia, based upon urban and rural needs, and a road system that will extend through the length and breadth of this country to give us a better arterial road system than we have previously known.
– I support the motion moved by the honourable member for Newcastle (Mr Charles Jones) that the equivalent of all fuel tax should be expended on roads and associated facilities. The State governments, of course, do spend all the revenue they collect from motor vehicle users on roads. That cannot be said of the Commonwealth Government. The original Federal Aids Roads Act was passed in 1926, and similar Acts have operated since then. From 1926 to 1968 the Commonwealth has collected over $2, 600m from petrol tax and, more recently, from automotive fuel tax and over the same period the amount disbursed to the States has been less than SI, 728m. The Government has actually retained in the Consolidated Revenue Fund over that period §903,401,000. If the amount placed in Consolidated Revenue had been used for roads we would not be in the fix we are in today as far as our roads are concerned. The Treasurer (Mr McMahon) who, I am sorry to say, has left the chamber, said that the amount of tax derived from customs and excise duty on motor spirit and automotive diesel fuel had declined over some periods, and he mentioned 1961-62. But the table which he agreed should be incorporated in Hansard showed that in 1961-62 the amount rose to $132,062,000, from $125,400,000 in the previous year. The table, which he said had been checked and was correct, shows that from year to year the amount of fuel tax has increased. He could not have analysed the table very thoroughly.
I repeat that all fuel taxes should be ear marked for roads and associated works. The Treasurer said that this was an absurd suggestion, but I point out to him that the governments of Japan, Sweden, New Zealand and the United States of America expend at least all the fuel taxes on their road systems. As the honourable member for Newcastle has pointed out, the estimated revenue from customs and excise on automotive petrol and diesel fuel for the years from 1969-70 to 1973-74, based on an average annual increase of 5%, will exceed the amount to be allocated to the States for roads by $3 14m. Based on an average annual increase of 8%, which is a better way to assess it because this is the average rate of increase over the last 10 years, the surplus would be $459m. This amount at least should be expended on roads and associated works.
In addition the road users pay other taxes. During the past 10 years the sales tax on new motor vehicles has varied from 30% to 25% and the amount collected by this means for last year, 1967-68, amounted to $140m. Then there is the duty on the import of motor vehicles and parts and sales tax on commercial vehicles, motor cycles and parts. All these are additional charges on the road users and, as the honourable member for Newcastle said, the motor car is no longer a luxury but is a necessity. We have one motor vehicle for every 2.6 persons in Australia. Road construction and maintenance must do more than keep pace with the increase in the use of motor vehicles. It must pick up the back log and must do so quickly. Traffic congestion reduces speed and increases petrol consumption. A survey in the United Kingdom showed that when the speed of traffic is reduced by congestion to 10 miles an hour, petrol consumption increases by about 50%. In addition, there is a wastage of tyres, mechanical parts and manpower. It has been estimated that the loss due to inferior roads in Australia is approximately $2m a day.
The Premier of Western Australia, in my view, did not put as solid a case as he could have put in support of a claim that Western Australia should have received a better deal at the recent meeting of Premiers with the Prime Minister when the road grants were made. He should have joined with the Premiers of Tasmania and South Australia, and indeed with Mr Court, the Western Australian Minister, in putting the strongest protest possible at the amount allocated and the way it was allocated. Western Australia’s share of the total of $ 1,252m allocated for national roads has dropped from about 18% of the total, which is the proportion it would have received under the old formula, to about 16%. If it had not been for the supplementary grant of $40. 8m, which is included in the 16% I mentioned, Western Australia would have been in an impossible position in regard to its roads. The total amount to be received by Western Australia for roads during the next 5 years is $200.4m. This is an increase of about 50% on the amount granted in the past 5 years, but it is pretty poor compared to the increase of 82% for New South Wales and more than 73% for Victoria.
The old formula that has been abandoned was based on population, vehicle registrations and area. The area content for all practical purposes has gone by the board and this is why Western Australia has slipped back and will go back further in the future under the new formula, unless the supplementary grants are continued. I do not complain about the amount that New South Wales and Victoria received, but I believe that, if the whole of the fuel tax at least had been made available for roads, more could have been done for the developing States. I point out that the Western Australian Government is faced with the task of developing one-third of Australia, nearly 1 million square miles. The provision of adequate roads is a formidable task because of the vast distances that must be covered. The road system in Western Australia extends from Eucla in the south-eastern division to Wyndham, which is 3,000 miles away in the far north. As Western Australia is just passing through a developmental stage, the State is faced with the important task of providing a road system that will enable new areas of land to be opened up. In the 14 years from 1952 to 1966, 7,851,000 acres of new land was alienated. This meant an extension of the road system in the State, and it was urgently needed.
In the northern area of Western Australia, nearly half a million square miles of land are without rail communication, except for the new iron ore railway, and so roads are of major importance and are needed to serve the scattered mining and pastoral settlements. I do not think that these facts have been given sufficient consideration in the allocation of the amount provided for roads in the next 5 years. Most centres in Victoria are close to the railways; few are more than 30 miles from the railways. For each 1,000 square miles of country, Western Australia has only 5 miles of railway, whilst Victoria has 46 miles. The area of Western Australia is eleven times that of Victoria and three times that of New South Wales. Western Australia has 109,180 miles of roads, of which 11,386 miles are principal roads. Western Australia has a ratio of 11 miles of road to each 100 square miles and this is lower than the ratio in any other State. Victoria has 106 miles to each 100 square miles of country. I refer to the 1968 edition of ‘Australian Roads’, which is produced by the National Association of Australian State Road Authorities, which contains at page 53 a table showing the figures I have given. Another table shows that Western Australia has eight persons per mile of road and Victoria has thirty-three persons per mile of road.
Despite the huge overseas trading surplus of Western Australia during the 10 years ending 1967-68, which amounted to $1, 666.9m, it has had an interstate trading deficit of $2,33 1.6m. Western Australia’s imports from the eastern States totalled $3,325.7m and exports to the eastern States totalled $994. 1m. Western Australia now buys nearly 5400m worth of goods annually from the eastern States. If Western Australia did not have such a big surplus of export earnings, it could not buy so much from the eastern States and this in turn would affect the development of the eastern States. This argument also applies to Queensland, which has a huge overseas trading surplus. lt is clear that, if it were not for the export of minerals, wheat, wool, beef and so on from Western Australia and Queensland, the high level of imports into New South Wales and Victoria could not be sustained. 1 emphasise that special consideration should be given to road grants for the developing States.
Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired.
– The Opposition has suggested that a greater proportion of automotive fuel taxes should be spent on roads and associated works through the Commonwealth aid road grants for the next quinquennium. It is interesting that the Opposition should make its suggestion in this form. If we look back to the time when the present Labor Opposition was in government, when there was a direct relationship between the amount raised in fuel taxes and the amount spent on roads, we see that there Ls a marked difference in attitude between the Opposition in government and the Opposition today. For instance, in 1948-49 only 43% of the amount collected from fuel taxes was spent on roads. In 1949-50 this amount was increased to 49%. I notice that the honourable member for Wilmot (Mr Duthie) at that time expressed complete satisfaction not only for himself but for all municipalities in his electorate at the allocation of money from the amount collected by the Commonwealth in fuel taxes.
In addition, as my colleague, the Treasurer (Mr McMahon) had already explained to the House, in terms of managing an economy that is fully employed, there is a complete difference between the revenue collected and the avenues of necessary expenditure. Indeed, Mr Ward, the Minister for
Transport back in 1949, in reply to a question put to him by the then member for Wimmera, now the honourable member for Mallee (Mr Turnbull), said:
The honourable member for Wimmera has referred to the conversion of portion of the proceeds of the petrol tax …. I assume that he has implied that the whole of the proceeds of the petrol tax should be used for road purposes. lt is true that the petrol tax is imposed on one section of the community but so also are the taxes imposed on beer drinkers and smokers.
It is obvious that the Opposition, when speaking from a different side of the chamber, has an entirely different perspective. I do not think it can be maintained that in the allocation of money by the Commonwealth for roads there should be a direct relationship between the sources from which the revenue is collected, the amount collected and the avenues of expenditure. It was because the Commonwealth was determined to try to ascertain the necessary avenues and areas of expenditure that it commissioned the Commonwealth Bureau of Roads to investigate and to produce for it an analysis of road needs. This was to enable a more accurate allocation of funds for the future than that which had been possible in the past. The Bureau has taken into account for the first time a cost benefit analysis which points out that there are many other fields that need to be taken into account - for example, the economic advantages to rural communities through the provision of decent access roads and the social benefits derived from the provision of decent roads, lt has not been able to analyse all these things scientifically, but much has been done as a result of the cost benefit analysts.
The Bureau concluded that the large amount of $7,700m, in 1967 prices, will need to be spent if all the roads throughout Australia are to be brought to what the Bureau refers to as a tolerable standard. I do not think anyone could argue about the size of this figure or the way in which the Bureau has gone about its work other than to suggest that with the other factors to which 1 have referred it could well1 be that the amount might be greater than the Bureau has suggested. In relation to the relevance of the figure to the capacity of the economy to provide this amount, the Bureau itself has said that at this stage it would not be competent nor would it be acceptable for the various bodies who spend money on road construction, reconstruction and maintenance to spend some of this amount. Nor, indeed, would it be possible within the existing resources of the Australian economy to undertake expenditure of anything like that order for the next few years. It is not just the financial resources which are the limiting factor; it is also necessary that the men and machines to construct the necessary work should be mustered, and in a time of full employment this would be quite impossible.
So what does the Bureau suggest? It has proposed that over the next 5 years a sum of $3,390m, in 1967 prices, should be allocated for road construction. It is suggested that this would be reasonable within the resources and manpower available over that period. Allowing for cost increases and price rises over the 5 years this figure has been put down at $3,600m. As a reasonable estimate of the actual expenditure of this amount the Bureau has said that the States and local authorities should be able to contribute some $2,070m, leaving about $ 1,280m to be expended by the Commonwealth under the Commonwealth aid roads legislation and a further sum of approximately $150m to be spent specifically in Commonwealth territories and also on specific grants, such as the beef roads fund and the Gordon River Road fund, all of which are specific fields for Commonwealth road expenditure.
After taking a look at the undoubted pressures on the Commonwealth Budget and the area of increased expenditure by local government and State governments, and also at the undoubted continuance of specific Commonwealth allocations in Commonwealth territories and on beef roads, the Commonwealth has suggested a basic grant of $ 1,200m over the 5 years plus a supplementary grant of $52.05m. This basic grant of itself is a 60% increase on the $750m allocated by the Commonwealth for roads over the previous 5 years, and the basic grant plus the supplementary grant represents a 67% increase in sums allocated by the Commonwealth for road construction. What the Commonwealth has done in this proposal is, for the first time, to try to move towards an identification of areas of need and benefit to the economy from direct expenditure on certain categories and sections of roads. In the past there has been a requirement that money be spent in one particular area only in the other rural road category. In the future this other rural road category, as the Prime Minister (Mr Gorton) himself has expressly stated, is to receive an additional 5% per annum over each of the 5 years of the agreement.
In addition two other areas of expenditure are to be defined, and each of these is related back not to individual classifications defined by the States but to classifications that have been laid down by the Bureau of Roads. It is quite possible that some of these classifications will need some adjustment State by State. It is possible that in some States roads that might appear to be within one of these categories will need, in order to cope with the intended increase in each of the sections, an adjustment between one classification or one group of classifications and another. But there are, in the future, to be three specific areas within which the Commonwealth is to provide its allocation. We are to have, first of all, the other rural road category, with an increment of 5% per annum for each of the 5 years. Then, out of the basic grant we are to allocate for planning and research 1.5% of the money that is set aside. In addition we are to have two very substantial allocations. One will be for the national trunk roads, the main roads and the highways that connect one end of this great country of ours to the other; and the other is for expenditure on urban roads, predominantly not residential roads but main throughways and expressways - the arterial roads that will enable a greater through movement of traffic in the cities, so expediting the passage of goods for export down to the wharves and the passage of goods for consumption from one end of the country to the other.
So, what we are doing is allocating, in three specific areas, moneys to cope with the defined area of necessity - the road needs for the future. It is true that there will be, within each of these categories, differences from State to State. This is partly because the needs of each State - the classifications of each State - vary considerably. The honourable member for Stirling (Mr Webb) expressed his concern about the problems that exist in Western Australia. The undoubted needs of Western Australia are recognised by each one of us, as indeed are the needs of each one of the other States. Those States which receive a supplementary grant will be given complete flexibility in respect of the area where that money is to be spent. But beyond this, each of the States is to receive at least a 50% increase in the amount over the last 5 years. In addition in each of the denned categories there is to be a sufficient increase to ensure that for the first time there will be an adequate provision of money. Within the State expenditure and the local government expenditure, which constitute two-thirds of the total to be spent for the 5 years, there will undoubtedly be a necessary measure of flexibility. Beyond this there will be a great deal of benefit from the cost study of transport which is to be initiated by the Government.
-Order! The Minister’s time has expired.
– I think that in comparing expenditure between governments the Minister for Shipping and Transport (Mr Sinclair) overlooked some of the important facts that apply to the road building programme in Australia. Certainly circumstances have changed over the years. The Minister referred to the immediate post-war years. Certainly no-one would argue that there is not more vehicular traffic on the roads today. The Minister would have to acknowledge that in the years he referred to there were limitations on resources - not only financial limitations. There were labour problems and other problems facing Australia during that period; so circumstances have changed entirely. The Minister must appreciate this fact; I am sure he does. I welcome the opportunity this afternoon to make some brief comments about the new road agreement which was announced by the Prime Minister (Mr Gorton) on 13th March, and to support what the honourable member for Newcastle (Mr Charles Jones) said in this House this afternoon.
It is true that the announcement attracted a great deal of publicity and favourable comment. Two of the Prime Minister’s most trenchant critics, the Premiers of Victoria and New South Wales, were, I suppose, most fulsome in their praise of the new measure. Certainly the new Agreement represents a substantial transfer of road funds to New South Wales and Victoria, a transfer which is justified and overdue. But at the same time, as the honourable member for Stirling (Mr Webb) has pointed out, not all of the Premiers agreed with the new formula. Quite obviously, so far as Tasmania is concerned, the overall formula will react against its interests in this respect. Indeed, I think it can be said that Tasmania will lose $3,750,000 over the next 5 years as a result of the new Agreement. There is no certainty that this position will be met at the end of the 5-year period. Tasmania could still be down again. These are the questions that were raised by the Premiers during the Conference. The Minister for Shipping and Transport has not answered these questions or given any indication that these problems will be resolved at the end of the 5-year period.
The new Agreement also noted the plight of urban areas and diverted resources to urban roads. The Government, 1 suppose, is to be commended also for adopting the recommendations of the Commonwealth Bureau of Roads upon the earmarking of funds for research. However, there are many alarming features to the new Commonwealth Roads Agreement which the Opposition feels should be put to the Parliament. That is why we have decided to raise this issue this afternoon instead of waiting until the new Commonwealth Aid Roads Bill comes before the Parliament.
The matter raised for discussion by the Opposition indicates our belief that the Commonwealth Government should spend an amount at least equivalent to the proceeds of Commonwealth fuel taxes on roads and associated facilities. The proposal that revenue raised by taxes on road users should be earmarked for spending on roads has always been a controversial one. The Opposition does not believe that every cent raised by taxes on road users should be spent in this way. Quite clearly these taxes are general revenue taxes and it would be unwise to earmark the employment of general revenue taxes in this way. What we do say is that there is a widening gap between taxes raised from road users and money spent to provide facilities for road users. There are two components of taxes on road users. The first is made up of motor fuel taxes. The second is customs duty and sales tax on motor vehicles. These are very substantial sources of Commonwealth revenue.
Now, I wish to refer to some projections prepared by the Automobile Association of Australia which are relevant to this discussion. According to these projections, in the 5-year period from 1969 to 1974 the estimated Commonwealth revenue raised from taxes on road users will be $3.1 billion. This figure is made up of $1.56 billion in motor fuel taxes and $1.55 billion in customs duty and sales tax. In this 5-year period, the Commonwealth Government has earmarked $1,252 billion for spending on roads. This means that the Commonwealth will spend on roads a little over 40% of what it collects from road users. If a policy were adopted of spending at least as much as raisings from motor fuel taxes, it would spend $1.56 billion, which is about $3 00m more than it has allocated. This would seem a reasonable minimum for Commonwealth spending in this 5-year period. It would leave approximately half of the revenue collected from road users to be diverted to other areas of public spending. The Opposition believes that this should be the very minimum of Commonwealth spending on roads. It may be that this projection of motor fuel taxes is too modest. Other projections have put revenue from motor fuel taxes at an even higher level. But, at the very minimum, there is a substantial case for increasing Commonwealth spending on roads by at least $300m for the 1969-1974 period.
State and local government sectors are devoting a very much higher proportion of their revenue from taxes on road users to spending on roads. The Automobile Association of Australia projections I have quoted estimate that between 1969 and 1974 State and local government will spend about 77% of their raisings from motor taxes on roads. I do not suggest the Commonwealth should match this proportion or even match anything like it. However, I believe there is a very strong case for lifting the proportion of Commonwealth spending on roads to a level equivalent to raisings from motor fuel taxes. The estimated spending on roads by all levels of government in the 1969-1964 period is about $4 billion. This is approximately 2.2% of Australia’s estimated gross national product for this period. This is certainly an increase on the 1.3% of gross national product that Australia is spending on roads in 1960-1961. However, it does not compare favourably with countries such as West Germany and the United States of America which in 1960-1961 were spending close to V?o of their gross national products on roads and associated facilities. Undoubtedly, spending in these countries has increased in the subsequent 8 years.
It was disappointing that the Prime Minister in his statement outlining the new Commonwealth Roads Agreement did not attempt to outline a national policy for roads, lt was unfortunate also that his statement did not acknowledge the valuable work of the Commonwealth Bureau of Roads, apart from a cursory reference to the decision to vary the formula recommended by the Bureau. The Prime Minister’s statement was little more than a listing of allocations to the States without any attempt to justify these allocations or fit them into a logical and coherent transport policy. Quite clearly, when it came to the crunch, crucial decisions were not made by the experts of the Commonwealth Bureau of Roads but by the Treasury and in private talks between the coalition partners of the Government. I have not the time to examine in detail the allocations announced by the Prime Minister. The House will be able to do this when the new Bill comes before it.
I would like to point out that the Commonwealth Bureau of Roads in its report estimated that to maintain the status quo of Australian roads, total spending of $7.85 billion would be required for the 5 year period under discussion. This would be the minimum needed to raise all portions of the road system to an adequate level. Instead, total spending during this period will be around $4 billion. This can hardily serve to bring Australian road standards to anywhere near an adequate level. It will not serve to make any substantial impact on the existing deficiencies in road standards. The Government has missed an excellent opportunity to completely re-think and re-define spending on roads within the context of a national transport plan. Again the Commonwealth has failed to provide energetic leadership and initiatives needed if Australia is not to become a jungle of congested roads completely enveloped by the motor car. Again, the Automobile Association of Australia in a recent publication has emphasised that a fresh approach must be applied to planning and co-ordinating for all forms of transport. This requires Commonwealth leadership on a broad basis and not in fits and starts.
-Order! The honourable member’s time has expired.
- Mr Deputy Speaker, during the last 2 or 3 weeks, I have listened to the Opposition raise for discussion 4 or 5 matters of so called public importance, each of which has been equally abortive and has been dealt with very effectively by speakers from this side of the House. In my opinion, this action has served only to waste the time of this House. Now we find the raising of an equally ridiculous matter for discussion here today in which the Opposition suggests that the Commonwealth Government should spend an equivalent amount to that collected by way of fuel taxes on Australian roads and also an equivalent amount to that collected by taxation from associated facilities. The next thing we will hear the Opposition suggest is that we should spend the whole of the revenue derived from beer and spirit sales for the benefit of beer and spirit drinkers and also spend the revenue from cigarettes for the benefit of cigarette smokers. I believe that this is entirely ridiculous.
It is interesting to reflect on the history of the Commonwealth’s provision of assistance to the States for the construction of roads. The main features of the Commonwealth Aid Roads Agreement of 1964 were agreed to at a special Premiers’ Conference held in March of that year. Under that Agreement an amount not exceeding $750m was to be payable by the Commonwealth to the States over a 5 year period commencing in July of that year. That amount represented an increase of 50% over the amount of $500m provided in the preceding 5 year period. The $750m was made up of a basic grant of $660m and an additional $90m payable subject to certain annual limits on a basis of $1 for $1 spent on roads by the States from their own resources over and above certain base amounts.
We should not forget the specific grants that have been made for the construction of beef roads. The Minister for Shipping and Transport (Mr Sinclair) has referred to Queensland in this context. We know also that Western Australia and South Australia have received such grants. In 1961-62 more than $ 16.5m was spent on constructing or sealing beef roads in Queensland. Considerable sums of money have been spent in Western Australia on beef roads. The Commonwealth made a special grant to Tasmania for construction of the Gordon River road. Here was an example of generosity on the part of the Commonwealth. In South Australia $50,000 has been provided for upgrading the Birdsville Track. Additional amounts will be forthcoming for this project. The Commonwealth has provided finance to maintain the Eyre Highway and Barkly Highway. Both South Australia and Tasmania have been assisted by these projects.
In considering the requirements of each State in the matter of finance for roads basically the ‘ Commonwealth pays regard to the recommendations of the Commonwealth Bureau of Roads. Having assessed the requirements of the States the experts in the Bureau recommended to the Commonwealth that over the next 5 years it should provide $l,280m to the States for roads. The Government has seen fit to reduce the amount to $ 1,200m but it has made supplementary grants of more than $50m for South Australia, Western Australia and Tasmania without strings attached. Those States will have the privilege of spending that $50m where they like in rural areas. Am I correct?
– Everywhere on roads.
– I thank the Minister. Over the next 5 years the States will receive about 50% more than they received in the previous 5-year period. I can sympathise with the Premier of South Australia. Over the next 5 years South Australia is to get about $129m while Western Australia receives about $200m. I think it is reasonable for the Premier of South Australia to suggest that the Commonwealth do something specifically to aid South Australia. For instance, the Commonwealth should do something towards upgrading the Eyre Highway. I think this is a reasonable suggestion. Having regard to the considerable amounts of money being paid in petrol tax and to the precedent of making grants for specific purposes, I have fully supported the Premier of South Australia in his application to the Commonwealth for special consideration to be given to his State. The Eyre Highway connects South Australia and Western Australia. Most of the vehicles which use that road are registered outside South Australia. These are reasons why sympathetic consideration should be given to Mr Hall’s request. I am sure that if the Commonwealth comes to the party in a special way, as has been suggested, South Australia will bc perfectly happy with the allocation for roads in other respects.
Other roads in South Australia are in need of attention, just as specific roads in other States are in need of attention. The north-south road connecting Port Augusta and Alice Springs is almost non-existent. I think South Australia could make out a good case for special assistance in maintaining this road and I submit that the Commonwealth should receive such an application with sympathy. I recall that during the Christmas period the honourable member for the Northern Territory (Mr Calder) had to drive, accompanied by his wife, from Port Augusta to Alice Springs. It was an unenviable experience and I understand that the honourable member has made representations to the Minister for Shipping and Transport about the road. In the past the Government has given consideration to these roads. The Port Augusta to Alice Springs road is very significant from the point of view of tourism. Thousands of vehicles traverse the road. Each year the number increases. I am certain that the Government will treat special applications sympathetically provided the roads in question provide access to Commonwealth Territories or carry a large volume of traffic which is registered outside the State in which the road is located. In these circumstances I think the Commonwealth has every reason to come to the party with special grants.
Clearly the proposal that has been advanced by the Opposition is uneconomic and impractical. I doubt whether in their wisdom honourable members opposite would, if it were in their power to do so, spend as much on roads in Australia as they have suggested should be spent.
– In initiating this debate the honourable member for Newcastle (Mr Charles Jones) has drawn attention to the Government’s continuing refusal to expend on roads and associated facilities in Australia an amount at least equal to the proceeds from the automotive fuel tax. For Government supporters to draw attention to the Governments proposals for the next 5 years serves merely to indicate that the Government is not prepared to increase expenditure on roads. Not only the Australian Labor Party but also automotive associations, such as the National Association of Australian State Road Authorities have urged a greater expenditure on roads. For a number of years these bodies have been sending to members of Parliament the results of surveys into roads and have pointed to the deficiencies that exist.
In the new Commonwealth Aid Roads Agreement the Commonwealth has for some reason seen fit to reduce the amount recommended by the Commonwealth Bureau of Roads to be spent in the next 5 years from $l;282m to $l,252m. The Treasurer (Mr McMahon) has said that the Premiers agreed to this reduction and were quite happy because the amount allocated in the next 5 years represented an increase of 60% over the amount granted in the previous 5 years. There are pitfalls in dealing with percentages. If you start with a low base an increase of 60% seems considerable. On the other hand, it is well known that shires in rural areas have asked that the 40% allocation for rural roads be maintained, but this request has not been acceded to. I for one believe that there should be a greater allocation to the rural areas. The Treasurer (Mr McMahon) himself acknowledged that those who face competition on export markets need better roads for the transport of their goods.
The Treasurer has stated that the Premiers were quite happy with this additional money. If they were happy when they were here in Canberra they certainly were not happy when they returned to their home States. The Premier of New South Wales, Mr Askin, stated that S2,200m would have been closer to the allocation needed than was the sum of $l,252m. The Premier of Queensland was reported on 14th March as violently objecting to the Commonwealth’s take it or leave it attitude. The States had to take it or leave it; there was no option. The Premier of South Australia also objected strongly to the allocation to his State. I cannot accept the statements made today that the Premiers were quite happy with the allocations.
The total length of roads in Australia is 545,467 miles, and according to figures supplied by the Australian Automobile Association only 16% of this consists of sealed roads. This appears to be a very low proportion of the total road mileage. It is apparent why organisations such as the Australian Automobile Association are seeking a greater allocation for roads. Let me quote the following Press report of the comments of the president of the Royal Automobile Club of Queensland, in his presidential address yesterday:
Governments needed to put aside parochial pride so that one national authority could be formed to research, plan and build a national road system of which Australia could be proud.
The points system, radar and breathalyser were all the result of unco-ordinated attempts to halt the road toll which continued to grow. “All the measures being taken seem to have one thing in common - they are all aimed at the driver,” Mr Stodart said. “Certainly the human element is a major factor in our present traffic and safety situation, but it could be that we are beginning to reach the limit of demand that can be placed on the motorist as a human being. “Far more than just the human element is involved because we are travelling more miles every year on roads that are many years behind in their capacity to cope with the traffic flow.”
He went on to say, as reported: “Normal law-abiding motorists expect the manufacturers to pay more attention to making their vehicles safer and they also expect Federal, State and local authorities to make our road systems safer.”
– Who said that?
- Mr Stodart the president of the Royal Automobile Club of Queensland.
– That was said before the Commonwealth extended aid announcement was made.
– These statements were made yesterday. Commonwealth revenue from motor vehicle and fuel taxes has increased from S380m in 1944-45 to $47 1m in 1967-68. For the same period the States’ revenue has increased from $154m to $208m. Commonwealth expenditure on roads for the year 1964-65 was SI 47m out of a revenue of $380m, and for the year 1967-68 it was Si 87m out of a revenue of $47 lm. Expenditure by the States more or less conforms to the amount of revenue available.
The honourable member for Newcastle (Mr Charles Jones) gave projections based on an average increase of 5%. lt showed that the Commonwealth will receive in revenue up to the year 1973-74 an amount of $l,566.2m. If there is an increase of only 5% in this period the allocation of S 1,252m will leave a credit of $3 14m available to the Commonwealth. This money will not be spent. The Treasurer said that some of this money will be used for defence purposes. The honourable member for Grey (Mr Jessop) said that the excise duty on drink and the like should be provided to those people who drink the most. This suggestion is absurd. We do not say that the sales tax levied on motor vehicles should be used for roads; this would not be equitable. You, Mr Deputy Speaker, pay the same amount of sales tax as does a person who travels four to five times the mileage you travel. Persons who use the roads more pay more excise duty on the fuel that they use, and in so doing contribute a larger sum towards the revenue that is applied to the maintenance of roads. For this reason I believe that the application of the revenue to be collected from petrol and diesel fuel is an equitable way of distributing the cost.
Earlier in my speech 1 said that the president of the Royal Automobile Club of Queensland had referred to the road toll. It is interesting to note that the road toll in Australia is one of the worst in the world. The Australian Automobile Association has set out the fatalities per 10,000 vehicles registered in selected countries for the year 1966. In New Zealand the death rate was 5.2%; in the United States of America it was 5.5%; in the United* Kingdom it was 6.1%; in Canada it was 7.2% and in Australia it was 8.1%. The number of persons killed and injured in motor vehicle accidents in Australia for the year 1967-68 was 84,397. I believe that there is just cause for additional expenditure on roads throughout Australia. For the reasons I have slated I support the proposal.
-Order! The honourable member’s time has expired.
– I do not know why this matter has been introduced as an urgency proposal, because it is something that has been discussed at various times over the years. At the present time it is not in any way urgent. As the honourable member for Grey (Mr Jessop) said, it is the most absurd urgency matter that the Opposition has introduced this session. One after another honourable members on the Opposition side arc grasping at straws to try and save themselves from drowning in the election seas in which they will have to try to swim later this year. Apparently honourable members opposite think that if they advocate that more of the money obtained from- fuel tax should be spent on roads they will get a few votes here and there. I point out to the honourable member for Newcastle (Mr Charles Jones) that no finance expert in the world at any time has advocated that a special lax should be applied to a special purpose. Where would we be if we were to do this? lt was stated in the report of the Bureau of Roads that about one-third of the total amount of money obtained from fuel tax is spent on roads. There are more motor cars in the urban centres than in the country centres. Are we to carry this principle further and say that the bulk of the tax revenue, which is provided by those who live in urban centres, should be spent in the capital cities instead of in the country?
– It is carried far enough now.
– It was carried much further in Victoria. The Country Roads Board in Victoria is not allowed to spend any money at all in the city of Melbourne. Do not talk about carrying it further. That is a ridiculous situation, as the honourable member very well knows. It is gradually being overcome. As I said, the principle suggested by the Opposition is not being applied to any form of taxation. The honourable member for Grey asked what are we to do with the excise on beer and spirits. Are we to spend it only on hotels? What are we to do with the sales tax or the customs duties? Are we to divide them up into the different sections of the industries or people who pay them and then apply them only to the purposes in which they are interested? The whole suggestion is against all the principles of taxation applied in every country of the world.
We all want to see the best roads system that we can produce in Australia. We all are in favour of the bulk of the money being spent in the country districts. If this principle is to be carried further we should say: Why should any of the ratepayers in the cities pay for the roads if they do not own a motor car?’ We do not get goods delivered by the tradesmen nowadays as we did in the old days. We should say: ‘Why should local council rates be used to build roads? They should all be paid for from the fuel tax.’ We find ourselves with an absolutely absurd proposition that cannot be held up by principle, past practice or the advice of experts on finance or taxation. Why this matter should have been brought here to waste the time of the House at this stage I do not know. The Minister for Shipping and Transport (Mr Sinclair) pointed out to the Opposition very clearly that when a Labor government was last in power in 1948-49 only 43% of the fuel tax was spent on roads. In 1949-50, the last year in which it had any say, the figure was only 49%. Since that time, according to the figures I have had taken out for me, the percentage spent on roads has been as follows: For 1964-65, 83.6%; 1965-66, 69.8%; 1966-67, 64.9%; and 1967-68, 64.7%. The estimated percentages for the 6 years following 1967- 68 are 62.9%, 65.8%, 68.4%, 71.1%, 74.6% and 78.2% . In other words, the percentage of the tax collected that has been spent on roads has almost doubled since the Labor Government went out of office at the end of the 1940s.
The whole discussion is ridiculous in the extreme, and why the matter should have been brought up at this stage I do not know. If the Opposition had wanted to contribute to a really useful discussion, it might have introduced the matter on the basis of our failure to proceed with the inquiries into the co-ordination of transport which were being made by Sir Harold Clapp’s committee under the aegis and with the enthusiastic support of the former honourable member for East Sydney, the late Mr Ward, who was then the Commonwealth Minister for Shipping and Transport. At that time I was the Minister for Transport in the Victorian Government, and all the Ministers for Transport from the States together with the Commonwealth Minister for Shipping and Transport were endeavouring to bring some sense into the co-ordination of transport. According to the principle suggested by the Opposition, air transport should receive only the money that it pays in fuel tax. That is nonsense. More money was spent on the airport at Mascot alone than would be needed to build an underground railway system in Melbourne. I am not criticising Mascot. We need to have international airports. I am not criticising the fact that local government authorities pay from the rates that they collect something towards the roads. In fact, they pay quite a lot. But whatI am criticising is our failure to bring about sensible co-ordination of transport.
We still have a lot of archaic procedures, some of them local, some of them State and some of them Federal. The tramway system in Melbourne is still asked to pay for the lighting, its own section of the road, which is one-third of the total, and subsidies to the metropolitan fire brigades. It is nonsense that tram passengers should have to pay for that. The railways pay for the fences, the track, the stations and the signalling, and yet road transport does not pay for the fences, the signals and the services of the police who have to regulate it. In many other ways we have not attempted to bring sense into those three forms of transport, all of which are vital to the city but even more vital to the country and outer areas. Of course we agree with the subsidising of air services to outback areas. Otherwise people in those areas would not have any service at all. On the other hand, train transport, which is still the cheapest and best form for bulk transport, because it is in the hands of the States has been left to run its own show and is running down at the present time. Every passenger who steps on an aeroplane is subsidised to the extent of about $1. The road transport operators are subsidised by the ordinary private car owner because the cost of construction of a road capable of carrying 5-ton and 10-ton lorries is onefifth more than the cost would be for a road to carry the heaviest private motor cars.
All these things are of importance, but the question that has been brought up by the Opposition, namely, that all fuel tax should be applied for a particular purpose, is absurd. Are we to ask the pensioners to pay for their pensions? When we carry the proposal to the extreme lengths we see how ridiculous it becomes. Therefore, I support very strongly the replies that have been made by the Treasurer (Mr McMahon), the Minister for Shipping and Transport and the honourable member for Grey. This matter should never have been brought forward. If we are to spend time discussing transport problems let us get down to the proper co-ordination of transport that will be in the best interests of the development of every part of this country.
– The discussion is concluded.
– I move:
That, in accordance with the provisions of the Public Works Committee Act 1913-1966, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House: Construction of sound broadcasting studios at Collinswood, South Australia, for the Australian Broadcasting Commission.
The proposal involves the construction in reinforced concrete of three interconnected buildings - a nine-storey administration block, a three-storey studio wing and an orchestral studio. All occupied areas of the complex will be airconditioned. The estimated cost of the proposal is S3. 7m. The Committee has reported favourably on the proposal and, upon the concurrence of the House in this resolution, detailed planning can proceed in accordance with the Committee’s recommendations.
– I rise to say that the South Australian people will be glad to see that after nearly 20 years we are to get a place for the Australian Broadcasting Commission which is worthy of the State from which I come. Frankly, I cannot understand why it has taken the Government so long to have this matter referred to the Parliamentary Standing Committee on Public Works for consideration. It is something that should have gone to the Committee at least 15 years ago, but nothing at all was done and no move was made. Apparently not one of our Ministers from South Australia bothered to bring the matter to the notice of the Cabinet.
– Did you?
– Yes, I have done so repeatedly, and 1 thank the Minister for the Interior for that interjection. I have written letters, I have made speeches and 1 have asked questions about this matter. But if this matter was brought to the notice of Cabinet by Ministers from South Australia, quite obviously Cabinet took no notice of them. Of course, it is not known whether this was Cabinet’s way of indicating contempt for the Ministers from South Australia or contempt for the people of South Australia. But one thing that we do know is that this project is long overdue. Mr Deputy Speaker, I think you are about to pull me up, so I will end on that note. I am pleased that at long last - when almost 20 years overdue - the Government has belatedly and perhaps almost grudgingly given South Australia the due to which it is entitled.
Question resolved in the affirmative.
Debate resumed from 18th March (vide page 589), on motion by Mr McEwen: That the Bill be now read a second time.
– The new International Sugar Agreement is without doubt the most important international sugar agreement that has ever been negotiated in the history of the Australian sugar industry. Of course, there have been other international sugar agreements, but never was so much at stake and never was the economic livelihood of so many cane farmers and millers in jeopardy as was the case with this Agreement. I do not think it would be an exaggeration to say that the position of the sugar industry at the time of the negotiations before Christmas was desperate. If a new International Sugar Agreement had not been negotiated I believe it is fair to say there would have been virtual economic chaos within the sugar industry in Australia, as well as within the sugar industry overseas. Instead of prices skyrocketing in a most remarkable fashion as soon as the news of the new Agreement became known, it would seem that if the Agreement had not been negotiated possibly the reverse would have applied. Prices would have fallen even further than the disastrous level which they had reached at the time of the negotiations.
The Opposition has at all times supported the need for a new international sugar agreement. As I have pointed out many times in this House, time was running out and if the last negotiations had failed desperate and drastic measures would have had to be taken by the Federal Government, indirectly, and by the State Government, directly, with respect to sugar production. If the record levels that were being crushed last year had been maintained at the world prices prevailing at that time, and if those world prices had fallen, it was clear that a drastic reduction in production would have had to take place or, alternatively, some stabilisation scheme would have had to be introduced. This is the broad case which we on this side of the House have pursued for several years and, of course, it is the case which the Government has pursued. The No. 1 objective has been to negotiate an international sugar agreement which would provide for the tremendous surpluses that were being generated from Australian production.
The Opposition has no hesitation in paying tribute to the people responsible for the successful negotiation of the new international sugar agreement. As I said before, because of the circumstances at the particular time, this was the most important International Sugar Agreement that had ever been negotiated on behalf of any government or on behalf of the Australian sugar industry. The only point on which I join issue with the Minister for Trade and Industry (Mr McEwen) is that although he paid great credit to the Queensland Premier, to the two former Queensland Premiers, and to others, he did not give sufficient praise to the key men in the negotiations. I refer to the senior trade and primary industry officials, the public servants who devoted a tremendous amount of time and effort in the negotiation of the new Agreement. Perhaps it is not the policy of the Minister for Trade and Industry to pay tribute to public servants, but being an ex-public servant myself I believe that often too little is known of the work of senior public servants in international negotiations. As I said before, the Opposition has no hesitation in paying tribute to the Minister for Trade and Industry who without doubt is by far the best international negotiator that the Government has had in its ranks certainly for many a day. I think that in these circumstances, when there was so much at stake, it does not hurt to give a little praise. This, of course, does not resolve the question of what would have happened if the new International Sugar Agreement bad not been negotiated. We can be thankful for it because, as I said previously, if it had not been negotiated there would have been virtual economic chaos in the sugar industry.
Let us consider why the International Sugar Agreement is so important to Australia. One can say that in terms of volume concerned it is now perhaps more important than even the Commonwealth-Queensland Sugar Agreement, because that Agreement provides for about 650,000 tons whereas the International Sugar Agreement provides for approximately 1 million tons. Before expansion took place in the sugar industry there was an aggregate peak production of approximately 1.3 million tons. Then, as a result of the investigation of the Gibbs Committee, which was backed by the best advice that the Queensland Government or the Gibbs Committee could secure at that time, the Queensland Government decided to expand the sugar industry. The industry expanded at a very fast rate. Decisions were taken extremely quickly. The Commonwealth was not consulted in any formal way because under the Constitution the Commonwealth has no control over production within a State.
There is no point in pursuing this argument a great deal further, but I have often wondered whether the Commonwealth Government, if it had been in a position to advise at that point of time on the rapidity of the expansion, would have agreed with the Queensland Government, because of the peculiar position of the residual free market of sugar. Only 9% of total production of sugar is sold on the residual free market, which is the market being controlled by the International Sugar Agreement. It always has been a notorious market for fluctuation, even while international sugar agreements have been operating. This means, of course, that there could be a sudden increase in production in Australia, for example, in No. 2 Pool, which was filtered on to the world markets to such a degree that only a 1% or 2% increase in production of sugar could lead to a decrease of approximately 10% in the price of sugar. This is why such dramatic increases or decreases have occurred rn the residual free price of sugar. From memory, I think that at the height of the boom conditions the average free price for the year was approximately £Stg73.
Then, in less than 3 years the price had rocketed downwards to around £stg20. The fact that this could happen is, of course, a great warning to an industry such as the sugar industry. The explanation lies in the fact that only a very small proportion of the world production is being sold or traded on the world market. But Australia jumped from fifth to second place as an exporter of sugar. The need for an international agreement is of great importance because prior to the expansion only 20% of total exports were being traded on the residual free market. After the expansion - that is before the International Sugar Agreement - approximately 70% of our total exports were sold on the free market. Therefore, Australian exports jumped from 20% to 70% and from several hundred thousand tons to a million tons. Honourable members can see the consequences of the dramatic jump from fifth to second place behind Cuba that Australia has made and the great need for the negotiation of an agreement. This is, of course, what confronted the negotiators. I think it is fair to say, as I said earlier, that few people outside of those closely associated with the negotiations or the industry itself realise how desperate and precarious a position the sugar industry of Australia was in at the time of those negotiations.
The main objective of the International Sugar Agreement is to achieve stability. This stability ls achieved through the rather rigorous application of supply and demand principles. If all members of the Agreement play the game it would seem that stability has a very good chance of being achieved. The present Agreement is a much more complex one than previous agreements. Within the present Agreement there are safeguards that minimise the fluctuations in prices throughout the play of supply and demand. There are provisions for quotas for the various exporting countries. These quotas are flexible enough to be able to take into account the ups and downs in prices. If the price gets too high it is clear that by releasing further stocks onto the market or by increasing quotas this price can be kept at a reasonable one, and satisfactory to both exporter and importer. In other words, if all members of the Agreement - both exporters and importers - play the game and abide by the regulations, there is every chance that this Agreement will be successful.
Perhaps the weak links of the Agreement - and as far as I am concerned the weak links are greatly outweighed by the advantages - are potential problems that could occur. As I see it, there are two major weak links in the Agreement. One is the omission of the European Common Market. A provision of a 300,000 tons quota has already been made in regard to this body. It is to be hoped that over time those responsible for policies in the European Common Market, and particularly France, will see the advantage of joining the International Sugar Agreement. But certainly under the present common agricultural policy in the European Common Market there is and there must be admitted some danger if over-production of beet occurred. This can occur. I do not say that it could easily occur. It has occurred in the past and could occur again. This is one of the weaknesses in the Agreement. Over-production of beet should not happen this year. From the best advice that we can get on production levels in the European Common Market countries there will not be a substantial surplus this year. Even though there are safeguards within the Agreement for non-buying from countries outside the Agreement, if the position arises where European Common Market countries have a large surplus of sugar, that sugar without question will be placed on the world market and someone will buy it. This is because not all importers are a party to the Agreement.
What Australia and other countries vitally concerned with the Agreement have to do is to try to persuade other importing countries that so far have not been signatories to the Agreement to join the Agreement. If countries of the European Common Market and other importers are persuaded to join we would have all the major importers and exporters of the world in the Agreement. If this happened it would not be too much to expect that we would achieve progressive development in the underdeveloped countries as well1 as in Australia as the demand for sugar increased. I think that stability is the principal objective we want.
The other weakness I see is not economic but one of politics. Whereas we can argue that the omission of the European Common Market and some importing countries is perhaps economic, the omission of the United States of America could be potentially a weakness. I do not think that anyone would argue against the fact that we would rather have the United States in the Agreement than out of it. To what degree America would be better in the Agreement than out of it so far as we are concerned would be debatable. The weakness I see here is that as long as this political tightrope exists with respect to Cuba, Russia, the United States and some South American countries that are influenced by the United States, there is the political danger of a crack in the Agreement. But as I said earlier, the two arguments I put up are economic and political and as far as I am concerned are greatly outweighed by the tremendous advantages to the industry of the International Sugar Agreement.
Although we can be very thankful that the Agreement has been made, I think we would be remiss if we did not take heed of some of the lessons that have been learned from the expansion. As the Minister for Trade and Industry knows, on several occasions in this Parliament I have taken issue with him en the way the expansion was achieved. I can go, of course, only by the written word - the word that is in Hansard. The main issue that 1 have always taken with the Minister and the Government has been that 1 firmly believe that never again should such a massive expansion as this one ever take place unless there is some guarantee or inbuilt price protection for the sugar industry and the cane growers - the mcn who have to expand production - or the new growers.
So there is little point in looking back except to note the effects of previous developments. I would always argue, because I think it is a fundamental proposition, in the case of a massive expansion in any primary industry that is completely at the mercy of the export market, that before such major expansion is agreed upon the people involved - the cane growers in this instance - should at least have some price or income guarantee so that they will not be effected by it as they were by the last expansion in the industry. On the surface it appeared that export prices would be maintained and that even with expansion to the levels recommended in the Gibbs Report, the sterling price in the free market would not fall below £Stg40 a ton. This was the best advice available, but nevertheless because the residual market is so small and so susceptible to fluctuations we then found a very dramatic decrease and we had bedrock prices at one stage of about £Stg12 and £Stg13 Looking back in history, I am concerned to ensure that never again should we expand an important industry like the sugar industry to a major extent without providing proper protection for the industry, whether by a temporary stabilisation scheme or by the provision of grants or by interest free loans or interest bearing loans. If the industry is to expand, in the absence of a multilateral or bilateral agreement to protect it, such as operated with the 15-year meat agreement, the Government itself should give the industry a guarantee that it will protect it if things go bad.
As I said before, the sugar industry now faces a much brighter future with this, probably its most important agreement ever. There can be no doubt that had the industry not expanded it would not have received a quota of this size, under the International Sugar Agreement. The situ- action is that of a dog chasing its tail. If we had not expanded we would not have got the quota. But it must be remembered that many small farmers were hurt and are still being hurt in the process of expansion. I believe that in any future expansion these people should be protected. What is the future which we must look at? The most pressing problem at the moment is the income position of cane farmers themselves. The Minister for Trade (Mr McEwen) has always said, and rightly so, that the industry itself should initiate moves. But what is the industry? On the one hand there is the Queensland Cane Growers Council of which every canefarmer in Queensland is a member and which I consider is the correct and rightful spokesman for the cane farmers. At the last three meetings of the Queensland Cane Growers Council resolutions were passed to approach the Federal Government for an increase in the price of the 1968 crop up to at least $92 per ton.
The other spokesman for the industry is the Australian Sugar Producers Association, which 1 and most growers believe is dominated by the interests of millers. The Association opposed this move. So here we have a situation in which the Queensland Cane Growers Council which represents all the cane farmers approaches the Government for financial assistance in the form of an increase to $92 a ton, while the ASPA is very much opposed to it. Having two spokesmen for ‘ cane farmers always creates problems. I have always made it clear that I think the Queensland Cane Growers Council is the real spokesman for the cane farmers.
This suggested increase to $92 per ton should be looked at very closely. The Minister for Primary Industry (Mr Anthony) knows that this cost of production concept is a highly dangerous one. The variation in cost of production figures when peaks range from 800 tons to 6.000 or 7,000 tons is so great that any one cost of production figure is meaningless. This was shown quite conclusively in the wheat industry. Every farm has a cost of production figure, but those conversant with the sugar industry know full well that there is a definite downward sloping average cost curve as production increases. The cost of production for a man producing 1,000 tons is quite different from that for a man producing 3,000 or 5,000 tons. I have no hesitation in saying that a person producing 3,000 or 3,500 tons can get by with $86 or $92 per ton, given normal seasonal stability. On the other hand, a farmer with a peak of only 1,000 tons has little chance of getting through financially with $92 per ton.
This brings me to the complex question of the distribution of money between farmers and millers. As far as I am concerned some mills are getting too big a slice of the pie from last season’s crop. One has only to look at their balance sheets and financial statements to see that they are in a very healthy position. In fact bonuses will be paid by some mills. Yet in those same mill areas there are large numbers of farmers in serious financial difficulty. This, of course, is a complex question. A farmer may be in a poor financial position for any one of a number of reasons. It may be the size of his farm, or the frequency of droughts, or the need to borrow money when prices were low. I would ask the Minister for Primary Industry and the Minister for Trade and Industry to give serious consideration in the coming months to some financial assistance to those people who need it. I do not believe that all mills, or all big farmers who have had good seasons, need more money, but there is a very large sector of the sugar industry today which does need financial assistance because even if under the International Sugar Agreement the No. 1 pool price is increased significantly the effects will not be felt until next year. One only has to look at the unemployment situation in the sugar towns, particularly Mackay and the towns on the Burdekin River area. Those areas have the highest rate of unemployment - I am speaking relatively and not absolutely - in Australia.
– How would you suggest a differential payment to the producers?
– I would suggest a particular grant, under section 96, to the State of Queensland to be worked on a basis similar to the drought loans for those in necessitous circumstances until these farmers get the benefit of the higher prices which will flow from the International Sugar Agreement. Alternatively, of course, there could be interest bearing loans as before, but this I feel would not solve the problem. This would give assistance to some mills and some large growers who do not really want it. They have had good seasons. The small grower, the new grower, the grower who has been hit by drought and the grower who is in debt are the people in this industry who are in trouble and need help. In some areas the growers will get into worse trouble because of the present serious drought. I doubt whether mills serving areas around Nambour and Maryborough will even start crushing this year, so bad is the drought. That is the point I wish to make about the immediate future.
The first problem to be solved this year arises from the financial position of the growers. The second problem relates to the Commonwealth Sugar Agreement with Queensland, and I assume that legislation will be introduced into the Parliament to deal with this agreement. This is the most important legislative problem facing the industry in this year. I am assuming that the Government will act so that the incomes of growers, especially the. small growers, will be increased. The Commonwealth Sugar Agreement is of considerable importance to the industry, but some problems have been evident recently. The House will recall that in 1967 the wholsale price of refined sugar was increased from $176 to $201.60 a ton. The Government provided a loan of up to Si 5m from which supplementary finance was given to those growers in need. But the Government saved $llm, because only $4m was distributed. Perhaps this saving could provide the source of money to be given to the industry for the growers in need to supplement the income from the 1968 crop.
The term of the Commonwealth Sugar Agreement was extended for 12 months until 31st August 1968. Then a further extension was granted. There was little point in negotiating a new Commonwealth Sugar Agreement when negotiations for the International Sugar Agreement were proceeding. The Government certainly was on sound ground in waiting for the result of negotiations on the International Sugar Agreement before commencing negotiations for the Commonwealth Sugar Agreement. I would think that we need a long term agreement for, say, 5 years. A long term is the only satisfactory basis for the Commonwealth Sugar Agreement. We do not want to be placed in the position of having to negotiate every year and to be subjected to the great pressures that are exerted on the sugar industry by those who want, for example, a sugar rebate. Requests for a rebate come from the manufacturing industries that use substantial quantities of sugar. There is no doubt that the manufacturers of canned fruits, for example, will want a substantial increase in the rebate on sugar. It is now $10 a ton and they would no doubt argue that this amount should be substantially increased. The House will recall that when the agreement was last before us the Opposition put forward a suggestion in an amendment, which was defeated, that the severe discrimination against consumers in areas other than capital cities, who have to pay higher prices for sugar, should be ended.
– How would you do that?
– If you had listened to the debate on the last occasion you would have found out, but knowing the way you listen I can understand that you would not know. The discrimination arises from what is called the base price system. It is well known that if the price of sugar had been reduced in the sugar towns or in Darwin, the cost would have fallen on the Queensland Government or on the industry itself. We suggested it should be paid by the Queensland Government from the large surplus it has from its railways operations. We believe it should not fall on the sugar industry.
The next point 1 want to make relates to the stability of the industry. The International Sugar Agreement has as its objective the stability of the industry, and this is sought eagerly by all sections of the sugar industry throughout the world. But in order to achieve stability generally, it is necessary to achieve some measure of stability in Australia, and we do not have stability here now. For instance, production in the Mackay district last year was 30% above peak, lt is one of the most favourably placed cane growing areas in Australia and the season was very favourable. But this year we have a severe drought in some areas of Queensland. I do not know what the current conditions are like in northern New South
Wales, but certainly conditions in Queensland are very patchy and it is doubtful whether even the peaks will be reached this year. The cane at this time of the year is probably 2 or 3 feet smaller than it would be in a normal season. Large areas of cane are dead. As I said before, there is some doubt as to whether the mills in the Maryborough-Nambour areas will even start crushing. The Burdekin area is suspect. Although the condition of the crops is reasonably good, production in the Burdekin area depends on water. This is true also of Bundaburg, which is another major cane area. If there is not sufficient moisture in the soil, we will not get stability and we will not consistently achieve peaks so necessary for a smooth operation.
If the Commonwealth Government wishes to stabilise the industry so that it can consistently achieve the quotas that have been set, it must give some thought to stabilising production in the areas that are most susceptible to drought. Almost all the areas between Nambour and the Herbert River are susceptible to drought and need the assistance of water conservation projects. The International Sugar Agreement, the Commonwealth Sugar Agreement, our price arrangements with the United States of America and our own home market now give a measure of protection to the entire industry. The objective should therefore be to achieve stability within the industry not only in terms of price but also in terms of production.
I want to make one further comment and this relates to nitrogenous fertilisers. I have said in the House before that it is unfair for an increased subsidy to be given to superphosphate but not to nitrogenous fertilisers. I hope that in the forthcoming Budget session the Government will give some consideration to this important factor, because the costs on each cane farm are greatly affected by the amount of fertiliser applied and the price of fertiliser. Nitrogen, of course, is by far the element most used as an artificial fertiliser in the production of sugar.
The Opposition supports the Inter,national Sugar Agreement which has, in fact, saved the sugar industry at this time. We must work to see that all the major importers and exporters, but more importantly the European Economic Community, become parties to the Agreement.
Given that all these countries and the major exporters and importers become parties to the Agreement, there is every chance of its succeeding. Let us remember one important thing: If we look at the past history of international sugar agreements we can appreciate that there is no such thing as a guaranteed price. Many farmers believe that there is a guaranteed price, but there is no such thing. It is a hoped for price - a price which is determined by the interaction of supply and demand. To prove this I point out that in the last two agreements the floor price - the minimum price - was reached only 50% of the time. In other words the floor price, which averaged around 3.25c a lb, was reached only 50% of the time in the last two agreements. There is no such thing as a guaranteed price; it is a hoped for price which can be achieved. The Government and the industry have to be perpetually on guard to see that there are no economic or political factors which white-ant this most important agreement.
Sitting suspended from 5.53 to 8 p.m.
- Mr. Speaker, the purpose of the International Sugar Agreement Bill 1969 is the ratification of the International Sugar Agreement 1968. It is a very important measure that concerns the great sugar growing industry of Australia. This Agreement is the consequence of the most successful negotiations in which Australia played a leading part in Geneva under the auspices of the United Nations Conference on Trade and Development, following earlier conferences, one of which took place in New Delhi. The consequences of this Agreement are of tremendous significance to the Australian nation as well as to the Australian sugar industry and to the sugar producing and consuming countries around the world.
The objectives of the International Sugar Agreement have been set out very clearly. I think that it is appropriate that we should have some reference to these objectives in this House. The objectives are:
I pause there to note an important consideration. This is the fact that Australia is represented as a developed country because of the tremendous increase in sugar production following the enlarged acreage under cultivation. A few years ago, we scarcely could claim to be a nation that could sustain the problems any better than some of the underdeveloped countries of the world.
I was interested in the contribution made by the honourable member for Dawson (Dr Patterson) to this debate. Over the last 3 years or 4 years, the honourable member for Dawson has been more vocal on this issue than perhaps any other honourable member. I wish to acknowledge right away that he did pay a tribute to the Deputy Prime Minister and Minister for Trade and Industry (Mr McEwen) and to the others who represented Australia from time to time at the international level and, in particular, to the officers of both the Commonwealth Government and the Queensland Government who contributed so much in the important work of securing a satisfactory arrangement for sugar marketing. When I say ‘securing a satisfactory arrangement for sugar marketing’, I do not want for one moment to suggest that Australia achieved all of this alone. What I do say is that Australia was one of the key nations in bringing about the decisions which were reached and which have produced in the Agreement some seventy-two articles, which are comprehensive and which cover the facets and the problems of the production and the marketing of sugar around the world in a manner that I believe transcends any previous approach to an international agreement concerning sugar or an international agreement of this kind concerning any primary product.
The honourable member for Dawson went on to tell us that he had been advocating that this be done. He spoke, I believe, with three faces - with three tongues, perhaps we could say. He was, I believe, generous in his comments about the situation that we have today. But he went on to ask what would have happened if we had not achieved this agreement and stated that this had been his concern over the last few years. I want to remind him that virtually despite his opposition in this House the Government fought on when the going was really tough. The Deputy Prime Minister in particular was tenacious in his approach to this problem. He ensured that whatever action was practicable and was possible was taken, first of all, to get loan moneys for the sugar industry during the period of crisis and, secondly, that we did not entertain for one moment any wildcat scheme of cutting down cane acreage or of imposing any restrictions en the growers, which would have achieved nothing and which would have placed them in a position today where the benefits of this new international Agreement may not have been as useful to the Australian industry as they will prove to be.
Then, the honourable member for Dawson went on to tell us that in a certain area of Queensland alarm is still felt and that there should be further price support or some other action. I want to remind him that in this House, outside and, perhaps, particularly in that part of Queensland, he himself should bear some responsibility for the differences of opinion that exist in the industry today. I believe that the Queensland Cane Growers Council has a fair understanding qf this problem, just as the Australian Sugar Producers Association has. But there are sections within the industry that still do not know precisely what has been done, what the results will be and what are the details, and the consequences of this Agreement. I do hope that the honourable member for Dawson will do the right thing as far as the cane growers in these parts of Queensland where there is a lack of proper knowledge and understanding of the situation are concerned. If he were to do this, he would be doing a service for himself, for his Party and for the sugar industry.
The honourable member told us that some farmers - small farmers, perhaps - are still facing difficulties. This is recognised. But the question as to what the remedy is is ene that I am sure no-one will want to run away from. If a proper approach is made to it through the industry, and with the Queensland Government working in co-operation, undoubtedly there is an answer. Although I am not able to call into this debate all of the details as to the differences even district by district in parts of Queensland, I can speak as a member representing a very substantial sugar growing area in northern New South Wales. I say that where there is a rational approach, where mill peaks are observed with a reasonable regard for weather difficulties - whether a dry period, a flood period or a good season is experienced - and if mill peaks are given their proper consideration by the growers and by growers’ organisations - and I am certain that every Queensland mill has a firm grip of the problem as well as a proper approach to it - the problems of some farmers who are facing difficulties can be resolved, insofar as every unit should be an economic unit within the scope and capacity of production and marketing, to give that unit economic strength. If there are units that are not up to that strength - in other words, if there are individual farmers who, under these very favourable arrangements for people in the sugar industry, are not able to play a useful role for themselves and for their industry - some alternative should be found.
I believe that in every primary industry, whatever it may be, this is the prime responsibility, first of all, of the individual and, secondly, of the organisations concerned with the welfare of the producer. Certainly, the sympathy and the help of the Commonwealth Government and the State governments should be extended to small farmers, but not on a basis that carries on some problems into the future on a long range basis. Short term help is desirable, and it should be forthcoming. So, the honourable member for Dawson would be doing a service to the part of Queensland which he described to us this afternoon as still facing serious difficulties, if he were to lead the cause for getting better arrangements for the farmers in the area.
I turn now to the situation as we find it. The result of the International Sugar Agreement which this Government currently is confirming by legislation in this Parliament and which many other countries in the next few months and perhaps in the next year or so will deal with in a similar way will give a properly organised international approach to the production and marketing of sugar. Again f turn to the objectives of the Agreement, which are:
Those objectives spell out clearly a reasoned and proper approach to the problems confronting a great primary industry. Great credit is due to every Australian who played a part in securing a decision at Geneva, making it now possible for about 40 countries to participate in an arrangement under which the international price of sugar has been increased from about £stgl8 a ton on the London market to its present price of a little more than £Stg36. This is a matter of particular interest to the Australian producer. The price could go a little higher, but not a great deal higher. The levelling out under the Agreement is designed to ensure that the market is not over-supplied or under-supplied. It is designed to ensure a sensible price structure on the international market. As a leading sugar producing country Australia will benefit greatly from the Agreement. When the price reaches a level at which it returns about US4c per lb the Australian industry will reap the benefit of about $40m annually on the international market.
I do not propose to deal with all the ramifications of the various segments of marketing. Most honourable members know about our preferred market in the United Kingdom and our preferred market in the United States for a certain quantity of sugar. It is interesting to see an improvement already in arrangements for the supply of sugar to other countries. I understand that a contract has been entered into for Australia to supply 250,000 tons of raw sugar to Japan. The price at which we supply this sugar will be advantageous because of the new price level on the international market. This price level is not over-generous by any means but it is suffi cient to sustain the sugar industry. It is a level that will ensure an economic return to the Australian producer for his year’s operations. Certainly as a consequence of the improved situation there may be a further price increment. If this happens great benefits will accrue to the producer. lt is an historic fact that in times of high prices land values have risen, only to fall sharply when the world price of sugar has fallen. 1 hope that the improvement in the lot of producers over the next 24 months will not induce them again to chase the market in land transactions, resulting in a rapid increase in tend values. This would be an unfortunate consequence but I do not believe that it will happen. Today the growing of sugar does not represent a gold mine for the individual producer or for the industry as a whole. It provides a sensible return - an economic base upon which the industry is able to go forward, taking advantage of many things of which the industry should be proud, having regard to conditions in other primary industries. 1 refer particularly to the efficiency of the sugar industry. Few primary industries could equal the Australian sugar industry in efficiency. Let me refer to some of the efficient aspects of the industry. Over the years there has been a remarkable approach to the breeding of sugar cane. The trend continues today. Assisted by various great organisations such as the Colonial Sugar Refining company, the growers, through a scheme of real co-operation, are able to have constant research. In this respect they are assisted by the Commonwealth and by the Queensland Government. The growers get every assistance in the development of new varieties of cane. They are assisted with their disease and pest problems. They get the very best agronomist advice.
As a result of all this the efficiency of the industry, particularly the yield per acre, has reached a very high level. Without this assistance many farmers would not have survived the recent crisis in the industry. The efficiency of harvesting, transporting to the mills and handling the cane in the mills has been unique in a country like Australia, because we do not depend on a labour force of the kind used in underdeveloped countries. We use good Australian labour. The employees in the industry are paid very satisfactory and proper rewards for their efforts. This is part of the history of Queensland and of successive Queensland governments. Queensland governments of all political colours have over the years participated in building up a sugar industry of a kind that does not exist anywhere else in the world. A similar observation applies to the industry in northern New South Wales. Even the sophisticated United States found it expedient to cut back its sugar industry by some 20% because of failure to find a solution to management problems in the way we solved those problems in Australia.
I think some comment is warranted on the greatly increased acreages in Australia. The honourable member for Dawson said that he would like to know what the Commonwealth’s attitude would have been if it had had any say in decisions following the report of the Gibbs Committee, but I recall his saying in the House over the last 24 or 36 months that the Government was responsible for the decision that was made.
– The State Government.
– No. I will stand corrected if I am wrong, but I challenge the honourable member to prove that he did not say in this House that the Commonwealth Government was responsible for the increased acreage following the report of the Gibbs Committee. If he did not say that I will apologise to him, but my recollection is that he made the statement. This was the sort of thing he did over and over again. But we were agreeably surprised this afternoon to hear bis more moderate speech. He recognised many of the basic factors that underline the management of the sugar industry in Australia. In particular he recognised what the Government has done to assist the industry by negotiating with other countries this very necessary and useful International Sugar Agreement.
I have already referred to the objectives set out in the Agreement. Many provisions in the seventy-two Articles of the Agreement will be important to Australia as the years pass. Undoubtedly the Agreement will stand for a number of years. It will be necessary to have further discussions on an international level to iron out the difficulties which will arise from time to time, but basically the seventy-two articles set out very clearly a sensible medium of operation.
The exporters, the importers and the producers are all accounted for in a quite unique fashion with voting powers according to productivity on the part of the producing countries, and voting powers according to import levels on the part of the importing countries. It is unique to the point that there is scarcely a problem that could arise for which an answer does not lie in the provisions of this remarkable Agreement.
I refer now to the way in which this Agreement was produced. It was produced as a consequence of the sensible approaches of a number of nations. I mention in particular the practical down to earth approach of this Government and the Queensland Government under the leadership of the Minister for Trade and Industry who was supported by other Ministers who participated. I refer particularly to the present Minister for Primary Industry (Mr Anthony) who was the representative of the Commonwealth at the second last Geneva conference which did not succeed in reaching an agreement and broke up amidst some disappointment. I believe that it was the work of the Minister for Primary Industry at that time which set the seal on the arrangement for the appointment of a steering committee, I think it was called, to continue with the work and to try to find mediums that would give the other nations the opportunity to go back to Geneva to try to iron out their differences. This achievement occurred at a time when it was being said around the world that there was no hope of getting an international agreement. One of the factors which led to this achievement was that Aus.tralians are very much respected around the world and a number of nations perhaps would not be amenable to propositions that could come from any one of the other large producing nations. This was a matter, to a large extent, of personalities, which are inseparable from both internal and external politics.
Whether we are involved in an international conference to deal with a problem such as sugar or in any other international approach, we need to have people representing Australia who can interpret the point of view not only of ourselves but of others who participate. The attitude of people such as the honourable member for Dawson, while ail this was going on, was not really very helpful. 1 suggest that this is one very good reason why not only the sugar industry but the nation as a whole should recognise the depth of the capacity of the present Government to participate in international negotiations. As a consequence of this Agreement the sugar industry will benefit to the extent of $40m. If we look at the many other facets of our trading as a nation we will find that without this kind of approach Australia, still dependent as it is on primary products to balance its payments and to set a sound economy, would be staggering under the load of trying to cope with the economic problems which would beset it if it were not able to achieve success of the kind we are able to observe when we debate this Bill tonight.
We have seen, in relation to wheat and practically every other primary product, that this country, through this Government, has the capacity to find markets and to make use of them. Australia is often the leader in advocacy of a manageable market - a market that is managed by some kind of international organisation. The next field in which Australia will strive hard to succeed will be the difficult field of selling butter on an organised rather than a disorganised world market. I mention this broad spectrum because it is important if we are to be aware of the significance of this present Agreement. My view, and 1 am sure the view of everyone connected with the sugar industry, is that this provides, after a lapse of some years, a basis upon which to assess, to manage and to plan the Australian industry. In that planning there will be very serious questions to be determined - questions as to just how we should play our role to the best advantage in participating in and gaining benefits from this international Agreement.
There will be times when we will have to hold quite large quantities of sugar in storage. Again we do not appear to face any difficulty in this regard because of the wisdom of the industry and of this Government and the Queensland Government in providing modern storage facilities of such a nature that there is no diminution in the value of the product while it is in storage and where handling facilities are such that they can cope with any movement of sugar that becomes necessary on short notice or where sugar may have to remain stored for a considerable period of time. Not only has this been a useful situation right from the very beginning of the operation of the Agreement, but it is something that demonstrates to other countries that we are able to do a proper job. It goes beyond that. We have a very unique arrangement in Australia in our approach to marketing at the international level.
Here I want to pay a tribute to the sugar milling side of the industry. The honourable member for Dawson said earlier that these people would get rich quickly on the proceeds. What sheer rot. Perhaps there are some instances in which a mill will take some advantage. It is for the industry in the respective States to look at this seriously; but I say without doubt that the total mill organisation, whether it be the Colonial Sugar Refining company, which has been and is trusted around the world to lead the sugar marketing field, or some other company, will not for one moment do other than adhere to the very remarkable principles which the CSR company has applied over the years in its negotiations on behalf of the industry and within the industry. There are in Queensland a number of co-operative mills which, I remind honourable members, are owned by the sugar growers. The growers are the shareholders; they are the participants. Some of these mills have had difficulties during the last 3 years. They have been assisted by the Government of Queensland and the Commonwealth Government. When there was a bedrock situation on the international market this Government saw fit to provide loan moneys to boost the price of sugar. This was not restricted to a socialist approach so that just a grower would get something out of it; nor was it there for those on the milling side who did not need it. There was a sensible approach which ensured that co-operative mills obtained the benefit too, because without that benefit flowing to co-operative mills there would have been a serious situation so far as the growers in those respective areas were concerned.
I commend this Bill to the House. There is every reason for expressing the highest possible confidence in its value to this nation, and a very real reason for us to express the belief that the Government has acted in the best interests of the industry and of the individuals in the industry in reaching this Agreement which is now submitted to this House for ratification. The sooner that the seal of the Commonwealth is on this Agreement the greater the encouragement will be to other nations to enter the Agreement by similar action within their own parliaments.
– I have listened attentively to the previous speakers. It is quite apparent to me that the honourable member for Cowper (Mr Robinson) is looking after the interests of his own electorate and is speaking on behalf of the Colonial Sugar Refining Co. Ltd rather than the industry as a whole. One wonders whether he knows anything about the industry as a whole. I personally offer no apology on behalf of myself, the honourable member for Dawson (Dr Patterson), the honourable member for Leichhardt (Mr Fulton) or the former honourable member for Herbert, Mr Harding, for any argument that we have put forward in respect of the sugar industry. We have done so to make this Parliament aware of the problems of the industry. We have done so rather than silently acquiesce and pretend that all was well within the industry when we knew quite well that it was not.
The Australian Labor Party supports this agreement and would support any agreement to bring stability to an industry which for the past 3 years at least has been at the mercy of fluctuations, some of which have undoubtedly been caused by market manipulators. As the Minister for Trade and Industry (Mr McEwen) pointed out, some 60% of the production is being sold at world market prices. The honourable member for Cowper was at variance with the Minister. The Minister, in his second reading speech, said:
The expansion programme created some major difficulties for both the cane growers and the mills. The real problem was that although a significant proportion of the total crop was guaranteed market outlets at reasonable prices, an everincreasing proportion could only be sold in the so-called free market at very low prices.
The honourable member for Dawson said that some 9% of the world production is sold on the world market. A large proportion of the Australian production is sold at world market prices. The industry has been for a number of years in serious difficulties because of low prices. I congratulate those who have been able to bring about this agreement, because never at any time has the sugar industry been more dependent upon the reaching of such an agreement. My recollection that the Minister for Primary Industry (Mr Anthony) suggested that if some sort of agreement was not reached there would have to be a reduction in acreage.
My electorate of Wide Bay depends greatly on the prosperity of the sugar industry. There are five mills operating in the electorate, and there is a co-operative mill at Childers and another at Maryborough. Engineering companies at Bundaberg and Maryborough manufacture the heavy milling machinery, particularly at Bundaberg. A major proportion of the agricultural machinery such as the cane harvesters is manufactured not only for Australia but for export to other major sugar producing countries, lt is most important that this agreement be reached. It will bring some measure of stability to the industry, something that has been sought by the industry. It was achieved by the industry in 1915 with the signing of the Sugar Acquisition Act by the Queensland Labor Government led by T. J. Ryan. This was followed by the signing of the first Commonwealth-State Sugar Agreement by the Queensland Government and the Fisher Government. This Agreement gave preference to the sugar manufactured in Australia and not only restricted the production to a certain figure but also guaranteed a domestic price for sugar throughout Australia based on capital city prices. This did much to bring about stability in the industry.
This same Labor Government in 1.915 arranged for payment for sugar on a commercial cane sugar, or ces., basis. Previously the growers were at the mercy of the millers. The Government encouraged the growers to set. up their own co-operative mills so that they not only then knew what was happening in the other section of the industry but also had some say in it. However, to a certain extent, they are a minority voice on the production side. The Colonial Sugar Refining Co. Ltd was given power to act as marketing authority under the agreement. On many occasions the sugar industry has been held up to other industries as an example of an industry that has achieved stability. Whilst we are getting stability of prices, we also want some stability of production. Under the expansion programme the grower had to accept an obligation to produce a certain amount of cane sugar. Some new areas were thrown open for production. People were allowed to ballot for these and they were allocated to certain persons. Some of those farmers have been faced with bad times. They have had to cope not only with the low price of sugar but also with drought conditions.
The position has not been exaggerated by the honourable member for Dawson. He said that there are grave doubts whether certain mills will be operating this season. In the Childers district the cane is falling back. It is about half the size it should be. In many cases, unless rain falls before the end of the month, it will have to be ploughed out The prospects of a good season there are very remote indeed. The sugar industry is somewhat different from industries such as the wheat industry, where there is a problem of over-production. Under the Sugar Acquisition Act a certain amount of cane has to be produced. If one farmer does not grow his quota, some other farmer will. Each mill is allocated a mill peak at the beginning of each season. The industry has worked within this ambit. It has accepted restrictions when they have been necessary and it has expanded when it has been able to do so.
On the matter of the expansion, there has always been some difference of opinion. Following the Gibbs report the cane growers wanted to act slowly and have a gradual increase whereas the millers wanted a rapid increase. No new mill areas were created and, in some mill areas, no new assignments were made. Some assignments were increased, but no new areas were opened up. The farmers have an obligation to produce an amount of cane that will yield a certain tonnage of sugar. However, if they have a bad season, they have difficulty in producing their quota. This has been pointed out repeatedly, particularly in the Bundaberg area. Representations have been made to the State Ministers. They were assured that the Burnett-Kolan scheme would assist, in particular, the three mill areas of Fairymead, Bingera and Gin Gin-Wallaville and, to a lesser extent, the underground water basin in the Bundaberg area, lt was pointed out that the commencement of the Kolan River scheme would bring a measure of stability and guarantee production to this area by irrigation.
A case was submitted, and I believe that it could have been backed up. An energetic committee was formed and it used a great deal of its own funds, to which contributions were made not only by the millers but also by the cane growers themselves to the extent of £10,000, to carry out investigations and to present a case. The proposal was passed over in favour of the NogoaEmerald scheme. Whatever the rights or wrongs of the decision are, I do not blame the Commonwealth Government one iota for making a decision in favour of the Nogoa-Emerald scheme because the Queensland Government gave priority to that scheme. But the point is that if the Kolan scheme is adopted - and I hope it will be shortly - it will give a measure of stability in production to cane growers in this area, who have an obligation to produce certain quantities of sugar. If they cannot produce these quantities it will mean that there will be a shortfall in production in Australia, unless there is increased production in some other area, and this does not always happen.
The International Sugar Agreement places an obligation not only on the exporting countries but also on the importing countries. Paragraph (1) of article 28 of the Agreement, which refers to the obligations of importing countries, states:
To prevent non-Members from gaining advantage at the expense of Members, each Member undertakes for each quota year:
not to permit the import from nonMembers as a group of a total quantity of sugar greater than the average of the quantities imported from those nonMembers as a group over the 3-year period 1966-1968. . . .
Again, the exporting members undertake that should prices increase they will give preference to importing countries which are signatories to the Agreement. We can be very pleased that Australia was able to obtain such a high quota. Possibly this was the result of expansion in the industry. We have a quota of 1,100,000 tons in the first 3 years. Under the Agreement provision has been made for the export of 300.000 tons a year to the European Economic Community, which hai not yet become a signatory to the Agreement. As a national parliament we should be pleased that we will receive export income from the sale of 1,100,000 tons of sugar in addition to the sugar which is sold under the agreements with the United Kingdom and the United States of America. Although the export of sugar is earning income for Australia I do not believe that one section of industry should have to bear the cost of providing these funds, by selling its sugar at less than the recognised cost of production. I think that this is wrong, particularly as it relates to people in small areas. The expansion of the sugar industry and the reduction in the price of sugar have meant that many farmers have had to take on larger areas. This is not typical of the sugar industry only; it is typical of other industries. Farmers have to produce more in order to gain an economic return. Some of the smaller farmers are not in a position to do this. Either land is not available to them or they do not have the finance to acquire additional land. These are the people who are in need and to whom the honourable member for Dawson has referred.
Another point which arises is whether the industry should be obliged to borrow again in this season to maintain a return to the growers which would be somewhere near the cost of production figure. The Commonwealth has made funds available. It was requested to make interest free loans available. This was not the case put forward by the Queensland Government. This was the case put forward by the Queensland Cane Growers Council. It asked the Commonwealth Government to make funds available to assist the sugar industry over a very difficult period. Funds were made available, but they were not on an interest free loan basis. The present indebtedness of the industry is $30m. I am indebted to the Minister for Trade and Industry for making available to me the history of International Sugar Agreements. I hope that honourable members take the opportunity to read this document because it will give some appreciation of the sugar industry, which was established in an area which was said to be black man’s country. For many years the industry existed on indentured labour which was brought from the Solomon Islands. This system ceased in 1901. Shortly before 1900, due to the efforts of men like Sir Samuel Griffiths, the
Hon. Tom Glassey and others, indentured labour was no longer used. A living wage was paid to men of European origin to work in the industry. This is the way in which the industry has been able to operate.
In the document which contains the history of the sugar industry mention is made of the fact that the argument between the United States and Cuba led to the breakdown of the International Sugar Agreement. I was perturbed to read in this morning’s Sydney Morning Herald’ an article titled Timebomb Ticks under America’. It refers to a possible argument with Peru and to the possible withdrawal of preference for Peruvian sugar on the United States market. The article states, in part:
The military junta, which seized power last October, promptly expropriated $135m worth of US-owned oil refineries in northern Peru.
If Peru does not satisfactorily compensate the oilfield owners - Standard Oil Company of New Jersey’s International Petroleum Company - the Nixon administration is bound by law to retaliate.
On April 5, all US foreign aid would be cancelled, and on April 9, the United States - as specified in the Hickenlooper amendment to the sugar quota law - must suspend all purchase of Peruvian sugar.
I am unaware of the actual quantity involved, but the article continues:
US aid to Peru totalled $37m in the 1968 financial year.
But sugar sales to the US brought Peru $59m last year.
Cancelling the quota would throw thousands of Peruvian farmers out of work and create more animosity toward the United States.
Under the Agreement Peru has an export quota of 50,000 tons, lt would appear from this article that a considerable portion of the sugar exported from Peru goes to the United States. I would not like to see circumstances arise similar to those which arose when Cuba walked out of the International Sugar Agreement. Peru certainly is not as large a sugar producer as Cuba, but the circumstances have a very similar flavour. I certainly would not like to see this happen, particularly after so much good work has been done in the establishment of the Agreement. If agreement had not been reached, very shortly countries producing sugar would have had voluntarily to reduce their quotas. There is no doubt in my mind that it was not necessary to do this and a demand for sugar was available throughout the world. Also, 1 believe that people manipulating the market were doing so for their own advantage and certainly not in the interests of the sugar growers and the sugar producing countries. I believe that this Agreement will be in the interests of everyone. 1 hope it will not be long before the United States and the European Common Market become signatories to the Agreement. When this happens we shall be able to say that the future of the Agreement will be stabilised, if not assured.
– The honourable member for Wide Bay (Mr Hansen) is at least to be admired for his protestations of bravery concerning his Party’s attitude on sugar over a number of years. We recall the words that rang out: ‘I am ashamed of nothing that my Party has done concerning the sugar industry either in Government or in Opposition.’ Perhaps the honourable member will afford to some of us a few moments tonight to direct one or two shafts in that direction and we shall see whether he is ashamed of what he has done. If after it has been explained to him he is not ashamed of what he has done, perhaps he has been protected by his own ignorance of the consequences.
This is the fourth International Sugar Agreement to which Australia has been party. This is a Bill to approve the ratification by Australia of the International Sugar Agreement, commonly known as the 1968 Agreement. The previous agreements negotiated and ratified by this country were those of 1937, 1953 and 1958. In the manner of international agreements, perhaps a little bit of history is worth recalling. History will explain the shortcomings and the misunderstandings of the Opposition with respect to this matter.
The precursor of the international sugar agreements was the famous Chadbourne agreement of 1931. This agreement was a unique attempt to produce orderly marketing in the international sugar market. It failed due to the shortcomings of the agreement itself and to the shortcomings also of the economic trials of the 1930s. But if we recall the Chadbourne Agreement, it is well worth remembering that when it had been signed the proponent of the agreement himself, Mr Chadbourne had this to say:
We have set in motion a unique expedition into a new field of world economics.
He had set the new venture under way. It failed during the 1930s for reasons that will at least be obvious to most honourable members at once. We should then ask ourselves: If Australia rows a mightly oar in the world of international sugar, is the agreement which has been ratified appropriate to the leverage which Australia can and does put upon that oar? It will be obvious that it is in fact appropriate to the leverage which we have put into the international sugar market. It is appropriate to the leverage because we have obtained international sugar quotas for this country which are possibly among the best of the exporting countries of the world. We ought to be quite proud that this has been done. When we look at the reasons for which such beneficial results have come from the Agreement, the errors and misunderstandings of the Opposition will become painfully clear.
But before I advert to these, perhaps it would be worthwhile recalling the simple principles involved in this Agreement, lt has been pointed out this evening that the principles of the Agreement arc quite clear. They are painfully clear. Perhaps even 1 can understand them. They rest upon the simple principle that the price at which sugar will trade in the international market varies as the supply. This is such a simple principle. Australia is giving ratification to this principle. Wc can ask ourselves: ‘What is there new about this?’ There are a number of features new about the Agreement. More checks have been given to the prices at which different suppliers are entitled to the market than have ever been given before in an agreement. This Agreement possibly is similar to only one other international commodity agreement which has been negotiated. It is infinitely superior to the grains agreement. 1 would say that it is quite clearly similar to the International Tin Agreement. This Agreement has a number of features that are on a par with the International Sugar Agreement. The International Tin Agreement has, as we know, floor and ceiling prices, lt has estimates of the probable demand for the commodity in the international sphere. It has negotiated a buffer stock. The buffer stock is the nucleus and the heart of that Agreement. In fact, by altering the buffer stock the price negotiated for tin on the free market is varied. This Agreement has been successful. Australia has agreed to voluntary restrictions on its production in the Tin Agreement. The International Sugar Agreement is not dissimilar to it.
One would have to look at the other ingredients of the International Sugar Agreement. If there is one characteristic which is involved in this Agreement and is not involved in any other, it is the fact that probably for the first time expectations are to vary the production efforts and the production quotas which a country undertakes. If I may illustrate, I would like to turn to the Agreement itself. It is perfectly clear that the level of US4c per lb is a critical level in the negotiations. If the market is rising at US4c per lb, a country is allowed to have the whole of its basic export tonnage exported. But if the market is decreasing at US4c per lb different arrangements are made and a rather smaller proportion of the country’s basic export tonnage is appropriate. For the first time in any agreement 1 have seen this probably illustrates that expectations are a critical factor in the levels of supply which are appropriate to those countries which have in fact negotiated it. Therefore, it is clear that the commodity which will determine the success or otherwise of this Agreement is a matter of supply.
It is perfectly clear also that over supply would wreck the Agreement and that countries which come into the international sugar market and have not ratified the Agreement can also wreck it. This was the great factor of the1958 agreement. It was the factor which helped to destroy the Chadbourne Agreement of the early 1930s. While we have a look at this matter of over supply, if we concentrate upon this most critical factor perhaps one might direct a very gentle shaft at the gentleman who led for the Opposition. He would wish he had not said in the House things he has said in the past. Over supply can clearly wreck this Agreement. I would take honourable members in this chamber back over recent years and draw their attention to the prices of sugar. Who would deny, after listening to the gentleman speak on sugar tonight, having heard him suggest that the excess sugar production in certain areas of Queensland ought to be encouraged onto the world market no matter in what manner over supply was depressing the price?
– I have never said this before.
– I think the honourable member has suggested this very often.
– The honourable gentleman has suggested that the excess export production over peaks around Mackay should attract a higher price than in fact it attained. It means that excess production was being encouraged, and if excess production was being encouraged the honourable member is invoking the very principles which could wreck any international agreement.
– We would not have got the quota if there had not been this overproduction.
– Everybody has heard the honourable member say that in this chamber. Everybody has heard him say it on a number of occasions. He goes back to the farmers in Mackay in his own electorate - not in the electorate of Leichhardt or Wide Bay - where there has in fact been over-production for a number of years and he can make a big fellow of himself, but at the same time he disadvantages those sections of the sugar industry which did not over-produce and did not wish for a price greater than the peaks provided for those sections. But I have other people to support my testimony. I will take a former Premier of Queensland. He was a very significant Labor Premier of Queensland, the late Mr Forgan Smith. He was the member for Mackay in the days when the honourable member at the table and his family for a number of years did not support Mr Forgan Smith’s particular Party, so I would forgive the honourable member if he did not understand the principles which had been advocated by Mr Forgan Smith. I am referring to the statements made by Mr Forgan Smith at a public meeting in Mackay on 4th and 5th August 1936, when he was referring to the international sugar market, on the matter of over-supply.
– What year?
– The year was 1936. The same principles applied. He said: 1 am not advocating a policy of limited production because I believe in that policy, but obviously you must take slock of the availability of markets and of conditions as they exist today.
That is wisdom in that day and it is wisdom in the present day. He continued: 1 hope you win view these things from the points 1 have raised- the well being of the industry, and those engaged in it.
The former Labor Premier, of course, had responsibility for the industry, something which the honourable gentleman who has led for the Opposition has never had. But he went on further on the matter of effective demand, which in fact is the ingredient which attracts production. He had this to say:
I want to see the sugar industry go on and make progress, to see all engaged in it able to carry on on a sound basis, but I have felt it my duty to point out to you thai if you continue each year increasing your production beyond effective demand. . . and that is the principal point -
. you are ia danger of lower prices and in danger of quotas being imposed.
There we have it, from the former Labor member for Mackay, the late Mr Forgan Smith. But then other principles have been advocated tonight both by the honourable member for Wide Bay (Mr Hansen) and the honourable member for Dawson (Dr Patterson), and I might deal with these, and in dealing with them 1 might also deal with the internal structure of the industry. It is perfectly clear that if there is an amount of money to be attracted for sugar production - a maximum amount of something like $200m a year, as can be quite well documented - I am concerned with the distribution of that money, because the Opposition has sinned in this matter quite often in this chamber. It is perfectly clear, then, that if we are going to be able to attract a maximum amount of revenue for sugar the distribution of that revenue is critical. If we are to distribute that revenue to those who have over produced we will disadvantage the No. 1 pool price for those sugar farmers in the electorates of Leichhardt. Wide Bay and Cowper who have in fact not over produced. So it is the principle of distribution within the industry which has also been contravened on a number of occasions by the honourable gentleman who has led for the Opposition. I return once again to Mr Forgan Smith, who explains the errors of excessive individuality in the industry which have been encouraged by the Opposition so often. In the same speech at the same dinner Mr Forgan Smith had this to say:
There has been too much individuality in the industry and not enough appreciation for the need for collective security.
Problems were the same then as they are today, but, of course, ignorance has been the great protector of those who would not learn from the past.
– That helps you a lot.
– I will deal with the honourable member for Wide Bay. Would he suggest that in supporting the principles he enunciated over the last couple of years and which he has voted on has he not helped to disadvantage the farmers at Childers compared with those in the other areas of the State.
– Of course not. The honourable member does not know what he is talking about. There are two pools.
– Of course the honourable member has put them at a relative disadvantage. If he does not understand what relative disadvantage is I have some pity for him, but it is a real thing. A real Cook’s tour was proposed by the Opposition this evening on the Sugar Bill. lt took in the matter of unemployment in the Mackay sugar area. It also took in the matter of the price differentials in the provincial cities. I will deal with both those matters because they are worth discussing. It has been said that unemployment in the Mackay area is very high. I know that. Unemployment in other provincial cities has been very high, and it is traditionally high, but let us concentrate upon Mackay, which is worth thinking about for a moment. It will be recalled, of course, that in recent days an agreement has been signed, concerning the export of coal, which will provide employment for some hundreds of men in the service industries in the area just west of Mackay. I am referring, of course, to the Gunyella coal agreement, one which is looked at very avidly and is supported by the people in the area. This is a proposal which will provide employment in this area of high unemployment, and I ask honourable gentlemen opposite: Why are they in a Party which opposed the signing of that agreement which will create employment in the area, and which will bring regional development par excellence, regional development they have not known before? Honourable members are a little embarrassed by this, and well they might be embarrassed. But will they come back to their own-
– I rise to a point of order, Mr Deputy Speaker. If the honourable member is going to debate the question of foreign investment in minerals I would like to reserve my right to speak again.
– 1 think the honourable member is making only a passing reference. I hope so.
– Thank you, Mr Deputy Speaker. It was a passing reference in relation to unemployment. One should realise, of course, that when men are out at work they do not worry so much who is employing them but rather about obtaining decent conditions of employment and decent wages, and whether these men happen to live in a sugar town or some other town, it ought to be made perfectly clear that the very agreement which is to provide greater employment in that town has in fact been opposed by the Party to which the honourable gentlemen opposite have given supine support.
But I go a little further. I will have a look now at the price differentials in the different cities, and here we have seen probably the most magnificent error committed by the Opposition in relation to sugar for some years. It is not a new one. There are price differentials in provincial cities, and I asked the honourable member opposite: ‘What is your solution?’ He gave me some very unkind replies. That is to be expected, but let me remind him that the solution which he proposed in 1967 on the Sugar Agreement Bill had much to do with the price differentials in provincial cities. The amendment to that Bill which was moved by the Opposition and supported by it in section (b) stated:
The extra costs of any additional freights associated with the inclusion of Rockhampton and Townsville in the base price system should be borne by the Queensland Government from the substantial profits made annually by the State on the central and north Queensland Railway Divisions.
There are a couple of features of the solution proposed by Opposition members that ought to be explored in some depth, and the principles involved in the solutions to the difficulty of price differential ought to be borne in mind. They were in fact going to place greater pressure on the long haulage of wool, wheat, meat and minerals which make the railway system profitable in order to help some of their own sector of the sugar industry. Of course, the Opposition members had already made the calculations. Wool, meat and minerals managers are not in Labor electorates in great numbers. There were not many of them, but they were in the electorates of my friends, the honourable members for Maranoa (Mr Corbett) and Kennedy (Mr Katter). Why should they go to those electorates in order to get a petty advantage for themselves? They voted for this amendment and I hope the full significance of their action comes home to them, even though it is a little belated.
But they did something else. They are good Labor men. The honourable member for Dawson is among the most recent acquisitions of the Australian Labor Party in this chamber. It is inconceivable that these good Labor men would hit a government transport system while other systems involved in the transportation of sugar - road transport and shipping - were left completely free. These are in the hands of private entrepreneurs. I merely point out that the lack of knowledge of the traditions of the Opposition Party at times gets the honourable member for Dawson into areas that embarrass his own Party. His colleagues were sorely embarrassed over this and those members of his Party who voted for it were not happy that they had been led into such a trap.
Those are some aspects of the sugar industry that are appropriate to mention in a consideration of the International Sugar Agreement and in exploring the case put by the Opposition. If I may, I will revert again for one or two moments to the International Sugar Agreement. It has been suggested that the quota appropriate to Australia under the Agreement is not adequate, that the quota that has been allotted to this country is a big reduction in our net exports to the free markets over recent years and that in fact we have been disadvantaged more than other exporting nations have and more, shall we say, than has Cuba, the greatest exporting nation. If one makes a table of the degree of sacrifice that a country has had to sustain in order to realise its quota, compared with its net exports in recent years, one comes to this result: Australia has had to sustain a degree of sacrifice of 28% of its exports in recent years, Brazil 14%, Taiwan 27%, South Africa 26%, Czechoslovakia 30% and India 38%. It is immediately obvious then that, while many countries have had to reduce Ae quantity of their exports in recent years, Australia has not had to make as big a reduction as some other exporting nations have.
If we look specifically at Cuba we see that, having had her market outlets to mainland China and the Communist countries of eastern Europe restricted and then having had the additional restriction in the basic export tonnage. Cuba has not fared particularly well under this Agreement. So what do we say? We say that Australia’s experience of the International Sugar Agreement has been this: The realisations of our prices are excellent at the moment and are such that we should be able to export the full quota if prices rise by a further .2c a lb. This has all been achieved by acting contrary to the principles enunciated by the Opposition since it has been led on sugar by the honourable member for Dawson.
– The honourable member does not know what he is talking about. He would not know sugar from sorghum.
– lt has not been my purpose tonight to offer any unwarranted criticisms of the attitudes of other people on these matters, but perhaps in the course of truth these things should be said from time to time.
I now turn to the experience in recent years in the sugar industry. We know that there was a great expansion of production in Queensland in the early 1960s. We know that this expansion of production was in response to the higher prices obtained overseas and that these higher prices were somewhat illusory. We know that the expansion of supply, which had been supported by the Queensland Government, proved difficult for the industry for a num ber of years. The Queensland Government was responsible for the supply and here we have a division of authority that may be worth looking at. We also know that the principal negotiating authority for Australia on the International Sugar Agreement is the Commonwealth Government and as the price in the Agreement affects a significant sector of the industry, we are faced with a problem. The authority that is responsible for the supply is different from the authority that is responsible for negotiating the price. This gives rise to difficulties and tensions within the industry and they have become manifest within recent years. I would hope that if there is to be a significant change in the production of sugar in the north there will be closer consultation between those responsible for supply, and if the free market is responsible for the profitability of the sugar industry - and it seems that it will be for some years in the future - that the authorities responsible for supply will not be separated from those responsible for the price that is supported and negotiated on the international market.
There are other features of the Agreement that are completely new. Shortfalls within the basic export tonnage can be distributed if some exporting countries under certain conditions cannot meet their quotas. I understand that Taiwan and South Africa - I think they are the two countries - will not be able to meal their export quotas. There is a possibility that if the price attains to a higher level there will be a redistribution of the shortfalls in their exports. This is a point that Australia pressed strongly and il is a point in the Agreement that may benefit the Australian sugar industry rather sooner than we expect.
One other feature of the Agreement worth considering is the hardship fund. Countries dependent on sugar for their economic viability may have the distribution of a hardship fund to help them. The hardship fund consists of an amount of sugar - I think it is 150,000 tons. The distribution of the hardship fund will be a welcome and a new exercise in the implementation of international commodity aid. It is a pity that this has not been mentioned rather more often by those who have criticised the Agreement and the industry in the past.
If I were to make one or two points concerning the Agreement they would be that it is the most sophisticated agreement we have had. It is probably the first international commodity agreement that varies supply according to expectations as well as to the price being experienced at the moment. This has required a great number of checks and balances in the Agreement and the checks and balances will be responsible for ironing out the fluctuation in the international sugar market. The Deputy Prime Minister (Mr McEwen) is to be given every credit for having negotiated the Agreement. The late Premier of Queensland, Mr Pizzey, and the present Premier are to be given great credit for negotiating the Agreement. It is very beneficial to this country, but most significantly it is beneficial to this country probably because it includes action that is quite contrary to the principles that have been advocated by the Opposition.
– The Bill has not in general been opposed by the Opposition. We welcome the Agreement as a piece of enlightened international Socialism. I shall define Socialism shortly, but for the moment it will suffice to agree with the honourable member for Lilley (Mr Kevin Cairns), that great champion of Socialism, that it offers an unusual system of checks and balances to modify the inhuman and harsh law of free enterprise, the rule of supply and demand. In fact this Agreement is a pattern on which a world society might well be built.1 Unlike most socialised industries this is a co-operative not only of the producers but also of the consumers. It. is a credit not only to the parliamentarians who took part and, as my learned colleague the honourable member for Dawson (Dr Patterson) has pointed out, to the backroom boys, of economics, the civil servants, who worked strenuously to evolve this model of trade planning, but also to the United Nations and its Conference on Trade and Development - UNCTAD- and to UNCTAD’s SecretaryGeneral, Dr Prebisch who has achieved what w: are daily told is impossible, that is, the surrender of sovereignty by seventyfive sovereign slates of the most diverse political systems from Cuba to Kenya and from Spain to the Soviets, or at least those thirty-four among them who so far have agreed to sign.
One heartening sign of the readiness to accept the supra-national rule of law on matters which cause international tension is to be found in Article 12 which reads, in part, as follows:
The Council shall make whatever arrangements are appropriate tor consultation or co-operation with the United Nations and its organs, in particular UNCTAD, and with the Food and Agriculture Organisation and such other Specialised Agencies of the United Nations and inter-go ernmental organisations as may be appropriate.
This is reinforced by the vital administrative co-ordination which is to be given to the United Nations Secretary-General under Articles 68 and 72. This shows a sense of responsibility towards a supranational authority and a respect for that authority. Such respect among the mass of mankind, which cun be achieved with modern education and publicity, is necessary to achieve the rule of law in more vital matters than the sugar trade, such as the trade in human life which daily we transact through war and our foreign aid policies, it points also to a way to help stabilise other industries and developing countries other than those which depend mainly on sugar exports for their development. In his second reading speech the Minister for Primary Industry (Mr Anthony) said: . . every exporter wanted the biggest possible allocation for itself . . . it was necessary to have recourse to an independent referee . . . the Secretary-General of UNCTAD. Dr Prebisch . . no one country is really satisfied . . . but exporters have accepted their individual quotas in the general interest of reaching agreement. 1 find this pregnant with possibilities for agreement in wider and more vital spheres if only we wilt devote energy to the search for solutions to other causes of tension and war in the same proportion as we have done in the search for a sugar agreement, which is a step towards world peace and prosperity.
I welcome the Agreement as an international Socialist measure. At this point I must object to the use of the km Socialist’ in the Agreement, lt defines the Socialist countries us Albania, Bulgaria, Czechoslovakia, Eastern Germany, Hungary, Poland, Romania, the Union of Soviet Socialist Republics, mainland China, Mongolia, North Korea and North Vietnam. I do not object to these countries describing themselves as Communist, for only they claim to be moving towards Communism. I do not object to their being called the countries of a state monopoly of capital. But, as a democratic Socialist I object to their claim to be Socialist, with the possible exception of Czechoslovakia which had a long history of political liberty long before the Communist regime - a liberty recently rekindled. 1 shall not move an amendment to the wording; I am just making clear why I describe this Agreement as a Socialist measure. My definition of Socialism is public control of the means of production, distribution and exchange but only - and I stress this - to the extent necessary to prevent exploitation. There is exploitation in Communist countries to the extent that they fail to achieve public control. The dictatorship of the vanguard of the proletariat is not public, although it may have achieved, in many cases, more democracy in some economic respects than the capitalism it replaces. Another Socialist aspect is the undertaking, in Article 27, to ensure fair labour and living standards for sugar producers. Another humane provision was referred to by the honourable member for Lilley - the hardship fund to help developing countries which have sugar to export beyond their permitted level. Finally - this is another very good Socialist principle - it provides for a sugar consumption committee to study the promotion of consumption, competition from synthetic sweeteners, and research into new uses of sugar and other products of the industry. 1 turn to the research aspect for a few moments. Lately we have heard a lot about diseases attributed to sugar. This is not news. Refined foods, including flour and several others, have been variously incriminated for years in several of the diseases of civilisation, although doubtless there are other factors besides food refining processes which cause these disorders. The industry, to expand and perhaps to survive in the face of future competition from substitutes, must look into this question and into the relative health hazards of sugar substitutes, some of which have been blamed for various kinds of cancer. The inclusion of consumer countries is significant here, for doubtless sooner or later they will take up this kind of research. Australia, having perhaps the highest development of sugar science and technology of any country in the world, should beat these consumer nations to the punch. High nourishment is obtainable from sugar beet and sugar cane. This is proved by the excellent fodder value of by-products of the industry.
It is up to the Colonial Sugar Refining Company Ltd and the mills, which are riding on the backs of the growers and are earning good dividends in good seasons and bad, to spearhead the move towards more variety in and the appeal of nourishing cane products. It is a scandal that in Cuba, the chief sugar producing country, the peasant children who freely chew sugar cane at all hours have perfect teeth while Australians, with the highest sugar consumption per head in the world, have the worst teeth. The Colonial Sugar Refining Company did, I believe, have a little bout of conscience about its neglect of this matter and decided that, since teeth consist mainly of calcium and phosphate, it would be a good idea to combine cane sugar - that is sucrose - with these constituents. This gave the company a substance called calcium sucrose phosphate. And lo and behold, when it was added to sugar, it gave a substantial protection against tooth decay. This is only scratching the surface of the problem. It is notable that the honourable member for Lilley, in spite of his vast years of experience in the sugar industry - filling teeth cavities - has made not one mention of this problem. When 10 of his 30 minutes were left be said: ‘I wish now to refer to the Sugar Agreement itself. Most of his speech, as usual, undertook to enlighten the Australian Labor Party about how uneasy its members were about its past policies, and about the ignorance of the honourable member for Dawson who, as a matter of fact, is one of the world experts on this question, is one of the same vintage of experts who hammered out this Agreement for the parliamentarians, and is an expert who was appointed by the Government of which the honourable member for Lilley is a member from about fifty applicants to be the Director of the Northern Division of the Department of National Development.
– Defend the policy; get away from this.
– The honourable member for Dawson is perfectly and adequately able to defend his policy. The facts are that the industry leaders well know - even if the honourable member for Lilley does not know - that if it were not for the excess sugar produced in Mackay and on the Burdekin we would not have secured as high a quota under the International Sugar Agreement as we have. The honourable member for Lilley, as usual, has had recourse to fixing on members of the Opposition the faults that are his own. He speaks of the ignorance of the honourable member for Dawson out of the depths of his own ignorance. The record of the Australian Labor Party is a proud one. Not only did it pioneer the stabilisation of sugar industry when the Parties supported by the honourable member for Lilley howled it down for Socialist talk but also there is probably only one primary industry in Australia that does not owe its stabilisation schemes to the Labor Party. That is the wine industry. If the honourable member for Lilley knows of another one, let him name it.
– The honey industry also.
– Well, there we have it - wine and honey. I commend the Agreement. I commend the spirit that is shown in the drafting of it. I commend the Government for accepting it. I commend it as a step forward in international affairs as well as in the industry. I commend it as a model to other industry. I sincerely hope that Government members will not foster future agreements of this kind by the dubious methods exhibited by the honourable member for Lilley.
- Mr Deputy Speaker, this Bill seeks the approval of the Parliament for the ratification by the Australian Government of the International Sugar Agreement 1968. I feel that the measure is welcomed warmly by members generally. The successful conclusion of the prolonged discussions that took place on this matter may be described as one of the great contributions made by the Minister for Trade and Industry (Mr McEwen) in promoting the welfare of Australia to the welfare of its primary industries. In this case, it is the sugar industry. The Minister in his second reading speech made very generous reference to others, but I feel that it is only appropriate that we should recall on the occasion of the consideration of this Bill the tremendous part that he himself has played in the formulation of this Agreement. The Minister for Trade and Industry made a number of trips to Geneva in connection with the negotiations. I do not think that it is going too far to say that if we had not had his complete guidance and his world recognised ability in obtaining successful agreements, the International Sugar Agreement, which we hope to ratify in this Parliament now, would not have been as favourable to Australia as it is.
– Even the honourable member for Dawson accepts that.
– Yes. I appreciate the fact that reference has been made to the Minister’s contribution. I support the commendation made of other people who were associated with him, in particular the officers of the Department of Trade and Industry. I support also the very generous commendation by the Minister for Trade and Industry in his second reading speech of those who went with him and who worked with him in bringing these negotiations to a successful conclusion. It was specially pleasing to me to know that the Premier of my own State of Queensland played such a prominent and successful part in his first major overseas undertaking as Premier of Queensland. I also endorse the measure of praise given to the Minister for Primary Industry (Mr Anthony) who was in control of these negotiations at one time.
– This is a backslapping society.
– Well, it is a very successful Agreement. It is one in which those who participated deserve the credit that I am giving to them. Any person who feels it is not due is entitled to his own opinion, but 1 am sure that it will not be shared by the great majority of Australians, particularly those concerned with the sugar industry. The difficulty in reaching agreement was highlighted by the Minister in his second reading speech. Vie said that the problems in reaching this Agreement were among the most difficult that he has known of in his long experience. The Minister said:
I can say that these were the most difficult and most protracted negotiations with which I have ever been associated. However, our efforts were ultimately successful and it is a matter of considerable personal satisfaction to me to present the new Agreement to the Parliament.
If the successful negotiation of this Agreement is not worth giving some credit to those who are responsible for bringing it about, I would like to know what work done in this Parliament deserves the commendation that is handed out so often in other less important spheres.
The importance of the sugar industry to Australia hardly needs emphasising. Nevertheless, it is interesting to note that more than half the population of Australia north of the Tropic of Capricorn is dependent in some way on the sugar industry. The dramatic development of the pastoral1 and mineral industries is combining now with the Austraiian sugar industry to bring unprecedented growth, development and prosperity to the once neglected northern half of our continent to the benefit of not only that area but also the rest of the Commonwealth. lt is worth noting also that the sugar industry stretches some 1,300 miles along the north east coastline of Australia from northern New South Wales to northern Queensland. The density of population in that area provided by the sugar industry not only contributes so much to the economy of the State and of the Commonwealth but also enables the coastline there to be more efficiently protected against entry by unauthorised persons and generally contributes to the effective defence of our north eastern shores. This I say as something to which I think we should give a lot of consideration. I do not think that enough has been made of this particular aspect because without the sugar industry the population would not be there and without this Agreement we could not have the successful continuing expansion that we will get in the sugar industry.
Turning to the economic value to the Industry of the International Sugar Agreement. I might mention that it had the effect of lifting the price in London from £Stg17 1 10s a ton as on 23rd September 1968 to approximately £Stg37 per ton as at 13th March 1969. So, already this International Agreement - and we are being twitted for giving credit to people for bringing it into being - has made a tremendous difference to the economy of the industry and, through it, to the economy of Australia. It has done that already. If the price continues to rise and reaches US4c per lb or approximately £Stg41 per ton the returns to the Australian industry will be increased by approximately $40m annually. This has been said but it is worth repeating because it does indicate the value of the industry to Australia and, in turn, the value of the International Sugar Agreement 1968 to the country through the sugar industry.
I wish to make some mention of the industry itself and the efficiency that characterises it. The industry deserves commendation for the manner in which it has handled its own affairs. This is to the credit of growers themselves and their officials and representatives in the sugar industry organisations. Commendation is deserved also for the high degree of efficiency which is evident in all phases of the industry. This efficiency extends in all directions, lt extends to ‘Producers’ Review’, the official journal of the Australian Cane Growers Association. That is a journal of very high standard. It is a credit to the industry and to its Managing Editor, Mr John O’Brien, who has contributed a great deal towards furthering the interests of the sugar industry.
I was very pleased to note the remarks of the Minister for Trade and Industry when he opened the Forty-second Annual Conference of the Queensland Cane Growers Council, held in Brisbane on 3rd March last. Referring to some of the people associated with the industry be said:
This attitude of independence undoubtedly reflects the high quality of men who over the years have emerged as leaders of your industry organisation, the Sugar Board and in the political arena itself. Of your present leaders I have always respected the ability and integrity of Joe McAvoy, who has been your President since 1963. Your General Secretary, Bruce Henderson, has been a model of good sense in industry councils for many years and was, of course, with me in Geneva last year. 1 value the friendship and sound advice of men such as these.
Once again my critics might say that this credit should not be forthcoming, but I say that it should be given to these men. They have earned it. lt is ray pleasure and privilege to give credit to them and no amount of interjections from honourable members opposite will prevent me from doing so.
We have had some criticism of the expansion programme authorised by the Queensland Government following recommendations by a committee of inquiry. This criticism has come from many quarters, including the Opposition. I draw the attention of honourable members to the personnel of the committee. Chairman was the Hon. Harry Talbot Gibbs, a judge of the Supreme Court of Queensland. Members of the Committee were Mr Otto Wolfensberg Chairman of the Sugar Board; and Mr Norman Joseph King, Director of the Bureau of Sugar Experiment Stations. Surely those gentlemen could not be said to have had an axe to grind. They were well acquainted with the sugar industry and fully capable of assessing impartially the needs of the industry. Advisers to the committee were Mr John Lindsay Clayton, chemist member of the Central Sugar Cane Prices Board; Mr Alan Bruce Henderson, General Secretary of the Queensland Cane Growers Council; Mr Edward Tom Stanley Pearce, General Secretary of the Australian Sugar Producers Association Ltd; and Mr Percy Thomas Wheen, Assistant General Manager of the Colonial Sugar Refining Co. Ltd. Some of those gentlemen have been acknowledged tonight as world authorities. It may bc said that the .criticism that lias been levelled tonight at the expansion in the industry does not accord with the advice given by these experts, who made a thorough investigation into the sugar industry before recommending the expansion which the Queensland Government decided to put into effect.
It is interesting to note the broad nature of the inquiry. Matters dealt with in the committee’s report include: Markets for Australian sugar; economic effects of increased sugar production on the Australian sugar industry; the adverse effects upon the production of sugar arising from unfavourable seasonal conditions; mill peaks and pool quotas; the maximum area for harvest; new assignments; whether preference could or should reasonably be afforded to any particular area or district; new cane areas; new mills; small growers; and storage and harbour facilities. Having regard to those matters it must be agreed that the inquiry was broad. It must also be agreed that the inquiry was conducted by men capable of making an assessment of the needs of the industry. It is very easy for critics to be wise after the event, as some have been, and suggest that the inquiry should not have been held or should nol have been held when it was held. I would like to meet the man who can successfully forecast world markets over a period of years. 1 do not believe anybody has been able to do that.
The decision to expand the industry was taken in good faith and with a desire to promote the interests of the industry. It was taken with the desire also of increasing population in certain areas. This increase in population has been advantageous to many parts of northern Australia and south as far as northern New South Wales. Against the background of development of the sugar industry we have had development generally of the north.
I want to refer to some statements that have been made over a period of time by the honourable member for Dawson. I propose to quote from Hansard so that there will be no doubt about the authenticity of my quotations. On 21st April 1966 the honourable member said:
The important point in relation to these mill peaks is that because of the recommendations of the Committee of Inquiry appointed by the Queensland Government - and 1 understand these recommendations are supported implicitly by the Commonwealth Government-
So on 21st April 1966 the honourable member claimed that the recommendations were supported implicitly by the Commonwealth Government.
– I said that I understood they were supported.
– Very well, but that is getting pretty close without making a statement. It is a careful way of making a statement. The honourable member should not have said that he understood, unless he had grounds for understanding. On 15th September 1966 the honourable member said:
I have asked the Minister for Primary Industry, who is now at the table, whether he, the Department or the Commonwealth Government had been consulted about the expansion of the sugar industry, lt is very difficult to get an answer, but from what 1 can understand it appears that the Commonwealth was consulted verbally only after all the plans had been made and after the State Government had decided to go ahead. . . . It is my belief that the Queensland Government expanded the industry without considered consultation with the Commonwealth Government.
So first of all it was the honourable member’s opinion that the Commonwealth Government endorsed everything. Then some months later on 15th September 1966 he said that the Queensland Government expanded the industry without considered consultation with the Commonwealth Government. On 19th May 1967 he said:
My point is that the producers are not responsible for the low incomes they are receiving. Certainly in some areas drought has been a major factor but the prime reason has been that the sugar industry was expanded. The Queensland Government authorised the expansion and the Commonwealth Government endorsed it.
So we have had some changes on the part of the honourable member to suit circumstances. The honourable member for Capricornia (Dr Everingham) said that Australia obtained the extra quota under the International Sugar Agreement because producers at Mackay were producing extra sugar. The real reason for getting this very valuable quota under the International Sugar Agreement is that the Government went ahead with the expansion which was the subject of so much criticism. At this stage in Australia’s development it is a tremendous advantage to have the benefits that arise from the International Sugar Agreement. Those benefits have been multiplied by virtue of the fact that expansion took place when it did. I am not forgetting for a moment the difficulties which growers faced when prices fell below the anticipated level but I repeat that the decision was not necessarily wrong: Nobody can forecast markets accurately. At this stage the expansion has been proved to be the right thing to have done.
There is a long history of international efforts designed to bring order and stability into the world sugar trade. The first formal international sugar agreement in which importing as well as exporting countries participated was negotiated in 1937. The first post-war Agreement was negotiated in 1953 and was renewed with certain amendments in 1958. The economic provisions of this agreement were suspended in 1961.
Following the removal of export quotas and in the light of the improved market conditions in 1963 and 1964, Australian sugar production substantially increased, the increase coming initially from existing farms. There will be some criticism of this. Subsequently, upon the recommendation of a committee of inquiry, new farms were established and mill capacity was expanded. As a result, Australia moved from being the fifth largest sugar exporter to the second largest, after Cuba. Australia’s production of sugar increased from 1,380,000 long tons in 1961 to about 1,950,000 tons in 1965 and to about 2,330,000 tons in 1966 and 1967, approximately equal to the planned expansion of the industry. In the 1968 season, with favourable conditions in almost every cane-growing area, a record quantity of 2,725,000 long tons were produced. This indicates the difficulty in assessing accurately what the production will be.
This increase in production was reflected in a corresponding expansion of sugar exports. In 1961, for the first time, Australia secured a valuable outlet in the attractive United States market. We do not hear any criticism of that. In addition, the quantity of Australian sugar sold on the free market increased from about 400,000 long tons in 1961, representing about 30% of our production, to about 790,000 tons in 1965, and over H million long tons in 1968, or nearly 60% of the total crop. Other sugar producing countries undertook production expansion programmes. I particularly draw the attention of the House to this factor. Australia has been criticised for doing it, but other countries felt that this was an opportune time to expand production. If Australia had not come in with that expansion at that time it would have been in a much worse position today than it is. Because of this expansion, not only in Australia but also in those other countries, free market prices fell in 1964, and in the following 4 years they averaged about £stg20 per long ton c.i.f. London, equivalent to about US1.75c per lb on an f.o.b. Caribbean basis. This level is far below the cost of production of sugar in even the most efficient sugar producing countries.
In the period following 1961, when the economic provisions of the 1958 International Sugar Agreement were not in operation, the International Sugar Council was maintained in being and operated in a caretaker capacity. I mention these things because they indicate that this Government had been aware of the need for an international agreement even though the economic provisions of the Agreement were not operating. Continuing efforts were made within the machinery of the ISC and, from 1965, in the United Nations Conference on Trade and Development as well, to reestablish the basis for an operative international sugar agreement. A full scale United Nations sugar conference in 1965 was unsuccessful, although it recorded useful progress on some matters of principle such as firmer undertakings by sugar importing countries. Numerous meetings took place among major exporting and importing countries after the 1965 conference, and these discussions culminated in the calling of the 1968 United Nations sugar conference. Following about 3 months of difficult negotiations in 1968, the new International Sugar Agreement was successfully concluded on 24th October 1968. It was found necessary to hold two sessions of the negotiating conference and discussions among the major exporting countries in the interim, in view of the failure to reach agreement at the first session on the critical issue of export quotas. These facts show the difficulty experienced in obtaining complete agreement on this important matter - important particularly to Australia.
The basic objective of the International Sugar Agreement is to maintain a stable price for sugar which will be reasonably remunerative to producers. Unlike the International Wheat Convention, the Agreement does not lay down a minimum price or prices below which sugar must not be traded. Rather it is intended that market prices be raised and then kept within a specified price range essentially by way of the regulation of supplies of sugar to the world free market. This involves export restraints in the form of quotas. The Agreement provides a basic export tonnage for each exporting country or, in some instances, for groups of countries such as the Central American Common Market.
In the time that is left to me I will not be able to cover all the factors 1 had intended to deal with. I will go on to the more important features. The term of the new Agreement is 5 years. This is consistent with earlier sugar agreements. There is provision for a review of quotas and prices in the third year of operation. The new Agreement is widely regarded as being a more sophisticated agreement than its predecessors, mainly because of the great care taken in the formulation of the complex mechanism under which quotas are to be adjusted in the light of price movements. The total export outlets available to Australia, allowing for the unaffected outlets under the Commonwealth Sugar Agreement and in the United States market, amount to about 1,650,000 metric tons.
– I rise to a point of order. The honourable member for Maranoa is simply reading word for word the document which the Minister for Trade and Industry circulated with his second reading speech. If it will assist the honourable member I will table the document for him.
There is no substance in the point of order.
– I am quoting from a report giving the background and a summary of the Agreement. I want to emphasise the salient features of that report; I think they are worth quoting in my speech. I am sure that the information in the document will be of great advantage to honourable members of the Opposition side. If they listen carefully to what I am saying - they might not take the trouble to read the whole of it - I am sure they will get a great deal of benefit from it. The honourable member for Dawson would do well to read the passages which I have selected, and to memorise and become acquainted with them. I want to mention one other part of this document. A sufficient number of countries have taken the necessary action for the Agreement to enter provisionally into force on 1st January 1969. By early March 1969. 26 exporting countries and 8 importing countries had accepted the Agreement either provisionally or definitively. The exporting countries concerned account for about 92% of the aggregate of basic export tonnages under the Agreement. The major free market importers such as Japan and Canada have accepted the Agreement, but important markets such as Switzerland, “Morocco, Finland, Norway and Spain have yet to join. However, some of those countries are already discussing conditions of accession with the Sugar Council.
They are the salient features, as I see them, of this document, which apparently the honourable member for Dawson did not want to hear. Apparently he preferred to have them incorporated in Hansard in the hope that the people who will read Hansard would not go through all of them. However, those people now have an easy way of assessing the very effective document from which I have been quoting. I might tell him that I did not quote from that document for the first half of my speech or for even longer than that. Many of the points that I have made will be made for the Opposition and for the sugar growers of Queensland to take note of.
There are other important factors worthy of mention on this occasion, but I do not have time to detail them. As a Queenslander and as an Australian, I take great pleasure in supporting this Bill which will be of tremendous advantage now and in the future to this great sugar industry which has contributed to the export income of this country and to the development of northern Australia. It has contributed particularly to the development of northern Queensland which is going ahead quickly under the very effective sound policies that this Government has brought into being. Provided that we can retain this Government, and with such excellent trade agreements as have been negotiated over the years by the Minister for Trade and Industry, assisted on this occasion by the Minister for Primary Industry (Mr Anthony), and by the Country Party Premiers of Queensland and all the officials who have so ably supported them, the sugar industry will have no need to worry. The honourable member for Dawson will be able to read more documents of this calibre and the country will benefit very considerably. I support the Bill.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Erwin) read a third time.
Bill returned from the Senate without requests.
Debate resumed from 20 March (vide page 788), on the following paper presented by Mr Gorton:
Defence - Ministerial Statement, 25 February 1969- and on the motion by Mr Erwin:
That the House take note of the paper.
– Lord Byron, who spent his fortune and gave his life in a struggle for freedom, rightly said:
Who would be free themselves must strike the blow.
By their right arms the conquest must be wrought
This is true also of nations. The Australian Labor Party down through the years has preached and practised this. It does not mean that the Labor Party insists on isolation and will in no way be a party to alliances with other nations to preserve the security or to promote the defence of Australia. It was a Labor government under the late John Curtin that negotiated with America during the last World War. lt obtained American assistance and gave assistance to America in the defence of common interests. This was done despite the bitter, almost fanatical opposition of the anti-Labor parties in Australia. Those who today accuse Labor of anti-Americanism apparently forget the attitude adopted by the Liberal and Country Parties during the last World War. The Government of the United States of America entered into an alliance with Australia not for any sentimental reasons, not because of affection for the Australian people, but because the interests of America and its people were best served by such an alliance. It expected Australia to play its part in accordance with its resources of men and material. Nations can secure friends in proportion to their ability to assist such friends. Upon their own strength depends not only their ability to help themselves but also the extent to which they can hope to get help from others.
Honourable members will remember, too, that Britain was unable to aid Australia in those days just before the Japanese invasion. They will remember that Churchill desired to retain Australian forces in Europe and in other places on the grounds that Australia was expendable. The then Prime Minister of Australia, the late John Curtin, would not subscribe to the proposition that Australia was expendable. Those who today are our friends may think in some future struggle that Australia is expendable. It will, of course, depend upon the circumstances in which they find themselves and the dangers that confront their own people in a particular conflict. The late Prime Minister of Australia was very definite that, whatever leaders in other countries thought, the resources of Australia must be used to preserve the freedom of our own people. The greater the resources of Australia the more its people can do in ils own defence when others will not come or cannot give us assistance. The most that can be expected of any nation is that, while helping itself, it helps us. To expect it to sacrifice its own interest or people while protecting us is more than should be hoped for in any circumstances. Ultimately it is our own power that will decide the extent and the quality of our defence. The Australian Labor Party established the Australian Navy. This action was bitterly opposed by anti-Labor parliamentarians. The Australian Labor Party established clothing factories, munition factories and aircraft factories. It established a shipping line and shipbuilding works.
– How long ago was this?
– Alt of these gave it power to defend itself. The honourable member for Barton asks me how long ago that was. The most important thing is not how long ago it was but who put that policy into operation. Who is to blame for the nonexpansion of that policy and for the cessation of the expansion of our aircraft industry, which today is waning and dying? Who is responsible for not constructing ships in the shipyards of Australia? Who is responsible for the limitation and curtailment of those factories in which munitions of war and clothing for troops and things of that description are manufactured? That is an important point. Everyone knows that it is only during recent years, since antiLabor governments have sat upon the Treasury bench of this Parliament, that that state of affairs has operated. As I said, the Australian Labor Party established a shipping line and a shipbuilding works. All of these gave Australia power to defend itself. This, of course, should not only have been maintained but should have been greatly expanded during recent years. lt has been alleged that Wellington said that the Battle of Waterloo was won on the playing fields of Eton and Harrow. Whether he said this and whether, if he said it, there was any truth in it may be doubtful, but it can with truth be said that the battles of the future will be won in the factories and the laboratories. Therefore, in peacetime our factories and laboratories must be expanded and more of our requirements for peace and war must be produced in our own land. Australia is at present engaged in an undeclared war, and more and more of the requirements of the fighting forces are being provided by other lands. Aircraft are imported from overseas. The Fill aircraft have been ordered and paid for but have not yet been received. When they are received, it is doubtful whether they will be potent weapons of defence or offence. In addition, the replacements and all kinds of equipment essential to keep our planes in the air, our ships at sea and our armies in the field are being purchased in other countries at immense expense. Hundreds of millions of dollars worth of the requirements of war are purchased annually in other lands. Our war effort depends upon such nations. If the time comes when other nations are unwilling or unable to supply our war requirements the capacity of Australia to defend itself will have been reduced. An examination of what is being bought overseas for war purposes should take place with the object of devising means whereby more and more of it can be manufactured in Australian factories by Australian workers.
The governments of Australia since 1950 have been relying more and more for the requisites for defence upon other lands. This should not be. I know it will be asserted that large aircraft and big battleships, if they are to be obtained for Austrafia, must still be secured from other lands. If this is right, it does not justify the increase in the dependence of Australia on the factories of other lands for all kinds of war materials. Let us develop self-reliance. While Australia is becoming more and more dependent upon other countries it is helping to promote the industrial and lighting strength of others, including those whom the Government declares are our bitterest enemies. Vast quantities of wheat, wool and other commodities are sold to mainland China. It is alleged that mainland China is the power largely responsible for supplying the materials of war to North Vietnam. If this is so, the goods we send to China enable the feeding and clothing of the armies fighting against Australia. It is stated that, of course, Australia would not sell strategic materials; goods that can be used against Australians by the enemy or by those supporting the enemy. What materials are of more strategic importance to fighting forces than the food and clothing without which forces cannot be used for war purposes? If the goods sold by Australia to China are not sent directly to North Vietnam they can easily be sold to other countries to enable the purchase by North Vietnam of any and every type of instrument of war that is needed by it.
I suggest that no policy for the defence of this country is realistic that does not set out the means by which Australia can become more and more self-reliant and reduce its dependence on other lands for the needs of defence. No policy is realistic that enables the use of Australian resources by Australia’s enemies, whether those resources supply directly or indirectly the needs of war to Australia’s enemies. The Prime Minister (Mr Gorton) in his defence statement ignored the issues that I have raised. Honourable members opposite, in speaking in support of the Government, have also ignored them.
I ask honourable members opposite whether they consider the expenditure of hundreds of millions of dollars annually on defence materials and requirements in other countries, is justified at the present time; whether they believe that Australia should, by the grace and with the assistance of others, be able to wage war, or be in a position in which it can no longer wage war. After all, this is not merely the position that operates, to a considerable extent, today. It is a position that is growing as the years pass because not less and less, but more and more of the defence requirements of this country are coming from other lands, and in the event of war those lands may be unwilling or unable to supply our defence requirements. In this sense it is by our right hand that our freedom must be wrought. I ask honourable members opposite whether trading with the enemy, which was a treasonable act not so long ago, has become a worthy and desirable trading operation, to be promoted whenever profit can be made.
– After listening to the honourable member for Scullin (Mr Peters) one realises that the Opposition has got a long way away from the original matter which this House is now debating. I think we might remind ourselves that tonight we are debating the statement by the Prime Minister (Mr Gorton) concerning the defence of Australia, with particular reference to the policy that we shall pursue in South East Asia after the British forces are withdrawn in 1971. This is the first definitive statement on this matter that he has made since he became Prime Minister. I believe that every honourable member on this side of the House has welcomed what he has had to say. Some commentators have felt that he has merely reiterated the policy pursued by his predecessors for the good reason that there is to be little change in the distribution of our defence forces. But, in fact, he has made this statement in a completely new context.
I think we should remember that for the first time in our history we are about to commit forces overseas unilaterally. Included in these forces will be national servicemen. Actions of this nature, I believe, would have been unthinkable 20 years ago and would have been opposed by the vast majority of the Australian people. But today I believe that the Prime Minister has correctly interpreted the feeling of the nation. The Australian people, as is evidenced by the recent gallup poll, believe that we should commit forces to the Asian mainland in time of peace and in the present situation in which we find ourselves. This is an historical decision which needs to be emphasised again and again in this House.
The next fact that we need to emphasise is that we have decided this policy only after we have received requests to do so from the governments of Malaysia and Singapore. I do not agree with the Leader of the Opposition (Mr Whitlam) who talked about the formal negotiation of treaties, because I do not believe that this is nearly so important when we are considering the genuine aspects of friendship which exist between these nations of Malaysia and Singapore and ourselves at the present time. Also, I do not think it is necessary at this moment to put a timetable on the extent of our commitment because, once again, we are looking at a period of transition and we are going to these countries at the request of our friends. Now J think wc should examine the significant reasons for the policy that we have adopted. 1 believe they are important.
For years now the people of Malaysia and Singapore have relied on foreign forces for their external defence. To a great extent they have rested on this support as possibly an injured man tends to rely too long on a crutch. But now the crutch is being taken away. 1 for one am glad that this is happening. But it is important to realise that it is not possible for any nation to make a complete change in its defence arrangements in a short time. The people of Malaysia and Singapore are now engaged in building up their own defence forces. They are doing a tremendous amount at this time to help themselves, but they need a period of time in which to train their new personnel and to purchase or manufacture new equipment. 1 believe that Britain has made a great mistake by making its withdrawal of forces so rapid. Originally the timetable was for complete withdrawal by 1975. This would have provided a reasonable period for the formation of new forces in these countries and for these countries to adapt themselves to their new situation. But withdrawal by 1971 provokes a completely new situation. That is why I believe the new policy announced by the Prime Minister is so important. The situation is that Australia with New Zealand is prepared to fill in the intervening period between 1.971 and 1975, the role previously undertaken by the British forces. Australia and New Zealand are trying to do all they can to help these countries in this very difficult period of transition. Firstly, we are helping these nations by stationing units of our three defence forces in these countries for this very purpose. Secondly, I suggest that we must be willing to provide whenever and as far as possible personnel for the purpose of training the new defence forces of Malaysia and Singapore when we receive requests of this nature. Thirdly, I believe that we should help to provide such new equipment for the forces of these nations as far as we possibly can from our own factories in Australia.
But there is one further point on which 1 believe Australia can help and why the policy just announced by the Prime Minister is so important at this time. The Leader of the Opposition in the United Kingdom Parliament has stated that if his Party wins the next election, the withdrawal of British forces from Malaysia will be halted. The more that Australia can do to help maintain intact defence dispositions in Malaysia at this time, the easier it will be for British forces to return and assist as far as possible in’ this very difficult period of transition to which I have already referred.
But having said all this concerning the actual policies in regard to Malaysia and Singapore, I now think it is important that we should look at the wider situation that also emerges at this time. We have clearly said that Australia has put her cards on the table. The Government has said in effect that this is what we in Australia can contribute to the defence of this region. I believe that, in this period of our history, this is the maximum contribution that we can be expected to make at the moment. We have clearly decided that this is the part of the world in which we should make a contribution and the part of the world in which our contribution can best be made. If at any stage in the future we can increase our contribution of defence forces overseas, I believe they should continue to be placed in the Malaysia and Singapore regions. We should concentrate on one area and do that task effectively rather than try to spread our defence effort over a much wider zone.
At this time, therefore, I believe that we are matching our diplomatic policy with our military strength, unlike possibly the period up to 1963 in which we did not have the military strength with which to back up our diplomacy. I believe that quite clearly we are now in a position to ask our allies what their intentions are regarding the security of South and South East Asia. We have put our cards on the table. I think we now have a right to ask our allies what they are prepared to do also in this new situation. In a recent book entitled ‘The Essence of Security’ Mr Robert McNamara the former Secretary of Defence in the United States of America, said: 1 believe that over the long run a truly independent, neutral South East Asia would best serve the interests of all the nations involved, lt would remove one source of strife between the outside world and the Communist nations, and-
I would like to emphasise this: among the latter as well. Moreover, it would create the kind of environment required for the rapid development of the region’s basically rich natural resources.
This is the policy that the United States Government has followed in Vietnam. There are signs now that this policy is being proved correct. 1 think, unlike the prophets of a year ago, there are many people realising that the military situation has improved in Vietnam in the last 12 months. I know that the military assessment is that this situation could go on for many months - possibly for up to 2 years. But during this period it is possible to foresee that the United States forces could be reduced and the forces of the Government of South Vietnam could take over the task from them. If this situation did develop, it would clearly place the Government of North Vietnam in a quandary. This situation may well result in a military stalemate. But, as a result of this policy, to quote Mr McNamara again: . . the time purchased at heavy cost is being put to good use by the non-Communist Asian states. There is a growing appreciation of the need for collective action to meet common problems. … We can hope that these efforts eventually will provide the region with the collective political, economic and military strength that will enable it to determine its own destiny.
That must be the aim of all of us who are interested in the eventual future of South East Asia. But if this does happen in Vietnam, as I have suggested, my judgment is that the most important area that we should watch within the next few months is north eastern Thailand. I think we should all take heed of the timely warning made by Denis Warner in an article in the Melbourne Herald’ of 11th February this year in which he states:
At no time has Peking made any secret that it plays host to members of the Thai Communist Party and to the Thailand Patriotic Front. It made the first announcement of a supreme command to co-ordinate all the anti-government guerilla actions in Thailand at the beginning of 1969. . . . Whatever the reason, there is no longer any doubt about it; a new war of national liberation is in the making - and the principal maker is China.
Clearly he has indicated that the Government of China is making a deliberate threat to the security of Thailand. I have been to north eastern Thailand in recent years and can confirm the situation that he has outlined. Here is a deliberate new threat to the security of South East Asia. This is where I believe the next threat to the security of this area can be expected. I believe now that Australia has every right to ask what steps are being taken by our allies to meet this new situation. We have undertaken to play our part in Malaysia and Singapore. We cannot, I believe, also take part in the defence of Thailand. I further believe that it is unlikely that the Thai Government by itself can meet and destroy this threat to its security. So, I believe that the Prime Minister, in his visit to Washington next week, should seek to ascertain from the President of the United States what his intentions are regarding the security of Thailand. I would hope that they would agree to maintain forces in this country. But if this does not happen, and I believe there are some people in Washington at the moment who would feel that the policy should be for the United States to get out of Thailand, I think we should also examine the alternative aspects of what may well occur.
There are other nations which also have an interest in the security of South East Asia. In recent weeks I visited India in my capacity as Chairman of the Executive Commitee of the Commonwealth Parliamentary Association. In the many conversations that I had in New Delhi, I found a desire amongst members of Parliament - in the Lok Sabha - to see a truly independent and neutral South East Asia, particularly a truly independent and neutral Thailand. They made it clear to me that, in their view, this was an aim that should be fostered by both themselves in India, by us in Australia and by our friends in Japan. But in addition it was interesting that they also suggested that their contacts with the Government of the Union of Soviet Socialist Republics had given them to realise that Russia itself would prefer a truly independent and neutral South East Asia, that the Russians as well as Indians and Australians have, in the view of the Indian members of Parliament, similar desires and similar aims. So one may ask oneself, after talking to the Indians, whether one believes what they said. Will Russia seek to ensure a buffer zone in this area if the Americans should decide to withdraw from Thailand?
I think that from what I have heard it might even confirm the view of Mr McNamara that I have quoted that a buffer area would remove not only a source of strife between the outside world and the Communist nations but also a source of strife between the major Communist powers themselves. Clearly, therefore, there are many nations that have aims similar to ours at this time. I believe that Australian diplomacy should be geared to translating, as far as possible, these aims into actions, because here is a very clear threat to the security of Thailand posed by the Government of China. I believe that we must take every step to deal with it. If one action does not work then I believe we must also examine other alternatives. As a result of the new Australian policy in South East Asia that has been announced by the Prime Minister (Mr Gorton) I believe that we can hold our heads high in the gatherings of nations at the present time. We have clearly said that we are prepared to play our part and to assist to a very great extent in matching our words with our actions. Clearly, from the statement made by the Prime Minister this is the maximum possible length to which we can go to promote stability in our region of the world. Now, I think we can well ask all our neighbours to play their parts in securing the aims that we can see so clearly are desirable. In the present political scene that I believe is now emerging, we can see that these aims can be achieved.
Debate (on motion by Mr Curtin) adjourned.
House adjourned at 10.33 p.m.
The following answers to questions upon notice were circulated:
asked the Prime Minister, upon notice:
– The answer to the honourable member’s question is as follows: 1 and 2. Information, provided by the Ministers responsible, regarding formal meetings which have taken place during the period January to November 1968 is set out in the following table.
Details given are of conferences and meetings which were attended by Ministers and/or officials of Commonwealth Departments and Ministers and ‘or officials of more than one State.
There have been other conferences and meetings concerned with policy matters the subjects of which are confidential. Details have not been provided of these, nor of other discussions which occurred as part of day-to-day administration.
11544/69- rt- ¥33J
asked the Minister for Labour and National Service, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister representing the Minister in charge of Tourist Activities, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister for External Affairs, upon notice:
In view of the fact that the Hague Conference on International Law in October 1968 was attended by delegates from the countries with which Australia has her greatest migration and commercial relations, has consideration been given to acceding to the (a) Convention on the Recognition of Divorces and Legal Separations, and (b) Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, which were adopted at the Conference?
– The answer to the honourable member’s question is as follows:
The Conventions are not expected to be open for accession by Australia before 1971. In the meantime the extent to which individual countries, including those referred to in the question, will become parties to the Conventions will be kept under notice. The implications of Australia becoming a party are also being studied.
asked the Minister for External Affairs, upon notice:
– The answer to the honourable member’s question is as follows:
Cockburn Sound (Question No. 1278)
asked the Minister for the
Navy, upon notice:
When was the Claremont Yacht Club informed that no release of property could be contemplated at this stage at Jervois Bay in the Cockburn Sound area?
– The answer to the honourable member’s question is as follows: 6th January 1969.
– On 18th March the honourable the Leader of the Opposition (Mr Whitlam) asked me a number of questions about the Prime Minister’s communications with the Secretary-General of the United Nations concerning the recent public executions in Iraq. In reply to his question I said that I would treat it as being on notice and obtain for him a detailed reply. I have now obtained the following information:
The message of the right honourable the Prime Minister was conveyed to the SecretaryGeneral of the United Nations in a letter dated 2nd February 1969, from the Australian Permanent Representative to the United Nations, Mr P. Shaw.
The Secretary-General replied to Mr Shaw in a note dated 17th February 1969, which stated that this communication had been dealt with in accordance with paragraphs 2(B) and (E) of resolution 728 (F) (XXVIII) of the Economic and Social Council relating to communications concerning human rights.
The effect of this was that the substance of the Prime Minister’s message was brought to the notice of the Commission on Human Rights, and a copy was sent to the Government of Iraq.
asked the Minister for Defence, upon notice:
What steps have been taken or guarantees sought to ensure that Australia does not encounter the same difficulties as Israel in securing spares and replacements from France for the Mirage aircraft?
– The answer to the honourable member’s question is as follows:
There has been no interruption in the supply from France of Australian requirements either of armaments or equipments for our Mirage aircraft. The friendly ties between France and Australia are the surest guarantee that our requirements will continue to be met in the future.
asked the Attorney-General, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister representing the Minister for Customs and Excise, upon notice:
Have supplies ordered by or for the Argyle Bond and Free Stores been investigated by the Department of Customs and Excise in the last 2 years? If so, with what results?
– The Minister for Customs and Excise has provided the following answer to the honourable member’s question:
I do not understand the reference to an investigation by the Department of Customs and Excise into supplies ordered by or for the Argyle Bond and Free Stores. The Department is interested only in the operation of a bond and the dutiable goods contained therein.
If, however, the question relates to an investigation into the licensed Customs Warehouse activities of the Argyle Bond and Free Stores, I can say that in August 1968 an investigation was made into the operations of Australian Rum Distillers (Sydney) Ply Ltd who carry out under bond bottling of various spirits in the Argyle Bond and Free Stores.
The investigations disclosed that the records of the company were inadequate and that greater quantities of spirit had resulted from bottling operations than those shown in returns submitted to the Department.
As a result, 57-8/12 cases of spirit were seized and duty of $2,514.47 was called up.
The company appeared before the Collector of Customs for New South Wales for an inquiry under the provisions of Part XIII of the Excise Act 1901-1968 on the 22nd October 1968. Following this inquiry a penalty of $200, the maximum provided for a breach of Section 120 (VII) of the Excise Act, was imposed on the company.
The penalty was notified in Commonwealth Gazette No. 8 of 30th January 1969.
On 9th January 1969, the company was informed by the Collector of Customs, New South Wales, that he had withdrawn permission for future bottling operations to be conducted under bond.
asked the Minister repre senting the Minister for Customs and Excise, upon notice:
– The Minister for Customs and Excise has provided the following answer to the honourable member’s question:
The Commonwealth Statistician has advised that details of imports of railway wagons are not separately recorded. He has however, supplied the the attached table showing imports cleared for home consumption into Australia as follows:
The confidentiality provisions of the Census and Statistics Act, 1949-66 preclude him from supplying the information requested in Section 3 of Question No. 1110.
asked the Postmaster-General, upon notice:
– The answer to the honourable member’s question is as follows: 1 and 3. Yes. An engineer of the Australian Broadcasting Control Board recently visited the area to make first-hand observations of broadcast reception.
Cite as: Australia, House of Representatives, Debates, 25 March 1969, viewed 22 October 2017, <http://historichansard.net/hofreps/1969/19690325_reps_26_hor62/>.