House of Representatives
24 September 1969

26th Parliament · 2nd Session

Mr SPEAKER (Hon. W. J. Aston) took the chair at 10.30 a.m., and read prayers.

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– I desire to inform the House that members of the Select Committee on Election Laws of the Ontario Legislative Assembly, Canada, led by Mr E. Dunlop, are at present in the gallery of the House. On behalf of the House I extend to members of the Committee a very cordial welcome.

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Annual Leave and Equal Pay


– I ask the Prime Minister a question about the Public Service. The Government has received another deputation from the Australian Council of Trade Unions, the Council of Commonwealth Public Service Organisations and the Australian Council of Salaried and Professional Associations asking for 4 weeks annual leave, as has applied in all New South Wales State and local government employment for nearly 6 years, in lieu of the ceiling of 3 weeks leave which the statute has ordained since Federation and which is now below the standard in all State Public Services except the Western Australian. Since it was the right honourable gentleman who in another place 3 years ago rejected the last such application on behalf of the Holt Government, I ask him whether his Government has made a decision in the matter and when it will be announced. I also ask him when the equal pay decision, which the Commonwealth Arbitration Commission gave over 3 months ago, will be implemented in the Commonwealth Service.

Prime Minister · HIGGINS, VICTORIA · LP

– In reply to the last part of the question asked by the Leader of the Opposition, I inform him that the introduction of equal pay is a matter for the Public Service Board which, according to information given to me, is negotiating, is in discussion or is initiating action along those lines. In saying ‘initiating action’, I am not indicating that it has yet done anything, but it is directing its attention to the methods of doing it. On the first part of the question, there is nothing I can add to what is already known.

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– My question is directed to the Minister for Trade and Industry. Has his attention been drawn to the request by business leaders that he write to the Tariff Board directing attention to his previous statements that he believed the current policy of the Board is unacceptable to the Government? This request appears to follow the statement of the Senior Deputy Chairman of the Tariff Board on 29th July, at the industrial chemicals inquiry, that the Board had received no-


-The honourable member is now giving information. I suggest that he ask his question.


– I refer to that statement, which indicated that the Board had received no direction in the broad concerning a new policy. I therefore ask the Minister whether he will accept the industry recommendation and write to the Board repeating what he has previously said in this Parliament and elsewhere and advise the Parliament when he has done so.

Deputy Prime Minister · MURRAY, VICTORIA · CP

– There would be no precedent for the Minister responsible for the Tariff Board writing to the Board and instructing it or seeking to influence its judgment. The historic policy of the Government stands; it is our policy to accord appropriate protection to industries which the Tariff Board itself adjudges to be economic and efficient. The great bulk of the Tariff Board references are in that form. The Board, as an advisory body, makes its recommendation to the Government and the Government regards itself as unfettered in making its own judgment about accepting the recommendation of the Board, or rejecting it, or referring it back to the Board, or perhaps amending it. The record shows that overwhelmingly the Government accepts the recommendations of the Tariff Board, but there are exceptions. When the Government wants the Tariff Board to take into account a particular matter in respect of the circumstances of an industry it does this not by writing a letter to the Board but within the terms of the reference to the Board.

These are the property not only of the Board but also of the public and of the industries concerned. This happens only on rare occasions.

I think the reference that the honourable member made to a statement by a deputy chairman of the Tariff Board referred to the chemical industry. If I may take one moment to refer to this matter it will illustrate completely the relationship between the Government and the Board. The chemical industry is operated overseas in gigantic complexes, often involving the investment of hundreds of millions of dollars in one plant. History shows that if, through some circumstance, the market for that production tends to fall away, almost without exception the industry prefers to continue production and sell at whatever price it can get. Australia really is the only country which relies only upon a tariff to protect its industry. Therefore, subject to the tariff, this is one country which is open to a vast inflow of a particular product.

This happened in respect of the chemical industry. In a chemical industry reference we asked the Tariff Board to take this factor into account. The Tariff Board in that case did take it into account and made a recommendation that in addition to the normal ad valorem tariff percentage prescribed there should be a system of support prices. If the imports fell below support prices prescribed by the Tariff Board the effective duty would be higher than the normal ad valorem rate to meet that circumstance. That arose from a reference to the Tariff Board which I took to the Cabinet and cleared before it was sent to the Board.

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– I ask the Minister for External Territories: Are witnesses before the committee of inquiry into the recent events in the Gazelle Peninsula of New Britain covered by parliamentary privilege? If they are, is this immunity being made clear to them? In view of the House of Assembly’s lack of perception recently of the significance of the freedom of the Press and its sensitivity to Press criticisms, will the committee’s advisers make clear to members of the committee the right of witnesses to say what they really feel, even if it should be hostile to the House of Assembly and to the

Administration? In view of what has happened in other emerging countries, can steps be taken to bring home to the House of Assembly the significance of the freedom of the Press, the immunity of witnesses and the independence of the courts in safeguarding human liberty?

Minister for External Territories · MCPHERSON, QUEENSLAND · CP

– The honourable member suggests that witnesses appearing before this commission of inquiry in the Gazelle Peninsula should have some sort of protection. I would agree with him because it would be a complete farce if a witness was unprotected. I am not aware of the circumstances of this particular case. However, I would agree with the point that the honourable member made. The honourable member seemed to cover another area in his question and this no doubt was prompted by an answer I made to a question yesterday on the freedom of the Press. As I said, I am satisfied that the House of Assembly accepts the importance of the principle of the freedom of the Press. This is a very important principle in a free democratic country. The honourable member also mentioned the judiciary. If we do not have a free judiciary, unfettered by any influence of Parliament, then we do not follow the other important principle of freedom of the judiciary. This also must be protected.

As I pointed out yesterday, I have some sympathy with the House of Assembly. Yesterday I pointed out the misrepresentation by the Press of Australia of the circumstances of the Territory. One of the greatest dangers to the Territory is the build-up of opinion in Australia which has no regard for about 95% of the people of the Territory. Because people do not come down here to be interviewed at Press conferences their views are disregarded. This is a most serious situation for the people of the Territory. I mentioned yesterday that the Press was free to express its views. The action taken by the House of Assembly to exclude journalists was its only way of protesting at what was happening. I hope that it was an effective action.

EDUCATION Mr PEARSALL - I ask the Minister for Education and Science a question. Has his attention been drawn to statements that have been made concerning the cost of building schools in the States as compared to the cost of building schools in the Australian Capital Territory? Would the Minister care to comment if his attention has in fact been drawn to this statement?

Mt MALCOLM FRASER- My Department has been conducting an exhaustive inquiry into the cost of school construction in the Australian Capital Territory. It is difficult to make precise comparisons with building costs in the States because the things included in building costs in the various States and in the Australian Capital Territory are not always the same. Therefore, in many cases we find we are not comparing like with like. However, the examination we have conducted has shown that with advances in modern school design which have been taking place in parts of Australia and overseas, there is a high likelihood that in future designs we will be able to save on capital costs of schools without any reduction in quality and perhaps even with an improvement in quality insofar as the actual design of a school from an education point of view is concerned. Substantial changes in design of the kind we have in mind are unlikely to have an impact on schools for about 2 years because it will take time to adopt the designs which are now coming forward and in any case the construction always takes some time. But we will be seeking to establish closer liaison with architects and the constructing authorities to make sure that education requirements are maintained at a high level and kept up to date with the most modern designs in Australia and around the world. In doing this, I believe we will be able to save funds.

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– My question is addressed to the Minister for Social Services. In view of the numerous promises of financial assistance that have been made to State governments, to the wool industry and to various organisations in the past few days for the purpose of placating some unhappy sections of voters, will the Minister undertake to do something for another discontented section of the community which is much more deserving than some of the groups whiCh are being helped, by granting an extra week’s pension at Christmas time to all pensioners in Australia?

This could be paid as a special gesture by the Government to commemorate the 200th anniversary of Captain Cook’s landing in Australia.

Minister for Social Services · MACKELLAR, NEW SOUTH WALES · LP

– I have no doubt that the honourable member’s request will receive consideration, especially as it is in line with requests which he and other honourable members have made in the past. I cannot, of course, hold out any promise or commitment with regard to it. I would ask the honourable member to reconsider his remarks and not repeat the derogatory implications he has made about certain charitable organisations which have been helped in the Government’s scheme of social services. We intend progressively to make more and more use of these charitable organisations, both church and lay, in the application of funds and policy. I ask the honourable member to bear this in mind and to help us in what I am sure is the best way of using our funds both for the material benefits that they bring and the associated non-material benefits which sometimes go with them.

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– My question to the Treasurer refers to the 1969 annual report of the International Monetary Fund and the setting up of a facility for the deliberate creation of international reserves through a scheme for special drawing rights. I refer also to the fact that the forthcoming fifth quinquennial review of the Fund quotas will provide a welcome opportunity to enlarge the Fund. Will the Treasurer inform the House of Australia’s position regarding the special drawing rights scheme and the review of the Fund quotas?


– For some years the Australian Government has been pressing strenuously to have special drawing rights created and then what is called ‘activated’ - that is, that the amount of drawing rights should be ascertained and the allocations fixed so that countries may take advantage of this new facility. Three years ago at tha Rio de Janeiro meeting of the World Bank and the International Monetary Fund Australia took what I would regard as a leading role in working for the creation of these funds.

Mr Whittorn:

– We were well represented.


– Thank you. At the Fund meeting that opens on Monday my colleague, the Minister for Labour and National Service (Mr Bury) will represent Australia. At this meeting two very important decisions will be made. The first is to ensure that the funds are activated, then that quotas are fixed and that the amount of funds to be made available is determined and available for use. It is understood that the recommendation from the Chairman of Directors of the Fund will be for the creation of $9,500m of special drawing rights - $3,500m this year and $3,000m in subsequent years. Of this amount the Australian Government - the Australian people to put it more accurately - will be entitled, on present quotas, to $225m. That in the initial stages is a big addition to our overseas reserves. After the difficulties we have faced in recent years, with money crisis seeming to follow money crisis, the completion of the agreement first of all to activate the scheme then to allocate the drawing rights will, I think, be of enormous benefit in the improvement of world trade and the facilitation of the means by which world trade may be carried on. The last part of the honourable gentleman’s question referred to the quinquennial review. A decision to review quotas will be made at this meeting. I hope that the Australian quota will be looked at favourably by the other countries. We shall be seeking an improvement on the present quota.

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– My question is directed to the Treasurer. Is the right honourable gentleman aware that a man with a wife and two children, who earned the average annual income of $1,200 in 1950-51, paid 3.2% of his annual income in taxation? Does a man in a similar position today who is earning an average annual income of $3,500 pay 12.4% of his annual income in taxation? Is the greater percentage of taxation paid due to inflation lifting the average income into a higher taxation scale? If so, does this support a case for taxation relief for the low and middle income earners?


– It is a pity that honourable gentlemen opposite do not listen to what is so frequently said by honourable gentlemen on this side of the House. The Deputy Leader of the Opposition is repeating what I have conveyed to the House on at least four occasions. I do not know whether the actual figures he has given are correct, but I assume that they are. The figures the Deputy Leader of the Opposition should have looked at are those for disposable income. Disposable income has in fact increased despite an increase in taxation from 3.5% to about 12%. 1 have made it clear that the Government regards this section of the community as deserving of the most careful and sympathetic consideration. I have already-

Mr Barnard:

– When is the Government going to do something about it?


– Obviously the Deputy Leader of the Opposition has not listened to what has been said or does not understand what has been said.


– He has the wool over his eyes.


– In his ears. As 1 have made clear to the House on at least two occasions during the last few weeks, I have a report in front of me concerning the total taxation structure of the Commonwealth, which includes the lower and middle income groups. I have sent a copy of the document to the Prime Minister. We will be looking at it shortly.

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Mr Andrew Jones:

– I direct a question to the Minister for Health. Is the Minister aware that currently circulating in certain local newspapers in Adelaide - not the major dailies - are certain statements concerning the health proposals of the Australian Labor Party, which were put out by the Labor Party’s head office and campaign headquarters in Adelaide? If the Minister has not seen these statements, I will provide him with copies of them. There are certain inaccuracies in these statements which have been corrected by the general manager of one of the benefit funds.


-Order! I suggest to the honourable member that he ask his question.

Mr Andrew Jones:

– Will the Minister investigate the allegations made by the Australian Labor Party in order to ascertain their accuracy and reply accordingly?

Minister for Health · BARKER, SOUTH AUSTRALIA · LP

– 1 have not seen the specific articles to which the honourable member refers. If they follow the lines of articles I have seen elsewhere they will be complete misrepresentations of the position. I have seen a paper which was circulated by the Director of the Mutual Hospital Association Ltd in South Australia. I believe it to be an extremely accurate and fair representation of the situation in South Australia. It completely disproves allegations which have been made by the Labor Party in relation to South Australia. I shall be pleased if the honourable member will supply me with copies of the actual articles to which he refers in order that I can provide him with a reply in the terms he has requested.

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– My question is directed to the Prime Minister. In view of the reported announcement that the Federal Government could offer Victoria $40m for Melbourne’s proposed underground railway as an election gimmick, will the Prime Minister also give consideration, when preparing his election policy speech, to providing a similar sum to the State of South Australia to enable the building of the Chowilla Dam?


– I think the honourable member’s question is based entirely on a Press report which 1 am quite sure he cannot substantiate because I am quite sure nobody else can substantiate that Press report either.

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– My question is addressed to the Minister for Health. Has a proposal been put forward for a compulsory health scheme under which the Leader of the Opposition has claimed that people on average incomes would contribute about half as much as they now pay to the voluntary funds? Is this factual? Will all persons with a taxable income of $2,000 per annum or more pay less or more under the Labor scheme, and will the single male on an average income pay twice as much as he now pays, not 50% less?

Mr Curtin:

– This is a Dorothy Dix question.


– It is nothing of the sort. The honourable member worked it out for himself. As the Prime Minister told the House some time ago, from the point of view of gross contributions under the two schemes the break-even point is $52 a week or $2,700 a year for a single person, and SI 04 a week for married couples. That is not the full story, because the Labor Party scheme involves the loss of the present tax concessions for contributions. So many ordinary people in the community rely on that nest egg once a year in their tax refund cheques to buy important things. If net contributions are taken into account, the break-even point, that is the point at which people will commence to pay more under the ALP scheme, will be reached by a single person when he earns $39 a week. That is the $2,000 a year suggested by the honourable member. A married person earning S62 a week or $3,276 a year will pay more under the Labor Party’s compulsory scheme. The honourable gentleman referred to the average income earner. I am informed that the present average income is $71.40 a week. Under the Labor Party’s scheme the net contribution would be $45.80 a week for a single person, and under the present scheme the net contribution would be $22.70, so that the honourable gentleman is quite accurate in saying that the contributions under the Labor Party scheme for this person would be twice what they are under the present scheme.

Mr Uren:

– I take a point of order on two grounds. Firstly, question time is for questions without notice. Government supporters are asking questions that are questions on notice. Ministers have the right to make statements after question time.


-Order! The honourable member will not debate the question.

Mr Uren:

– The second point-


-I will deal with one point of order at a time. I have already said in this House on a number of occasions that no valid point of order can be taken on this ground. The Chair has no way of finding out whether questions are on notice or without notice. Question time is a time for questions without notice, and it is up to honourable members who pose questions to see that no notice of those questions has been given.

Mr Uren:

– My second point of order, Mr Speaker, is that last week you warned Ministers about lengthy replies and today on two occasions, Ministers-


-Order! The honourable member will resume his seat.

Mr Uren:

– Ministers have ignored-


-Order! If the honourable member does not resume his seat I will name him. I call the Leader of the Opposition.


- Mr Speaker, I ask the Minister for Health a question without notice.


-Order! The honourable member will resume his seat. I thought that he was raising a point of order. The Minister for Health will continue his reply.


– I have been reminded by one of my colleagues that I inadvertently said that contributions would be $45.80 a week for the Labor Party’s scheme and $22.70 a week for the present scheme. Those figures are for annual contributions. The only other point I make is that the figure I gave for a married couple takes no account of the fact that it only relates to a position where the husband is the sole income earner. If the wife receives taxable income she would also pay the levy under the Labor Party’s scheme whereas under the present scheme she is covered by her husband’s contribution.

Dr Mackay:

Mr Speaker, I rise to order. 1 want a retraction of the statement by the honourable member for Watson who said that, the reverend gentleman told a lie. That is offensive to me.


-I am afraid that the Chair did not hear any such remark. I would ask the honourable member for Watson if he did say this to withdraw the remark.

Mr Cope:

– I said fancy his telling the lie that it was not a Dorothy Dix question. It was quite evidently a Dorothy Dix question.


-Order! I did not hear the comment.

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– I ask the Minister for Health a question, and it is without notice. I recall to the honourable gentleman that in the Budget speech the announcement was made that a Bill would be introduced to carry out a modified version of one of the forty-two recommendations which the Nimmo Committee made to the honourable gentleman 6 months ago to patch up the present national health scheme. I notice from the blue programme that this Bill is not coming in today. I was so attracted by the honourable gentleman’s first speech in 6 months yesterday - his first speech on any subject - that I now ask him: Does he propose to give a second reading speech on this promised Bill tomorrow or on Friday?


– I noticed that the honourable gentleman, in speaking on the Health estimates, in another of his change daily operations in relation to the Labor Party’s health scheme brought in a proposal concerning low income families to patch up Labor’s scheme. He refers to the Government’s proposal, carefully considered by the Welfare Committee of Cabinet and by the Government in relation to the proposals put forward by the Nimmo Committee, as a patching up operation in circumstances in which he himself has found it necessary in respect of low income families to patch up - I use his phrase - the Labor Party’s scheme. In answer to the specific question asked by the honourable gentleman, I say that unfortunately this Bill has run into drafting difficulties but it is intended that the Bill will be brought into the House and, I am sure, will be passed by the House before the House rises. Whether it will be today - and I remind him that the blue paper is only a guide to the business of the House - I cannot tell him at this stage. I would hope so. If it is not brought in today I feel certain that it will be introduced tomorrow.

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– I preface my question which is directed to the Treasurer, who is Acting Minister for Labour and National Service, by drawing attention to an address given at the national conference of chairmen of productivity groups in Canberra on Monday by the Minister for Labour and National Service. The Minister was reported to have said that he would like to see more attention given to several aspects of industrial training. He said that the training of technicians who lay between tradesmen-


-Order! The preface to the honourable gentleman’s question is far too long. I suggest that he now ask his question.


– Will the Minister consider recommending to the Government that scholarships be provided to selected apprentices, similar to those made available by the Commonwealth Bank, for classifications between professional workers and tradesmen, semi-skilled workers whose workmanship contributes largely to the quality of many goods and services?


– As I understand it, the Minister for Labour and National Service made what I regarded as an outstanding speech to the chairmen of productivity groups on Monday. He pointed out that with proper allocation of resources and with productivity increasing we should expect a dramatic improvement in the standards of living. He went on to say that what he felt was critically important was on the job training, not only for tradesmen but for technicians as well. As I understand it we have at the moment certain schemes, particularly the Commonwealth Bank training scheme for apprentices, and these schemes seem to be working efficiently. But there is no doubt that there is some gap so far as the technician is concerned; that is, the grade between the tradesman and the technologist. I will have a very careful look at the question asked and refer it to the Department of Labour and National Service. If it is considered that something more can be done I will take the matter up in the appropriate manner.

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– I refer the Minister for Primary Industry to the appointment of a committee to consider the problem of the high quantity of cheese imports into Australia which represent, according to the Minister, about 13% of the home consumption. I ask the Minister: Are the health regulations applicable to cheese imports, which were deferred, now applying? What action can be taken to prevent a price cutting war by Australian processors in their efforts to dispose of surplus cheddar cheese? If the committee recommends restraints on imports can those restraints be extended to the imports of cheddar cheese from New Zealand under the New Zealand-Australia Free Trade Agreement?

Minister for Primary Industry · RICHMOND, NEW SOUTH WALES · CP

– The question asked by the honourable member embraces the responsibility of a number of departments. The question about quarantine regulations on cheese coming into this country is one for my colleague, the Minister for Health. The question whether amendments, alterations or influence could be used to regulate the inflow of cheese from New Zealand under the New Zealand-Australia Free Trade agreement would be one for my colleague, the Minister for Trade and Industry. There are a number of problems centering on the cheese manufacturing industry in Australia. Last week I met the Australian Dairy Industry Council and the Australian Dairy Farmers Federation to discuss this very problem and from those discussions we felt that the best way to tackle the problem would be to set up a committee representative of interested bodies to assess what the problem was, the area and the degree of it, and to try to come up with ways and means of coping with this rather difficult situation. I am hopeful that with the advice that can be obtained from the departments concerned, the industry, the manufacturers and the retailers in Australia, a satisfactory answer will be found to a problem that is worrying the industry.

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– My question is addressed to the Prime Minister. I understand that when the right honourable gentleman was Minister for Education and Science he arranged for Sir Leslie Melville to investigate complaints that came from scientists and others on the non-portability of superannuation funds, which hindered their movements between universities, government and semigovernment authorities. Does the Government contemplate any action to meet the problem that causes this trouble?


– The answer is yes. Before the House gets up I would hope to indicate to it the recommendations of Sir Leslie Melville which we would propose to accept.



– I direct my question to the Minister for Defence. What weapons systems will be provided for the Fill? Does the price presently announced of $299m include the cost of such weapons systems? If not, will the Minister indicate what further costs may be incurred in preparing the Fill for active service?

Minister for Defence · PATERSON, NEW SOUTH WALES · LP

– As has been pointed out in the House on a number of occasions the weapons in terms of bombs would be regarded as normal replacement items and would not be costed as part of the Fill project. These are normal expendable stores and do not appear in the price of the FI 1 1 project.

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– My question is addressed to the Minister for Shipping and Transport. My attention has been d$awn to the fact that in some instances in Victoria the Country Roads Board allocation to shire councils for road building and maintenance is less than the sum allocated last year. As this is the first year of the new Commonwealth Aid Roads Agreement, I ask: Is there anything in the Commonwealth Aid Roads Act that would in any circumstances cause a reduction of grants to councils?

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

– The Commonwealth Aid Roads Act provides for specific allocations to four categories. One of them is the category to which the honourable member referred in his question. There is no requirement by the Commonwealth that a State allocate funds to any particular authority for it to expend. The only requirement is that the money be spent on certain categories of roads. Money that was allocated under the old Act for roads other than, highways, main roads and trunk roads is allocated under the new Act to roads in areas other than the statistical divisions of the capital cities or the urban areas designated in the Act. Those roads specifically attract an escalated amount of 5% compounded per annum over and above the amount allocated in 1968-69 under the old Commonwealth Aid Roads Agreement, but there is no requirement that that escalated amount should be necessarily spent by any particular body. Accordingly it could be that in a State the amount allocated to local government is in fact less than the amount allocated in the previous year. It is not the intention of the Commonwealth that this should be so, but it is the intention that the money should go in increased allocations to that old designated category of roads.

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– My question is directed to the Prime Minister. I remind the right honourable gentleman that on 26th August 1 asked him why Commonwealth departments refused to co-operate with public servants who are members of credit unions and who wished to have deductions made from their salaries. The Prime Minister replied that he had no information but would obtain it and advise me. In view of the considerable interest evinced by public servants in the thrift and loan finance advantages offered by credit unions, when may I expect an answer to this important question?


– The information sought has not been supplied to me. I will follow it up and see where it is. The honourable member can be assured that as soon as I get it be will get it.

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– In directing a question to the Treasurer I refer him to the recently closed Commonwealth cash loan. Does the right honourable gentleman regard the result as satisfactory, bearing in mind the as yet unknown final result of the associated conversion loan and the present state of the Australian money market? Is he in a position to inform the House what factors have been responsible for the remarkably strong support given to the short term securities maturing in November 1970?


– From a national point, of view and also from a Government point of view I regard the loan as outstandingly successful. I say that for these reasons: Firstly, the money has to be obtained in order to support the loan and housing programmes of the States and to permit the Commonwealth development programmes to continue. Secondly, the loan before this was not the outstanding success that we would have liked. When looking at the question of interest rates we also had to take into consideration the fact that the May 1971 and the May 1972 maturities which had market yields of 5.3% and 5.4% respectively, could not in fact be sold by the Reserve Bank of Australia on the open market. We therefore had to look at somewhat more attractive rates in order to ensure that we got the kind of subscription that we needed. Another very important fact associated with this matter is that we have, as I said in the Budget speech, a problem of excess liquidity or excess money supply. Therefore the more money that we can sop up at the moment the more it permits us to control the money supply and to make some impact upon inflationary forces. The amount of money directed to the 1970 loan was of the order of $157m. The loan maturing in November 1972 was for only $3.8m. That indicates, I think, that the Government, in deciding upon the 14 months security and the interest rate that was provided, made a very wise decision and an excellent contribution towards ensuring the satisfactory results of the loan.

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Minister for Social Services · Mackellar · LP

– For the information of honourable members I present a list of homes subsidised under the Aged Persons Homes Act 1954-1969 as at 30th June 1969. I take this opportunity to thank honourable members on both sides of the House for the help they have given on behalf of aged people to my Department during the past year and for their assistance in the administration of the Act

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Ministerial Statement

Mr Malcolm Fraser:

– by leave - Honourable members will recall that on 17th April this year I gave the House some details of progress made under the Government’s new scheme for the development of secondary school libraries. A full report setting out progress and activities for the first year of the scheme will be made in due course as required under the States Grants (Secondary Schools Libraries) Act 1968. However, at this point I would like to let honourable members have some fur ther details of progress made. The Commonwealth libraries programme provides a total of $27m over the period of the three calendar years 1969, 1970 and 1971. The general allocation of funds available is shown in the following table which, with the concurrence of honourable members, I incorporate in Hansard.

All State governments have received payments from the Commonwealth in respect of government secondary schools and have commenced their programmes. For the most part this expenditure has been on books, library materials and equipment. As far as library buildings are concerned all States are engaged in planning the facilities they propose to erect with Commonwealth assistance. In some cases the buildings have begun and are expected to be available for use early in the 1970 school year. I am not in a position now to indicate the individual government schools being assisted. The full lists of government schools assisted under the programme during 1969 will be made available when the report on the first year of operation of the programme is presented to the House.

Considerable progress has also been made in implementing the programme for independent schools. Honourable members will recall that for these schools I have the assistance of two advisory committees in each State, one representative of Roman Catholic schools and one of other nongovernment secondary schools. These committees recommend priorities among applicant schools and the amounts of individual grants and I have now received recommendations from the advisory committees in respect of almost all of the schools which will be assisted with library facilities in 1969. Two committees have yet to advise me on schools within particular dioceses, and I expect a few additional recommendations to come forward shortly where committees have not yet allocated all the funds available to them.

The attached lists set out by States the independent schools receiving grants in 1969 together with the amount of the grant in each case. The grants are for buildings, books, furniture or equipment or in some cases a combination of these purposes as recommended in each case by the appropriate advisory committee. I expect that all the advisory committees will be meeting later in the year to prepare recommendations for allocations for the year 1970, and all schools which have already applied for assistance will be reconsidered automatically for 1970 grants.

I have written to more than half the schools on the attached lists to make formal offers of assistance in accordance with the recommendations of the State advisory committees and I shall be writing to the remaining schools in the very near future. I shall also be informing all the independent secondary schools which applied for assistance of the 1969 allocations. Many schools have in fact already been informed of these decisions.

I have already approved the library building plans of a considerable number of independent schools. This means that these schools can go ahead with their projects with the knowledge that they will qualify for Commonwealth assistance. Some building projects have commenced and I have authorised the first payments to schools concerned. I expect this aspect of the programme to accelerate considerably in the next few months.

In my statement of 1 7th April I informed honourable members that a number of short specialist courses in school librarianship had been arranged in co-operation with the State education departments for teachers from both government and independent schools. These courses were very successful and further sums have been set aside in the 1969-70 Budget to sponsor additional courses. My Department and State education departments are now planning these courses.

In July of this year a 2 day seminar for architects interested in school library planning was held in Sydney. The Library Association of Australia organised the seminar in co-operation with my Department and the success of the seminar has led to the planning of a second one to be held in Melbourne next month. The Library Association is again undertaking the organisation on our behalf.

There is no doubt whatever that the very great co-operation given by State and independent education authorities has enabled the Commonwealth libraries programme to get away to a very good start. 1 am confident that this level of cooperation will ensure the ultimate success of the scheme. With the concurrence of honourable members 1 incorporate in Hansard tables showing grants to independent schools under the Commonwealth secondary schools libraries programme.

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Discussion of Matter of Public Importance


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

The dangerous consequences which would flow from the implementation of Labor policies relating to National Service and the stationing of Australian servicemen overseas.

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)

Suspension of Standing Orders

Motion (by Mr Erwin) - by leaveagreed to:

That so much of the Standing Orders be suspended as would prevent the Leader of the Opposition or a member deputed by him speaking for a period not exceeding 15 minutes.


– I have brought this subject forward for discussion in the belief that as the House stands on the eve of dissolution it is fitting that we should concentrate for a short time on an area of politics in which the Government and Opposition parties stand sharply divided. Everybody, not the least myself, recognises that in the forthcoming elections great issues of domestic policy are to be resolved in the fields of social welfare, education and health. But I believe that in the forthcoming election campaign the country must fasten its attention on the all important issue of defence. Here the Government and the Opposition are, unfortunately, not of the same mind. As we go to the polls it may fairly be said that the defence services of this country are growing in manpower. They are better equipped than ever before in the nation’s history. The structures of defence organisation have been greatly strengthened. This is the heritage bequeathed to the country by the present Government. It is legitimate in the present context to ask ourselves, on the eve of an election, to consider what fate would befall this very fine heritage if the Opposition party were elected to government.

Considered merely as a piece of paper enunciating ideals, some parts of the Labor Party’s policy on defence constitute very fine words - quite a good piece of work - but it is the work, I believe, of a dishonest showman. If you go behind the facade of words, Labor’s policy on defence is nothing but a false pretence. Let me illustrate. If one goes to the platform enunciated at the Melbourne conference of the Australian Labor Party, held last July, one finds that this Party pays lip service to the principle that Australia must have strong defence forces, properly equipped and provided with modern weapons of war. You cannot have strong defence forces unless you have sufficient manpower. Manpower is the base of defence - the co-equal base with equipment. (Quorum formed). When the honourable member for Grayndler (Mr Daly) obligingly decided to give me the audience he thinks I deserve, I was saying that, whilst paying lip service to the ideal that Australia must have strong defensive forces, the Australian Labor Party is committed to a policy which would result in the de-gutting or the evisceration of a vital component of our defence forces because, if it conies into office, the Labor Party is committed to the abolition overnight of national service training.

The strength of the Australian Regular Army now stands at 48,000 men, of which 16,000 are national service trainees. I have not heard any honourable member on the other side of the House argue against the proposition that Australia needs a regular army of its present size. I pay tribute to the Deputy Leader of the Opposition (Mr Barnard) for his sincerity on defence matters. He has never urged that we can afford the risk of a smaller regular army.

The Labor Party will not face up to the question of how to provide in peacetime a regular army of the present size without resorting to national service training as an essential ingredient of our defence programme. It is plain beyond any doubt that, in a situation such as we enjoy today of rising living standards and great opportunities for young people, we will not get by any means at all - economic inducement or otherwise - a regular army of the strength needed without resorting to conscription. Conscription in what is in fact a time of undeclared war is not a palatable step for any government to take, but it is a step which this Government took in 1964 and it is a policy to which this Government has since adhered out of a sense of national responsibility.

What does the Australian Labor Party pose as an alternative to national service? lt is idle to advocate the theory that voluntary recruitment will give us a regular army of the strength we need. Nevertheless, the Labor Party goes into the forthcoming election bent upon a policy which will result in the destruction of the Australian Regular Army as an effective fighting force. It is not just a question of our commitment in Vietnam or in Malaysia. Were those commitments to evaporate overnight - and they will not - it would still be necessary for us to have a regular army of the present size. Whatever may be said in all sincerity by men of good intention on the other side of the House, such as the Deputy Leader of the Opposition, the Labor Party does not pose any viable or effective alternative to national service. The consequences to Australia of such a situation should not be left out of mind.

I want to say a few words about Australia’s military assistance to Malaysia and Singapore. When the Government formulates a defence policy it does so on the advice of military experts. Unfortunately, the same thing cannot be said about the formulation of a defence policy by the Australian Labor Party. It may have resort to a good deal of military advice, but the unfortunate, melancholy fact is that when the Australian Labor Party formulates policies, as it did in Melbourne in July at its Federal Conference, its policies are formulated without any regard to proper considerations of military security. I think 1 can make my point fairly effectively in this way: When the Leader of the Opposition (Mr Whitlam) returned in January of this year from a tour which took in Asian countries he said that the Labor Party would be prepared to keep Royal Australian Air Force and Royal Australian Navy units based in Malaysia and Singapore. He was prepared to pledge himself to do that as short a time ago as the end of January of this year. While one may be fully entitled, as I think I am, to criticise the Leader of the Opposition for having said in the same breath that he saw no need for stationing Army units in the Malaysia-Singapore area, one must at least give him credit for having proposed the retention of an air and naval presence in an area which is so important to our security.

It is perhaps a pity that the Labor Party’s policy on defence cannot be formulated by the parliamentary members of the Party because, if what the Leader of the Opposition said in January represented the policy of the parliamentary members of the Australian Labor Party, there is a relatively narrow area of difference on this aspect of our defence posture. But this is not so. At the Federal Conference of the Australian Labor Party in July the principle was propounded that Australia’s armed forces should not be stationed anywhere overseas. Honourable members will recall that in a speech on defence in February of this year the Deputy Leader of the Opposition adumbrated the theory that it would be proper for Australia to provide specialists to train the Malaysians and Singaporeans to achieve an indigenous military capacity. But what I want to point out to the House, and I think it is something that should not be left out of account in the coming weeks, is that if the policy of the Labor Party which was formulated at the July conference is adhered to it would not be possible for a Labor government, consistently with that policy, to station any Australian troops - specialist, general purpose or otherwise - in any overseas country iti a situation short of declared war. It is therefore true to say that while the Labor Party, as well as the Government, recognises that the part Australia should play in regional defence is to develop the indigenous capacity of our friends and neighbours, the Labor Party will do nothing to help develop that indigenous capacity short of selling arms and equipment, which I do not think is enough. I do not believe that the people of Australia think it is enough. If the Labor Party came to power the consequences which would be reflected in the adoption of its policy in relation to national service and to the stationing of Australian forces overseas would put us in the position of being a nation whose word is not its bond. I do not think that that is a fate which the people of Australia would want to wish upon the nation.


– I listened with a great deal of interest to the honourable member for Parkes (Mr Hughes). I acknowledge that any discussion in this Parliament on defence matters is one of very great importance not only to the members who constitute the Parliament but also to the people of Australia as a whole. It is a great pity that the honourable member for Parkes did not have more support. Not one member of the Cabinet considers this matter to be of sufficient importance to be present in the House. Where are the Minister for Defence (Mr Fairhall), the Minister for the Army (Mr Lynch) and the Minister for the Navy (Mr Kelly)? The only minister who listened to the honourable member for Parkes submit a case on behalf of the Government was the Minister for Air (Mr Erwin). This is a clear indication of the importance that the Government gives to the subject of defence, but I am glad to be able to spell out to the Government some of the Labor Party’s defence policies.

I have said publicly on a number of occasions that I regard the question of defence as one of crucial importance to this country. I do not believe that any responsible government, whether it be a Labor government or a Liberal government, would want to neglect the defences of this country because of the critical position that this could create and because of the position in which it could place Australia at some time in the future. As shadow Minister for Defence in this Parliament, I have said on a number of occasions that I certainly would not want to be elected to the position of Minister for Defence to preside over the disintegration of the armed forces. The honourable member for Boothby (Mr McLeay), who is seeking to interject, will not be here long enough to see the changes that I envisage take place.

It is quite remarkable that the Government back bench should be taking the initiative in proposing matters for discussion as matters of public importance, even at this belated stage. From memory, in the first session of Parliament the Opposition raised some twenty matters of public importance. In comparison, the Government raised one. It is commendable that Government members should be trying to improve this dismal record in the last week of Parliament. In particular, it is comforting to see the honourable member for Parkes, who has not previously taken a great deal of interest in the innumerable defence debates in this House, suddenly finding hidden dangers in Labor’s policies.

The two specific policies the honourable member chose to deal with were the stationing of Australian servicemen overseas and national service. Apparently the honourable member still clings to the policy of forward defence, although it has been completely discredited. The central point of this policy was the commitment of Australian ti oops to Vietnam. I think it is now generally accepted by the majority of Australians that this commitment was a mistake. There is also widespread evidence and acceptance in the electorate that Australian troops should be withdrawn. This has been reflected in the public opinion polls and in most of the responsible editorial opinions of the Press. Unfortunately, the Government has got out of step with changing opinion trends. Certainly, there was a majority support for me war before the 1966 elections. This feeling has gone full circle until now there is an atmosphere of disenchantment with the war. The honourable member for Parkes had nothing to say about the situation in Vietnam. This disenchantment has been the inevitable result of the great re-thinking of the Vietnam issues which has gone on in the United States.

The process of United States disengagement has begun; it will not be slowed down or reversed. Thailand and the Philippines have indicated that they want to withdraw their units as soon as possible. The Prime Minister of New Zealand has expressed his willingness to consider withdrawal of that country’s commitment. The other major participant, Korea, is in Vietnam largely in a mercenary role, and presumably it will remain to the end. Only the Australian

Government has refused to accept the realities and plan a phased withdrawal. Despite the announcement of further United States troop cuts and the inevitability of heavy withdrawals next year, the Government remains recalcitrant. However, this is a situation that must be faced.

It may have been possible for the Government to avoid fixing a withdrawal timetable on the grounds that United States troop cuts only bring its forces back to the level of 1967, when the Australian commitment reached its peak. But even this subterfuge will become increasingly untenable as the pace of United States withdrawal steps up. The Government may be able to side-step until the election, but if it is returned it must face up pretty quickly to setting a time-table for withdrawal. If a Labor Government is elected there will be no uncertainty about the course of events. We will withdraw all Australian units as quickly as possible, allowing time for alternative arrangements to be made, and for Australian troops to be disengaged without danger to them. This is the course the Government will ultimately be forced to take; it would be an honest approach to face this issue squarely and tell the electorate before 25th October how it intends to withdraw. Government policy will be forced by the train of events to move in the direction of the consistent and principled stand which has been taken by the Labor Party.

With regard to Vietnam, I see no dangerous consequences flowing from Labor’s policy. It is a policy the Government will be forced to adopt if it is returned. It is purely a question of degree whether the troops are withdrawn early in the new year by a Labor Government or at the end of the year by a Liberal-Country Party Government. The troops certainly will be withdrawn; it is blind folly to pretend otherwise.

The other aspect of Labor’s policy on stationing troops overseas, and which was referred to by the honourable member for Parkes, relates to the Malaysia-Singapore region. The Labor Party has always recognised that Australia has a special interest in the security of this region. However, the party’s attitude is that this security can no longer be assured by the stationing of token forces in the region. Under present Government policy an army battalion is stationed in western Malaysia; it will be moved to Singapore with one company posted on a rotating basis to the Penang region. The Labor Party believes that a continued presence in Malaysia-Singapore does nothing to assure the security of the region. The Government has insisted that Australian troops would not be involved in the internal affairs of the two nations. The Prime Minister (Mr Gorton) is insistent that Australian troops must be kept out of any conflict over Sabah. The Malaysian Government with an army of sixteen battalions has the capability to handle guerilla insurgency from the remnants of Communist forces around the Thai border area. In these circumstances what is the Australian commitment expected to provide, apart from showing the flag and bringing some minor economic benefits? It is a commitment of quite remarkable military irrelevance. It has not served to improve our relations with Malaysia; rather it has produced considerable bickering and misunderstanding.

Against this background the return of Australian troops from Malaysia-Singapore is both desirable and necessary. The Labor Party believes that Australia’s regional responsibilities can best be assured by flexible and highly mobile troops with the capability of striking rapidly from the mainland to assure Australian security or to fulfil treaty or United Nations obligations. Accordingly a Labor Government would scrap the sterile and discredited forward defence concept and replace it with a policy of regional defence. The basis of this policy is that the armed forces would be reorganised and re-equipped for maximum mobility. They would be based on the Australian mainland and in New Guinea. Under this policy, an active role would be pursued in training with regional partners. Britain has set the pattern for the sort of training exercises we envisage by its rapid transfer of mobile forces from the United Kingdom for training exercises in Australia and South East Asia. Further five-power exercises are planned for the training area in western Malaysia next year. It would be much more meaningful and realistic for Australia to participate in exercises of this sort on a mobile basis from the Australian mainland than to adopt a static approach based on conventional posts in Malaysia and Singapore.

It has been suggested by Government members, principally the honourable member for Lilley (Mr Kevin Cairns), that Labor’s policies would confine activity to the Australian mainland with the Navy locked up within our harbours. This is an absurd misinterpretation. What Labor policy envisages is a creative co-operation with regional partners in training of all elements of the. forces - land, sea and air. This active programme of regional training would be supplemented by the provision of specialist and technical assistance to regional partners. Under such a policy, assistance would be given to train and assist the development of the air defences of Malaysia and Singapore for which Australia has accepted special responsibility. Again I believe this is a more rational and responsible approach to Australia’s defences than a continued token presence on the ground.

The commitment to Vietnam has added not a jot to Australia’s ultimate security Rather, it has associated this country with a policy abhorrent to most of the nations of the world. The commitment to Malaysia contributes nothing positive to the defences of either Australia or Malaysia-Singapore. Again I see no dangerous consequences flowing from this policy. Tt is a valid alternative and I suggest that it is much more in accord with the trend of events than the Government’s responses.

The other subject of concern to the honourable member for Parkes was national service. This is directly related to the Vietnam war. Conscription was quite blatantly introduced by Sir Robert Menzies with the Vietnam commitment in view. As an instrument of policy it cannot be divorced from the Vietnam war. The Labor Party has always been most vehemently opposed to conscription for this war. If we are elected on 25th October the conscription process geared for the Vietnam war will cease immediately. We have said to the people of Australia that we believe there is not necessity for the conscription of Australian youth, particularly in the circumstances under which this Government carries out its conscription programme, unless there is a state of national emergency. I do not want to retreat into history to remind the Government of the responsibilities that were accepted by the last two Labor governments, particularly the Curtin Government, when

Australia was involved in a global conflict. No other Australian government has accepted responsibility in the way that Labor governments accepted responsibility at that time.

With withdrawal from Vietnam and re-organising and re-equipping the forces on the lines I have indicated, there will be a complete transformation of the existing military structure. This will take place in a context in which even the Prime Minister concedes there will be no threat to Australian security for at least 10 years. With no perceptible threat, conscription for military services is neither necessary nor desirable. In this environment it will be possible for a Labor government to end the existing national service scheme and rebuild the armed forces in the way I have outlined. Let me assure the honourable gentleman that if there is ever a direct threat to Australian security a Labor government will have no compunction about raising forces for national service. In the absence of such a threat we will have no hesitation in abolishing a harsh system of selective service which was introduced solely to prosecute the Government’s commitment to the Vietnam war. A Labor government would aim to fill the forces in a situation where Australian security was not directly threatened by voluntary means. The party believes that there is considerable scope for activating recruiting rates by up-grading the whole status of servicemen and their conditions.


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


– In 10 minutes it is particularly difficult to make a contribution from one’s thoughts on a debate such as this and to reply to the previous speaker, the Deputy Leader of the Opposition (Mr Barnard). In reply to his criticism concerning the absence of Ministers from the chamber I can inform the House and all who are listening that all of the Ministers to whom he referred are at present attending a Cabinet meeting. Who is to say that at this moment they may not be discussing the very subject of defence? If we consider the wording of the matter before us we must be clear on two points. Firstly, what are the policies of the Australian Labor

Party with respect to national service and the stationing of Australian troops overseas? Secondly, where are Australian servicemen serving at this particular time? We know that Australian troops are in Vietnam, Malaysia and Singapore, and that some are in Papua and New Guinea mainly as support elements to the Pacific Islands Regiment and the Citizen Military Forces component there - the Papua and New Guinea Volunteer Rifles.

The spheres of activity in Vietnam should be clearly in our minds. Let me run through them quickly. The first sphere of activity in Vietnam is the combat operations carried out by the First Australian Task Force. Secondly, there is that most important phase of operations relating to military-civic action, the work that is being done by our troops for the betterment of the civilian population. Then there is a third remarkable group which is aiding the training of the indigenous forces of South Vietnam. There are only about 100 in that group and apparently one has to be a Victoria Cross winner or a potential Victoria Cross winner to qualify for that group. However, none of these three phases should be treated in isolation in a quick discussion.

The Australian Labor Party’s policy has been enunciated. It is in that Party’s platform and it was referred to by the honourable member for Parkes (Mr Hughes), lt was given further attention by the Deputy Leader of the Opposition, but I cannot go past a public speech he made to the Fabian Society in Victoria in August. Without going through it and quoting from it I mention three salient factors: Firstly, that the Labor Party would tell the American Government that Australia would withdraw its troops from Vietnam. As I see it this would be a completely unilateral action. Admittedly it would be a timed withdrawal. The Labor Party would allow 6 months for this operation from the time of the general election. Secondly, it would negotiate for the return of military units stationed in Malaysia and Singapore. Finally, it would negotiate for the early return of the Mirage squadrons which would certainly not remain in Malaysia and Singapore after tha British withdrawal. lt is interesting to note that one of our top experts, the Chief of the Air Staff, has spoken of the Fill aircraft’s being deployed either in our north or west or, in certain circumstances, at Butterworth. This is forward defence as envisaged by our top Air Force expert. There are other planks in the Labor Party’s platform that I have not time to deal with at length but they deal with the signing of the nuclear non-proliferation treaty and the alternative arrangements for the Fill - and that egg will be hard to unscramble now. I confine myself to the first three salient factors as they relate to the matter before us. In his speech the Deputy Leader of the Opposition used the term ‘the discredited military strategy of forward defence’. I ask: Discredited in whose eyes? Certainly not in the eyes of the skilled expert, not in the eyes of the Australian military mind and not in the eyes of our top advisers who gain their experience not just from the training they receive in Australia but from training at the top military academies and staff colleges throughout the world. These are the experts, the men who are advancing this concept of forward defence, and it is not for the politician to come here as a military expert. These men have devoted their lives to the study of these particular problems. Judging from election results and from what I can gather in my area, I disagree with the previous speaker.

This is not a discredited policy in the eyes of the Australian public. We could argue about that all day, but we will hear the answer to that on 25th October next. It is certainly not discredited in the eyes of our allies, our partners in the most powerful ANZUS treaty. It is not a discredited policy at all. It is not discredited in the eyes of Lee Kuan Yew, the Prime Minister of Singapore, or the Malaysian people, the people of the Philippines, Borneo, Thailand or any of the other countries for which we have feelings of friendship, and with which we desire to trade and to have closer relations in the cultural field. It is not discredited in their eyes at all. It is discredited only in the eyes of the isolationists. That is the only place in which forward military defence is discredited.

I do not mind delving into history and I think that we can take lessons from history if it is applied to the future. I well remem ber the screams that came from the Western part of the world, and from some quarters in this country, against the isolationist policy of our great ally, America, in the last war. Whenever I hear talk of isolationism and of Fortress Australia it brings to mind what I read in one of Churchill’s books on the Second World War. The theme of this volume was how the British people had held the fort alone till those who hitherto had been half blind were half ready. 1 think we should be careful that we do not put ourselves in that position. I submit that if Australia were to follow the Australian Labor Party policy it would act as if it were half blind, and certainly we would run the risk of being militarily half ready.

I could go on at length but time is against me in this debate. It is interesting to ask: Why are our troops overseas? What dangers confront us in the short term and the long term? I see Communist imperialism as a threat to Australia in the future. This is manifested by quite a number of things. I could refer to a number of manifestations as they apply to Russia and to the Chinese People’s Republic, but there is insufficient time. I sum up my remarks by saying that these troops in the main are there in a forward position mainly because of our treaty obligations and at the request of our allies. I think any talk of unilateral withdrawal is not in the interests of this nation.

Mr Hayden:

Mr Deputy Speaker, 1 ara” your attention to the state of the House.

The bells having been rung -


-Order! The honourable member for Cunningham should know that he may not leave the chamber when the bells are being rung for a quorum to be formed. I suggest that he come back into the chamber and resume his seat, particularly as it was a member of the Opposition who called for a quorum. [Quorum formed.]


– For 8 years in this country, from 1951 to 1959, a form of national service existed without much controversy. It was abolished in 1 959 by the Liberal Government without any controversy. It was reinstated with the addendum of conscription for Vietnam by the Liberal Government for the purposes of the Vietnam war. So that your belief or non-belief in the present state of national service depends upon your belief or non-belief in the Vietnam war. If the Commonwealth Government had any purpose of trying to win the Vietnam war or to achieve anything in Vietnam one could begin discussing the case for it and therefore the case for the national service that is associated with it, but the Government has no purpose in Vietnam.

My son is one of those who has drawn the marble. He is not a conscientious objector. He believes in obeying a legitimate government of the country. When his university course expires, if he passes his medical tests - and I anticipate that he will - presumably he will go in. If the Government is still in office and is still running its perpetual war in Vietnam he will no doubt go there, but neither he nor I has any belief that the Government has any purpose in Vietnam except sheer expediency. This was brilliantly summed up by a lecturer at the Royal Military College, Duntroon, who said that the Government’s policy towards Vietnam was Danegeld to the United States of America and beyond that it did not want the subject mentioned. I exempt from some of the strictures that I am going to make the honourable member for Moreton (Mr Killen) because the honourable member and the honourable member for Chisholm (Sir Wilfrid Kent Hughes) with some sort of logic and belief in the war in Vietnam asked the Government to protest about the fact that ships of British registration were carrying arms to the port of Haiphong for the purpose of killing Australian and allied soldiers. We saw the reaction of the Government to the motion that they moved. The Government was simply embarrassed. But the habitual low posture that non Labor parties have always adopted to the UK, even when it is governed by a Labour Government, has caused this Government to do nothing, and say nothing publicly. So there is a tacit agreement between the US and the Soviet Union that the port of Haiphong remains open and British ships .carry the North Vietnamese and Vietcong supplies.

When the Soviet Ambassador was responding to the sympathetic noises - sympathetic towards Soviet policy - that were made by the Minister for External Affairs (Mr Freeth) the Ambassador chidingly and gently said: ‘Of course, we had one field of disagreement still, and that was Vietnam.’ In the supplies that go to North Vietnam the Soviet supplies the ‘champagne’ and China supplies weapons which might be classified as the ginger beer. The weapons that are being used for the destruction of Australian troops in Vietnam come from the Soviet Union and some of them are carried in British ships. If Australia ever had done that against Britain during a UK war we and the world would have heard a good deal about it. But the whole thing adds up to this: Why are we in Vietnam? The answer is that we are in Vietnam because the Americans are there. Why are the Americans there? I think that C. Northcote Parkinson made a fair enough statement about that when he said:

In its foreign policy the United States is somewhat hampered by the US system of education in which ideology is strong and geography weak. A policy of containing Communism everywhere may be theologically admirable but it is geographic nonsense. The United States cannot hold territory in Asia without appalling and useless bloodshed and expenditure. Strategically, the longterm purpose is and must be to prevent the Chinese occupying Australia. A war for this purpose would be fully justified, but no American in his senses should want, for this purpose, to give battle north of the Philippines and the Isthmus of Kra. And granted that such a conflict is inevitable (as it probably is) the time chosen is no more suitable than the battlefield. For the Chinese move southward has not even begun. The present American policy is thus to waste resources on a local conflict, forgetting that the main enemy is not in the field and may have no immediate plans relating to the area in dispute. It is possible to exhaust one’s ammunition before the battle begins.

That is a perfect summary of the reasons why the United States is seeking to withdraw from Vietnam. People who believe in a continuing war in Vietnam believe also in the present form of national service. The honourable member for Parkes (Mr Hughes) who launched this debate, spoke about expert advice. The Government had some expert advice on recruiting and it has been made public. It is the advice of Admiral Becher, the Director-General of Recruiting. He said his problem in recruiting men for the Army, Navy and Air Force stems from the hatred of Australian youth for the war in Vietnam. This is the major explanation he gives for the failure of volunteers to come forward. Honourable members opposite suggest that a Labor government would not have any chance of getting any recruits for the Regular

Army. But this is a purposeless war in which quite clearly we are betraying our own forces because wc are not trying to win it. Our forces just stand around in the last analysis as targets while they engage in some mythical form of ‘containment’. This sort of war is not believed in by youth who may be classified as extreme right, because it is purposeless, and obviously is not believed in by youth whose views are of the left.

The absurdity of the war in Vietnam is found in all these tacit agreements. There is a Soviet-United States tacit agreement about weapons. If the Soviet Union provided North Vietnam with Styx missiles, the kind of gun bombardments engaged in by HMAS ‘Hobart’ would be quite impossible. We are deceiving ourselves about the nature of modern war by engaging in Gallipoli era bombardments of the Vietnam coast by destroyers made possible by tacit limitations. This misleading of ourselves in defence thinking is extremely dangerous. ] believe that the Australian people are becoming very sceptical of the Government’s perpetual technique of discovering great defence questions just before elections. The Australian aircraft carriers that are still drifting around the Australian coast were bought by the Chifley Labor Government in 1948. They are the ‘Melbourne’ and the ‘Sydney’. Since their purchase by the Chifley Labor Government in 1948, no aircraft carriers have been added to the Navy. The ‘Melbourne’, of course, has had to undergo certain refits. My distinguished colleague, the honourable member for Perth (Mr Chaney), was concerned about the presence of Soviet destroyers in the Indian Ocean. I can only suggest that they should jointly manoeuvre with HMAS ‘Melbourne’ in the new association of friendship created by Mr Freeth with the Soviet Union.

But for the rest no modernisation of the Navy has really been undertaken. We hear talk about Cockburn Sound. It came up just before the election in 1966 and, of course, it is coming up just before the election in 1969. No-one suggests, however, that we should have a Navy equipped with ships fitted with nuclear engines that would have so extensive a cruising radius that they would be independent of many of these bases. We have no policy of modernising the major naval weapons that are most important in the defence of this country. The honourable member spoke about the presence of Australian troops in Malaya. I thought they had been withdrawn. I know that Australian airmen are still at Butterworth, but I thought Australian troops had been withdrawn to Singapore because of the race situation that developed.

The whole tragedy of that situation again amounts to a failure by the Government. We asked the former Minister for External Affairs to remonstrate with Indonesia about the appalling maltreatment of the Chinese in Indonesia. Nothing was done. The result is that Chinese fear spread to Singapore and broke the union between Singapore and Malaysia. Now Chinese fear is in Malaysia and has rendered untenable our military presence on the Malay Peninsula. This comes from a foreign policy that thinks narrowly in terms only of the strategic situation and not in the human terms that it should be thinking about. The Government will be very hard put to sell a war that it is not trying to win. To conscript men for a war which has no purpose and not to remonstrate with Britain about the supply of arms to the enemy can do nothing but completely undermine the young men whom it is committing to that conflict.


– The foreign policy and the defence policy of the Australian Labor Party rest upon one principal assumption and that is that it would be open to this country to secure specific performance of any treaty agreement. That in my judgment is the assumption upon which the policy of the Australian Labor Party rests in the fields of foreign affairs and defence. If this assumption is not correct, what other assumption is open to the honourable member for Fremantle (Mr Beazley) on which he can base his chiding remark that the only reason why Australia, in a corporate sense, is committed to Vietnam is because the Americans are there? He referred to a ‘Danegeld to the Americans’ and quoted the words of a gentleman he described as a distinguished lecturer at the Australian National University or some gathering under its auspices.

Mr Beazley:

– No, at the Royal Military College.


– That doss not confer upon it any measure of infallability as 1 am sure my honourable friend would agree.

Mr Whitlam:

– It does not bastardise the comment.


– That is a typical remark from the Leader of the Opposition, who wants to reduce to a cheap, vulgar level a discussion that hitherto has been kept on a very high plane. I for my part have a singular reluctance to indulge in any partisan activities, as we are on the threshold of an election campaign. I am constrained and 1 hope that my constraint will shine through, beckoning him on, step by step. 1 want to come back to Labor’s assumption. It is a fallacious assumption, it is a misleading assumption and beyond that lt is a dangerous assumption. It is all very fine for the Australian Labor Party, in Parliament and out of Parliament, to say: ‘We will support the ANZUS agreement’. But if no goodwill has been established with the United States of America, what summons do we give to it in a time of stress, strain or difficulty? The simple truth of the matter is that it is not possible to call for the specific performance of the ANZUS agreement. We should reflect upon the observation passed by the present President of the United States of America, President Nixon, when as a private citizen he wrote on foreign affairs 2 years ago. He pointed to the malaise now affecting the American society, and that is the extreme reluctance of the people of the United States to become involved in any disturbance anywhere in the world. My honourable friend and the Leader of the Opposition will recall that the President went on to say - I give an approximate paraphrase - that even at the request of the host government the United States would not unilaterally intervene if asked to do so.

That remark carries the most significant meaning for this country. I go to the subject of Vietnam and I say to my honourable friend from Fremantle that here is an illustration of the building up of goodwill. I indulge in no humbug about Vietnam. My complaint has been about the way that the Vietnam war has been conducted. It could have been won and it should have been won years ago. If the proposition had been put years ago that there would be a build up to 600,000 troops in Vietnam, it would have been described as a massive escalation. The war could have been won and it should have been won. Today the unhappiness and the misery that grip that part of the world would not have been present.

Where would Labor stand in relation to Vietnam if Australia had said: ‘Under the SEATO agreement South Vietnam is a protocol country, but you will excuse us from accepting our obligation under that treaty’? SEATO predicates a joint and several obligation. I hope that is clear, although I have the gravest of doubt as to whether it is clear to the other side of the House. There is a joint and several obligation. What would have been the feeling of the United States of America towards Australia if this country, referring to its obligation to SEATO and Vietnam, had said: ‘We hope you will excuse us from any involvement’? Then the Labor Party would have turned to the ANZUS Agreement. Could it in those circumstances have called for specific performance under the ANZUS Agreement? Let us put ourselves in the position of an American citizen, an American taxpayer who has been paying high taxes for years and is being kicked in the shins by people all over the world. He would have said: ‘Very well, if this is to be the attitude of Australians and there is to be no response from them, then there will be no response from us’. The policy of the Labor Party is lit up when one looks at article 2 of the ANZUS Agreement which deals with the parties maintaining and developing, by means of continuous and effective self help and mutual aid, their individual and collective capacity to resist armed aggression.

It is the clear policy of the Australian Labor Party to renegotiate, for example, the North West Cape communications base agreement. What does renegotiate mean/ To my mind at least it means that they want to get something which, in their judgment, is far more favourable to Australia than is the case at the moment. What happens if the Americans say: ‘No, we will not renegotiate’. Do they pitch the agreement out? Do they say to the Americans: ‘Take your junk and go home’? Let the Leader of the Opposition (Mr Whitlam) answer that question. Will he say to the Americans, with respect to the Pine Gap and Woomera joint Australian and American bases, two more bases constructed under the ANZUS Agreement: ‘Tear them down and get out of the country’? I would like the honourable gentleman, whom I understand will be on his feet in a moment, to answer these questions. What is the policy of the Australian Labor Party with respect to these three oases in Australia? Are they for dismantling them or are they for the assumption of a reasonable and respectable degree of responsibility under the ANZUS Agreement?

Sir, 1 come to the last thing I want to say. The honourable member for Fremantle said - and this also was said in a different way by the Deputy Leader of the Opposition (Mr Barnard) - that political leaders in South East Asia do not want Austraiian troops in South East Asia. That was not the experience of the honourable member for Robertson (Mr Bridges-Maxwell) and myself when we spoke to the Singaporean leaders and the Malaysian leaders. These are the people who live in that area, the people who have assumed responsibility for government and defence in the area. They stated - and ] hope this is no breach of confidence- in the plainest possible terms that they welcomed an Australian presence there. My colleague from Robertson and I could not find one politician in the entire area who was moderately antagonistic to an Australian presence in South East Asia, t suppose this would account for what was stated on 27th January 1969 by Dato Donald Stephens, the High Commissioner for Malaysia. I refer to the following newspaper report

Confidence in Australia by the Malaysians would be badly affected if Australia withdrew its defence forces from Singapore and Malaya, the Malaysian High Commissioner, Dato Donald Stephens, said in Canberra on Saturday.

What do my honourable friends opposite say to that? Is Mr Stephens in error? If so, let us hear from the Opposition. Sir, this debate has been a useful exercise because I think it has pointed up, in the way it should be pointed up before the electors of Australia have their say on great issues, that there are significant differences in opinion between those who sit on this side of the Parliament and those who sit on the other side. The Deputy Leader of the Opposition, in bis Fabian Lecture, spoke about a Labor government being in the saddle and with the whip drawn by 1st November. That is the sort of language that I appreciate very much indeed but I am bold enough to point out to the honourable gentleman that as

I see the Australian Labor Party it is standing at the barrier flatfooted and does not even have a bridle on.

Leader of the Opposition · Werriwa

Mr Deputy Speaker, the honorable member for Moreton (Mr Killen) is a chastened man after yesterday. This was to be his great week. He is preparing for opposition. I do not underrate his gifts as an oppositionist. For 14 years he has sat behind the Ministry - well behind it. He once in fact rose to the giddy heights of Deputy Whip but he lost that position or gave it away. I should not imagine that, if he survives as a member of this House on 25th October, he would aspire to be Leader of the Opposition or Deputy Leader of the Opposition; but this week he has been making his run for the position of Whip. Yesterday, after 14 years, he showed a sudden interest in Queensland hospitals and raised the subject. Of course he was well and truly chastened. Today we were expecting, not the honourable member for Moreton’s maiden speech on health, but the swan song of the Minister for Defence (Mr Fairhall) on this subject which has been raised by the Government Parties.

The Government is panic stricken. This is the first government in memory which, in the last week of sittings before an election, has rehearsed the arguments it will put in opposition. Imagine Sir Robert Menzies admitting defeat in advance. Imagine Sir Robert Menzies, who, admittedly, regarded the honourable member for Moreton as magnificent-

Mr Killen:

– Say it again, please.


– I suppose he would have thought that the honourable member was one of those magnificent men in his flying machines that he ordered, the FU ls.

Mr Erwin:

– Cut that out.


– A beautiful aircraft, Mr Minister, in your own words. But imagine Sir Robert Menzies allowing this paltry tactic in the last week of the shortest Budget session on record.

I cannot fail to note how the honourable member for Moreton burns the midnight oil polishing up phrases in order to get them on the record without actually transgressing the Standing Orders. Then he can always quote from Hansard the scintillating phrases which he has made about his opponents, myself not least. I acknowledge I am the favourite subject of his devoted attention. There are twenty-one Ministers in the House of Representatives and the senior twenty are absent. The junior Minister, the Minister for Air (Mr Erwin), is keeping house. In the absence of so many eminent gentlemen I cannot be expected to take this matter seriously. If the Prime Minister (Mr Gorton) can spare time to speak to the House on defence, as he did last February, I will lead the debate in reply. If the Minister for External Affairs (Mr Freeth) makes a speech on international affairs - he did so a month ago, the first Government statement on international affairs since autumn last year - I will lead the debate in reply. I will myself raise, as I did last April, the subject of these obscure joint facilities, sinister facilities as the Government deliberately made them appear, in central Australia or as in the Defence estimates a fortnight ago the subject of voluntary recruitment. I do not have lo repeat now what I said on those occasions.

Dr Mackay:

– You have nothing to say on defence.


– The voice of Mammon is now the voice of Moloch. The man of God descends from pagan idol to pagan idol in this place.

Dr Mackay:

– What about talking on the subject?

Mr DEPUTY SPEAKER (Mr Lucock)Order! I suggest that interjections from my right cease as from this moment.


– I am indebted, Mr Deputy Speaker, to the honourable member for Moreton for describing the honourable member for Evans (Dr Mackay) as ‘His Oiliness’. I want to pay tribute to the aptness of phrase of the honourable member for Moreton. In case the honourable member for Moreton or the honourable member for Parkes (Mr Hughes) - or perhaps Berowra, if he gets over the Liberal independent’s opposition - decides to quote from today’s Hansard, let me put on record the Australian Labor Party’s policy on the matters which are the subject of the urgency motion as circulated. I will state my Party’s platform, as reiterated only at the beginning of last month, about mutual defence systems in our region. As my deputy has said, the

Labor Party’s attitude on these matters concerns regional defence, regional development, regional training and regional procurement. I would now like to read the platform of the Australian Labor Party on defence, as reiterated at the beginning of last month. Our platform states:

A mutual defence system should be developed among nations within the South East Asia and Indian sub-continental areas and beyond, consistent with the requirements of the United Nations Charter and with the general provisions of Australia’s existing defence treaty commitments.

The platform continues:

Provision of strong defence forces:

Properly equipped and provided with modern weapons of war.

Capable of great mobility in areas necessary for Australia’s defence.

Having sufficient range and strike power to deter aggressors.

Capable of being used for maintenance and supervision of peace as part of the United Nations forces or for carrying out international peace keeping agreements.

The honourable gentleman for Parkes who interjects and who originated this debate referred to our attitude towards Malaysia and Singapore. He did not, in fact, quote our full statements on this subject. Therefore, let me put this in the record. The Australian Labor Party has said:

Britain has announced her intention to have mobile forces available for use if required in the area. Australia must recognise Britain’s intention and co-operate with it. Australia must develop flexible forces. These forces should be capable of ensuring Australia’s security as well as cooperating with allies in the area. Australia should be prepared to provide assistance to train military forces in Malaysia and Singapore and to make Australian defence facilities available to Britain. Australia must work to form a mutual defence system, including all her neighbours. No defence arrangements in her area can be fully effective unless they include Indonesia. Indonesia should be encouraged to participate in regional arrangements for the development and security of the area.

The honourable gentleman omitted to quote these matters which I have now put in the record. I do not say that he did not accurately quote some matters. The honourable member for Moreton, however, attributed many statements to the Labor Party which are not to be found in any of our publications. What I have said on four occasions - on defence last February, on the central Australian installations last April, on international affairs last month, on recruitment this month - has been confirmed by my Party.

On the very matter which the honourable member for Parkes raises, might I ask him: What does he believe are the facts upon which a fortnight ago I put the following questions on the Notice Paper for the Minister for Defence (Mr Fairhall):

  1. (a) When did the Royal Australian Air Force units depart from Ubon and (b) What governments were consulted before and about their departure.
  2. (a) What governments are being consulted about the departure of the troops from Terendak and (b) What arrangements have been made for their departure.
  3. When is each battalion in Vietnam due lo complete its tour of duty in that country.

The fact is that the honourable member for Fremantle (Mr Beazley), my deputy and 1, over repeated visits to all those South East Asian countries in the last 5 years know the attitude of these countries. We have conducted discussions on terms of personal intimacy with the leaders of their governments. What I have said on the four occasions which I have cited stands and in fact accords with their wishes. After looking at the disastrous Five-Power Conference in Canberra a few months ago. which was conducted under the present Prime Minister, it will be a breath of fresh air in this area and in this country to have a change of government; to have my deputy as Minister for Defence and Supply, to have in him and the honourable member for Fremantle, who would be in charge of Territories, and myself people who know the people and governments of the region and know what they require and desire.

Mr KILLEN (Moreton) - I wish to make a personal explanation. 1 claim to have been misrepresented in an outrageous fashion by the Leader of the Opposition (Mr Whitlam). During the course of his speech on defence he described me as being a debutant speaker on health. Yesterday he said, with respect to health and he said again today - I want to be quite precise on this - that it was the first speech I had ever made on health in 14 years. I picked up at random a Hansard dated 23rd September 1958. It contains a powerful forward-looking speech on the National Health Bill. The speech was made by myself and it concludes:

A single doctor, like a sculler plies, The patient lingers, then slowly dies. But two physicians, like a pair of oars, Shall waft him swiftly to the Stygian shores.

I think the two doctors, politically speaking, will do exactly that to the Leader of the Opposition.


-Order! The discussion is now concluded.

page 1838



Development of RAAF Base, Wagga, New South Wales

Minister for the Navy · Wakefield · LP

– I move:

The proposal involves construction of an electrical instrument and armament training building, a catering training building, lecture rooms, WRAAF quarters, laundries for officers, NCOs and airmen, officers’ quarters, airmen’s quarters, recreation centres, senior NCOs mess and kitchen, emergency power house and external engineering services including a sewage treatment plant. The estimated cost is $5,500,000. The Committee has reported favourably on the proposal and upon the concurrence of this House in this resolution detailed planning can proceed in accordance with the recommendations of the Committee.

Question resolved in the affirmative.

Construction of Instructional Buildings, HMAS ‘Cerberus’, Westernport, Victoria

Minister for the Navy · Wakefield · LP

– I move:

The proposal involves construction of three buildings, a marine engineering demonstration building, a marine engineering classroom block and a weapons electrical engineering demonstration building. The estimated cost is $1,350,000. The Committee has reported favourably on the proposal and upon the concurrence of this House in this resolution detailed planning can proceed in accordance with the recommendations of the Committee.

Question resolved in the affirmative.

Construction of Divisional Store at Fannie Bay, Darwin

Minister for the Navy · Wakefield · LP

– I move:

The proposal involves construction of a building for the storage, packaging and processing of medical stores. The estimated cost is $737,000. The Committee has reported favourably on the proposal and upon the concurrence of this House in this resolution detailed planning can proceed in accordance with the recommendations of the Committee.

Question resolved in the affirmative.

page 1839



Motion (by Mr Erwin) agreed to:

That Government Business shall take precedence of General Business tomorrow.

Sitting suspended from 12.38 to 2 p.m.

page 1839


Second Reading

Debate resumed from 19 September (vide page 1697), on motion by Mr Swartz:

That the Bill be now read a second time.

Mr DUTHIE (Wilmot) [2.01- For several decades measures such as this have been hardy annuals in this Parliament. Until recent times Western Australia and South Australia were, like Tasmania, claimant States. They have now ceased to be claimant States, leaving Tasmania alone to participate each year in these special grants. As a result of Western Australia’s and South Australia’s ceasing to be claimant States the work of the Commonwealth Grants Commission has been greatly reduced.

Because of its small population and its inability to develop itself at the speed at which mainland States are developing, Tasmania will continue to be a claimant State for several years to come. Economically Tasmania could not stand on its own feet while at the same time giving to its people the standard of living that is enjoyed in the other States. So we are grateful firstly for the decision of the Grants Commission and secondly for the Government’s approval in the matter.

Under this Bill the amount of $21,900,000 recommended for payment in 1969-70 is made up of a negative adjustment of $100,000 to the grant for 1967-68 and an advance payment of $22m for 1969-70. In his second reading speech the Minister for Civil Aviation and Minister assisting the Treasurer (Mr Swartz) said:

The Commission’s recommendations continue to be based on the principle of ‘financial need’ under which special grants are designed to enable a claimant State to provide government services of a standard similar to those of the standard States, provided it makes a comparable effort in raising revenue and controlling expenditure. This involves a detailed comparison of the standard and claimant States’ budgetary revenues and expenditure. From 1959-60 the standard States have been New South Wales and Victoria. However, subject to any developments arising from the forthcoming review of the financial assistance grants arrangements, the Commission intends, as from 1970*71. to base its recommendations on a standard derived from the experience of all non-claimant States.

This is the new feature in this legislation. The legislation widens the field of standard States. In the long run this could be a good thing.

One of the problems associated with being a mendicant State is that your budgetary position is subject to complete analysis by the Commission. At the present time no State other than Tasmania is in the embarrassing situation of having its financial position placed under the most careful scrutiny of a government-created commission. But 1 suppose beggars cannot be choosers. If we are to accept money from the Commonwealth for our development we must put up with this annual investigation by the Commission into our expenditures and incomes. Tasmania has suffered the embarrassment of being told that it was not raising enough money. In its last year of office the former Labor Government of Tasmania was practically forced by the Commission to follow the lead set by Victoria and one or two other mainland States and introduce a tax of lc in every $10.


– It was a receipts tax. This was very unpopular in Tasmania, but its introduction was forced on the Tasmanian Labor Government. At the elections the Labor Government had to explain to the people that the decision to introduce the tax had been forced upon it by the Grants Commission’s saying that Tasmania was not raising enough money. One of the conditions attaching to the grants from the Commonwealth is that Tasmania expand its range of taxes to a level which the Commonwealth regards as satisfactory. Tasmania is caught in a vicious squeeze. If it is to receive money from the Commonwealth it must take more money from the people of Tasmania. The States which initiated the receipts tax are now in grave trouble because of a decision of the High Court, reached on the casting vote of Sir Garfield Barwick, that the tax is an excise tax and should be levied not by the States but by the Commonwealth. The sum of $90m is involved. This is not peanuts. The States are finding it harder and harder themselves to raise money. They are becoming more and more dependent on Commonwealth assistance for their day to day existence. The States thought that the receipts tax would be one way out of their financial troubles. Costs of every kind borne by the States are increasing. They adopted a realistic .attitude. They decided to introduce a receipts tax. But the High Court has ruled that it is unconstitutional. Where we go from there is anybody’s guess. The Liberal Party Premier of Tasmania has suggested that the States should ask the Commonwealth to levy this tax and then give it back to the States. I do not think the other Premiers will agree to that suggestion. The Commonwealth would not be very happy about increasing taxes by S90m so as to pay a like amount to the States.

Some of us might describe the work of the Commonwealth Grants Commission as an interference with the sovereignty of the States - as criticism of the way in which the States spend government money on such matters as social services, health and education. Tasmania has often been criticised and penalised by the Commission for spend ing too much per capita on health, social services and education. 1 take a very dim view of the Commission’s attitude. Why should a State be penalised because it is spending in certain fields what it believes to be right and proper? Things have come to a pretty pass when a State can be accused of spending too much on health, education and social services. Can we spend too much on health? Can any State or the Commonwealth spend too much on education or social services? These are matters that affect the day to day welfare of the community. Yet a Labor Government in Tasmania has been criticised for spending too much in these fields. Tasmania had to adjust its expenditure on forestry because the Commission complained that it was spending too much in this direction. I suppose the Commission’s attitude is that there should be uniformity throughout Australia. Apparently, in the Commission’s view, no State should spend more than another State in a particular field.

Mr Howson:

– Is that not the view of the honourable member’s Leader?


– No, it is certainly not the view of the Leader of the Australian Labor Party.

Mr Howson:

– Is it not his view that all decisions should be made in Canberra?


– Decisions on matters affecting almost the whole of our economy are made in Canberra now by the present Liberal Government. Centralisation has galloped on like a racehorse since the Government took office 20 long years ago, yet the honourable member sits in his place and asks me whether the Labor Party believes in centralisation. The Government’s activities are the best example of centralisation that we have ever seen in Australia. Every act of the Government is a centralised one. Through the Reserve Bank of Australia it clamps down on the availability of finance by increasing interest rates. The Commonwealth’s actions are causing great distress in Tasmania, particularly the latest decision of the Reserve Bank to clamp down on mortgage overdrafts. Honourable members opposite say that a Labor government would make all decisions in Canberra. Everything is already being done from Canberra. If any honourable members have any doubts they should seek the views of the States. The forthcoming Federal election will indicate what the people in the States think about the centralist policies of the present LiberalCountry Party coalition shotgun marriage Government.

The Commonwealth Grants Commission was originally set up away back in 1933 during the depression and it has been very good. It has done a lot to help the economies of South Australia, Western Australia and Tasmania. Power corrupts but absolute power corrupts absolutely and I am convinced that the increased power given to the Grants Commission over the years caused it to become an economic father or dictator to the claimant States - in this instance Tasmania. The claimant States could not disagree with the Commission, in this instance the Commission has recommended a special grant to Tasmania of almost $22m. One does not argue with Father Christmas. For this very good reason Tasmania is not arguing with the Grants Commission because it is being helped to a very large extent. But T do not think it is right that Tasmania should be forced to cut expenditure on vital services because of some economic theory or formula worked out by the Grants Commission. Although I am critical of the Commission on this aspect, at the same time I appreciate the work that it does under its charter. The Commission has been a great worker. It has been interested in the development of the claimant States. Tt has made a thorough analysis of the situation which exists in a particular State and has travelled everywhere to see the development - hydroelectric, public works, forestry and so on - in that State. The Grants Commission is acquainted at all times with what is going on in Tasmania. I cannot criticise it for the way it goes about its duties. My criticism is the principle under which the Grants Commission is forced by the Government to work. Naturally it would be a wonderful thing for Tasmania if it did not have to rely on the Grants Commission for assistance but could work, out its own economic salvation entirely. However, that day is a Jong way off yet.

I do not want to speak at length on this Bill, although I could speak for the half hour allotted to me because the Bill concerns every phase of Tasmania’s economy. The amount of almost $22m which is to be provided under this Bill will be spent, as the State Government sees fit, in every phase of Tasmania’s economy. A portion of the amount will go towards roads, the administration of the State and ordinary, every day services. The sum of almost S22m is quite a lot of money for a State the size of Tasmania.

In conclusion, I wish to comment on the roads system in Tasmania. The annual grant to Tasmania under the Commonwealth Aid Roads Agreement was increased earlier this year. Under the legislation - one could almost call it a national roads plan - the total grant to the States over the next 5 years was increased to $1 ,250m. The proportion is worked out in accordance with a certain formula. Tasmania was to receive something like $50m more over the next 5 years, but the Government introduced the new category of urban roads. This measure will help the development of the urban roads throughout Austrafia, particularly the mainland States. Hobart and Launceston are the only places in Tasmania which are deemed to have urban roads. In this sense there will be rivalry between the two cities as to which one will get the greater proportion of money.

The former Premier of Tasmania, Mr Reece, asked the Commonwealth Government to include the north-west coast roads in the category of urban roads. This would take in the roads from Devonport to Burnie. These towns, which are very close together, are in the electorate of the honourable member for Braddon (Mr Davies). The area is well’ known to everybody in Tasmania. A beautiful highway has been built there. Mr Reece asked the Commonwealth Government whether it would include this section under its urban road category because its inclusion would take the drain off main roads expenditure. Up to the time Mr Reece was defeated he had not been informed whether the Commonwealth Government had agreed to his request but since then the Commonwealth Government stated that it is against such a move. This has been a blow to Tasmania. The Commonwealth Government has allowed the road system along the Gold Coast of Queensland to be included in the urban roads category. There is no difference between the two sections of roadway, except that more money has been invested in the Gold Coast area. Although there is no difference in the miles of road and although both areas are beautiful, the Tasmanian request has been refused and its section will not be included in the new category.

The second category in the roads legislation is the main roads-trunk roads systems. The third category is council or municipal roads. We are all familiar with these roads, especially honourable members who represent country electorates. The Tasmanian Minister for Lands and Works has been sending out letters to the local councils in Tasmania informing them that in some cases they might get as much as they received last year under this grant but in other cases they will get less. In some instances the amounts provided by the State Government for certain road projects will be halved. These letters have caused quite a revolution throughout the States. It is a wonder that the councils have not marched on Hobart en masse because they are so upset and angry about these letters from the Tasmanian Minister. I suppose he is only carrying out the instructions he received from the Commonwealth. I asked the Minister for Shipping and Transport (Mr Sinclair) yesterday whether he was aware of the anger of the councils. I went on to ask:

Is it not a fact that the 1969 Commonwealth Aid Roads Bill reduced Tasmania’s total share of Federal Government moneys from 5% to 4£%? Will the Government review the legislation in the light of the unfavourable impact of it?

Especially its unfavourable impact on Tasmania. Let us be quite frank about it, the Minister’s reply puts the Tasmanian Government on the spot. He said:

I am aware that the Commonwealth Aid Roads Agreement is out of its swaddling clothes. 1 am also aware that ft is going to make a notable contribution to the improvement of the Australian road systems. As to the other suggestions, I inform the honourable member that these have not been brought to my knowledge. I am not aware of any concern felt by local authorities in Tasmania as to the level of funds they will receive under the next 5-ycar allocation. However, the honourable member will be aware, as we all are aware, that Tasmania received a 50% increase in its allocation over the 5 years of this Agreement by comparison with the 5 years of the earlier Agreement.

He will also be aware that for all the local authorities which under the old Act received a 40% allocation-

For years local government authorities have been allocating 40% of the grant for rural roads made to the State Government under the Commonwealth aid roads grants - . . there is provision within the new Commonwealth Aid Roads Agreement for an increase of 5% above the amount that was allocated for roads in the last year of the previous 5-year Commonwealth Aid Roads period.

This 5% per annum compounded increase of funds should ensure that all of those roads that were previously designated as roads other than highways, main roads and trunk roads-

That is municipal roads - will receive an increased allocation, and consequently should ensure that in Tasmania and every other State of the Commonwealth there will be an enhanced road construction programme for the ensuing period.

The last sentence is significant. It states:

Certainly there should be no reduction.

Yet the councils have been informed by the State Minister in Tasmania that there is to be a reduction in many of their yearly allocations. So somewhere the lines have crossed between the Commonwealth and the State in what we call the ‘implementation of the Commonwealth Aid Roads Act’ - both in the spirit of the Act and in its practical application. I hope that this matter will be ironed out between the two Governments so that local authorities in Tasmania will not be penalised under the new Commonwealth Aid Roads Act, because when the Bill was introduced in the autumn session of Parliament these local authorities were told that they were to receive 5% more than they received previously. My colleague the honourable member for Braddon (Mr Davies) will be following me from this side of the chamber, and anything which I have omitted he will take up.


– I rise to support the Bill, and would simply comment, in respect of the statement made by the honourable member for Wilmot (Mr Duthie) concerning a shot gun marriage, that the marriage has turned into a long and happy affair. Perhaps the weapon used could well have been cupid’s bow and not the shotgun as suggested by the honourable member. However, I can understand the honourable member’s chagrin at having been relegated to the Opposition benches for so long. It is hard to take.

Mr Duthie:

– You had a long time in Tasmania.


– 1 had a similar experience. So far as the grant to Tasmania is concerned, perhaps there is some degree of probing inquiry - I would not call it embarrassment - made by the Commonwealth Grants Commission into the activities of the State Government, particularly regarding the proposed expenditure of grants which may from time to time be made to the State. I do not feel that a grave problem is facing the Tasmanian Government. Perhaps the situation could impede certain progress in some directions along the road which the Government ought to be taking as compared with the decision ultimately reached by the Grants Commission. But I believe that generally speaking the people who carry out this inquiry are competent, tolerant, capable and understanding. Usually the grants which they recommend for the State are fair and equitable.

We realise that the inquiry could bring into stark reality some of the problems which are not common in a continent the size of Australia. In Tasmania we have some problems which are of a seasonal nature and which perhaps do not occur in the State of Queensland. For instance, under the very heading of ‘welfare’, to which the honourable member for Wilmot referred, we find that over the years the Tasmanian government, at the insistence of the then Opposition, finally granted a heating allowance to age pensioners who live alone. I should imagine that this allowance is unnecessary in a State such as Queensland, but it is one which takes a considerable amount of money from the welfare grant to Tasmania. When we look to the magnitude of the continent of Australia we see that there must be great variations, yet in the determinations of the Grants Commission there is a levelling or an averaging of what is happening in every State.

I wonder in what situation the State of Tasmania would find itself, from the point of view of the Grants Commission if, for instance, it were to manage without a deficit budget. Since every other State finds it necessary or fashionable to budget for heavy deficits, if the State of Tasmania were not to budget for a deficit, would it incur a penalty from the Grants Commission? I do not believe that this is situation which could or should not be tolerated in the event of the State managing to balance its budget. It is an unfortunate state of affairs that some of the States are finding it necessary to have deficit budgets, particularly in the proportions which deficits are reaching at the present time, because it is eating into the next year’s taxation revenue, and each State is finding that it must borrow money in order to liquidate interest which is owed from the previous year. So to this extent there is a degree of crippling of incentive by the averaging system.

This fact was recognised by the Grants Commission some time ago, because there was a period during which Tasmania, as a claimant State, was compared with the standard or larger States of New South Wales and Victoria with whom Tasmania had perhaps less in common than it had with any of the other States. Probably Tasmania has a great deal more in common with Western Australia, in terms of terrain, exports, and the need to develop because of the smaller population in those States. So I believe it is an advantage that Tasmania is to be considered in the light of the average of all the other Australian States. So long as Tasmania’s incidence of taxation does not fall, by comparison, below the average of the other States, and so long at its standard of expenditure is not unduly high under any of the headings of expenditure, then Tasmania will be conceded the benefit of a grant. The system seems to have worked reasonably well over the years, with some of the limiting factors which do and in fact have applied to it. Some of these factors have been mentioned by the honourable member for Wilmot.

The Commonwealth aid roads agreement could well come within the ambit of this legislation, but 1 do not propose to canvass that matter, except to say that I believe the present Tasmanian Government will expend the grant which it receives fairly and justly, and if the requirements of the areas to which the honourable member for Wilmot has referred - the north-west coast cities - are such that they warrant a priority in preference to other parts of the island, then they will get it. But my experience has been that over the years the northern part of the island has been so thoroughly spoilt in this matter that it is about time some of the money was expended in the other end of the island, and I am looking forward to seeing this happen under the present Government. Responsibility has been transferred from the shoulders of one Minister to the shoulders of another Minister who, perhaps, will recognise the needs of the other parts of the island and will not forget that there is such a thing as the southern part of Tasmania. At present I believe that Tasmania is reasonably well satisfied with the Grants Commission. But perhaps I should not let the moment pass without saying to our bigger brothers and sisters in the mainland States: Thank you for the contribution that has been given to Tasmania from your taxation. It is gratefully received, and I am sure it will be faithfully applied*.


– This is a machinery Bill which is designed to implement payment to Tasmania of a special grant of $21,900,000. As my colleagues from Tasmania have mentioned, it is part of the traditional process by which assistance, as recommended by the Commonwealth Grants Commission, flows to the State of Tasmania. The Minister for Civil Aviation and Minister assisting the Treasurer (Mr Swartz), in his’ second reading speech, pointed out that the Grants Commission’s thirty-sixth report had been tabled in the House. I want to lodge a protest about this, because ever since the Minister said that I have been trying to obtain a copy of the report. I understand that there are only four copies available. On repeated occasions I have been to the various parts of the House where it is normally possible to obtain copies of reports, but these four reports are like gold dust. It is impossible even to get a look at one of them. We from Tasmania are at a very great disadvantage here today discussing the recommendations of the Grants Commission that have been accepted by the Government when they are contained in a report which we have not yet seen. There are many parts we are eager to look at. There are many comments carried over from year to year that we want to see and which are in this report. As I say, we are at an extreme disadvantage. The same applies, of course, to the honourable member for Franklin (Mr Pearsall) and the honourable member for Wilmot (Mr Duthie), because we have not been able to se- this report. I understand that it is being printed in Melbourne. So, as I indicated, it is not possible to consider the legislation in the context of the report as we had hoped to do.

This report is significant because Tasmania is the only remaining claimant State. The purpose of the grant is to put the State of Tasmania in a position of fiscal equality with the mainland States. As the honourable member for Franklin pointed out, we have to maintain at least until next year a standard of taxation comparable with that of the two standard States of Victoria and New South Wales.. If we go ahead of them and provide more in the way of social services, essential services and social welfare we are penalised and get an adverse grant. I will have more to say about that later, because this has always been a bone of contention with mc. For many years there were three marginal States which received this form of assistance. They were Western Australia, South Australia and Tasmania. As we all know, South Australia withdrew from its claimant status several years ago. Western Australia broke the chains last year and has achieved a substantial degree of fiscal independence. Only the Tasmanian budget remains subject to the surveillance of the Grants Commission.

The broad intention of the special grants procedure is to ensure equitable standards of attainment in a number of areas of State spending. I indicated some of these, such as social welfare, health, education and public transport. Tasmania is the only survivor of this traditional process of equalisation. The former Grants Bill has dwindled to a Tasmania Grant Bill. Despite the substantial economic and industrial progress that has been made by Tasmania in recent years, there is little prospect of its being able to shake off its claimant status. The island still suffers from many economic and social disabilities. Irksome though the supervision of the Grants Commission may be, Tasmania will remain under its wing, we feel1, for many years yet. Undoubtedly the system has brought many benefits to Tasmania. These were referred to by the honourable member for Franklin. Commonwealth funds have been employed effectively in transforming Tasmania from a predominantly rural and a comparatively poor State into the much more balanced and prosperous State that it is today.

However, there are still inequalities between Tasmania and the mainland States. For example, personal income per bead is generally lower in Tasmania than in the rest of Australia. This is one of the factors taken into consideration by the Grants Commission and, I must repeat, it is a pity that we did not have the report because we are eager to have a look at it and see how it carried forward from the thirty-fifth report. In the year 1967-68 personal income per head in Tasmania was $177 below the average for the whole of Australia. During the past 20 years personal income on this basis has been consistently the lowest in Australia. The pattern of employment in Tasmania is particularly subject to seasonal influences, and in addition fluctuations in the building industry tend to be more marked than in the mainland States, and inevitably this has a distorting effect on economic activity. The pattern of industrial development has moved strongly towards heavy industry with a relative lack of success in stimulating light manufacturing.

We have recently gone through a tremendous mining boom. It has been a great thrill to Tasmanians to see the tremendous mineral development that has been taking place on the west coast of Tasmania and the expanded programme of the Mount Lyell Mining and Railway Co. Ltd. In only recent years the expected life of the mine at Mount Lyell was no more than 10 to 12 years. With the discovery of another ore body, and as a result of the visit overseas by the General Manager when he successfully investigated modern methods of underground mining and introduced them at Mount Lyell, it has now been forecast that the life of the mine will be some 25 years. Of course this is based on the known deposits at present. This is great news not only for the people who live there but also for the State Government and the Federal! Government because they have invested money in this area.

Further north from Queenstown is the great tin mine at Renison Bell. It was wonderful to read in today’s Press that following research into the recovery methods employed, the recovery rate has been improved and Renison Bell is assured of a very bright future. Then there is Rosebery, the old faithful. The Electrolytic Zinc Co. of Australasia Ltd which operates the mine at Rosebery is spending a fantastic amount of money on a new shaft in order to get to new ore bodies. Further north are the new townships of Luina and Savage River, which have been carved out of the rain forest by the mining companies in the last couple of years. I must pay a very great tribute to Cleveland Tin NL which developed the tin mines at Luina and developed a very fine town there. The difficulties the company was experiencing in recovering tin on the tables have been overcome and it has made a very good profit in recent months. The future for Cleveland Tin is very bright indeed.

The story of mineral development at Savage River is indeed a very fascinating one. Iron one is being mined at Savage River, and again in a typical rain forest area on top of a plateau the mining company has carved out a town that has all modern amenities such as a school, a very fine hotel-motel, hospital facilities and very fine homes for its employees. The iron ore is mined by open cut methods. It is crushed and pushed by water through a pipeline just under the surface of the ground which goes 70 miles over some of the most difficult country in the world down to the coast at Port Latta, where the slurry is treated with bentonite. It goes through a process in the furnaces and is converted into pellets. Here again we had teething troubles, but it is good to know that these have now been overcome, and there is a continual turnround of ships from Japan taking the pellets away. All this helps the general economy of Tasmania, and we have seen wonderful development.

I mention with great pride the fact that two Tasmanian companies, the Mount Lyell Mining and Railway Co. Ltd and Electrolytic Zinc Co. of Australasia Ltd have jointly put up $14m to build an acid plant at Burnie. They will be contributing 1 50,000 tons of pyrites from Queenstown and the same quantity from Rosebery, and out of this 300,000 tons of pyrites, which was previously a waste by-product, they will now be able to make 420,000 gallons of sulphuric acid. This will save the Australian economy a considerable amount in overseas credits having regard to the amount we spend on the importation of brimstone from the gulf ports of Mexico and from Canada.

Tasmania has had a great deal of success with heavy industries. 1 sympathise with the honourable member for Franklin who complains that this has not generated much activity in his area in the southern part of the State but it certainly has done so on the west and north-west coasts of Tasmania. The domestic market has been small because we have a population of only about 330,000 and this has had a detrimental effect on the development of the domestic economy. The home market is always best but if there is only a small home market goods must be exported and Tasmania is at the behest of the people who control freight rates. Freight rates militate against the development of sales interstate and overseas. We have extreme freight cost difficulties, but these are associated with all islands and Tasmania is no exception. We recognise that fact. We appreciate what the Australian National Line has done in introducing the roll-on roll-off and door-to-door method of sea-road transport, but we need more ships. The ‘Australian Trader’, the magnificent vessel that came into service in June, must be duplicated immediately. The Government should place an order with an Australian dockyard for the duplication of this type of vessel. This ship, which came on the run in June, is fully booked out for the next 12 months. On 20th January last, before the ship was in service, it was impossible to book before January of next year. This gives some indication of the popularity of the service, but this situation should not be happening. We should be able to tell passengers, tourists and manufacturers who want to freight goods to the mainland markets that there is no difficulty in booking ship space. It is up to the Commonwealth Government to see that Tasmania is not at any disadvantage and that there can be a free flow of exports interstate. We should have the same facilities as those that exist on the mainland, particularly as on the mainland one can have recourse to road and rail transport, which are facilities that we do not have.

Freight costs and difficulty in obtaining accommodation on vessels form a significant part of Tasmania’s disadvantage compared to the mainland States, particularly New South Wales and Victoria. I mention those States because these have been the standard States with which Tasmania is compared when it comes to the allocation of special assistance. The Commonwealth Grants

Commission relates financial assistance to Tasmania to expenditure in New South Wales and Victoria. The Minister, in his second reading speech, referred to the adoption of a new concept of standard States under which special grants will be determined. In earlier years when there was more than one claimant State, New South Wales and Victoria were the standard States. This, of course, was when Western Australia, South Australia and Tasmania were claimant States. It is proposed that from 1970-71 recommendations for the one remaining claimant State, Tasmania, will be based on a standard derived from the experience of all non-claimant States. This is subject to any developments arising from the forthcoming review of financial assistance grants in Australia. It is not possible to predict with any accuracy what the effect of this change will be but I read with some concern a report that working on the formula that is likely to be used whereby Tasmania is compared to a four-State pattern, Tasmania will be adversely affected by the best part of $2m which is a considerable sum.

Tasmania is proud of its education system and of the educational facilities and services it provides. We would resent being compared with Queensland where the educational system is run down and where money, which should have been spent on education - and I am not talking politics - has been used to bolster up the public hospital system. Queensland’s educational services are among the worst in the Commonwealth. If Tasmania is to be compared with that State it is going to be penalised. It has been estimated by experts in this field that Tasmania could be penalised to the extent of Sim in the amount it would have to spend on education in the future.

This is a matter of great concern because Tasmanian authorities at the Hobart meeting of the Grants Commission and at other meetings have consistently advanced the view that Tasmania should not be compared on a four-State basis. We do not mind being compared with Victoria and New South Wales but we certainly should not be compared with Queensland. We object to this proposal strongly. I feel sure that the Premier and the Treasurer of Tasmania, and the incoming government, will agree that our services should not be compared in this manner. We are very proud of our educational standards in Tasmania and it is a matter of concern to everyone interested in this field to learn, from figures that have been produced, that we could be disadvantaged to the extent of Sim in the funds that would be available for us for education.

I appeal to the Government and to the Grants Commission - I understand the direction came from the Treasury - to look again at this suggestion of comparing Tasmania with Queensland. We have nothing against the people in the north. They certainly got an additional grant from the Grants Commission a few years ago. They got the treatment to which they were entitled because they have a scattered population and a large area in which to provide essential services. But, for goodness sake, give Tasmania a little bit of a go considering that it is an island State. Do not compare the great strides that we have made in the fields of education and hospitalisation with places like Queensland.

Mr Cope:

– The second best people in Australia come from Tasmania.


– I appreciate what the honourable member is saying. I stress to the Parliament that we are pleased with the assistance that has been given to us by way of the Grants Commission through its recommendations to the Parliament, and we are grateful that the other States and members from both Houses of this Parliament have endorsed the recommendations of the Commonwealth Grants Commission. However, I point out that we financed all of our hydro-electric development from loans that we raised, whereas all of the money required for the Snowy Mountains scheme came directly from Commonwealth taxation. We feel that we should have been assisted more. Certainly we received a grant for the Gordon River Road but that was a drop in the ocean compared with the special assistance grants that have been handed out to the other States. When we consider that these special purpose grants in recent years have formed the pattern of Commonwealth and State financial relationships under which the States have been given huge sums of money for railway standardisation, port development and various other projects, we believe that we have not received a reasonable share of the handout. If this is to be the continuing pattern of financial arrangements between the Commonwealth and the States, then the people of Tasmania make a plea to the Government for more consideration to be given v/hen these grants are being made.

The Government has gone into the field of rail standardisation and it has made large sums of money available to the States on the mainland, but Tasmania has not been able to participate in that. The Government has also assisted with port development. The Savage River mines conveyor belt that goes out about 1 mile into Bass Strait off Port Latta is used to export a large number of pellets to Japan and brings in a huge amount of export earnings; Tasmania will be exporting from the port development at Burnie $420 million gallons of acid a year; thousands of tons of copper concentrates are being sent to Japan for refining. All this port development is being undertaken by Tasmanian State instrumentalities without one penny from the Commonwealth Government by way of assistance. I think the time has been reached when such matters should be given more consideration.

I was anxious to obtain a copy of the report of the Commission, but of course this is not available as yet. I wanted to find out about a matter on which I spoke 2 or 3 years ago, concerning the observations of the Commission regarding the introduction of totalisator agency betting in Tasmania. This is a burning question in my State. As I indicated a couple of years ago, the introduction of the Totalisator Agency Board system in Tasmania would bring a lot of difficulties to that State. I am speaking on behalf of the small punters in Tasmania, the people who should have some say in this matter. If we are to maintain a democracy or any semblance of government for the people of Australia then the small people who get some pleasure out of punting on Saturday must be considered when there is an attempt by the Commission, by means of a recommendation, to foist on the TAB system. I do not think it is the function of the Commonwealth Grants Commission, through its reports, and certainly it is not the function of the Commonwealth Treasury, to attempt to coerce or intimidate the State Government in Tasmania and to say to that Government: ‘If you do not bring this in you will be penalised in some other form’. This is not the function of the Commission.

If the people of Tasmania wish to retain the open betting shops which they have had for some 35 years, they should be permitted to do so. People can put their few cents on with the local bookmaker. Incidentally, these betting shops are a tremendous tourist attraction; the tourists are continually commending the Tasmanian Government on the facilities available at present. People can walk into these well conducted shops in any town, village or district, see the prices on a board, and study the fluctuations. There may be two or three changes in betting up to the last minute before a race commences. They can put their money on, and as soon as correct weight is announced after a race has been run anywhere in Australia the punter can collect his winnings. On the other hand, if there were the TAB system the punter would, in the case of telephone betting have to establish credit, and in the case of normal betting would have to place his bet about 40 minutes before the starting time of a race. He might have to wait for a day or two after the race before he could collect his winnings. As I have said, I was anxious to see the report of the Commission. I do not think that it is the function of the Commission to make a recommendation on this subject. I think that this is being used by those who favour (he TAB. I know of the comments that have been made by the Commission but T do not think it is right for it to do so. That is not the function of the Commission.

Because of my interest in education I noted again this year the adverse grant for Tasmania in respect of the cost of conveying children to school. This matter is of importance to me and I am sorry that the report is not available. The Commission has in the past recognised the disability in Western Australia of getting children to and from school. It has accepted the fact that Western Australia has spent large amounts of money on school transport because of the long distances between schools in that State. The Commission has accepted that we in Tasmania have special difficulties because of the peculiar topography of the

State. Transport costs in getting children to and from schools is much dearer per mile than it is in other States. But each year the Commission has come up with this story to ease itself out of the problem. It says that while we are bringing children in we are closing five or six schools. It says we are centralising schools instead of having several small schools in country districts, although in consolidating the schools we are effecting a saving. The Commission penalises us regarding the amount of money spent on school transport. That is not right because this is essential expenditure.

No Government in Australia would attempt to bring in a charge for the transportation of children to and from school. If it did so, it certainly would not be in office for very long. It is now an accepted principle that all children, particularly those in country districts, should have equal educational opportunities. I fail to see why a State that is simply carrying out its job to see that children are getting the best possible education and can attend better schools should be penalised in regard to the money it spends on school transport. By consolidating schools better facilities for teachers and better educational opportunities are made available. I think that the Commission has in the past rather overstepped the mark in giving Tasmania adverse treatment in this respect.

In conclusion 1 want to pay a general tribute to the Commission. As the honourable member for Wilmot said, when the Commission has come to our State it certainly has had a look at all the facets. The officers of the Commission are very thorough in their work. I know that when we were worried about war service land settlement, officers of the Commission went to King Island, and there are not many people who want to go there. They had a look at the difficulties which existed there. The Commission has made very substantial grants in recognition of payments made by the State of Tasmania in order to meet the excessive costs of development of war service land settlement schemes. I ask the Government to bear in mind one or two of the criticisms which I have made, I hope objectively. I join with the honourable member for Franklin (Mr Pearsall) in thanking honourable members from other States because automatically each year they have accepted the fact that we need the money which is granted and they always endorse the recommendations of the Commission.

Minister for Civil Aviation and Minister assisting the Treasurer · Darling Downs · LP

[2.58J - in reply - Mr Speaker, there is one brief point I want to raise. I think the honourable member for Braddon (Mr Davies) was under a misunderstanding when he referred to recommendations which will from 1970-71 be on the basis of all non-claimant States. He quoted figures to indicate that there could be a disability suffered by Tasmania as a result of this. I refute any figures that have been quoted. There is no way at this time that such figures could be worked out, because the existing standards do not apply. Until such lime as standards are arranged and we have the actual figures from all nonclaimant States it would not be possible to determine the actual figures. The impression I would gather is that this will be to the advantage of Tasmania and I think this will be borne out after the standard is adopted from 1971 onwards. I did say when introducing the Bill that a review is now being undertaken of the arrangements covering the financial assistance grants to the States. As a result of that review, it could be that some other amendments will apply so far as recommendations of the Commonwealth Grants Commission are concerned. It is very difficult to be positive at this stage. We cannot be positive that there will be any disadvantage, but I feel that it will be to the ultimate advantage of Tasmania as a whole.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr Swartz) read a third time.

page 1849


Report of the Public Works Committee


– In accordance with the provisions of the Public Works Committee Act 1913-1966, 1 present the report relating to the following proposed work:

Rehabilitation of the 1942 building, GPO, Sydney.

Ordered that the report be printed.


Ministerial Statement

Debate resumed from 23 September (vide page 1767), on motion by Mr Gorton:

That the House take note of the following paper:

Fill aircraft - Ministerial Statement, 23 September 1969.

Minister for Defence · Paterson · LP

– The decision announced last night by the Prime Minister (Mr Gorton), the only decision that was reasonable in the circumstances, was not only reasonable but right. Australia in 1963, for the reasons then stated and since reiterated any number of times, needed a strike aircraft. We need a strike aircraft just as much, if not more, today. We have a contract with the United States of America for the production of the Fill and there has not been one occasion during the conduct of the project when an objective analysis of the facts has justified any move towards cancellation. If the aircraft fulfilled its performance, we would certainly not want to break faith commercially and much less with an ally like the United States.

I freely concede that the Opposition finds no need for an Fill in a Labor defence programme. But all this does is highlight the vital difference between Labor’s defence policy and that of the present Government. Whereas the Australian Labor Party would defend Australia only at the first line of breakers on our own seashore, this Government believes that the threats that may arise against Australia’s interests develop first at a distance, that they ought to be met there and that they ought to be mct by cooperative defensive arrangements with the nations in our part of the world. Clearly we need to leave ourselves in a position where we can make a contribution to such arrangements according to our interests and according to our capacity. Labor has a policy of home defence and therefore does not need a strike aircraft. Labor has an isolationist policy. But 1 point out that isolationism in the modern world is hardly possible and may well leave Australia cold and pretty lonely in this rather disturbed part of the world.

Last night the Deputy Leader df the Opposition (Mr Barnard) drew attention to statements that have been made by the Prime Minister and myself from time to time about the nature of the threat that faces this country strategically. We have indeed pointed out that a threat is unlikely in the immediate future. But two points arise here. We made a reservation, and the reservation is that we would be completely unwise not to allow for the possibility of rapid change in the strategic situation. After all, we are not so far away in terms of years from confrontation. Who knows what the future may hold in our sphere of interest? Nor do we overlook our obligation to come to the assistance of our neighbours under pacts if they should be threatened. As we have stated repeatedly, to plan on the assumption that there is no threat and that there will be no threat for 10 years or any other period would be completely suicidal. Our whole policies are directed against a threat ever arising. It is certainly one thing to say that a threat is unlikely; it is a different proposition to say that there is no threat, and the Government has never done that. The odd thing about the situation is that the Opposition always talks about collective defence, about entering collective defensive arrangements with our neighbours. It is notable that Labor always talks about this from a safe distance and would not equip this country to participate actively in those arrangements should a threat develop. Therefore Labor’s policy must and indeed does appear meaningless in the eyes of our friends and neighbours.

The Deputy Leader of the Opposition said last night that in his view the Fill had no relevance to Australia’s defence in the next 10 to 20 years. T wonder what kind of crystal ball the honourable gentleman used to see that kind of picture. Here we live in what is acknowledged as one of the most turbulent areas of the world at the moment. New nations are struggling for development and survival. Yet the honourable gentleman is bold enough to say that there is nothing in the next 10 or 20 years that would throw up a need for a strike aircraft of the Fill type. The Government rejects this view, completely. We will not see this country defenceless. The Deputy Leader of the Opposition claimed that the Fill is not versatile enough. This aircraft was bought for a particular purpose. It is a strike aircraft and it meets in every respect the Air Staff requirement and therefore meets the advice given to this Government by the same kind of military advisers as would undoubtedly be advising the Opposition if it came to power. One has to assume, therefore, that Labor would fly in the face of the best military advice available to it. But I leave that matter there.

The Deputy Leader of the Opposition pointed out that fighter bombers with superior performance to the F1 11 are available. I would like to see a precise comparison, if that were not completely unobtainable because of security, with those matters on which the Fill certainly stands alone and without peer in the world today. In terms of range, payload. its outstanding navigational capability, its bacl weather performance, its bomb accuracy on target in any kind of weather, its capacity as an electronic counter aircraft and more besides, the Fill stands above any other aircraft now available or likely to be available in the reasonably near future. As we have said from time to time, this is not merely an aircraft that we are talking about. We are talking about a complete weapons system of the most extraordinary capacity.

The Deputy Leader of the Opposition said that there are better close support aircraft available. The Fill was never designed to be a close support aircraft. It was not bought to be a close support aircraft. So where is the validity of this argument? The honourable gentleman pointed out that the Phantom is a wonderful aircraft and said that United Kingdom has just bought it. That is true. The United Kingdom has bought it to take care of that country’s requirements over the short distances in Europe, as indeed did Germany. The fact that these two countries should buy the F4

Phantom for deployment in Europe merely says that they do not have Australia’s long range requirement. The honourable member for Bass went on to point out that Israel had bought the F4. That is quite true. Israel has the job of defending only its own country in the rather narrow confines of the Middle East where once again long range is not required. Japan has bought the F4. Once again, Japan is restricted to a force for home defence of the Japanese islands and why should she want range? Sir, none of these comparisons is valid in relation to the Fill.

The honourable member for Bass went on to introduce a completely new note, one we had not heard from him before. He pointed out that tankers and supporting aircraft would be required with the Fill. But as I have pointed out, the very essence of the Fill weapons system is its capacity to do without supporting aircraft and tankers. The testimony given by the pilots who have flown the Fill in Vietnam, published in, I think, ‘News and World Report’, or one of the other leading international news magazines, pointed out the Fill’s peculiar capacity to approach a target under the radar, in all kinds of weather, to drop its bombs with complete accuracy and to disappear from the scene before the enemy is even aware that it has been there. Because of its range it does not need tankers; because of its extraordinary weapons system capability it does not need electronic counter measures; because of its speed it does not need fighter cover. On the testimony of the pilots who have flown these aircraft in battle, two pilots and one Fill can do a job in bad weather, with complete accuracy and with safety, which could only be done half as well by 5 or 6 other aircraft. This is the cost benefit advantage of the FI 1 1 .

The Deputy Leader of the Opposition introduced another new note when he said that the ceiling price, which we had quoted as being $5.95m, cannot be pierced. Sir, nobody in this House at any time has made that statement I cannot recall the ceiling price of this aircraft ever having been mentioned in this House by me or another Minister for Air or by the Prime Minister without the qualifications that it covered also escalation and other costs which have been specified. Mr Speaker, it is quite patent that the Labor Party has run out of argument about the Fill. We have heard all this tired repetition of threadbare criticisms before. The Opposition has said nothing new.

The fact is that for a year past we have had one major problem with this aircraft which has prevented it flying with the Royal Australian Air Force; that is, we have had a metal fatigue problem in the wing carry through box. This has been a particular problem born of the use of a new kind of metal about which there is not long years of experience. It is a problem, which has defied the best technical brains in the world, including some of our own world experts in metal fatigue, but the problem is about to be solved. Over this period the Government, quite rightly, has been consistent in demanding that we would have assurances, firstly, that we would have a fatigue free life of type of something like the usual 15 years. We said that we would be prepared to take the aircraft only when it was demonstrated to us that that condition could be met. We said that we wanted to be sure that the United States would itself use the aircraft and that therefore there would be no difficulty about spares backing for the project during the life of type. We said we wanted an assurance that the performance of the aircraft met the requirement of the Air Staff. We said we wanted to know how the aircraft worked out in terms of maintainability - if I might use that term - the number of hours of maintenance required per hour of flight.

On each of these matters the mission which proceeded to America just recently has given us the most complete assurances on the best possible evidence. We do have spares backing. In terms of performance the aircraft does better, in many degrees, than the Air Staff requirement. The maintainability of the aircraft is more than satisfactory. We believe that we are on the eve of settlement of this fatigue problem but our whole outlook in relation to our aircraft and whether or not, or when, we should take delivery has been changed by the undertaking by the United States that the Americans will now proceed to develop a completely new wing carry through box which will embody all the metallurgical and other experience learnt in the last few years; and that this box would be available in 1972 for fitment to our aircraft at the expense of the United Stales.

Clearly we now have a completely new picture. The United States has agreed to do this readily and without fuss. I believe that this is a measure of the kind of cooperation we have had from the United States throughout this project. Of course, it has been as difficult for the United States as it has been for us except that where our investment in the aircraft is $300m plus, the United States investment runs into $4 billion or $5 billion. Is it to be supposed that the United States would not bend every effort - indeed, it has been successful effort - to the solution of this problem? The deal we have worked out on the basis of our ceiling price plus escalation, still with escalation gives us an aircraft which is cheaper than the price which the United States itself will pay. What this undertaking by the United States means, Mr Speaker, is that the Americans have virtually underwritten a satisfactory fatigue free life for our aircraft. They have said that if the wing carry through box in the aircraft should fail they will replace it with another and they will see us through until 1972 when a new box will be available. If by any measure of misfortune that box should not be available then, they will go on replacing boxes in our aircraft so that we will continue to have our 15-year life of type. These changes will be made at American expense.

The Deputy Leader of the Opposition complained, as he has always done, about the cost of these aircraft. He is talking about the cost of an aircraft and we have been talking about the cost of a weapons system of the most extraordinary capability. I have quoted figures in the House to show that even a civilian aircraft like the Boeing 727 has a fly away cost of something over $5m and it is not to be compared with a military aircraft of the Fill type in terms of capability. I have seen some notes somewhere about the F4 and 1 believe the fly away cost of that aircraft is $3. 8m. If one adds to that cost the cost of the ground handling equipment, spares, test equipment and all the rest of the things -crew training and so on - which is embodied in the contract price of the Fill, then even the Labor Party’s chosen Phantom, despite its enormous disadvantages so far as we are concerned, would be comparable to the Fill in terms of price.

The Deputy Leader of the Opposition complained that we may have paid 80% of the price of the aircraft before we take delivery. 1 am informed that Qantas probably will have paid something like 50% of the cost of its forthcoming aircraft programme before it takes delivery. This is normal commercial procedure. If it had not been for the fact that the Labor Party has completely run out of ideas on the FU 1 we would not hear the same arguments turning up time after time in this tediously repetitious debate. Australia needs a strike aircraft with a capacity of this kind. He would be a brave and, indeed, foolish soul who would say that within the life of this aircraft we would be unlikely to find or could not envisage a situation in which Australia would sorely need this kind of aircraft capacity. lt is unfortunate that the fatigue problem and the fatigue programme in the United States is not matched with our parliamentary election timetable. Great capital has been made of the fact that the Prime Minister has not announced anything new. He has brought us up to date. He has announced the only decision which a government could take if it had any concern for the life and safety of the men who will fly this aircraft. We still say that when the aircraft has proved its capability we will be ready to bring it to Australia. I believe with every confidence that we are on the eve of that decision now. But if a new series of fatigue tests is about to be undertaken it would be foolish of us - indeed it would be imprudent - to bring the aircraft to Australia at this time. Despite the fact that we have been given a guarantee by America of replacement of the wing carry through box if there should be a failure, if we brought this aircraft out we could still fly it with complete safety. But why risk the possibility of that change having to be made when everyone associated with this programme, including our own experts, believes with every confidence that the series of tests now about to be embarked upon will certainly assure us of a fatigue free life until 1972 when the new wing box will be available. It may well be, if expectations are exceeded, that the tests on the new wing box will even be much better, and the question whether or not a new box needs to be fitted in 1972 will become completely clear in the course of the next few months.

I began my remarks with these words, and I repeat them in closing: The decision the Government has made in regard to this aircraft is the only reasonable decision that could be made. I believe that within a matter of months we will be seeing Australian FI 1 ls flying in Australian skies and, as I have repeatedly said before, adding immeasurably to this country’s defence capabilities.

Mr CREAN (Melbourne Ports) p.21]- As the Minister for Defence (Mr Fairhall) said, the first announcement about the FI 1 1 was made in 1963. What he did not add, of course, was that that announcement was made when the 1963 election was imminent and, in my view, it played a decisive part in the results of the election. 1 do not know whether anybody in 1963 would have conjectured that by 1969, after two more elections had been held, the Fill would not have been delivered. I agree with the Minister that the Government -has taken what is at this stage perhaps the only decision that can be taken, but I submit there is still a great deal of room for criticism and a great need to answer a lot of the questions about that decision. Until last night the Fill was undelivered, mainly unproven, and unconfirmed. What is the nature of the confirmation now? The confirmation contains a qualification with regard to the unsatisfactory gear box.

Mr Killen:

– It is a wing” carry through box.


– Well, it could be any part of the aeroplane. I am not arguing about which particular part. As I understand it, aeroplanes cannot be serviced in the air. If even a very minor part goes wrong the pilot cannot limp the plane home in the way that a driver of a faulty motorcar can get the car to a garage. Some honourable members are suggesting by interjection that it can be done, but I am sure they would not get up in this House and say with certainty that it can be done. In any case, at this stage the flight capabilities of the plane are still unproven and the order, it seems to me, is still unconfirmed because the Government still leaves itself the option of taking the plane or of not taking it, according to whether the gear box, or whatever the part is called, is satisfactory. I do not claim to be an expert about aeroplanes, but I do not believe that when we are discussing an expenditure of this magnitude everyone concerned has to be an expert before he can be critical. Since the Fill was ordered in 1963, as I have said before, $5, 100m has been spent on the defence of Australia and S 1,100m is the projected further expenditure this year. Of that $5, 100m - and honourable members can find detailed figures in the defence reports for 1968 and 1969- nearly two-thirds, or $3,400m, represents expenditure on manpower and maintenance in the Army, the Navy and the Air Force. This simply indicates, of course, that any armed Service has a certain amount of fixed expenditure and something like two-thirds of the total expenditure on defence is of this fixed nature.

But in the same period about $ 1,640m has been spent on capital equipment, a substantial part of which represents expenditure on the Fill. In the last 4 years, $l,300m has been spent on procurements in the three Services and nearly three-quarters of that, or about $1,00Om, has been spent overseas. The principal single item, of course, has been expenditure on the Fill. The Library includes quite a number of interesting documents on its reading list. On one of them recently there was an article taken from a New York publication called Flying- May 1969’. At the end of the article there is a description of the various brands of the family Fill. The article is headed: ‘The Fill family: a tough bunch’.

The reproduction is not very clear but it appears to have been on page 117. The article states:

F111C: The Australian version; based on a quoted price of $S.2m . . .

These are United States dollars, of course, and we have to discount the amount by something like one-tenth to get the equivalent Australian dollars. This article, of course, is contained in an American magazine. The article continues:

The Australian version; based on a quoted price of $5. 2m per aeroplane, including groundsupport equipment, training and a year’s supply of spares, Australia ordered 24 Fills in 1963 as Canberra replacements . . .

I repeat that, the Government ordered in the heat of the election of 1963 and hoped that this order would have some bearing on the election result. The article continued: accepting an open-ended contract. The cost of the 24 aircraft has since risen to SI 2. 3m -

This is American dollars - per aeroplane, or, in all. about a quarter of the country’s-

That is Australia’s - entire 1968-69 defence budget. The price is likely to continue rising, but cancellation of the contract would cost Australia about $225.6ra in penalties. The F1I1C is outwardly identical to the FB 111, but uses the earlier M k I avionics.

Earlier in the article - and this is a kind of examination of the performance of the Fill - under the heading ‘Summary and sentence* an examination is made of a number of points. I commend the article to anyone who has not read it. If anyone is in favour of the Fill this article in many places helps to give support to his case. However, the article states:

Maybe it could be said that there were too many unknowns involved at one time in the TFX venture - new variable-sweep engineering combined with new and untried power plants, with hitherto unapproached advances in afterburning, using radically new avionic and fire-control systems, operating with completely new missile systems, and the whole wrapped in the revolutionary concept, of commonality. 1 understand that ‘commonality’ means having all those things combined in the one operation. The article goes on to state:

Perhaps commonality could be said to have become obsessive with defendant McNamara-

McNamara is on trial in the article - without regard to cost.

The article then goes on to state:

We are entitled-

That is, the Americans and, I submit, with equal force Australians - to ask why the contract should have been placed at all if accurate costing was not possible at that lime. The point now being made-

This is in the United States - is that there is a possibility that the Fill, has become so expensive that the Air Force would hesitate to use it in operations where the target value is not commensurate with the risk of loss.

I was interested to hear the Minister for Defence (Mr Fairhall) say that it seemed that the Fill had no place in Labor’s defence programme. I might say charitably that it is just as wel’l that the FI 1 1 has had no place in the Government’s programme in recent years. One thing I am interested to know is the extent to which the rest of defence expenditure has been built around the Fill. Surely the Army, the Navy and the Air Force do not work in vacuums, saying: ‘Let us cut up the total’. I am sure this is not how they work. Surely one is not oblivious of what the other is doing. Capital expenditure on defence accounts for only one-third of total expenditure. Taking the overall picture it seems to me that the Government has been very recreant as far as Australia’s defence is concerned.

There seems to have been a rather curious inversion in this House in recent times. Five weeks before an election the people who appear to be on trial are members of the Labor Party. Actually, it is this Government that should be on trial. It has been in power in one form or another since 1949. Yesterday the Prime Minister (Mr Gorton) said:

The Government believes that the RAAF must have an ultra modern strike aircraft to replace the Canberras which are now the RAAF’s only strike force. The Government knows that the Canberras are approaching the limit of their service life, and the considerations which 1 have set out above all point to the Fill as the best aircraft to be this replacement, without exception.

Listening to that one would almost have thought that it was 1963 again and. on the eve of an election, the Government was ordering the Fill. It is 6 years since the aircraft was ordered. Notwithstanding what the Prime Minister has said, even now there is no certainty about delivery. As is pointed out in the American document from which I have quoted, cancellation of the contract would be expensive. I do not suggest that at this stage the Fill should be cancelled. Despite what you say about cost benefit analyses and other things, once you embark on a project, whether it is the Snowy Mountains scheme, the Ord River scheme or the Fill, and you spend hundreds of millions of dollars on it, it is difficult to walk out on the deal. To do so would involve a new set of cost considerations. But a few weeks before the general election to suggest that the Fill will be delivered and that all is now well is. in my view, an attempt to conceal the mess that is of the Government’s making.

I hope that there will be some indictment of this Government on 25th October because, as I demonstrated the other evening, public expenditure in Australia has been rising in recent years to a point where it now represents 25% of all goods and services produced in this country. The greatest increase in expenditure in recent years has been in defence expenditure. Defence expenditure has increased at an annual rate of 14.4%. compared with an increase in expenditure on education of slightly more than 10%. What has the Government to show at this stage so far as the Fill is concerned other than promises that it may come good? The Government should be trying to get all the evidence available to show what this aircraft might do.

Criticism of the aircraft is not confined to Australia. There has been criticism of this aircraft in the United States at a level just as high as that from which criticism has flowed in this country. It would be easy to try to score politically. Why should you not try to score politically when the occasion arises? Is that not what the Government has done for the last 20 years? Even today the speech of the Minister for Defence was not so much a defence basically of the F1 11 as an explanation of some mystical place where we might be able to use the aircraft if we had to do so.

All I can say is that we should be thankful that our potential enemies have been gentlemen for the last 6 years while we shilly-shallied about getting the Fill. We should be thankful that they did not attack us before we got the aircraft. Should we now tell them that we expect to have it by the beginning of next year or that, if the wingbox is not satisfactory by 1972, we may cancel the order? What sort of performance is this? The Fill represents the greatest single item of defence capital expenditure. The Government’s greatest expenditure on what might be called defence hardware is accounted for by the Fill, lt chose the aircraft in 1963 to be a showpiece.

If in 1 963 the Labor Party had said that it would buy this aircraft no matter what the cost, the Government would have raised the old bogey: ‘Where will the money come from?’ In 1963 the cost of the twenty-four aircraft was estimated to be $112m. What would the Government have said if in 1966 a Labor government had said: ‘People of Australia, the aircraft is still on the way, but we will have it by 1969’? Now. within a few das of the Parliament’s rising for the elections, the Prime Minister has had the hide to tell us, as if this were a new proposition, that we will have the aircraft very quickly.

As my colleagues will ask. how has the role of this aircraft in 1969 changed from that envisaged for it in 1963? Would the Government in 1963 have bought this aircraft if it had known that its ultimate cost would be not Si 12m but $300tn or more? They are the questions which the Government must answer. It is of no use asking who the enemy is and saying that we now have something with which to strike. We have not yet anything with which to strike. All that the people of Australia can be thankful for is that apparently there is not anybody whom we need to strike.

Minister for Trade and Industry · Murray · CP

– 1 listened attentively to the honourable member for Melbourne Ports (Mr Crean) but I was unable to discern any purpose in his speech. True an election is pending and it is the done thing at such a time to attack and deride the Government. The honourable member did this, but we are talking about a major defence issue. It is true that this aircraft has had its problems. No-one has tried to disguise or suppress that fact. But it is the supreme aircraft of this age. If the Australian Labor Party wishes to attack the Government’s decision it should state what it would have done and what the Government should have done. That should be its line of attack. But I did not hear one single word along those lines today. At the time the Government ordered this aircraft there were many declamatory expert speeches by the then Leader of the Opposition, who told the Government what it should have done. The Labor spokesmen today did not remind the House of the advice given by the Leader of the Opposition on that occasion. The Leader of the Opposition advised the Government that it should have purchased an aeroplane which in fact never got off the drawing board.

Mr Bryant:

– Which one was that?


– The TSR2.

Mr Bryant:

– It did get off the drawing board. The Deputy Prime Minister should get his facts straight.


– A prototype of the TSR2 flew but that aircraft never got- into operation. The Labor Party would have had this Government, this country, relying upon an aircraft which the Government’s expert advisers had advised was, at best, not as good as the one the Government ordered and which did not, as things transpired, get into operations at all. I think a prototype of the TSR2 actually flew but the project was then cancelled and that was the end of the matter. But it was the view of the Labor Party at the time that the Government should purchase this aircraft. I ask honourable members opposite to compare their Party’s policy at the time the decision was taken to purchase the Fill aircraft with the Government’s policy. It does not stand up to the Government’s decision.

It is true that there have been problems with this aircraft, which is the most intricate aircraft that the mind of man has ever conceived. It is designed to perform in a manner that is beyond compare with any aircraft which has ever been designed. Indeed, as I understand the situation, there is at present no successor to this aircraft in concept. The aircraft the Opposition favoured was an aircraft which, on distant flying, had to pause in the air and refuel when it was getting near the target. It would have been a sitting duck for enemy aircraft. That is the aircraft the Government did not order. Instead, it ordered an aircraft which would do the kind of job that the Government’s expert advisers had advised that it ought to be able to do; an aircraft which the expert advisers of the United States Government, the most powerful military nation in the world, had advised that the United States should have. What is the position today? There are 120 aircraft of this type flying in the United States today. They have flown for 40,000 hours, including 25,000 hours in operations. These aircraft have a lower accident rate than the Super Sabre, the Phantom and any other aircraft in this F category. I would be the last to say that even one accident is nothing to worry about. One accident is one too many, but aircraft accidents occur and experience indicates that the FI 11 aircraft is safer than any of the modern aircraft which have been designed and built in the United States.

What is the position with the aircraft today? I wish to speak quite frankly about the Fill aircraft. I do not deny that it has been the subject of great controversy and I do not deny that doubts have been raised about it. I admit that the aircraft was first ordered 6 years ago, which is a long time but not an extraordinarily long time having regard to the technology involved. An election is to be held in the near future. I shall be quite candid and say that the people of Australia are entitled to know where the Government stands on this matter. I am being quite frank when I say it is my view that the people of Australia are entitled to be told what the Government is doing. It is in this context that the Prime Minister (Mr Gorton) stood up in the House last night and informed honourable members of the decision the Government had taken after receiving the report of the mission which had been despatched overseas to examine the matter. It was not the first, second or third mission to go to the United States but the most recent one. The mission comprised the very top advisers that the Government possesses. These advisers are men who are capable in respect of business and administration, capable in respect of knowing the concept of our strategic requirement, capable in respect of the technicalities of the aircraft and capable in respect of a scientific assessment of it. When this mission returned from the United States it informed the Government that it had confidence in the aircraft, but that the aircraft has one weakness.

Following the report of the mission the Prime Minister stood up in the House and said to the people of Australia: ‘These are the facts of life: We have ordered an aircraft which, on all our advice, we still believe is incomparably the best for the purposes for which we may need aircraft’. It is an aircraft whose cost has escalated. There is nothing really strange about that. It may be distressing but it is not strange that in the last 6 years something so scientifically intricate should have encountered unexpected problems which have resulted in modification of the design and consequently an increased cost. There is nothing astonishing about that. There is nothing astonishing about the Prime Minister saying: ‘This is an aircraft which is flying today and will be flying for Australia for the next 15 years, subject to what I shall say in a moment. There is one weakness in the life, without replacement, of one component but the expert advisers believe that this can be overcome’. So we find the Prime Minister standing up and saying: ‘Here is an aeroplane that has everything we want except life, without replacement, in one component - the carry-through wing box. This has a limited life. The designers and builders of the aircraft have already made another carry-through wing box, which they anticipate will overcome to some extent the shortness of life of this component. It will be tested next month and if it is successful it will be installed. If it is not successful, I believe the present one could carry on, but it would need to be replaced eventually’.

The Prime Minister then went on to say: We have negotiated an arrangement with the United States Government that to the extent that the wing carry-through box needs to be replaced, perhaps reoccuringly replaced, to give the aircraft a life of 15 years, the United States Government will replace it without charge to the Australian Government’. This allows us to have an aircraft. If we were to say that such a course of action was no good to us we would be without an aircraft of this nature and there is no other aircraft in Great Britain, France or the United States that we could turn to. What has to be faced up to at this stage by the Labor Party is whether it wants us to be without an aircraft of this capability at all. It is no good saying: This thing has been a damned nuisance. It has cost a lot of money and it requires a number of modifications. As the aircraft is at present it does not have a life of 15 years. Therefore we are not going to take it’. Even if a penalty for cancellation were not imposed would the Labor Party suggest that we should cancel the order, knowing that we would then be without a strategic aircraft altogether? I do not hear any honourable members opposite saying: ‘Yes, that is what you should do’. We have to do as governments have done throughout the ages and face up to the fact that there are some occurrences which are unpredictable. It is unchallenged that the aircraft will operate. It is not under challenge that it is unsafe.

The aircraft is undeniably operational, having already flown 40,000 hours in the United States, of which 25,000 hours were under operational circumstances. But it has a short endurance unless the wing box as at present designed, or even as it will bc designed, say, next month is replaced.

The United States Government says: ‘We have 1.20 Fills, and we are going to have a devil of a lot more. We intend to overcome this problem of the wing box and we intend to get one in operation that will have the life of the aeroplane’. Who is going to say that the people who can put men on the moon are incapable of solving that problem? I believe that they are capable of solving it, and I, for myself, would not bc greatly troubled if I had to depend on that. But I do not have to depend at all on their solving that problem by getting an impeccable wing box that will last for 15 years, because they say: ‘At the very worst we will keep on replacing this wing box that has a short life, and we will do it at no cost to you’. This is what the Prime Minister has stood up and explained to the Parliament and to the people. For my part, I think it is a very unreasonable person who believes that any other decision could have been taken. This is the real thing.

  1. accept the Labor Party’s making capital of the fact that the Fill will cost more than we expected. That is true. If the Labor Party can get any mileage out of that, let it use it. It has taken 6 years to get the thing. If it can get any mileage out of that, let it use it. But the question which the Labor Party does not face up to is: ‘If an aeroplane is operational and can be kept operational for 15 years, should Australia possess it or should Australia have no aircraft of strategic capacity at all?’ That is the only question and, of course, for any responsible person there is only one answer - the answer which the Prime Minister gave last night.

– The Deputy Prime Minister (Mr McEwen) set up his own Aunt Sallies during the course of his speech and then knocked them over. The Australian Labor Party has never suggested that the defence of our country should be allowed to fall away. If we look at the whole history of the purchase of the FI 1 1 aircraft from the United States, we find that the decision to purchase it was a political decision, made in haste. At the time of the placing of the order no firm terms of contract were entered into by the present Government. It was a bad business deal from the beginning. As far back as April 1960 the then Chief of our Air Staff, Sir Valston Hancock, stated that the ageing Canberra bombers would have to be replaced before long. No action was taken by the Government. In 1962 public and political pressure mounted in all directions for the replacement of the Canberra bombers. Charges were made that the Indonesian Air Force could bomb any Australian city and that the Canberra bomber could not retaliate. The then Minister for Air, Mr Fairbairn, admitted that the Canberra bombers were the weakest link in our armoury at that time. By 1963 the Air Force itself was pressing for a replacement.

In June 1963 the then Prime Minister, Sir Robert Menzies, sent an Air Force mission overseas to evaluate the available aircraft. At that time an early election was imminent. The Labor Party had already promised that if it were returned to government it would take immediate steps to replace the Canberra bomber, and that promise met with wide public approval. In October 1963 the Government, because of its having gained a majority of one in an election which everybody knew was going to take place, sent the then Minister for Defence, Athol Townley, overseas to enter into a contract with the United States of America. A few days after the late Athol Townley left Australia, Sir Robert Menzies announced that the 1963 Federal election would be held on 30th November. On 24th October 1963 he came into the House and announced that an order had been placed for twenty-four Fill fighter bomber aircraft. He further announced that an interim replacement for the Canberra bombers, the B47, would be made available while the FI 11 were being built and delivered.

In his announcement on 24th October the then Prime Minister stated that Mr Townley’s mission ‘has been most remarkably successful; so successful that I have found it necessary to advise the United Kingdom Government that we propose to go ahead with the arrangement he has negotiated.’ Sir Robert Menzies was going to tell the United Kingdom Government that we were no longer interested in the

TSR2 bomber. A short time ago the Deputy Prime Minister said that the Labor Party at that time suggested that we should have purchased the TSR2 but that the aircraft did not get off the ground - only the prototype flew. If he had been honest with the House he would have added that the United Kingdom Government was compelled to discontinue its plans for the TSR2 because the Australian Government had decided to buy American planes and not British planes.

Mr Chaney:

– That is not right.


– Nobody can suggest with any degree of certainty that a country which was looking to Australia for the purchase of at least twenty-four planes could have afforded to proceed with the development of the planes when Australia rejected the British plane and decided to purchase American planes. The United Kingdom Government, after it cancelled its TSR2 programme, then placed, with the United States of America, an order for Fill planes, but because of rising costs, because of delay in delivery and because of general dissatisfaction with the terms and conditions under which the Fill were to be purchased, the United Kingdom Government cancelled that order.

Mr Howson:

– It did not cancel the order for that reason at all. It cancelled the order because it decided to withdraw from east of Suez.


– That is part of the reason. The other part of the reason was rising costs and uncertainty of delivery. In his speech on 24th October 1963 the then Prime Minister, Sir Robert Menzies, made certain other statements. He said, for instance, that Australia would make substantial savings. He promised delivery of the planes by 1967 onwards, and guaranteed that the planes could fly to any place on earth within 24 hours. But at that stage he made no definite statement about the total cost of the 24 Fills. In the intervening period the Australian Labor Party in this Parliament pressed the Government for some definite information on delivery dates and total cost of the Fills. It asked for the tabling of the documents relating to the purchase of the Fill, and it was not until 26th September 1968 that these documents were tabled in this House. One of the papers was labelled Memorandum of Understanding Between the US Secretary of Defence and the Australian Minister for Defence’. That was signed on 29th October 1963, 7 days before Sir Robert Menzies made the announcement in this House. It is a four and a half page document and it is ail in general terms, but in that memorandum of expenditure one or two estimates were given. Tt stated that the price would be Si 25m and that the first delivery would be made late in 1967.

The Austraiian Government entered into a deal which at that time it anticipated would cost $125m of the Australian taxpayers’ money, lt was a deal that was not written firmly and a deal that was made in haste for political reasons, lt was anything but a good business proposition and since that order was placed with the United States of America the Opposition in this place has based its criticisms mainly on the bad business deal that the Government got from the United States of America. We admit that we stated in 1961-62 that the Canberra bombers needed to be replaced. I add here that the Government first promised to replace the Canberra bombers as far back as 1954 and we are still waiting for their replacement. You call yourself an efficient Government. The Deputy Prime Minister and the Minister for Defence (Mr Fairhall) came into this House and set up their own Aunt Sallys. They said that the decision that has been made now is the only reasonable decision that could have been made.

Mr Erwin:

– What does the honourable member want to replace the Canberra, with?


– The Minister for Air has asked a question across the table. You have not given this House or the people of Australia any indication at all of the value of the Fill. You have said that they can fly to any part of the world within 24 hours; that they are the greatest things with wings since angels; that they are not an aeroplane but a weapons system. You have all the technical details at your command. You do not give any of this to us and then you sit there and have the audacity to ask us to make a decision on what we would purchase.

Mr DEPUTY SPEAKER (Mr Drury)Order! I suggest that the honourable member address the Chair.


– Through you. Mr Deputy Chairman, I say to the members of the Government that they are the people who need to make these decisions and that it is not the responsibility of the Opposition to make them. But it is the responsibility of the Opposition to criticise this Government when it willy-nilly throws out S300m of the Australian taxpayers’ money on a plane that is still not completely satisfactory. The Australian Labor Party admits that the Canberra bombers need to be replaced.

Mr Calder:

– How does the honourable member work that out?


– Because we were told a long time ago, as far back as 1954. What we want is for the replacement to be made. The order was placed in 1963. The first payments for this aircraft were made in 1963. The first payment was made when the plane was still on the drawing-board. This Government entered into an agreement under which we were paying out Australian taxpayers’ money without knowing whether these planes would ever fly and even before the United States of America had placed contracts with General Dynamics. We entered into this agreement for political reasons only, and if by pure chance this plane turns out to be as good as the Government thinks it is the Government will be lucky indeed. By the end of this year Australia will have paid S207m to the United States of America, and as yet we have not received one plane. If we add to that cost of 3S207m the 5530m worth of capital works and ground equipment that we have purchased, the cost of about $2. 3m for the training of the air crews in the United States of America, and travel and accommodation for air crews and visiting missions to the United States of America of about $1.1 8m wc get a total of approximately S240.5m.

In 1963 when the memorandum of understanding was signed the price then was to be §l25m. By December 1965 the price had risen to $204m. By April 1967 it had moved to S295m. The ceiling price of the plane was fixed in 1966 as $5.95m for each aircraft. The Minister for Defence a few moments ago said that neither he nor anyone else had said in this House that the ceiling price would not be pierced. On 22nd August 1967 on page 276 of Hansard the Minister for Defence said:

When the cost reached a certain figure the United Stales came to the party and by agreement set the basic figure at $5.95m per fly-away aircraft. There is still some research and development to go on and to the extent that it affects the fly-away aircraft, Australia will carry no part of that charge.

If that was not a definite statement that $5.95m was the ceiling price for each aircraft and that no other research or development charges would be placed upon it, I am a bad judge. Contained in the papers that were tabled on 26th September 1968 was a minute signed on 4th May 1967. Paragraph 4 of that minute reads:

Based on the exchange of letters between Secretary McNamara and Minister Fairhall on 27th September, 1965 and 31st March, 1966, the unit price of the 24 FI IIA aircraft is re-affirmed to be based on the condition of the UK Agreement. (This calls for a. ceiling price of $US5.95m on the basic FI IIA configuration or a total of $US142.80m). Configuration changes desired by the RAAF (FB-111A landing gear and wingtips, and reconnaissance capability for six aircraft) are estimated to add $10.50m for a total aircraft flyaway cost of about $US153.30m.

At that time it was estimated that the changes were to cost $ 10.5m in all’. We are now being charged SI. 5m for modifications to each plane. So now we are adding $1.5m to each of these aircraft for modifications, bringing the ceiling price from S5.95m to $7’.4m. We still do not know what the final cost of the aircraft will be, because in his statement last night the Prime Minister (Mr Gorton) said that some of the charges are still to be looked at. So from a firm agreement on $5. 95m as the ceiling price for each aircraft we have now moved to $7.4m and we are likely to move higher.

The whole handling of this purchase of the aeroplanes from the United States of America has been ham-fisted and inefficient. The Deputy Prime Minister was or is a practical farmer. If he were to buy a tractor for his farm he would certainly want a better deal than the one this Government has got on the purchase of the Fill aircraft. The Labor Party bases its main criticism on the fact that from the time this started there has been procrastination, lack of honesty with the Parliament and the people, changes of plans and changes of statements, and numerous things have been said in this House that have been contradicted within a very short time. The Government is now admitting that the new wing carry through boxes are still not satisfactory and that they have shown breakdown after 8,000 hours testing. A new design is to be used but it will not be ready until 1972. On 15th August 1968, in reply to a question that I asked in this House, the Minister for Defence said:

The committee came away completely satisfied that all areas of doubt, after the most careful scrutiny, have now been eliminated. There is therefore every reason to have complete confidence in the aircraft.

How can anybody believe the statements of the Ministers sitting opposite when there is contradiction after contradiction and when there are dishonest statements, or statements that are not based completely on fact, and when facts are hidden from the Parliament and the people? This situation has occurred because the Government entered into a business proposition blindly and without due consideration. It bought a plane that was still on the drawing boards. A mock-up in wood was about the only thing the Government saw. The planes are needed.

I think that perhaps the Government may have made the correct choice but it cannot say that it has acted with efficiency in this business proposition in which over S300m of Australian taxpayers’ money will be laid out. We have been paying for it since 1963 and we still have not received one plane. We still do not know when we will get them. We have been promised delivery year after year. On numerous occasions the Minister for Defence said that they would be flying in Australian skies in September of last year. He gave up predicting when the delivery date would be after he had burned his fingers on six or seven occasions. We hope that these aircraft do arrive. We hope that the Government’s decision is the only reasonable decision that could be made because too much of the Australian taxpayers’ money will have gone down the drain unless these planes are delivered and are satisfactory.


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

Minister far Air · Ballaarat · LP

– Last week was Air Force Week. We honoured the memory of fallen airmen who died on active service. In particular we remembered those airmen who gave their lives in the Battle of Britain. But today have we forgotten some of the lessons of World War 117 In the limited time 1 have, I should like to draw the attention of the House to some of the general considerations of air power and to some of the lessons that should be remembered when discussing the role of the Fill in the Royal Australian Air Force. Two of the most significant lessons are that the country must be prepared against possible attack in peace time and that an air force without a strike capacity is most limited in its ability to bring the full force of air power against the enemy. This will no longer be the situation when the aircraft are delivered.

The Opposition’s attack on the announcement of the Prime Minister (Mr Gorton) last night was based on two main themes. The first was whether there was a need for an aircraft of this type and the second was the cost of the aircraft. These attacks are not new and it has been a continuing approach of Opposition members and no matter of hard fact, given over the years, will satisfy them as far as this project is concerned. One happy note which emerged from the speech of the Deputy Leader of the Opposition (Mr Barnard) last night was that at long last it would seem that he has accepted that the Fill has a better safety record than any other comparable aircraft at the same point of time in number of flying hours flown. The other happy note is thai he concedes the excellence of the aircraft, but on a note of inconsistency, then proceeds to say we do not need it.

Let me remind honourable members of the role of the Air Force in our country’s defence. Amongst other things, it is to provide prompt, effective and sustained contributions in support of allied operations in South East Asia; to contribute to the offensive air support of the Australian Army; to provide tactical air transport support for the Australian Army; and to provide a longrange air strike component. You may ask, Mr Deputy Speaker, why is a long-range strike component necessary to our Air Force? It will be required if we are ever called upon to attack the enemy’s offensive power, including those military and industrial centres essential to his power of resistance. Thus in the broadest terms the effectiveness of the Air Force to meet all of its roles depends on the aircraft in its inventory at any one time. The F111C is essential to carry out the air strike role.

It has long been conceded by the Opposition that the Canberra aircraft is in need of replacement. Indeed the Deputy Leader of the Opposition states that the Opposition was opposed to the initial purchase of this aircraft. This I would suggest is only partly true. In fact the present Leader of the Opposition (Mr Whitlam) in October 1963 welcomed the decision to replace the Canberra but expressed a preference for the TSR2 instead of the TFX, as the Fill was then known. The previous speaker, the honourable member for Lang (Mr Stewart), commented that the United Kingdom abandoned the TSR project because Australia selected the Fill. This is utter nonsense. In any case, the Royal Australian Air Force evaluation team which went overseas clearly assessed that the TFX, as it then was, was superior to the TSR2 for our purposes. Fortunately, the Government did not follow the Opposition’s advice but selected an aircraft about which there can be no doubt now as to its performance in the role for which it is intended - that of a strike bomber aircraft. With the arrival of our F111C aircraft, for the first time in its history the Air Force will have the most modern aircraft available, with potential for strategic strike operations.

The deterrent value of strike force must be stressed. While it can be conceded that the threat is low at the present time, this does not alter the fact that the time may arise when the aircraft may be needed. I would suggest it would be imprudent not to recognise latent possibilities for a quick change in the area of direct concern to us. Here I draw attention to the power vacuum in the Indian Ocean, the consequences of the British withdrawal from the MalaysiaSingapore region and Russia’s growing interest in these areas. Let me also remind the House that if we did not have a recognisable and effective strike force in our inventory and a situation arose which called for its use, the lead time involved in introducing such a force would be such that we could well find ourselves in difficulty.

The last decade has demonstrated the rapidity with which threats can change in spite of our best endeavours. I strongly believe, therefore, that a viable and credible deterrent is in the best interests of Australia’s defence. And if the need arises because the deterrent has failed, then the aircraft must be capable of inflicting heavy damage. This the F111C will do.

The suggestion by the Opposition while conceding that the aircraft is an excellent one, that it is not versatile enough for Australia’s needs, does not stand in the light of what I have just said. Let me point out once again as I did in an earlier speech on this subject the confusion about the role of the F111C in the RAAF’s inventory. It is not needed as a fighter or as a closesupport aircraft or in the maritime reconnaissance role or in the transport role. Its role is strike reconnaissance, and as the Prime Minister stated last night in his statement, this aircraft has demonstrated an outstanding capacity to deliver its bomb load in all weathers and with unprecedented accuracy. It is without doubt the best aircraft of its type, and for our stated requirement, in the world today. As far as the ground attack and close support roles are concerned, we already have a proven and excellent aircraft in these roles in the Mirage.

I return now to the question of the cost of the project. The Opposition has stated that the acquisition of this aircraft will not stand the test of a cost effectiveness study. I ask: How does one measure, in terms of cost effectiveness, the deterrence against attack on our country which this aircraft will give us? How does one measure the saving of Australian lives if this aircraft destroys the capacity of an enemy to attack the country? I believe strongly that this aircraft is needed in the Australian defence inventory and that it will stand up to any measurement of this nature. The Opposition has also said that the aircraft will be a drain on our resources and an important component of defence spending. Of course we will use our resources, and of course the project will represent a charge against our total defence vote over the years it will be in service. But the same may be said of the Mirage, of the RAAF transport fleet, of the Orion and of every other aircraft which is in our inventory. And does the

Opposition suppose that any of the other aircraft which it now suggests as alternatives to this project would not also have a similar, if not greater, drain on our resources? What leads the Opposition to suppose that the Phantom, for instance, would be less costly in maintenance? Indeed there is every reason to believe that in terms of servicing and maintenance generally, the F111C may be superior to any other aircraft already in our inventory. The Fill was specifically designed to ensure fast, efficient, low cost servicing and maintenance. Further, the initial purchase of ground support equipment, test equipment and maintenance support items sufficient to allow flexibility in operations to give the RAAF a capability to deploy to South East Asia for limited periods without the need for special additional installations in those areas. Contrary to what the Opposition has said, the aircraft has a flexibility which will enable us to operate it away from its home base, and the costs associated with this flexibility are already included in total project costs. The Opposition has also introduced a red herring by saying that further heavy spending will be needed on tankers and escort aircraft. There is no intention to procure such tankers for in-flight refuelling as the aircraft meets the range parameters as stated in the original Air Staff requirement.

The Deputy Leader of the Opposition also referred to associated costs such as capital works, ground support equipment and training. These costs are not peculiar to the F111C and would have been incurred as part of the normal developments associated with the introduction of modern aircraft, irrespective of the aircraft which was purchased to replace the Canberra. The references to the costs have no relevance in the discussions about the total cost of this project. In conclusion, I would like to state that our military advisers have assured us that the F111C meets our Air Staff requirement, and that there is no other aircraft of this type in production in the world today, or planned for in the future, which approaches the performance of this aircraft as a strike aircraft. We have in the RAAF today a highly skilled body of dedicated men, well trained, technically skilled and with high morale. I have every confidence that the addition of the F111C will give the RAAF the capability to provide this nation with a formidable strike force.


– The Deputy Leader of the Opposition (Mr Barnard) laid out some of the alternatives and some of the reasonable criticisms which one could offer of the decision to purchase the Fill, if a decision to purchase has been made, and this appears to me to be still in doubt. The honourable member for Melbourne Ports (Mr Crean) has examined the financial implications. The honourable member for Lang (Mr Stewart) has been through the sorry history of the negotiations. None of the questions has been answered. None of the problems that have been arrayed before us has been given a substantial answer. Instead we have been dragged through another of the series of ministerial rhapsodies about this error made 6 years ago. The Minister for Air (Mr Erwin) dealt with a beautiful series of generalities, but if one looks through his speech one will not be able to find anything specific. What can this aircraft do? How will it do it? How much will it cost? How much of our resources will it take? How far will it fly? At what height will it fly? What load will it carry? When will it come back?

The Minister for Air talks about generalities such as its air strike role. What does he mean by that in this part of the world? Air strike role against what? He says against the bases and the industrial complexes and so on of a potential enemy. Where are they? The closest possible base at the present time is possibly in Indonesia and certainly in Singapore. Can the Fill reach those places and come back again? Where are the closest industrial complexes which it will challenge, if necessary? They are in India, China and Japan. Can it reach them and come back? Of course it cannot. So all we have heard is a continual series of generalities. I suppose it is to be refuelled by the Indonesians on its way to Surabaya. The minister says it will do this and do something else. He does not give one single specific fact. He did not say anything about the strategic position; the tactical role; its cost; its range; its cost of maintenance, or anything else. I have listened very carefully to the debates on this subject over a number of years. What operational work has this aircraft ever done? It is supposed to be able to fly at the speed of fury and seek out the enemy, destroy it and come home again. Where and when has it done this? How often has it done it? Where and against what sort of opposition has it done this? They never tell us where and what and how. They are very specific in the unspecific nature of their approach to this question.

The Minister for Defence (Mr Fairhall) has a whole battery of mystiques and so has the Minister for Air. First of all, the Australian Labor Party is not concerned with defence, according to the Government. This is a good rattling rabble-rousing kind of attitude to bring into this Parliament. Our political opponents always do it. We are not interested in defence, says the Government. As I said before, I am quite confident that every member of this Parliament is interested in defence. We will make our judgments based upon the decency and sincerity of Australians whether they are in the Liberal Party, the Australian Country Party, the Australian Democratic Labor Party or the Australian Labor Party. We believe that the strategic thinking behind the Government’s argument is nonsense. For instance, the Minister for Defence said that we live in the most turbulent part of the world. Do we? Is this area as turbulent as the Middle East? Is it as troublous as Belfast? Is it as bad as many parts of Africa? Has it the potential for trouble of South America? Of course it has not.

Certainly we are in an area which has administrative difficulties with the problems in Malaysia, and after all they are serious problems, but that is the place in which the Government will place Australian troops and Australian aircraft. Then we get the hoary old one that comes out every time - power vacuum. It is repeated ad nauseam. What on earth does a power vacuum mean? Does the Government intend to fill a power vacuum with 24 aeroplanes over 6 million square miles of sea and land? Give up the generalities.

Mr Erwin:

– Ask the Russians.


– That is right, but obviously you are going to ask the Russians to protect our lines of communications to Malaysia. You are not doing anything about it yourself. This is the most modern aeroplane available, according to the Government. What does that statement mean? You might have the most sophisticated item in any field, but if you have no particular use for it what is the use of having it? The descriptions of members of the Australian Labor Party as isolationists and as being interested only in home defence are again the cliches of intellectual sterility, one might say. I suppose a classic case was the statement made by the Deputy Prime Minister, the Minister for Trade and Industry (Mr McEwen). He came into the House because he had to speak in favour of purchasing this aircraft. He and the Treasurer (Mr McMahon) are the sole survivors of the Cabinet which ordered this aircraft so they have to hang together on this one no matter how they hang on other things. So we have the Minister for Trade and Industry and the Treasurer as one, and they have come in and apologised and explained the purchase of this aircraft. But the Minister for Trade and Industry said, and I think this is symptomatic of the whole discussion, that the TSR2, the British aircraft, did not get off the drawing board. Anybody interested in this subject, of course, knows that that is quite wrong. In 1965 the ‘Flying Review’ said:

When the final review of the TSR2 situation started late last year, the prototype had made only one flight, and had run into many minor snags inseparable from so complex an aeroplane. There was a long delay between the initial flights . but after that, progress was so rapid that the initial flight envelope was completely cleared by the early part of March. It can already be said that the qualities of stability and control are superior to those predicted in the design programme . . . 1 quote that passage only to show that many of the arguments advanced by honourable members on the other side of the House have no relation to fact whatever.

Why did we buy the Fill aircraft? Last night the Prime Minister (Mr Gorton) said that our military advisers are completely satisfied that the range and weapons load of the aircraft will meet the requirements that the Air Force set down when the decision to order the aircraft was made. The order for the aircraft was placed 6 years ago when we were faced with confrontation between Indonesia and Malaysia. The situation in this part of the world then was completely different and the problems were different. Yet the Prime Minister said the decision was based upon the needs of that time and it was still adequate for the needs of that time. It is interesting to note that the right honourable gentleman spoke in the past tense. The decision to purchase the Fill was partly political. It was partly to get a status symbol and it was partly sycophancy towards the American system.

What has the Fill done to the Australian defence system? It has produced a marktime period of 6 years in the Royal Australian Air Force. Nobody is sure that we will get the aircraft. It does not matter whether this is the right aircraft; the fact is that for 6 years one of our major Services has been held up by this decision. There has been a series of indecisions about it, and continuous indecision. There has been hesitation over airfield development. We must meet a tremendous cost. It will be $300m or between one-third and onequarter of the total defence vote, and for this money we will have only twenty-four aeroplanes. Has this not reduced our capacity in naval and military defence? With this money could we not have bought an aircraft carrier with all its related equipment? Has the purchase of the Fill not strangled any possibility of developing our own aircraft industry? Of course it has. The effort to keep this aeroplane operational is tremendous. For instance, I understand that there is an air conditioned hangar at Amberley to which it has to return for some aspect of its maintenance. 1 understand that it needs many other aeroplanes to handle its support equipment. Then of course we need a tremendous training programme for the people who will operate it.

What will the Fill do? That is what I want to know. According to a newspaper article that appeared in the ‘Age’ during this year, it has a range of about 2,500 miles with a full bomb load. That is at the maximum height and probably at the lowest speed. When it is in business at full bore it probably has a range of only 700 miles or so. What does that mean in relation to the geographical aspects of the area in which we find ourselves? It will carry 16,000 lb of bombs. All this information is extracted from non-classified sources. If it is wrong it is up to the Government to tell us. It is supposed to have this information. What does a range of even 2,500 miles mean in the Australian context? We must not lose sight of the fact that this range is obtained when it is not flying at its maximum speed and is not providing its maximum usefulness. Of course, this is never explained. For what purpose do we need the aircraft? I understand that it will be a strike bomber and that it will be used to interdict the enemy. That means that it is supposed to stop the enemy from getting too close to us. It is to go out, find the enemy forces and destroy them before they get too close. Can it do this? For what distance can it operate? The Minister for Air does not tell us. He does not say whether it would reach Djakarta. I apologise to our Indonesian friends for using the capital of their country to illustrate my point. Can this aircraft get to Djakarta or Surabaya, destroy the bases there and get back to Darwin, operating at full load and full speed? The Government does not say.

The Fi ll is supposed to inhibit other people in this area who may have aggressive tendencies. That it may well do. We are told that it will under all conditions strike our enemies wherever they can be found, and do this with an unknown range and an unknown load. This has not been proved. Can it, for instance, support the Army on the ground? Can it do any of these things? Can it reach Singapore? The map I have shows me that Singapore is about 2,000 miles from the closest part of Australia. It is about 1,600 miles from the closest part of Australia to Djakarta and about 1,000 miles to Surabaya. Can the aircraft give adequate cover over Rabaul, if necessary? These are the problems that must be faced. They are not problems of sophistication at all. They are problems of distance. They are not problems of having the most modern aircraft that is available. They are problems of being able to cover 6 million square miles of land and sea. From what I can see of the performance figures of which we have some knowledge, many of the handful of air bases in Australia from which the Fill can operate continuously are so far apart that the aircraft could barely cover the distance between them under operational conditions. For instance, what is the position in the Australian Bight and 300 or 400 miles out to sea? The aircraft would operate out of the Adelaide airfield and the one in Western Australia. They are 1,200 to 1,500 miles apart.

We have not seen this aircraft in business against an enemy equipped to deal with it.

Can it reach the places that it may need to reach? Can it strike at industries and fleets? In fact, what will it strike? What do we need in this part of the world? This question has never been answered by anyone on the Government side. It is true that if we lived in Europe we would need an aircraft that could strike at industries in another country, although such action has not yet been successful in any war. If we were in Europe we might need an aircraft that could strike at a fleet. I understand that the Fill will carry nuclear weapons. I hope we will never use them, that we will not need to use them and that there is no possible opponent against whom we may be required to use them. We could, of course, strike at people. There are many people in our area. There are 100 million people in Indonesia. We can strike at bases. But where are all these objectives? Of course, Australia is not that kind of a country.

We on this side of the House believe that, if it were necessary to spend $300m on defence, it would be better spent on something other than the Fill. Would it not have been better to have tried the Phantom aircraft? We on this side of the House do not claim to be experts. But what about the Skyhawk, the Viggen, the Buccaneer and the Harrier? I have questioned before why we have not done something about the development of the vertical take-off aircraft. It seems to me that this would have advantages for us. I know that my friend from North Sydney (Mr Graham) in a speech during the Estimates debate said that he had inspected this aircraft. He gave some sound reasons why the present version is not satisfactory for us. But what have we done? We have special problems of our own and the American research scientists will not solve them. They are engaged on different problems. European countries have their problems. Our geographic and strategic situation is unique. No other country has the problems that arise from our size and the distances we must cover. We have the technical and industrial resources that we need to solve our problems. I do not believe the arguments that we hear from honourable members opposite and from others around the country that it is not economical for us to do so. If the Swedes can produce the Viggen, we can produce an equivalent aircraft, lt is not a matter of keeping up with the Joneses or the Swedes. It is a matter of developing the potential to meet the needs when they arise. 1 believe with the Prime Minister and others that the potential threat to Australia is remote, at least for the next 10 years. No matter how much honourable members opposite scoff and sneer at suggestions made by honourable members on this side of the House, we will do our best to ensure that Australia is properly protected and that its security is guaranteed. Honourable members on the Government side, also, will do their best to see that Australia is properly protected and that its security is guaranteed. But we challenge the strategic and other concepts behind the Fill project. There seem to be innumerable aircraft on the market that could add to Australia’s security, lt seems to me that, with the space of this continent, twenty-four aircraft are a minute contribution to the solution of any problem that may face us. If one or two are out of business and one or two more are being maintained, we will be lucky if we have 6, 8 or 10 aircraft continuously in operational condition. Indeed, for our purposes we would be better served if we had some less sophisticated, less miraculous and less angelic kind of aircraft but more of them. There seem to be quite a number of aeroplanes around today to which we could turn. I would certainly like to see Australia developing its own potential.

Of course we hear nothing from the Government during these debates about what our defence aims are. There is this continual generality to the effect that we should have a strike potential, whatever that might mean. We have to be able to interdict somewhere at a reasonable distance from our shores. Anybody who came with aggressive intentions towards the Australian coast ought to know that he would get a powerful punch indeed at a certain distance from our shores. But what should that distance be? I have been saying to myself as a result of my thinking on the subject, that the distance should be somewhere out in the 1,000-mile range. We ought to be able to deliver a very powerful blow somewhere in the vicinity of the range of Singapore. 2.000 miles. We ought to be able to make things very difficult for a potential aggressor at that distance. Somewhere beyond that distance we ought to be able to keep a close and constant eye upon a potential aggressor. We also ought to be able to patrol satisfactorily Australia’s 12,000 miles of coastline and the 300 or 400 miles of mountainous and jungle strewn borders.

Does the statement of the Prime Minister about the Fill provide for any of these things? There has been no indication from the Government side that it intends to do these things. Of course it is one of the facts of life that the present Government does not apply itself at all to the defence problems closest to home. We have only to go up to the border with West Irian to see that this is the case. We are full of fight when we are 3,000 or 4,000 miles away, involved in somebody else’s battles, but if we go to the West Irian border at Wutung it is apparent that the Government does not care a darn about things; that all this talk is a figment or is part of some ideological fantasy which the Government calls a foreign policy.

What could we have done with the money that is being spent on the Fill? Possibly we could have bought an aircraft carrier or something to extend certain aspects of our Navy and the Fleet Air Arm. Certainly the Army has been ground to the ground for too long, lt ought to be more mechanised. It ought to have more rocketry. It ought to have more of such equipment. Perhaps we could have bought 100 more Mirages. Perhaps we could have got 80 or 90 Phantoms, or Lightnings, or Vulcans or something else. It is easy enough for the Opposition to criticise and to say: Get something else. However the facts are that in the geographical context in which we find ourselves 24 aircraft of this nature, no matter how miraculous they may be, are not going to resolve any of our strategic or tactical problems or give us a properly integrated defence service.

I think 1 should close by quoting an article from today’s Melbourne ‘Age*, lt relates to this decision or non-decision about the FI 1 1 . Has there been a decision? Has the Government definitely decided to buy these aircraft? ls anybody absolutely certain that the aircraft will turn up; that on Day I or on 24th October there will be flocks of them flying over Melbourne and that on them will be painted ‘Vote Bryant 1’ or something like that? I doubt it. However, this is what the ‘Age’ had to say:

Even accepting the Prime Minister’s assurances on the Fill capabilities and safety record, the fact remains that the affair has proved to be one of the most prolonged, expensive and unnecessary in the nation’s history. He may be right in describing the Fill as the best aircraft of its type in the world. But what on earth are we going to do with it? At that price what can we afford to do with it? The whole protracted business reflects little credit on the Gorton administration and none at all on its predecessors.

Of course, in the Cabinet there are only two survivors of the Government’s predecessors -

It stands as a supersonic reminder of the folly of purchasing expensive military hardware sight unseen in a fit of military and political panic. In the past year it has also provided an example of the high cost of indecision.

Debate (on motion by Mr Kevin Cairns) adjourned.

page 1867


Second Reading

Debate resumed from 28 August (vide page 827), on motion by Mr McMahon:

That the Bill be now read a second time.

Mr CREAN (Melbourne Ports) (4.44] - Mr Speaker, this Bill deals with what can be taxed rather than the rate at which particular things can be taxed. The Income Tax Assessment Act determines what shall be taxed and what shall be excluded from tax by way of deduction and so on. As has been said in this place before, the Income Tax Assessment Act is a very compendious volume indeed. The amendments before us on this occasion are highly technical in nature and are before us not really so much for the purpose of collecting tax but in fact to say that operations in certain fields shall be taxed differently from some other transactions. The amendments are serving a social purpose rather than a strictly income tax purpose. It is because of the inclusion of matters of this kind in the Act that in some respects it has become a less simple document than it otherwise might be.

The Treasurer (Mr McMahon), when he introduced this Bill and the two related Bills, said they dealt with the rates but for various reasons this Bill was deferred until now. I had thought that there was to be another series of complicated amendments dealing with what are called convertible notes. However I understand that the legislation has been so complicated that the amendments will have to be dealt with in another Bill, Bill No. 4, which may be introduced before this House rises. Alternatively, it may not be introduced until the new Parliament assembles, perhaps towards the end of this year. The main parts of the amendments in this Bill are set out at page 2 of the explanatory memorandum distributed by the Treasurer which states:

The third Bill - the Income Tax Assessment Bill (No. 2) 1969 - has the following main purposes: Structural improvements for water or fodder conservation . . .

The scope of capital expenditure incurred by primary producers which is deductible in full in the year of incurrence is to be extended to include expenditure on improvements made to conserve water or fodder.

According to the Treasurer the second group of amendments deals with the following:

Capital subscribed for purposes of mining or prospecting . . .

The provisions of the income tax law which now permit, in specified circumstances, separate deductions for share capital subscribed by Australian residents to -

petroleum exploration companies; and

other companies, the principal business of which is mining or prospecting for minerals other than gold or petroleum, are to be revised so that, in broad terms, deductions may be available where share capital is subscribed to companies engaged in both of these branches of the mining industry.

There is also a provision which deals with double deductions. Apparently, because of the way the Act is drawn, some people tried to read into it the possibility that you could claim twice for the one lot of expenditure. Any doubt in this respect is to be clarified by this amendment.

I do not want to say a great deal about the technicalities of the amendments because, as I have said on a previous occasion, I do not claim to be able to comprehend some of them in some respects. When amendments of this kind are contemplated there ought to be better machinery than is currently available to evaluate them. Ultimately Parliament must pass the law; I do not deny that and we ought not to deny that. Nevertheless we ought to be given much more opportunity to hear different points of view on these matters. I was interested to read when these matters were brought down that quite a number of financial writers had some doubts about the petroleum provisions. I refer to one article, which appeared in the ‘Australian’ of 19th August, headed: ‘Uptight over Treasurer’s tax amendments’ - whatever ‘uptight’ means. The article suggests that there is some balance both ways. It would seem to me that when that kind of doubt exists there ought to be opportunity for people with opposing points of view to submit their views perhaps to a committee of this House, where there would be access to the experts from the Treasury or the Taxation Branch, or from outside. Then we would have better means of deciding whether what the Government proposed was an improvement of the law.

The other evening when the rate Bills were before us we talked about the weight of taxation in Australia. Of course, the weight of taxation is ultimately determined not only by the income that an individual has but also by the deductions that are available to that individual. The deductions that are available fall into two pretty broad groups. The first covers deductions for dependants, such as wives and children, and the second includes deductions under a variety of other headings, such as expenses incurred in educating children, expenses incurred in meeting that part of one’s medical bill which is not covered by the so-called voluntary health scheme, deductions for donations to certain charities, allowances for life assurance premiums and so on. In some respects there is not a great deal of logic in including certain things as deductible and excluding others. I think I have said before in this House that if we are going to allow as a concessional deduction expenditure on medical treatment to cure a person of an illness, there is probably a good case for allowing one’s milk bill as a concessional deduction because the milk saves a person from getting sick. That is just one example that I might take. There seems to be little logic in what is included and what is excluded, but of course the inclusions and exclusions have a considerable bearing upon the amount of revenue that is collected.

The Budget Papers included Commonwealth income tax statistics which showed that, for the last financial year for which figures are available, total deductions allowed for income tax purposes amounted to some $2,588m. In other words, if we added up all allowable deductions of all taxpayers, for wives and children and medical expenses and what have you, we would get a total of $2,588m. Of this total some $884m was for dependents. In other words, one third of the total was for dependents and two thirds was allowed under other headings, under which the deductions tend to be available to people whose incomes are high rather than to people whose incomes are low. If we make a breakdown of the deductions something like half the face value of deductions, and therefore considerably more than half their tax worth, goes to fewer than a quarter of the taxpayers, so that in a sense this is running counter to what the logic of the income tax is supposed to be.


– There can be illogicalities, as the honourable member will realise, if he will listen to me. One of my colleagues pointed out the other day that in some cases a person who is presented with what appears to be a high medical bill can be allowed as a concessional deduction as much as twothirds of that bill. He may actually pay less for an expensive operation than does a person on a much lower income. This is the point I am endeavouring to make, lt seems to me at least, however it may seem to the honourable member, that in some respects the principle of allowing deductions rather indiscriminately runs contrary to the logic of the tax system itself.

In an address in Perth the Treasurer said that the allowance of these various concessions means that the Commonwealth loses in tax yield some $750m, which was fairly close to half the total amount collected in tax in that year, which was the year ended 30th June 1967. So that the effective yield was reduced by nearly a third, and the benefit of that abatement in tax went to the extent of more than a half to a quarter of the taxpayers. I submit thai at least it is arguable whether this is a logical sort of thing to continue. As I have said before, in my view one of the greatest deterrents to getting better social welfare programmes in Australia is that this kind of inbuilt injustice in the income tax structure impedes our ability to give payments equally to all members of the community. I submit this is a matter that needs to be looked at. As I said the other evening, 1 do not think that these things, in very great detail, can become an argument at election time. We cannot fight elections around what ought or ought not to be in a schedule, because it is a very complicated business.

To get on to some of the other matters that are specifically included in this measure, I come again to deductions or exemptions that have application to a relatively small section of the community in total - but a not unimportant section. I do not want to deny the importance of the mineral industry and the tax concessions that have been given to it. Nor can anyone deny the significance of the mineral industry to Australia. But at least one ought to be aware that because income tax concessions are given, and for the most part to undertakings which are incorporated or operate as companies, for every dollar of deduction that is given the Government, in a sense, underwrites that dollar to the extent of nearly 45c. It is almost a partner by default in the enterprise. If it allows a deduction that reduces the taxable income of the company by $1 for every $1 of that type of exemption it reduces the tax payable by that company by something like 45c in the $1. In other words, the company pays 55c out of the $1 while the Government has underwritten 45c. This is one of the peculiar things that are going on in a lot of our undertakings today by reason of the high rates of tax at marginal rates for individuals and at flat rates for companies. Whether or not a thing is tax deductible is a matter of some considerable significance and at least occasionally the Parliament ought to probe these questions when this kind of legislation comes before it because, in essence, it means there is a loss of revenue, although that is not the primary purpose of. the deduction. The primary purpose of the deduction is to encourage a particular venture which is being undertaken.

I think there is considerable room for argument whether this is always the most effective way of encompassing this sort of objective. I submit again that there is considerable room for argument and the market results, if you like to put it that way, of particular ventures can be affected by whether or not investment in them is or is not tax deductible as a source of capital. There are considerable items which are treated as income tax deductions for primary producers, for instance, which in the case of anyone else in the community would be regarded as either domestic transactions or capital transactions, and those persons would not be able to write the value off as they actually incur the expenditure. This is designed for particular purposes. I realise that our primary industries, as well as the mining industry, play a very important part in Australia’s economy, particularly in the field of overseas earnings. If you are to allow a certain item of a capital kind to be written off as a tax deduction it seems immaterial to me whether this is done over a period of years at some arbitrary rate or in the year in which the expenditure occurs, if it suits the taxpayer to do it this way. We have the fiction of depreciation being allowed at the rate of 15% per annum in respect of a motor vehicle used for the earning of income. But the taxpayer is allowed to increase that 15% by a half, which makes the effective rate for the year 22i%. This is a fiction. You say that the asset will last for about 7 years, then you write it off as though it will last only 4 years. There seems to be only a slight difference between doing it in that way and in allowing it to be written off completely at one go, as is already done with a large part of capital expenditure both in mining and in primary production.

Let me deal with the definition of income. The Income Tax Act is built around the concept of taxing income. In some cases it is not very difficult to determine what is income. If a person is a wage earner it is presumed that the total of his wage is income. In the case of a business, however, it is not so easy. It would be disastrous for a business if it were taxed on its turnover, although this is the rather peculiar device adopted recently by the Premier of Victoria to augment his finances. In the case of a business its income is the difference between what is received and what is expended. There may be some arguments as to what items of expenditure are of an annual outgoing kind, what are of a capital kind and what are of a kind that is not regarded as deductible. The division between what is taxable and what is not is a fine one.

In recent times there has been a lot of talk in the community about including in the concept of income items which in other times would have been regarded as capital items - sometimes described simply as capital gains’. In some respects a great deal of confusion has been caused by recent actions of the Commissioner of Taxation, although I defend him because he is acting within the Act and within the terms of his legal rights and to some extent his discretionary rights as he sees them. These actions relate to people who choose to make investments on a small scale in shares. I have said on other occasions that I have never owned a share in a company. That is my business. I regard the buying of shares often as a form of speculation, which in some respects can have anti-social effects. But this is not necessarily the view of everybody in the community.

Until recently a person who bought shares on what he thought was a small scale had only to declare the dividends which he received on those shares or. if he put his money into debentures, the interest which he received. But the boom in mining has changed things. Not only is the company engaged in mining allowed a tax deduction but also the person who invests in shares in such undertakings is allowed to claim a deduction in respect of calls he has paid for particular kinds of shares in a particular year. Calls on most shares are not regarded as tax deductible items. They are regarded as capital outgoings on the part of the investor. All that concerns the Commissioner of Taxation is whether there has been a dividend or interest. But in the last financial year or so a number of taxpayers who by no stretch of the imagination could be regarded as share dealers have been asked to give details of their share transactions going back over a considerable number of years. Most small investors are not bookkeepers. Some are more methodical than others. All that most would keep would be the scrip of the shares. They may even keep it in banks for safe keeping. Other than last year’s cheque butts, they would not have any records of when they bought the shares and so most of the detail has to be obtained from the office of the broker handling the transaction.

If the law were altered to provide for a capital gains tax there would at least be some certainty about the matter. But a capital gains tax should not be imposed by stealth. To a degree this is what is happening to people who never imagined that they were share traders and who, having bought shares this year, find that they have to divulge certain information about the transactions to the Commissioner of Taxation. Recently, in answer to a question, the Treasurer (Mr McMahon) said that it was a question of intention and that all that the person had to do was prove his intention at the time he acquired the shares. But proving one’s intention is not so simple. In some respects it is almost impossible, because it involves a state of mind. It is something like the arguments we had in our younger days about the morality of gambling. For instance, would a person put money on a horse if he knew in advance that the horse would lose? I have known plenty of people who have backed a horse thinking it would win, who should have known that it had no chance of winning. That is a matter of fine judgment - or perhaps wide judgment. If a person buying a share were honest he might say: ‘I bought it because last year these shares yielded 5% or 6%. It is a gilt edged investment. I can get more for my money this way than if T left it in the bank.’ On the other hand, a person may have purchased shares with a reasonable degree of prudence hoping that, at some time in the future, there will be an appreciation of his capital. It seems to me to be a fine line to draw to ask such a taxpayer to prove what his intention was at the time he acquired the shares. But this is, in essence, what the Commissioner of Taxation is asking.

I think the Commissioner is giving himself a vast amount of work with very little prospect of recovering large sums of money. He is also using manpower in the Taxation Branch which could be employed upon much more useful exercises. But if this borderline probing of whether there has or has not been a capital gain is to take place it should be regularised, as it is in the United States of America and the United Kingdom. I am not propounding a definite proposition at this stage because I believe that the matter will require a great deal of further examination, but it could be laid down that if a person bought shares and sold them within a certain period of time, making a capital gain, that gain should be included in his taxable income for that financial year. But there can always be doubts about this. Because of changed personal circumstances a person may have to sell his shares soon after he felt free to divest himself of some cash and put it into shares as an asset. However, by and large, if a person buys shares one day and sells them within 2 or 3 weeks it can usually be presumed that he is aiming to make a capital gain on the transaction. It’ such a person makes a capital gain during a financial year perhaps it should be included in his taxation return as income. Losses made in the same period could be offset. But such a law should not be imposed by stealth.

A number of sharebrokers have approached me concerning this aspect. As I said earlier, I do not own any shares, but people seem to think that in some way or another I am the spokesman for a large section of the community on this matter. Sharebrokers are disturbed at the fact that the action of the Taxation Branch officers can cause a great deal of inconvenience at their offices for very little real return to the Government. It also creates uncertainty in the minds of the small investors because they do not want to be bothered. Everybody knows that there is a great flood of letters from sharebrokers advising people to buy shares in one company instead of another or something of that nature. Acting on the receipt of that type of prudent advice a person may buy the shares recommended, but he will buy them in the hope that he will get a return. He may think that the shares are so good that he will hold on to them for several years. He is not hauled before the Commissioner of Taxation if he sells them 5 or 10 years later, but he runs that risk if he sells them in a relatively short space of time. All 1 am suggesting is that there should be some clarity on this aspect. If it is believed that people are speculating in this field in large dimensions - there is no doubt that there is large scale speculation - the Commissioner of Taxation is justified in taking action. But there are many people who speculate in very small dimensions. It seems to me that it is hardly worth the trouble of the Commissioner to take action. However, I think this aspect should be cleared up.

Recently a man who had bought shares over a good number of years and who had always returned his dividends accurately each year came to me for advice. He had bought certain shares in mining ventures and had claimed the calls as deductions as he was entitled to do. He included all the relevant information in his income tax return. He was then met with a demand to show the full layout of his transactions over 4 or 5 years. The man told me that he had actually sold only one lot of shares in all the years he had had been purchasing them, but he happened to strike a winner and. like everybody else, thought it was prudent to sell at a particular time. Normally a person who buys a share at SI hopes it will go up to $1.50 and give some return. If, for some reason or another, it goes up to $5 or $6 and that person has 1 ,000 shares he would be a most imprudent man if he did not sell them, even if he did not buy them with the intention of selling them within such a space of time. The taxation law as it stands either makes liars out of certain people or causes tax officials to impute improper motives to some taxpayers. think the law should be clarified.

I am one who believes that there are large capital increments in the community which lead to distortion in the distribution of wealth. Not all capital gains are excluded from taxation, as everybody who studies the law knows. But there is a certain amount of haphazardness as to what is permissible and what is not. The Government can remove some of the haphazardness as far as the small investors are concerned by saying: ‘If you buy a share today and sell it within the financial year the gain should be included in your income’.

Dr Mackay:

– What is to be the criteria?


– The honourable member asked me the same thing the other clay. I do not think it can be laid down. The

Government is trying to lay down criteria for convertible notes. It has far more expertise at its disposal than I have. I am only referring to the recent probing of the files of brokers in Perth and Adelaide in order to determine what income is received by certain persons from share dealings. This matter has received prominence in most of the financial newspapers. A number of questions have also been asked in the House. It seems to me that the probing has caused unnecessary confusion and uncertainty. There is a certain amount of discrimination as to who discloses what. I am not suggesting that anything can be done at this stage about the matter, but I think that something should be done when the Parliament resumes after the forthcoming election. These matters should be looked into more closely.

I take the opportunity this afternoon of complaining about this uncertainty because I am one who believes that there should be certainty in taxation. A law may be written into the statutes book in a certain way but, as the precedents and cases indicate, there are always clever people who will want to get around it. The law is entitled to take steps to close any loopholes and to remove as much uncertainty as is possible. I think the same situation exists in regard to the capital gains tax. At the moment we do not have any legislation in broad terms, although certain capital transactions which are carried out frequently enough to form a regular pattern are subject to taxation. On the other hand, there are some people, such as bookmakers and sharebrokers, who buy and sell and deal in this sort of thing and the whole of their income is subject to taxation. Up to date, except for the tax on bookmakers’ tickets as well as State taxes on share turnovers, the small investor, unless he declares himself as a share dealer, is not subject to any tax on his capital appreciation. It seems to me that recent indications are that the Commissioner is endeavouring to bring such a person within the net. I submit that it is wrong to impose by stealth a tax capital gains. However, if the Government wants ultimately to reform the law it should do so.


– We have just heard from the honourable member for Melbourne Ports (Mr Crean) one of his usual, well thought out and reasonable assessments of the position in regard to taxation. Many of the things that I intend to say will1 coincide with the views which he has expressed. But more particularly, I feel that we do not want a capital gains tax at all - certainly not by stealth. The honourable member indicated that this tax is creeping into the system at the present time. But I will return to that matter a little later in referring to a similar set of circumstances.

This Bill1 covers various sections of the Income Tax Assessment Act, but I am more interested in the changes that are proposed in relation to taxation on mining shares. Sections 77a and 77aa of the Act, which have been in operation for some time, are now being combined and will reappear in the new terms of the law as section 77d. There is no real alteration. The principles remain the same. The Government will not provide more concessions. To all intents and purposes, the same results will be achieved by the new section. But, of course, it will be a tot more convenient for everybody. The Treasurer (Mr McMahon), in announcing this change, indicated that the purpose was to simplify the law. No matter how we look at this taxation law, the more it can be simplified the better, because it is quite beyond the capacity of the ordinary individual to wade through all the complicated clauses that are involved in the Bill which we have before us.

The sections to which I have referred provide that deductions from taxable income of moneys paid to resident companies who make the appropriate renouncing of their own future claims will be allowed to the taxpayer in subscribing new capital to newly formed companies. Section 77a applies to petroleum, and section 77aa applies to prospecting for minerals, other than petroleum and gold. So some companies which were formed for mining purposes were obliged to maintain separate organisations. The new section, I hope, will prevent the proliferation of companies, which occurred this year when many of the companies which were originally formed to carry out exploration for petroleum found that it was al’so in their interests to look at other minerals, and they had to form separate organisations. Now persons subscribing moneys to mining companies will be able to claim the amount specified in the declaration by the company as a deduction, so retaining in principle a vital factor which we have always had in obtaining funds essential for the discovery of petroleum, to which I am referring in particular.

Unfortunately, there is some confusion in the minds of investors, because on tax returns for the last year the Commissioner of Taxation is deferring the application of this concession. It is suggested that a closer look is being made at whether many of the companies, particularly those which have been floated recently, are genuinely engaged in exploration. For this reason the Commissioner is deferring the allowance of this claim made under this heading in income tax returns. 1 query this matter because I find, in a prospectus which has been sent to me, that the company concerned has made the necessary declaration, and people who subscribed to the company early this year, very rightly expected that they would be able to obtain a deduction in their taxation for this year, not next year. But the Commissioner of Taxation has placed this interpretation on his responsibility.

With other members of the Government Members’ Mining Committee, T have kept in very close touch with oil search which is being conducted in Australia today, very largely for the reason that oil is one of the commodities of which Australia is in very great need. We have to find more reserves, or all the work of the past 10 years will be wasted. I am most concerned at the effect of the next part of the Bill to which I will refer. This part refers to the removal of the double deduction provision that has been available under section 82. The removal of this provision deals a shattering blow to the concession which we fought hard to obtain and which is still required if the search for oil is to continue vigorously. The denial of this deduction must be a restraining factor in the raising of new capital for oil exploration. I think that most people will agree that the whole concept which the Government has adopted in the encouragement of oil exploration has been based on the provision of tax concessions as an incentive. This provision, which prohibits deductions for the cost of oil or other mining shares being allowed under more than one section of the Act, completely cancels out the concession for any person who has the misfortune to be classified as a trader or a dealer by the Deputy Commissioner for Taxation who, as the honourable member for Melbourne Forts has pointed out, has faithfully - but perhaps too faithfully - interpreted the Act as it now stands.

Let me emphasise that the double taxation deduction in the Act has really been available only to dealers, anyway. If people were not caught up in the net, they were not affected by the provision because they received their deduction under section 77a, which is to become 77d, and when they sold shares they did not make a return because they did not feel that it was necessary. But in future they will have to be a little bit careful. Such is the confusion and uncertainty over what the Commissioner of Taxation will do that many investors are not claiming the deduction to which they are entitled and for which provision is made on income tax forms. But some people are not claiming the deduction because they do not want the Commissioner to pry into their past transactions. If the Deputy Commissioner of Taxation decides - and he will only decide by intuition or clairvoyance - that the purchaser of shares did not make the purchase as an investment for the receipt of dividends, but meant to sell them for a profit, the proceeds become taxable. The Treasurer, in his second reading speech, said: lt is a general rule of the income tax law that an amount of expenditure is only deductible once.

On the face of it, this appears to be correct. Sub-section (1.) of section 82 gives the Commissioner the right to decide which provision should be allowed if a deduction could fairly be claimed under more than one provision. Amendments added to the Act in 1958, 1959 and 1960 had the effect of including exceptions to this rule so that deductions made under special provisions were disregarded. In other words - it has to be interpreted in this way, because the reading of the verbage in the sub-section of the Act is rather difficult - the double taxation allowed by this section has been in operation for some time. The reason for this is easy to see. Unless this had been done the concessions given under section 77a and later section 77aa would have been legally impossible. The position now reverts to what it was before the 77a concession was introduced, except that the new provision applies only to shares purchased after 12th August 1969, and I presume that the exception will also apply to calls made or options taken up by an original subscriber. Anyone purchasing shares after 12th August and becoming subject to calls or taking up options would still get the benefit of deduction under 77d, but under section 82 would lose this when such shares were sold. I would welcome advice on whether this is the correct interpretation. It is the best I can do from my reading of the Bill.

Under the legislation that has been in force until now only the amount received in excess of the cost would be taxed, but the new provision being introduced in this Bill has the effect of making the total proceeds taxable because a deduction has already been allowed under section 77d and only one deduction is allowed for the cost of these shares. The effect must be disastrous to the oil exploration industry. This incentive was introduced to stimulate and encourage the search for oil at a time when there were no known oil deposits in Australia. Now we have a sizeable field in the Bass. Strait, a medium field at Barrow Island and a small field at Moonie in Queensland which is rapidly running down. The Bass Strait field will make a worthwhile contribution to our needs for the next 10, 15 or maybe 20 years. Barrow Island is a useful contributor and possibly has a life of 20 years also. Butunless we find additional reserves to replace these as they are consumed and to provide for a demand that is increasing by 9% or 10% per annum, we will be right back where we started from.

It is important from every point of view that Australia become self-sufficient in oil. Looked at from the point of view of defence, overseas balances, the establishment of local industries, the valuable by-product industries that are associated with refineries, or from any other point of view, the need for incentive in the search for oil is as great today as it was 10 years ago. The Treasurer has assured me that this removal of the double taxation provision is aimed only at stopping what he considers to be undesirable practices which were regrettably only too apparent in recent months with the disastrous spate of oil floats that has flattened the market at the present time. He is aiming at the professionals, the dealers, who cleaned up pretty large sums by floating oil prospecting companies which had no leases to prospect in, no tenements in which to operate and which could contribute to the oil search only by farming in with the established groups. But one does not really have to take a hammer to crack a peanut. There were some problems associated with this sudden change in the impact of raising money for the oil search. If it had not been overdone there would not have been any harm, but as we all know the great majority of these speculative ventures put their shares on the market at a discounted price. I hope that we are not likely to have a repeat of this.

A lot of quite small investments make up the sum total of the amount of money that is going into oil search. That money has to keep coming in, otherwise we will not be able to drill holes. The only way to find oil is by drilling holes and hoping. These people seem to be eternally optimistic that at some time they will strike a bonanza. These small people who have been making small investments are not to be confused with the dealers who are investing all the time. Anyone who is making his living in this way naturally has to keep books and declare everything he earns, but the smaller man is doing this just as an adjunct to another job. If it becomes the major part of his income or even a very large part of his income, the Commissioner of Taxation may be justified in taxing that additional income.

In the last few weeks particularly many people have been perturbed at the action of Deputy Commissioners of Taxation in various States in investigating the books of sharebrokers to track down transactions that may have been made on the stock exchange but which have not been included in taxation returns. Questions have been asked on this subject in the House and the Treasurer in his replies has indicated that these investigations have not been at his instigation; they are entirely in the province of the Deputy Commissioners. I understand that this practice has been stopped because of the protest by the various chairmen of stock exchanges who want the Parliament to clarify what is taxable and what is notjust as the honourable member for Melbourne Ports does.

Under section 26a the assessable income is treated as profit earned from the sale by the taxpayer of property acquired by him for the purpose of profit making by sale or from the carrying on or carrying out of. any profit making undertaking or scheme. It seems to me that there would be very few people putting money into the purchase of shares with any other motive than ot finishing up with an increase in their assets or, in other words, of making a profit. As far as the wording of section 26a is concerned, one of our very reputable sharebroking firms put out a prospectus for a mineral company earlier this year, and it printed on the face of the prospectus: ‘This is a speculative proposition’. Obviously nobody putting money into that venture would ever be able to say that he was making an investment.

Anyone putting his money on a race horse does so with the purpose of making a profit, lt could well bc described in the words of section 26a as doing something which is the carrying out of a profit making scheme. Yet it is customary to regard any gains on the racecourse, even quite substantial gains, as pin money, unless it becomes apparent that the person concerned is making this his main business, (f he is making it his main business, he should pay tax on what he earns the same as any other business or the same as share traders. Many people approach the share market with an optimism similar to that with which they face the racecourse. They take a punt on some oil or mining shares and are hopeful of a profit, but certainly they have no idea of becoming dealers in the sense in which it is now being threatened they will be considered. Last Friday I asked the Treasurer a question on this subject, and part of his reply was: lt has long been the law thai there is a distinction between investment and trading in shares. When it is investment and can be proved to be investment, no tax is payable on profits. When it is trading, that is, when a person is investing for the purpose of re-sale at a profit, tax on profits is payable. Always there is a right of appeal . . .

But who wants to appeal from the decision of the Commissioner of Taxation? It is a very chancy process. If a person was dealing in only small amounts he would probably say that he would not bother to appeal. The main thing is that the small investor wants to know where he stands before he starts, and the brokers want to know what they can advise their clients when they come in and ask for advice about what shares they should buy. How can anyone prove that a transaction is really an investment? lt has been pointed out so often that the interpretation of this word ‘investment’ is very important. A spokesman for the Taxation Branch has put it in these words:

If a lax payer acquires shares and his dominant purpose is to sell them at a profit then he has to include the profit in his income tax return and tax will bc levied accordingly.

There is no liability if a taxpayer makes a profit from selling shares if his dominant intention at the time of purchase was to hold them for their dividends. That interpretation helps somewhat but it does not help the small investor because if it were intended to hold such shares for dividends nobody would invest anything in the oil companies that have been floated in the last several years because dividends would not be the dominant motive in investing. A large number of people have invested in the oil industry because they have wanted to support the discovery of oil in Australia. A lot of them knew that their money would go down the drain in certain instances but, by spreading their investment over several companies, they hoped to come out all right. Where would we find any subscriber to an oil exploration company who could, with reasonable honesty, claim that he was putting his money into the company as a capital investment purely for the dividends that would accrue? It is bad enough to try to relate this to industrial shares which, I presume, is the intention of section 26, but I ask again: Who could honestly say that he bought BHP shares when they were S20 as an investment? He would be lucky to get even 2% on them. He would be better off wilh the money in the bank. Obviously the intention was to make a gain on the eventual sale of the shares. If we leave this legislation as it is the legitimate supporter of new ventures - whether it be in petroleum, mining or industrial shares - will be entirely confused as to where he stands with regard to taxation and will be deterred from joining in a venture which, if successful, could result in his being subjected to a savage capital’ gains tax.

A line in the income tax form requires a taxpayer to state any profits made from the sale of land, leases, shares or any other property purchased for resale. Surely if that line appears in the income tax forms there should be some clarity about the ultimate result. If a person records an entry against that line as a profit he will pay taxation on that amount. The person who honestly follows the taxation return form is penalised, but someone who makes his own determination and does not record his profits escapes paying taxation. A person automatically becomes a dealer in the eyes of the Commissioner if he fills in that line. If a person does not disclose profits he has made because he decides to withdraw moneys from one company and pay them into another which he thinks may prove to be a better prospect for income and so be classed as an investment, he runs the risk of coming under the scrutiny of the Commissioner and having’ to disclose transactions over many years. I have heard a period of 5 years suggested.

This uncertainty of interpretation is intolerable. The petroleum exploration industry is dependent on the general public putting savings into sound proposals, but when it comes to floating a new venture it would be a sl’ow and painful exercise to seek out the small investor. The professionals are needed to get ventures launched and the only way that holes can be drilled and oil discovered is for someone to make money available for that purpose. If ever we are to become selfsufficient, incentives must be provided. The incentives that we now have must be retained. The Government must do nothing to frighten investors away, as is being done by the constant erosion that is taking place in weakening the incentives that are offered. We have gone to a lot of trouble to encourage people to invest money in this particular field but several of the actions that have been taken since have eroded away the value of the concessions.

I have three suggestions to make. We must have more precise rules and guidelines to remove the fear that is in the mind of the general public that has savings to invest of being badgered by taxation authorities. One way out would be for all contributions made to original capital to bo regarded as investment money and not subject to taxation if the original subscriber held the stock for a specified period. The honourable member for Melbourne Ports (Mr Crean) made a similar suggestion. I would propose a period of 6 months. In January 1966 this problem was discussed exhaustively by the Government Members Mining Committee. As Secretary of that Committee at that time I made the same proposal and, as I understood the position, some of the Deputy Commissioners of Taxation would have been glad to have had guidelines that removed from them this terrible responsibility of trying to determine what was in a person’s mind at the time he purchased shares. If shares were so!d before the expiration of the 6-month period, the sales should be subject to scrutiny. I do not say that the returns should be automatically taxable because the subscriber might be able to show that fie had a legitimate reason for disposing of what was intended to be an investment. However if the sale were regarded as a quick turnover the profits should bear a tax. Sales by people already declared to be dealers would be taxable in any event.

Secondly, there should be some determination regarding the number of transactions to be transacted in a year. If a person exceeded that number he would become a dealer. I would hesitate to suggest the number of transactions but doubtless the Taxation Branch could work something out. Thirdly, I would suggest limiting the percentage of total income which the deduction claimed under section 77d represents. If it were 10% this would mean that a person with a taxable income of $32,000 would be limited to claiming, as a deduction, $3,200 for shares in mining ventures in any one year. In any case, whichever of these suggestions was adopted, it would help. I prefer the first, I think. The amendment to section 82 should be dropped. If it is insisted on, it will deal a severe blow to any group that is trying to raise finance to exploit a promising venture, and it will be the death knell for underwriting new exploration proposals. There are several other items that I should have liked to discuss, including changes relating to primary industry. These proposals are desirable but as my time has nearly expired I will conclude my remarks and hope that section 82 will be given a lot more thought.

Debate (on motion by Mr Davies) adjourned.

Sitting suspended from 5.48 to 8 p.m.

page 1877


Ministerial Statement

Treasurer · Lowe · LP

– by leave- The 1969-70 Budget Speech foreshadowed some reliefs from estate duty for the estates of primary producers and stated that the proposed reliefs would apply to the estates of persons who die after the authorising legislation has been assented to. Broad details of the scheme of reliefs have now been worked out but it will not be practicable for the amending legislation to be introduced and considered by the Parliament in the short time that remains of this parliamentary session. The Government, has, therefore, decided that the reliefs should, when the amending legislation has been assented to, apply to estates of persons who die after today. The purpose of the proposed reliefs is to provide assistance to discourage the breaking up of economic rural holdings, particularly family holdings, because of the need to pay estate duty. There will be two basic tests for determining whether an estate qualifies for the reliefs. In broad terms, an estate will be eligible if more than 50% of the dutiable assets are primary production assets and if more than 50% of gross income of the deceased for the 5 years preceding death was derived from carrying on a business of primary production in Australia. Primary production assets for this purpose will include land used in a business of primary production and improvements on such land. Also included will be livestock, farm produce and farm plant and machinery.

One form of relief for eligible estates will be given by raising existing exemption limits by 20%. At present the exemption for an estate passing to close relatives is $20,000, diminishing by $2 for each $8 by which the dutiable value of the estate exceeds $20,000 and cutting out when the dutiable value is $100,000. It is proposed that, for eligible primary production estates, the basic exemption be increased to $24,000, diminishing in the same way as at present and cutting out at S 120,000. For small estates not passing to close relatives the present exemption is $10,000, shading out by $2 for each $8 in excess of that amount so that it cuts out at $50,000. It is proposed that, for eligible primary production estates, the end limits of this rang; of exemption will be increased to $12,000 and $60,000 respectively. The other form of relief will be by way of the allowance of a rebate of part of the duty attributable to the value of primary production assets included in the dutiable estate. Both for the purpose of determining whether an estate is eligible under the assets test I have already described, and for the purpose of determining the duty attributable to primary production assets included in the estate, debts of the estate, including State death duties, will be distributed proportionately over all assets in the estate according to the gross value of each asset.

Duty will, in the first place, be calculated in the usual way. Against duty so calculated will be allowed a rebate, on a sliding scale, of part of the duty attributable to primary production assets. Where the dutiable value of an estate, before allowance of the appropriate amount of statutory exemption, is $140,000 or less, the rebate will be 50% of the duty attributable to the value of primary production assets included in the estate. So if, after pro-rating all debts as I have already explained, it was found in such a case that 90% of the value of dutiable assets was attributable to primary production assets, the rebate allowable would be 50% of 90% of the duty. It is proposed that the rate of rebate will diminish by onetenth of 1% for each $220 by which the value of the estate exceeds $140,000, so that, for estates of $250,000 or more, there will be no rebate available. I have had a table prepared which sets out the savings of duty that will, through the combined effects of the raised exemptions and the allowance of the rebate, accrue to estates passing wholly to close relatives. The table shows these savings for estates of various values, assuming that the value of primary production assets in the estate amounts to twothirds of the dutiable value. To quote some examples, the saving, on this assumption, for an estate of a dutiable value of $50,000 is $1,051, for an estate of $150,000 it is $7,727 and for one of $210,000 it is $5,854. Larger savings would, of course, accrue if the proportion of primary production assets were greater than two thirds. With the concurrence of honourable members I will have this table incorporated in Hansard.

The Government has not overlooked the fact that, in these times, it is not uncommon for the assets of a primary production business to be held by, and for the business to be conducted through, a family proprietary company. We have, therefore, given careful consideration to finding an equitable and administratively practicable means of including within the scope of the scheme primary production assets represented by shares in a family proprietary company. One difficulty that had to be faced is that, while such assets held by primary producers personally are, for estate duty purposes, valued at their true market value, shares in private companies carrying on a business of primary production are usually valued on an expected future earnings basis, a method of valuation which can produce a value for duty significantly less than the market value of the assets backing the shares. The Victorian Government, which also gives relief from probate duty on rural holdings by means of a rebate, faced a similar difficulty and adopted a solution which we think is also appropriate, and equitable, in the context of the proposed rebate of Commonwealth estate duty. We therefore propose that for the purposes of the two forms of relief, shares in a family private company, to the extent that they represent primary production assets, will be treated as such assets, if the trustee elects to have the shares valued, for all duty purposes, on an assets backing basis, that is on the basis of a notional voluntary liquidation of the company without allowance for liquidation expenses. This will go a long way towards preserving equity between producers who have retained their farms as personal holdings and those who have transferred them to private companies. It will also give trustees of estates of the latter producers an opportunity to decide which would give the greater benefit to the estate - election for an assets backing valuation with consequential higher exemption levels and a rebate or for an alternative valuation with no rebate or increased exemption. There will, of course, be the opportunity for producers who have entered into private company arrangements to consider for themselves whether, in the light of the new reliefs, there would now be an advantage in reviewing the arrangements they have made.

I have mentioned that the proposed scheme will extend to family companies. By family companies I mean companies all the shares in which, at the date of a relevant person’s death, were beneficially owned by that person or by him and his family. I might sum up the broad proposals as to the reliefs in relation to private company arrangements in the following way: Firstly, shares in a one-family primary production company may, to the extent that they represent primary production assets of the company, qualify as such assets in the estate of a deceased shareholder if the gross value of the company’s primary production assets exceeds the gross value of its other assets at the date of death of the deceased shareholder; secondly, such shares that are included in the assets of an estate would be regarded as primary production assets, to the extent that their value is attributable to such assets, if, as under the Victorian probate duty rebate scheme, the trustee of the estate elects that, for all estate duty purposes, they be valued by reference to the value of the company on a notional voluntary liquidation, without allowance of notional costs of liquidation; and thirdly, for the purpose of determining whether more than 50% of the gross income of the deceased for the 5 years preceding death had been derived from carrying on a business of primary production, income drawn by him from a one-family company in the form of dividends, director’s fees, salary or wages in a year within that 5-year period would be regarded as income from primary production if the company’s gross income from primary production in that year were greater than its gross income from other sources.

Reference was also made in the Budget speech to a proposed relaxation of some administrative requirements of the estate duty law relating to lodgment of security and extensions of time for payment of duty. These requirements will be relaxed for the general body of estates, not only those of primary producers. I conclude by repeating that, in the Government’s view, the proposed reliefs, combined with the relaxation of administrative requirements, will be a substantial step towards ensuring the retention of economic farm units by primary producers and their families.

I present the following paper:

Estate Duty Reliefs for Primary ProducersMinisterial Statement- 24 September 1969.

Motion (by Mr Erwin) proposed:

That the House take note of the paper.

Debate (on motion by Dr Patterson) adjourned.

page 1879


The following Bills were returned from the Senate:

Without amendment:

Book Bounty Bill 1969

States Grants (Aboriginal Advancement) Bill 1969

States Grants (Aboriginal Advancement) Bill (No. 2) 1969

States Grants (Advanced Education) Bill 1969

States Grants (Advanced Education) Bill (No. 2) 1969

Universities (Financial Assistance) Bill (No. 2) 1969

States Grants (Universities) Bill 1969

Fishing Industry Research Bill 1969

Without requests:

Income Tax Bill 1969

Income Tax (Partnerships and Trusts) Bill 1969

Customs Tariff Validation Bill 1969

page 1879


Second Reading

Debate resumed (vide page 1877).


– We have been issued with an up to date version of the Income Tax Assessment Act and it now becomes, as it were, our bible for the interpretation of the income tax laws. I wish to deal with some of the sections of this Act. Within recent weeks the Deputy Commissioner of Taxation for Tasmania has notified mining companies of the existence of a provision in the Income Tax Assessment Act and has requested that it be observed. This will mean that employees of mining companies on the west coast of Tasmania, as well as in all other parts of the State, will have to pay thousands of dollars in this financial year if the provision is enforced. It is a fact that the Act stipulates that, where an employee lives in a company house at a nominal rental, the difference between that rental and the figure more normally accepted as the true rental value of such a residence should be shown on the employee’s income tax return as taxable income.

I will quote section 26 of the Income Tax Assessment Act, which accompanies the Bill. It reads:

The assessable income of a taxpayer shall include -

  1. the value to the taxpayer of all allowances, gratuities, compensation, benefits, bonuses and premiums allowed, given or granted to him in respect of, or for or in relation directly or indirectly to, any employment of or services rendered by him, whether so allowed, given or granted in money, goods, land, meals, sustenance, the use of premises or quarters or otherwise.

The Deputy Commissioner has pointed out to the mining companies that this provision exists and has advised them when preparing group certificates to show, in addition to the wages and salaries paid, the value of all allowances or benefits given to employees in relation to their employment. He has pointed out that such allowances include not only money but also any allowances in respect of land, goods, meals, sustenance and the use of premises or quarters. He has indicated that possibly the most common benefit of this nature is the right to occupy a residence or premises either free of charge or for a lower figure than would normally he charged. In cases where the employer charges rent for accommodation provided, the figure to be included in the assessable income will be limited to the amount, if any, by which the value to the taxpayer exceeds the amount charged as rent.

The Deputy Commissioner has pointed out, for example, that if the value to the taxpayer is established as being $468 per annum or $9 a week and the rental charged by the employer is $312 per annum or $6 a week, the amount to be included in the assessable income of a taxpayer is $156. I understand that the Deputy Commissioner of Taxation for Tasmania has settled on $9 a week or $468 per annum as a reasonable rental for premises on the west coast of Tasmania. I point out here that this is the position as he sees it, but it is not the position as the people living on the west coast of Tasmania see it. The Deputy Commissioner has indicated that his value might be excessive in some instances. For instance, it might be excessive for sub-standard, old or dilapidated premises in respect of which normal rental values could not be obtained in a particular locality or small premises unsuitable for occupation other than by a single man. He has indicated, conversely, that managers and similar senior employees to whom the value of the benefit derived may be expected to be greater than $468 per annum or $9 a week should return a higher figure. He has told the mining companies that they should take $9 a week as the accepted rental value unless some agreement to the contrary is reached between the companies concerned and the Taxation Branch in respect of any house or houses. ft is obvious that the tax squeeze is on, and I would like to know whether there is any truth in the prevailing strong rumour that the Taxation Branch in Tasmania has beaten the gun by notifying the mining companies in that State of this new direction to obtain more tax from the workers. It is common knowledge that instructions have been given that this direction is not to go out to mining companies in Queensland, northern Australia or the Northern Territory and to the big mining companies in the west and north-west of Australia until after the election is held on 25th October. 1 would like to know why the State of Tasmania has been singled out and who gave the instructions not to notify the mining companies in those areas of Australia held by Government members until after the election. Once this directive is enforced, the effect will be felt all over Australia, because it is the practice of mining companies in isolated areas to subsidise rentals for their employees as an incentive to get workers to go to these areas for employment.

If this direction is applied to mining companies, it must also be applied to such instrumentalities as the Hydro-Electric Commission, which provides housing all over the place. I believe that this instrumentality has not been including the value of benefits or allowances on the group certificates issued to its employees. In the mainland States there are many counterparts to our Hydro-Electric Commission and I have no doubt that they also provide incentives in the way of subsidised rentals for their employees. My colleague, the honourable member for Wilmot (Mr Duthie), is concerned over this matter also. We understand that the HydroElectric Commission charges $5 for rental at Gowrie Park. This means that, at the fair rental figure of $9 a week set by the Taxation Branch, the employees would have to include an additional $4 a week or $208 per annum as taxable income.

The ‘Advocate’ newspaper carried a v«;ry good leading article on the effects of the enforcement of this provision. It said:

Every now and then a public servant comes up with a brainwave for improving the ‘efficiency’ of his department. Undoubtedly the person who discovered how to squeeze some extra millions in income tax out of employees living in houses on subsidised rentals will get a pat on the back from Canberra. The number of new ‘company towns’ established in connection with Australia’s new mineral ventures in recent years will mean a substantial sum in additional taxation. Nor are other new towns like those at Strathgordon and Gowrie Park likely to escape. But there are big dangers involved, not only because of the much wider implications of the tax provision concerned, but in the industrial repercussions which could follow. Trade unions whose members enjoy a benefit like housing on subsidised rentals and who must now pay extra tax because of the subsidy will obviously press for higher pay to offset the tax increase. This is now an Australia-wide problem: Unless here i is a solution, quickly, it could have disastrous consequences - particularly in Tasmania, where subsidised housing has long been one of e magnets used to attract workers to isolated areas for employment in essential projects.

The strict implementation to observe section 26e of the Income Tax Assessment Act fully can have only a very profound effect upon the stability of employment m such mining towns as Queenstown, Zeehan, Rosebery, Williamsford, Renison Bell, Waratah, Luina and Savage River on the west coast of Tasmania, and these effects will undoubtedly spread and must influence employment in all the great mining ventures that have been undertaken, especially in Recent years on the mainland of Australia. The mining companies associated with these towns have for years past seen the need to provide employees homes at low cost rentals as a basic requirement to maintain even modest levels of employment in all branches of the mining industry. The severe weather conditions and comparative isolation of these areas have been a continuing deterrent to many prospective employees and it has been largely due to the fringe benefits, such as low cost rentals, that persons have been prepared to live and work in this part of Tasmania. Stability of employment is the most important factor governing the future of the west coast mining industry and its consequent contribution to the economy of this State and the nation.

On the one hand, the Income Tax Assessment Act recognises this factor and provides for income tax deductions to individuals or firms to construct housing for the use of their employees in timber. I refer to section 124ja, to section 122 which relates to mining, and to section 54, which relates to primary production. These sections were inserted in the Income Tax Act out of the very real recognition of the difficulties of obtaining suitable accommodation for employees without such provisions. Surely it necessarily would follow that employers would be able to pass the benefits they gained from cheaper housing on to their employees by way of cheaper rents and in that way encourage married couples to go to these rather isolated areas to work. It therefore seems highly absurd that the Commissioner of Taxation should now invoke the operation of another provision - section 26e - to enable what appear, in the circumstances, to be exorbitant rentals to be charged, not allowing for the special difficulties associated with employment in such areas as the west coast of Tasmania. Also what is being done runs counter to the logic of the existing zone allowance as it applies to the west coast of Tasmania. The present proposal of the Commissioner would cancel out the benefits of the zone allowance when, as I stated in the recent Budget debate, recognition of the claims for the west coast to be transferred to Zone A is long overdue.

I point out that a zone allowance is granted in recognition of the inclement weather, high living costs and high freight rates applicable in an area such as the west coast of Tasmania and by enforcing what appears to the Taxation Branch to be a fair rental of $9 a week, it will automatically wipe out any advantage which the wage earner obtains through living in an area gazetted as Zone B. I maintain that the Commissioner should either interpret the section that he now intends to implement in order to allow for the special circumstances that I have outlined or, if he feels that the Act does not allow for this discretion, the Government should amend section 26e to allow for this discretion. I have nothing but the greatest admiration for people who go into these rather isolated areas to work. I lived and worked as a school teacher on the west coast for the best part of 5 years and having lived and worked amongst those people I feel that I understand their problems. In most of the towns that I have mentioned, and in similar mining towns throughout Australia, there is usually but one employer for the great majority of workers. The wages that are offered might on paper appear to be high, but I point out that everything the employee touches and uses is taxable. The freight on his goods, the cost of food and clothing, the maintenance on his car, medical expenses and the cost of higher education, because of the necessity to send children to the cities for matriculation and university education, all are outgoings from which he cannot escape.

I maintain that there should be a differential tax for such people as opposed to those who live in a city because, in effect, the city dweller gets financial advantages from many employers in (hat he can avail himself of discount on goods, cheaper food such as meat and groceries, and cheaper maintenance and television repairs because he has immediately available to him a vast club, as it were, from which he, through being a city dweller, can draw the advantages of his membership. I repeat again that, on the other hand, once the employee goes to the rather isolated mining towns the initial advantage which he gains on paper from the higher wages is soon eroded by the fact that everything he needs in the town is taxable. If this drift away from such places to the towns and the cities is to be stopped, then the Taxation Branch must recognise that the worker is entitled to the benefits of such incentives as cheaper housing which can be provided, and is provided, by the mining companies in order to retain their work force.

I would strongly urge the Government to have another look at this matter. The Government knows full well that the export earnings from the recent mineral development in this country have been rising and we are lucky in that we have been able to cushion the falling revenue which we have been getting from rural exports in recent years, lt is in the Government’s interests to see that there is no upheaval or any change by which the mining community can be upset.

In conclusion, I would point out that if the Government intends to persist with this measure, then it is going to be a very costly operation. Officers of the Taxation Branch will have to visit every house in every mining town and Hydro-electric Commission settlement and visit every farm in order to determine what is to be a fair rental. The company or employer concerned will be faced with a tremendous bookkeeping job in calculating the figure on the basis of the taxable income for each individual employee, because by no strength of the imagination can the Branch set a rental of $9 a week in Hobart and say that this should be applicable to every home that will be subject to this provision throughout Tasmania and, similarly, throughout the Commonwealth.

I appeal to the Federal Treasurer (Mr McMahon) to take the most sensible view of this matter. He and his colleagues repeatedly have paid tribute to the benefits that the great mining exploration and development have brought to this country in recent years. The imagination and the pride of all Australians have been stirred by the progress we have seen taking place in this field in the building of new towns, such as Savage River and Luina - towns carved out of the heart of the rain forest. They have been duplicated over and over again in all types of climates. The construction people have faced tremendous difficulties, through isolation and difficult terrain. New towns have been springing up in northern and north western Australia. Some of us have seen this and marvelled at it on personal visits. For the great mass of Australians it has been brought into their homes by the medium of television.

This Government and the Australian people have proudly acknowledged the great contribution made by the mining companies in the development of this country. 1 ask the Treasurer: ls it fair now to move in on the companies and dictate to them what they should charge as a fair rental to their employees? They are only doing what is an accepted thing in all parts of the world where mining is carried on. In Scandinavia, the United States of America and Africa, companies offer homes to employees at a figure which may appear to be below that for comparable houses in a town in order to get men and their families to go there.

As I have pointed out, however, this advantage on paper might appear attractive for the employee, but it is quickly eroded by the higher costs of riving that are always associated with living in these rather isolated areas.

So again 1 appeal to the Treasurer to take the more sensible and realistic view and say that if the companies can afford to let these families have these homes at a reduced rent, then that is the concern of the company and not of the Taxation Commissioner. The Commissioner should not be able to come in and say to the mining companies: ‘You are to charge your employees $9 a week for rent’. If the mining company is able to conduct its housing settlement economically and say to its employees: ‘You can have a house for $2 or S3 a week’ then I say to the Treasurer that this should be the prerogative of the mining company. I maintain that such a viewpoint is imperative in the interests and well-being of the mining communities scattered throughout this country. In conclusion, I again ask why we were singled out as a State and why the directive was issued only in Tasmania? I would like to know why this action was not taken in other parts of Australia such as northern Queensland and the Northern Territory and evidently will not be taken until after the forthcoming election?


– I would like to congratulate the honourable member for Braddon (Mr Davies) on the speech he has made. I agree with the vast majority of the points that he has made. I do not think, however, that I could go quite so far as he did in his last few sentences when the honourable member asserted that the Commissioner should not have the right to determine or dictate, to use his word, the rate of rental for the houses he described. I believe that the Commissioner does have a duty to determine what is in effect the emoluments and the benefits - financial and comparable benefits - that are received by an employee for his labour. The value of the rental has long been established as one of the things which are properly taxable. Nevertheless I agree very much with his arguments regarding the effect of the overzealous implementation of this power in section 26 (E) in the case of isolated and far flung mining communities. I have personal experience of the difficulty in these days of over-full employment of obtaining any kind of permanence in the work force in remote mining areas. Only by the provision of houses suitable for families, and particularly for families rather than for single men, is it possible for a mining company to get labour today. Even then the turnover is tremendous. One of the few things which can be held out as an incentive to a young married couple with children not yet old enough to require city residence for schooling purposes, is that such a family may be able to save something because housing is provided by the company at a reasonably low figure.

But this brings me immediately into the context of the other and larger subject that I want to discuss. I believe that the honourable member for Braddon was quite right when he said that this is something for the Government to determine rather than for the Government to sheet it home to the Commissioner. Throughout the whole process of the performance of the functions of the Taxation Department there is this increasing necessity for the exercise of discretion. I am one who believes that this is a sign of ill-thought-through legislation to pile into the lap of the public service the exercise of discretion in matters which ought to be more nicely determined in this place. I want to turn from this portion of the legislation which I believe does need to be redetermined and rephrased so that the results so aptly described by the honourable member opposite do not ensue. I would now like to refer to the subject that was discussed first by the honourable member for Melbourne Ports (Mr Crean) and more recently by the honourable member for McMillan (Mr Buchanan). I refer to this whole subject of income tax deductions as applying to investments in mining shares and stocks relating to the mining of oil and other minerals. Let us just make a resume of what has occurred which, 1 think, would go something like this: This Government determined that there was the necessity to stimulate oil and mineral exploration in Australia. We were a country that was becoming increasingly dependent upon the overseas supply of petroleum products. From defence, economic and many other reasons it became imperative that if oil did exist within our boundaries we should indeed bend every effort to its discovery and production. The way in which the Government chose to set about this - I think that events have proved that the Government chose wisely - was to induce the investing public of Australia, the ordinary people of Australia, to lend a hand in the business. If offered income tax inducements and concessions in relation to funds contributed directly to exploration companies. When this was done the effect was immediately noticed. It became known overseas, in America and elsewhere, that these kinds of incentives were available, and overseas companies became interested in coming to Australia to explore. This scheme worked reasonably well, by and large, across the nation.

But even some years ago there were cases which cropped up from time to time of persons who had subscribed perhaps large sums to companies they formed themselves or companies in which they had been concerned in the original notation or the acquisition of leases and areas. They had substantial interests and held shares for longer than the periods that have been mentioned this evening. In some cases they held shares certainly for longer than 5 years. However, when these people came to sell their shares the argument was used that the shares had been acquired for the purpose of sale at a profit because it was a no-dividend situation. Even when the sale was a single one in effect, although in fact a large parcel had been placed with a broker who was told to dribble the shares out in small parcels so as not to upset the state of the market, the number of subtransactions within that major determination to sell was taken into account and the matter was taken as far as the High Court. So, even in cases involving just one particular stock which was held for a considerable period tax has been imposed because, I firmly believe, the sum involved was a very large one by ordinary standards.

This brings me to the point that there is the necessity for discretion in the application of this legislation. There is a subjective factor that comes into this that was so well described by the honourable member for Melbourne Ports when he said that it was the intention at the time of the purchase of shares that had to be demonstrated, and it was this which determined whether the shares were acquired for resale or profit - no matter how long the time interval before they were sold - or whether they were genuine investments, namely capital transactions which would return some form of dividend or interest payment or something of the kind over the years. This is a subjective matter; it is something which lends itself to all kinds of interpretations. People with different backgrounds of information may find it necessary to make changes in their portfolios from time to time according to what would be the prudent management of their portfolios in the light of their own knowledge and experience. On the other hand, persons involved in new business activities might find it necessary to make changes. These could occur rapidly soon after the purchases in some cases. The Treasurer has pointed out that the great majority of cases meet a sympathetic hearing when an investigation is made following a challenge to the Commissioner’s ruling. But 1 ask in terms of our duty as legislators whether this is a state of affairs which is desirable in such an important sector of our financial legislation. I admit that it has worked because during the years there has been an eminent sensibleness on the part of the Commissioner. There has been tacit acceptance of small transactions that form only a minute part or a very small percentage of the regular income of the person concerned. These have been winked at.

But when the volume of transactions or the amount of money involved has reached a certain unstated percentage, then tax has at least been suggested and even attracted. So in practice it has worked reasonably well until recently, when the mining boom started. Then there were these smart Alecks who floated companies that had no assets in terms of properties to offer to the public. They had nothing other than the suggestion of managerial skill and perhaps technical skill in the management of the capital. They in turn attracted an income tax deduction under section 77a or section 77aa. In the hands of those who manipulated these flotations there were in addition double deductions which virtually removed the element of risk from these processes and it became possible for persons to make very large killings. I use that term as a description for a practice which 1 think is reasonable in this field.

Obviously something had to give. There had to be a clamping down on this situation, lt is true on the one hand that there was an answer, albeit a highly undesirable one in the fact that the plethora of new companies soon knocked the bottom out of the investment capacity of the Australian people and the market generally, and prices began to tumble so that instead of coming on at a substantial premium new floats were coming on to the market at a discount. As soon as this situation emerged it became important to determine whether the amount of discount was over-arched by the taxation deduction and so all kinds of different calculations became necessary. But the enthusiasm for new flotations began to wane. Obviously the threat was still there that as soon as any upsurge in prices on the flock exchange occurred - as soon as i: became profitable to make a new flotation -the machinery was there to be exploited again. Obviously something had to be done 5nd what has happened as a result has been lis move with regard particularly to section 82 of the Income Tax Act as it relates to share dealers.

But again the situation is bedevilled because it is not quite clear who are and who are not share dealers. It is quite clear in the obvious cases of the persons who make their incomes from dealing in shares. This is self-evident. But the fear that has entered into the minds of the majority of parsons who have had anything to do wilh investment in oil and mineral shares is that there is a grey area which is expanding. This is the area of the person who buys shares in oil and mineral companies that do not have immediate prospects of returning a dividend and so must be buying to sell at a capital gain profit. I use that expression deliberately to show how confused the situation is in terminology. The two should be mutually exclusive in taxation terminology. This is what is in the mind of the average man. He wants to do his bit of capital expenditure and be able to sell at a profit because he has made a shrewd assessment of the value or likely upsurge in interest in a particular area of investment.

So these persons have in point of fact engaged in a business of buying and selling shares. Are they or are they not share dealers? Technically and traditionally the answer has been no. They have not been the kind of persons who themselves have sought to be declared dealers. They have not been the persons whom the Commissioner has sought so to declare. Nevertheless, the practice which appears to have developed over recent months has been to seek out all these transactions, particularly above a certain unstated level of activity, to see whether in terms of volume it would not be more appropriate for these persons to be classed as dealers. So you have the situation of uncertainty today.

The proposal of the honourable member for Melbourne Ports (Mr Crean) was to make a capital gains tax applicable throughout the whole area. He did not quite say this but this was the tenor of his remarks. I must admit that I agree with the majority of the things he said. On the other hand the honourable member for McMillan (Mr Buchanan), assessing the situation as he saw it - he had obviously given a great deal of thought to it - felt that there was a number of other possibilities to avoid this blanket tax on all gains made from such transactions. One of his proposals, for instance, was that consideration should be given to the length of time a stock had been held, particularly a stock acquired by original subscription to an exploring company. He suggested that holding a share for 6 months might constitute evidence of its being a genuine investment rather than something that was bought to be sold at a profit. This is a very sensible suggestion but it still does not get over the possibility of large sums of money involved in this - very large investments. The proposal would do away with one of the evils, if I may so describe it - one of the malpractices anyway - of those who have floated companies and virtually disposed of the stock they have taken up for tax advantage even before the shares have been listed on the stock exchange and certainly before trading has begun through the ‘second market’. These people have off-loaded their holding at no risk to themselves to what I would call the ‘real investors’, who pay for it at market value and receive no tax advantage as a result. Certainly it would overcome that particular anomaly but even then we still have the problem of the volume that would be permitted under this time rule. The honourable member suggested that if the shares were held for less than 6 months close scrutiny should be made of evidence produced that they were in fact genuine investments before tax was avoided.

Another method of approaching the problem was to suggest that a certain number of transactions might be permitted before tax was attracted, but this again is open to all kinds of manipulation. I refer to the case which I mentioned earlier of a person holding a large number of one particular type of share and placing many of them in one large selling order. This could involve a large amount of money and could be something that the Commissioner of Taxation would want to look at even though it was technically only one transaction. Similarly, there could be a large number of small transactions which would make it inappropriate to act - to take the other extreme. So perhaps the number of transactions is not altogether a good solution. The honourable member mentioned a third proposal which I admit has been closest to my own mind in trying to find an answer to this problem. That is that it may be best after all to limit the amount of advantage that could flow to any investor through section 77a or section 77aa, which will now become section 77d. This idea would provide limits to a certain stated percentage of a person’s otherwise taxable income. 1 would suspect that in this way the legislation would immediately eliminate those persons who have, during the last 12 months, received the bulk of their income from such activities on the stock exchange. I think it would be clearer to everybody in the community if the limit were set at, say, 10% or 20% of the otherwise earned taxable income. I think this would be a reasonable limit that should be claimed as a tax advantage under the old sections 77a and 77aa of the Act and the proposed section 77d. I put those thoughts to the Government. f believe it is a job for the Government and not for the Commissioner of Taxation to examine the anomalies that exist under the present taxation legislation. It is abundantly clear that there is uncertainly and a feeling of depression in this field. The Government started out with high hopes of stimulating oil and mineral exploration and it had a great deal of success. I make the plea that the matter should not be left where it is now. We know that underwriters are prepared to underwrite genuine investments and new floats which have something to offer the community, although there is a degree of risk. These persons must be encouraged. At the same time, I believe that the ordinary Australian who wants to have the opportunity of playing just a small part in the great mineral boom in Australia should be permitted to do so. Ordinary citizens such as the postman and the milkman have come to me and, without any stimulation on my part, have disclosed that they have taken up a few shares in some company or another and have asked my opinion about their investment. The ordinary little man in the community feels that he now has a chance of making some money. I would think that from a national point of view it is much better for him to take a chance of making a few dollars out of such shares than gambling at the races or on poker machines. I believe that the Government should stimulate this type of speculative investment by offering and making secure the long standing taxation advantages.

The situation at the moment is such that the whole horizon is overcast with uncertainty because of certain activities which have been pursued - I believe justly, if over zealously - by the Deputy Commissioners of Taxation in an endeavour to come to grips with those who have made hogs of themselves by exploiting the situation. These as well as certain other things have still to be done. The honourable member for Braddon (Mr Davies) referred to section 26e of the Principal Act. Proposed sections 77c and 77d as well as proposed section 82 still require clearer definition by the Government. I trust this will1 speedily be done by the new Government.


– 1 wish to spend at least 20 minutes on the matter raised by the honourable member for Braddon (Mr Davies). I am grateful to the honourable member for Evans (Dr Mackay) for his support. I am also grateful to the honourable member for Braddon for his comments. There is something very wrong indeed with the new directive which has been forwarded to the employers in the mining areas of Tasmania. When the document I have in my hand was delivered to these employers a few weeks ago by the the postman it was as though he delivered a time bomb. There are no half measures about this document; it is the most rigid interpretation of an Act of Parliament that has ever been supplied to an employer of labour. I shall read it to the House in due course because I want the terms of the document recorded in Hansard.

The honourable member for Braddon represents an electorate which is on the west coast of Tasmania. Although it is an isolated area it is a rich mining area. Indeed, it is one of the richest areas in Australia. It will be severely affected by the new directive which has been issued by the Deputy Commissioner ot Taxation in Tasmania, Mr C. R. Woodhouse. Two mining towns and two hydro-electric towns in my electorate are also affected by this directive. When honourable members who represent Tasmania in the Parliament were informed of the terms of this directive last week we thought the matter was so important that we met yesterday and discussed it. The honourable member for Braddon and myself have been deputed to speak on behalf of the companies in Tasmania that have been or will be affected by this directive. We are not approaching this matter haphazardly. We are making a planned approach to the Parliament by way of democratic means during the course of the debate on this Bill concerning taxation assessment.

Mr Scholes:

– The Treasurer is not present in the House.


– That is correct. The Treasurer (Mr McMahon) has not been sighted in the House since the debate on this Bill was commenced prior to the suspension of the sitting this evening for dinner. I notice that there is no Minister at the Table at the moment. However, we will not be content to raise the matter in the Parliament. My colleagues and I will be making representations to the Treasurer. The two towns in my electorate which are severely affected are Rossarden and the Storeys Creek tin mining and wolfram area. One of the hydro-electric townships is Strathgordon, which is the newest and most remote settlement in the roughest and toughest part of Tasmania, lt is on the Gordon River not far from the ocean in the south of the island. It has a population of about 1,000. The other township is Gawrie Park in the Mersey Valley, which has a population of 2,500. A large hydro-electric scheme costing $60m is being completed. Those are the areas involved.

The basic argument against this directive is that without the workers there would not be any mining activity at al). The best methods of mining can be used to find and mine the most valuable minerals, but without the men to do the work not one ounce of metal can be mined. Therefore, any directive which will make it harder on the Tasmanian employers of mine labour is a disastrous piece of taxation legislation, lt is in that category that I put the directive at the moment. As the honourable member for Braddon pointed out so dramatically and effectively, the way to get workers to these isolated areas is through incentives. In many cases contract mining is the incentive, but that is a very tough way to earn more money. Those men who earn extra money contract mining deserve every cent that they get because they are really flat out working against the clock. Incentives must be given to get the single and married men to these very isolated areas. If this directive is to be spread throughout the whole of Australia it will have a very bad impact on the new mining ventures in Queensland and Western Australia in particular. We are still wondering why Tasmania was selected as the place where this directive should be issued.

Mr Davies:

– lt has to be Commonwealth wide.


– My colleague interjects and says that it has to be Commonwealth wide. Any Act of Parliament dealing with taxation which is a Commonwealth responsibility only has to be Commonwealth wide. It has to affect the mine workers in Weipa in the same way as it affects the mine workers at Rossarden, Mt Lyell or Savage River in Tasmania or at Hamersley Range in Western Australia or anywhere else. Yet this directive so far has turned up in only one State. It is to operate as from this financial year, which means that already Tasmania has been selected for this special treatment and no other State has been selected for it. This in the first place is a piece of gross discrimination in taxation against one State.

The incentives that mining companies have to offer employees to attract them to come into the isolated areas where the mining operations are being undertaken are vital and fundamental to mining. Every mine manager offers these incentives, and they apply to every mine. Persons interested in employment in mines will ask the mine manager: ‘What is the wage?’ He will be told the wage and the next question will be: ‘What sort of living conditions have you got?’ The manager may reply; ‘They are not very good, but the rent is low and you can get free wood and free power.’ In some cases rent may be quite nominal; other cases there may be no charge for rent.

These are a mixture of incentives that are given to employees to bring them out into these isolated areas.

The honourable member for Braddon and myself, who believe in touring our electorates regularly to meet the people and keep in touch with their problems, know the areas we are talking about nearly as well as if we had been born there because we have been through them so often. Rossarden and Storeys Creek, which are right up under Ben Lomond, one of Tasmania’s snow-capped mountains, are in very cold and isolated areas. There is no bitumen road to these areas; just a winding and twisty road of about 14 miles off what we call the Fingal Highway. The people are living in the sight of snow all winter. The houses are very poor; the management admits this. It cannot afford to provide very expensive accommodation. There are not the sorts of homes that a person would bother to live in, in this sort of climate and in these conditions, if they were not right at the place where he worked. The rents are very low.

The Commonwealth, through its taxation office in Hobart, is now to get stuck into these managements and force them to allow for $9 a week rental for these places, which would not be worth more than $2 or $2.50 a week anyway by any standard. The rent on some of these places will be lifted from nil which is what some tenants are now paying, up to $9. This will be a very heavy charge on the employees and on the managements. The interesting point about both Rossarden and Storeys Creek is that the technical staff are nearly all from outside Tasmania, and they have been brought to these isolated mining areas because of these incentives and these helpful conditions that the mining managements have given to them. This applies not only to the technical staff but also to the workers. Should the Taxation Branch rob the mining companies of the right to offer these inducements they will not be able to compete in a satisfactory way with the larger companies producing tin on the mainland because they will have to increase substantially the salaries of their technical staff and the wages of their hundreds of employees to make up for this taxation burden.

Aberfoyle Holdings has put the matter before the Australian Mines and Metals Association so that that body can make an approach to the Federal Treasurer. It is also having a meeting in Hobart on 30th September to hear the report of a recent deputation by its industrial sub-committee to the Deputy Commissioner of Taxation in Tasmania. Of course, this meeting has not yet taken place, but this debate is the best opportunity we have in this Federal Parliament to raise the matter of this time bomb that has been issued to mine managements in Tasmania. Before I pass on to the document that was issued by the Taxation office in Hobart, I would like to stress again that the inducements that the mining companies can hand out are the key to obtaining sufficient employees in the isolated areas in which they operate. The workers have to contend with isolation, very rough weather and the tough working conditions typical of mining everywhere, right around the worl’d. The poor roads into the mines and the poor amenities for people living in these areas are unfortunately common to mining towns everywhere. The document that was issued by Mr Woodhouse of the Taxation office in Hobart is a circular to group employers and is headed ‘Income Tax. Value of Premises supplied to Employees.’ I will not read every line of it, but I will read part of it to give an idea of what the Taxation office is driving at. It reads:

  1. Section 26 (c) of the Income Tax Assessment Act provides that the assessable income of a taxpayer shall include the value to the taxpayer of all allowances or benefits given or granted to him in respect of any employment or services rendered by him, whether so allowed, given or granted in money, goods, land, meals, sustenance, the use of premises or quarters or otherwise.
  2. Possibly the most common benefit of this nature is the right to occupy a residence or premises either free of charge or for a nominal rental. The question of what is the value to the taxpayer for the purposes of section 26 (e) is a question of fact, which must be determined in the light of the circumstances of the particular case.
  3. Where, for example, a taxpayer is supplied with premises for the use of himself and/or his family it is considered reasonable to accept that the value to the taxpayer would be equal to the rental which a private tenant might be expected to pay for the accommodation provided.
  4. In cases where the employer charges rent for the accommodation provided, the figure to bc included in assessable income, will, of course, be limited to the amount, if any, by which the value to the taxpayer exceeds the amount charged as rent: e.g. if the value to the taxpayer is established as being $468 per annum-

That is $9 a week - and the rental charged by the employer is $312 per annum, then the amount to be included in the assessable income of the taxpayer would be $156.

  1. Having regard to current values it is expected that, as a general rule, values in the vicinity of $468 per annum should be adopted where an employee is provided with a residence.
  2. lt is realised that this value, if generally applied, might prove to be excessive in exceptional circumstances. The question arises as to what would constitute ‘exceptional circumstances’, and in this connection it is thought that these would include:

    1. the existence of sub-standard, old or dilapidated premises in respect of which normal rental values could not be obtained in the locality; or
    2. the existence of small premises which are unsuitable for occupation by a married man with a family and which could only be occupied by a single man. 1 pause here to comment on this last section of the document. He is admitting that in certain exceptional circumstances the houses may be so sub-standard, old or dilapidated that it would be unfair to the employee to charge him $9 a week rent. This is the only light in the darkness of this document and it is to bc hoped that if we cannot do anything to change it or to get it withdrawn, then when we start to implement it paragraph 7 (a) should be applied fairly, without discrimination and with consideration given to all the circumstances. Paragraph 8 of the document states:

Conversely, of course, managers and similar senior employees, to whom the value of the benefit derived may be expected to be greater than $468, should return a higher figure.

That is to say, if they are charged more than $9 a week they have to include that in their return. Paragraph 9 states:

Employers are requested, unless otherwise agreed with this Department, to show a minimum value of $468 per annum on group certificates of employees provided with premises for the year ending 30th June 1970.

That is in black and white. Paragraph 10 states

The group certificate of an employee charged rent for the use of a residence of a higher rental provided for his use should indicate the net amount to be returned by recording separately the gross rental value of the property (i.e. a minimum of $468) and the rental paid by the employee.

Paragraph 11 states:

In the exceptional case where an employee considers that the value of $468 is excessive, it will be open to him to demonstrate that, in the particular circumstances of his case, lower rental value would be appropriate. Any such request should be accompanied by a statement showing the following details:

Under this paragraph the Deputy Commissioner of Taxation lists certain things in detail that must be done if the employee wants to get an exemption from this payment of $9 a week. They include a general description of the property, including the number of rooms and a description and the size of each room. Think of the work that will have to be put into this, as the honourable member for Braddon said, if this is to be policed properly by the Department. This will possibly involve going into every house in mining districts to check all the details. The details include descriptions of the age and location of the property and particulars of facilities provided, including hot water service, air conditioning and the like. I like the mention of air conditioning. This is usually provided through a hole in the roof or sometimes through boards which do not fit or flooring that is falling to pieces. This is the sort of air conditioning that most of our tough mine workers in the tough mining areas have to put up with. The statement must also include details of the capital value, if known, and whether the premises are furnished or unfurnished. A man is not likely to be living in an unfurnished house. There would be at least a table and possibly a chair or a bed, and a stove. It certainly would not be unfurnished unless it were occupied by some escapee from justice who suddenly found an unfurnished house in which to live temporarily until he was caught up with.

The statement must also include the amount of rent charged, if any, and the rental value of comparable residences in the locality. This is funny, because these are isolated areas. The only comparable residence would be the same type of house in the same town. It would not be possible to go two or three suburbs away to get comparable accommodation. Also detailed must be any other factors which may be relevant and details of any other allowances received, such as free use of telephone and the supply of fuel and light, etc. A lot can come under the meaning of ‘etc.’ This is a dangerous word in any language. Under paragraph 11 the Deputy Commissioner of Taxation is saying to the employees: ‘If you think that this is excessive, you apply to us for consideration, but you have to give us all these particulars.’ Then the Branch would have to make checks in case an employee stated that the accommodation had 5 rooms when it had 6 rooms. It would have to determine whether the stated size of the rooms was wrong. Paragraph 12 of the document states:

You will be aware that paragraph 12 of the Notes for Guidance of Employers in relation to Group Instalment Deduction Procedures states that the value of premises or quarters provided for ‘the purpose of computing instalment deductions shall be the amount fixed by any award, or where the value is not sofixed an amount of 50c per week.

Paragraph 13 states:

It must be emphasised that such an amount is for instalment deduction purposes only and has no relation to the amount to bo included as income in column 2 of the group certificate.

The final paragraph, paragraph 15, states:

Your co-operation in advising employees of the above matters and including relevant values on group certificates would be appreciated.

Mr Woodhouse is a darned good bloke. I have had a lot to do with him. He is a considerate and very sympathetic Deputy Commissioner of Taxation. Many problems have been solved by communicating with him on the telephone. I think that we cannot speak too highly of the Deputy Commissioners of Taxation in all States. They are not people to be avoided or to run away from. If a person is prepared to put a case to them in a decent manner and is prepared to see them personally by appointment in their offices he will be absolutely amazed at the splendid treatment he will receive. Many a man, or woman for that matter will receive a pleasant surprise and will leave the office a far happier and brighter person than when he entered it.

Mr Katter:

– Even though the person may finish up broke.


– I do not think a Deputy Commissioner of Taxation would let the situation go that far. He would leave a person with sufficient money to get home. This is my experience of these gentlemen who are doing a wonderful job in adminis tering an Act of this Parliament. The solution to the problem is, as was suggested by the honourable member for Evans (Dr Mackay) and the honourable member for Braddon (Mr Davies), not with the Deputy Commissioner of Taxation but with this Government. The Act would have to be amended to allow employers of labour to give workers incentives to go to isolated areas to work. The Government will have to amend the Act. We cannot blame Deputy Commissioners of Taxation such as Mr Woodhouse. He is obviously acting under directives from the Federal Treasurer (Mr McMahon). No wonder the Treasurer is not in the House tonight if he is responsible for this decision. If any of these mine managers catch up with the Treasurer during the election campaign he will be down the mine and there will be no way back.

Mr Whittorn:

– That is not funny.


– I know.

Mr Buchanan:

– You know perfectly well that the directive did not come from the Treasurer. He does not write every letter that is sent out.


– That is very funny, too. Fancy it not coming from the Treasurer. He is the big white chief of taxation. He is the Federal Treasurer. He helps to bring in legislation which determines taxation laws. It is up to the Federal Treasurer to look at this problem and to provide a satisfactory answer. Who gave the directive to Mr Woodhouse in Hobart to send out the document that I have read out in detail tonight? Who was responsible for the document being written in the way in which it was written? Was it Mr Woodhouse or was it somebody in Canberra - the Commissioner of Taxation himself?

Mr Daly:

– What was he after?


– He is after more money - more revenue from the poor mine workers who are living in isolated towns. It is discriminatory to apply taxation laws only to one State when they should be applied to the whole of Australia. The Opposition wants the Treasurer to have a look at the situation immediately and to see whether an alteration can be made either by introducing legislation in this Parliament or by a directive from the Commonwealth Commissioner of Taxation. By that means this discrimination could be stopped pending a study of the position by the Government. I think it is a matter of sufficient importance to be brought to the notice of the Parliament tonight. The honourable members for Braddon and Evans agree with me that this is a discriminatory provision which will have grave effects on the employment level throughout the mining districts of Tasmania.

Mr GARLAND (Curtin) 19.21]- It was not my intention until about 5 minutes ago to enter this debate, when it was suggested that I should, but one or two matters have arisen about which I want to make some comment. Referring to the speeches by honourable members opposite I might say that there is one thing on which 1 would agree and there are others om which I would like to join issue. I thoroughly agree that we ought to take this opportunity to acknowledge the outstanding efforts of the men in the Taxation Branch of the Treasury, at any rate those men who are in the upper echelons who have over the years forged very good relationships with solicitors, tax agents and all those involved in official or non-official capacities, in ensuring that the taxation laws are carried out properly and efficiently. 1 must say that all the deputy commissioners of taxation with whom I have come in contact appeared to be very conscious of the need for good public relations and were at all times helpful. When one considers the number of discretions contained in the Income Tax Assessment Act and which are invested in the Commissioner and his delegates I think that this is most important. The Taxation Branch is now more willing than it formerly was to give an opinion on the effects of taxation on a proposed course of action whereas in the past there was an attitude - and I can well understand the reason for it - that opinions should not be expressed on hypothetical matters without a complete set of facts.

Last week I addressed myself to problems of income tax legislation and I drew attention to one or two matters which I thought could be amended. I take the opportunity of correcting one or two errors of fact and opinion which I previously expressed. Firstly, in relation to the advocacy that the exempt taxable income should be raised from the present figure of $416 per annum to $1,000 per annum, I suggested that the limit had not been increased since 1954 or 1955. It has since been pointed out to me that in fact it was at a lower level at that time and it has only reached the level off $416 in more recent times, I think in 1961. Secondly, in putting the suggestion that the non-taxable income should be raised to an amount of $1,000 per annum, I mentioned that this would result in a loss of some $12m per annum. Criticism has fairly been made since I made that suggestion to the effect that it would be necessary to have some shading-in provision, so that there would not be a position where tax would not bc paid on $999 and approximately $50 would be paid on an income of $1,000 per annum, it would be necessary for some shading-in and the total revenue loss could be in the vicinity of $20m per annum. But I am still of the view that my basic argument could apply in that it would save the assessment of approximately 500,000 taxation returns for a loss of revenue which, if my other suggestions were adopted, could easily be taken up in a total review of the general tax scale itself.

Honourable members opposite have this evening mentioned one or two things about which I would like to comment. The first refers to the taxableness. if I may use that term, of the surplus which arises from the sale of shares. In the last 2 or 3 years I suppose that we have had a good deal of publicity about this matter but I think it should be pointed out that the section in the Income Tax Assessment Act upon which the Commissioner of Taxation relies is a very old section indeed. It was said in this house tonight that the Commissioner should go easy on this body of taxpayers or that he must assess on the basis of the law as it is. If the Parliament thinks that this law - and I will explain in a moment what the law is - ought to be changed, then it is up to the Parliament to change it. Quite frankly it is political nonsense for honourable members to come into this House in the last week of the present parliamentary session and suggest that the Treasurer (Mr McMahon) should take some action on this matter when what is needed to bring about a change is an amendment of the Act itself. Honourable members are well aware that this Parliament is now concluding its business and that all legislation which was intended to be introduced during this session has long since been referred to the Parliament as has, indeed, the main part g£ the Budget proposals, and there is no practical way of making alterations to an

Si1 at this time. * do not believe that honourable members on the Opposition side really think that at this stage amendments of an Act could be made.

In uttering those remarks I do not necessarily support the view that there should be a change or that there should not be a change in the taxation laws, but having regard to the way that the law stands at present, and as has been outlined by honourable members earlier this evening, if somebody buys shares, or anything else <pr that matter, with the intention of making a profit, and if such a profit is made it is assessable income. That is the law as it exists. That is the law as it has existed for a very long time. I agree that there are uncertainties in determining that intention because the law as it exists relates to what the intention was in the mind of the taxpayer at the time he purchased the shares, business, land or whatever it was, rather than to an arbitrary cut-off period. Various suggestions have been made from time to time regarding changes of the taxation laws as they now exist. A suggestion put tonight in this House was to the following effect: Why do not we say that if someone has held an asset for 6 months it need not be taxed and can be classed as capital and therefore be non-assessable? Of course, the opposite side to that suggestion is that if it were held for less than 6 months it would be taxable.

I want to come back to my original point. It is of no use to raise these matters at this stage. The Treasurer could not be expected to instruct the Commissioner of Taxation, or to take some executive action, to make this non-taxable income. That is the law and that is the way it has always been, subject only to development by case law, although the principle is now basically clear. But with the development of case law from time to time as various cases and circumstances involving this intention were considered, there is a great body of law, both in taxation boards of review and in the High Court of Australia, on these questions which any taxpayer can consult in order to understand his position. Perhaps I should also include potential taxpayers. I will go further and, though this stage of the session is not the time to pursue it, say that I rather support the view that a more arbitrary method of arriving at taxable profits could well be determined. I do not suggest that this would be easy, but I would have to advocate such a course because I believe that the taxation laws in general are far too complicated. It should be easier for taxpayers to know with more certainty what the law is and how they can conduct their business so as to be taxed or not taxed. I believe it is a good principle in all law that people should know precisely, how the law will affect them without having to go through the whole process to find out.

A number of criticisms of the income tax law could be offered. In the list I raised the other night I mentioned one matter only by name and I would like to refer to it in a little more detail now. I will deal with the provisions of the Income Tax Assessment Act as they refer to superannuation. I record, as has been recorded by many others already, that the sections in the Act dealing with superannuation are numerous, lengthy and sporadic. They are sections 6, 23 (j), 23 (jaa) 23 (ja), 23 Ob) 23f, 79, 82aaa to 82aar, 83h and 121b to 121e. This is apart from the special provisions dealing with the superannuation funds of life insurance companies and special rates of tax under the Income Tax Act and the Income Tax (Partnerships and Trusts) Act. This may sound frightening enough, but I can assure honourable members that a close reading of those sections leads to more confusion. It is exceedingly difficult to understand them. One would need to spend a great deal of time resolving the superannuation problems of a firm or fund or, as in my case, of a client who seeks advice. These matters have been before the House on many occasions and have been examined closely by officers of the Department. Yet the result of all that thinking and all that work is to leave us with a very complicated result and, as I mentioned with other matters, a considerable area of doubt. So I come to the question I was propounding the other night and that is: Is all this complexity worth the trouble when basically our objective is simply to raise revenue to meet the expenditure of the Government?

Tonight some honourable gentlemen on the other side said that the Treasurer should take action to ensure that people in remote areas, who benefit by renting houses owned by the company for which they work or who may receive other benefits in the nature of allowances for telephones and so on, should not have the value of such benefits treated as assessable income. They said that treating the benefits in this way was discouraging decentralisation and making it more difficult for the companies to employ labour. It is all very well to advance these arguments but the Commissioner of Taxation must carry out the law as it exists. The law is that such moneys received by virtue of the employment that these people undertake must be treated as assessable income. if this House considers that an allowance should be given to these people and that this income - that is what it is - should not be assessed, the House should amend the Act that we are discussing now. If these matters have been raised before, they have not to my knowledge been raised with the vigour employed tonight. So I think I can say with a certain amount of respect to the honourable members opposite that this is really part of electioneering.

It was refreshing the other evening to hear the honourable member for Melbourne Ports (Mr Crean) put in context the argument that has been advanced in recent weeks through the newspapers by Opposition members that taxes on the middle income groups should be reduced. He said that argument could not be considered in isolation. By inference he told his colleagues that it was not a proper matter to use for electioneering purposes and that there were larger questions relating to income tax to consider before picking out one item that might appeal to a certain sector of the community. I commend his approach and point out that from time to time reviews of the tax scale are necessary because of the inflationary tendency in our community and in every community in the world. Most highly industrialised Western countries have a progressive income tax scale and inflation together with rising salaries means that higher rates of tax are paid. Statistically, salaries rise day by day and month by month, and in this country they have risen remarkably in recent years. With these two influences, it is natural that the taxrates paid on rising incomes will increase. So it is necessary from time to time to review the tax rates.

The Treasurer has promised that a review will take place and in fact it is now under way. I know that others have asked for various other aspects of income tax to be reviewed at the same time. But I would point out that it is all very well to say that some sections of income tax earners should be relieved of some of the taxes that they bear. Equally we have to consider at the same time how the revenue lost to the Government will be made up. It is not a full and honest argument to ask for a reduction without at the same time indicating how the lost revenue will be recouped. lt is true that the rate of taxation - the tax scale itself - can be varied in a number of ways. Indeed, in recent years, although we have not varied the slope of the income tax curve, taxes have been varied up and down by an increment of 2i% on a number of occasions. But what is contemplated, I understand, would be a complete redrawing of the rate scale. If, as a result of investigation, it is fell that a certain section of the community should be paying a lower rate, then clearly a larger amount has to be paid by other groups. I think it would be a pity if this issue should be used for party political propaganda purposes. It was notable in a newspaper article published, I think, last week that glaring headlines were used to mislead. What purported to be almost an official announcement was published to the effect that only those incomes of over $100 a week would receive any concession. I assume that that article and headline would have been printed purely with the view of attempting to denigrate the efforts of the Government to be fair to all. 1 use the word ‘fair’ because there has been an effort by this Government over many years - indeed, by all governments - to try to place the burden of taxation as equitably as possible. Special consideration has been given as to where the burden of income tax should fall and on which categories it should fall. Of course, there are many other taxes besides income tax but it raises the vast amount of revenue for the country. There has been a survey throughout those years to determine the most equitable way to spread the load. We have seen the progressive introduction of a large number of deductions and other things to the Income Tax Assessment Act. They include concessional deductions and other deductions of, shall we say, an unusual nature for primary producers, such as the implementation of averaging clauses. Various methods have been devised, the most recent of them being in this Bill. There are other things such as the drought bonds scheme shortly to be implemented. But the growth of those deductions, plus the large number of amendments made to the Act, has meant that there is a need for an increasing sophistication of the law in order to prevent a great loss of revenue to the Treasury. Taxpayers have the advantage of a number of structures such as companies, partnerships and trusts which have been devised, in the main, although perhaps not entirely, to minimise income tax. All these movements - and they have been pretty technical all the time - have resulted in a very complicated tax structure.

I again plead for some effort to be made to go back to first principles. I ask whether the complicated structure now arrived at is essential’ in order to raise the revenue of this country? In an attempt to be equitable have we not created for ourselves a great administrative burden? This structure has, perhaps, encouraged other undesirable developments in the community such as the employment, when our resources are already stretched, of a number of highly skilled people, both inside and outside the Public Service, and the registration of hundreds, perhaps thousands, of private and public companies, partnerships and trusts purely for the purpose of minimising income tax. I wonder whether, after very close consideration, it would be possible to eliminate a great deal’ of this complexity even though it might be that the burden of tax would shift slightly between income groups or social groups within the community. However, at any rate I think it would save a lot of other problems which have arisen as a result of a structure which we have set up ourselves.

This is not something that has been forced upon us. It is a growth which we have developed. Surely the time is coming when we must give more and more thought to getting more value for the money that we spend. Certainly part of the money that we spend is tied up in the administration and policing of this law and activities on the part of businessmen to attempt to minimise the burden which they feel. As I said recently, businessmen feel that these funds could otherwise be reinvested in their own businesses. Of course that would be a net transference of public funds to the private sector. Such a simplification of the taxation system would require a complete redrawing of the tax scale and therefore the burden of taxation would shift.

Mr Acting Deputy Speaker, looking at the amendments, one could only commend the provision in the Bill to extend the deduction to primary producers for structural improvements. Formerly certain items were depreciated by 20% instead of being allowed as full deductions. Probably this will not make a great impact on the Treasury because of the averaging provisions under which the incomes of most primary producers are assessed. However I think it will be of great benefit to primary producers and of assistance to Australia’s economy because it will encourage primary producers to make provision for water and fodder conservation. Primary producers will have the knowledge that if they lay out a certain amount of money they will receive a tax deduction in the first year based on the whole amount and not merely 20%. Therefore they will face a reduced taxation burden commensurate with the expenditure for which formerly only part allowance was given. Surely that is the intention of this amendment. I support it. I think it will be of particular benefit to primary producers in areas which have experienced or are now experiencing the difficulties of drought.

Likewise the amendment provided in clause 12 is fair. It is a principle of taxation that one should not be able to receive a double deduction for any line of expenditure. This surely is fair in every way. The fact that a share dealer has been able to obtain it is one of those anomalies that arise because of the complexity of the legislation to which I have already referred. I am more than happy to see the introduction of this element because of its basic reasonableness.


– I might repeat that I have no intention of bringing into my speech the emotion and feeling that was the pattern of the speech given by the honourable member for Curtin (Mr Garland). If the honourable member was pleased with this legislation I would hate to hear him speak if he was sad about it. I just mention that the legislation before us is a Bill to amend the law relating to income tax. This gives very wide scope for discussion. I mention this because I believe that I should take full advantage of the scope of the Bill.

I was interested during the last week and the week before to hear a number of honourable members express grave concern because a number of share traders’ accounts were being investigated to ascertain whether certain people who were able to traffic in shares had been evading their taxation responsibilities. The Treasurer (Mr McMahon) in this House on 16th September in answer to a question said:

  1. . he has asked the Deputy Commissioners in Perth and Adelaide to discontinue their actions in having a general survey of the accounts of various people in brokers’ offices.

I pass no judgment on what they were doing and what they were not doing. But the fact is that the Taxation Commissioner evidently thought that certain people were evading their taxation responsibilities and he endeavoured to ascertain whether or not that was a fact. But the Treasurer has now indicated that this practice has been stopped. I see also that the newspapers gave great headlines to this matter.

This interests me particularly because only a few months ago the garbage men in Sydney were asked to submit statements as to how much they were making out of the bottles they were collecting from their garbage trucks. I did not see any statement by the Treasurer that he would give up chasing garbage men around Sydney. However, when share traders who speculate in huge amounts are involved - supporters of this Government no doubt - the Treasurer intervenes to say that his Department will discontinue that practice. It it is good enough to chase garbage men and bottle-ohs around Sydney for the few dollars they make out of bottles they collect, it is good enough to go into the share trading activities of those trafficking in shares to a huge extent in this country.

Mr Cope:

– The Department took them back 3 years.


– The honourable member for Watson has advised me that they took the garbage men back 3 years to find out the few miserable dollars they made out of bottles that were collected from time to time.

We find today Government supporters expressing great concern at the intrusion on the rights of the individual by the taxation officers investigating share trading. But not a word is said about the garbage men from whom the Taxation Branch is seeking to extract every penny, every dime and every cent. The Taxation Department gave those men no respite, and 1 presume the Department probably would not take their word for what they earned and would probably double the actual amount that was stated. I point out that under the tax laws of this country which are enforced by this Government there is one law for the rich and one for the poor. Not only are the rates unjust; not only have they been unchanged for years; not only does the burden of taxation bear most heavily on those who are unable to afford it: but in addition share traders are exempt from investigation, are evidently given protection and can make what they like out of their activities. But the people who were making a few shillings out of the bottles they collected were chased back over 3 years. What a tragic state of affairs. Is the Government so short of money that it has to chase garbage men for the bottles they collect? I would like the Acting Treasurer (Mr Swartz), who is at the table, to tell us whether they have desisted in chasing garbage men around Sydney for their taxation returns? I wonder whether the Taxation Commissioner has been brought into it.

I did not hear any questions from the Liberal side on this matter. However, I know that my colleague from Watson (Mr Cope) and others on this side of the House have raised this matter with little avail from what I can see, except that the Government said that the law had to be enforced and the Government does not interfere with the Taxation Commissioner’s activities. Therefore, I do not express any great concern and I will not stay awake at night worrying about people who have probably made thousands in tax-free share trading whilst the Government of the day is prepared to let the taxation investigators go right into all the pros and cons of what garbage men are making out of bottles. I do not intend to speak at any great length tonight. I just mention this on the eve of the election for all Australians to hear. In taxation, as in other matters, there is one law for those who support the Government and another for those who the Government does not think supports it. There is one law for the rich and one for the poor. Tonight we saw this exemplified in the Treasurer’s statement to this Parliament. We have seen this in the way in which he answers questions. I listened to some Government speakers on this matter. They were almost crying about the share traders. Why, the honourable member for Swan (Mr Cleaver) was very concerned about this matter the other day. He expressed grave concern about this downtrodden section of society making a few millions out of share trading. We did not hear the honourable member for Swan rise in his place on behalf of the garbage men. He overlooked that. The taxation people probably carried out this treatment of garbage men right throughout the length and breadth of the country. Probably that would not worry the honourable member because from the look of him no-one in his electorate drinks. The point 1 make is that this matter deserves to be aired. This is why I raise this matter tonight in this Parliament. I wish to indicate the discrimination in social services and in taxation against sections of the community by this Government which has been in office for so long. However, I will be pleased to announce to garbage men and everyone that there will be a change on 25th October. Justice will come to the taxation laws. People that are oppressed by them at present will be relieved of the onerous charges that are made under this Government’s proposals. A new era will open up in the field of taxation under a Labor Government. This is a long time overdue. This change will apply to the middle income earners and to those people on the lower incomes. Those who cannot afford to pay will not be asked to pay, but those who can will naturally be called upon to accept their responsibilities. I mention that in passing to point out the discrimination of the

Government, the injustice of the laws in many respects and the concern felt by some members on that side for those who can well look after themselves while garbage men are expected to pay tax on their bottle collections to make up for the taxation mat is evaded by people who ought to pay.


– 1 would not have spoken but for the fact that two points were brought up. One was in regard to rent allowances for cottages supplied by mining companies for their employees. Of course, the same principle applies right throughout the taxation field. Farm workers, bank clerks and others are expected to show in their income tax returns the value of the rent of the cottage or the residence in which they are living. This applies throughout Australia. It is fair and just, Having had experience of this myself, I would say that the value of the rental as assessed by the Taxation Department is most reasonable.

In regard to what the honourable member for Braddon (Mr Davies) had to say, I think there should be an inducement and encouragement for people to go and work in remote areas. But, of course, we must remember that we have a zone allowance that would apply to places in Tasmania and other places in remote areas in Western Australia. My friend the honourable member for Grayndler (Mr Daly) evidently did not take the precaution of reading what was in the Bill or he would not have put on the little exercise that we have just seen. When I heard his remarks in regard to the honourable member for Curtin (Mr Garland) I had to provide myself with two handkerchiefs into which I could cry. If I read from the second reading speech made by the Treasurer (Mr McMahon) I am sure that I will make the honourable member for Grayndler very happy. The Treasurer said: 1 turn now to the second major amendment proposed by the Bill. This amendment is designed to eliminate a feature of the mining investment incentives which, in the light of experience, the Government judges to be unnecessary. Provisions for tax deductions are being availed of by persons classed as ‘share dealers’ who then sell out to others who, in effect, supply the funds to finance exploration and development, but who do not receive any tax concession on their original payment.

It is a general rule of the income tax law that an amount of expenditure is only deductible once. There are, however, some exceptions. One of these relates to capital subscriptions to petroleum exploration companies, which are deductible in full, and another to calls paid to mining and afforestation companies, which are deductible to the extent of one-third of the amount paid.

A dealer in shares - that is, a person who, under longstanding principles of the income tax law, is taxable on profits made on share transactions and receives deductions for losses made - is not only entitled to the special deductions for capital subscribed to mining companies, but the same amount is also deductible in determining a taxable profit, or deductible loss, made on a sale of the shares.

Mr Clyde Cameron:

– I rise to order. Will you, Mr Deputy Speaker, request the honourable gentleman to hold his speech higher so that we may better hear him?


– There is no substance in the point raised by the honourable member.


– The Treasurer continued:

For capital subscriptions to petroleum exploration and mining companies, the amount deductible can be as much as 200% of the expenditure actually made. For calls to general mining or afforestation companies the amount deductible can be 133J% of the. actual outlay.

As announced in the Budget Speech, the Government has decided to amend the law so that the deduction available to share dealers cannot exceed the outlay actually made. By so doing, the provision of funds on a continuing basis will not be significantly affected.

I think that statement discounts what the honourable member for Grayndler submitted. Australians have a reputation for being great gamblers but until recently very few people in this country were prepared to invest in mining companies and other industries where there was an element of risk. This attitude has been traditional since our experiences in gold mining in the 19th century. Any incentive which the Government can give to Australians to invest in these companies will be to the ultimate advantage of Australia. I applaud the Government’s action.

The provision with regard to farm improvements may be of some benefit. If the farmer knew that he was to have a bumper year he would be induced to make improvements to his property, although the averaging provision would have an effect. The rate is higher when his income exceeds the average in any one year. Advantage will be gained only from the averaging provision. I commend the Bill.


– The honourable member for Braddon (Mr Davies) and the honourable member for Wilmot (Mr Duthie) made pleas to the Government on behalf of persons engaged in mining in Tasmania. The cases submitted by the honourable members deserve the support of the Parliament. We should be mindful of the role played in the development of Australia by persons engaged in mining. These people, whether they work in the mine or around the mine, are producing the wealth of this nation. If this Government fails to heed the pleas of the honourable members it will be guilty of betraying men who are building the economy of this nation and helping to overcome our balance of payments problem. I do not want to pursue this argument to its logical conclusion, because telling speeches have already been made. It is now up to the Treasurer (Mr McMahon) and the Prime Minister (Mr Gorton) to heed the representations that have been made and to pay regard to the contributions of the people who work in mines in remote parts of this Commonwealth.

I would like to touch upon inequalities in the tax law particularly with regard to expenses incurred by taxpayers in the earning of income. Company directors who operate expense accounts are entitled to charge those expenses against taxation, and they do so. There is no argument about that. But the costs incurred by commuters who travel every day of the week to the big cities to engage in industry, work in offices or attend to their professional duties are not allowed as deductions for tax purposes. This is obviously a great injustice and should be corrected. There should not be one law for the company director or executive and another law for the commuting citizen. If it is good enough for the company director to charge his expenses against taxation it should be good enough for the commuter who is obliged to use public transport or, for that matter, private transport in travelling to his place of employment to do likewise.

In making these remarks I think of the thousands of people who live on the Blue Mountains in my electorate who are obliged to travel to Sydney each day to work in industry or commerce. These people are victims of discrimination. To refuse to allow them to claim travelling expenses as a deduction for income tax purposes is unjust and unfair. It violates all principles of justice. This matter should be investigated to see that there is fair play in the matter of expenses claimed as deductions for tax purposes. Miners are often obliged to buy a motor car in order to travel to work because satisfactory public transport is not available. A motor car is essential if they are to get to the mine and win the coal or other commodity which is of such importance in the economic life of this country. These men have made approaches to the Treasury and to the Treasurer seeking some relief, but their claims to charge against taxation travelling expenses incurred in earning their living have been rejected. Most of the expenditure on the purchase of a motor car and on registration and running costs is for the purpose of earning a living. As a result their income in the industry has been reduced.

The same argument can be applied to those engaged in the timber industry. These people have to travel great distances to the forests in which they cut the timber. It is notorious that there is a lack of accommodation close to where the trees are being felled. As a result, the timber workers have to travel a fair distance from some country town or village into the forest to fell the trees to provide the timber that is so necessary for the comfort and security of our people. But the men who have to meet the expense of this travel are not allowed to claim it in the compilation of their income tax deductions. Although it is late in the day, the Government should consider the matter. I believe that a Labor government would accept responsibility for dealing justly in matters of this kind. I raise this matter to emphasise the great injustice which has been perpetrated upon a large number of people over the years.

Another group of people who are being treated unjustly are those engaged in fire fighting. This is a shameful, shocking and scandalous state of affairs. These people are giving their time and energy to fighting bush fires. Only last week I attended a field day at which twenty-three bush fire fighting brigades were in attendance. Com petitions were conducted and notes were compared by these brigades in an endeavour to become more proficient in the saving of homes and lives. But when these men buy a helmet or a uniform they are not allowed to claim the expense as a taxation deduction. I repeat that these items are not authorised taxation deductions. I have made representations but my representations have been rejected. This shocking state of affairs should not be permitted. If there is one thing that the Government should heed it is the pleas of these men who have performed such an outstanding public service over the years. No more notable service could be given to their fellow men. It is on record that men have died whilst fighting fires to protect the people of the area. Of course, the Government is not moved by their pleas. Canberra is too far away and those who advise the Government are too remote from such problems.

I close with another thought. The Government makes a contribution towards national fitness, which is important to the nation. But what is the position in regard to those clubs which are engaged in sporting activities? For instance, rowing clubs have to provide the shells and oars. Is any taxation concession granted for the provision of this equipment? No, it is not. Taxation is imposed on the very equipment that is used by national fitness organisations to build up the fitness of the citizens of Australia. These are examples of the scandalous record of a Government which is unwanted in this country. The sooner it is defeated the better.


– I agree with most of the comments made by the honourable members for Wilmot (Mr Duthie), Braddon (Mr Davies) and Macquarie (Mr Luchetti) in regard to taxation concessions which should be granted to people in the mining industry. It is almost invariable that mining discoveries are made in isolated areas. Of course, there are certain penalties associated with isolated areas. One is the distance from the ordinary amenities that are enjoyed by the people who live in more favoured areas. The point I wish to make, and it is probably the only point I wish to make, is in relation to the concessions granted nowadays by mining companies to their employees. These concessions are granted to the employees to encourage them to settle in and become permanent members of the community. Most mining communities have a reputation for the transience of their workers. The workers come to the area and make quick money before getting out. The companies try to make the workers and their families content with becoming permanent members of the community. In order to achieve this certain concessions are made available to the workers by the companies. One concession I have in mind is the concession granted by the major company in my electorate, Mount Isa Mines Ltd, of free air travel once every 2 years to the capital city of Brisbane for a man and his family. Because of the tax on this benefit the concession is reduced quite considerably. I would say that this matter should be looked at very closely by the Treasurer (Mr McMahon).

Mr James:

– Are there any strings to it?


– No, there are no strings except the strings applied by the Commissioner of Taxation. One has the spectacle of a good part of the concession being lost to taxation. As the honourable member for Macquarie pointed out, miners have to use safety helmets, boots and other apparel of this nature but these items are not allowable as taxation deductions. I believe that they should be allowable. Tremendous mining activity is going on in my electorate. Other activities are emerging around Cloncurry and Mount Isa as well as the Mount Isa mines. There is also the ever-increasing coal development in the central west of Queensland at Blackwater and places like that. I would hope that the operators of these developments will continue to offer increased concessions to employees in order to entice them to these areas and then influence them into becoming permanent citizens. I believe that the Taxation Branch has a role to play if these people are to settle in these areas and become permanent citizens. I believe that they should receive some encouragement.

The other matter I would like to mention does not relate precisely to taxation. At present we have the situation of communities bursting at the seams and snowballing. I believe that there should be some very precise planning. An important element in this regard is taxation. But the matter goes further than that. One cannot plan and develop under the normal formula a mining town that is bursting at the seams. In 10 years time such a town may have a population of 5,000. There are many rapidly developing mining towns, particularly in my own electorate. Therefore, I believe that the local authorities as well as the State and Federal governments should watch closely the development of these areas, particularly the health and education aspects. They should plan so that these facilities are adequately provided for. In this way one will have workers who are happy with the set-up and will become permanent citizens of the area.

Mr Clyde Cameron:

– I am obliged to the honourable member for Kennedy (Mr Katter) for the excellent case he has made out against the Government. It is quite noticeable that whenever supporters of the Australian Country Party have an opportunity to snipe at the Government, particularly the Treasurer (Mr McMahon), they will always do so. Once again we have an example of a supporter of the Country Party making snide shots at the Treasurer because he has failed to give proper attention to a certain matter. In this instance it is the needs of the Mount Isa miners. The honourable member for Kennedy is quite right in his criticism. What will the Mount Isa miners do about the matter? Will they return the honourable member at the forthcoming election so that he will again be able to come here and support the very Government which has neglected them in the way that the honourable member has so eloquently described tonight? If they have any brains they will vote against those who support the Government which is perpetrating these anomalies in the taxation laws and will elect somebody who is pledged to a Party which will remove the anomalies of which they complain. I appreciate that the honourable member has not had much experience, but I think that, without realising what he said, he has-

Mr Katter:

– I realise exactly what I said. I do not need any guidance from a King William Street expert.

Mr Clyde Cameron:

– I am pleased that the honourable member knows what he said because the people in the electorate of Kennedy have been told that they should vote against somebody who supports the sort of Government which goes on ignoring the just needs of the people in the electorate, particularly those who live in the Mount Isa area. The honourable member for Kennedy made his point quite well and I support him in what he had to say. However there is another point I want to raise. I think we have reached the time when wc should look carefully at the taxation allowances in respect of machinery purchased for mechanising the building industry. Year after year we look at the building statistics and we find that the rate of building is not keeping up with the current demand, let alone taking care of the backlog. The reason why this is so is because the building industry in Australia is so poorly equipped. It is not properly mechanised. It has not taken full advantage of the mechanisation that is available to it if it were in a position to become more highly mechanised.

I am told by people in the brick making industry, by people in the cement industry, by people in the roof tile industry and by people in other industries basic to the building industry that one of the reasons for this is that when they purchase machinery they are not allowed to write it off at a rate that makes it attractive to introduce machinery to the industry. The fanners are able to write off the cost of a silo to store the wheat which the Government has not been able to sell and which through its own lack of interest and apathy we find mounting up all over the country. If it is right that they should be able to write off the cost of a silo in 1 year, surely in a country that needs more houses so badly - and which we will never get unless we 4«et more basic materials - the first thing we ought to be doing is to extend to the building industry the right to write off the cost of mechanising the basic materials section of the building industry.

That is all I want to say except that since we are reaching the end of the Parliament I want to compliment you, Mr Deputy Speaker, on the able manner in which you have presided over the Parliament during this session. You have presided over the Parliament with great distinction, great dignity and great impartiality. I for one, like many other members on both sides of the

House, would like to place on record my appreciation of your dignity and impartiality.

Mr DEPUTY SPEAKER (Mr Cope)I will send the honourable member a Christmas card.

Minister for Civil Aviation and Minister assisting the Treasurer · Darling Downs · LP

– I can do nothing but support the last comments of the honourable member for Hindmarsh (Mr Clyde Cameron) and hope that you, Mr Deputy Speaker, will send me a Christmas card also. In view of the fact that the time has gone a little beyond that at which wc originally expected we would finish this Bill I will refrain from making a number of comments on this measure because we have a couple of amendments to move in the Committee stage. But I must refer very briefly to one or two of the comments that have been made, particularly by the honourable members for Wilmot (Mr Duthie), Braddon (Mr Davies) and Macquarie (Mr Luchetti). Whilst the matters they raised were of great interest and certainly were raised with great sincerity, they had little reference to the measure that is before the House. Whilst we have noted the comments which have been made, I am afraid that they cannot be accepted in the context of the Bill that we are discussing at the present time.

I want to refer to the Bill itself. Much has been said about profits on the sale of shares and double taxation deductions, but very little has been said about the major amendment proposed by this Bill, that is, the amalgamation of Sections 77a and 77 aa into a new Section 77d. That has been done to meet the present circumstances of a number of exploration companies that are engaged or wish to engage in both oil and other mineral exploration and mining. The amendment will undoubtedly assist those companies both in the raising of risk capital and in the management of their operations. The companies will also benefit from the amendments in that the amount declared for the benefit of shareholders under Section 77d will not reduce the companies’ own allowable capital expenditure until the amounts declared are actually expended and not, as under the present law, when the amounts are declared.

Finally, 1 wish to refer to the major amendment that was made to the income tax law last year which both widened the scope of allowable expenditure for mining companies and which also clarified and brought up to date many of the capital expenditure provisions. It is also interesting to note that the honourable member for Melbourne Ports (Mr Crean) and the honourable member for McMillan (Mr Buchanan) raised a number of questions under this measure which really referred to Section 26 (a) of the income tax law. While most of their speeches were devoted to this aspect of the income tax law, they had no relationship whatsoever to the Bill presently before the House, but we have certainly noted the comments which they have made-

Question resolved in the affirmative. Bill read a second time.

In Committee

The Bill

Minister for Civil Aviation and Minister assisting the Treasurer · Darling Downs · LP

– I refer to clause 6, which reads:

Section 75 of the Principal Act is amended -

by omitting paragraph (h) of sub-section (1.) and inserting in its stead the following paragraph: - “ (h) the construction of-

structural improvements for the purpose of conserving water for use in carrying on primary production on the land (including dams, earth tanks, underground tanks, concrete tanks and stands for tanks); or

irrigation channels or similar improvements for the purpose of conveying water for such use;”;

by omitting from paragraph (j) of subsection (1.) the word “or” (last occurring);

by inserting after paragraph (k) of subsection (1.) the following word and paragraph: - “; or 0) the construction on the land of buildings or other structural improvements for the purpose of storing foodstuffs for use in the feeding of animals in the course of carrying on primary production on the lond,”; and

by omitting from sub-section (2.) the words “under paragraph (g), (ga), (gb), 00, (i), 0) or (k) of the last preceding sub-section” and inserting in their stead the words “under paragraph (g), (ga), (gb), (h), (i), (i), 00 or (l) of the last preceding sub-section”.

I move:

Add the following words after sub-paragraph df) of proposed new paragraph (h): - “, including the sinking of bores or wells for water for such use1’.

The amendment relates to paragraph (a) of clause 6 concerning the insertion of a new paragraph (h) in section 75 of the Income Tax Assessment Act. The purpose of the new paragraph is to extend the scope of water conservation facilities the cost of which is wholly tax-deductible by primary producers in the year of incurrence. In its old form the paragraph specifically referred to the cost of sinking bores or wells. This reference was dropped in the amended paragraph and, although it is considered that, in technical terms, the new paragraph would, like the old, cover the cost of such expenditure, the Government has decided, in the light of representations it has received, that it would make the position clearer to primary producers if the specific reference to the sinking of bores or wells were restored. The amendment I propose will, accordingly, restore the specific reference to the sinking of bores or wells. I move:

In paragraph (c). omit ‘storing foodstuffs for use in the feeding of animals’, insert ‘the storage of grain, hay or fodder’.

The amendment relates to paragraph (c) of clause 6 concerning the insertion of a new paragraph - paragraph (1) - in section 75 of the Income Tax Assessment Act. As it now stands, the proposed new paragraph (1) of section 75 of the Income Tax Assessment Act will mean that the cost of installing facilities for on-farm conservation of fodder will be deductible in full in the year in which it is incurred. The Government has decided that it would be appropriate to extend the 100% deduction to all on-farm facilities for storing grain, hay or fodder. I commend these amendments to the Committee.


– I would like to speak briefly on these two amendments. The first amendment is one with which everybody will agree. There is some difficulty of interpretation of section 75 with respect to the actual sinking of bores. However, I think it is a good amendment. But I believe that the second amendment will set a dangerous precedent. It is quite obvious from the answer that was given by the Minister for Trade and Industry (Mr McEwen) in response to a question asked by a member of the Country Party that he was under the impression, as many others were, that the 100% deduction for structures for the storing of foodstuffs or grain applied to storages for grain which was to be later moved to Wheat Board silos. The prime purpose of the amendment is to provide 100% depreciation for structures to store foodstuffs for use in the feeding of animals on the farm. This is in line with other depreciation allowances but the precedent that is being established here could lead to abuse. For example, there is nothing to stop a dealer who classes himself as a primary producer from establishing large structures on a property for the express purpose of storing fodder for sale. This is not the purpose of the Act.

In the present circumstances a primary producer who builds a structure to store wheat which is subsequently sold to the Wheat Board is entitled to this deduction. Under the crisis conditions in the wheat industry today there may be some excuse for this, but as I say these amendments provide a loophole for anybody who wants to set himself up as a dealer with the prime objective of selling either fodder, grain or hay which is not to be used on the property. In other words, there is nothing to stop him buying produce from elsewhere for resale. This is not in accordance with the provisions of the Act. This is not what the Act was designed for nor is it the purpose of this Bill. 1 should think that the Taxation Branch would have to look closely at this amendment otherwise it could be subject to abuse.

Minister for Civil Aviation and Minister assisting the Treasurer · Darling Downs · LP

– This amendment refers solely to a farm. The reference is to farm facilities for storing grain, hay and fodder. Perhaps a must unusual circumstance might arise, as the honourable member for Dawson (Dr Patterson) suggested but generally 99% of the cases to be covered by the amendment would be genuine cases.

Amendments agreed to. Bill, as amended, agreed to. Bill reported with amendments; report - by leave1 - adopted.

Third Reading

Bill (on motion by Mr Swartz) - by leave - -read a third time.

page 1902


Bill - by leave - presented by Dr Forbes, and read a first time.

Second Reading

Minister for Health · Barker · LP

– I move:

That the Bill be now read a second time.

The Bill before the House provides machinery by which special groups of people in need may receive adequate medical and hospital insurance benefits. The people who will be assisted by this Bill fa/1 into two groups - those on low incomes and migrants. With regard to the first group the Bill provides machinery whereby people on low incomes may have adequate insurance cover under the national health scheme without the burden of paying contributions normally necessary to secure the benefits available under the scheme. These people on low incomes fall into two categories: Firstly, people in receipt of unemployment, sickness or special benefit under the Social Services Act 1947-1969, and secondly, families whose means are within prescribed limits.

Those eligible for unemployment, sickness or special benefit and who are already members of a medical or hospital benefits fund, may continue membership without the need to pay any further contributions to the funds for the period of unemployment or sickness and for 4 weeks after the unemployment or sickness ceases. Claims for benefits in respect of medical or hospital expenses during the period of assistance will be paid by the funds in the normal way. The funds will claim on the Commonwealth, not only for the Commonwealth benefit as provided under the existing law, but also for the fund benefits paid. Similar provisions will apply to persons who join funds during the period of unemployment or sickness except that the benefits will nol be available in respect of medical or hospital expenses during a waiting period of the first fortnight. This period is considered necessary to prevent undue abuse of the arrangements.

Special beneficiaries under the scheme are those who, although not qualified to receive unemployment or sickness benefits, are unable to earn a sufficient livelihood, by reason of age, physical or mental disability or domestic circumstances, and to whom the Director-General of Social Services has granted a special benefit. It is estimated that there are in Australia approximately 30,000 unemployment and sickness beneficiaries at any one time. Assistance under the Bill is available for medical and hospital expenses incurred after 1st January 1970 and the fund benefits which are the subject of reimbursement are those available under approved scales of benefits. The approved scales will be, for medical benefits, the highest table of fund benefits available and, for hospital benefits, the table providing cover for the public ward hospital charge in the State concerned. The medical benefits available will be limited so as not to exceed 90% of the medical account in accordance with the principle of the present scheme.

For low income families, where the head of the family is of pensionable age, assessment of eligibility is on the same basis as that for age pension purposes. That is, the assessment takes into consideration both property and income and is therefore consistent with age pension assessment. A family is eligible for benefits if, on this basis, the means as assessed does not exceed $2,028 per annum. That amount is the annual equivalent of $39 per week. For younger families, where the head of the family is not of pensionable age, assistance is available if the weekly cash income does not exceed $39 without regard to property. The ceiling of $39 provided by the Bill approximates the average minimum wage payable under the Commonwealth awards in the various States. Assessments of income and means levels of beneficiaries will be reviewed from time to time and in cases where income has moved above the ceiling, the contributions to funds will continue to be waived for a further 4 weeks after notification of the withdrawal of the assistance.

The levels of benefit available are the same as for unemployment and sickness beneficiaries and there is no waiting period for those who, on becoming eligible under the scheme, are not already insured. Those eligible are persons who qualify under the income or means test, who have at least one dependant and who are not enrolled in the pensioner medical service. It has been estimated that about 100,000 families compris ing nearly 300,000 people will be eligible for the assistance now being made available under the Bill to low income families.

With regard to migrants, the Bill provides cover under the national health scheme for medical or hospital expenses which are incurred within 2 months of entry into Australia. This cover is available even if the migrant has not joined an organisation at the time when the expense was incurred. Migrants in the first few weeks of their arrival in Australia have health insurance problems which are not necessarily financial ones. In the short term, migrants, especially those from non-English speaking countries, are faced with a bewildering number of problems in adapting to our ways of life. This has been noted particularly in the matter of health insurance, and, despite assistance and guidance in many directions by Immigration officials before, during and after migration, many migrants fail to insure quickly enough to avoid the burden of medical expenses in the early period after arrival. Many migrants, of course, do insure promptly. However, individuals who suffer illness can be faced with financial hardship if they are not insured. The Bill therefore has been drafted to provide a breathing space for these people by ensuring cover during the period of 2 months after arrival. Migrants who incur medical or hospital expenses during that period may, on joining a benefit fund, claim for normal benefits in respect of those expenses. The fund which pays the benefits will then claim reimbursement from the Commonwealth for the benefits so paid.

The Bill provides for the benefits to be available notwithstanding that the migrant was not a member of a fund when the illness occurred. Migrants who insure themselves in the breathing space afforded by this legislation will also be covered in respect of claims for medical and hospital expenses incurred after the expiration of the 2-months period thus ensuring con.tinious cover. Benefits available are at the same level as under the other measures contained in the Bill, that is, the highest medical tables and the public ward hospital tables. The benefits are available to all migrants on first permanent entry into Australia and operate in respect of illnesses after 1st January 1970. It is estimated that the measures will cost approximately SS.lm m a full year. I commend the Bill to the House.

Debate (on motion by Mr Whitlam) adjourned.

page 1904


Generic Prescribing - Commonwealth Serum Laboratories - Northern Ireland - Returned Services League - Commonwealth Police Investigation - Road Safety - Repatriation - Valedictory

Motion (by Mr Erwin) proposed:

That the House do now adjourn.


There is a good case, as I have remarked before in this House, for a central drug authority in Australia. One of the jobs of such an authority could well be the compiling of names for official drugs just as streamlined as the patented trade names so dear to the heart of the honourable member for Bowman (Dr Gibbs). I want to take issue with the honourable member who has argued for trade name prescribing. Certainly Terramycin is more romantic in derivation and streamlined than the alternative oxytetracycline. But the argument he used is a rather shallow one. If BP criteria for drug purity and effectiveness are inadequate, then it is time we looked for something better. Anyone who has heard the honourable member for Bowman speak on this subject could be pardoned for concluding that z would rather be guided by the big drug firms on matters of drug standardisation than by any statutory body. This is quite consistent with his doctrinaire anti-Socialist, pro-monopoly philosophy.

It is claimed that Terramycin produces higher blood levels of oxytetracycline than so-called generic oxytetracycline; that is, a cheaper brand which the chemist will supply unless there is a brand indication in the prescription. This may well be so. The evidence produced by the honourable member for Bowman is not, however, scientific evidence. To be valid it would need to be a double blind trial. That is to say, the opposing brands would have to be produced in a form indistinguishable from each other to both those who take them and those who assess clinically the effectiveness of the drug. The persons who are the subjects of the experiment must be statistically matched and then the drugs alternated between the groups. This is known as a double blind cross-over trial.

The experiment referred to by the honourable member for Bowman may have been such, but the evidence he gave was not to that effect. In any case, the findings may be quite valid. They may be quite capable of being repeated in other experiments. His point will then be proved if it has not already been proved. He said that he could give other examples but I would be surprised if the list he can produce based on scientific criteria will exceed a handful of drugs. His conclusion that trade name prescribing should be allowed is also valid only so long as the official standards of drug potency remain inadequate and inferior to those of private drug interests. There is no good reason in the wide world why they should be if the statutory authority concerned is doing its job. It may not be necessary to specify the average blood level reached or the peak blood level reached in a large number of a specified type of population. In fact it is highly unlikely that this method is used by the Pfizer corporation or any other firm which claims its product is superior to its generic competitors.

A common explanation given for this superiority is a micronisation of drug particles, or to put it in the vernacular of the television commercials, the drug may be microfined. The smaller particles, obtained sometimes by a filtering process, dissolve and absorb more readily and so may reach higher blood peaks, which are more effective, but this effectiveness will be to some slight extent offset by quicker excretion of the drug which of course normally accompanies the higher and earlier blood peaks. Other advantages may depend on the shape or wetability of the particles of the active ingredient or other factors which can be measured far more simply than by using human guinea pigs or real guinea pigs. They may be additives concerned in drug effectiveness, and to use another television advertisement, beloved of the petrol companies, for example, the alcohol vehicle which preserves atropine methonitrate. which has the trade name Eumydrin, or the drug probenecid, which has the trade name Benemid, which is taken with penicillin or separately to delay excretion of penicillin and so keep up its blood levels. If such an additive is the reason for the advantage of the trade name product, then the additive itself should take its place in the official l’ist, as ethyl alcohol and probenecid have done. The drug firms who have spent so freely in recent years and months to convince the medical profession that they should jealously guard their right to trade name prescribing are very often the holders of patents and supply the coarser grades of the drug to smaller operation. It is then a very easy matter to set up an experiment such as the one quoted by the honourable member, knowing with certainty in advance that their product is micronised. That is, they have passed it through a filter and passed off the coarser fraction of the product to their competitors. They do not, of course, do this at a loss. Their gross profit margin is therefore higher than that of their customer competitors and this so richly rewards the cost of their research that they spend about one-quarter of the manufacturing costs on promotion of sales and another quarter goes in dividends, according to a survey of the twenty-two largest producers in the United States a few years ago. A report of the survey was published in the British Medical Journal.

I again appeal to the Government to set up a national drug authority to save the continual conflicts between State drug laws, but above all to free the Commonwealth Serum Laboratories Commission from the unfair restrictions placed on it. This is in contrast to the freedom of private drug interests to enter any field of drug production. A Labor government will not shackle this efficient, pioneering research and manufacturing drug firm to the production of biological products only. There was a case for this when the Commonwealth Serum Laboratories Commission was set up, because biological preparations at that time were mainly perishable and were bard to obtain overseas. There is no longer a case for it, except the doctrinaire, anti-Socialist attitude that private enterprise must be best even if this must be proved by putting Government restrictions on public enterprise.


– The honourable member for Capricornia (Dr Everingham) did not do me the courtesy of advising me that he intended to attack me or my remarks tonight. However, it is very easy to refute his arguments. There is as much truth and basis in his argument as there was in recent statements he made. One was that the present Queensland Government could not achieve power after many years of Australian Labor Party rule until it adopted as its electoral policy the preservation of the free hospital system, which it still vigorously defends. That is a completely untrue statement. The Country Party-Liberal Government in Queensland came to power when the Australian Labor Party in Queensland split asunder because of doctrinaire differences. These differences still exist within the ranks of the Parly at the Federal level. There is as much truth in his argument tonight as there was in his statement that the free hospital scheme in Queensland was bitterly opposed by the predecessors of the present Minister for Health. One of the strongest protagonists of this scheme was the present Minister’s only predecessor, the late Dr Winston Noble, a man whom I personally knew very well. He was extremely keen on the free hospital system in Queensland. Indeed he was so keen that he offered his services in an expert capacity to the Queensland Labor Government when he was a member of the Opposition. Of course, his offer was rejected.

The honourable member for Capricornia seems to have caught an infectious disease from the Leader of the Opposition (Mr

Whitlam), the infection being the argumentum ad hominem. The principle of this is: Do not let us spend too much time on the argument as to fact. Let us attack the man. Let us have a go at some of his attitudes or general viewpoints.’ They will fill in time in this way but will not get to the basis of the argument. This is what the honourable member for Capricornia did tonight.

His argument tonight is an argument that is espoused by most Socialists in Australia but not so much by their colleagues in Great Britain, because they have learned by experience. In this argument he tacitly admitted that there were differences between drugs of the same broad chemical composition. I will use the drug that he mentioned, oxytetracycline. It does not worry me what its name is. Terramycin has not sounded a particularly romantic name to me, but I have always recognised that the firm that manufactured it is of high probity and produces a highly effective drug. That is why I prescribe it. I do not prescribe it very often but when I do I prescribe Terramycin by name. I know it is highly effective and I can be sure of its action.

The honourable member nevertheless admitted that there were differences between various groups of the same drug. He suggested that this might be due to addi tives or different forms of the drug, and he is certainly right. He challenges me to take other examples. There are thousands of other examples. I will bet that in the days when thyroid BP was being prescribed, he was prescribing, if he was a good doctor, thyroid BP.BW because it was by far the superior brand. But what about Chloromycetin - chlorampheticol. If he does not admit that there were many instances when the drug, though chemically the same, was virtually unabsorbed. he has not been reading his literature very well.

There are many other examples, but I will take a simpler one. Let me take the case of an enteric coated drug - a drug that is coated so that it will not dissolve until it has passed through the stomach. There are many enteric coatings, though the substance inside might be absolutely identical. However, because the same skill is not used in applying the enteric coating or because an inferior type of enteric coating is used, the preparation goes right through the body without being absorbed at all. The patient might just as well never have taken the drug. Though they might both, for example, have sodium salicylate, the patient might just as well never have swallowed one as compared with the other. I challenge the honourable member to deny this. This is why a doctor who is not blinded by his doctrinaire socialism will prescribe the drug manufactured by a firm that he knows and trusts. He will prescribe the drug that he knows from his own experience and from reading literature is more effective than another, because it is so prepared that it will be absorbed.

The honourable member also made some remarks about making a double blind test. This is all very well, but it is utterly irrelevant to the set of circumstances that I spoke about. I spoke about blood levels. There is no gainsaying the fact that, if a certain identifiable blood level of a drug is achieved and if that level is higher than the blood level of a similar drug prepared by another firm, that is prima facie evidence that the preparation that produces the higher blood level is more effective. The question of double blind tests does not enter into it at all. I made the point that one preparation of oxytetracycline is absorbed far better than another is. This is conclusively proved simply by stating that the blood level of the first was higher than the blood level of the others. Talking about double blind tests in this context is just talking nonsense.

Then the honourable member went on to say that if one firm discovers an additive that produces a better effect on a patient - that is, it is more effective - the additive should be included in the generic nomenclature. The name of this additive should be disclosed. The honourable member loses sight of this fact. He will find that the incentive to do research is lost when the discovery is taken away from the firm that has done very expensive research without allowing it a considerable time in which to reap the financial benefits of its discovery. This is proven conclusively by the fact - this is not denied by anyone - that when we take away the profit motive we take away the incentive to produce new drugs. Russia, for example, has produced practically no drugs of any worthwhile effectiveness. It has certainly broken no new ground in the field of pharmaceuticals since the Revolution. It has made a nil contribution in this field. It invented a few antibiotics, but they were all variants of an existing highly toxic type of antibiotic. In the field of chemo-therapy, it has produced nothing. In fact, no socialist state has produced anything new. This is universally admitted. Only firms that have the incentive of profits that they will gain from their research arc engaged in productive research, lt is the incentive that the human being requires to venture forth. If he is denied incentive he stagnates. lt is the same with drug companies. In fact drug firms are particularly fine examples of this. This is recognised by the British Socialist Government. During the course of one of my investigations into the British health scheme I had a great deal of discussion with the person who controls drug pricing. He admitted that this was a fact and that the British Socialist Government had recognised it by giving firms who produced a new drug a preferential rate of costs for a number of years so that they could recoup the cost of their research. This was done in an endeavour to induce them to continue their research.

I have only a few moments left to deal with the remarks made by the honourable member for Capricornia about the Commonwealth Serum Laboratories. The Laboratories are doing an excellent job in their present field. A Labor government would want the Laboratories to parasitise on the discoveries of drug firms: to produce the drugs in Australia and possibly undercut them. At least it would want preferential treatment for the Laboratories and would therefore drive out those firms in Australia which are doing a magnificent job for us by producing drugs for export, certainly to Asia, and are employing scientists who previously worked abroad. The research work of those drug companies has attracted our scientists to return to Australia. They are employed in the manufacture of very high quality drugs. The companies are greatly benefiting our economy and the people of Australia. If the Commonwealth Serum Laboratories are to be unleased into this field and away from their own private field, this action certainly will discourage further drug firms from coming to Australia, and this will be to the detriment of our people.

Mr MINOGUE (West Sydney) fi 1.2]- Mr Deputy Speaker, I thank you and honourable members for allowing inc the opportunity to speak in this House tonight. 1 thought I had finished making speeches in this place 2 weeks ago when I made my swan song. As one who realises that friends must part I was prepared to leave it at that. However since then everybody I have met has asked me what 1 intend to do in retirement. Retirement is something I had never worried about. I was invited to join an association working for the people of Northern Ireland. Honourable members may laugh. However if it was Russia or any other country all honourable members would be prepared to speak to them, as did the Prime Minister (Mr Gorton). Five weeks ago I saw thousands of people come from Northern Ireland to Southern Ireland for protection. Their homes had been burnt and shot at. People had fired from cars passing by. In 1 week 5,000 homes were burnt. Thousands of people have left Northern Ireland and have gone all over the world. Some of them are in Australia today. Other homeless people have been taken in and given protection.

In Sydney we have started a body known as the Northern Ireland Interdenominational Distress Organisation. Two of the patrons of this body are His Eminence Cardinal Sir Norman Thomas Gilroy and the Right Reverend F. O. Hulme-Moir, Bishop Coadjutor of Sydney. Those two gentlemen would not have put their names lightly to something that was not genuine. It is my duty to tell people wherever I go from now until 2nd October - that will be Thursday week - that there will be a public meeting at the Sydney Town Hall on that date. The Organisation has received the sum of $2,300 at present by way of donations from good people. However that is not enough. Therefore we hope and trust that more money will be coming in.

Mr Clyde Cameron:

– What was the date of that meeting?


– The meeting will he held on 2nd October. Do not get it confused with the night on which the Labor Party opens its campaign. I understand that our campaign will be opened the night before. This public meeting will be held in the Sydney Town Hall at S p.m. and all are welcome. I am pushing this meeting as much as I can in order to help in some way people who cannot help themselves.

There is a Labour Government in England. I am sorry to say it is not living up to the tradition of Labour. What has been happening in Northern Ireland can be called nothing but murder. Eight people were shot during one day and night. This sort of thing is continuing. The English Chancellor of the Exchequer provides ?Stg300m a year to keep the H million people of Northern Ireland going. The Prime Minister of England said the other day that those subscriptions would have to be withdrawn if certain people in Northern Ireland did not agree with what he had been trying to do. The Labour Government in England also has condemned out of hand Bernadette Devlin, the girl member for Bogside - Mid-Ulster if you like - and has told her that she belongs to the Castro regime, whoever Castro is. However she has told them, in her own language, that if they want peace in Ireland they should go and make peace. To Bernadette Devlin’s credit, during the first 2 days that she was in Parliament she said it was wrong to say that she was against people in the north of Ireland who are against the English Government. She said that they could not exist were it not for the ?Stg300m that is poured in to keep Stormont going. The people of Northern Ireland want only a portion of that money in. order to carry on. There are half a million people without guns, ammunition or anything else while the English Government is buying guns and ammunition for the remaining 1 million people.

Honourable members might ask whether I have any proof of this. There is proof enough that the ?Stg300m is being poured into that country and it is not given to the 500,000 people I am referring to. A representative from Northern Ireland is always present at Commonwealth conferences which we attend. I met the representative for Northern Ireland at a conference I attended 2 years ago. I said to that gentleman: ‘There are four Lords present today and for the Lord’s sake do something about the north of Ireland. Do not let it become a second Rhodesia in the near future.’ That is exactly what has happened. Mr Deputy Speaker, with the concurrence of honourable members I incorporate in Hansard a document setting out the purpose of the Northern Ireland Inter-Denominational Distress Organisation, New South Wales Branch.

page 1908


President: Hon. Secretary: Hon. Treasurer:

Dr M. Fitzpatrick Mr S. Connaughton Mr E. J. Drew 81 Rangers Avenue 14 Emily Street 92 Miller Street

Leichhardt, N.S.W. 2040 North Sydney, N.S.W. 2060

Phone: 56 8502 Phone: 92 3624

Cremorne. N.S.W. 2090 Phone: 90 2839


His Eminence, Cardinal

Sir Norman Thomas Gilroy

The Rt Rev. F. O. Hulme-Moir Bishop Coadjutor of Sydney

John Armstrong

Mrs Wal Chandler, o.b.e. Dr Catherine Hyndes Professor Noel Martin

Dr Gwen McGirr

James A. Meagher, ll.b

Dan Minogue, m.h.r.

Assoc. Prof. P. J. O’Farrell

Mrs Senan Ryan

Dr Plunkett Sweeney

This Organisation was founded by prominent citizens in order to alleviate the grave hardships being experienced by different Religious groups in Northern Ireland. It has been known that those unfortunate people most effected are in no way connected with the present disturbances.

Accordingly, we felt a sense of duty, based on humanitarian grounds, to try and help the needy who have suffered so much in recent months. At least 5,000 families are homeless, and destruction in parts of Belfast and Derry closely resembles that of London during World War II blitz.

We are appealing to your generosity in order that we may be able to provide the needy with the necessities of life. The Irish Committee to which we are affiliated is Inter-Denominational. It consists of prominent and respected figures. They will see that all funds raised will go to those most in need.

Charity demands that we who are fortunate enough to live in a peaceful and affluent society, should help to alleviate the great suffering being experienced by our less fortunate brothers in Northern Ireland.

Please contribute as generously as possible by sending an immediate donation. Also try and influence your friends and neighbours to do likewise. Aid is urgently needed. Without immediate help many lives may be lost through malnutrition and lack of proper housing facilities.

His Hon. Judge G. B. Thomas

Please forward all donations to: Mr E. J. Drew, Drew’s Pharmacy, Agent for A.N.Z. Savings Bank, 92 Miller Street, North Sydney 2060

Help such as yours given in the name of humanity may be the means of bringing together all religious factions, so that like ourselves they may liv in peace and harmony.

Yours sincerely,

Dr Michael Fitzpatrick, President

And make cheques payable to: Northern Ireland Inter-Denominational Distress Organisation, N.S. W. Branch ] have incorporated this document in order that the exact truth might be known. People might interpret what I have said one way or the other. I want the truth of this paper that has been sent to me to be made known.


– I wish to pay tribute tonight to a body which does a very fine job in the community and gets very little credit. I refer to the Returned Services Leagues throughout Australia. People tend to think erroneously of the RSLs in two ways - either as a group of people who band together to talk about the last two world wars and the Boer war and to fight again the battles of those days or as a pressure group which tries to get governments to give to returned service men and women concessions to which many people think they are not entitled. In my own State of New South Wales there is often a wrong picture of poker machine palaces and sentimental smokos with tribute paid at 9 o’clock each night to those who fell in past wars. I wish to say tonight that there is a side to the work of the RSLs throughout Australia that is seldom mentioned but that the public should be told about. The image that I have outlined as the public’s view of RSLs is a false one - certainly it is a band of ex-servicemen and women, and certainly they are bound together by sentiment and a shared sacrifice in the service of our great country. Certainly they do put pressure on the Government to improve the lot of ex-servicemen and women, but they do not try to get them concessions to which they are not entitled. 1 know that in my own State of New South Wales the RSL discourages its members from applying for pensions if it feels that they are not genuinely entitled to them. The RSL realises that every man or woman who applies for a pension entitlement without genuine reason weakens the chance of genuine applicants, and so it discourages the phony and the adventurer. I was discussing this with the honourable member for Kingston (Miss Brownbill) during the Winner adjournment and she wholeheartedly supported my contention that throughout the Commonwealth the RSL is carrying out its declared policy of working for the people. As a matter of fact, Brigadier Tom Eastick, the South Australian president of the RSL and my former commanding officer in Borneo, is one of her constituents and she is loud in her praises of what he has done for the returned men and women. She has told me of the splendid community service the RSL provides in the electorate of Kingston.

J find the RSLs, in my State anyway, a group of people dedicated to a welfare programme for ex-servicemen and women and their dependants. Also, they are doing a tremendous job for the youth of the community. It is about this side of the RSL’s work that I wish to speak tonight. Perhaps I may be pardoned if I restrict my comments to my home State of New South Wales, as this is the State in which the RSL youth movement is most active. In New South Wales the membership of the RSL youth clubs is in excess of 40,000 young men and women, boys and girls from the age of 5 years up to 21 years, irrespective of class, creed and colour. An important point I wish to stress is that membership is open to all children whether their parent or parents are members of an RSL or not. In addition to this, RSL clubs are giving active support to many youth clubs outside the ambit of the RSL, covering many thousands of young people in addition to the 40,000 young people I have mentioned.

The aim of the RSL youth clubs is to perpetuate the close and friendly ties of friendship created by mutual service. Secondly, the aim is to set an example of public spirit and patriotic loyalty to Australia. The clubs are maintained by purely voluntary effort by a dedicated band of RSL officers and instructors in various interests and sports. They give a tremendous amount of their leisure time and money to guide these young people along the way of democracy, freedom and liberty. I pay a tribute to them. Some of the RSL clubs in my electorate of Barton do not have accommodation for youth activities such as the clubs at Ramsgate and Brighton-le-Sands have. In these cases they give practical assistance to other youth activities in their areas. For example, the Brighton-le-Sands RSL club built and dedicated a superb playing field complex opposite the public school in that suburb. It is available to all youth in the area and has a superb running track, football field, basketball courts, tennis courts and changing facilities. It is the finest sporting arena in my area. It was paid for by the Brighton-le-Sands RSL so that the youth in the area could engage in clean, healthy activities and grow in body, mind and spirit. This playing field cost §80,000 to lay down and the Brighton RSL pays $10,000 per year maintenance for it on the condition that it is available to all youth of the district and that they do not pay to use it.

The Kogarah, Oatley, Rockdale, South Hurstville, Penshurst and Hurstville RSLs each has a flourishing youth club attached to it with well built halls and equipment and a varied programme of constructive activities. Penshurst is my largest RSL youth club with a membership of over 1,400 young people and activities which include girls’ basketball, nine teams of footballers, 100 members playing squash, three baseball teams, girls’ physical education teams, judo, trampoline and boxing classes, table tennis, ballroom dancing and ballet groups, tennis and cricket teams, as well as groups engaged in rifle shooting and popular singing.

Mr Daly:

– What about hopscotch?


– May be the Opposition is not in favour of RSL youth clubs. I am serious about this because I believe that they are doing a good job. My other RSL youth groups engage in similar activities, all run by similarly dedicated committees of voluntary RSL members. The value of this type of work cannot be estimated and I thought it was time that someone stood in this Parliament and paid tribute to this dedicated band of men and women who are giving of their time, money and talents so that the young people of Australia, in every State of the Commonwealth, can make the most of this wonderful country that their parents and friends fought to keep safe, and that we must ensure remains a country worthy of the sacrifice that our mates made in the years gone by.


– Ten minutes is not long enough in which to put a case which is of a very serious nature. However, I want to refer to the case of Mrs Jacqueline Patterson who died last year and whose family and she herself were subject to a lot of trouble and harassment by the Commonwealth police and the Attorney-General’s Department. Let me say that I have written about eight letters to the Attorney-General (Mr Bowen) but I have never received an answer to one of them. I have not even received an acknowledgment. I told the Attorney-General that I was speaking tonight but he is not here. The only time that I ever received a letter was when I wrote to his private secretary. The Attorney-General’s Department just is not concerned very much with members of Parliament. The Attorney-General’s Department wants to run the whole show in its own way.

The story of this unfortunate woman is this: She was a nursing sister. She was married to an American and she worked for the Department of Health from 12th December 1962 to 14th October 1966. She ceased duty by resignation. Her ranking was that of Sister (Industrial) and her service was certified as being satisfactory by the Commonwealth Director of Health in Victoria. However, from 1966 until the time she died, some time in 1968, she was hounded for at least 2 years by the Commonwealth police who wished to prove that she stole 30c worth of morphine and either used it herself or stole it to give to someone else. There was never any evidence of this. She was subjected to a great deal of interrogation, much of it quite unfair, and ultimately she was taken away from her work to be interrogated by the Commonwealth police. Her husband said to me in a letter that Mr Bowen is quite insistent that the

Commonwealth police observed all legal formalities and that she was neither threatened physically nor verbally’. Mr Patterson went on to say:

Her mother, father and I saw the bruises on her shoulders where Sergeant Fox pushed her into a chair when she attempted to leave the room. When she arrived home she was very upset and remained that way for 2 days, as we can testify. The police were trying to force her to admit that she was taking morphine. However, my wife is dead and cannot testify, as the Commonwealth Police well know.

As a matter of fact all the evidence shows that this unfortunate woman, who was 32 years of age, was allergic to morphine. She could not use it. The drugs register was countersigned by a senior nurse and by a doctor. But this evidence was not accepted by the Commonwealth Police or by the Attorney-General’s Department.

I took the matter up first with the Department of Health, whose officers were very co-operative and understanding. But once the matter got into the hands of a couple of flat feet like Sergeant Fox they decided that they would force her to admit what they wanted her to admit. This poor woman came to see me 2 days before she died. She was pursued in 1966, then for 2 years nothing was done. Ultimately she was charged and at the Williamstown court in Victoria she was committed for trial. When I saw her 2 days before she died - she died the day before she was due to appear in court - I thought that she was very distraught and highly emotional. She was a woman with an unfortunate medical history. She had had many operations but she was always cheerful, as her father told Constable Smith of the Commonwealth Police. He said:

I have read my wife’s statement. It is true and correct. I have only to add that I have never known anyone to go through the hell and torment of one doctor after another, with illnesses that no-one could find a cure for, and still be able to smile and be cheerful to the end. She was a credit to the profession and a credit to herself.

When I saw this poor woman in my office I thought she should be in hospital. She was so emotionally upset that I thought she was suffering from high blood pressure. A day or so later she entered her mother’s room - she and her husband lived with her parents - and appeared reasonably well but her mother discovered her an hour or so later lying near a lamp. She was burnt.

There was a thermometer on the table registering 108 degrees.

In my opinion this is a remarkable case. The Commonwealth Police should never have pursued this woman. They should not have hounded her into her grave. They should have had some compassion. When she died her case was called on in court and the facts became known but it was months after her death before any information essential to the clearing of her reputation could be obtained. I have a mass of evidence here. I have all the depositions from the coroner’s inquiry. I have copies of the summonses served on her. She was charged on four counts that she: did, contrary to section 72 (a) of the Crimes Act 1914-1966, being a Commonwealth officer, fraudulently and in breach of her duty make a false entry in a book, to wit she did write the name ‘B. Grayson’ in the drugs register at the casualty section of the Government Aircraft Factory.

She was a trained nurse. When the police 2 years later spoke to the doctor in charge of the casualty section it was difficult for him to remember the name of the person concerned. Anything this unfortunate woman did to release drugs in the discharge of her duty was countersigned by the senior nurse and by the doctor. In my opinion the Attorney-General’s Department acted very badly and very viciously in pursuing this woman as it did. I would not under any circumstances believe the evidence of Sergeant Fox on the documents I have perused. I think that in his ultimate reply to me 8 or 9 months after this woman died the Attorney-General was covering up for his Department. It is disgraceful that the Commonwealth Police should be able to do the things they did in this case and possibly in others. (Extension of time granted). In a letter which he wrote to me the woman’s husband said:

Her parents and I are under no illusions. If God himself told Mr Bowen that she was innocent the testimony would be rejected. Any man who would disregard the evidence, accuse a dead girl and deprive her of a defence is not as interested in justice as he is in keeping his precious Department free from criticism. Even if she had written a suicide note 2 years before her death it would not have been admitted as evidence.

She had no intention of committing suicide. What the officers were trying to get her to admit was that she stole this small amount of morphine to give to somebody else. She would not make that admission. She said that she did not steal it. There was no evidence that she stole it. Sergeant Fox went to her home. She said that he called for her at 10.30 a.m. and took her home at 3 p.m. He broke it down to H hours. Somebody was not telling the truth and I believe the woman rather than the sergeant. She said that she wanted to telephone her parents and a lawyer but that she was not allowed to leave the room - not even to go to the toilet. She said tha she had nothing to eat during the period.

All the letters that I wrote to the Attorney-General about this case were unanswered. Ultimately I got a letter from the Attorney-General in which he defended his officers. In his letter to me of 5th August 1969 the woman’s husband, Mr Robert A. Patterson stated:

The letter which I wrote to you on July 4 was intended as a reply to Mr Bowen’s attempt to sidestep the issues and whitewash the police and his own Department. Consequently I only examined the points he raised. What he ignored was more important. Mrs Smith-

She is the woman’s mother - mentioned that my letter would not make sense without Mr Bowen’s letter, so I have enclosed it in case you do not have a copy. 1 have perused all the documents and I believe that there has been an injustice in this case. There should have been a full inquiry into the matter, notwithstanding that the woman had died. The coroner returned an open verdict. He certainly did not say that she had killed herself with drugs or had done anything to hasten her death. Referring to the Attorney-General, the husband said:

If he had answers to my charges, he would have given them within 10 days; it is now a year to the day since I first wrote my letter.

The husband received a reply. Again referring to the Attorney-General, he said: he cannot disguise the fact that it took 2 years to prosecute, which made it impossible for us to get the patients. He also knew that the men existed and that there were ISO others who receive treatment in casualty who don’t need records.

The husband went on to say that the Attorney-General was aware:

  1. . that the doctor who signed the drug register was legally responsible. He knew that the Department of Health gave her-

Meaning this man’s wife - a certificate of service, unless of course Sergeant Fox knew more about running Casualty than the Department of Health.

The Attorney-General knew that the woman could not take the drug. The husband said that after 3 years of trying he could not get over this fact. I must conclude because I can have only one extension of time. 1 hope that, even at this late stage, the Government will make some inquiries into this unfortunate incident. The parents and the husband of the woman say that she was unjustly treated. They want to clear her reputation. They do not want to leave the matter as it is at present. I shall be glad to give them all the time I can to help them achieve their purpose.


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


– The subject I wish to raise tonight is a very serious one. About 3,000 people are killed every year on our roads. I wish to comment on the policy of the Australian Medical Association on road safety and to mention some new developments in the road safety campaign. I am told that during October the Royal Australian College of Surgeons will hold an important seminar in Melbourne on the management of road traffic casualties. I believe that it may lead to the formation of a foundation for road casualties along similar lines to the existing cancer and heart foundations. One important document to which delegates at the seminar may refer is the policy of the AMA on road safety. It is very good to see that the medical profession is interested in preventive medicine in this field. I wish to quote from a document entitled ‘Australian Health Education. Advisory Digest*. It states:

Under the age of 35 years road accidents are the commonest cause of death in the community. It is predominantly the young and healthy who fall victims to this ‘-disease*. Accordingly the AMA recommends first of all:

That a Government appointed body be set up at national level with power to conduct and support scientific research into the factors responsible for road accidents, and to recommend appropriate counter measures; such a body to be similar in organisation to the National Health and Medical Research Council

Research is already being carried out but it is being carried out by so many different authorities that we are falling between a number of stools in trying to solve this problem. The document continues:

Fragmentation of responsibility for various aspects of road safety is probably the reason why so little progress has been made in controlling the frequency and severity of road accidents.

Ac Federal level there are several useful bodies, but no overall strategic planning such as there has always been in regard, for example, to civil aviation.

The Department of Civil Aviation has established an enviable record in safety. Recently I wrote to all Ministers for Transport in Australia concerning the problem and 1 received replies from some of them. Not all the replies were satisfactory. One of the Ministers for Transport wrote to me in the following terms:

I have no doubt that Mr Sinclair will raise your letter and its contents at the next meeting of the Australian Transport Advisory Council to be held in Adelaide next February for consideration by the Commonwealth and State Transport Member Ministers.

Another 1,000 Australian lives will be lost by then. February is a long way ahead and so many lives are being lost on our roads. Another reply I received from a Minister for Transport was in the following terms:

I can assure you that these matters are discussed at the Transport Ministers Conferences and all Ministers are concerned at the problems in connection with young people and the large number of accidents in which they are involved. Also we have discussed, to a fairly large degree, the problems regarding speeds of vehicles.

A further reply 1 received from a Minister for Transport read as follows:

This matter has on more than one occasion been discussed by the Australian Road Safety Council and I understand that the Council is pursuing its case to have manufacturers reduce the emphasis on speed in motor vehicle advertising.

What is meant by the statement that the Australian Road Safety Council is pursuing its case to have manufacturers reduce the emphasis on speed in motor vehicle advertising? Will it result in more conferences and discussions but very little action? I received the following reply from a Minister of Roads and Transport:

When the Australian Transport Advisory Council met in Darwin in July I raised the question of whether it would be possible to ask the motor industry to reduce the emphasis on_ speed in its advertising campaigns. It is my opinion that advertising that cars can quickly accelerate to 40 m.p.h. does nothing to help road safety and, as you so rightly point out, a car can never be made safe to travel at 100 m.p.h. in our road systems.

I do not regard the replies I received as being particularly satisfactory. However, there is one bright spot on the horizon. I refer to the development of the simulator driver trainer and the campaign surrounding it. I acknowledge the assistance of Mr F. K. Phillips, who has done a lot of work in this field at great personal sacrifice. He has been good enough to provide me with some notes about developments in this field. A new organisation entitled Simulation Driver Education Ltd has been established. It is a non-profit organisation. Its aims are:

  1. To educate and instruct men and women in the principles and practice of driving motor vehicles.
  2. To give and arrange lectures and to give and arrange tuition and instruction for or in connection with the above purposes.
  3. To establish and support or aid in the establishment and support of associations, institutions, funds, trusts and conveniences for the abovementioned purposes.

In company with some other honourable members, I was privileged to see a demonstration of the simulator in Canberra recently. I believe that these simulators will be very useful. I do not have the time to explain what happened, but the machine, which is called a ‘Drivotrainer’, consists of a variable number of simulators which closely resemble a modern motor vehicle. These trainers are equipped with standard controls and are designed to give the feel of operating a full-sized vehicle. There is a standard-sized steering wheel, a gear shift in either automatic or manual control, a simulated motor noise which is audible when the ‘engine’ is running, engine stall features, a realistic hand brake, foot brake and clutch pedal operation, standard dash panel instrumentation and a rear window for parking manoeuvres. The car system is connected to an electronic recorder which provides the instructor with an instantaneous and permanently printed record of the actions of each driver. So within a big room it will be possible in future for young people and old people alike to be trained in motor driving. Of course, people will still have to go out on the road to complete their training, but this training will give them instruction in what to do in unexpected circumstances. With the aid of a movie screen it is possible for a person to go into action when he sees a car ahead of him stopping, swerving or coming at him at a great rate.

In the United States the 1966 Federal Highway Act provided for all States to institute a driver education programme, and now I am told that States applying for a federal roads grant must have an extensive programme of driver education. Today about nine-tenths of students in the United States are going through these driver campaigns. I do not have all the answers. 1 wish I did, but as I said before I know what is happening on the Hume Highway and the Calder Highway. Let us entangle the problem of divided control over this matter. Too many governments are fiddling with the problem; there are too many slow moving conferences and too little real training. Most of it is done on city streets in slow moving traffic. What is the Federal Chamber of Automotive Industries doing? What is the National Roads and Motorists Association doing about this problem? What is the Royal Automobile Club of Victoria doing? It has a very nice building and a very nice club, but is it coming to grips with this problem? What are the Federal and State governments doing?


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


– There are a couple of matters to which I wish to address myself tonight. Firstly, whilst farewells have been tendered to most members who are leaving, I would like to mention one member who is leaving this Parliament and who is not here today and who will probably not be here tomorrow. 1 refer to the honourable member for East Sydney (Mr Devine). If somebody has already mentioned this, I was not here when it was mentioned. Tonight I want to place on record as a colleague of his what I consider to be his splendid representation of the electorate of East Sydney in the time that he was in this Parliament.

I believe that in every way he made a splendid contribution to the cause of Labor. He proved to be a very worthy successor of the late Eddie Ward in that great Labor district, and his loyalty to the platform and policy of the Australian Labor Party has won him friends not only inside the Parliament but outside as well. In every way tonight 1 place on record a commendation for the way in which he has served his electorate and the way be has endeavoured to improve himself and to present Labor’s platform in this Parliament and its policy elsewhere. I wish him well, particularly in the forthcoming municipal council elections in Sydney. He may end up as Lord Mayor of Sydney. He would certainly make an excellent lord mayor. Having said so much, let me say also that I valued his friendship here and I regret that at least temporarily he will not be a member of this Parliament. But 1 feel certain that he will return at some future date.

Tonight 1 wish to refer to a letter that I wrote on 24th October 1968 to the Minister for Repatriation (Senator McKellar) about what I considered to be one of the worst cases of injustice inflicted on an exserviceman in the long time that I have been in this Parliament. Let me say very briefly that on 24th October I wrote to the Minister and said:

Briefly, these are the circumstances mentioned to me. 1 will mention the man’s name because it is in Hansard. The letter goes on:

Mr Medlyn enlisted in 1942 in die AIF Combat Unit, A.l. Due to his 100% physical condition and height, he was drafted into the Armoured Corps. In 1944 be was discharged medically unfit suffering from chronic inflammation of all sinuses and neurosis. In 1959 he suffered total blindness and at the present time is only in receipt of an invalid pension. lt is not my intention to go into details of the case in the course of this letter as I am enclosing photostat copies of all the documents relating to his case including a complete history of his enlistment, service and medical history, together with other relevant documents which would appear to substantiate his claim for a pension.

A study of these documents indicates that the Department has evidently refused to take responsibility for the operation that was performed by an American surgeon. The fact of the matter is, however, that Mr Medlyn is now totally blind following service in the Armed Forces.

At this stage he is totally dependent, with his wife and two children, on an invalid pension. The full’ details of his case are set out in a speech that I made in this Parliament on 28th March 1968, commencing on page 575 of Hansard. I am sorry to say that at this stage his circumstances are worse than ever. I have some letters here which I intend to read to prove the tragic case of an ex-serviceman who was a fine physical specimen when he enlisted and who is now in a state, as I say, of absolute poverty because of the failure of the Repatriation Commission to give justice to this ex-serviceman. He has gone through appeal after appeal. I personally have assisted him, and the Legal Service Bureau has assisted him, in order that he might get certain documents to substantiate his case, but each time a rejection has been received. On 29th August 1969 his appeal was rejected again, and his wife wrote me this letter on 8th September 1969:

Dear Mr Daly,

This letter came today. Despite the written opinions (evidence) of the AMA and the registrar of Sydney Hospital, the Repatriation Department is still being stubborn.

Since Mr Medlyn met you he has had another 6 major eye operations, without success, which unfortunately has left him permanent pain of varying degree, but most of all his kidneys now are deteriorating through the continual use of diuretics and other drugs, as prescribed.

He is now, at this moment, in the kidney ward of the Sydney Hospital, apart from urgent admissions to smaller hospitals on the far south coast, which are not equipped for his condition.

Please keep on righting on his behalf and try to help. Best wishes,

That letter is from his wife. Subsequently I received a letter from him in which he said that his wife was so distressed that she took certain action which caused her very grave illness: He went on:

She has second and third degree burns to her back and arms and it is likely that she will be in hospital for quite some time but it is also almost certain that she may not return to this life here of isolation, poverty and worry.

I returned homo by ambulance last Friday night from Sydney Hospital apparently not fully recovered, as I was passing blood through the night and an examination by a Nowra doctor of repute it is suggested that I be sent back to Sydney Hospital, but at this stage I will have to stand by the two boys still at high school.

I brought to your notice some time ago two of our problems here are (1) lack of skilled medical attention and (2) the extremely high cost of basic foodstuffs. Please keep in touch with me.

From the correspondence that was supplied to me it is apparent that this man is well known to the Minister for Social Services (Mr Wentworth) and that the Minister at some stage had been friendly with the family or had known them in army days and knew the children well. The Minister was good enough to show me the files on this case, and I went through them. One thing impressed me. Any benefit of the doubt was always given against the exserviceman. Right through the files it is said that when he enlisted he had this sinus trouble but did not admit it. Evidently he had it, but he was a fellow who gave up a good business to enlist. All through it is said that his condition may be one of the general conditions that occur. Blindness can occur from this. All the time we see the phrase: ‘It could*, ‘It could’, ‘It could’. I said to the officer who was with the Minister when I spoke to him: ‘Don’t you ever give the soldier the benefit of the doubt in a case like this?’ Every time there was any doubt it was found against him.

The fact of the matter is that he is totally blind and is living in poverty on an invalid pension. The tragic circumstances of his case are contained in a very big file, and I think the circumstances of his case would appeal to even the most hardhearted citizen in the community. For my part, I cannot help but be convinced that some of the repatriation boards want cleaning up lock, stock and barrel. I think the people who sit on those boards are case hardened. I do not know how soldiers treat soldiers, but I think the boards might be improved by putting a couple of civilians on them. They do not get case hardened on these questions. In cases like this, where only a few dollars are involved, they go into all the elements of doubt.

I repeat in this Parliament what I have said before. I think the Repatriation Commission is taking it out on this soldier because it has something against him. He is fighting for his rights, and it will not give him the justice to which he is entitled. The other day the Prime Minister (Mr Gorton) paid the fare to England of one of Prince Charles’s school mates as a gesture of goodwill. If the Government can afford to spend money that way, why the devil can it not afford to give to an ex-serviceman a pension if his circumstances are such that there is an element of doubt? It is all very well to say that these things can be glossed over. Anyone seeing this man would be horrified at his condition. The business he gave away for £400 to enlist has changed hands since because of the change of times for around about £40,000. He is now desperate and in poverty. Someone from the Government side should take a good look at these repatriation boards because I am far from satisfied with them. If the treatment that I have exemplified in this case is indicative of what is being handed out, it is nearly time that something were done about it. I listened to the honourable member for Barton (Mr Arthur) tonight when he said that the Returned Services League tells soldiers not to apply for pensions unless they are sure of getting them. I give this advice: Tell the RSL to change its policy and advise all soldiers to put in for a pension because whether their cases are good, bad or indifferent, with some of these repatriation boards they have no chance of getting a pension.

This man has been told to have an operation to remove both of his eyes, but he cannot get a pension of a few bob a week. The difference between a military pension and an invalid pension for his wife and children would not represent much in a Budget of the magnitude that we have to consider. I know that ex-service members opposite probably get cases like this. I suggest that the Minister look at this matter again. When I interviewed him and the officer of the Repatriation Commission they more or less gave me to understand that if certain evidence were produced the case would be reviewed, possibly favourably. That evidence has gone in but the matter is back where it started. This treatment of an ex-serviceman is a public scandal. There is no justification for it. It is something that the Minister should investigate in fairness to the person concerned and, I think, in fairness to the Government’s reputation of standing by the rights of ex-servicemen who have given much and sacrificed a lot and who are entitled to justice and security, not poverty as in this case. I probably will not get an opportunity to speak on this matter again. The man, because of his condition, may well be dead before anything is done but I brought this matter before the Parliament tonight because I felt a great responsibility to do so.


– I have been inspired to speak as a result of the remarks of the honourable member for

Lalor (Mr Lee) who referred to road accidents and the need for greater’ training of drivers. This is a matter in which the Parliaments of the States and the Commonwealth must interest themselves to a greater extent. Road accidents represent a grave social problem. In recent times the Parliamentary Standing Committee on Public Works, of which I am a member, has had to investigate Commonwealth rehabilitation centres. Recently it recommended, and the Government approved, work involving considerable expenditure at the Commonwealth rehabilitation centre in Perth. Recently, too, it investigated another Commonwealth rehabilitation centre in Melbourne. The Committee inspects the sites of these centres and it is tragic to see the number of people who are being trained to take up other professions because they are not able to resume their normal professions as a result of physical handicaps sustained, in many instances, in road accidents.

Whilst I appreciate what the honourable member for Lalor said, I should have thought that his speech would have been richer had he urged greater use of television in educating drivers. His speech was sincere, but this was an omission on his part. He is a member of what all members opposite claim to be is a free enterprise government that denounces the Socialist tendencies of the Australian Labor Party. Of course, it would be difficult to get private enterprise television stations to allocate time to advertising the need for persons to drive more safely. If we examine the annual report of the Australian Broadcasting Control Board we find that the major newspapers and big businesses own most of the shares in television stations. Honourable members cannot deny this fact. To get television stations to emphasise the need for safe driving would probably need a government subsidy.

Mr Lee:

– Not necessarily.


– I appreciate what the honourable member for Lalor says. We know that under the legislation controlling radio broadcasting and television there is an obligation for a specified time to be made available weekly for religious broadcasts. Whilst these broadcasts may be regarded as important it is equally important that this grave social problem should be given the same time so that the need to drive properly on our roads may be emphasised.

Recently we have seen the introduction of breathalyser tests, but these have not reduced road accidents at all. I can never be enthusiastic about such tests. I always say to audiences that I address on this subject that I think that the police authorities should be empowered to give blood and alcohol tests to drivers who are involved in accidents in which a person suffers actual bodily harm. Many people can drive cars in perfect safety even after having consumed sufficient alcohol to render them punishable under the present breathalyser tests. If a person is involved in a collision and actual bodily harm is caused to another person the police authorities should have the right to give him a blood and alcohol test. The other day I read in some of the correspondence that honourable members get that by the year 1980 one in every three persons will have been involved in a serious road accident by the time he reaches the age of 45 years. This is a problem that is being investigated by experts throughout the world. It is a serious problem in the United States of America and Canada which have a greater number of cars per head of population than most countries. It is a problem that politicians must tackle. It is a problem that society must tackle. When society tackles the problem, its political representatives tackle it. I reiterate that television stations should be requested to devote an hour a week, even if the time is spread over a number of days, to emphasising the need for safe driving. If necessary the Government should subsidise the television stations. If this were done I believe that government expenditure on Commonwealth rehabilitation centres could be reduced. I hope that the Parliament will consider and that people will talk about the submissions of the honourable member for Lalor and myself.

People are being maimed on our roads. If a breadwinner is killed a pension is paid to his surviving wife. If we were to avert one accident the television time would be worth while. I believe that the number of deaths would be minimised, so obviating the need to pay widows’ pensions to those persons whose husbands have died. 1 believe that breadwinners would be persuaded to drive safely.

In conclusion I want to say that since coming to this Parliament I have read some of the writings of that great lawyer in the United States of America, Clarence Darrow, who is now dead. In his writings he had this to say:

We provide in a capitalist society the means of committing further crime and then we punish the evil doers for committing the crime.

How true it was then and how true it is today. The people of Australia are on the brink of extending drinking hours in hotels to Sundays. On the other hand we are fighting with the problem of the drinking driver who is maiming himself and others on the roads. How true Darrow’s remarks are. We induce people to commit a crime and then we punish them for committing it. That is the very thing that a capitalist society does. The big businesses want to make more profits for their shareholders by opening hotels on Sundays, and if this comes about then we will need to have more police on the roads to curtail serious accidents. As a preacher yourself, Mr Deputy Speaker, you must appreciate the sincerity of my remarks and agree that they are factual.

Question resolved in the affirmative. House adjourned at 12.2 a.m. (Thursday).

page 1918


The following answers to questions upon

Tullamarine Airport (Question No. 1933)

Mr Whitlam:

asked the Minister for Civil Aviation, upon notice:

  1. On what dates and wilh what results have Commonwealth and Victorian officials met to discuss the zoning of land adjacent to Tullamarine Airport.
  2. Why has he not given me the information he promised on 26th November 1968 (Hansard 3222) and 15th April 1969 (page 1063).
Mr Swartz:

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

  1. So far the Committee has met on six occasions, namely 13th and 25th November, 6th December 1968, 6th and 17th January and 11th September 1969.

January to September was taken up in detailed studies of and informal discussions on all elements of the problem. The Convenor of the Committee also appeared before the House of Representatives Select Committee on Aircraft Noise.

I understand that the Victorian Airfields Committee will be making its report later in the year n notice were circulated: and this is in line with what I believe was said during the select Committee’s Melbourne hearings.

  1. This answer is contained in the reply to (1) above.

Conciliation and Arbitration Act (Question No. 1581)

Mr Clyde Cameron:

asked the .Minister for Labour and National Service, upon notice:

  1. What penalties have been imposed under section 111 (4.) of the Conciliation and Arbitration Act for failure to observe orders under the other provisions of section 109 not included in the reply to question No. 1027 (Hansard, 25 February 1969, pages 81-90), and what was the amount of costs ordered in each case.
  2. What were the dates of the proceedings that led to the imposition of these penalties, the names of the parlies involved and the penalties imposed in each case.
Mr Bury:
Minister for Labour and National Service · WENTWORTH, NEW SOUTH WALES · LP

– The answer to the honourable member’s question is as follows: The information sought is set out in the following table:

Housing Loans: Repayments (Question No. 1721)

Mr Whitlam:

asked the Treasurer, upon notice:

What percentage of payments was attributable to (a) repayment of capital and (b) payment of interest at the interest rates applying 20 years ago and is so attributable at the rates applying today in the case of housing loans for the usual period of years from (0 the War Service Homes Division, (ii) the State Housing Commission, (iii) terminating building societies, (iv) permanent building societies, (v) savings banks, (vi) trading banks and (vii) insurance companies.

Mr McMahon:

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

There is insufficient information available on the average period of loans and rates of interest charged to answer this question precisely, but the following tabic sets om what are understood to be typical periods for loans from the various institutions, interest rates charged (or the predominant rates) in 1949 and 1969, and monthly repayments) per $1,001), assuming a credit foncier arrangement (i.e. equal monthly repayments to cover both principal and interest), with interest charged half-yearly. Except for the War Service Homes Division there is a range of interest rates for each group; for example in April 1969 the range for State Housing Commission was 41-5)% (with second mortgage loans up to 6i%) and for savings banks from 5i-6i%. The figures should therefore be taken as a guide only.

The following table illustrates the effects that differences in term and interest, rate have on monthly payments of principal plus interest on credit foncier loans, assuming interest is charged half-yearly:

Uniform Building Regulations (Question No. 1723)

Mr Whitlam:

asked the Minister representing the Minister for Housing, upon notice:

On what dates and with what results have Commonwealth and State Officials met in the last 5 years in the attempt to secure uniform building regulations, including home building regulations.

Mr Bury:

– The Minister for Housing has provided the following answer to the honourable member’s question:

A standing committee of State departmental officers together with representatives of the Australian Capital Territory and the Northern Territory is drafting uniform building regulations. The Interstate Standing Committee on Uniform Building Regulations, for which the Commonwealth Experimental Building Station of the Department of Works provides the secretariat, has met on seventeen occasions in the last few years. These are: 24th March 1965 24th June 1965 30th September and 1st October 1965 2nd December and 3rd December 1965 3rd March and 4th March 1966 9th June and 10th June 1966 13th September and 14th September 1966 30th November and 1st December 1966 2nd March and 3rd March 1967 1st June and 2nd June 1967 13th September to 15th September 1967 6th December to 8th December 1967 26th March to 28th March 1968 16th July to 18th July 1968 19th November to 21st November 1968 12th March to 14th March 1969 9th July to 11th July 1969.

The proposed Code is to consist of fifty-nine parts, and to date eleven parts, entitled Series 1, have been completed and issued to constituent administrations for the purposes of their respective building regulations. Reports indicate that all administrations are well advanced in their consideration of Series 1, which deals with fireresisting construction of buildings, and a number of parts of an administrative nature. Progress is being made on a further seven parts to comprise Series 2 and 3. To ensure that the preparation of the Code proceeds without delay from one Series to another, work has been done by the Committee on a further nineteen parts of the Code.

In addition, the Commonwealth Department of Housing has now completed its first draft of a uniform cottage building code, and intends shortly to submit this for comment by institutional lenders before offering it for consideration by the Interstate Standing Committee on Uniform Building Regulations.

National Service (Question No. 1774)

Dr J F Cairns:

ns asked the Acting Minister for Labour and National Service, upon notice:

  1. How many young men are known to have refused to register for national service and have (a) been charged with an offence related to their refusal and (b) not been charged with any offence.
  2. How many young men have refused to register for national service in the form or manner required by his Department, but have notified his Department of their identity and address and that they have a conscientious objection to military service.
  3. Is such action regarded as a refusal or failure to register; if so, on what grounds.
Mr McMahon:

– The answer to the honourable member’s question is as follows: (I), (2) and (3) Section 48 of the National Service Act provides that it is an offence for ‘a person who being required to register under this Act-

  1. fails so to register; or
  2. while the liability continues, remains unregistered under this Act.’

Section 13 of the National Service Act provides the circumstances in which a person who is required to register shall be deemed to be registered under the Act.

Persons who are liable to register and fail to do so at the required time thus render themselves liable to prosecution. All cases of apparent default including refusal to comply with the requirements of the Act are investigated to determine a person’s liability to register and whether a prima facie case which warrants prosecution exists. Records are not maintained of cases cleared of default nor are the reasons for failure to register or late registration classified. As at the 31st August, 1969, 784 persons had been prosecuted for failure to register and 91 cases were pending.

Aboriginals: Employment (Question No. 1782)

Mr Collard:

asked the Minister for Labour and National Service, upon notice:

How many of the 5,118 Aborigines who registered for employment during the 12 months to 28th June 1968 were found employment with (a) State and (b) Commonwealth Departments, and what was the number found in each Department.

Mr Bury:

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

Commonwealth Employment Service records do not distinguish between registrants for employment on the basis of race, and thus there are no statistics compiled on this basis. The special survey of Aborigines registered for employment which yielded the figure quoted by the honourable member, was possible only because District Officers were notified in advance that for the purpose of the survey they would be required to identify Aboriginal registrants. Registrants’ cards were later returned to normal registers without special identification. At this point of time it is not possible to provide the detailed information asked for; however, it is estimated that more than 800 Aborigines were found employment in Government departments, Commonwealth and State.

Aboriginals: Employment (Question No. 1783)

Mr Collard:

asked the Minister for Labour and National Service, upon notice:

  1. Was the number of 103 Aborigines who registered for employment at Port Hedland during the 12 months to 28th June 1968, the total number of Aborigines who applied.
  2. If not, how many did apply but were not registered, and why were they not registered.
Mr Bury:

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

  1. and (2) Yes, insofar as it was possible to identify the particular persons as Aborigines for the purpose of the survey.

Aboriginals: Employment (Question No. 1784)

Mr Collard:

asked the Minister for Labour and National Service, upon notice:

How many of the 103 Aborigines registered for employment at Port Hedland during the twelve months to 28th June 1968, were found employment with (a) State and (b) Commonwealth Departments, and what was the number found in each Department.

Mr Bury:

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

As explained in my answer to Question No. 1782, it is not possible to give precise figures in answer to this question. However, it is known that at least fifty of the 103 Aborigines referred to were placed with State Government Departments operating in the area.

Aboriginals: Employment and Unemployment (Question No. 1785)

Mr Collard:

asked the Minister for Labour and National Service, upon notice:

  1. What facilities are available for Aborigines at (a) Onslow, (b) Roebourne, (c) Broome, (d) Derby, (e) Wyndham, (f) Fitzroy Crossing and (g) Hall’s Creek to register for employment or unemployment benefit.
  2. Are the facilities adequate, if not, what is intended to make them adequate.
Mr Bury:

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

  1. There is no Commonwealth Employment Service representation at any of the towns listed. The State Department of Native Welfare has officers stationed at Broome, Derby, Wyndham and Hall’s Creek, and the towns of Onslow, Roebourne and Fitzroy Crossing are visited regularly by field staff of that Department. Aborigines in these and other remote areas are assisted in making application for employment or unemployment benefit by officers of the State Department who maintain close liaison with the Commonwealth Employment Service. Liaison on employment matters is also maintained between the Commonwealth Employment Service and police officers.
  2. In order to improve the service now being provided consideration is at present being given to creating additional positions so that greater attention can be given to the employment needs of persons in more centres of the North-West.

Pre-school Education: Expenditure by States (Question No. 1681)

Mr Whitlam:

asked the Treasurer, upon notice:

  1. Why do the Statistician and the Commonwealth Grants Commission fail to publish comparative State expenditure on pre-school education. (2) What does each State spend on it.
Mr McMahon:

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

  1. and (2) The Commonwealth Statistician and the Commonwealth Grants Commission advise that, in the statistics of State expenditure on social services published by them, it has been necessary to restrict the dissection of expenditure on education to several broad headings. The accounts published by the States contain insufficient detail in an appropriate and comparable form to enable any further breakdown to be made. In particular, it has not proved possible to separate out figures of expenditure on pre-school education. Significant differences between the States in the method of providing pre-school education services have added to the problem. 1 am advised by the Grants Commission that further details of expenditure on education have been sought from the States but not all of them have been able to supply the figures requested.

Standing Committee of Attorneys-General (Question No. 1646)

Mr Whitlam:

asked the Attorney-General, upon notice:

  1. Where and when have there been meetings of the Standing Committee of Commonwealth and State Attorneys-General since his answer to me on 10 October 1968 (Hansard, page 1902).
  2. What matters were considered at these meetings in the attempt to secure uniform laws.
  3. What stage has now been reached in the attempt to secure uniform laws on the matters listed in his answer on 10 October 1968.
Mr Bowen:

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

  1. Hobart, March 1969; Brisbane, July 1969.
  2. and (3) It would be inconsistent with the confidential nature of the discussions on the Standing Committee of Commonwealth and State Attorneys-General to provide an exhaustive list of the matters considered by the Committee. The present position of the matters listed in my answer of 10 October 1968 and of other matters since considered by the Committee appears from the list set out below. Items numbered 1, 2, 5, 8, 10, 11, 12, IS and 16 were considered at meetings after 10 October 1968.

Conciliation and Arbitration Act (Question No. 1580)

Mr Clyde Cameron:

asked the Minister for Labour and National Service, upon notice:

What was the amount of costs ordered against each of the respondent organisations mentioned in his reply to question No. 1027 (Hansard, 25lh

February 1969, pages 81-90) in respect of each penalty stated in the question.

Mr Bury:

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

The information sought is contained in the following table which for convenience repeats most of the detail in the answer to question No. 1027 provided on 25th February 1969. In some instances further information has become available and the table has accordingly been amended.

Flood Mitigation - Commonwealth Grants to New South Wales (Question No. 1756)

Mr Whitlam:

asked the Prime Minister, upon notice:

  1. Did the New South Wales Grant (Flood Mitigation) Act 1964 authorise grants in respect of the Mackay, Clarence, Richmond, Tweed, Shoalhaven and Hunter Rivers during a period expiring on 30 June this year.
  2. On what date did New South Wales request the Commonwealth to extend grants in respect of those rivers and the Moruya, Hawkesbury Manning, Hastings and Bellinger Rivers for a further period of 6 years.
  3. What have been the dates, nature and result of later communications between the Commonwealth and New South Wales.
Mr Gorton:

– The answer to the honourmember’s questions are as follows:

  1. Yes. l?) and (3) On 13th September 1966. the Premier of New South Wales wrote to the then Acting Prime Minister requesting that the scope of Commonwealth financial assistance to New South Wales, as embodied in the New South Wales Grant (Flood Mitigation) Act 1964, be expanded so as to embrace rises in costs of works already in progress or programmed and additional new works on the six rivers mentioned in paragraph 1 of the question, together with new works on the other rivers, namely, the Hawkesbury, Manning and Hastings Rivers. My predecessor, the late Mr Holt, acknowledged the Premier’s letter on 10th October 1966.

On 24th January 1967 the Prime Minister advised the Premier that the Commonwealth was not prepared at that stage to contemplate extending the scheme of Commonwealth assistance on the basis proposed. He indicated, however, the Commonwealth’s preparedness to review the upper limit of 95.5m in the then existing scheme to take account of cost rises since that figure had been determined. The Premier acknowledged this letter on 264h January 1967. The Premier wrote again on 7 April 1967 expressing his agreement to Commonwealth and State officers meeting to examine the question on an appropriate adjustment to the upper limit of $5. 5m.

On 24th April 1967 the Prime Minister wrote to the Premier to say he was arranging for Commonwealth officials to contact State Treasury officials in New South Wales to arrange a meeting on this question. Following consideration of the outcome of the officials’ examination, the Government agreed to increase the maximum Commonwealth contribution from $5.5m to $8ra for the then current programme of flood mitigation works, in respect of the six-year period ending 30th June 1969. This decision was conveyed to the Premier of New South Wales by the Prime Minister in a letter dated 20lh October 1967. The Premier acknowledged this letter on 25th October 1967.

In a letter to me dated 2nd May 1969 the Premier of New South Wales outlined in broad terms proposed Hood mitigation works in respect of which the State wished to seek Commonwealth financial assistance. The proposals comprised additional works on the Macleay, Clarence, Richmond, Tweed, Shoalhaven and Hunter Rivers and works on other rivers, namely, the Moruya, Hawkesbury, Manning, Hastings and Bellinger Rivers. The Premier advised me that a detailed examination of the proposed programme was well under way and that a more detailed submission would he forwarded as soon as possible. I acknowledged the Premier’s letter on 19th May 1969.

On 28th August 1969 the Premier wrote to me giving additional information on the proposed programme, together with firm estimates of cost. This information is now being examined by the appropriate Commonwealth authorities.

Defence Land in Sydney Area (Question No. 1113)

Mr Whitlam:

asked the Minister for Defence, upon notice:

  1. At what places within 100 miles of Sydney does the Commonwealth occupy lami for defence purposes.
  2. . What is the area of the land in each case.
  3. When was the land acquired.
  4. On what tenure is it held.
  5. When did the Commonwealth and State last hold negotiations or deliver documents about the land in each case, and what was the nature and result of the negotiations or documents.
Mr Fairhall:

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

  1. The attached schedules give details in answer to parts (l)-(4) of the question:

Schedule A: - Land owned by the Commonwealth (Land occupied by Commonwealth owned residences has been excluded). Schedule B: - Land held on some form of leasehold tenure. (In both schedules approximate areas are shown in each case except where it is less than one acre).

With reference to Schedule A, where land has been acquired in two parcels, both dates are shown e.g. 1.901/1932. Multiple acquisitions over a number of years are identified by showing the first and last years, e.g. 1912 to 1930.

  1. With reference to part 5 of the question, the lands identified with the symbol * have been the subject of recent discussions with the State Authorities and these are still continuing.

Drugs (Question No. 1373)

Dr Everingham:

asked the Minister for Health, upon notice:

  1. What Commonwealth laws forbid or control

    1. production, (b) possession and (c) trafficking in Cannabis species and their derivatives.
  2. Cao he say what State laws have similar application.
  3. What clinical evidence has been produced to legislators to justify these laws.
  4. Is there more clinical evidence of (a) physical, (b) mental or (c) moral damage among users of (i) alcohol and (ii) tobacco than among comparable numbers of users of Cannabis and its derivatives.
  5. Will he take such prompt steps as are available to him to reconcile the conflict between laws controlling (a) Cannabis and its derivatives and

    1. alcohol and tobacco.
Dr Forbes:

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

  1. The Customs Act 1901-1969 prohibits the possession of and trafficking in prohibited imports. The Customs (Prohibited Imports) Regulations prohibit absolutely the importation of Cannabis.

The Narcotic Drugs Act 1967 contains provisions on manufacture, as defined by the Single Convention on Narcotic Drugs 1961, of drugs, but does not cover the production or preparation of Cannabis or Cannabis resin from the Cannabis plant. This is covered by State and Territory legislation.

  1. The following State legislation prohibits ot limits cultivation, production, possession and trafficking in Cannabis:

New South Wales -

Local Government Act Part XXII

Poisons Act of 1966

Victoria -

Poisons Act 1962

Queensland -

Stock Routes and Rural Lands Protection Acts

Health Acts South Australia -

Dangerous Drugs Act Western Australia -

Poisons Act

Police Act Tasmania -

Dangerous Drugs Act. Similar provisions in relation to Commonwealth Territories are contained in: Australian Capital Territory -

Noxious Weeds Ordinance 1921-1966

Public Health (Prohibited Drugs) Ordinance 1957-1966 Northern Territory -

Prohibited Drugs Ordinance 1963-1969.

  1. The World Health Organization together with many other medical authorities including the United Kingdom Inter-departmental Committee on Drug Addiction, holds the opinion that Cannabis has practically no therapeutic use and virtually no value in modern medicine.

The latest report of the World Health Organization strongly reaffirmed opinions expressed in previous reports that Cannabis was a drug of dependence, producing public health and social problems, and that ils control should be continued.

  1. Investigations on the pharmacological effects of Cannabis are at present being conducted in various countries under the auspices of the World Health Organization. Until these studies are completed no conclusive answer can be given to the question of the drug’s effects.

Dr Dale Cameron, head of the World Health Organization Drug Dependence Unit, at a press conference in January of this year, reiterated that it was not possible to compare the effects of Cannabis with those of alcohol.

  1. The World Health Organization, with the support of the United Nations Commission on Narcotic Drugs, was instrumental in the drafting of the Single Convention on Narcotic Drugs 1961. Australia, as a signatory to that Convention has implemented its provisions by the enactment of the Narcotic Drugs Act 1967. By operation of Article 4 of the Convention. Australia has agreed to “. . . limit exclusively to medical and scientific purposes the production, manufacture, export, import, distribution of. trade in. use and possession of drugs”. Cannabis is specified as a narcotic drug in Schedule I to the Convention.

The National Health and Medical Research Council through its committees makes recommendations from time to time on a wide range of matters concerning public health, including the use of tobacco and alcohol. This Government, together with the Governments of the various States, has always been willing to consider these recommendations and bring in legislation where that has seemed the proper course to follow.

Aboriginals: Trust Funds (Question No. 1437)

Mr Cross:

asked the Minister-in-Charge of Aboriginal Affairs, upon notice:

  1. What trust funds does his office administer on behalf of Aborigines.
  2. What is the purpose of each fund.
  3. When was each fund established.
  4. What amounts have been spent from each fund in the current financial year and what amounts remain unexpended.
Mr Wentworth:

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

  1. The Aboriginal Advancement Trust Account
  2. The purpose of the Trust Account is to provide a source of payments for the advancement of Aboriginal citizens:

    1. To the States for programmes approved by the Minister-in-Charge of Aboriginal Affairs and the Treasurer in relation to housing, education, health and other welfare matters agreed by them;
    2. To the Department of the Interior for programmes relating to internal Territories approved by the Minister-in-Charge of Aboriginal Affairs and the Treasurer in relation to housing, education, health and other welfare matters agreed by them;
    3. To an account in the name of the Treasurer in the Commonwealth Development Bank to be referred to as the Commonwealth Capital Fund for Aboriginal Enterprises which will be administered in accordance with procedures agreed between the Treasurer and the Minister-in-Charge of Aboriginal Affairs.
  3. 10 December 1968.
  4. Expended-^8,658,521. Unexpended - $1,341,479.

Defence Orders Placed in Australia (Question No. 1671)

Mr Whitlam:

asked the Minister representing the Minister for Supply, upon notice:

What was the (a) value and (b) nature of the defence orders placed by (i) the United States of America, (ii) Britain, (iia) New Zealand, (iv) Malaysia and (v) Singapore in each of the last 2 years.

Mr Fairhall:

– The Minister for Supply has provided the following answer to the honourable member’s question:

The following information is provided in respect of those defence orders placed in Australia by the countries specified and which were processed by my Department -

Total value of defence orders placed in Australia by the countries specified

Financial year $ra

1967- 68 .. .. 8.239

1968- 69 25.947

The orders were placed for items in the - following major, general categories:

Ikara and Jindivik

Small Arms


Miscellaneous Supplies.

In addition to the above orders processed through my Department, there has been a number of quite substantial defence orders placed direct on industry in Australia by certain of the specified countries.

Home Nursing Subsidies (Question No. 1856)

Mr Charles Jones:

asked the Minister for Health, upon notice:

Which organisations received the home nursing subsidy shown in his answer to my question No. 1297 (Hansard, 15 April 1969, page 1133), and how much did each organisation receive in each year.

Dr Forbes:

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

The information requested by the honourable member is available for the years 1962-63 onwards and is shown hereunder:

Aboriginals: Health of Infants (Question No. 1867)

Dr Everingham:

’ asked the MinisterinCharge of Aboriginal Affairs, upon notice:

  1. Has official research in Queensland vindicated the clinical evidence of Dr Kalokerinos, in a recent trial of an Aboriginal mother in Queensland, that Aboriginal infants have severely impaired health due to deficiencies of vitamin C.
  2. Was a social worker or ethnopsychiatrist called to give evidence as to the cause of the mother’s neglect of the child who died.
  3. Will he take immediate steps to correct apparent grave omissions in expert evidence at the trial.
  4. Will the facts of nutritional disorder and his emergency preventive measures be published now, to enlighten doctors and others concerned, or are they to be withheld until October; if they ure to be withheld until October, why is this so.
Mr Wentworth:

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

  1. Research by Dr David Jose of the Queensland Institute of Medical Research, concluded over the past 2 years, has revealed a problem group of Aborigines showing evidence of malnutrition. Having examined children under 5 years of age on five settlements he concentrated on a selected group showing growth retardation and did blood ascorbic acid estimates on children in two of the five settlements. In children exhibiting growth retardation there was evidence of deficiency of several factors including iron, folic acid, ascorbic acid together with a low calorific intake. Blood ascorbic acid levels were found to be well below average in many of the children on the two settlements on which the test was performed, hi spite of this, clinical scurvy was detected in only five cases which represented less than 1% of the age group. While I am myself impressed with the views of Dr Kalokerinos I emphasise that this is a medical question in which a lay opinion should carry little weight in comparison with the opinions of qualified medical men. I have asked for these opinions on the highest level and shall be guided bv them.
  2. No.
  3. I have asked my Office of Aboriginal Affairs to consult with the Commonwealth Department of Health on the possibilities of setting up a Committee of Enquiry with sufficiently broad terms of reference to enquire into Aboriginal infant mortality.
  4. The work of Dr Jose is being published in the 1968-69 Annual Report of the Queensland Institute of Medical Research, at present being printed. Supplementary feeding has already been commenced on Reserves in Queensland. In addition to normal feeding provided in the respective Aboriginal households a full three course meal is offered each day to all children from the time they are able to assimilate solid foods up to the age of 6 years. Additional iron and vitamin supplements are given together with any other medication prescribed by attending physicians. An amount of $74,000 was paid by the Commonwealth to the State of Queensland for supplementary food assistance for Aboriginal children in 1968-69.

Health Insurance (Question No. 1886)

Dr Everingham:

asked the Minister for Health, upon notice:

  1. Has his attention been drawn to the fact that I proposed to his predecessors and to the Australian Medical Association, Queensland Branch, the principle of subsidy on health insurance premiums for low income families including pensioners, before the Nimmo Committee was appointed, and that my proposal was consistently rejected.
  2. Will he make an early statement of the Government’s proposals for reform of the National Health Scheme which have been developed following his discussions with organisations involved in these proposals.
Dr Forbes:

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

  1. Various people have made similar suggestions and these could only be properly considered as part of a general review of the National Health Scheme, as was undertaken by the Nimmo Committee at the request of the Government
  2. A statement will be made as soon as it is practicable to do so.

Australian Forces Overseas (Question No. 1894)


asked the Minister for Defence, upon notice:

  1. (a) When did the Royal Australian Air Force units depart from Ubon and (b) What governments were consulted before and about their departure.
  2. (a) What governments are being consulted about the departure of the troops from Terendak and (b) What arrangements have been made for their departure.
  3. When is each battalion in Vietnam due to complete its tour of duty in that country.
Mr Fairhall:

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

  1. (a) 31st July 1968. (b) In my statement of 16th July 1968 I said that the move was being made after consultation with the governments concerned. I see no need to elaborate on that statement.
  2. (a) We are in continuing consultations with our four partners in the Five Power Defence Arrangements, namely, Britain, Malaysia, New Zealand and Singapore, (b) The movement of troops from Terendak to Singapore is planned to commence shortly and will continue over the next few months.
  3. 9 RAR is due to complete its tour of duty in Vietnam late this year and 5 RAR and 6 RAR are due to complete their tours of duty in the first 6 months of 1970. Actual dates of departure will be announced later.

Pensioner Medical Service (Question No. 1912)

Mr Whitlam:

asked the Minister for Health, upon notice:

In what circumstances and to what extent is the Pensioner Medical Service available to residents who receive social service benefits under reciprocal agreements with New Zealand and Britain.

Dr Forbes:

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

Residents of Australia who receive social service benefits under reciprocal agreements with New Zealand or Britain are eligible for the benefits of the Pensioner Medical Service on the same basis as any other resident of Australia. In this regard, the benefits of the Pensioner Medical Service are available to those persons to whom or in respect of whom there is being paid an age, invalid or widow’s pension or a sheltered employment allowance under the Social Services Act and who can satisfy the means test applied in accordance with the Social Services Act 1947-68. They are also available to persons in receipt of a service pension under the Repatriation Act or a tuberculosis allowance under the Tuberculosis Act and who can satisfy the means test corresponding to that set out in the Social Services Act 1947-68 or relevant Regulations.

Immigration (Question No. 19.18)

Mr Clyde Cameron:

asked the Minister for Immigration, upon notice:

How many migrants were recruited during 1968-69 in each of the countries in which the Department has a mission.

Mr Snedden:
Minister for Immigration · BRUCE, VICTORIA · LP

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

The figures in this table are bused on ‘country of last residence’, i.e. the country in which a settler had resided for the last 12 months or longer. Normally, the ‘country of last residence’ indicates which overseas mission would have arranged for interviews, etc., but in the case of certain European ‘guest workers’ and refugees, the country of last residence sometimes differs from the country in which the migrants were recruited for migration to Australia.

War Service Land Settlement (Question No. 1931)

Mr Webb:

asked the Minister representing the Minister for Housing, upon notice:

  1. What are the approximate areas of land in Western Australia which are currently available for ex-servicemen entitled to assistance under the War Service Homes Act.
  2. In what localities is this land situated.
  3. What arrangements exist to ensure that additional lands will be earmarked from time to time for allocation to ex-servicemen in Western Australia.
Mr Bury:

– The Minister for Housing has provided the following answer to the honourable member’s question:

  1. As at 19 September 1969 the following areas of land were available in Western Australia for allocation to eligible persons under the War Service Homes Act -

    1. Metropolitan area - 14 acres I rood
    2. Country - 10 acres l rood
  2. (a) Metropolitan -

  1. Country - 34 sites in various towns.

    1. In addition to the land specified in (I) and (2) a further 23i acres of undeveloped land in Manning has been acquired for the purposes of the War Service Homes Act and 14 acres of land in various metropolitan localities is in the course of acquisition. Additional acquisitions will bc made as conditions permit.

Answers to Questions on Notice (Question No. 1968)

Mr Whitlam:

asked the Minister for Shipping and Transport, upon notice:

On what occasions and for what reasons have draft replies to questions on notice addressed to the Minister for Shipping and Transport been prepared for him by the Department of Trade and Industry.

Mr Sinclair:

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

No draft answers to questions on notice addressed to the Minister for Shipping and Transport have been prepared in the Department of Trade and Industry.

Cite as: Australia, House of Representatives, Debates, 24 September 1969, viewed 22 October 2017, <>.